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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 quarter ended March 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file Number 0-8287
LINDBERG CORPORATION
DELAWARE 36-1391480
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State of Incorporation IRS Employer Identification No.
6133 North River Road, Suite 700
Rosemont, Illinois 60018
(847) 823-2021
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
----- -----
The number of shares of the Registrant's Common Stock outstanding as of
May 11, 1998 was: 4,858,581.
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LINDBERG CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
Part I Financial Information: Page No.
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<S> <C>
Item 1. Consolidated Statements of Earnings - Three Months
Ended March 31, 1998 and 1997 .................... 3
Consolidated Balance Sheets - As of March 31, 1998
and December 31, 1997 ............................ 4
Consolidated Statements of Cash Flows - Three Months
Ended March 31, 1998 and 1997 .................... 5
Notes to the Consolidated Financial Statements ... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations .............. 9
Part II Other Information:
Item 6. Exhibits and Reports on Form 8-K ................. 12
Signatures ....................................... 13
Exhibit Index .................................... 14
</TABLE>
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<TABLE>
LINDBERG CORPORATION AND SUBSIDIARIES
PART I FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
Three Months Ended
March 31,
---------------------------
1998 1997
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<S> <C> <C>
Net Sales $30,872,196 $20,645,811
Cost of Sales (21,272,434) (15,173,396)
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Gross Profit 9,599,762 5,472,415
Selling and Administrative Expense (4,723,832) (3,154,306)
Equity in Earnings of Partnership -- 255,931
----------- -----------
Operating Earnings 4,875,930 2,574,040
Interest Expense - Net (775,526) (370,609)
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Earnings from Continuing Operations
Before Income Taxes 4,100,404 2,203,431
Provision for Income Taxes (1,660,487) (892,441)
----------- -----------
Earnings from Continuing Operations 2,439,917 1,310,990
Loss from Discontinued Operations,
Net of Income Taxes -- (206,108)
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Net Earnings $ 2,439,917 $ 1,104,882
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Basic Earnings Per Share:
Earnings from Continuing Operations $ .50 $ .27
Loss from Discontinued Operations -- (.04)
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Net Earnings $ .50 $ .23
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Weighted Average Shares Outstanding 4,835,884 4,788,858
=========== ===========
Diluted Earnings Per Share:
Earnings from Continuing Operations $ .48 $ .27
Loss from Discontinued Operations -- (.04)
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Net Earnings $ .48 $ .23
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Weighted Average Shares Outstanding
and Equivalents 5,041,993 4,868,685
=========== ===========
Cash Dividends Declared and Paid $ .08 $ .08
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</TABLE>
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<TABLE>
LINDBERG CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1998 1997
(Unaudited)
------------ -----------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 546,325 $ 283,270
Receivables - Net 18,894,122 14,875,005
Prepaid and Refundable Income Taxes 14,011 1,380,768
Prepaid Expenses 946,153 632,846
Net Assets of Discontinued Operations 17,354,934 17,475,866
Other Current Assets 603,264 1,616,774
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Total Current Assets 38,358,809 36,264,529
PROPERTY AND EQUIPMENT:
Cost 95,849,749 91,602,405
Less-Accumulated Depreciation (53,801,229) (52,505,822)
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Net Property and Equipment 42,048,520 39,096,583
Goodwill 19,700,059 11,537,742
Other Non-Current Assets 2,657,089 2,664,577
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TOTAL ASSETS $102,764,477 $89,563,431
============ ===========
CURRENT LIABILITIES:
Current Maturities on Long-Term Debt $ 83,328 83,328
Notes Payable 8,380,000 10,220,000
Accounts Payable 4,659,643 3,540,279
Accrued Expenses 6,850,941 6,273,794
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Total Current Liabilities 19,973,912 20,117,401
NON-CURRENT LIABILITIES:
Deferred Income Taxes 6,209,001 6,149,001
Long-Term Debt (Less Current Maturities) 36,062,512 25,862,512
Accrued Pension 3,304,257 3,342,458
Other Non-Current Liabilities 2,960,973 2,000,641
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Total Non-Current Liabilities 48,536,743 37,354,612
STOCKHOLDERS' EQUITY:
Common Shares, $2.50 par value: 14,183,493 14,183,493
Authorized 12,000,000 shares in 1998 and
1997. Issued 5,673,397 shares in 1998
and 1997
Additional Paid-In Capital 1,528,620 1,526,192
Retained Earnings 23,430,887 21,377,489
Treasury Shares (826,216 in 1998
and 845,016 in 1997), at Cost (4,734,643) (4,841,221)
Underfunded Pension Liability Adjustment (154,535) (154,535)
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Total Stockholders' Equity 34,253,822 32,091,418
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $102,764,477 $89,563,431
============ ===========
</TABLE>
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<TABLE>
LINDBERG CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
INCREASE (DECREASE) IN CASH March 31,
---------------------------
1998 1997
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<S> <C> <C>
Cash Flows from Operating Activities:
Net Earnings $ 2,439,917 $ 1,104,882
Adjustments to Reconcile Net Earnings
to Net Cash Provided by Operating Activities:
Depreciation 1,309,901 948,201
Goodwill Amortization 160,686 2,500
Increase in Deferred Taxes 60,000 60,000
Change in Assets and Liabilities 1,248,609 (663,413)
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Total Adjustments to Reconcile Net
Earnings to Net Cash Provided by
Operating Activities 2,779,196 347,288
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Net Cash Provided by Operating Activities 5,219,113 1,452,170
Cash Flows from Investing Activities:
Capital Expenditures (2,315,837) (1,154,370)
Investment in Acquisitions, Net
of Cash Received (10,613,703) --
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Net Cash Used in Investing Activities (12,929,540) (1,154,370)
Cash Flows from Financing Activities:
Net Borrowings Under Revolving Credit Agreement 10,200,000 300,000
Notes Payable for Purchase of Ticorm (1,900,000) --
Notes Payable for Purchase of Alumatherm 60,000 --
Dividends Paid (386,518) (382,491)
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Net Cash Provided by (Used in)
Financing Activities 7,973,482 (82,491)
Net Increase in Cash 263,055 215,309
Cash at Beginning of Period 283,270 36,228
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Cash at End of Period $ 546,325 $ 251,537
============ ===========
Supplemental Disclosures of Cash Flow Information:
Interest Paid $ 562,537 $ 209,082
Income Taxes Paid - Net of Refunds 232,984 99,938
</TABLE>
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LINDBERG CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS:
NOTE 1 The condensed consolidated financial statements included
herein have been prepared by the Company, without audit,
pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the
disclosures are adequate to make the information presented not
misleading. It is suggested that these condensed financial
statements be read in conjunction with the financial
statements and the notes thereto included in the Company's
latest annual report on Form 10-K.
Statements for the three month periods ended March 31, 1998
and March 31, 1997 reflect, in the opinion of the Company, all
adjustments (consisting only of normal recurring accruals)
necessary to present fairly the results of these periods.
Results for interim periods are not necessarily indicative of
results for a full year.
NOTE 2 Effective January 1, 1998, the Company adopted SFAS 130,
"Reporting Comprehensive Income." For the first quarters of
1998 and 1997, there was no difference between net earnings as
reported and comprehensive income as per SFAS 130.
NOTE 3 On January 16, 1998, the Company acquired all of the
outstanding shares of both Industrial Steel Treating Company
("Industrial") and Fabriform Metal Brazing, Inc.
("Fabriform"), related heat treating companies in the Los
Angeles area, for $11.6 million. The acquisitions were funded
with borrowings under the revolving credit agreement.
The preliminary allocation of the purchase price of Industrial
and Fabriform included in the Company's financial statements
for the quarter is as follows: (in thousands)
<TABLE>
<S> <C>
Property and Equipment $ 1,952
Accounts Receivable 2,018
Cash 1,032
Other Assets 199
Goodwill 8,323
Accounts Payable (166)
Other Liabilities (1,713)
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$ 11,645
</TABLE>
The cost of the acquisitions has been allocated to the assets
and liabilities based on their estimated fair market value.
Goodwill is amortized using the straight line method over 30 years.
The purchase agreement with Industrial and Fabriform was
effective as of January 1, 1998. Therefore, the results of
Industrial and Fabriform are included for the entire first
quarter of 1998.
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The following table presents pro forma information for the
first quarter of 1997 of the combined entities of Lindberg
Corporation, Industrial and Fabriform, and Alumatherm Heat
Treating Company, the later which the Company purchased the
remaining 50% interest from its partner on October 1, 1997.
The pro forma information assumes the acquisitions had taken
place at the beginning of the period presented (in thousands,
except per share data).
<TABLE>
First
Quarter
Unaudited 1997
---------------------------------------------
<S> <C>
Net Sales $ 26,186
Earnings from Continuing Operations 1,687
Net Earnings 1,481
Per Diluted Share:
Earnings from Continuing Operations .34
Net Earnings .30
</TABLE>
Adjustments to the statement of earnings include additional
depreciation and interest charges, goodwill amortization,
adjustments of certain other expenses and income tax effects.
The pro forma information is provided for illustrative
purposes only and is not necessarily reflective of the future
results of the Company or results of operations that would
have actually occurred had the transaction been in effect for
the period presented.
NOTE 4 On February 10, 1998, the Company's revolving credit agreement
("Agreement") with its banks was amended to increase the
facility by $10 million to $45 million and to adjust certain
loan covenants. Additionally, the amendment extended the
maturity date of the Agreement to April 2000.
NOTE 5 No material changes have occurred with respect to the
Company's contingent liabilities outlined in the Company's
1997 Form 10-K through the date of this report. However, the
Company did assume a liability for environmental remediation
which was estimated to be $1.2 million as of March 31, 1998 in
its acquisition of Industrial and Fabriform.
NOTE 6 Subsequent to the end of the first quarter, on April 16, 1998,
the Company acquired all of the outstanding common stock of
Houston Heat Treating Company ("HHT") for $11.5 million in
cash. The acquisition was funded with additional borrowings
under the Company's revolving credit agreement, net of
$800,000 received on the closing date from HHT. HHT is a heat
treating facility located in Houston, Texas, specializing in
processing for the oil field equipment market.
NOTE 7 On April 22, 1998, the Company sold its Impact Industries
("Impact") subsidiary, one of the three divisions included in its
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discontinued Precision Products segment, for cash and a note.
The Company is continuing to pursue the sale of the remaining
two Precision Products divisions and expects to complete
divestiture of the segment by year-end 1998, as originally
scheduled.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION:
At March 31, 1998, the Company's total debt was $44.5
million, an increase of $8.4 million from $36.2 million
outstanding as of December 31, 1997. The Company's total
debt to capitalization ratio was 57% at the close of the
first quarter in 1998 versus 53% at the end of the prior
quarter.
The level of debt increased in the quarter primarily as a
result of the acquisition of all of the common stock of
Industrial Steel Treating Company and Fabriform Metal
Brazing,Inc. ("Industrial") on January 16, 1998 for a
purchase price, net of cash received, of $10.6 million. This
transaction was funded with additional borrowings under the
Company's revolving credit agreement. The cash effect of the
purchase of Industrial was offset to a degree by cash
generated through operations during the quarter, which was
used to repay debt.
Effective February 10,1998, the Company's revolving credit
agreement with two banks was amended to increase the total
borrowing facility from $35 million to $45 million and to
adjust certain loan covenants. At March 31, 1998, the
Company had $17 million of available capacity under its
amended revolving credit agreement.
Capital expenditures for the first three months of 1998 were
$2.3 million, an increase from the $1.2 million recorded in
the same period of 1997. The spending in 1998 related
primarily to the acquisition of additional furnaces and
equipment for expansion at certain heat treating divisions
and for equipment under the Company's Strategic Partnership
2000 program.
On January 31, 1998, the Board of Directors declared a cash
dividend of $.08 on each share of the Company's common stock,
payable on March 1, 1998. The total cash dividends paid on
the latter date were $387,000. This compared to a dividend
payout of $.08 per share of common stock, or $382,000, in the
same quarter of 1997.
The Company believes that its borrowing capacity and funds
generated through operations will be sufficient to meet
currently foreseen capital investment and working capital
needs in support of existing businesses for the balance of
1998 and in the longer term.
OF RESULTS OF OPERATIONS:
Quarter ended March 31, 1998 and 1997
Sales for the quarter ended March 31, 1998 were $30.9
million, up $10.2 million, or 50%, from $20.6 million for the
same three month period in 1997. These results are for the
Company's continuing heat treating operations, and do not
reflect revenues from the Precision Products business segment
which has been reported as discontinued operations as of the fourth
quarter of 1997.
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About 81% of the year-to-year increase in sales resulted from
the Company's acquisition of Ticorm (July 1997), the
remaining 50% of the Alumatherm Heat Treating Company
partnership (October 1997) and Industrial. Excluding the
effect of those recent acquisitions, the Company's remaining
operations reported increased revenues of 9% overall.
Facilities serving aerospace markets experienced strong order
rates in the first quarter of 1998, making a significant
contribution to the total sales increase.
The Company's gross profit percentage in the first quarter of
1998 was 31.1% in comparison to 26.5% in the same period of
1997. The improved percentage resulted as sales growth
exceeded the increase in expenses due to the fixed nature of
certain of the Company's operating costs, and also the effect
of the recent acquisitions.
Selling and administrative expenses increased to $4.7 million
for the first three months of 1998 in comparison to $3.2
million in the first quarter of 1997. The increase resulted
largely from expenses associated with acquired companies.
Selling and administrative expenses as a percentage of sales
were 15.3% for the 1998 period, the same as for the first
three months of 1997.
Interest expense more than doubled to $776,000 in 1998 from
$371,000 in the first quarter of 1997. This resulted from
the increased level of borrowing for the Company's recent
acquisitions. Borrowing rates were largely unchanged.
Reflecting the above, net earnings from continuing operations
in the first quarter of 1998 of $2.4 million, or $.48 per
diluted share, increased from $1.3 million, or $.27 per
diluted share, for the same three month period of 1997.
As required by Accounting Principles Board Opinion No. 30,
results of discontinued operations for the first quarter of
1998 were included in the reserve for loss on discontinued
operations provided for previously. Discontinued operations
reported a net loss of $206,000, or $.04 per diluted share,
in the first quarter of 1997. Therefore, the Company
reported net earnings of $1.1 million, or $.23 per share, for
that period.
SUBSEQUENT EVENTS:
On April 16, 1998, the Company acquired 100% of the common
stock of Houston Heat Treating Company. The purchase price
for the acquisition, net of cash received, was $10.7 million.
The purchase price was funded with additional borrowings
under the Company's revolving credit agreement.
On April 22, 1998, the Company sold the operating assets of
Impact Industries, Inc., one of three divisions in its
Precision Products business segment. The Company received
$4.6 million and a note receivable of $2 million from the
buyer on the closing date of the transaction. The Company
retained and is collecting approximately $4 million in trade
accounts receivable and is leasing land and a building to the
buyer which assumed the liability for trade accounts payable
and certain accrued
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expenses. Cash received from the sale was used to pay down
debt under the Company's revolving credit agreement.
"Safe Harbor" Statement: Statements contained herein that
are not based on historical facts are forward-looking
statements subject to uncertainties and risks including, but
not limited to, product and service demand and acceptance;
economic conditions; the impact of competition and pricing;
capacity and supply constraints or difficulties; results of
financing and acquisition efforts; regulatory and other legal
issues; and other risks detailed in the Company's other
Securities Exchange Commission filings.
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PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits Required by Item 601 of Regulation S-K - Exhibits
required by Item 601 of Regulation S-K are listed in the
Exhibit Index which is attached hereto at page 14 and which
is incorporated herein by reference.
(b) Reports on Form 8-K - The following Form 8-K was filed
during the quarter ended March 31, 1998:
The acquisition, on January 16, 1998, of Industrial Steel Treating
Company and Fabriform Metal Brazing, Inc. was reported under Item 2 of
Form 8-K. Both of the acquired companies, located in the Los Angeles
area, are engaged in the heat treating business and specialize in the
aerospace market.
In accordance with Form 8-K requirements, no financial statements were
filed with this Form 8-K.
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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.
LINDBERG CORPORATION
Principal Financial and Accounting By __________________________
Officer: Stephen S. Penley
Senior Vice President
and Chief Financial Officer
Dated: May 13, 1998
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LINDBERG CORPORATION
Quarterly Report on Form 10-Q
for the Quarter Ended March 31, 1998
Exhibit Index
<TABLE>
Number and Description of Exhibit
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<S> <C>
3. Articles of Incorporation and By-Laws
3.1 Certificate of Incorporation (composite) Attached
3.2 1998 Amendment to Certificate of
Incorporation Attached
11. Statement re computation of per share earnings Attached
27. Financial Data Schedule Attached
</TABLE>
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Exhibit 3.1
Conformed to show
amendments through
April 24, 1998
COMPOSITE
CERTIFICATE OF INCORPORATION
OF
LINDBERG CORPORATION
FIRST. The name of the corporation is
LINDBERG CORPORATION
SECOND. The address of its registered office in the State of
Delaware is No. 100 West Tenth Street, in the City of Wilmington, County
of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
THIRD. The nature of the business or purposes to be conducted or
promoted is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of
Delaware.
FOURTH. The total number of shares of all classes of stock which
the corporation shall have authority to issue is 26,000,000, of which
25,000,000 shall be shares of common stock, $0.01 par value, and
1,000,000 of which shall be shares of preferred stock, $0.01 par value.
The corporation may issue preferred stock from time to time in one or
more series as the board of directors of the corporation may establish
by the adoption of a resolution or resolutions relating thereto, each
series to have such voting powers, full or limited, or no voting powers,
and 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 of such series adopted by the board
of directors pursuant to the authority granted hereby.
FIFTH. The name and mailing address of the incorporator is as
follows:
<TABLE>
Name Mailing Address
---- ---------------
<S> <C>
John H. Bitner................135 South LaSalle Street,
Chicago, Illinois 60603
SIXTH. The original by-laws of the corporation shall be adopted by
the incorporator. Thereafter, in furtherance and not in limitation of
the powers conferred by statute, the board of directors is expressly
authorized to make, alter or repeal the by-laws of the corporation
(subject to the terms of Article Tenth).
SEVENTH. Meetings of stockholders may be held within or without
the State of Delaware, as the by-laws may provide. The books of the
corporation may be kept (subject to any provision contained in the
statutes) outside the State of Delaware at such place or places as may
be
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designated from time to time by the board of directors or in the by-
laws of the corporation. Elections of directors need not be by written
ballot unless the by-laws of the corporation shall so provide.
EIGHTH. (a) Any person (and the heirs, executors, administrators
and estates of any such persons) who at any time shall serve, or shall
have served, as a director or officer of the corporation or of any other
enterprise at the request of the corporation, shall be indemnified by
the corporation in accordance with and to the fullest extent authorized
by the General Corporation Law of Delaware as it may exist from time to
time, except as to any action, suit or proceeding brought by or on
behalf of such director or officer without the prior approval of the
board of directors. Any person (and the heirs, executors,
administrators and estates of such persons) who at any time shall serve,
or shall have served, as an employee or an agent of the corporation, or
of any other enterprise at the request of the corporation, may be
similarly indemnified at the discretion of the board of directors of the
corporation.
(b) 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 to the extent provided by
applicable law (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) pursuant to Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director
derived an improper personal benefit.
(c) Neither the amendment nor repeal of this Article Eighth,
nor the adoption of any provision of the certificate of incorporation
inconsistent with this Article Eighth, shall eliminate or reduce the
effect of this Article in respect of any matter occurring or any cause
of action, suit or claim that, but for this Article would accrue or
arise, prior to such amendment, repeal or adoption of an inconsistent
provision.
NINTH. The corporation reserves the right (subject to the terms of
Article Thirteenth) to amend, alter, change or repeal any provision
contained in this certificate of incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
TENTH. The number of directors which shall constitute the whole
board of directors of the corporation shall be the number from time to
time fixed by the by-laws of the corporation, and such number of
directors so fixed in such by-laws may be changed only by receiving the
affirmative vote of (i) the holders of at least two-thirds of all the
securities of the corporation then entitled to vote on such change, or
(ii) two-thirds of the directors in office at the time of vote. At the
time of the corporation's annual meeting of stockholders in 1976, the
board of directors shall be divided into three classes: class I, class
II, and class III. Such classes shall be as nearly equal in number as
possible. The term of office of the initial class I directors shall
expire at the annual meeting of the stockholders in 1977; the term of
office of the initial class II directors shall expire at the annual
meeting of stockholders in 1978; and the term of office of the initial
class III directors shall expire at the annual meeting of stockholders
in 1979, or thereafter in each case when their respective successors are
elected and qualified. (In the event the proposed merger of
2
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this
corporation with Lindberg Corporation, an Illinois corporation, shall
not be effective prior to the election of directors at the 1976 annual
meeting of shareholders, the foregoing references to years shall be
advanced by one; e.g., 1976 shall be deemed to read 1977, etc.). At
each annual election held thereafter, the directors chosen to succeed
those whose terms have expired shall be identified as being of the same
class as the directors whom they succeed and shall be elected for a term
expiring at the third succeeding annual meeting of stockholders or
thereafter in each case when their respective successors are elected and
qualified. When the number of directors is changed any increase or
decrease in the number of directorships shall be apportioned among the
classes so as to make all classes as nearly equal in number as possible.
ELEVENTH. (a) For the purposes of this Article Eleventh: (i) the
term "Person" shall include any individual, corporation, partnership,
trust, unincorporated organization or other entity, any syndicate or
group or any two or more of the foregoing that have any agreement or
understanding (or, with or without an agreement or understanding, act in
concert) with respect to acquiring, holding, voting or disposing of
securities of the corporation, and shall include also any "affiliate" or
"associate" (as those terms are defined in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934 as in
effect on January 1, 1976) of any Person; (ii) any Person shall be
deemed to be the beneficial owner of any securities of the corporation
which such Person has the right to acquire pursuant to any agreement, or
upon exercise of conversion rights, warrants or options, or otherwise;
(iii) the term "Substantial Part" shall mean any assets having a then
fair market value, in the aggregate, of more than $5,000,000; (iv) the
term "Subsidiary" shall mean any corporation in which the corporation
owns, directly or indirectly, more than 50% of the voting securities;
(v) the term "Substantial Amount" shall mean any securities of the
corporation having a then fair market value of more than $5,000,000;
(vi) the outstanding securities of any class of the corporation shall
include securities deemed owned through application of the preceding
clauses of this paragraph (a) of this Article Eleventh, but shall not
include any other securities which may be issuable pursuant to any
agreement or upon exercise of conversion rights, warrants or options, or
otherwise; and (vii) a "Required Vote" shall mean the affirmative vote
of the holders of at least two-thirds of all of the securities of the
corporation then entitled to vote at a meeting of stockholders,
considered for the purposes of this Article Eleventh as one class.
(b) Except as set forth in paragraph (d) of this Article Eleventh,
a Required Vote shall be necessary (i) for the adoption of any agreement
for the merger or consolidation of the corporation with or into any
other Person, or (ii) to authorize any sale, lease, exchange, mortgage,
pledge or other disposition of all, or substantially all, or any
Substantially Part of the assets of the corporation or any Subsidiary to
any other Person, or (iii) to authorize the issuance or transfer by the
corporation of any Substantial Amount of securities of the corporation
in exchange for the securities or assets of any other Person, if, in any
such case, as of the record date for the determination of security
holders entitled to notice thereof and to vote thereon, such other
Person is the beneficial owner, directly or indirectly, of more than 10%
of the outstanding securities of the corporation then entitled to vote
at a meeting of stockholders, considered for the purposes of this
Article Eleventh as one class. The Required Vote shall be in lieu of
any lesser vote of the holders of the voting securities of the
corporation voting as one class otherwise required by law or by
agreement, but shall be in addition to any class vote or other vote
otherwise required by
3
<PAGE> 4
law, this certificate of incorporation or any agreement or contract
to which the corporation is a party.
(c) The board of directors of the corporation shall have the power
and duty to determine for the purposes of this Article Eleventh, on the
basis of information known to the corporation, whether this Article
Eleventh applies to any transaction, including but not limited to
whether (i) such transaction involves a Substantial Part of the assets
of the corporation and its subsidiaries, (ii) one or more Persons are to
be deemed to be a single Person, (iii) a Person is an "affiliate" or
"associate" (as defined above) of another, (iv) any Person beneficially
owns more than 10% of the outstanding securities of the corporation then
entitled to vote at a meeting of stockholders, (v) a Person has an
agreement or understanding, or is acting in concert, with respect to
acquiring, holding, voting or disposing of securities of the
corporation, and (vi) the memorandum of understanding referred to in
Paragraph (d) of this Article Eleventh is substantially consistent with
the transaction covered thereby. Determinations of the board of
directors of the corporation shall be conclusive and binding for all
purposes of this Article Eleventh.
(d) The provisions of this Article Eleventh shall not be
applicable to (i) any agreement or transaction referred to in paragraph
(b) of this Article Eleventh, if the board of directors of the
corporation shall by resolution have approved a memorandum of
understanding with the other Person who is a party to such agreement or
transaction with respect to, and substantially consistent with, such
transaction and such resolution shall have been approved either (A) by
the board of directors, prior to the time that such Person shall have
become a holder of more than 10% of the outstanding securities of the
corporation then entitled to vote at a meeting of stockholders, or (B)
by sufficient members of the board of directors who were directors prior
to the time that such Person shall have become a holder of more than
10% of the outstanding securities of the corporation then entitled to
vote at a meeting of stockholders, to constitute a majority of the total
number of directorships (including vacant directorships), or (ii) any
merger or consolidation of the corporation with or into any Person, or
any sale, lease or exchange of any of the assets of any Person to, or
with the corporation or any subsidiary thereof if a majority of the
outstanding shares of all classes of stock then entitled to vote at a
meeting of stockholders of such Person is owned by the corporation and
its Subsidiaries.
TWELFTH. The corporation may voluntarily liquidate and dissolve
only if the proposed liquidation and dissolution is approved by the
affirmative vote of the holders of at least two-thirds of all of the
securities of the corporation then entitled to vote at a meeting of
stockholders, considered for the purposes of this Article Twelfth as one
class.
THIRTEENTH. The corporation reserves the right to amend, alter,
change or repeal any provision contained in this certificate of
incorporation, in any manner now or hereafter permitted or prescribed by
statute; provided that no amendment to this certificate of incorporation
shall amend, alter, change or repeal any of the provisions of Article
Tenth, Article Eleventh, Article Twelfth or this Article Thirteenth,
unless the amendment effectuating such amendment, alteration, change or
repeal shall have received the affirmative vote of the holders of at
least two-thirds of all the securities of the corporation then entitled
to vote on such amendment, alteration, change or repeal, considered as
one class. Such two-thirds affirmative vote shall be in addition to any
vote
4
<PAGE> 5
of the holders of securities of the corporation otherwise required
by law, this certificate of incorporation or any agreement or contract
to which the corporation is a party.
5
</TABLE>
<PAGE> 1
Exhibit 3.2
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LINDBERG CORPORATION
LINDBERG CORPORATION, a corporation organized and existing under
and by virtue of the Delaware General Corporation Law (the
"corporation"),
DOES HEREBY CERTIFY:
FIRST: That the board of directors of the corporation, at a
meeting duly held, adopted a resolution proposing and declaring
advisable the following amendment to the Certificate of Incorporation of
the corporation:
The corporation's Certificate of Incorporation shall
be amended by changing Article FOURTH thereof so
that, as amended, said Article shall be and read as
follows:
FOURTH. The total number of shares of all
classes of stock which the corporation shall have
authority to issue is 26,000,000, of which
25,000,000 shall be shares of common stock, $0.01
par value, and 1,000,000 of which shall be shares of
preferred stock, $0.01 par value. The corporation
may issue preferred stock from time to time in one
or more series as the board of directors of the
corporation may establish by the adoption of a
resolution or resolutions relating thereto, each
series to have such voting powers, full or limited,
or no voting powers, and 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 of such series
adopted by the board of directors pursuant to the
authority granted hereby.
SECOND: That, at the duly called and held annual meeting of the
stockholders of the corporation, the necessary number of shares required
by statute were voted in favor of the amendment.
THIRD: That the aforesaid amendment was duly adopted in
accordance with the applicable provisions of Section 242 of the Delaware
General Corporation Law.
<PAGE> 2
IN WITNESS WHEREOF, the corporation has caused this certificate to
be signed by Stephen S. Penley, its Secretary, this 24th day of April,
1998.
LINDBERG CORPORATION
By:________________
Stephen S. Penley
Secretary
2
<PAGE> 1
Exhibit 11
COMPUTATION OF NET EARNINGS PER COMMON SHARE
<TABLE>
Three Months Ended
March 31,
--------------------------
1998 1997
---------- ----------
<S> <C> <C>
EARNINGS
- --------
Earnings from Continuing Operations $2,439,917 $1,310,990
Loss from Discontinued Operations -- (206,108)
---------- ----------
Net Earnings $2,439,917 $1,104,882
========== ==========
SHARES
- ------
Weighted Average Number of
Common Shares Outstanding 4,835,884 4,788,858
(See Note)
Additional Shares Assuming
Conversion of Stock Options 206,109 79,827
--------- ---------
Weighted Average Common Shares
Outstanding and Equivalents 5,041,993 4,868,685
========= =========
Basic Earnings Per Share:
Earnings from Continuing Operations $ .50 $ .27
Loss from Discontinued Operations -- (.04)
--------- ---------
Net Earnings $ .50 $ .23
Diluted Earnings Per Share:
Earnings from Continuing Operations $ .48 $ .27
Loss from Discontinued Operations -- (.04)
--------- ---------
Net Earnings $ .48 $ .23
========= =========
Note: All activity during the year has been adjusted for the number of days
in the year that the shares were outstanding.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 546,325
<SECURITIES> 0
<RECEIVABLES> 18,894,122
<ALLOWANCES> 499,168
<INVENTORY> 0
<CURRENT-ASSETS> 38,358,809
<PP&E> 95,849,749
<DEPRECIATION> 53,801,229
<TOTAL-ASSETS> 102,764,477
<CURRENT-LIABILITIES> 19,973,912
<BONDS> 0
0
0
<COMMON> 14,183,493
<OTHER-SE> 1,528,620
<TOTAL-LIABILITY-AND-EQUITY> 102,764,477
<SALES> 30,872,196
<TOTAL-REVENUES> 30,872,196
<CGS> 21,272,434
<TOTAL-COSTS> 21,272,434
<OTHER-EXPENSES> 4,723,832
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 775,526
<INCOME-PRETAX> 4,100,404
<INCOME-TAX> 1,660,487
<INCOME-CONTINUING> 2,439,917
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,439,917
<EPS-PRIMARY> 0.50
<EPS-DILUTED> 0.48
</TABLE>
