<PAGE> 1
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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 2, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
------------ -------------
Commission File No.: 0-14685
GENICOM CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 51-0271821
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14800 CONFERENCE CENTER DRIVE
SUITE 400, WESTFIELDS
CHANTILLY, VIRGINIA 22021-3806
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 802-9200
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 -
---- ----
As of July 21, 1995, there were 10,771,499 shares of Common Stock of
the Registrant outstanding.
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<PAGE> 2
FORM 10-Q INDEX
<TABLE>
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - July 2, 1995 and January 1, 1995 3
Consolidated Statements of Income - Three and Six Months Ended
July 2, 1995 and July 3, 1994 4
Consolidated Statements of Cash Flows - Six Months Ended
July 2, 1995 and July 3, 1994 5
Notes to Consolidated Financial Statements 6 - 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9 - 12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
</TABLE>
PAGE 2
<PAGE> 3
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
GENICOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JULY 2, JANUARY 1,
(In thousands, except share data) 1995 1995
---------------- -----------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 114 $ 673
Accounts receivable, less allowance for
doubtful accounts of $1,656 and $1,479 44,195 37,846
Inventories 54,752 43,368
Prepaid expenses and other assets 5,625 5,040
---------------- -----------------
TOTAL CURRENT ASSETS 104,686 86,927
Property, plant and equipment 32,147 26,215
Intangibles and other assets 25,222 14,125
---------------- -----------------
$ 162,055 $ 127,267
================ =================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Debt maturing within one year $ 10,384 $ 371
Accounts payable and accrued expenses 49,174 37,540
Deferred income 11,761 8,236
---------------- -----------------
TOTAL CURRENT LIABILITIES 71,319 46,147
Long-term debt, less current portion 52,407 47,192
Other non-current liabilities 7,043 5,845
---------------- -----------------
TOTAL LIABILITIES 130,769 99,184
STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value; 18,000,000
shares authorized, 10,751,999 and 10,638,299
shares issued 108 106
Additional paid-in capital 25,927 25,760
Retained earnings 7,213 4,351
Foreign currency translation adjustment (1,263) (1,435)
Pension liability adjustment (699) (699)
---------------- -----------------
TOTAL STOCKHOLDERS' EQUITY 31,286 28,083
---------------- -----------------
$ 162,055 $ 127,267
================ =================
</TABLE>
The accompanying notes are an integral part of these financial statements.
PAGE 3
<PAGE> 4
GENICOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED, SIX MONTHS ENDED,
JULY 2, JULY 3, JULY 2, JULY 3,
(In thousands, except per share data) 1995 1994 1995 1994
=============== =============== =============== ================
<S> <C> <C> <C> <C>
REVENUES, NET:
Products $ 46,370 $ 41,490 $ 90,973 $ 84,974
Services 25,472 17,835 49,003 29,687
--------------- --------------- --------------- ----------------
71,842 59,325 139,976 114,661
--------------- --------------- --------------- ----------------
OPERATING COSTS AND EXPENSES:
Cost of revenues:
Products 31,528 29,238 62,766 61,598
Services 20,647 13,807 39,128 22,172
Selling, general and administration 12,440 10,966 25,373 22,341
Engineering, research and
product development 2,299 2,118 4,264 4,032
Acquisition related costs 1,204 1,204
--------------- --------------- --------------- ----------------
68,118 56,129 132,735 110,143
--------------- --------------- --------------- ----------------
OPERATING INCOME 3,724 3,196 7,241 4,518
Interest expense, net 1,887 1,928 3,645 3,908
Other income 734 1,635
--------------- --------------- --------------- ----------------
INCOME BEFORE INCOME TAXES 1,837 2,002 3,596 2,245
Income tax expense 278 500 736 649
--------------- --------------- --------------- ----------------
NET INCOME $ 1,559 $ 1,502 $ 2,860 $ 1,596
=============== =============== =============== ================
EARNINGS PER COMMON SHARE
AND COMMON SHARE EQUIVALENT
(primary and fully diluted) $ 0.13 $ 0.13 $ 0.24 $ 0.14
=============== =============== =============== ================
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES AND COMMON SHARE EQUIVALENTS
OUTSTANDING:
Primary 12,095 11,252 11,859 11,086
=============== =============== =============== ================
Fully diluted 12,141 11,480 11,882 11,200
=============== =============== =============== ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
PAGE 4
<PAGE> 5
GENICOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED,
JULY 2, JULY 3,
(In thousands) 1995 1994
------------------ ------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,860 $ 1,596
Adjustments to reconcile net income to cash provided
by operating activities:
Depreciation 6,209 4,513
Amortization 2,155 1,507
Effect of investment gain (901)
Effect of gain on early extinguishment of bonds (734)
Effect of acquisition related costs 1,204
Changes in assets and liabilities net of effects
from acquisitions:
Accounts receivable (14) 756
Inventories (7,924) 4,070
Accounts payable and accrued expenses (383) 2,539
Deferred income 404 1,472
Other 982 786
------------------ ------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 5,493 15,604
------------------ ------------------
Cash flows from investing activities:
Payment for purchase of businesses, net of cash acquired (8,227)
Additions to property, plant and equipment (6,520) (7,288)
Proceeds from sale of investment 3,436
Other (110) (560)
------------------ ------------------
NET CASH USED IN INVESTING ACTIVITIES (14,857) (4,412)
------------------ ------------------
Cash flows from financing activities:
Borrowings from long-term debt 19,382 11,749
Payments on long-term debt (10,204) (18,548)
Purchases of senior subordinated notes (5,059)
------------------ ------------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 9,178 (11,858)
------------------ ------------------
Effect of exchange rate changes on cash and cash equivalents (373) (372)
------------------ ------------------
Net decrease in cash and cash equivalents (559) (1,038)
Cash and cash equivalents at beginning of period 673 1,797
------------------ ------------------
Cash and cash equivalents at end of period $ 114 $ 759
================== ==================
</TABLE>
The accompanying notes are an integral part of these financial statements
PAGE 5
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. In the opinion of management, the accompanying unaudited consolidated
financial statements of GENICOM Corporation and Subsidiaries (the
"Company" or "GENICOM") contain all adjustments (consisting only of
normal recurring accruals) necessary to present fairly the Company's
consolidated financial position as of July 2, 1995, and the results of
operations and cash flows for the periods indicated. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed consolidated financial statements be read in conjunction
with the financial statements and notes thereto included in the
Company's January 1, 1995 Annual Report. The results of operations
for the six months ended July 2, 1995, are not necessarily indicative
of the operating results to be expected for the full year. Certain
reclassifications have been made to the 1994 condensed financial
statements in order to conform to the 1995 presentation.
2. Inventories are stated at the lower of cost, determined on the
first-in, first-out method, or market. Inventories consist of, in
thousands:
<TABLE>
<CAPTION>
JULY 2, JANUARY 1,
1995 1995
============= =============
<S> <C> <C>
Raw materials $ 13,128 $ 14,354
Work in process 11,537 6,639
Finished goods 30,087 22,375
------------- -------------
$ 54,752 $ 43,368
============= =============
</TABLE>
3. Earnings per share are based upon the weighted average number of
common shares and dilutive common share equivalents (using the
treasury stock method) outstanding during the period. Presentation is
in thousands:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
========================== ===========================
JULY 2, JULY 3, JULY 2, JULY 3,
1995 1994 1995 1994
============ =========== ========== ===========
<S> <C> <C> <C> <C>
SHARES USED IN COMPUTATION:
Weighted average common shares outstanding 10,734 10,627 10,695 10,625
Shares applicable to stock options, net of shares
assumed to be purchased from proceeds at
average market price 1,361 625 1,164 461
------------ ----------- ---------- -----------
Total shares for earnings per common share
and common share equivalent (primary) 12,095 11,252 11,859 11,086
Shares applicable to stock options in addition to
those used in primary computation due to the
use of period-end market price when higher
than average market price 46 228 23 114
------------ ----------- ---------- -----------
Total fully diluted shares 12,141 11,480 11,882 11,200
============ =========== ========== ===========
</TABLE>
PAGE 6
<PAGE> 7
4. During the first quarter ended April 2, 1995 the Company adopted the
provisions of SFAS No. 114 "Accounting by Creditors for Impairment of
a Loan" and SFAS No. 118 "Accounting by Creditors for Impairment of a
Loan - Income Recognition and Disclosure - Amendment of SFAS No. 114".
The implementation of SFAS Nos. 114 and 118 did not have a material
effect on the Company's financial condition or results of operations.
5. Business Acquisitions
Printer Systems Corporation
On February 16, 1995, the Company acquired Printer Systems Corporation
("PSC"), a privately held company whose primary business is the
design, manufacture, distribution and support of printer networking
products for commercial customers. PSC had 1994 revenues of $10.0
million. Pursuant to the purchase agreement, the Company acquired
substantially all of PSC's outstanding common and preferred shares for
consideration aggregating to potentially $4.8 million. Of the
consideration $0.8 million was payable at closing and $1.2 million is
payable over the three years subsequent to closing. The remaining
balance of up to $2.8 million in consideration is contingent upon
attainment of performance objectives during the three years subsequent
to closing. The purchase price will be funded from the Company's cash
flows from operations and credit facilities and the acquisition will
be accounted for as a purchase. The allocation of the purchase price
and related acquisition costs is subject to adjustment based upon
refinements in the application of purchase method accounting and the
final determination of the purchase price.
Harris Adacom Network Services, Inc.
On March 1, 1995, the Company acquired substantially all of the assets
and certain liabilities of Harris Adacom Network Services, Inc.
("HANS"), including all of the stock of its Canadian subsidiary,
Harris Adacom Inc. for cash and notes totaling $7.3 million. The
assets acquired relate to HANS's service depot facility, field service
operations, systems integration business and network baselining and
monitoring operations. HANS had 1994 revenues of $36.1 million. The
purchase price will be funded from the Company's cash flows from
operations and credit facilities and the acquisition will be accounted
for as a purchase. The allocation of the purchase price and related
acquisition costs is subject to adjustment based upon refinements in
the application of purchase method accounting and the final
determination of the purchase price.
Pro forma financial information
Presented below are the unaudited pro forma statements of operations
as if the acquired operations had been integrated into the Company
effective at January 3, 1994. Accounting adjustments have been made
to include estimated costs of the combinations and to reflect the
integration and consolidation of facilities and personnel. Included
in such integration costs are lease termination fees and relocation
costs associated with redundant facilities and employee severance
expenses. This pro forma information has been prepared for
comparative purposes only and does not purport to be indicative of the
results that actually would have been obtained if the acquired
operations had been conducted by the Company during the periods
presented and is not intended to be a projection of future results.
Presentation is in thousands except for earnings per share amounts.
PAGE 7
<PAGE> 8
<TABLE>
<CAPTION>
THREE
MONTHS ENDED SIX MONTHS ENDED
============= ==================================
JULY 2, JULY 3,
JULY 3, 1994 1995 1994
============= ============= ==============
<S> <C> <C> <C>
Revenue $ 70,907 $ 148,340 $ 138,146
Net income 2,520 2,762 3,163
============ ============= ==============
Earnings per share $ 0.22 $ 0.23 $ 0.28
============ ============= ==============
Weighted average shares outstanding 11,480 11,882 11,200
============ ============= ==============
</TABLE>
PAGE 8
<PAGE> 9
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition:
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
================================================================================================================
THREE MONTHS ENDED SIX MONTHS ENDED
======================================== =========================================
(in millions) 2ND QUARTER 2ND QUARTER 2ND QUARTER 2ND QUARTER
1995 CHANGE 1994 1995 CHANGE 1994
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 71.8 $ 12.5 $ 59.3 $ 140.0 $ 25.3 $ 114.7
Percentage change 21.1 % 22.1 %
================================================================================================================
</TABLE>
The Company achieved revenue growth of 21.1% and 22.1% in the second quarter
and first half of fiscal year 1995, respectively, as compared to the same
periods in fiscal year 1994. The double digit revenue growth reflects
proactive initiatives undertaken in all three of the Company's strategic
business units.
Product Solutions Group ("PSG")
Revenues in this business declined slightly in the three and six month periods
ended July 2, 1995, as compared to prior year periods. PSG continued to
experience a decline in several of its impact printer product lines which was
largely offset by growth in its laser printer products and strong performance
in its high speed serial matrix impact printers.
Increases in the Company's high-speed serial matrix printers, including the
3800 Series, and the new 4800 Series shuttle matrix line impact printers
favorably impacted revenues, however, they did not offset the declines in the
mature serial matrix and mature shuttle matrix line impact printers. The
Company's sales of laser printers increased 41.3% and 25.0% in the second
quarter and first six months, respectively, on a year-to-year comparison, due
primarily to sales of new laser printer products offered as a result of the PSC
acquisition.
Management expects PSG revenues in the second half of 1995 to exceed 1994
second half levels due to the sales of new laser printer products, a full year
of volume shipments of the Company's new shuttle matrix line impact printers
and other new impact printer offerings.
Multivendor Services Group ("MSG")
MSG experienced revenue growth of 42.6% and 65.9% in the three and six month
periods ended July 2, 1995, respectively, as compared to the year-ago periods.
This growth reflects the Company's expansion efforts over the past eighteen
months into workstation, systems, peripheral and personal copier services
through its depot and field service arrangements with Computervision
Corporation, Canon U.S.A. and Motorola Computer Group and the acquisition of
HANS.
Management anticipates that MSG 1995 revenues will be above fiscal 1994 levels
as a result of a full year's effect of the revenues associated with the
expansion efforts referred to above and the Company's anticipated expansion of
its multivendor field and depot operations.
Network Services Group ("NSG")
Established in March 1995, this business addresses the expanding market for
integrated network services. This business contributed revenues of $5.7
million and $7.9 million to the three and six month periods ended July 2, 1995,
respectively. Management expects second half revenues for this business to
exceed first half levels due to expanded sales and marketing programs and
growth in its business with Nasdaq subscribers, resulting from the Company's
customer arrangement with Nasdaq.
PAGE 9
<PAGE> 10
Relay revenues decreased $0.8 million and $1.3 million in the three and six
month periods ended July 2, 1995, respectively, as compared to the year-ago
periods. Management does not expect that 1995 relay revenues will meet those
of fiscal 1994.
The Company historically experiences a decrease in revenue volume in its third
quarter due to European holidays. As a result, third quarter revenues may be
lower than those in the second quarter.
<TABLE>
<CAPTION>
===================================================================================================================
(IN MILLIONS) 2ND QUARTER 4TH QUARTER 2ND QUARTER
1995 1994 1994
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Order backlog $ 43.4 $ 48.9 $ 37.7
Change - 2nd Quarter 1995 compared to:
Amount (5.5) 5.7
Percentage (11.2)% 15.1 %
===================================================================================================================
</TABLE>
The decrease in order backlog from the 1994 fourth quarter is the result of a
decrease in order backlog associated with the order rates of certain customers
in the PSG and MSG businesses. The increase in order backlog from the 1994
second quarter is due to the HANS and PSC business acquisitions and an increase
in pre-acquisition MSG backlog.
<TABLE>
<CAPTION>
====================================================================================================================
THREE MONTHS ENDED SIX MONTHS ENDED
======================================== ============================================
(in millions) 2ND QUARTER 2ND QUARTER 2ND QUARTER 2ND QUARTER
1995 CHANGE 1994 1995 CHANGE 1994
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gross margin $ 19.7 $ 3.4 $ 16.3 $ 38.1 $ 7.2 $ 30.9
As a % of revenue 27.4 % 27.4 % 27.2 % 26.9 %
====================================================================================================================
</TABLE>
The Company's consolidated gross margin, as a percentage of revenue, did not
change significantly during the periods.
The Company expects slightly improved performance in the second half due to the
progress the Company had made in the second quarter in eliminating duplicative
costs associated with its 1995 business acquisition of HANS and PSC.
<TABLE>
<CAPTION>
===========================================================================================================================
THREE MONTHS ENDED SIX MONTHS ENDED
============================================= =============================================
(IN MILLIONS) 2ND QUARTER 2ND QUARTER 2ND QUARTER 2ND QUARTER
1995 CHANGE 1994 1995 CHANGE 1994
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating expenses:
Selling, general and
Administrative $ 12.4 $ 1.4 $ 11.0 $ 25.4 $ 3.1 $ 22.3
Engineering, research and
Product development 2.3 0.2 2.1 4.3 0.3 4.0
Acquistion related costs 1.2 1.2 0.0 1.2 1.2 0.0
------------- -------- ----------- ----------- -------- ----------
Total $ 15.9 $ 2.8 $ 13.1 $ 30.9 $ 4.6 $ 26.3
As a % of revenue 22.2 % 22.1 % 22.0 % 23.0 %
============================================================================================================================
</TABLE>
PAGE 10
<PAGE> 11
During the quarter, the Company recorded a charge against earnings of $1.2
million for costs in connection with a proposed acquisition which was
terminated plus non-capitalized costs associated with the Company's 1995
business acquisitions. Excluding the effects of the $1.2 million charge, the
Company experienced a decrease in operating expenses, as a percentage of
revenue, in both the three and six month periods of 1995 as compared to the
year-ago periods. This decrease is attributable to management's focus on
controlling discretionary costs.
The actual amount expended on operating expenses increased year over year
primarily due to the expenses incurred by HANS and PSC, increased sales and
marketing efforts needed to support the growth in the multivendor services and
network services businesses, the introduction of new printer products and the
Company's January 1994, cost reduction program which included personnel, salary
and benefit reductions for the Company's worldwide operations.
<TABLE>
<CAPTION>
========================================================================================================================
THREE MONTHS ENDED SIX MONTHS ENDED
========================================== ==========================================
(IN MILLIONS) 2ND QUARTER 2ND QUARTER 2ND QUARTER 2ND QUARTER
1995 CHANGE 1994 1995 CHANGE 1994
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest expense, net $ 1.9 $ 0.0 $ 1.9 $ 3.6 $ (0.3) $ 3.9
Percentage change 0.0 % (7.7)%
Other income $ 0.0 $ (0.7) $ 0.7 $ 0.0 $ (1.6) $ 1.6
Percentage change (100.0)% (100.0)%
========================================================================================================================
</TABLE>
The decrease in interest expense in the first six months of 1995 as compared to
the year-ago period is primarily due to the Company's repurchase of its 12.5%
Senior Subordinated Notes in 1994, partially offset by an increase in Company
borrowings from its senior credit facility. This increase resulted from the
Company's 1995 business acquisition activities which increased the Company's
borrowings and an interest rate increase on the same senior credit facility on
February 1, 1995. Additionally, on July 7, 1995, the Company's interest rate
on the senior credit facility decreased from 12.0% to 11.75%, as result of a
0.25% decrease in the prime lending rate.
During 1994, the Company realized pre-tax gains of $0.7 million and $0.9
million on the early extinguishments of debt and the sale of an investment in a
Belgian company, respectively.
<TABLE>
<CAPTION>
===================================================================================================================
THREE MONTHS ENDED SIX MONTHS ENDED
=========================================== ============================================
(IN MILLIONS) 2ND QUARTER 2ND QUARTER 2ND QUARTER 2ND QUARTER
1995 CHANGE 1994 1995 CHANGE 1994
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income tax expense $ 0.3 $ (0.2) $ 0.5 $ 0.7 $ 0.1 $ 0.6
Effective tax rate 15.1% 25.0% 20.5% 28.9%
===================================================================================================================
</TABLE>
The Company's effective income tax rate for the second quarter of 1995 was
15.1% as compared to 25.0% for the year-ago period. These rates are
significantly affected by foreign income taxes and the utilization of net
operating losses.
PAGE 11
<PAGE> 12
LIQUIDITY AND CAPITAL RESOURCES
<TABLE>
<CAPTION>
=================================================================================================================
Six Months Ended
================================================
(in millions) 2nd Quarter 2nd Quarter
1995 1994
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash provided by operations $ 4.8 $ 15.6
Cash used in investing activities (14.2) (4.4)
Cash provided by (used in) financing activities 9.2 (11.9)
=================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
===========================================================================================================
(in millions) 2ND QUARTER 4TH QUARTER
1995 1994
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Working capital $ 33.4 $ 40.8
Inventories 54.8 43.4
Debt obligations 62.8 47.6
Debt to equity ratio 2.0 to 1 1.7 to 1
===========================================================================================================
</TABLE>
The Company's working capital decreased $7.4 million as of July 2, 1995 as
compared to January 1, 1995 due primarily to an increase in debt classified as
current and the issuance of notes to the sellers of HANS and PSC. As of July
2, 1995, the Company had $3.4 million of the Notes in treasury, which will be
applied to the $9.0 million needed for the 1996 sinking fund requirement. In
addition, as of July 2, 1995, the Company has classified $2.0 million as
current obligations due to the sellers of HANS and PSC.
Cash and cash equivalents decreased $0.6 million since January 1, 1995. Net
cash generated by operations in the first six months of 1995 decreased $10.8
million compared to the year-ago period due to an increase in inventories in
the PSG business. This increase is related to the relocation and outsourcing
to third parties of certain manufacturing operations. Management believes PSG
inventories will be reduced during the second half of 1995.
The Company does not have any material commitments of funds for capital
expenditures other than to support the current level of operations, which
includes the remaining amounts due for the HANS and PSC acquisitions.
In the first quarter of 1995, the Company retired $9.0 million principal amount
of its previously purchased Notes in fulfillment of its annual sinking fund
requirement. In addition to the above mentioned sinking fund requirements, on
February 15, 1997, $31.0 million of the Notes will mature. While the Company
expects that it will be able to satisfy the balance of the 1996 sinking fund
and the 1997 maturity, there is no assurance that the Company will have the
resources available to do so.
As of July 2, 1995, the Company had $20.0 million outstanding and $7.0 million
available for borrowing under its senior credit facility. Management believes
that the Company has adequate resources, through its cash flows from operations
and credit facilities, to meet its future payment obligations, including those
to the sellers of HANS and PSC.
Management believes that a material decline in sales volume or the Company's
inability to effectively execute their integration programs for the newly
acquired strategic businesses could have a material adverse impact on the
financial condition, results of operations, or liquidity of the Company.
PAGE 12
<PAGE> 13
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings:
Not applicable.
Item 2. Changes in Securities:
Not applicable.
Item. 3 Defaults Upon Senior Securities:
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders:
Not applicable.
Item 5. Other Information:
Not applicable.
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
============ ==============================================
<S> <C>
27.1 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K:
On May 12, 1995, the Company filed Amendment No. 1 to its report
on Form 8-K dated March 16, 1995, which reported that it had
completed its acquisition of substantially all of the assets and
certain liabilities of Harris Adacom Network Services, Inc.,
including all of the stock of its Canadian subsidiary, Harris
Adacom, Inc. for $7.3 million. The Amendment included the
financial statements of the business acquired and pro forma
financial information.
PAGE 13
<PAGE> 14
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.
GENICOM Corporation
------------------------------
Registrant
Date: August 16, 1995
James C. Gale
------------------------------
Signature
James C. Gale
Senior Vice President Finance
and Chief Financial Officer
(Mr. Gale is the Chief Financial
Officer and has been duly
authorized to sign on behalf of
the Registrant)
PAGE 14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER>1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-01-1996
<PERIOD-END> JUL-02-1995
<CASH> 114
<SECURITIES> 0
<RECEIVABLES> 45,851
<ALLOWANCES> (1,656)
<INVENTORY> 54,752
<CURRENT-ASSETS> 104,686
<PP&E> 100,037
<DEPRECIATION> (67,890)
<TOTAL-ASSETS> 162,055
<CURRENT-LIABILITIES> 71,319
<BONDS> 52,407
<COMMON> 108
0
0
<OTHER-SE> 31,178
<TOTAL-LIABILITY-AND-EQUITY> 162,055
<SALES> 90,973
<TOTAL-REVENUES> 139,976
<CGS> 62,766
<TOTAL-COSTS> 101,894
<OTHER-EXPENSES> 30,841
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,645
<INCOME-PRETAX> 3,596
<INCOME-TAX> 736
<INCOME-CONTINUING> 2,860
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,860
<EPS-PRIMARY> 0.24
<EPS-DILUTED> 0.24
</TABLE>
