<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended JUNE 4, 1995.
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________________ to ____________________.
Commission File Number 1-8700
M E A S U R E X C O R P O R A T I O N
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
------------------------------------------------------
DELAWARE 94-1658697
---------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE RESULTS WAY, CUPERTINO, CALIFORNIA 95014
-------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (408) 255-1500
NOT APPLICABLE
-------------------------------------------------------------------------------
(Former name, former address & former fiscal year, if changed since last report)
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 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.
Common stock outstanding at July 9, 1995: 15,408,997
(1) Excludes common stock held in treasury.
This document contains 15 pages, with the Exhibit Index located on pages
10 to 12.
1
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
MEASUREX CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(Dollar amounts in thousands except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------- --------------------------
June 4, May 29, June 4, May 29,
1995 1994 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Systems $48,814 $36,482 $ 95,616 $ 74,100
Service and other 28,173 26,096 54,806 50,123
------- ------- -------- --------
Total Revenues 76,987 62,578 150,422 124,223
------- ------- -------- --------
Operating costs and expenses:
Systems 29,318 23,264 59,397 47,220
Service and other 17,486 16,333 34,651 31,358
Product development 4,537 4,865 9,307 9,944
Selling and administrative 18,654 15,776 35,894 31,205
------- ------- -------- --------
Total operating costs and expenses 69,995 60,238 139,249 119,727
------- ------- -------- --------
Earnings from operations 6,992 2,340 11,173 4,496
Other income (expense):
Interest expense (524) (330) (1,311) (666)
Interest income and other, net 1,524 1,125 3,325 2,671
------- ------- -------- --------
Total other income, net 1,000 795 2,014 2,005
------- ------- -------- --------
Income before income taxes and
cumulative effect of accounting change 7,992 3,135 13,187 6,501
Provision for income taxes 2,768 1,357 4,482 2,535
------- ------- -------- --------
Income before cumulative effect of
accounting change 5,224 1,778 8,705 3,966
Cumulative effect of accounting change - - - 524
------- ------- -------- --------
Net income $ 5,224 $ 1,778 $ 8,705 $ 4,490
======= ======= ======== ========
Net income per share:
Income before cumulative effect
of accounting change $ .30 $ .10 $ .50 $ .22
Cumulative effect of accounting change - - - .03
------- ------- -------- --------
Net income per share $ .30 $ .10 $ .50 $ .25
======= ======= ======== ========
Dividends per share $ .11 $ .11 $ .22 $ .22
======= ======= ======== ========
Average number of common and
common equivalent shares (in thousands) 17,299 18,040 17,315 18,095
======= ======= ======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated condensed
financial statements.
2
<PAGE>
MEASUREX CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
June 4, November 27,
1995 1994
- ----------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 64,321 $ 82,254
Short-term investments 6,271 27,030
Accounts receivable 76,503 61,583
Inventories 30,612 24,685
Prepaid expenses and other 12,350 11,957
-------- --------
Total current assets 190,057 207,509
-------- --------
Contracts receivable 36,365 32,139
Service parts, net 12,554 12,286
Property, plant and equipment, net 49,393 49,655
Other assets 20,531 18,234
-------- --------
Total assets $308,900 $319,823
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 4,040 $ 4,387
Short-term debt 358 4,063
Accounts payable 7,572 5,989
Accrued expenses 75,735 65,686
Income taxes payable 5,776 3,848
-------- --------
Total current liabilities 93,481 83,973
-------- --------
Long-term debt 21,444 12,167
Deferred income taxes 5,972 6,500
-------- --------
Total liabilities 120,897 102,640
-------- --------
Shareholders' Equity 188,003 217,183
-------- --------
Total liabilities and shareholders' equity $308,900 $319,823
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated condensed
financial statements.
3
<PAGE>
MEASUREX CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
Six Months Ended
-----------------------------
June 4, May 29,
1995 1994
- -------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 8,705 $ 4,490
Non-cash items included in net income:
Depreciation and amortization:
Service parts 896 873
Property, plant and equipment 4,454 4,712
Capitalized software and goodwill 2,465 2,155
Deferred income taxes (656) (1,923)
Translation loss (gain) (208) (585)
Inventory reserves 577 645
Net decrease (increase) in:
Accounts and contracts receivable (16,377) 440
Inventories and service parts (6,990) (1,167)
Prepaid and other (183) 482
Net increase (decrease) in:
Accounts payable and accrued expenses 9,650 (4,326)
Income taxes payable 1,918 (1,478)
Other, net (82) 837
-------- --------
Net cash provided by operating activities 4,169 5,155
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of held-to-maturity securities (2,000) (51,928)
Sale of available-for-sale securities 11,255 21,203
Maturities of held-to-maturity securities 11,450 29,049
Acquisition of property, plant and equipment (3,675) (3,347)
Acquisition of technology (3,380) -
Capitalized software (800) (1,591)
-------- --------
Net cash provided by (used in) investing
activities 12,850 (6,614)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of short-term debt (3,705) -
Additions to long-term debt 17,779 -
Payment of long-term debt (10,258) (2,576)
Dividends (3,578) (3,936)
Stock issued under employee stock purchase
and stock option plans 8,154 1,359
Payment for treasury stock (43,578) -
-------- --------
Net cash used in financing activities (35,186) (5,153)
-------- --------
Effect of exchange rate fluctuations on
cash and cash equivalents 234 349
-------- --------
Net decrease in cash and cash equivalents (17,933) (6,263)
Cash and cash equivalents at beginning of period 82,254 76,040
-------- --------
Cash and cash equivalents at end of period $ 64,321 $ 69,777
======== ========
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING
AND FINANCING ACTIVITIES
Note exchanged for intangible assets $ 700 $ -
</TABLE>
The accompanying notes are an integral part of the consolidated condensed
financial statements.
4
<PAGE>
MEASUREX CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
_____________________________________
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated condensed financial statements have been prepared
in accordance with SEC requirements for interim financial statements. They,
therefore, do not include all the disclosures which are presented in the
Measurex Corporation ("the Company") Annual Report on Form 10-K. It is
suggested that the financial statements be read in conjunction with the
Consolidated Financial Statements and notes thereto included in the Company's
Annual Report on Form 10-K.
The information furnished reflects all adjustments (consisting only of normal
recurring adjustments) which are, in the opinion of management, necessary for
the fair statement of financial position, results of operations and cash flows
for the interim period. The year-end condensed balance sheet data was derived
from audited financial statements, but does not include all disclosures required
by generally accepted accounting principles. The results of operations for the
periods presented are not necessarily indicative of results to be expected for
the full year.
Consolidation
The consolidated condensed financial statements include the accounts of all
subsidiaries after elimination of intercompany balances and transactions.
Net Income per Share
Net income per share is computed based on the weighted average number of common
shares outstanding during the period adjusted to reflect the assumed exercise of
outstanding stock options to the extent these had a dilutive effect on the
computation.
Fiscal Year
The Company uses a 52-53 week fiscal year. Fiscal 1995 is a 53 week year and
fiscal 1994 is a 52 week year. The extra week in 1995 is accounted for in the
first quarter.
5
<PAGE>
MEASUREX CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS, (Continued)
(June 4, 1995 - Unaudited)
_____________________________________
NOTE 2. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
(in thousands) June 4, November 27,
1995 1994
------- ------------
<S> <C> <C>
Purchased parts and components $12,673 $12,417
Work in process 11,558 7,724
Finished subassemblies and systems 6,381 4,544
------- -------
$30,612 $24,685
======= =======
</TABLE>
- -------------------------------------------------------------------------------
NOTE 3. LINES OF CREDIT AND DEBT
On June 4, 1995, the Company had two unsecured bank line of credit agreements
that provide for unsecured borrowings up to $70 million. The lines of credit
include a $20 million revolving credit agreement that provides for variable
interest rate borrowings based on the London Interbank Offer Rate (LIBOR) and a
$50 million multicurrency credit agreement with a group of banks providing
borrowings at variable interest rates including a base rate borrowing, an
offshore rate borrowing and local currency rate borrowing. The agreements expire
July 1996 and February 1998, respectively. There was $59 million available in
connection with these agreements at June 4, 1995, of which $8 million was
committed to letters of credit.
The Company also has a 5.35% five-year unsecured term loan agreement with a
bank. Interest is payable quarterly, with principal payable in equal quarterly
installments of $1.0 million through June 1998.
These agreements contain certain covenants regarding working capital,
indebtedness and tangible net worth. The Company was in compliance with all
covenants at June 4, 1995.
Long-term debt consists of the following:
<TABLE>
<CAPTION>
(In thousands) June 4, November 27,
1995 1994
------- ------------
<S> <C> <C>
Bank credit agreements $10,750 $ 4,063
Term loan 13,000 15,000
Other borrowing 1,734 1,554
------- -------
25,484 20,617
Less amount due within one year 4,040 8,450
------- -------
$21,444 $12,167
======= =======
</TABLE>
- --------------------------------------------------------------------------------
NOTE 4. COMMITMENTS AND CONTINGENCIES
The Company is subject to legal proceedings and claims that arise in the normal
course of its business. In the opinion of management, these proceedings will
not have a material adverse effect on the financial position and results of
operations of the Company.
________________________________________________________________________________
6
<PAGE>
MEASUREX CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS, (Continued)
(June 4, 1995 - Unaudited)
_____________________________________
NOTE 5. EXIT AND RESTRUCTURING COSTS
In the fourth quarter of 1994, the Company recorded a $6.4 million charge for
exit costs relating to a restructuring plan. This plan included establishment
of a cross-functional team organization for Cupertino and Ireland operations as
well as consolidation of some other facilities and organizations. Of the $6.4
million, $3.6 million has been utilized through June 4, 1995.
________________________________________________________________________________
NOTE 6. SUBSEQUENT EVENTS
On June 22, 1995, the Company bought back approximately 1.6 million shares of
its stock, held by Harnischfeger Industries, Inc. at the closing market price of
$32.50 per share. This repurchase, combined with the Company's repurchase of
approximately 2 million shares of its stock at $21.50 per share on December
29, 1994, reduced Harnischfeger's holdings of the Company's stock from 20% at
November 27, 1994 to zero. The Company utilized $25.4 million of cash and $27
million of additional debt for the June 1995 transaction.
On June 21, 1995, the Company amended its Credit Agreement with a group of banks
to increase the amount of the unsecured multi-year credit facility from $50
million to $75 million.
7
<PAGE>
MEASUREX CORPORATION
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
- --------------------------------------------------------------------------
OPERATIONS
- ----------
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
In the six months ended June 4, 1995, the Company generated $4.2 million of cash
from operating activities. $16.2 million generated by net income after
adjustments for non cash items was partially offset by increases in working
capital to support the higher revenue level. Receivables were impacted by a
high level of shipments in the final month of the quarter and several large
contracts with extended payment terms where cash collection will not occur until
later in the year.
Cash of $12.9 million was generated from investing activities. The company
sold its available-for-sale securities for $11.3 million and reduced its holding
in held-to-maturity securities by $11.5 million. During the first half of the
fiscal year, $3.7 million was spent in acquiring property, plant and equipment.
This is consistent with recent capital expenditure patterns. No major facilities
expansions are planned for the balance of fiscal year 1995. On December 14,
1994, the Company acquired the Webart Division of the Ohmart Corporation, and
its family of on-line measurement and control systems for $3.4 million in cash
and a $0.7 million note payable.
Cash used in financing activities was $35.2 million. In December 1994, the
Company bought back approximately two million shares of the Company's stock held
by Harnischfeger Industries, Inc., reducing Harnischfeger's holdings of the
total stock outstanding to 10% at June 4, 1995 from 20% at November 27, 1994.
The total value of the transaction was $43.6 million. Offsetting the cash
outflow for this transaction and $3.6 million for dividends, the Company
received $8.2 million cash in connection with its employee purchase plan and
stock option exercised and increased its debt by $7.5 million. The Company was
in compliance with all loan convenants as of June 4, 1995.
As a result of the above activities, and excluding exchange rate fluctuations,
the Company's cash and cash equivalents decreased $17.9 million compared to
year-end 1994.
The Company's current ratio (current assets divided by current liabilities) was
approximately 2.0 at the end of the second quarter of 1995 compared to 2.5 at
fiscal year-end 1994. The total debt/total capitalization ratio was 12% as of
June 4, 1995, compared to 9% at fiscal year-end 1994.
As of June 4, 1995, the Company's principal source of liquidity included cash,
cash equivalents and short-term investments of $70.6 million and unsecured
revolving bank lines of credit of $59 million of which $8 million was committed
to letters of credit. On June 21, 1995, in connection with the stock purchase
discussed below, the Company negotiated a $25 million increase in its bank lines
of credit.
On June 22, 1995, the Company purchased the remaining 1.6 million shares held
by Harnischfeger Industries, Inc. for $52.4 million. $25.4 million of cash and
$27.0 million of additional borrowing under the Company's lines of credit were
utilized for this transaction. As a result of this transaction, the Company's
current ratio changed from 2.0 at the end of Q2'95 to 1.8 and total debt/total
capitalization ratio increased from 12% to 22%. The Company remained in
compliance with all loan convenants after this transaction.
The Company believes that its financial resources will provide adequate
flexibility to fund the Company's operating needs, capital expenditures and cash
dividends during the balance of the fiscal year.
8
<PAGE>
MEASUREX CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
- --------------------------------------------------------------------------
OPERATIONS (CONT.)
- ------------------
RESULTS OF OPERATIONS
- ---------------------
System orders in the second quarter of 1995 were $80 million, more than double
the $39 million reported in the second quarter of 1994. This was the highest
level of orders for any quarter in the history of the Company. Orders from the
paper industry were $70 million, and for the industrial systems division were
$10 million. These represent 115% and 55% increases, respectively, over the
second quarter of 1994. The increase in the paper industry is due to upgrades
and replacements of the Measurex installed base and an expanded product offering
resulting from acquisitions made in the last four years. Orders were strong in
all major geographic areas. For the six months ending June 4, 1995 orders were
$130 million, an 86% increase over the comparable period in 1994.
System backlog at the end of the quarter was $129 million, up 52% from $85
million at the end of the second quarter of 1994 and a 33% increase from $97
million at the end of the first quarter of 1995.
System revenue for the second quarter of 1995 was 34% higher, and for the first
half was 29% higher than the same periods in 1994. The increased shipment level
occurred as a result of the higher order levels achieved in the fourth quarter
of 1994 and the first quarter of 1995.
Service revenue for the quarter was 8% higher than the previous year and for
the first half was 9% higher. The increase was due to the higher dollar value
of foreign currency service billings resulting from the weakening of the dollar
and growth in the service business.
Margins on systems in the second quarter of 1995 improved to 40% and for the
first half of 1995 to 38%, both up from 36% in the second quarter of 1994 and
the first half of 1994. The increased volume allowed better utilization of
existing capacity and the product mix was better with more higher margin
products and features being sold.
Service margins improved 1% to 38% compared to the 37% achieved in the second
quarter of 1994. For the first half of 1995 service margin was 37% unchanged
from first half of 1994.
Product development expense in the second quarter of 1995 and for the first half
of 1995 was 7% and 6% below the same period in 1994, respectively. This
reflected savings achieved from the restructuring that took place in the fourth
quarter of 1994.
Selling and administrative expenses in the second quarter of 1995 and in the
first half of 1995 were 18% and 15% higher than the previous year, respectively,
although they remained relatively flat as a percentage of revenue. This was the
result of higher sales commissions, travel and profit sharing consistent with
the increase in sales and profitability, as well as the impact of stronger
foreign currencies.
Interest expense increased as a result of higher debt levels. Interest income
and other improved primarily because the second quarter of 1994 was impacted by
a $0.4 million write down the value of securities available-for-sale.
The effective tax rate in the second quarter was 34.6% up from 33% in the first
quarter. This increase results from a change in the geographic mix of earnings
and brings the year-to-date rate to 34%. This rate of 34% compares to 39% in
the comparable period of 1994. The lower rate compared to 1994 results from the
return to profitability in 1995 of several subsidiaries for which no tax benefit
for losses could be taken in 1994.
Net income for the second quarter of 1995 was $5.2 million, which represents a
194% increase from the $1.8 million result in the second quarter of 1994.
Earnings per share increased to $0.30 up from $0.10.
9
<PAGE>
MEASUREX CORPORATION
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
The Company held its Annual Meeting of Stockholders at its principal
executive office, One Results Way, Cupertino, California, at
10:00 a.m. Tuesday, April 18, 1995. The results of voting at said
meeting were as follows:
MATTER 1: The following individuals were elected to the Company's
Board of Directors by a vote of the stockholders:
<TABLE>
<CAPTION>
FOR WITHHOLD
---------- --------
<S> <C> <C>
David A. Bossen 14,865,994 37,017
Orion L. Hoch 14,869,006 34,005
Jeffrey T. Grade 14,869,405 33,606
</TABLE>
In addition, the term of office as a director continued subsequent to
the meeting for the following individuals:
Paul Bancroft III
Dwight C. Baum
John C. Gingerich
John W. Larson
J. W. McKittrick
Graham Tyson
MATTER 2: A proposal to ratify the selection of Coopers & Lybrand
L.L.P., as independent auditors of the Company was approved by a vote
of the stockholders as follows:
FOR AGAINST ABSTAIN
----------- ---------- -------
14,877,622 9,901 15,488
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Title
------- -----------------------------------------------------
<C> <S>
10.1 Copy of Registrant's Employee's Stock Option Plan (1981)
(incorporated by reference from Exhibit 28.1 to Post
Effective Amendment No. 2 to Registration Statement No.
33-22589, filed with the SEC on June 25, 1990)
10.2 Copy of Registrant's Employee's Stock Option Plan (1993)
(incorporated by reference from Form S-8 Registration
Statement No. 33-65762 filed with the SEC on July 8,
1993)
10.3 Copy of Registrant's Management Incentive Plan
(incorporated by reference from Exhibit 10.8 on page 24
of Report on Form 10-K for the fiscal year ended November
30, 1986)
10.4 Copy of Registrant's Employee Stock Purchase Plan,
amended and restated effective December 14, 1993
(incorporated by reference from Exhibit 10.4 on page 21
of Report on Form 10-K for fiscal year ended November 27,
1994).
10.5 Copy of Registrant's Affiliation Agreement dated as of
May 30, 1990, between Measurex Corporation and
Harnischfeger Industries, Inc. (incorporated by reference
from Exhibit 4.1 to Form 8-K filed with the SEC on June
12, 1990)
10.6 Copy of Repurchase Agreement dated December 29, 1994
(which contains certain amendments to the Affiliation
Agreement referred to in Exhibit 10.5) (incorporated by
reference from Exhibit 10.6 on page 21 of Report of Form
10-K for fiscal year ended November 27, 1994.
</TABLE>
10
<PAGE>
MEASUREX CORPORATION
PART II. OTHER INFORMATION (continued)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (CONTINUED)
---------------------------------
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Title
------- -----------------------------------------------------
<C> <S>
10.7 Copy of Registrant's Joint Marketing, Sales and
Development Agreement dated May 30, 1990 between Measurex
Corporation and Beloit Corporation (incorporated by
reference from Exhibit 10.1 to Form 8-K filed with the
SEC on June 12, 1990).
10.8 Copy of Registrant's Joint Marketing, Sales and
Development Agreement dated February 12, 1991 between
Measurex Corporation and Enertec (incorporated by
reference from Exhibit 10.8 on page 33 of Report on Form
10-K for the fiscal year ended December 1, 1991).
10.9 Copy of Registrant's Joint Marketing, Sales and
Development Agreement dated February 28, 1991 between
Measurex Corporation and Mitsubishi Heavy Industries,
Ltd. (incorporated by reference from Exhibit 10.9 on page
34 of Report on Form 10-K for the fiscal year ended
December 1, 1991).
10.10 Copy of Term Loan Agreement dated as of May 21, 1993,
between Measurex Corporation and the Bank of New York
(incorporated by reference from Exhibit 10 on Form 10-Q
for the period ended May 30, 1993).
10.11 Copy of Amendment dated as of February 10, 1995, to Term
Loan Agreement referred to in Exhibit 10.10 (incorporated
by reference from Exhibit 10.11 on page 22 of Report on
Form 10-K for fiscal year ended November 27, 1994).
10.12 Copy of Credit Agreement dated as of July 22, 1993,
between Measurex Corporation and ABN Amro Bank N.V., San
Francisco International Branch and/or Cayman Islands
Branch (incorporated by reference from Exhibit 10.11 on
Form 10-Q for the period ended August 28, 1994).
10.13 Copy of First Amendment dated as of July 8, 1994 to
Credit Agreement referred to in Exhibit 10.12.
(incorporated by reference from Exhibit 10.13 on page 22
of Report on Form 10-K for fiscal year ended November 27,
1994).
10.14 Copy of Second Amendment dated as of December 29, 1994 to
Credit Agreement referred to in Exhibit 10.12
(incorporated by reference from Exhibit 10.14 on page 22
of Report on Form 10-K for fiscal year ended November 27,
1994).
10.15 Copy of Third Amendment dated as of February 10, 1995 to
Credit Agreement referred to in Exhibit 10.11.
(incorporated by reference from Exhibit 10.15 on page 22
on Form 10-K for fiscal year ended November 27, 1994).
10.16 Copy of Credit Agreement dated as of February 10, 1995
among Measurex Corporation, Bank of America National
Trust and Savings Association, as Agent, and the other
financial institutions party hereto (incorporated by
reference from Exhibit 10.16 on page 22 of Report on Form
10-K for fiscal year ended November 27, 1994).
10.17 Copy of Registrant's Stock Option Agreement (Special
Acceleration Grant) dated as of December 14, 1993
(Incorporated by reference from Exhibit 10.10 on page 45
of Report on Form 10-K for the fiscal year ended November
25, 1993).
10.18 Copy of First Amendment dated June 21, 1995 to Credit
Agreement referred to on Exhibit 10.16.
10.19 Copy of Stock Repurchase Agreement and Amendment to Joint
Marketing Sales and Development Agreement dated June 22,
1995 among Measurex, Harnischfeger, HIHC and Beloit
Corporation (incorporated by reference from Exhibit 2.1
on Form 8-K filed with the SEC on July 6, 1995).
</TABLE>
11
<PAGE>
MEASUREX CORPORATION
PART II. OTHER INFORMATION (continued)
Item 6. Exhibits and Reports on Form 8-K (continued)
(a) Exhibits
Exhibit
Number Exhibit Title
------- -------------
11.0 Computation of Net Income per Share of Common Stock of the
Registrant.
27.0 Financial Data Schedule
Other exhibits have not been filed because conditions requiring filing
do not exist.
(b) Reports on Form 8-K
The Company filed a Report on Form 8-K dated June 22, 1995 in
which the Company reported that it had bought back from
Harnischfeger Industries, Inc. 1,613,100 shares of outstanding
Measurex Common Stock, par value $.01 per share, at a purchase
price of $32.50 per share on June 22, 1995.
12
<PAGE>
MEASUREX CORPORATION
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.
Measurex Corporation
------------------------------------
(Registrant)
Date: July 18, 1995 By: /s/ Robert Mc Adams, Jr.
-------------------------------
Senior Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
13
<PAGE>
EXHIBIT 10.18
FIRST AMENDMENT TO CREDIT AGREEMENT
-----------------------------------
THIS FIRST AMENDMENT TO CREDIT AGREEMENT ("Amendment"), dated as of June
---------
21, 1995, is entered into by and among MEASUREX CORPORATION (the "Company"),
-------
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as agent for itself and
the Banks (the "Agent"), and the several financial institutions party to the
-----
Credit Agreement (collectively, the "Banks").
RECITALS
--------
A. The Company, Banks, and Agent are parties to a Credit Agreement dated
as of February 10, 1995 (the "Credit Agreement") pursuant to which the Agent and
----------------
the Banks have extended certain credit facilities to the Company and its
Subsidiaries.
B. The Company has requested that the Banks increase their respective
Commitments (as defined in the Credit Agreement) and agree to certain other
amendments of the Credit Agreement.
C. The Banks are willing to increase their respective Commitments and make
certain other amendments to the Credit Agreement, subject to the terms and
conditions of this Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms used
-------------
herein shall have the meanings, if any, assigned to them in the Credit
Agreement.
2. Amendments to Credit Agreement.
------------------------------
(a) The definition of "Applicable Margin" in Section 1.01 of the Credit
Agreement is hereby amended by replacing clause (ii) in such definition with the
following:
"(ii) with respect to Offshore Rate Loans, the applicable margin (on a per
annum basis) set forth below based on the Utilization Rate on such date:
Utilization Rate Applicable Margin
---------------- -----------------
Less than 33.33% 1.00%
More than or equal to
33.33% and less than 66.66% 1.25%
More than or equal to
66.66% 1.50%
1
<PAGE>
provided, however, that if at the end of any fiscal quarter of the Company, the
- -------- -------
Company's fiscal quarter end financial statements indicate that the Company's
Quick Ratio is greater than 1.10 to 1.00 and the Company's Leverage Ratio is
less than 1.00 to 1.00, then commencing upon receipt by the Agent of such
financial statements and continuing until the Agent receives any subsequent
financial statements indicating that either such ratio is not met, the
"Applicable Margin" with respect to Offshore Rate Loans shall be (A) 0.75% if
the Utilization Rate is less than or equal to 50.00%, and (B) 1.00% if the
Utilization Rate is greater than 50.00%."
(b) The following definitions shall be added to Section 1.01 of the Credit
Agreement:
"Leverage Ratio" has the meaning specified in Section 7.17.
--------------
"Quick Ratio" has the meaning specified in Section 7.15.
-----------
(c) Each Bank agrees to increase its respective Commitment to the amount
set forth on Schedule 2.01 hereto, which Schedule 2.01 shall, for all purposes
------------- -------------
of the Credit Agreement, amend and restate and replace in its entirety Schedule
--------
2.01 attached to the Credit Agreement.
- ----
(d) Paragraph (a) of Section 6.02 of the Credit Agreement shall be amended
and restated to read in its entirety as follows:
"(a) concurrently with the delivery of the financial statements referred
to in subsections 6.01(a) (other than those delivered for the fiscal year ended
November 27, 1994) and (b), a Compliance Certificate executed by a Responsible
Officer;"
(e) Section 7.15 of the Credit Agreement shall be amended and restated to
read in its entirety as follows:
"7.15 Quick Ratio. At the end of each fiscal quarter of the Company, the
-----------
Company shall not permit on a consolidated basis the ratio of (a) the sum of
cash, cash equivalents, short-term marketable investments (each as determined in
accordance with GAAP), and receivables net of bad debt reserves maintained in
accordance with GAAP, to (b) all amounts which would, in accordance with GAAP,
be included under current liabilities on a consolidated balance sheet of the
Company and its Subsidiaries and the outstanding amount of any Loans not
included under current liabilities (the "Quick Ratio"), to be less than (1) 0.85
to 1.00 as of the end of each fiscal quarter of the Company until the Company's
second fiscal quarter in 1996; (2) 0.90 to 1.00 beginning with the end of the
Company's second fiscal quarter in 1996 and until the Company's second fiscal
quarter in 1997; and
2
<PAGE>
(3) 1.00 to 1.00 beginning with the end of the Company's second fiscal quarter
in 1997 and thereafter."
(f) Section 7.16 of the Credit Agreement shall be amended and restated to
read in its entirety as follows:
"7.16 Tangible Net Worth. At the end of each fiscal quarter of the
------------------
Company, the Company shall not permit on a consolidated basis the Tangible Net
Worth for the Company to be less than the sum of (a) $137,000,000, plus (b) 75%
----
of quarterly net income for the Company for each fiscal quarter ending
subsequent to the fiscal quarter ended March 5, 1995 through the first fiscal
quarter of 1996, with no reduction for net losses, and 65% of quarterly net
income for the Company for each fiscal quarter ending subsequent to the first
fiscal quarter of 1996, with no reduction for net losses, provided, however,
-------- -------
that if at the end of any fiscal quarter of the Company ending subsequent to the
first fiscal quarter of 1996, the Company's fiscal quarter end financial
statements indicate that the Company's Quick Ratio is greater than 1.10 to 1.00
and the Company's Leverage Ratio is less than 1.00 to 1.00, then commencing upon
receipt by the Agent of such financial statements and continuing until the Agent
receives any subsequent financial statements indicating that either such ratio
is not met, 50% of quarterly net income for the Company, with no reduction for
net losses, shall be the applicable amount pursuant to this clause (b) of this
Section 7.16, minus (c) 90% of the net purchase price paid by the Company for
-----
repurchases of its outstanding shares of common stock from HIHC, Inc. subsequent
to June 1, 1995 and through July 15, 1995, provided, however, that the amount
-------- -------
subtracted pursuant to this clause (c) shall not exceed a total amount of
$50,000,000, plus (d) the sum of (1) 100% of the net proceeds for any capital
----
stock issued by the Company after the fiscal quarter ended March 5, 1995 less
(2) 100% of the net purchase price paid by the Company after the fiscal quarter
ended March 5, 1995 for repurchases of its outstanding shares of common stock
(other than repurchases pursuant to clause (c) of this Section 7.16) pursuant to
the Company's stock option and employee stock option plans, provided, however,
-------- -------
that if the amount determined pursuant to clause (2) of this clause (d) exceeds
the amount under clause (1) of this clause (d) and such excess is greater than
$5,000,000, then for purposes of this calculation, $5,000,000 shall be
subtracted from the sum of clauses (a), (b) and (c) of this Section 7.16; and
provided, further, that the aggregate amount subtracted from the sum of clauses
- -------- -------
(a), (b) and (c) for any calendar year shall be limited to $5,000,000."
(g) Section 7.17 of the Credit Agreement shall be amended and restated to
read in its entirety as follows:
3
<PAGE>
"7.17 Leverage Ratio. At the end of each fiscal quarter of the Company,
--------------
the Company shall not permit on a consolidated basis the ratio of total
liabilities for the Company to Tangible Net Worth for the Company (the "Leverage
Ratio") to be greater than (1) 1.30 to 1.00 for the end of each fiscal quarter
of the Company until the Company's second fiscal quarter in 1996; (2) 1.10 to
1.00 beginning with the end of the Company's second fiscal quarter in 1996 and
until the Company's second fiscal quarter in 1997; and (3) 0.90 to 1.00
beginning with the end of the second fiscal quarter of the Company in 1997 and
thereafter."
(h) Schedule 2 to Exhibit C to the Credit Agreement is hereby amended by
replacing such Schedule 2 with Schedule 2 attached hereto, which Schedule 2
shall, for all purposes of the Credit Agreement, amend and restate and replace
in its entirety Schedule 2 attached to Exhibit C to the Credit Agreement.
3. Representations and Warranties. The Company hereby represents and
------------------------------
warrants to the Agent and the Banks as follows:
(a) No Default or Event of Default has occurred and is continuing.
(b) The execution, delivery and performance by the Company of this
Amendment have been duly authorized by all necessary corporate and other action
and do not and will not require any registration with, consent or approval of,
notice to, or action by, any Person (including any Governmental Authority) in
order to be effective and enforceable. The Credit Agreement as amended by this
Amendment constitutes the legal, valid and binding obligations of the Company,
enforceable against it in accordance with its terms, without defense,
counterclaim or offset.
(c) All representations and warranties of the Company contained in the
Credit Agreement are true and correct.
(d) The Company is entering into this Amendment on the basis of its own
investigation and for its own reasons, without reliance upon the Agent and the
Banks or any other Person.
4. Effective Date. This Amendment will become effective on June 21, 1995
--------------
(the "Effective Date"), provided that each of the following conditions precedent
-------------- --------
is satisfied:
(a) The Agent has received from the Company and each of the Banks a duly
executed original (or, if elected by the Agent, an executed facsimile copy) of
this Amendment, together with a duly executed Guarantor Acknowledgment and
Consent in the form attached hereto (the "Consent").
-------
4
<PAGE>
(b) The Agent has received from the Company a copy of a resolution passed
by the board of directors of the Company, certified by the Secretary or an
Assistant Secretary of the Company as being in full force and effect on the date
hereof, authorizing the execution, delivery and performance of this Amendment
and the Consent.
(c) All representations and warranties contained herein are true and
correct as of the Effective Date.
(d) The Agent has received from the Company the amount of Thirty-Seven
Thousand Five Hundred Dollars ($37,500.00), representing payment in full of a
non-refundable amendment fee. Upon receipt of such payment, the Agent shall
promptly distribute to each Bank its Pro Rata Share of such payment.
5. Miscellaneous.
-------------
(a) Except as herein expressly amended, all terms, covenants and
provisions of the Credit Agreement are and shall remain in full force and effect
and all references therein to the Credit Agreement shall henceforth refer to the
Credit Agreement as amended by this Amendment. This Amendment shall be deemed
incorporated into, and a part of, the Credit Agreement.
(b) This Amendment shall be binding upon and inure to the benefit of the
parties hereto and thereto and their respective successors and assigns. No
third party beneficiaries are intended in connection with this Amendment.
(c) This Amendment shall be governed by and construed in accordance with
the law of the State of California.
(d) This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument. Each of the parties hereto
understands and agrees that this document (and any other document required
herein) may be delivered by any party hereto either in the form of an executed
hard copy original or an executed original sent by facsimile transmission to be
followed promptly by mailing of a hard copy original, and that receipt by the
Agent of a facsimile transmitted document purportedly bearing the signature of a
Bank or the Company shall bind such Bank or the Company, respectively, with the
same force and effect as the delivery of a hard copy original. Any failure by
the Agent to receive the hard copy executed original of such document shall not
diminish the binding effect of receipt of the facsimile transmitted executed
original of such document of the party whose hard copy original was not received
by the Agent.
5
<PAGE>
(e) This Amendment, together with the Credit Agreement, contains the
entire and exclusive agreement of the parties hereto with reference to the
matters discussed herein and therein. This Amendment supersedes all prior
drafts and communications with respect hereto. This Amendment may not be
amended except in accordance with the provisions of Section 10.01 of the Credit
Agreement.
(f) If any term or provision of this Amendment shall be deemed prohibited
by or invalid under any applicable law, such provision shall be invalidated
without affecting the remaining provisions of this Amendment or the Credit
Agreement, respectively.
(g) The Company covenants to pay to or reimburse the Agent and the Banks,
upon demand, for all costs and expenses (including allocated costs of in-house
counsel) incurred in connection with the development, preparation, negotiation,
execution and delivery of this Amendment.
[Signature Page Follows]
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first above written.
MEASUREX CORPORATION
By: /s/ ROBERT MCADAMS
----------------------------
Title: EXECUTIVE VP & CFO
-------------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: /s/ WENDY M. YOUNG
----------------------------
Title: VICE PRESIDENT
-------------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Bank
By: /s/ KEVIN MCMAHON
----------------------------
Title: VICE PRESIDENT
-------------------------
ABN AMRO BANK
By: /s/ INGA C. LAPSINS
----------------------------
Title: CORPORATE BANKING OFFICER
-------------------------
By: /s/ ROBERT N. HARTINGER
----------------------------
Title: GROUP VICE PRESIDENT
-------------------------
THE BANK OF NEW YORK
By: /s/ ELIZABETH T. YING
----------------------------
Title: ASSISTANT VICE PRESIDENT
-------------------------
7
<PAGE>
SCHEDULE 2.01
-------------
COMMITMENTS
-----------
AND PRO RATA SHARES
-------------------
<TABLE>
<CAPTION>
Pro Rata
Bank Commitment Share
---- ---------- --------
<S> <C> <C>
Bank of America National
Trust and Savings
Association $30,000,000 40.00%
ABN AMRO Bank $22,500,000 30.00%
The Bank of New York $22,500,000 30.00%
TOTAL $75,000,000 100%
</TABLE>
8
<PAGE>
GUARANTOR ACKNOWLEDGMENT
AND CONSENT
------------------------
The undersigned, the guarantor under that certain Continuing Guaranty
(Multicurrency) dated February 10, 1995 (the "Guaranty"), with respect to the
Borrowers' obligations to the Agent and the Banks under the Credit Agreement,
hereby reaffirms and agrees that the Guaranty is in full force and effect,
without defense, offset or counterclaim, and applies to the Credit Agreement as
amended by the First Amendment to Credit Agreement, dated as of June 21, 1995.
(Capitalized terms used herein have the meanings specified in the Guaranty.)
MEASUREX CORPORATION
Dated: By: /s/ ROBERT MCADAMS
---------------------- -----------------------------
Title: EXECUTIVE VP & CFO
--------------------------
9
<PAGE>
AMENDMENT NO. 2 TO TERM LOAN AGREEMENT
This Amendment No. 2 dated June 21, 1995 (the "Amendment") to
the Term Loan Agreement, dated as of May 21, 1993 (the "Term Loan Agreement")
between Measurex Corporation, a Delaware corporation (the "Company") and The
Bank of New York (the "Bank"). Capitalized terms used herein have the
respective meanings specified in the Term Loan Agreement unless otherwise
specified herein.
WHEREAS, the Company desires to repurchase approximately 1,600,000
shares of its common stock from HIHC, Inc. for approximately $48,400,000 (the
"Repurchase"); and
WHEREAS, the Company and the Bank now desire to amend certain
provisions of the Term Loan Agreement;
NOW, THEREFORE, in consideration of the premises herein and for other
good and valuable consideration, the parties hereto agree as follows:
1. Section 7.01(a) of the Term Loan Agreement is hereby amended to
read in its entirety as follows:
Consolidated Tangible Net Worth. Maintain Consolidated Tangible Net
-------------------------------
Worth, as of the end of each fiscal quarter of the Company, of not less
than an amount equal to the sum of (i) $137,000,000 plus (ii) 75% of
quarterly net income for each fiscal quarter ending subsequent to the
fiscal quarter ended March 5, 1995 through the first fiscal quarter of
1996, with no reduction for net losses, and 65% of quarterly net income for
each fiscal quarter ending subsequent to the first fiscal quarter of 1996,
with no reduction for net losses, provided, however, that if at the end of
-------- -------
any fiscal quarter ending subsequent to the first fiscal quarter of 1996,
the Company's fiscal quarter-end financial statements indicate that the
Company's Quick Ratio is greater than 1.10 to 1.00 and the Company's
Leverage Ratio is less than 1.00 to 1.00,
10
<PAGE>
then commencing upon receipt of such financial statements by the Bank and
continuing until the Bank receives any subsequent financial statements
indicating that either such ratio is not met, 50% of quarterly net income,
with no reduction for net losses, shall be the applicable amount pursuant
to clause (ii) of this Section 7.01(a), minus, (iii) 90% of the net
purchase price paid by the Company to HIHC, Inc. for the Company's common
stock subsequent to June 1, 1995 and prior to July 15, 1995, provided,
--------
however, that such amount subtracted shall not exceed $50,000,000, plus
-------
(iv) the sum of (x) 100% of the net proceeds for any capital stock issued
by the Company after the fiscal quarter ended March 5, 1995 less (y) 100%
of the net purchase price paid by the Company after the fiscal quarter
ended March 5, 1995 for repurchases of its outstanding shares of common
stock pursuant to the Company's stock option and employee stock option
plans (exclusive of the Repurchase); provided, however, that if the amount
-------- -------
determined pursuant to clause (y) of this clause (iv) exceeds the amount
under clause (x) of this clause (iv) and such excess is greater than
$5,000,000, then for purposes of this calculation only, $5,000,000 shall be
subtracted from the sum of clauses (i), (ii) and (iii) of this Section
7.01(a), and provided, further, that the aggregate amount subtracted from
-------- -------
the sum of clauses (i), (ii) and (iii) of this Section 7.01(a) for any
calendar year shall be limited to $5,000,000.
2. Section 7.02(h) of the Term Loan Agreement is hereby amended to
read in its entirety as follows:
Quick Ratio. Permit the ratio of (a) the sum of Consolidated Cash and
-----------
Cash Equivalents and Marketable Securities, and Consolidated Accounts
Receivable net of bad debt reserves, to (b) Consolidated Current
Liabilities (including, without duplication, the loans under the Credit
Agreement dated as of February 10, 1995 among Measurex Corporation, Bank of
America National Trust and Savings Association, as Agent, and the Other
Financial Institutions parties thereto) to be
11
<PAGE>
less than (1) 0.85 to 1.00 as of the last day of each fiscal quarter until
the second fiscal quarter of 1996; (2) 0.90 to 1.00 as of the last day of
each fiscal quarter beginning with the end of the second fiscal quarter of
1996 and until the second fiscal quarter of 1997; and (3) 1.00 to 1.00 on
the last day of each succeeding fiscal quarter beginning with the end of
the second fiscal quarter of 1997.
3. Section 7.02(k) of the Term Loan Agreement is hereby deleted in
its entirety.
4. Section 7.02(j) of the Term Loan Agreement is hereby amended to
read in its entirety as follows:
Leverage Ratio. Permit the ratio of Consolidated Total Liabilities to
--------------
Consolidated Tangible Net Worth to be greater than 1.30 to 1.00 as of the
last day of each fiscal quarter until the second fiscal quarter of 1996,
1.10 to 1.00 as of the last day of each fiscal quarter beginning with the
end of the second fiscal quarter of 1996 and until the second fiscal
quarter of 1997, and 0.90 to 1.00 as of the last day of each succeeding
fiscal quarter beginning with the end of the second fiscal quarter of 1997.
5. Exhibit E to the Term Loan Agreement is hereby deleted and
replaced in its entirety with Exhibit E attached hereto.
6. The Company hereby represents and warrants to the Bank that:
The Company has all requisite power and authority to execute,
deliver and perform under this Amendment and no consent or approval of
any third party is required as a condition to its validity.
The execution, delivery and performance by the Company of this
Amendment do not and will not:
12
<PAGE>
(a) conflict with or result in any breach or contravention
of, or the creation of any Lien under, any indenture, agreement,
lease, instrument, contractual obligation, injunction, order,
decree or undertaking to which the Company is a party; or
(b) violate any requirement of law.
The representations and warranties set forth in Section 5.01 of
the Term Loan Agreement are true and correct in all material respects
on and as of the date hereof as though made on and as of the date
hereof.
No Default or Event of Default under the Term Loan Agreement has
occurred and is continuing.
7. Except as specifically amended by this Amendment, all terms,
conditions and provisions of the Term Loan Agreement shall remain in full force
and effect.
8. This Amendment may be executed in as many counterparts as may be
deemed necessary or convenient, and by the different parties hereto on separate
counterparts each of which, when so executed, shall be deemed an original
but all such counterparts shall constitute but one and the same Amendment.
9. This Amendment shall become effective on June 21, 1995,
provided that each of the following conditions has been satisfied:
- --------
(a) receipt by the Bank of an original of this Amendment duly
executed by the Company and acknowledged by Measurex International
Corporation and Measurex Systems, Inc.; and
(b) the closing of the Repurchase.
10. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
13
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their duly authorized officers as of the date
first above written.
MEASUREX CORPORATION
By: /s/ BOB MCADAMS
________________________________
Name: Robert McAdams
Title: EXVP CFO
By: /s/ CHARLES VAN ORDEN
________________________________
Name: Charles Van Orden
Title: Vice President, General
Counsel & Secretary
THE BANK OF NEW YORK
By: /s/ ELIZABETH T. YING
________________________________
Name: Elizabeth T. Ying
Title: Assistant Vice President
ACKNOWLEDGED:
MEASUREX INTERNATIONAL CORPORATION
By: /s/ ROBERT MCADAMS
________________________________
Name: Robert McAdams
Title: EXVP CFO
MEASUREX SYSTEMS, INC.
By: /s/ ROBERT MCADAMS
________________________________
Name: Robert McAdams
Title: EXVP CFO
14
<PAGE>
EXHIBIT E
---------
Form of Certificate of the Chief Financial Officer
Reference is made to that certain Term Loan Agreement dated as of May
21, 1993 (as amended, supplemented or otherwise modified from time to time, the
"Agreement") by and between Measurex Corporation, a Delaware corporation (the
"Company") and The Bank of New York (the "Bank"). Unless otherwise defined
herein, capitalized terms used herein shall have the same meanings ascribed
thereto in the Agreement. This certificate is delivered in accordance with
Section 7.01(b) of the Agreement for the period ended _____________, 199___ (the
"Relevant Period").
<TABLE>
<S> <C>
Section 7.01(a) Consolidated Tangible Net Worth
- -------------------------------------------------------
A. Total Assets
-----------
Less: Intangible assets (net)
-----------
Less: Total Liabilities
-----------
= Consolidated Tangible Net Worth - Actual
-----------
B. $137,000,000
Plus:
C. 75% of quarterly net income, commencing with the
fiscal quarter ending subsequent to the fiscal
quarter ended 3/5/95 (not reduced by any quarterly
loss) through the first fiscal quarter of 1996 and
65% of quarterly net income (not reduced by any
quarterly loss) commencing with the second fiscal
quarter of 1996, except that commencing with the
second fiscal quarter of 1996 and for so long as
the Company's Quick Ratio is greater than 1.10 to
1.00 and the Company's Leverage Ratio is less than
1.00 to 1.00, then 50% of quarterly net income (not
reduced by any quarterly loss) $_______________.
-----------
Minus:
D. 90% of the net purchase price for repurchases of
Company's outstanding shares of common stock from
HIHC, Inc. subsequent to 6/1/95 and prior to
7/15/95; provided that the amount subtracted
pursuant to this clause D shall not exceed
$50,000,000
-----------
Plus:
</TABLE>
15
<PAGE>
<TABLE>
<S> <C>
E. (1) 100% of net proceeds arising from the sale of
capital stock occurring after the fiscal quarter
ended 3/5/95
---------------
Less:
(2) 100% of the net purchase price paid by the
Company after the fiscal quarter ended 3/5/95 for
repurchases of capital stock pursuant to stock
option plans (exclusive of the Repurchase)
---------------
provided, however, that if the amount in (2)
-------- -------
exceeds the amount in (1) by more than $5,000,000,
then $5,000,000 is subtracted from the sum of
clauses B, C and D and provided, further, that the
-------- -------
aggregate amount subtracted from the sum of
clauses B, C and D for any calendar year shall be
limited to $5,000,000
---------------
= Minimum Consolidated Tangible Net Worth
---------------
Section 7.02(h) Quick Ratio
- ---------------------------
A. Consolidated Cash and Cash Equivalents and
Marketable Securities
Plus: Consolidated Accounts Receivable Net of Bad
Debt Resrves
---------------
= Consolidated Cash and Cash Equivalents and
Marketable Securities and Consolidated
Accounts Receivable
---------------
B. Consolidated Current Liabilities and outstanding
Loans under the Credit Agreement dated as of
February 10, 1995 among the Company, Bank of
America National Trust and Savings Association, as
Agent, and the Other Financial Institutions parties
thereto
---------------
Quick Ratio (A/B) - Actual
---------------
Minimum Quick Ratio
Until second fiscal 1996 quarter: Not less than 0.85 to 1.00
Beginning second fiscal 1996 quarter, until second 0.90 to 1.00
fiscal 1997 quarter: Not less than
Beginning second fiscal 1997 quarter, and 1.00 to 1.00
thereafter: Not less than
</TABLE>
16
<PAGE>
<TABLE>
<S> <C>
Section 7.02(i) Profitability Test
- ----------------------------------
A. Net operating profit on a consolidated basis for
fiscal quarter just ended in fiscal year ______
---------------
Company not to incur, on a consolidated basis, more
than one quarterly loss on a net operating basis
for any fiscal year and such loss shall not exceed
$5,000,000
---------------
B. Net profit on after tax basis for fiscal quarter
just ended in fiscal year _____
---------------
Company not to incur, on a consolidated basis, more
than one quarterly loss on a net after tax basis
for any fiscal year, on a consolidated basis, and
such loss shall not exceed $5,000,000
---------------
Section 7.02(j) Leverage Ratio
- ------------------------------
A. Consolidated Total Liabilities
---------------
B. Consolidated Tangible Net Worth
---------------
Leverage Ratio (A/B) - Actual
---------------
Maximum Leverage Ratio until second fiscal quarter 1996 1.30 to 1.00
Maximum Leverage Ratio from second fiscal quarter 1996 1.10 to 1.00
until second fiscal quarter 1997
Maximum Leverage Ratio after the start of second fiscal .90 to 1.00
quarter 1997
</TABLE>
I am the duly elected, qualified and acting Chief Financial Officer of the
Company. I have reviewed the terms of the Agreement and have made, or caused to
be made, under my supervision, a review in reasonable detail of the transactions
and condition of the Company and its Subsidiaries during the Relevant Period
covered by the financial statements attached hereto. Such review did not
disclose the existence during or at the end of the Relevant Period (as
applicable), and I have no knowledge of the existence as of the date of this
certificate, of any condition or event which constitutes a Default or an Event
of Default.
MEASUREX CORPORATION
By: _______________________________
Name:
Title: Chief Financial Officer
Dated: ____________________, 199___
17
<PAGE>
EXECUTION COPY
FOURTH AMENDMENT TO CREDIT AGREEMENT
------------------------------------
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Fourth Amendment") dated
as of this 21st day of June, 1995, by and between ABN AMRO BANK N.V. SAN
----------------------
FRANCISCO INTERNATIONAL BRANCH AND/OR CAYMAN ISLANDS BRANCH ("Bank") and
- -----------------------------------------------------------
MEASUREX CORPORATION, a Delaware corporation ("Company"),
- --------------------
W I T N E S S E T H:
WHEREAS, the parties hereto entered into that certain Credit Agreement,
dated July 22, 1993, as amended by a First Amendment to Credit Agreement dated
as of July 8, 1994, a Second Amendment to Credit Agreement dated as of December
29, 1994 and a Third Amendment to Credit Agreement dated as of February 10, 1995
(as so amended, the "Credit Agreement"), pursuant to which Bank agreed to
provide certain credit facilities to Company;
WHEREAS, Company has requested Bank to amend the Credit Agreement in
certain respects; and
WHEREAS, Bank has agreed to such an amendment upon the terms and subject to
the conditions set forth herein:
NOW, THEREFORE, in consideration of the premises set forth above and other
good and valuable considerations, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto agree as follows:
1. Definitions. All capitalized terms used herein and not otherwise
-----------
defined herein shall have the meanings given to such terms in the Credit
Agreement.
2. Amendment. The Credit Agreement shall be and hereby is amended as
---------
follows:
(a) Section 1.1 is amended by changing the definition of "Termination
Date" set forth therein to read in its entirety as follows:
"Termination Date" shall mean July 19, 1996.
----------------
18
<PAGE>
(b) Section 1.1 is further amended by adding thereto, in the
appropriate alphabetical order, new definitions of "Leverage Ratio" and
"Quick Ratio" to read in their entirety as follows:
"Leverage Ratio" shall mean, at any date of determination, the
--------------
ratio (calculated on a consolidated basis) of the total liabilities of
the Company to the Tangible Net Worth of the Company.
"Quick Ratio" shall have the meaning set forth in Section 6.3
-----------
hereof.
(c) Section 6.3 is amended to read in its entirety as follows:
Section 6.3 Quick Ratio. At the end of each fiscal quarter of
-----------
the Company, the Company shall not permit on a consolidated basis the
ratio of (a) the sum of cash, cash equivalents, short-term marketable
investments (each as determined in accordance with GAAP), and
receivables net of bad debt reserves maintained in accordance with
GAAP, to (b) all amounts which would, in accordance with GAAP, be
included under current liabilities on a consolidated balance sheet of
the Company and its Subsidiaries and the outstanding amount of any
Syndicated Loans not included under current liabilities (the "Quick
Ratio"), to be less than (1) 0.85 to 1.00 as of the end of each fiscal
quarter of the Company until the Company's second fiscal quarter in
1996; (2) 0.90 to 1.00 beginning with the end of the Company's second
fiscal quarter in 1996 and until the Company's second fiscal quarter
in 1997; and (3) 1.00 to 1.00 beginning with the end of the Company's
second fiscal quarter in 1997 and thereafter." (As used in this
Section 6.3, "Syndicated Loans" shall mean all loans outstanding under
the Credit Agreement dated as of February 10, 1995 among the Company,
the financial institutions from time to time parties to such
agreement, and Bank of America National Trust and Savings Association,
as agent for such financial institutions, as such agreement is
amended, modified or replaced from time to time.)
19
<PAGE>
(d) Section 6.7 is amended to read in its entirety as follows:
Section 6.7 Tangible Net Worth. At the end of each fiscal
------------------
quarter of the Company, the Company shall not permit on a consolidated
basis the Tangible Net Worth for the Company to be less than the sum
of (a) $137,000,000, plus (b) 75% of quarterly net income for the
----
Company for each fiscal quarter ending subsequent to the fiscal
quarter ended March 5, 1995 through the first fiscal quarter of 1996,
with no reduction for net losses, and 65% of quarterly net income for
the Company for each fiscal quarter ending subsequent to the first
fiscal quarter of 1996, with no reduction for net losses, provided,
--------
however, that if at the end of any fiscal quarter of the Company
-------
ending subsequent to the first fiscal quarter of 1996, the Company's
fiscal quarter end financial statements indicate that the Company's
Quick Ratio is greater than 1.10 to 1.00 and the Company's Leverage
Ratio is less than 1.00 to 1.00, then commencing upon receipt by the
Bank of such financial statements and continuing until the Bank
receives any subsequent financial statements indicating that either
such ratio is not met, 50% of quarterly net income for the Company,
with no reduction for net losses, shall be the applicable amount
pursuant to this clause (b) of this Section 6.7, minus (c) 90% of the
-----
net purchase price paid by the Company for repurchases of its
outstanding shares of common stock from HIHC, Inc. subsequent to June
1, 1995 and through July 15, 1995, provided, however, that the amount
-------- -------
subtracted pursuant to this clause (c) shall not exceed a total amount
of $50,000,000, plus (d) the sum of (1) 100% of the net proceeds for
----
any capital stock issued by the Company after the fiscal quarter ended
March 5, 1995 less (2) 100% of the net purchase price paid by the
Company after the fiscal quarter ended March 5, 1995 for repurchases
of its outstanding shares of common stock (other than repurchases
pursuant to clause (c) of this Section 6.7) pursuant to the Company's
stock option and employee stock option plans, provided, however, that
-------- -------
if the amount determined pursuant to clause (2) of this clause (d)
exceeds the amount under
20
<PAGE>
clause (1) of this clause (d) and such excess is greater than
$5,000,000, then for purposes of this calculation, $5,000,000 shall be
subtracted from the sum of clauses (a), (b) and (c) of this Section
6.7; and provided, further, that the aggregate amount subtracted from
-------- -------
the sum of clauses (a), (b) and (c) for any calendar year shall be
limited to $5,000,000.
3. Ratification of Credit Agreement. Except as amended or waived hereby,
--------------------------------
all of the provisions set forth in the Credit Agreement remain in full force and
effect. From and after the date hereof, any reference in the Credit Agreement
to "this Agreement" shall mean the Credit Agreement as amended by this Fourth
Amendment.
5. Severability. If any provision of this Fourth Amendment shall be held
------------
to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
6. Governing Law. This Fourth Amendment shall be governed by and
-------------
construed in accordance with the internal laws of the State of California.
7. Counterparts. This Fourth Amendment may be executed in any number of
------------
counterparts, all of which together shall constitute a single instrument, and it
shall not be necessary that any counterpart be signed by all the parties hereto.
8. Headings. The headings hereof are for convenience only and are not
--------
intended to affect the meaning or interpretation of this Fourth Amendment.
9. Benefit of Agreement. This Fourth Amendment shall inure to the
--------------------
benefit of, and be enforceable by Bank, Company, and their respective successors
and assigns.
IN WITNESS WHEREOF, the undersigned have caused this Fourth Amendment to
Credit Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
21
<PAGE>
MEASUREX CORPORATION
By /s/ ROBERT MCADAMS
Name: Robert McAdams
--------------------------------
Title: Executive VP & CFO
--------------------------------
By /s/ CHARLES VAN ORDEN
Name: Charles Van Orden
---------------------------------
Title: Vice President & General Counsel
---------------------------------
Secretary
---------------------------------
ABN AMRO BANK N.V.
By /s/ INGA C. LAPSINS
Name: Inga C. Lapsins
--------------------------------
Title: Corporate Banking Officer
--------------------------------
By /s/ ROBERT N. HARTINGER
Name: Robert N. Hartinger
--------------------------------
Title: Group Vice President
--------------------------------
22
<PAGE>
EXHIBIT 11.0
MEASUREX CORPORATION
COMPUTATION OF NET INCOME PER SHARE
(Unaudited)
_________________________________________________
(Dollar amounts in thousands except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------- ----------------
June 4, May 29, June 4, May 29,
1995 1994 1995 1994
-------- -------- ------- -------
<S> <C> <C> <C> <C>
Primary:
Average shares outstanding 16,621 17,918 16,736 17,902
Net effect of dilutive stock options
based on the treasury stock method
using average market price 678 122 579 193
------- ------- ------- -------
Average common and common
equivalent shares outstanding 17,299 18,040 17,315 18,095
======= ======= ======= =======
Income before cumulative effect of
accounting change $ 5,224 $ 1,778 $ 8,705 $ 3,966
======= ======= ======= =======
Net income $ 5,224 $ 1,778 $ 8,705 $ 4,490
======= ======= ======= =======
Income per share before cumulative effect
of accounting change $ .30 $ .10 $ .50 $ .22
======= ======= ======= =======
Net income per share $ .30 $ .10 $ .50 $ .25
======= ======= ======= =======
Fully diluted: (Note A)
Average shares outstanding 16,620 17,918 16,639 17,902
Net effect of dilutive stock options
based on the treasury stock method
using quarter-end market price or
average market price when greater
than quarter-end price 739 122 760 199
------- ------- ------- -------
Average common and common
equivalent shares outstanding 17,359 18,040 17,399 18,101
======= ======= ======= =======
Income before cumulative effect of
accounting change $ 5,224 $ 1,778 $ 8,705 $ 3,966
======= ======= ======= =======
Net Income $ 5,224 $ 1,778 $ 8,705 $ 4,490
======= ======= ======= =======
Income per share before cumulative effect
of accounting change $ .30 $ .10 $ .50 $ .22
======= ======= ======= =======
Net income per share $ .30 $ .10 $ .50 $ .25
======= ======= ======= =======
</TABLE>
________________________________________________________________________________
Note A: Fully diluted earnings per share have been calculated in accordance
with Accounting
Principles Board Opinion No. 15, "Earnings Per Share".
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED BALANCE SHEETS AT JUNE 4, 1995, THE CONSOLIDATED
CONDENSED INCOME STATEMENTS, THE CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
AND THE RELATED NOTES, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-04-1995
<PERIOD-END> JUN-04-1995
<CASH> 64,321
<SECURITIES> 6,271
<RECEIVABLES> 83,001
<ALLOWANCES> (6,498)
<INVENTORY> 30,612
<CURRENT-ASSETS> 190,057
<PP&E> 118,336
<DEPRECIATION> (68,944)
<TOTAL-ASSETS> 308,900
<CURRENT-LIABILITIES> 93,481
<BONDS> 0
<COMMON> 190
0
0
<OTHER-SE> 187,813
<TOTAL-LIABILITY-AND-EQUITY> 308,900
<SALES> 150,422
<TOTAL-REVENUES> 150,422
<CGS> 94,048
<TOTAL-COSTS> 139,249
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,311
<INCOME-PRETAX> 13,187
<INCOME-TAX> 4,482
<INCOME-CONTINUING> 8,705
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,705
<EPS-PRIMARY> .50
<EPS-DILUTED> .50
</TABLE>
