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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 13, 1998
Connectivity Technologies Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-12113 94-2691724
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
667 Madison Avenue, New York, New York 10021
(Address of principal executive offices) (zip code)
Registrant's Telephone Number, including area code: (212) 644-8880
N/A
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On February 13, 1998, Connectivity Technologies Inc., a Delaware
corporation (the "Company"), issued a news release indicating that it
anticipated additional charges to its earnings attributable to accounts
receivable adjustments and also estimated an inventory write-down for the
year ended December 31, 1997. A copy of the Company's news release dated
February 13, 1998 is attached to this Report as Exhibit 99.1 and is incorporated
herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of business acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
99.1 News Release of the Company dated February 13, 1998.
Safe Harbor Statements Under the Private Securities Litigation Reform
Act of 1995.
This Report contains, in addition to historical information,
forward-looking statements including but not limited to the amount of
anticipated receivables adjustments and inventory write-downs. Forward looking
statements are subject by their nature, to risks and uncertainties, actual
results could differ materially from those set forth in the forward-looking
statements. Typical risks and uncertainties include, but are not limited to,
those related to conversations between the Company and its lenders and the
results thereof, economic conditions, changes in competition, fluctuation in
interest rates, and other factors described from time to time in the Company's
reports filed with the Securities and Exchange Commission, including the
Company's Form 10-KSB for the year ended December 31, 1996 and subsequent
reports on Form 10-QSB and Form 8-K. Any forward looking statements are made
pursuant to the Private Securities Litigation Reform Act of 1995 and, as such,
speak only as of the date made. The Company is not undertaking to update any
information in the foregoing report until the effective date of its future
reports required by the securities laws.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
CONNECTIVITY TECHNOLOGIES INC.
(Registrant)
Dated: February 13, 1998 By: /s/ James Hopkins
------------------
Name: James Hopkins
Title: President and Chief
Executive Officer
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EXHIBIT 99.1
CONNECTIVITY TECHNOLOGIES INC.
667 Madison Avenue
NEW YORK, NEW YORK 10021
NEWS RELEASE
FOR IMMEDIATE RELEASE CONTACT:
Friday, February 13, 1998 Donald R. Dwight
(603) 795-2800
CONNECTIVITY TECHNOLOGIES
ANNOUNCES CHARGE TO EARNINGS
New York, N.Y. -- February 13 -- Connectivity Technologies Inc.
(OTC:BB:CVTK) today announced that the charge to earnings attributable to
accounts receivable adjustments anticipated in the company's December 17 8-K at
between $300,000 and $400,000, is now expected to be approximately $470,000. The
December 17 8-K also anticipated a possible inventory write-down which is now
estimated at between $1.3 and $1.7 million. Company officials stated that the
estimates are subject to year-end audit adjustments in the audit currently
underway.
As to the inventory write-down, the company estimates that factors
related to the sharp drop in worldwide copper prices and the manner in which
inventory has been accounted for will result in the inventory write-down. The
$1.3 to $1.7 million estimate is subject to adjustments, determination of
applicable quarters affected and to continuing review and analysis of the
inventory assets.
Since these adjustments are expected to result in non-compliance with
the financial covenants of the company's credit agreement with its principal
lenders, the company has initiated discussions with its
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lenders with the objective of obtaining clarification of the lenders' views,
obtaining waivers of non-compliance if necessary, and amending the credit
agreements to enable the company to be or remain in compliance with the
covenants in future periods. The discussions with the lenders are currently
ongoing and amicable and the company believes, although it cannot guarantee,
that, during the negotiations, the lenders will not demand payment, declare a
default or exercise any other remedies and will continue to fund, within
available limits, the company's working capital requirements. If the lenders
were to declare a default and insist on immediate payment, the lenders would be
entitled to require payment of the entire indebtedness (currently $12.9
million), to refuse further advances and to exercise various rights against the
company and its assets. If such occurs and the company were unable to obtain
substitute financing, the lack of appropriate liquidity could have a material
adverse effect on the company's results of operations and its ability to
continue as a going concern.
Connectivity Technologies, through its 85 percent interest in
Connectivity Products, Inc., manufactures and assembles wire and cable products.
Manufacturing is conducted by BSCC Corp. in Leominister, Mass., and assembly
activities are housed at the Energy Electric Assembly division in Detroit. The
major industrial markets served by the company are commercial and residential
security, factory automation, traffic and transit signal control and audio
systems.
SAFE HARBOR STATEMENTS UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995
This release contains, in addition to historical information,
forward-looking statements, including, but not limited to, the amount of
anticipated receivables adjustments and inventory write-downs. Forward-looking
statements are subject by their nature to risks and uncertainties, and actual
results could
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differ materially from those set forth in the forward-looking statements.
Typical risks and uncertainties include, but are not limited to, those related
to conversations between the company and its lenders and the results thereof,
economic conditions, changes in competition, fluctuation in interest rates, and
other factors described from time to time in the company's reports filed with
the Securities and Exchange Commission, including the company's Form 10-KSB for
the year ended December 31, 1996 and subsequent reports on Form 10-QSB and Form
8-K. Any forward-looking statements are made pursuant to the Private Securities
Litigation Reform Act of 1995 and, as such, speak only as of the date made. The
company is not undertaking to update any information in the foregoing reports
until the effective date of its future reports required by the securities laws.
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