<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 2000
Commission file Number 1-5356
PENN ENGINERRING & MANUFACTURING CORP.
(Exact name of registrant as specified in its charter.)
Delaware 23-0951065
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 1000, Danboro, Pennsylvania 18916
(Address of principal executive offices (Zip Code)
Registrant's telephone number, including area code:
(215) 766-8853
Indicate by check mark whether the registrant(1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practical
date: 1,675,082 shares of Class A common stock, $.01 par value, and
6,902,565 shares of common stock, $.01 par value, outstanding on
August 11, 2000.
<PAGE> 2
<TABLE>
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
PENN ENGINEERING & MANUFACTURING CORP.
CONDENSED CONSOLIDATED BALANCE SSHEETS
<CAPTION>
(Dollars in thousands)
ASSETS
(Unaudited)
June 30, 2000 December 31, 1999
-------------- -----------------
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $3,771 $4,231
Short-term investments 5,443 9,538
Accounts receivable-net 41,962 37,622
Inventories 38,706 43,292
Prepaid expenses 4,311 2,051
Deferred income taxes 1,068 0
------ ------
Total current assets 95,261 96,734
------- -------
PROPERTY
Property, plant & equipment 145,703 140,592
Less accumulated depreciation 65,061 60,742
------- -------
Property - net 80,642 79,850
------- -------
GOODWILL - net 20,612 21,460
------- -------
OTHER ASSETS 3,350 3,500
------- -------
TOTAL $199,865 $201,544
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $10,547 $9,622
Lines of credit 1,852 5,850
Dividends payable 1,029 0
Accrued expenses:
Pension & profit sharing 2,664 984
Payroll & commissions 6,574 3,613
Other 4,382 2,175
------ ------
Total current liabilities 27,048 22,244
------ ------
ACCRUED PENSION COST 5,096 6,518
------ ------
DEFERRED INCOME TAXES 5,006 4,902
------ ------
LONG-TERM DEBT 0 15,000
------ ------
STOCKHOLDERS' EQUITY
Common stock 72 72
Class A common stock 18 18
Additional paid-in capital 37,328 37,056
Retained earnings 132,155 122,335
Accumulated other comprehensive
loss (1,422) (1,165)
Treasury stock (5,436) (5,436)
------- -------
Total stockholders' equity 162,715 152,880
------- -------
TOTAL $199,865 $201,544
======= =======
See Notes to Condensed Consolidated Financial Statements
</TABLE>
<PAGE> 3
<TABLE>
PENN ENGINEERING & MANUFACTURING CORP.
STATEMENTS OF CONDENSED CONSOLIDATED INCOME
(Unaudited)
<CAPTION>
(Dollars in thousands except per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------------ ------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Sales $64,651 $47,037 $129,788 $93,037
Cost Of Products Sold 42,138 32,068 86,198 63,580
------ ------ ------ ------
Gross Profit 22,513 14,969 43,590 29,457
Selling Expenses 7,032 4,848 13,572 9,781
General & Administrative Expenses 6,111 3,905 11,837 7,675
------ ------ ------ ------
Operating Profit 9,370 6,216 18,181 12,001
------ ------ ------ ------
Other Income (Expense):
Interest income 144 351 278 726
Interest expense (207) 0 (629) 0
Other, net 277 (139) 374 (204)
------ ------ ------ -------
Total Other Income 214 212 23 522
------ ------ ------ -------
Income Before Income Taxes 9,584 6,428 18,204 12,523
Provision For Income Taxes 3,353 2,163 6,328 4,202
------ ------ ------ ------
Net Income $6,231 $4,265 $11,876 $8,321
===== ===== ===== =====
PER SHARE DATA:
Basic earnings $0.73 $0.49 $1.39 $0.96
==== ==== ==== ====
Diluted earnings $0.72 $0.49 $1.38 $0.96
==== ==== ==== ====
Cash dividends declared $0.12 $0.12 $0.24 $0.24
==== ==== ==== ====
See Notes to Condensed Consolidated Financial Statements
</TABLE>
<PAGE> 4
<TABLE>
PENN ENGINEERING & MANUFACTURING CORP.
STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS
(Unaudited)
<CAPTION>
(Dollars in thousands)
SIX MONTHS ENDED
--------------------------------
June 30, 2000 June 30, 1999
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $11,876 $8,321
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 4,526 4,165
Amortization 519 0
Loss (gain) on disposal of property 12 (174)
Changes in assets and liabilities:
Increase in receivables (3,777) (3,451)
Decrease (increase) in inventories 4,742 (1,263)
(Increase) decrease in prepaid expenses (2,251) 190
Decrease (increase) in other assets 150 (100)
Increase in accounts payable 654 877
Increase in accrued expenses 6,837 3,754
Decrease in accrued pension cost (1,422) 0
Increase (decrease) in deferred
income taxes 105 (333)
------ ------
Net cash provided by operating
activities 21,971 11,986
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (4,446) (6,819)
Acquisition of business (net of cash) (3,019) (1,694)
Adjustment of prior year acquisition
purchase price 1,228 0
Additions to held-to-maturity
investments 0 (14,475)
Proceeds from disposal of held-to-
maturity investments 4,064 8,522
Proceeds from disposal of property 70 215
------ ------
Net cash used in investing activities (2,103) (14,251)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net short-term repayments (3,998) 0
Net long-term repayments (15,653) 0
Dividends paid (1,027) (1,036)
Issuance of common stock 272 226
------ ------
Net cash used in financing activities (20,406) (810)
------ ------
Effect of exchange rate changes on cash 78 (7)
------ ------
Net (decrease) increase in cash and
cash equivalents (460) (3,082)
Cash and cash equivalents at
beginning of year 4,231 13,103
------ ------
Cash and cash equivalents at end of
period $3,771 $10,021
====== ======
See Notes to Condensed Consolidated Financial Statements
</TABLE>
<PAGE> 5
PENN ENGINEERING & MANUFACTURING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2000
Note 1. Condensed Consolidated Financial Statements (Unaudited)
---------------------------------------------------------------
The accompanying interim financial statements should be read in conjunction
with the annual financial statements and notes thereto included in the
Company's Annual Report for the year ended December 31, 1999. The information
contained in this report is unaudited and subject to year-end audit and
adjustment. In the opinion of management, all adjustments (which include only
normal recurring adjustments) have been made which are necessary for a fair
presentation of the Company's consolidated financial position at June 30,
2000 and 1999 and the consolidated statements of income and cash flows for the
six-month periods then ended. The results of operations for the six months
ended June 30, 2000 are not necessarily indicative of the results of
operations to be expected for the year ending December 31, 2000.
Note 2. Inventories
-------------------
Substantially all of the Company's domestic fastener inventories are priced
on the lower of last-in, first-out (LIFO) cost or market method. The remainder
of the inventories are priced on the first-in, first-out (FIFO) method, at the
lower of cost or market.
Inventories are as follows: (Dollars in thousands)
(Unaudited)
June 30, 2000 December 31, 1999
------------- -----------------
Raw material $6,058 $5,472
Tooling 3,566 3,529
Work-in-process 12,341 12,463
Finished goods 16,741 21,828
------ ------
TOTAL $38,706 $43,292
====== ======
If the FIFO method of inventory valuation had been used for all inventories
by the Company, inventories would have been $10,189,000 and $9,562,000 higher
than reported at June 30, 2000 and December 31, 1999, respectively, and
net income would have been $409,000 and $133,000 higher than reported for the
six months ended June 30, 2000 and 1999, respectively. Included in other
assets is long-term tooling inventory totaling $3,350,000 and $3,500,000 at
June 30, 2000 and December 31, 1999, respectively.
Note 3. Lines of Credit
-----------------------
As of June 30, 2000, the Company had three unsecured line-of-credit
facilities available. All lines-of-credit bear interest at interest rate
options provided in the facilities. The first line-of-credit facility permits
maximum borrowings of $15,000,000, due on demand. There were no amounts
outstanding under the $15,000,000 line of credit facility as of June 30, 2000.
The availability of funds under this facility is periodically reviewed by the
bank. The second line-of-credit facility permits borrowings of up to
$10,000,000 and expires on September 27, 2000 unless extended by the bank. At
June 30, 2000, $1,232,000, bearing interest at 7.14%, was outstanding on this
facility. In addition to the short-term lines of credit, the Company has an
unsecured line of credit with a bank that permits borrowings of up to
$30,000,000 to finance acquisitions. At June 30, 2000 there were no amounts
outstanding under this facility. In addition, the Company assumed notes
payable upon the purchase of Atlas Engineering, Inc. on April 10, 2000 (see
Note 6). The amount of notes payable outstanding as of June 30, 2000 was
$620,000. This amount has been classified as short-term debt as of June 30,
2000 since it is the Company's intention to liquidate this debt by December
31, 2000.
<PAGE> 6
PENN ENGINEERING & MANUFACTURING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2000
Note 4. Comprehensive Income
----------------------------
Total comprehensive income amounted to $6,155,000 and $4,442,000 for the
three months ended June 30, 2000 and 1999, respectively and $11,619,000 and
$7,909,000 for the six months ended June 30, 2000 and 1999, respectively.
Note 5. Use of Estimates
------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Note 6. Acquisition
-------------------
On April 10, 2000, the Company acquired all of the issued and outstanding
capital stock of Atlas Engineering, Inc. The acquisition will be accounted for
using the purchase method. The purchase price of approximately $4.0 million
consisted of cash, the assumption of certain liabilities, and acquisition
related expenses. The results of the operations of Atlas Engineering, Inc.
have been included in the accompanying consolidated statement of income since
the acquisition date. The purchase price has been preliminarily allocated to;
accounts receivable - $671,000, inventory - $322,000, property - $985,000,
other current assets - $29,000, and goodwill and other intangible assets -
$1,965,000. Goodwill and other intangible assets will be amortized using the
straight-line method over a period of 20 years.
Note 7. Segment Information
---------------------------
(Dollars in thousands)
THREE MONTHS ENDED THREE MONTHS ENDED
June 30, 2000 June 30, 1999
------------- -------------
Fasteners Motors Fasteners Motors
--------- ------ --------- ------
Revenues from external customers $53,825 $10,826 $38,485 $8,552
Operating profit 8,040 1,330 5,416 800
SIX MONTHS ENDED SIX MONTHS ENDED
June 30, 2000 June 30, 1999
------------- -------------
Fasteners Motors Fasteners Motors
--------- ------ --------- ------
Revenues from external customers $108,757 $21,031 $76,540 $16,497
Operating profit 15,878 2,303 10,607 1,394
Segment assets 182,920 16,945 160,589 15,096
<PAGE> 6
PENN ENGINEERING & MANUFACTURING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2000
Note 8. Earnings Per Share Data
-------------------------------
The following table sets forth the computation of basic and diluted earnings
per share for the periods indicated.
THREE MONTHS ENDED SIX MONTHS ENDED
June 30 June 30
------- -------
2000 1999 2000 1999
---- ---- ---- ----
(In thousands, except per share data)
Basic:
Net income $6,231 $4,265 $11,876 $8,321
Average shares outstanding 8,573 8,647 8,567 8,640
----- ----- ----- -----
Basic EPS $0.73 $0.49 $1.39 $0.96
===== ===== ===== =====
Diluted:
Net income $6,231 $4,265 $11,876 $8,321
===== ===== ====== =====
Average shares outstanding 8,573 8,647 8,567 8,640
Net effect of dilutive stock
options - based on treasury
stock method 111 13 65 12
----- ----- ----- -----
Totals 8,684 8,660 8,632 8,652
===== ===== ===== =====
Diluted EPS $0.72 $0.49 $1.38 $0.96
===== ===== ===== =====
<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
PENN ENGINEERING & MANUFACTURING CORP.
June 30, 2000
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
Quarter Ended June 30, 2000 vs. Quarter Ended June 30, 1999
-----------------------------------------------------------
Consolidated net sales for the quarter ended June 30, 2000 were $64.7
million, versus $47.0 million for the quarter ended June 30, 1999, a 37.7%
increase. Net sales to customers outside the United States for the quarter
ended June 30, 2000 were $16.1 million, versus $14.8 million for the
quarter ended June 30, 1999, an 8.8% increase. Net sales for the fastener
operation for the quarter ended June 30, 2000 were $53.8 million, versus
$38.5 million for the quarter ended June 30, 1999, a 39.7% increase. Approx-
imately 48% of this increase in the fastener operation sales was due to the
acquisition of R.C. Dudek & Co., Inc. (now called Arconix/USA) on September
30, 1999 and the acquisition of Atlas Engineering, Inc. on April 10, 2000. The
remainder of the increase is directly related to the strong equipment require-
ments demand for the telecom, datacomm, and communications markets. Motor net
sales were $10.8 million for the quarter ended June 30, 2000, versus $8.5
million recorded for the quarter ended June 30, 1999, a 27.1% increase.
The number of fastener units sold to the Company's global OEM direct
customers and its independent distribution network increased approximately
27.6% in the second quarter of 2000 compared to the second quarter of 1999.
The number of fastener units sold within North America increased approximately
38.1% in the second quarter of 2000 compared to the second quarter of 1999,
and represented approximately 73.1% of total fasteners sold in the second
quarter of 2000. This increase is attributable to continued strong demand
from the communications sector. The number of fastener units sold into Europe
increased approximately 14.3% in the second quarter of 2000 compared to the
second quarter of 1999 and represented approximately 20.9% of total fasteners
sold in the second quarter of 2000. The number of fastener units sold into the
Asia-Pacific region decreased approximately 16.7% in the second quarter of
2000 compared to the second quarter of 1999. Sales into the Asia-Pacific
region were still high in the second quarter of 1999 due to anticipated
demand for personal computer upgrades due to Y2K concerns. The average selling
price for fasteners sold increased approximately 6.2% from the second quarter
of 1999 to the second quarter of 2000 due to a shift from lower priced studs
and steel nuts to higher priced panel fasteners and standoffs. The number of
motors sold increased 17.4% in the second quarter of 2000 compared to the
second quarter of 1999 while the average selling price also increased 7.8%.
Consolidated gross profit for the second quarter of 2000 was $22.5 million,
versus $15.0 million for the second quarter of 1999, a 50.0% increase.
Fastener gross profit increased 51.5% in the second quarter of 2000 compared
to the second quarter of 1999 while motor gross profit increased 44.6%. Both
segments benefited from increased volume which resulted in lower fixed costs
per unit.
Consolidated selling, general, and administrative expenses ("SG&A") for the
second quarter of 2000 were $13.1 million (20.3% of net sales), versus $8.8
million (18.6% of net sales) for the second quarter of 1999. Commission
expense increased 47.2% from the second quarter of 1999 to the second quarter
of 2000 due to the large increase in sales in the North America region. Also
contributing to the SGA increase were increased legal and professional fees
and increased technology related expenses due to recent acquisitions as well
as goodwill amortization of $246,000.
Consolidated net income for the second quarter of 2000 was $6.2 million,
versus $4.3 million for the second quarter of 1999. The Company incurred
$207,000 of interest expense in the second quarter of 2000 related to loans
outstanding to finance 1999 acquisitions.
<PAGE> 8
PENN ENGINEERING & MANUFACTURING CORP.
June 30, 2000
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
Six Months Ended June 30, 2000 vs. Six Months Ended June 30, 1999
-----------------------------------------------------------------
Consolidated net sales for the six months ended June 30, 2000 were $129.8
million, versus $93.0 million for the six months ended June 30, 1999, a 39.6%
increase. Net sales to customers outside the United States for the six months
ended June 30, 2000 were $32.9 million, versus $30.8 million for the six
months ended June 30, 1999, an 6.8% increase. Net sales for the fastener
operation for the six months ended June 30, 2000 were $108.8 million, versus
$76.5 million for the six months ended June 30, 1999, a 42.2% increase. Strong
sales growth in the communications market as well as the acquisition of R.C.
Dudek & Co., Inc. on September 30, 1999 contributed to this increase. Motor
sales were $21.0 million for the six months ended June 30, 2000, versus $16.5
million for the six months ended June 30, 1999, a 27.3% increase.
The number of fastener units sold to the Company's global OEM direct
customers and its independent distribution network increased approximately
28.3% in the first six months of 2000 compared to the first six months of
1999. The number of fastener units sold within North America increased
approximately 44.3% in the first six months of 2000 compared to the first six
months of 1999, and represented approximately 73.2% of total fasteners shipped
in the first six months of 2000. This increase was a result of very strong
demand for all types of wireless communication devices. The number of fastener
units sold into Europe increased approximately 7.8% in the first six months of
2000 compared to the first six months of 1999 and represented approximately
21.2% of total fasteners sold in the first six months of 2000. The number of
fastener units sold into the Asia-Pacific region decreased approximately 26.1%
in the first six months of 2000 compared to the first six months of 1999 which
was an unusally high period due to Y2K concerns. The average selling price of
fasteners shipped in the first six months of 2000 increased approximately 8.2%
from the first six months of 1999. This increase is a result of a shift in
product mix towards higher priced panel fasteners and standoffs as well as
the acquisition of R.C. Dudek & Co., Inc. and the Company's increased
presence in the distribution segment of the market. The number of motors sold
increased 22.6% in the first six months of 2000 compared to the first six
months of 1999 and the average selling price increased 4.0% during the same
period. Increased demand from the data storage and semiconductor equipment
manufacturers contributed to the increase.
Consolidated gross profit for the first six months of 2000 was $43.6
million, versus $29.5 million for the first six months of 1999, a 47.8%
increase. Fastener gross profit increased 48.6% in the first six months of
2000 compared to the first six months of 1999 while motor gross profit
increased 44.4% during the same period. Gross profit increases were the direct
result of increased sales volume, cost containment, and productivity
improvements.
Consolidated SG&A expenses for the first six months of 2000 were $25.4
million (19.6% of net sales), versus $17.5 million (18.8% of net sales) for
the first six months of 1999. Commission expenses increased 40.7% from the
first six months of 1999 to the first six months of 2000 due to the increased
sales volume in the North America region. SG&A in 2000 also includes goodwill
amortization ($518,000) related to acquisitions made by the Company during the
second half of 1999.
Consolidated net income for the first six months of 2000 was $11.9 million,
versus $8.3 million for the first six months of 1999. The Company incurred
$629,000 of interest expense in the first six months of 2000 related to
loans outstanding to finance 1999 acquisitions.
<PAGE> 10
PENN ENGINEERING & MANUFACTURING CORP.
June 30, 2000
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
Liquidity and Capital Resources
-------------------------------
Net cash provided by operations totaled $22.0 million for the six months
ended June 30, 2000 as compared to $12.0 million in the comparable period
of 1999. Funds from operations were sufficient to pay normal dividends,
capital expenditures, and to repay a large portion of the Company's long-term
debt. The Company anticipates that its existing capital resources and
cash flow generated from future operations will enable it to maintain its
current level of operations and its planned growth for the foreseeable future.
Forward-Looking Statements
--------------------------
Forward-looking statements are made throughout this Mnagement's Discussion
and Analysis. The Company's results may differ from those in the forward-
looking statements. Forward-looking statements are based on management's
current views and assumptions, and involve risks and uncertainties that
significantly affect expected results. For example, operating results may be
affected by external factors such as: changes in laws and regulations, changes
in accounting standards, fluctuations in the cost and availability of the
supply chain resources, and foreign economic conditions, including currency
rate fluctuations.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
-----------------------------------------------------------------
There have been no material changes to Part 2, Item 7A of the Company's Form
10-K Annual Report for the year ended December 31, 1999.
<PAGE> 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
-------------------------
Reference is made to Part 1, Item 3 of the Company's Form 10-K Annual Report
for the year ended December 31, 1999.
Item 2. Changes in Securities
-----------------------------
Not Applicable.
Item 3. Default upon Senior Securities
--------------------------------------
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
-----------------------------------------------------------
The Company held its 2000 Annual Meeting of Stockholders (the "Annual
Meeting") on May 4, 2000. The matters voted upon at the Annual Meeting and the
respective voting results were as follows:
1. The election of three Class C Directors of the Company to hold office
until the Annual Meeting of Stockholders to be held in 2003 and until their
successors are duly elected.
Name of Nominee For Withheld
--------------- --- --------
Willard S. Boothby, Jr. 1,587,690 551
Thomas M. Hyndman, Jr. 1,587,690 551
Daryl L. Swanstrom 1,587,690 551
The Directors whose term of office continued after the meeting were:
Class A Directors:
------------------
Maurice D. Oaks
Charles R. Smith
Martin Bidart
Class B Directors:
------------------
Kenneth A. Swanstrom
Lewis W. Hull
Mark W. Simon
2. The election of Ernst & Young as auditors for the Company for its 2000
fiscal year.
For Against Abstain
--- ------- -------
1,587,481 0 760
<PAGE> 12
Item 5. Other Information
-------------------------
Any stockholder who, in accordance with and subject to the provisions of
Rule 14a-8 of the proxy rules of the SEC, wishes to submit a proposal for
inclusion in the Company's proxy statement for its 2001 annual meeting of
stockholders must deliver such proposal in writing to the Company's Secretary
at the Company's principal executive offices at 5190 Old Easton Road, P.O. Box
1000, Danboro, Pennsylvania 18916, not later than December 5, 2000.
Pursuant to Section 6 of the Company's By-Laws, if a stockholder wishes to
present at the Company's 2001 annual meeting of stockholders (i) a proposal
relating to nominations for and election of directors or (ii) a proposal
relating to a matter other than nominations for and election of directors,
otherwise than pursuant to Rule 14a-8 of the proxy rules of the SEC, the
stockholder must comply with the provisions relating to stockholder proposals
set forth in the Company's By-Laws, which are summarized below. Written notice
of any such proposal containing the information required under the Company's
By-Laws, as described herein, must be delivered in person, by first class
United States mail postage prepaid or by reputable overnight delivery service
to the Company's Secretary at the Company's principal executive offices at
5190 Old Easton Road, P.O. Box 1000, Danboro, Pennsylvania 18916 during the
period commencing on December 5, 2000 and ending on January 4, 2001.
A written proposal of nomination for a director must set forth (A) the name
and address of the stockholder who intends to make the nomination (the
"Nominating Stockholder"), (B) the name, age, business address and, if known,
residence address of each person so proposed, (C) the principal occupation or
employment of each person so proposed for the past five years, (D) the
qualifications of the person so proposed, (E) the number of shares of capital
stock of the Company beneficially owned within the meaning of SEC Rule 13d-3
by each person so proposed and the earliest date of acquisition of any such
capital stock, (F) a description of any arrangement or understanding between
each person so proposed and the Nominating Stockholder with respect to such
person's proposal for nomination and election as a director and actions to be
proposed or taken by such person as a director, (G) the written consent of
each person so proposed to serve as a director if nominated and elected as a
director and (H) such other information regarding each such person as would be
required under the proxy solicitation rules of the SEC if proxies were to be
solicited for the election as a director of each person so proposed. Only
candidates nominated by stockholders for election as a member of the Company's
Board of Directors in accordance with the By-Law provisions summarized herein
will be eligible to be considered by the Nominating Committee for nomination
for election as a member of the Company's Board of Directors at such meeting
of stockholders, and any candidate not nominated in accordance with such
provisions will not be considered or acted upon for election as a director at
such meeting of stockholders.
A written proposal relating to a matter other than a nomination for election
as a director must set forth information regarding the matter equivalent to
the information that would be required under the proxy solicitation rules of
the SEC if proxies were solicited for stockholder consideration of the matter
at a meeting of stockholders. Only stockholder proposals submitted in accor-
dance with the By-Law provisions summarized above will be eligible for
presentation at the 2001 annual meeting of stockholders, and any matter not
submitted to the Company's Board of Directors in accordance with such pro-
visions will not be considered or acted upon at the 2001 annual meeting of
stockholders.
<PAGE> 13
Item 6. Exhibits and Reports on Form 8-K
----------------------------------------
a). Exhibits
Exhibit No. Description
----------- -----------
3.1 Restated Certificate of Incorporation (Incorporated by
reference to Exhibit 3.1 of the Company's Form 10-Q
Quarterly Report for the period ended June 30, 1996.)
3.2 By-laws, as amended
27 Financial Statement Data Schedule
b). Reports on Form 8-K
None.
<PAGE> 14
SIGNATURE
Pursuant to the requirement of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
PENN ENGINEERING & MANUFACTURING CORP.
Dated: August 14, 2000 By: /s/ Kenneth A. Swanstrom
-----------------------------
Kenneth A. Swanstrom
Chairman/CEO
Dated: August 14, 2000 By: /s/ Mark W. Simon
-----------------------------
Mark W. Simon
Vice-President - Finance
