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, 1997
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.)
3 Skidaway Village Square
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 25, 1997
----- ----------------------------
Common Stock, $1.00 Par Value 16,414,080
<PAGE>
ITEM 1.
KUHLMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
<CAPTION>
<S> <C> <C> <C> <C>
1997 1996 1997 1996
--------- --------- --------- ---------
(Unaudited)
(In thousands, except per share data)
Net sales $ 170,221 $ 112,200 $ 304,369 $ 215,657
Cost of goods sold 131,707 88,476 236,113 170,469
--------- --------- --------- ---------
Gross profit 38,514 23,724 68,256 45,188
Selling, engineering, general
and administrative expenses 24,286 15,222 42,777 28,944
--------- --------- --------- ---------
Operating profit 14,228 8,502 25,479 16,244
--------- --------- --------- ---------
Other income(expense):
Interest expense, net (3,028) (1,772) (4,966) (3,335)
Other, net (388) (356) (703) (793)
--------- --------- --------- ---------
Total other
income(expense), net (3,416) (2,128) (5,669) (4,128)
--------- --------- --------- ---------
Income before taxes 10,812 6,374 19,810 12,116
Taxes on income 4,403 2,642 8,119 4,966
--------- --------- --------- ---------
Net income $ 6,409 $ 3,732 $ 11,691 $ 7,150
========= ========= ========= =========
Per share amounts:
Net income-primary $ 0.43 $ 0.27 $ 0.80 $ 0.53
========= ========= ========= =========
Net income-fully diluted $ 0.43 $ 0.27 $ 0.79 $ 0.52
========= ========= ========= =========
Average shares outstanding:
Primary 14,785 13,831 14,635 13,511
========= ========= ========= =========
Fully diluted 14,922 13,904 14,862 13,873
========= ========= ========= =========
</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,
1997 1996
--------- ---------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . $ 7,940 $ 2,209
Accounts receivable, less reserves of $3,481
and $2,344 at June 30, 1997 and December 31,
1996, respectively . . . . . . . . . . . . . . 97,945 70,079
Inventories . . . . . . . . . . . . . . . . . . . 63,778 52,530
Deferred income taxes . . . . . . . . . . . . . . 10,151 7,810
Prepaid expenses and other current assets . . . . 5,448 3,502
--------- ---------
Total current assets . . . . . . . . . . . . . 185,262 136,130
--------- ---------
Plant and equipment, at cost:
Land, buildings and leasehold improvements. . . . 51,096 42,213
Machinery and equipment . . . . . . . . . . . . . 156,927 122,655
Construction in progress . . . . . . . . . . . . 7,235 2,825
--------- ---------
215,258 167,693
Less - accumulated depreciation . . . . . . . . . (97,560) (89,829)
--------- ---------
117,698 77,864
--------- ---------
Intangible assets, net of amortization of $5,776
and $4,441 at June 30, 1997 and December
31, 1996, respectively. . . . . . . . . . . . . . 105,473 58,326
--------- ---------
Other assets . . . . . . . . . . . . . . . . . . . . 11,455 5,096
--------- ---------
$ 419,888 $ 277,416
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt . . . . . . . . $ 959 $ 2,295
Accounts payable . . . . . . . . . . . . . . . . 43,800 35,410
Accrued liabilities . . . . . . . . . . . . . . . 67,450 43,833
--------- ---------
Total current liabilities . . . . . . . . . . . 112,209 81,538
--------- ---------
Bank debt . . . . . . . . . . . . . . . . . . . . . 117,401 87,764
Other long-term debt . . . . . . . . . . . . . . . . 4,286 4,538
--------- ---------
Total long-term debt. . . . . . . . . . . . . . 121,687 92,302
--------- ---------
Accrued postretirement benefits. . . . . . . . . . . 19,087 8,859
--------- ---------
Other long-term liabilities. . . . . . . . . . . . . 9,613 3,143
--------- ---------
Total liabilities . . . . . . . . . . . . . . . 262,596 185,842
--------- ---------
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 16,318 shares at June 30, 1997 and
13,803 at December 31, 1996, respectively. . . 16,318 13,803
Additional paid-in capital . . . . . . . . . . . 96,668 32,749
Retained earnings . . . . . . . . . . . . . . . . 46,490 47,272
Foreign currency translation adjustments . . . . (574) (640)
Minimum pension liability . . . . . . . . . . . . (690) (690)
--------- ---------
158,212 92,494
Less - treasury shares at cost (72 shares at
June 30, 1997 and December 31, 1996) . . . . . (920) (920)
--------- ---------
Total shareholders' equity . . . . . . . . . . 157,292 91,574
--------- ---------
$ 419,888 $ 277,416
--------- ---------
</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<PAGE>
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------
1997 1996
-------- --------
(Unaudited)
(In thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . . . . . . . . $ 11,691 $ 7,150
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization. . . . . . . . . . . 9,339 6,320
Deferred income taxes, net . . . . . . . . . . . . (269) 862
Provision for losses on accounts receivable . . . 181 293
Other, net . . . . . . . . . . . . . . . . . . . . 1 (350)
Changes in operating assets and liabilities: (1)
Accounts receivable . . . . . . . . . . . . . (8,372) 1,375
Inventories . . . . . . . . . . . . . . . . . 1,621 (2,381)
Prepaid expenses and other current assets . . (1,083) (38)
Accounts payable . . . . . . . . . . . . . . . 469 3,231
Accrued liabilities. . . . . . . . . . . . . . 3,953 3,037
-------- --------
Net cash provided by operating activities 17,531 19,499
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures . . . . . . . . . . . . . . . (6,874) (4,579)
Acquisitions, net of cash acquired . . . . . . . . (85,375) (34,185)
Proceeds from the sale of assets . . . . . . . . . 328 80
-------- --------
Net cash used by investing activities . . (91,921) (38,684)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in revolving loan facility . . . . . . (61,319) (13,899)
Proceeds from issuance of long-term debt . . . . . 90,000 38,379
Repayments of long-term debt . . . . . . . . . . . (1,329) (846)
Dividends paid . . . . . . . . . . . . . . . . . . (4,124) (3,954)
Stock offering proceeds, net of expenses . . . . . 64,072 ---
Redemption of warrants . . . . . . . . . . . . . . (9,139) ---
Stock options exercised and other . . . . . . . . 1,820 1,696
-------- --------
Net cash provided by financing activities 79,981 21,376
-------- --------
Effect of exchange rate changes on cash. . . . . . . . . 140 178
-------- --------
Net increase in cash and cash equivalents . . . . . . . 5,731 2,369
Cash and cash equivalents at beginning of period . . . . 2,209 581
-------- --------
Cash and cash equivalents at end of period . . . . $ 7,940 $ 2,950
-------- --------
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest . . . . . . . . . . . . . . . . . . . . . $ 5,020 $ 3,237
-------- --------
Income taxes, net of refunds . . . . . . . . . . . $ 7,132 $ 2,004
-------- --------
</TABLE>
(1) Net of the effects of acquisitions, where applicable.
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, 1997
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Foreign
Additional Currency Minimum
Common Paid-in Retained Translation Pension Treasury
Stock Capital Earnings Adjustment Liability Stock Total
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31,
1996........$ 13,803 $ 32,749 $ 47,272 $ (640) $ (690) $ (920) $ 91,574
Net income... --- --- 11,691 --- --- --- 11,691
Cash
dividends
declared
($0.30 per
share)..... --- --- (4,144) --- --- --- (4,144)
Foreign
currency
translation
adjustment. --- --- --- 66 --- --- 66
Stock
offering
proceeds,
net of
expenses... 2,350 61,722 --- --- --- --- 64,072
Redemption of
warrants... --- (810) (8,329) --- --- --- (9,139)
Issuance of
shares
under the
Long-Term
Incentive
Plan....... 44 1,150 --- --- --- --- 1,194
Stock options
exercised
and other.. 121 1,857 --- --- --- --- 1,978
-------- -------- -------- ------ ------ ------ --------
Balance at
June 30,
1997...... $ 16,318 $ 96,668 $ 46,490 $ (574) $ (690) $ (920) $ 157,292
======== ======== ======== ====== ====== ====== =========
</TABLE>
The 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, 1997
(Unaudited)
1. Consolidated Financial Statements
The consolidated balance sheet at June 30, 1997 and the
related consolidated statements of income, cash flows and
shareholders' equity for the three and six months ended June 30,
1997 and 1996, have been prepared by Kuhlman Corporation (the
"Company" or "Kuhlman") 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, 1997 and the results of operations,
cash flows and shareholders' equity for three and six months
ended June 30, 1997 and 1996, have been made. Certain amounts in
the 1996 consolidated financial statements have been reclassified
to conform with the 1997 presentation.
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, including the notes thereto, should be read
in conjunction with the Company's audited consolidated financial
statements as of and for the three years in the period ended
December 31, 1996 included in the Company's annual report on Form
10-K.
The results of operations for the three and six months ended
June 30, 1997 are not necessarily indicative of the results to be
expected for the full year 1997.
2. Acquisition of Kysor Transportation Products Group
On March 10, 1997, the Company purchased certain assets of
the Transportation Products Group ("Kysor") of Kysor Industrial
Corporation, a Michigan Corporation traded on the New York Stock
Exchange. The purchase price for Kysor was $86,000,000 in cash
plus the assumption of certain liabilities in the amount of
approximately $46,000,000 including debt of approximately
$722,000. The purchase of Kysor was financed from borrowings
under the Company's 364-day credit facility.
The transaction is being accounted for as a purchase, and
the goodwill associated with the transaction will be amortized
over 40 years. The purchase price has been allocated to the
assets based on their estimated fair market value, subject to
adjustment should new or additional facts about the business
become known. The excess of the purchase price over the fair
value of assets is approximately $47,700,000, subject to future
adjustments, if any. The results of operations for Kysor are
included in the consolidated financial statements of the Company
from the date of acquisition.
The following unaudited pro forma information for the
periods shown below gives effect to the Kysor acquisition as if
it had occurred as of the beginning of each period.
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------------
In thousands, except per share data 1997 1996
--------- ---------
<S> <C> <C>
Net sales $ 331,178 $ 288,665
Net income $ 12,516 $ 9,478
Fully diluted per share amounts:
Net income $ 0.84 $ 0.68
</TABLE>
The unaudited pro forma information assumes the acquisition
of the net assets at the beginning of the periods presented and,
accordingly includes adjustments for goodwill amortization,
interest expense, certain administrative costs and income taxes.
The unaudited pro forma financial data is presented for
information purposes only and is not necessarily indicative of
the results of operations that actually would have been achieved
had the acquisition of Kysor been consummated at the beginning of
the periods presented.
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,
1997 and 1996 have been computed based on the weighted average
number of shares of common stock and common stock equivalents
outstanding throughout the period. Common stock equivalents used
in the primary and fully diluted per share calculations for the
three and six months ended June 30, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
In thousands Three Months Ended Six Months Ended
June 30, June 30,
-------------- --------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Primary 648 537 795 268
Fully diluted 734 610 952 630
</TABLE>
A cash dividend of $0.15 per share was declared during each
of the first and second quarters of 1997 and 1996.
In March 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" ("SFAS No. 128"). This standard modifies
disclosure requirements for companies required to report earnings
per share ("EPS") to include presentations of Basic EPS (which
includes no dilution of common stock equivalents) and, if
applicable, Diluted EPS (which reflects the potential dilution of
common stock equivalents). The standard will not be effective
for the Company until the completion of its fourth quarter and
year-end for 1997. The pro forma Basic and Diluted EPS for the
three and six months ended June 30, 1997 and 1996, respectively,
assuming the application of SFAS No. 128 at the beginning of
those periods, is as follows:
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
------------------- -------------------
In thousands, except per
share data 1997 1996 1997 1996
------- ------- ------- -------
<S> <C> <C> <C> <C>
Earnings per share:
Basic $ 0.46 $ 0.28 $ 0.84 $ 0.54
Diluted $ 0.43 $ 0.27 $ 0.80 $ 0.52
Average shares outstanding:
Basic 13,928 13,294 13,840 13,243
Diluted 14,785 13,831 14,635 13,700
</TABLE>
4. Inventories
Inventories consisted of the following, in thousands:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
-------- --------
(unaudited)
<S> <C> <C>
FIFO cost:
Raw materials $ 29,981 $ 24,648
Work-in-process 17,027 9,790
Finished goods 18,821 19,440
-------- --------
Total 65,829 53,878
Excess of FIFO
over LIFO cost (2,051) (1,348)
-------- --------
Net inventories $ 63,778 $ 52,530
======== ========
</TABLE>
5. Long-Term Incentive Plan
On August 9, 1996, the Board of Directors adopted the
Kuhlman Corporation Long-Term Incentive Plan (the "Long-Term
Incentive Plan") for certain key employees of the Company. The
Long-Term Incentive Plan was approved by the shareholders of the
Company on April 24, 1997. Under the terms of the Long-Term
Incentive Plan, awards may be made of incentive and nonqualified
stock options, stock appreciation rights, and restricted stock to
eligible employees. In addition, awards may also be made to
eligible employees with a value tied to specific performance
goals and, after a specified period, the value of those awards
may be paid with Kuhlman common stock or cash, or a combination
of the two. Non-employee directors of Kuhlman are eligible to
participate in the Long-Term Incentive Plan, but only for the
award of nonqualified stock options.
Pursuant to the Long-Term Incentive Plan, on August 8, 1996
awards were approved whereby certain key employees would receive
a payout after the attainment of each of two share price
thresholds for Kuhlman stock within three years from the program
commencement date, subject to certain vesting requirements and other
factors. The stock price thresholds were $23 and $27 per share.
In addition, subsequent to the acquisition of Kysor, additional awards
were granted to certain executives of Kysor at the $27 threshold.
Pursuant to such awards, the total pre-tax cost of such awards
would be approximately $7,800,000, with approximately $3,600,000
and $4,200,000 to be paid after the attainment of the above price
thresholds, respectively. Each award consists of two-thirds
Kuhlman stock and one-third cash and the level of award varies by
participant. The payout to the eligible participants pursuant to
such awards will be made in four quarterly installments subject
to certain vesting requirements and other factors. The related
compensation expense is recorded as the awards vest.
The Company achieved the $23 and $27 thresholds on April 10
and May 27, 1997, respectively, with payouts commencing on May 1
and June 1, 1997 for the first and second awards, respectively.
6. Stock Offering
On June 27, 1997, the Company completed a public offering
and sale of 2,350,000 shares of its common stock at a per share
price to the public of $28-7/8. The total proceeds, net of
expenses, were approximately $64,072,000 of which approximately
$54,933,000 was used to reduce amounts outstanding under the
Company's credit facilities, and approximately $9,139,000 was
used to redeem outstanding warrants. On July 8, 1997, an
additional 150,000 shares were sold at a per share price to the
public of $28-7/8 pursuant to the underwriters' over-allotment
option. The additional proceeds, net of expenses, of
approximately $4,115,000 were used to reduce amounts outstanding
under the Company's credit facilities.
On a supplementary basis, assuming that the total offering
and sale of 2,500,000 shares as described above had been
completed as of January 1, 1996 and the estimated net proceeds
had been used to reduce the Company's indebtedness and redeem the
warrants, fully diluted earnings per share for the year ended
December 31, 1996, and the three and six months ended June 30,
1997 would have been approximately $1.22, $0.41 and $0.75,
respectively.
7. Debt
On June 30, 1997, the Company amended its principal credit
facilities with a group of lenders to, among other things, expand
its revolving credit facility to $165,000,000, extend the
maturity date under the revolving credit facility by one year to
June 30, 2002, extend the expiration date under the company's
364-day, $125 million acquisition facility to June 29, 1998, and
adjust the cost of borrowings to reflect the improved credit
quality of the Company.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
On March 10, 1997, Kuhlman Corporation ("Kuhlman" or the
"Company"), purchased certain assets of the Transportation
Products Group ("Kysor") of Kysor Industrial Corporation for
$86,000,000 in cash plus the assumption of certain liabilities
which totaled approximately $46,000,000. The purchase of Kysor
was financed from borrowings under the Company's credit facility.
The acquisition has been recorded following the purchase method
of accounting and accordingly, the net assets and results of
operations for Kysor are included in the Company's consolidated
financial statements as part of the Industrial Products Segment
from the date of acquisition.
Kysor designs and manufactures proprietary products
including polymer fans and fan clutches, various engine
monitoring devices, truck fuel tanks, marine instruments and
heating, ventilating and air conditioning systems for commercial
vehicles. The principal markets for its products are original
equipment manufacturers of light-, medium- and heavy-duty trucks,
buses, off-highway equipment and the marine industry. For the
year ended December 31, 1996, Kysor's net sales were
approximately $136,000,000.
On June 27 and July 8, 1997, the Company sold 2,350,000 and
150,000 shares, respectively, in a public offering at a per share
price to the public of $28.875. The total net proceeds, after
expenses, from the offering, were $68,200,000. The proceeds were
used to redeem outstanding warrants to purchase 480,750 shares of
the Company's common stock and to repay outstanding debt.
On June 30, 1997, the Company amended its primary credit
facilities in order to, among other things, enhance its financial
flexibility, lower its cost of borrowed funds and extend its
facility for funding future acquisitions. The Company's
revolving credit facility was increased to $165 million, up from
$125 million, to be used for general corporate purposes and is
due on June 30, 2002. In addition, the Company's 364-day, $125
million facility primarily for funding future acquisitions was
extended to June 29, 1998 and amounts drawn, if any, would
convert to a 4-year term loan commencing on October 1, 1998, with
equal quarterly amortization. Interest rates on amounts borrowed
under both facilities are based on certain financial ratios which
have been amended to reflect the Company's improved financial
strength.
LIQUIDITY AND CAPITAL RESOURCES
The Company generated $17,531,000 in cash flow from
operations in the first half of 1997 compared to $19,499,000 for
the same period in 1996, a decrease of $1,968,000 (10%). The
decrease was due to higher working capital requirements,
particularly accounts receivable, caused by record sales volume
in the first half of 1997. Working capital (net of cash) was
$65,113,000 at June 30, 1997 compared to $52,383,000 at December
31, 1996, an increase of $12,730,000 (24%). The increase was due
primarily to greater cash balances at June 30, 1997 and working
capital associated with the acquisition of Kysor. Cash and cash
equivalents increased to $7,940,000 at June 30, 1997 from
$2,209,000 at December 31, 1996 due to the timing of cash
receipts and the addition of the cash balances held by Kysor.
Accounts receivable, net was $97,945,000 at June 30, 1997
compared to $70,079,000 at December 31, 1996, an increase of
$27,866,000 (40%). The increase was due primarily to the
acquisition of Kysor and the Company's record sales volume in the
first half of 1997. Similarly, inventories increased $11,248,000
(21%) to $63,778,000 at June 30, 1997 from December 31, 1996
primarily due to the inclusion of Kysor. Deferred taxes and
prepaid expenses and other current assets increased $4,287,000
(38%) to $15,599,000 at June 30, 1997 from the end of 1996
primarily because of tax attributes associated with the
acquisition of Kysor. Accounts payable and accrued liabilities
were $111,250,000 at June 30, 1997 compared to $79,243,000 at
December 31, 1996, an increase of $32,007,000 (40%). The
increase was due primarily to the addition of Kysor.
Total debt outstanding at June 30, 1997 was $122,646,000, up
$28,049,000 (30%) from the end of 1996. The increase in total
debt was due to the acquisition of Kysor, partially offset by the
proceeds from the sale of 2,350,000 shares of common stock in the
second quarter of 1997 which were used in part to pay down debt
and the positive cash flow from operations. Shareholders' equity
at June 30, 1997 was $157,292,000 compared to $91,574,000 at
December 31, 1996, an increase of $65,718,000 (72%). The
increase was due to the sale of common stock in the secondary
offering, net of the redemption of outstanding warrants, and
record earnings in the first half of 1997, partially offset by
the payment of dividends.
Capital expenditures for the first six months of 1997 were
$6,874,000 compared to $4,579,000 reported in the same period
last year. Expenditures in the first half of 1997 were primarily
for normal replacements and additions to machinery and equipment,
tooling for specific customer applications, and capacity
enhancements.
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
earnings by segment:
<TABLE>
<CAPTION>
In thousands
Three Months Ended Six Months Ended
June 30, June 30,
--------- --------- --------- ---------
1997 1996 1997 1996
--------- --------- --------- ---------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Net sales:
Electrical $ 74,235 $ 66,381 $ 146,718 $ 123,830
Industrial 95,986 45,819 157,651 91,827
--------- --------- --------- ---------
$ 170,221 $ 112,200 $ 304,369 $ 215,657
========= ========= ========= =========
Income before taxes:
Electrical $ 4,814 $ 4,469 $ 8,984 $ 7,866
Industrial 12,059 5,209 20,902 10,313
--------- --------- --------- ---------
Operating earnings(1) 16,873 9,678 29,886 18,179
Corporate (3,033) (1,532) (5,110) (2,728)
Interest expense, net (3,028) (1,772) (4,966) (3,335)
--------- --------- --------- ---------
$ 10,812 $ 6,374 $ 19,810 $ 12,116
========= ========= ========= =========
</TABLE>
(1) Operating earnings is defined as operating profit plus
other, net directly attributable to each segment.
Three Months Ended June 30, 1997 and 1996
Consolidated Results
The Company reported record quarterly results in the second
quarter of 1997 in several key financial areas, including net
sales, operating profit and net income. Net sales, operating
profit and net income increased approximately 52%, 67% and 72%,
respectively, in the second quarter of 1997 when compared to the
same period in 1996. The increases were attributable to the
positive operating performance reported in each of the Company's
two operating segments, Electrical and Industrial Products, and
the acquisition of Kysor.
Net sales were a record high of $170,221,000 in the second
quarter of 1997 compared to $112,200,000 reported in the same
period in 1996, an increase of $58,021,000 (52%). Each of the
Company's two segments contributed to the increase in net sales
as demand for most of the Company's key products remained vibrant
throughout the period. Net sales were benefitted by
approximately $42,468,000 in the second quarter of 1997 due to
the acquisition of Kysor. Excluding the net sales contributed by
Kysor, net sales increased approximately 14% in the second
quarter of 1997 when compared to the year-ago period.
Operating profit for the second quarter of 1997 was a record
high of $14,228,000 compared to $8,502,000 reported for the same
period in 1996, an increase of $5,726,000 (67%). Consolidated
operating profit margins in the second quarter of 1997 improved
to 8.4% of net sales compared to 7.6% reported in the year-ago
period. The increase in consolidated operating profit and
operating profit margins occurred primarily in the Industrial
Products Segment due to the record sales volume and improved
gross profit margins for certain products. Overall, operating
expenses increased $9,064,000 (60%) to $24,286,000 or 14.3% of
net sales in the second quarter of 1997 compared to $15,222,000
or 13.6% of net sales reported in the second quarter of 1996.
The increase in operating expenses was due primarily to the
higher sales noted above, greater corporate expenses associated
with the $1,300,000 pre-tax charge for the Company's Long-Term
Incentive Plan and the addition of Kysor. Operating expenses,
excluding the impact of the Long-Term Incentive Plan, in the
second quarter of 1997 were 13.5% of net sales compared to 13.6%
in the year-ago period.
Interest expense, net was $3,028,000 in the second quarter
for 1997 compared to $1,772,000 for the same period in 1996, an
increase of $1,256,000 (71%). The increase was due to the higher
levels of debt outstanding throughout the 1997 period compared to
the second quarter of 1996 due to the acquisition of Kysor.
Other, net was an expense of $388,000 in the second quarter of
1997 compared to a $356,000 expense reported in the same period
in 1996, an increase of $32,000 (9%). The increase was due to
higher miscellaneous, non-operating expenses, none of which were
significant, in the second quarter of 1997 compared to the year-
ago period.
Net income for the second quarter of 1997 was a record
$6,409,000 compared to $3,732,000 reported in the same period in
1996, an increase of $2,677,000 (72%). Earnings per share on a
fully diluted basis in the second quarter of 1997 were $0.43
compared to $0.27 for the second quarter of 1996, an increase of
59%. The increase in earnings per share was due to the higher
net income noted above, partially offset by more shares
outstanding throughout the period. The increase in the weighted
average number of shares outstanding for the earnings per share
calculation was due to higher common stock equivalents as a
result of an increase in the Company's stock price and the impact
of the common stock sold as part of a secondary offering on June
27, 1997. The Company's effective tax rate for the second
quarter of 1997 and 1996 was 40.7% and 41.4%, respectively. The
difference in rates was due primarily to the change in the source
of earnings between various taxing countries and the
deductibility of goodwill associated with the acquisition of
Kysor.
In addition, bookings were strong throughout the second
quarter of 1997. The Company's consolidated backlog increased
$5,083,000 (3%) to $158,865,000 at June 30, 1997 from the backlog
at March 31, 1997 and $39,884,000 (34%) from the end of 1996.
The increase in the backlog in the first half from the end of
1996 was attributable primarily to strong demand for certain
industrial components and the acquisition of Kysor.
Electrical Products Segment
In the Electrical Products Segment, net sales increased
$7,854,000 (12%) to $74,235,000 in the second quarter of 1997
compared to the same period in 1996. The increase was primarily
attributable to increased shipments of transformer products,
particularly medium power transformers, and certain wire and
cable products.
Operating earnings in the Electrical Products Segment
increased $345,000 (8%) to $4,814,000 in the second quarter of
1997 compared to the same period in 1996. The increase was due
primarily to greater net sales and improved operating margins at
Kuhlman Electric which reported the highest operating earnings in
its history. Operating earnings at Coleman Cable in the second
quarter of 1997 was slightly below that reported in the second
quarter of 1996. The decline was due primarily to lower gross
profit margins caused by the higher cost of copper, greater
manufacturing variances, and lower sales of security wire.
Industrial Products Segment
Net sales for the Industrial Products Segment in the second
quarter of 1997 were $95,986,000 compared to $45,819,000 reported
in the same period in 1996, an increase of $50,167,000 (109%).
The increase was due primarily to record sales of engine
components in North America and Europe and the addition of Kysor,
which added approximately $42,468,000 in net sales in the second
quarter of 1997. The record level of sales in the quarter were
due primarily to continued robust demand for turbochargers and
other engine components from original equipment manufacturers.
Operating earnings in the Industrial Products Segment
improved $6,850,000 (132%) to $12,059,000 in the second quarter
of 1997 when compared to the same period in 1996. The increase
was due primarily to the record shipments of engine component
products, the positive impact of a change in sales mix, improved
operating efficiencies, and the addition of Kysor.
Six Months Ended June 30, 1997 and 1996
Consolidated Results
Net sales, operating profit and net income for the first six
months of 1997 were record highs for the Company, up 41%, 57% and
64%, respectively, over the results reported for the first half
of 1996.
Net sales for the first half of 1997 were $304,369,000
compared to $215,657,000 for the same period in 1996, an increase
of 41%. The increase was due primarily to record shipments of
medium power transformers and certain engine components for
industrial engines and the addition of Kysor, which contributed
$51,748,000 in net sales in the first half of 1997. Excluding
the contribution of Kysor, net sales increased 17% in the second
quarter of 1997 over the year-ago period.
Operating profit for the first six months of 1997 was
$25,479,000 or 8.4% of net sales compared to $16,244,000 or 7.5%
of net sales in the year-ago period, an increase of $9,235,000
(57%). The increase in operating profit and margins was due to
the positive results posted in each segment in the first half of
1997 and the addition of Kysor. Operating expenses for the first
half of 1997 were $42,777,000 or 14.1% of net sales compared to
$28,944,000 or 13.4% of net sales in the year-ago period.
Operating expenses increased due to the higher sales volume noted
above, the addition of Kysor and the impact of the Long-Term
Incentive Plan. Excluding the impact of the Long-Term Incentive
Plan, operating expenses as a percentage of sales would have been
approximately 13.6%.
Interest expense, net for the first half of 1997 was
$4,966,000 compared to $3,335,000 for the same period in 1996, an
increase of $1,631,000 (49%). The increase was due to the higher
debt levels in the first half of 1997 for the acquisition of
Kysor. Other, net in the first half of 1997 was an expense of
$703,000 compared to an expense of $793,000 in the year-ago
period.
Net income for the first half of 1997 increased $4,541,000
(64%) to $11,691,000 from $7,150,000 reported in the same period
in 1996. Earnings per share on a fully diluted basis in the
first half of 1997 were $0.79 compared to $0.52 for the year-ago
period, an increase of 52%. The increase in earnings per share
was due to the higher net income noted above, partially offset by
more shares outstanding throughout the period. The fully diluted
shares outstanding for the first half of 1997 and 1996 were
14,862,000 and 13,873,000, respectively.
Electrical Products Segment
Net sales of the Electrical Products Segment in the first
half of 1997 were $146,718,000 compared to $123,830,000 in the
similar period in 1996, an increase of $22,888,000 (19%). The
increase was due primarily to greater shipments of transformer
products, particularly medium power transformers, and certain
wire and cable products, and the inclusion of CCI's results for
the full period. The increase was partially offset by lower net
sales of security wire due to increased competition in that
market segment.
Operating earnings in the Electrical Products Segment
increased $1,118,000 (14.2%) to $8,984,000 in the first half of
1997 compared to the same period in 1996. Operating margins were
6.1% and 6.4% in the first half of 1997 and 1996, respectively.
The increase in operating earnings was due primarily to the
higher sales volume noted above and improved margins at Kuhlman
Electric, partially offset by lower operating earnings at Coleman
Cable. Operating earnings at Coleman Cable declined in the first
half of 1997 compared to the year-ago period primarily because of
the higher cost of copper, greater manufacturing variances and
lower margins on certain wire and cable products due to
competitive market pressures.
Industrial Products Segment
Net sales for the Industrial Products Segment in the first
half of 1997 were $157,651,000 compared to $91,827,000 reported
in the same period in 1996, an increase of $65,824,000 (72%).
The increase was due primarily to record sales of engine
components in North America and Europe and the addition of Kysor,
which added approximately $51,748,000 in net sales from the date
of its acquisition by the Company. The record sales levels in
the first six months of 1997 were due primarily to continued
robust demand for turbochargers and other engine components from
original equipment manufacturers.
Operating earnings in the Industrial Products Segment
improved $10,589,000 (103%) to $20,902,000 in the first half of
1997 when compared to the same period in 1996. Operating margins
advanced to 13.3% in the first six months of 1997 when compared
to 11.2% in the year-ago period. The increase was due primarily
to the record shipments of engine component products, the
positive impact of a change in sales mix, improved operating
efficiencies, and the addition of Kysor.
OUTLOOK FOR 1997
Management believes that the results in the second quarter
support its view that the Company is positioned to prosper in
1997. However, management's optimism about the future continues
to be tempered somewhat by matters including, but not limited to,
the potential impact of fluctuating raw material costs, an
uncertain economic environment in certain key markets and the
potential for rising interest rates. Management will continue to
focus on these variables very carefully.
SAFE HARBOR STATEMENT
The statements contained under the caption "Outlook For
1997" and certain other information contained in this report
contain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended (the "Securities
Act") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), which can be identified by the use
of forward-looking terminology such as "anticipate," "may,"
"will," "expect," "continue," "remains," "intend," "aim,"
"trend," "seek," "should," and "prospects," or the negative
thereof or other variations thereon or comparable terminology.
Forward-looking statements are inherently subject to risks and
uncertainties, many of which cannot be predicted with accuracy
and some of which might not even be anticipated. Future events
and actual results, financial and otherwise, may differ
materially from the results discussed in the forward-looking
statements. Factors that might cause such differences included,
but are not limited to, the potential impact of fluctuating raw
material costs, an uncertain economic environment in certain key
markets and the potential for rising interest rates.
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 April 24, 1997.
(b) Gary G. Dillon, William M. Kearns, Jr. and George J.
Michel, Jr. were elected as directors at the Annual
Meeting. Curtis G. Anderson, William E. Burch, Steve
Cenko, Alexander W. Dreyfoos, Jr., Robert S. Jepson,
Jr. and General H. Norman Schwarzkopf continued as
directors after the Annual Meeting.
(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>
Gary G. Dillon 2000 12,696,884 41,429
William M. Kearns, Jr. 2000 12,696,908 41,405
George J. Michel, Jr. 2000 12,695,837 42,477
</TABLE>
At such meeting the security holders voted upon and approved the following:
(1) the Kuhlman Corporation Long-Term Incentive Plan.
9,889,648 affirmative votes and 443,752 negative votes
were cast, and there were 2,259,201 broker non-votes
and 145,712 abstentions with respect to such matter.
(2) the ratification of the selection of Arthur Andersen
LLP as the independent auditors for the Registrant for
the year ending December 31, 1997. 12,682,087
affirmative votes and 25,227 negative votes were cast,
and there were 30,998 abstentions with respect to such
matter.
ITEM 6 Exhibits and Reports on Form 8-K
(a) Exhibits
4.1 Rights Agreement dated as of April 30, 1997 between
Kuhlman Corporation and Harris Trust and Savings Bank
(incorporated by reference to Exhibit 1 to the
Registrant's Form 8-K dated April 24, 1997).
10.1 Kuhlman Corporation Long-Term Incentive Plan
[Incorporated by reference to Exhibit 4.2 to
Registration Statement on Form S-8 (No. 333-26371)].
10.2 Amendment No. 1 dated as of June 30, 1997, to the 364-
Day Amended and Restated Credit Agreement, dated as of
July 1, 1996, among the Registrant, The Chase
Manhattan Bank as Administrative Agent and the
participating lenders.
10.3 Amendment No. 1 dated as of June 30, 1997, to the 5-
Year Amended and Restated Credit Agreement dated as of
July 1, 1996, among the Registrant, The Chase
Manhattan Bank as Administrative Agent and the
participating lenders.
27.0 Financial Data Schedule for the six month period ended
June 30, 1997.
(b) Reports on Form 8-K
During the period covered by this report, the Registrant
filed the following reports on Form 8-K.
Form 8-K/A dated March 10, 1997, (Amendment No. 1) amending
form 8-K dated March 10, 1997, and reporting under Item 2 the
acquisition of a business and filing under Item 7 financial
statements, pro forma financial information and exhibits.
Form 8-K dated April 24, 1997 reporting under Item 5 the
registration of preferred stock purchase rights.
Form 8-K dated May 28, 1997 reporting under Item 5
information concerning an acquired business and filing under Item
7 pro forma financial information and exhibits.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto 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,
Chief Financial Officer and Treasurer
Date: August 14, 1997
EXECUTION COPY
FACILITY A (364-DAY)
AMENDMENT No. 1 (this "Amendment"),
dated as of June 30, 1997, to the 364-Day
Amended and Restated Credit Agreement (the
"Facility A Credit Agreement"), dated as of
July 1, 1996, among KUHLMAN CORPORATION, a
Delaware corporation (the "Borrower"); the
Guarantors referred to therein; the financial
institutions from time to time party thereto
(the "Lenders"); and THE CHASE MANHATTAN
BANK, as swingline lender (in such capacity,
the "Swingline Lender") and as agent for the
Lenders (in such capacity, the
"Administrative Agent").
A. The Borrower is party to (a) the above-
referenced Facility A Credit Agreement and (b) a certain
5-Year Amended and Restated Credit Agreement (the
"Facility B Credit Agreement") dated as of July 1, 1996,
among the Borrower, the Guarantors, the Lenders, and The
Chase Manhattan Bank, as Swingline Lender and Administrative
Agent (together, the "Amended and Restated Credit
Agreements").
B. The Borrower has requested and the Administra-
tive Agent and the Lenders have agreed to amend certain
provisions of the Amended and Restated Credit Agreements in
order to (a) extend the Maturity Date under the Facility B
Credit Agreement until the fifth anniversary of the
Amendment Effective Date, (b) extend the Conversion Date
under the Facility A Credit Agreement an additional 364 days
from the Existing Conversion Date pursuant to Section 2.21
thereof, (c) increase the aggregate principal amount
available for Revolving Loans under the Facility B Credit
Agreement from $125 million to $165 million and (d) increase
the aggregate principal amount available for Swingline Loans
under the Facility A Credit Agreement and the Facility B
Credit Agreement from $10 million to $15 million.
C. The Borrower, the Administrative Agent and the
Lenders have agreed to amend the Facility A Credit Agreement
for the limited purposes described and on the terms and
conditions set forth herein.
D. Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to such
terms in the Agreement.
NOW, THEREFORE, for valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree, on the terms and subject to
the conditions set forth herein, as follows:
SECTION 1. Amendment of Section 1.01.
Section 1.01 of the Facility A Credit Agreement is hereby
amended as follows:
(a) The definition of "Amendment Effective Date"
is hereby inserted in alphabetical order to read as follows:
"'Amendment Effective Date' shall mean the date on
which each condition to effectiveness set forth in
Section 7 of Amendment No. 1 to this Agreement dated as
of June 30, 1997, has been satisfied."
(b) The definition of "Applicable Margin" is
hereby amended and restated in its entirety to read as
follows:
"'Applicable Margin' shall mean, for any day, with
respect to any Eurodollar Loan or Swingline Loan, as
the case may be, the applicable percentage set forth
below under the caption 'LIBOR Spread' or 'Swingline
Spread', as the case may be, based upon the Leverage
Ratio as set forth below:
<TABLE>
<CAPTION>
Leverage LIBOR Swingline
Ratio Spread Spread
--------------------- ------ ---------
<S> <C> <C>
Category 1
Less than or equal to
1.25 0.3500 0.4125
Category 2
Greater than 1.25 but
less than or equal to
1.75 0.4000 0.4625
Category 3
Greater than 1.75 but
less than or equal to
2.50 0.5000 0.5625
Category 4
Greater than 2.50 but
less than or equal to
3.00 0.6250 0.6875
Category 5
Greater than 3.00 but
less than or equal to
3.50 0.7500 0.8125
Category 6
Greater than 3.50 1.2500 1.3125
</TABLE>
The Leverage Ratio utilized for purposes of determining the
Eurodollar Spread and the Swingline Spread shall be that in
effect as of the last day of the most recently completed
fiscal quarter of the Borrower in respect of which financial
statements have been delivered pursuant to this Agreement or
the Existing Credit Agreement. Each change in the Appli-
cable Margin resulting from a change in the Leverage Ratio
shall be effective with respect to all Loans and Commitments
outstanding on and after the date of delivery to the
Administrative Agent of the applicable financial statements
to the date of delivery of financial statements and
certificates indicating another such change."
(c) The definition of "Conversion Date" is hereby
amended and restated in its entirety to read as follows:
"'Conversion Date' shall mean June 29, 1998, as
such date may be extended pursuant to Section 2.21."
(d) The definition of "Effective Date" is hereby
amended and restated in its entirety to read as follows:
"'Effective Date' shall mean the Amendment
Effective Date."
SECTION 2. Amendment of Section 2.05. The first
sentence of Section 2.05(a) of the Facility A Credit
Agreement is hereby amended and restated in its entirety as
follows:
"The Borrower agrees to pay to each Lender,
through the Administrative Agent, on the first day of
January, April, July and October in each year, and on
the date on which the Commitment of such Lender shall
be terminated as provided herein, a commitment fee (a
"Commitment Fee") equal to .125% per annum on the
average daily unused amount of the Commitment of such
Lender during the preceding quarter (or shorter period
commencing with the date hereof or ending with the date
on which the Commitment of such Lender shall have been
terminated)."
SECTION 3. Amendment of Section 2.22(a).
Section 2.22(a) of the Facility A Credit Agreement is hereby
amended by deleting the first sentence therefrom and
restating it in its entirety as follows:
"(a) On the terms and subject to the conditions
and relying upon the representations and warranties
herein set forth, the Swingline Lender agrees, at any
time and from time to time from and including the
Effective Date to but excluding the earlier of (x) the
Conversion Date and (y) the termination of the
Commitments in accordance with the terms hereof, to
make Swingline Loans to the Borrower in an aggregate
principal amount at any time outstanding not to exceed
the lesser of (i) $15,000,000 minus the aggregate
amount of the swingline loans outstanding under the
Facility B Credit Agreement at such time and (ii) the
excess of the aggregate amount of the Commitments over
the Aggregate Revolving Loan Exposure at such time."
SECTION 4. Amendment of Section 3.05. Each
reference in Section 3.05 of the Facility A Credit Agreement
to "December 31, 1995" is hereby replaced with a reference
to "December 31, 1996", and each reference in Section 3.05
of the Facility A Credit Agreement to "March 31, 1996" is
hereby replaced with a reference to "March 31, 1997".
SECTION 5. Amendment of Schedules.
(a) Schedule 2.01 to the Facility A Credit Agreement is
hereby deleted and replaced with Schedule 2.01 to this
Amendment.
(b) Schedule 3.08 to the Facility A Credit
Agreement is hereby deleted and replaced with Schedule 3.08
to this Amendment.
SECTION 6. Representations and Warranties. The
Borrower represents and warrants as of the Amendment
Effective Date to each of the Lenders and the Administrative
Agent that:
(a) This Amendment has been duly authorized,
executed and delivered by the Borrower, and this Amendment
is, and the Facility A Credit Agreement, as amended hereby,
will upon the Amendment Effective Date be, the legal, valid
and binding obligation of the Borrower, enforceable against
the Borrower in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles
relating to enforceability (whether enforcement is sought by
proceedings in equity or at law).
(b) The representations and warranties set forth
in Article III of the Facility A Credit Agreement, as
amended hereby, are true and correct in all material
respects with the same effect as if made on the Amendment
Effective Date, except to the extent such representations
and warranties expressly relate to an earlier date.
(c) Immediately before and immediately after the
effectiveness of this Amendment, no Event of Default or
Default has occurred and is continuing.
SECTION 7. Conditions to Effectiveness. This
Amendment shall become effective as of and from the
Amendment Effective Date when (a) the Administrative Agent
shall have received counterparts of this Amendment that,
when taken together, bear the signatures of all the parties
hereto and (b) each of the following conditions precedent
shall have been satisfied in respect of this Amendment:
(i) the Borrower shall have requested Borrowings
under the Facility A Credit Agreement or the Facility B
Credit Agreement to be made on the Amendment Effective
Date immediately after the effectiveness of this Amend-
ment in a principal amount equal to the aggregate
principal amount of the Loans to be outstanding on such
date immediately prior to the effectiveness of this
Amendment (the "Outstanding Loans"), and arrangements
shall have been made for the proceeds of such
Borrowings to be applied on the Amendment Effective
Date to repay in full the Outstanding Loans (it being
agreed that, solely for purposes of Section 2.11(a) of
the Facility A Credit Agreement, no Loans will be
deemed to be outstanding on the Extension Date
occurring on July 1, 1997);
(ii) the Borrower shall have paid all fees and
other amounts accrued for the accounts of or otherwise
owed to the Lenders as of the Amendment Effective Date,
whether or not at the time due and payable, including,
subject to Section 8 below, amounts owed under
Section 2.15 by reason of the repayment of the
Outstanding Loans referred to in paragraph (i) above;
(iii) the Administrative Agent shall have received a
certificate, dated the Amendment Effective Date and
signed by a Financial Officer of the Borrower,
confirming (A) that the representations and warranties
set forth in Article III of the Facility A Credit
Agreement, as amended hereby, are true and correct in
all material respects, with the same effect as though
made on and as of the Amendment Effective Date, except
to the extent that such representations and warranties
expressly relate to an earlier date, and (B) that no
Event of Default or Default has occurred and is
continuing;
(iv) the Administrative Agent shall have received
certified copies of the resolutions of the Board of
Directors of the Borrower approving or authorizing
approval of the execution and delivery of this
Amendment and the performance of the Facility A Credit
Agreement as amended hereby;
(v) the Administrative Agent shall have received a
certificate of the Secretary or an Assistant Secretary
of the Borrower, dated the Amendment Effective Date,
(A) as to the absence of amendments to the certificate
of incorporation or the by-laws of the Borrower since
July 31, 1995 (or, in the event there shall have been
any such amendments, setting forth copies thereof
certified by the Secretary of State of Delaware in the
case of amendments to the certificate of incorporation
and by the Secretary or an Assistant Secretary of the
Borrower in the case of amendments to the by-laws), and
(B) certifying the incumbency and signatures of the
officer or officers of the Borrower signing this
Amendment;
(vi) the Administrative Agent shall have received a
satisfactory and favorable written opinion of counsel
for the Borrower, dated the Amendment Effective Date
and addressed to the Lenders; and
(vii) the Amendment Effective Date shall have
occurred on or prior to June 30, 1997.
SECTION 8. Special Provisions Regarding Interest
Periods and Breakage. Notwithstanding any other provision
of the Facility A Credit Agreement or the Facility B Credit
Agreement, (a) the Borrowings referred to in Section 7(b)(i)
(the "Effective Date Borrowings") will have Interest Periods
ending on the same dates as the Interest Periods applicable
to the Borrowings outstanding on the Amendment Effective
Date immediately prior to the effectiveness of this Amend-
ment (the "Outstanding Borrowings"), and the aggregate
amount of such Effective Date Borrowings of each Interest
Period will be equal to the amount of the Outstanding
Borrowing with the corresponding Interest Period; (b) that
portion of the Loans made by each Lender as part of the
Effective Date Borrowings that does not exceed the
Outstanding Loans of such respective Lenders will bear
interest from and after the Amendment Effective Date at
rates equal to the LIBO Rates used in determining the rates
applicable to the corresponding Outstanding Borrowings plus
the Applicable Margin from time to time in effect (giving
effect to this Amendment); (c) all other Loans or portions
of Loans made as part of the Effective Date Borrowings will
bear interest from and after the Amendment Effective Date at
rates equal to the applicable LIBO Rates two Business Days
prior to the Amendment Effective Date plus the Applicable
Margin from time to time in effect (giving effect to this
Amendment); and (d) each Lender with a Commitment under the
Facility A Credit Agreement on the date hereof that will
continue to have a Commitment under the Facility A Credit
Agreement after the Amendment Effective Date hereby waives
any claims it might otherwise have under Section 2.15 of the
Facility A Credit Agreement by reason of the repayment on
the Amendment Effective Date of the Outstanding Borrowings
to the extent that the Loans made by it on the Amendment
Effective Date are at least equal to the Loans made by it
that are repaid on the Amendment Effective Date.
SECTION 9. Agreement. Except as specifically
stated herein, the provisions of the Facility A Credit
Agreement are and shall remain in full force and effect. As
used therein, the terms "Agreement", "herein", "hereunder",
"hereinafter", "hereto", "hereof" and words of similar
import shall, unless the context otherwise requires, refer
to the Facility A Credit Agreement as amended hereby.
SECTION 10. Effect of Amendment. Except as
expressly set forth herein, this Amendment shall not by
implication or otherwise limit, impair, constitute a waiver
of or otherwise affect the rights and remedies of the
Lenders under the Facility A Credit Agreement, and shall not
alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained
in the Facility A Credit Agreement, all of which are
ratified and affirmed in all respects and shall continue in
full force and effect. Nothing herein shall be deemed to
entitle the Borrower to a consent to, or a waiver,
amendment, modification or other change of, any of the
terms, conditions, obligations, covenants or agreements
contained in the Facility A Credit Agreement in similar or
different circumstances. This Amendment shall apply and be
effective only with respect to the provisions of the
Facility A Credit Agreement specifically referred to herein.
SECTION 11. Applicable Law. THIS AMENDMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.
SECTION 12. Counterparts. This Amendment may be
executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together
shall constitute but one contract.
SECTION 13. Expenses. The Borrower agrees to
reimburse the Administrative Agent for all reasonable out-
of-pocket expenses incurred by it in connection with this
Amendment, including, but not limited to, the reasonable
fees, charges and disbursements of Cravath, Swaine & Moore,
counsel for the Administrative Agent.
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be executed by their respective officers
thereunto duly authorized, as of the date first above
written.
KUHLMAN CORPORATION, as Borrower,
by
/s/ Vernon J. Nagel
--------------------------
Name: Vernon J. Nagel
Title: Executive Vice
President of Finance
KUHLMAN ELECTRIC CORPORATION,
COLEMAN CABLE SYSTEMS, INC.,
TRANSPRO GROUP, INC.,
SCHWITZER, INC.,
SCHWITZER U.S. INC.,
ASSOCIATED ENGINEERING COMPANY,
and
BARON WIRE & CABLE CORP., as Guarantors,
by
/s/ Vernon J. Nagel
--------------------------
Name: Vernon J. Nagel
Title: Vice President
THE CHASE MANHATTAN BANK,
individually and as Administrative Agent,
by
/s/ Karen M. Sharf
--------------------------
Name: Karen M. Sharf
Title: Vice President
ABN AMRO BANK N.V., ATLANTA AGENCY,
by
/s/ Steven Hipsman
--------------------------
Name: Steven Hipsman
Title: Vice President
by
/s/ Larry Kelley
--------------------------
Name: Larry Kelley
Title: Group Vice President
AMSOUTH BANK OF ALABAMA,
by
/s/ Joseph P. Maxwell
--------------------------
Name: Joseph P. Maxwell
Title: Banking Officer
THE FIRST NATIONAL BANK OF BOSTON,
by
/s/ Christopher Holtz
--------------------------
Name: Christopher Holtz
Title: Vice President
BANQUE PARIBAS, NEW YORK BRANCH,
by
/s/ Duane Helkowski
--------------------------
Name: Duane Helkowski
Title: Vice President
by
/s/ John J. McCormick, III
--------------------------
Name: John J. McCormick, III
Title: Vice President
COMERICA BANK,
by
/s/Kristine L. Andersen
--------------------------
Name: Kristine L. Andersen
Title: Account Officer
CREDIT LYONNAIS ATLANTA AGENCY,
by
/s/ David M. Cawrse
--------------------------
Name: David M. Cawrse
Title: First Vice President &
Manager
FIRST UNION NATIONAL BANK OF GEORGIA, N.A.,
by
/s/ Daniel Evans
--------------------------
Name: Daniel Evans
Title: SVP
FUJI BANK, LTD.,
by
/s/ Toshiro Mitsui
--------------------------
Name: Toshiro Mitsui
Title: Vice President and
Manager
HARRIS TRUST AND SAVINGS BANK,
by
/s/ Patrick J. McDonnell
--------------------------
Name: Patrick J. McDonnell
Title: Vice President
MELLON BANK, N.A.,
by
/s/ Clifford A. Mull
--------------------------
Name: Clifford A. Mull
Title: Assistant Vice
President
PNC BANK, NATIONAL ASSOCIATION,
by
/s/ Mark Rutherford
--------------------------
Name: Mark Rutherford
Title: Vice President
THE SUMITOMO BANK, LIMITED,
by
/s/ Sybil H. Weldon
--------------------------
Name: Sybil H. Weldon
Title: Vice President & Mgr.
by
/s/ Roger Arsham
--------------------------
Name: Roger Arsham
Title: Vice President
SUNTRUST BANK, ATLANTA,
by
/s/ Bradley J. Staples
--------------------------
Name: Bradley J. Staples
Title: Assistant Vice
President
by
/s/ David W. Penter
--------------------------
Name: David W. Penter
Title: Group Vice President
WACHOVIA BANK, N.A.,
by
/s/ Russell W. Boozer
--------------------------
Name: Russell W. Boozer
Title: Vice President
EXECUTION COPY
FACILITY B (5-YEAR)
AMENDMENT No. 1 (this "Amendment"),
dated as of June 30, 1997, to the 5-Year
Amended and Restated Credit Agreement (the
"Facility B Credit Agreement"), dated as of
July 1, 1996, among KUHLMAN CORPORATION, a
Delaware corporation (the "Borrower"); the
Guarantors referred to therein; the financial
institutions from time to time party thereto
(the "Lenders"); and THE CHASE MANHATTAN
BANK, as swingline lender (in such capacity,
the "Swingline Lender") and as agent for the
Lenders (in such capacity, the
"Administrative Agent").
A. The Borrower is party to (a) the above-
referenced Facility B Credit Agreement and (b) a certain
364-Day Amended and Restated Credit Agreement (the "Facility
A Credit Agreement") dated as of July 1, 1996, among the
Borrower, the Guarantors, the Lenders and The Chase
Manhattan Bank, as Swingline Lender and Administrative Agent
(together, the "Amended and Restated Credit Agreements").
B. The Borrower has requested and the Administra-
tive Agent and the Lenders have agreed to amend certain
provisions of the Amended and Restated Credit Agreements in
order to (a) extend the Maturity Date under the Facility B
Credit Agreement until the fifth anniversary of the
Amendment Effective Date, (b) extend the Conversion Date
under the Facility A Credit Agreement an additional 364 days
from the Existing Conversion Date pursuant to Section 2.21
thereof, (c) increase the aggregate principal amount
available for Revolving Loans under the Facility B Credit
Agreement from $125 million to $165 million and (d) increase
the aggregate principal amount available for Swingline Loans
under the Facility A Credit Agreement and the Facility B
Credit Agreement from $10 million to $15 million.
C. The Borrower, the Administrative Agent and the
Lenders have agreed to amend the Facility B Credit Agreement
for the limited purposes described and on the terms and
conditions set forth herein.
D. Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to such
terms in the Facility B Credit Agreement.
NOW, THEREFORE, for valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree, on the terms and subject to
the conditions set forth herein, as follows:
SECTION 1. Amendment of Section 1.01.
Section 1.01 of the Facility B Credit Agreement is hereby
amended as follows:
(a) The definition of "Amendment Effective Date"
is hereby inserted in alphabetical order to read as follows:
"'Amendment Effective Date' shall mean the date on
which each condition to effectiveness set forth in
Section 6 of Amendment No. 1 to this Agreement dated as
of June 30, 1997, has been satisfied."
(b) The definition of "Applicable Commitment Fee
Percentage" is hereby amended and restated in its entirety
to read as follows:
"'Applicable Commitment Fee Percentage' shall
mean, for any day, the applicable percentage set forth
below under the caption 'Fee Percentage', based upon
the Leverage Ratio as set forth below:
<TABLE>
<CAPTION>
Leverage Ratio Fee Percentage
-------------- --------------
<S> <C>
Category 1
Less than or equal to
1:25 0.125
Category 2
Greater than 1.25 but
less than or equal to
1.75 0.150
Category 3
Greater than 1.75 but
less than or equal to
2.50 0.200
Category 4
Greater than 2.50 but
less than or equal to
3.00 0.225
Category 5
Greater than 3.00 but
less than or equal to
3.50 0.250
Category 6
Greater than 3.50 0.300
</TABLE>
The Leverage Ratio utilized for purposes of determining the
Fee Percentage shall be that in effect as of the last day of
the most recently completed fiscal quarter of the Borrower
in respect of which financial statements have been delivered
pursuant to this Agreement or the Existing Credit Agreement.
Each change in the Applicable Commitment Fee Percentage
resulting from a change in the Leverage Ratio shall be
effective on and after the date of delivery to the Admini-
strative Agent of the applicable financial statements to the
date of delivery of financial statements and certificates
indicating another such change."
(c) The definition of "Applicable Margin" is
hereby amended and restated in its entirety to read as
follows:
"'Applicable Margin' shall mean, for any day, with
respect to any Eurodollar Loan or Swingline Loan, as
the case may be, the applicable percentage set forth
below under the caption 'LIBOR Spread' or 'Swingline
Spread', as the case may be, based upon the Leverage
Ratio as set forth below:
<TABLE>
<CAPTION>
LIBOR Swingline
Leverage Ratio Spread Spread
----------------- ------ ---------
<S> <C> <C>
Category 1
Less than or equal to
1.25 0.3500 0.4125
Category 2
Greater than 1.25 but
less than or equal to
1.75 0.4000 0.4625
Category 3
Greater than 1.75 but
less than or equal to
2.50 0.5000 0.5625
Category 4
Greater than 2.50 but
less than or equal to
3.00 0.6250 0.6875
Category 5
Greater than 3.00 but
less than or equal to
3.50 0.7500 0.8125
Category 6
Greater than 3.50 1.2500 1.3125
</TABLE>
The Leverage Ratio utilized for purposes of determining the
Eurodollar Spread and the Swingline Spread shall be that in
effect as of the last day of the most recently completed
fiscal quarter of the Borrower in respect of which financial
statements have been delivered pursuant to this Agreement or
the Existing Credit Agreement. Each change in the
Applicable Margin resulting from a change in the Leverage
Ratio shall be effective with respect to all Loans and
Commitments outstanding on and after the date of delivery to
the Administrative Agent of the applicable financial
statements to the date of delivery of financial statements
and certificates indicating another such change."
(d) The definition of "Effective Date" is hereby
amended and restated in its entirety to read as follows:
"'Effective Date' shall mean the Amendment
Effective Date."
SECTION 2. Amendment of Section 2.21(a).
Section 2.21(a) of the Facility B Credit Agreement is hereby
amended by deleting the first sentence therefrom and
restating it in its entirety as follows:
"On the terms and subject to the conditions and
relying upon the representations and warranties herein
set forth, the Swingline Lender agrees, at any time and
from time to time from and including the Effective Date
to but excluding the earlier of (x) the Maturity Date
and (y) the termination of the Commitments in accor-
dance with the terms hereof, to make Swingline Loans to
the Borrower in an aggregate principal amount at any
time outstanding not to exceed the lesser of
(i) $15,000,000 minus the aggregate amount of the
swingline loans outstanding under the Facility A Credit
Agreement at such time and (ii) the excess of the
aggregate amount of the Commitments over the Aggregate
Revolving Loan Exposure at such time."
SECTION 3. Amendment of Section 3.05. Each
reference in Section 3.05 of the Facility B Credit Agreement
to "December 31, 1995" is hereby replaced with a reference
to "December 31, 1996", and each reference in Section 3.05
of the Facility B Credit Agreement to "March 31, 1996" is
hereby replaced with a reference to "March 31, 1997".
SECTION 4. Amendment of Schedules.
(a) Schedule 2.01 to the Facility B Credit Agreement is
hereby deleted and replaced with Schedule 2.01 to this
Amendment.
(b) Schedule 3.08 to the Facility B Credit
Agreement is hereby deleted and replaced with Schedule 3.08
to this Amendment.
SECTION 5. Representations and Warranties. The
Borrower represents and warrants as of the Amendment
Effective Date to each of the Lenders and the Administrative
Agent that:
(a) This Amendment has been duly authorized,
executed and delivered by the Borrower, and this Amendment
is, and the Facility B Credit Agreement, as amended hereby,
will upon the Amendment Effective Date be, the legal, valid
and binding obligation of the Borrower, enforceable against
the Borrower in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles
relating to enforceability (whether enforcement is sought by
proceedings in equity or at law).
(b) The representations and warranties set forth
in Article III of the Facility B Credit Agreement, as
amended hereby, are true and correct in all material
respects with the same effect as if made on the Amendment
Effective Date, except to the extent such representations
and warranties expressly relate to an earlier date.
(c) Immediately before and immediately after the
effectiveness of this Amendment, no Event of Default or
Default has occurred and is continuing.
SECTION 6. Conditions to Effectiveness. This
Amendment shall become effective as of and from the
Amendment Effective Date when (a) the Administrative Agent
shall have received counterparts of this Amendment that,
when taken together, bear the signatures of all the parties
hereto and (b) each of the following conditions precedent
shall have been satisfied in respect of this Amendment:
(i) the Borrower shall have requested Borrowings
under the Facility A Credit Agreement or the Facility B
Credit Agreement to be made on the Amendment Effective
Date immediately after the effectiveness of this
Amendment in a principal amount equal to the aggregate
principal amount of the Loans to be outstanding on such
date immediately prior to the effectiveness of this
Amendment (the "Outstanding Loans"), and arrangements
shall have been made for the proceeds of such
Borrowings to be applied on the Amendment Effective
Date to repay in full the Outstanding Loans;
(ii) the Borrower shall have paid all fees and
other amounts accrued for the accounts of or otherwise
owed to the Lenders as of the Amendment Effective Date,
whether or not at the time due and payable, including,
subject to Section 7 below, amounts owed under
Section 2.15 by reason of the repayment of the
Outstanding Loans referred to in paragraph (i) above;
(iii) the Administrative Agent shall have received a
certificate, dated the Amendment Effective Date and
signed by a Financial Officer of the Borrower,
confirming (A) that the representations and warranties
set forth in Article III of the Facility B Credit
Agreement, as amended hereby, are true and correct in
all material respects, with the same effect as though
made on and as of the Amendment Effective Date, except
to the extent that such representations and warranties
expressly relate to an earlier date, and (B) that no
Event of Default or Default has occurred and is
continuing;
(iv) the Administrative Agent shall have received
certified copies of the resolutions of the Board of
Directors of the Borrower approving or authorizing
approval of the execution and delivery of this
Amendment and the performance of the Facility B Credit
Agreement as amended hereby;
(v) the Administrative Agent shall have received a
certificate of the Secretary or an Assistant Secretary
of the Borrower, dated the Amendment Effective Date,
(A) as to the absence of amendments to the certificate
of incorporation or the by-laws of the Borrower since
July 31, 1995 (or, in the event there shall have been
any such amendments, setting forth copies thereof
certified by the Secretary of State of Delaware in the
case of amendments to the certificate of incorporation
and by the Secretary or an Assistant Secretary of the
Borrower in the case of amendments to the by-laws), and
(B) certifying the incumbency and signatures of the
officer or officers of the Borrower signing this
Amendment;
(vi) the Administrative Agent shall have received a
satisfactory written opinion of counsel for the
Borrower, dated the Amendment Effective Date and
addressed to the Lenders; and
(vii) the Amendment Effective Date shall have
occurred on or prior to June 30, 1997.
SECTION 7. Special Provisions Regarding Interest
Periods and Breakage. Notwithstanding any other provision
of the Facility A Credit Agreement or the Facility B Credit
Agreement, (a) the Borrowings referred to in Section 6(b)(i)
(the "Effective Date Borrowings") will have Interest Periods
ending on the same dates as the Interest Periods applicable
to the Borrowings outstanding on the Amendment Effective
Date immediately prior to the effectiveness of this Amend-
ment (the "Outstanding Borrowings"), and the aggregate
amount of such Effective Date Borrowings of each Interest
Period will be equal to the amount of the Outstanding
Borrowing with the corresponding Interest Period; (b) that
portion of the Loans made by each Lender as part of the
Effective Date Borrowings that does not exceed the
Outstanding Loans of such respective Lenders will bear
interest from and after the Amendment Effective Date at
rates equal to the LIBO Rates used in determining the rates
applicable to the corresponding Outstanding Borrowings plus
the Applicable Margin from time to time in effect (giving
effect to this Amendment); (c) all other Loans or portions
of Loans made as part of the Effective Date Borrowings by
Lenders will bear interest from and after the Amendment
Effective Date at rates equal to the applicable LIBO Rates
two Business Days prior to the Amendment Effective Date plus
the Applicable Margin from time to time in effect (giving
effect to this Amendment); and (d) each Lender with a
Commitment under the Facility B Credit Agreement on the date
hereof that will continue to have a Commitment under the
Facility B Credit Agreement after the Amendment Effective
Date hereby waives any claims it might otherwise have under
Section 2.15 of the Facility B Credit Agreement by reason of
the repayment on the Amendment Effective Date of the
Outstanding Borrowings to the extent that the Loans made by
it on the Amendment Effective Date are at least equal to the
Loans made by it that are repaid on the Amendment Effective
Date.
SECTION 8. Agreement. Except as specifically
stated herein, the provisions of the Facility B Credit
Agreement are and shall remain in full force and effect. As
used therein, the terms "Agreement", "herein", "hereunder",
"hereinafter", "hereto", "hereof" and words of similar
import shall, unless the context otherwise requires, refer
to the Facility B Credit Agreement as amended hereby.
SECTION 9. Effect of Amendment. Except as
expressly set forth herein, this Amendment shall not by
implication or otherwise limit, impair, constitute a waiver
of or otherwise affect the rights and remedies of the
Lenders under the Facility B Credit Agreement, and shall not
alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained
in the Facility B Credit Agreement, all of which are
ratified and affirmed in all respects and shall continue in
full force and effect. Nothing herein shall be deemed to
entitle the Borrower to a consent to, or a waiver,
amendment, modification or other change of, any of the
terms, conditions, obligations, covenants or agreements
contained in the Facility B Credit Agreement in similar or
different circumstances. This Amendment shall apply and be
effective only with respect to the provisions of the
Facility B Credit Agreement specifically referred to herein.
SECTION 10. Applicable Law. THIS AMENDMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.
SECTION 11. Counterparts. This Amendment may be
executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together
shall constitute but one contract.
SECTION 12. Expenses. The Borrower agrees to
reimburse the Administrative Agent for all reasonable out-
of-pocket expenses incurred by it in connection with this
Amendment, including, but not limited to, the reasonable
fees, charges and disbursements of Cravath, Swaine & Moore,
counsel for the Administrative Agent.
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be executed by their respective officers
thereunto duly authorized, as of the date first above
written.
KUHLMAN CORPORATION, as Borrower,
by
/s/ Vernon J. Nagel
-------------------------------
Name: Vernon J. Nagel
Title: Executive Vice
President of Finance
KUHLMAN ELECTRIC CORPORATION,
COLEMAN CABLE SYSTEMS, INC.,
TRANSPRO GROUP, INC.,
SCHWITZER, INC.,
SCHWITZER U.S. INC.,
ASSOCIATED ENGINEERING COMPANY,
and
BARON WIRE & CABLE CORP., as Guarantors,
by
/s/ Vernon J. Nagel
-------------------------------
Name: Vernon J. Nagel
Title: Vice President
THE CHASE MANHATTAN BANK,
individually and as Administrative Agent,
by
/s/ Karen M. Sharf
-------------------------------
Name: Karen M. Sharf
Title: Vice President
ABN AMRO BANK N.V., ATLANTA AGENCY,
by
/s/ Steven Hipsman
-------------------------------
Name: Steven Hipsman
Title: Vice President
by
/s/ Larry Kelley
-------------------------------
Name: Larry Kelley
Title: Group Vice President
AMSOUTH BANK OF ALABAMA,
by
/s/ Joseph P. Maxwell
-------------------------------
Name: Joseph P. Maxwell
Title: Banking Officer
THE FIRST NATIONAL BANK OF BOSTON,
by
/s/ Christopher Holtz
-------------------------------
Name: Christopher Holtz
Title: Vice President
BANQUE PARIBAS, NEW YORK BRANCH,
by
/s/ Duane Helkowski
-------------------------------
Name: Duane Helkowski
Title: Vice President
by
/s/ John H. McCormick, III
-------------------------------
Name: John H. McCormick, III
Title: Vice President
COMERICA BANK,
by
/s/ Kristine L. Anderson
-------------------------------
Name: Kristine L. Anderson
Title: Account Officer
CREDIT LYONNAIS ATLANTA AGENCY,
by
/s/ David M. Cawrse
-------------------------------
Name: David M. Cawrse
Title: First Vice President &
Manager
FIRST UNION NATIONAL BANK OF GEORGIA, N.A.,
by
/s/ Daniel Evans
-------------------------------
Name: Daniel Evans
Title: SVP
FUJI BANK, LTD.,
by
/s/ Toshiro Mitsui
-------------------------------
Name: Toshiro Mitsui
Title: Vice President and
Manager
HARRIS TRUST AND SAVINGS BANK,
by
/s/ Patrick J. McDonnell
-------------------------------
Name: Patrick J. McDonnell
Title: Vice President
MELLON BANK, N.A.,
by
/s/ Clifford A. Mull
-------------------------------
Name: Clifford A. Mull
Title: Assistant Vice
President
PNC BANK, NATIONAL ASSOCIATION,
by
/s/ Mark Rutherford
-------------------------------
Name: Mark Rutherford
Title: Vice President
THE SUMITOMO BANK, LIMITED,
by
/s/ Sybil H. Weldon
-------------------------------
Name: Sybil H. Weldon
Title: Vice President & Mgr.
by
/s/ Roger N. Arsham
-------------------------------
Name: Roger N. Arsham
Title: Vice President
SUNTRUST BANK, ATLANTA,
by
/s/ Bradley J. Staples
-------------------------------
Name: Bradley J. Staples
Title: Assistant Vice
President
by
/s/ David W. Penter
-------------------------------
Name: David W. Penter
Title: Group Vice President
WACHOVIA BANK, N.A.,
by
/s/ Russell W. Boozer
-------------------------------
Name: Russell W. Boozer
Title: Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS RESTATED SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE KUHLMAN JUNE 1997 CONSOLIDATED BALANCE SHEET AND THE STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1997
<CASH> 7,940
<SECURITIES> 0
<RECEIVABLES> 101,426
<ALLOWANCES> 3,481
<INVENTORY> 63,778
<CURRENT-ASSETS> 185,262
<PP&E> 215,258
<DEPRECIATION> 97,560
<TOTAL-ASSETS> 419,888
<CURRENT-LIABILITIES> 112,209
<BONDS> 121,687
<COMMON> 16,318
0
0
<OTHER-SE> 140,974
<TOTAL-LIABILITY-AND-EQUITY> 419,888
<SALES> 304,369
<TOTAL-REVENUES> 304,369
<CGS> 236,113
<TOTAL-COSTS> 236,113
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 181
<INTEREST-EXPENSE> 4,966
<INCOME-PRETAX> 19,810
<INCOME-TAX> 8,119
<INCOME-CONTINUING> 11,691
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,691
<EPS-PRIMARY> 0.80
<EPS-DILUTED> 0.79
</TABLE>
