<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED March 31, 2000 COMMISSION FILE NUMBER 0-14229
-------------- -------
CROWN ANDERSEN INC
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 58-1653577
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
306 Dividend Drive, Peachtree City, Georgia 30269
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 486-2000
--------------
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 filing such
requirements for the past 90 days. Yes _X_ No ___
===========================================================================
Class Outstanding at March 31, 2000
----------------------------- -----------------------------
Common Stock, $0.10 Par Value 1,838,614 shares
Page 1 of 13
<PAGE>
CROWN ANDERSEN INC
------------------
INDEX
-----
PAGE NO.
--------
Part I. FINANCIAL INFORMATION:
Consolidated Balance Sheets--
March 31, 2000 and September 30, 1999 3
Consolidated Statements of Income--
Three Months and Six Months Ended March 31, 2000
and 1999 4
Consolidated Statements of Cash Flows--
Six Months Ended March 31, 2000 and 1999 5
Notes to Consolidated Financial Information 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a vote of Security
Holders 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 13
2
<PAGE>
CROWN ANDERSEN INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, September 30,
2000 1999
------------ ------------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
CURRENT:
Cash and cash equivalents $ 1,586,609 $ 1,653,516
Receivables:
Trade, less allowance of $211,333 and $174,543 for
possible losses 5,138,920 4,924,700
Other 52,279 41,928
Income taxes -- --
Costs and estimated earnings in excess of billings on
uncompleted contracts 4,407,021 2,635,324
Inventories 2,265,839 2,364,616
Prepaid expenses 158,373 154,708
Deferred income taxes 152,868 152,868
------------ ------------
TOTAL CURRENT ASSETS 13,761,909 11,927,660
RESTRICTED CASH 1,036,000 1,036,000
EQUIPMENT HELD FOR RESALE 490,000 490,000
PROPERTY AND EQUIPMENT, less accumulated depreciation 2,843,077 2,806,522
DEFERRED INCOME TAXES 1,027,251 1,027,251
PROPERTY HELD FOR SALE 1,500,000 1,500,000
GOODWILL, net of accumulated amortization of $78,554 805,369 834,833
OTHER ASSETS 123,310 124,253
------------ ------------
$ 21,586,916 $ 19,746,519
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 400,000 $ 393,171
Accounts payable 4,899,246 3,801,352
Accruals:
Income taxes 132,586 4,714
Compensation 510,539 357,015
Warranty 242,000 228,000
Miscellaneous 478,630 417,507
Billings on uncompleted contracts in excess of cost and
estimated earnings 391,385 --
Current maturities of long-term debt 716,795 783,265
Deferred income taxes 364,513 378,322
------------ ------------
TOTAL CURRENT LIABILITIES 8,135,694 6,363,346
LONG-TERM DEBT, less current maturities 35,000 18,744
DEFERRED INCOME TAXES 251,932 251,932
------------ ------------
TOTAL LIABILITIES 8,422,626 6,634,022
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock, $.10 par; shares authorized 20,000,000; issued
1,875,918; outstanding 1,838,614 and 1,832,939 187,592 187,364
Additional paid-in capital 3,836,572 3,826,301
Treasury stock; 37,304 and 40,696 shares, at cost (262,675) (270,235)
Retained earnings 9,539,684 9,327,567
Foreign currency translation adjustment (136,883) 41,500
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 13,164,290 13,112,497
------------ ------------
$ 21,586,916 $ 19,746,519
============ ============
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
3
<PAGE>
CROWN ANDERSEN INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(Unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED MARCH 31, ENDED MARCH 31,
--------------------------- ----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES:
Contracts $ 4,821,195 $ 4,482,346 $ 9,814,092 $ 8,050,459
Sales 372,447 530,708 781,735 1,066,387
Other -- -- -- 27,138
------------ ------------ ------------ ------------
5,193,642 5,013,054 10,595,827 9,143,984
------------ ------------ ------------ ------------
COSTS AND EXPENSES:
Cost of contracts and sales 3,787,888 4,070,733 8,056,199 7,444,327
Selling, general and administrative 1,120,447 888,264 2,196,527 1,609,072
Interest and other 6,609 (11,321) (10,316) (7,759)
------------ ------------ ------------ ------------
4,914,944 4,947,676 10,242,410 9,045,640
------------ ------------ ------------ ------------
Income from operations before
taxes on income 278,698 65,378 353,417 98,344
TAXES ON INCOME 115,000 22,200 141,300 34,700
------------ ------------ ------------ ------------
NET INCOME $ 163,698 $ 43,178 $ 212,117 $ 63,644
============ ============ ============ ============
AVERAGE NUMBER OF SHARES - BASIC 1,837,819 1,825,403 1,835,526 1,707,584
AVERAGE NUMBER OF SHARES - DILUTED 1,957,740 1,882,011 1,955,447 1,761,233
EARNINGS PER SHARE
BASIC $0.09 $0.02 $0.12 $0.04
DILUTED $0.08 $0.02 $0.11 $0.04
</TABLE>
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED MARCH 31, ENDED MARCH 31,
---------------------- ----------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
NET INCOME $ 163,698 $ 43,178 $ 212,117 $ 63,644
OTHER COMPREHENSIVE INCOME
Foreign Currency Translation Adjustment (80,891) (141,226) (178,383) (140,330)
--------- --------- --------- ---------
COMPREHENSIVE INCOME (LOSS) $ 82,807 $ (98,048) $ 33,734 $ (76,686)
========= ========= ========= =========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
4
<PAGE>
CROWN ANDERSEN INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended March 31,
--------------------------
2000 1999
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income from operations $ 212,117 $ 63,644
Items in income from operations not affecting cash:
Depreciation and amortization 163,076 148,232
Gain on sale of assets (16,000) --
Cash provided by (used for)
Trade and other receivables (354,003) 831,580
Refundable income taxes -- 43,456
Costs and estimated earnings in excess of billings on
uncompleted contracts (1,771,697) (1,501,520)
Inventories 44,637 338,567
Prepaid expenses (7,844) (70,914)
Accounts payable 1,213,791 1,339,127
Accrued expenses 387,010 54,276
Billings on uncompleted contracts in excess of costs and
estimated earnings 391,385 (6,113)
Other (47,779) 17,802
----------- -----------
Cash provided by operating activities 214,693 1,258,137
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of assets 16,000 --
Investment in Griffin Environmental Company Inc. -- (2,296,010)
Capital expenditures (244,891) (66,321)
----------- -----------
Cash provided by (used for) investing activities (228,891) (2,362,331)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Reduction in long-term debt (50,214) (39,279)
Decrease in notes payable 6,829 (134,835)
Sale of common stock 18,059 977,198
----------- -----------
Cash provided by (used for) financing activities (25,326) 803,084
----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (27,383) (10,044)
----------- -----------
CASH AND CASH EQUIVALENTS:
Net decrease during the period (66,907) (311,154)
Balance at beginning of period 1,653,516 1,171,097
----------- -----------
BALANCE AT END OF PERIOD $ 1,586,609 $ 859,943
=========== ===========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
5
<PAGE>
CROWN ANDERSEN INC. AND SUBSIDIARIES
------------------------------------
NOTES TO CONSOLIDATED FINANCIAL INFORMATION
-------------------------------------------
1. Condensed footnotes:
-------------------
As contemplated by the Securities and Exchange Commission instructions
to Form 10-Q, the following footnotes have been condensed and therefore do not
contain all disclosures required in connection with annual financial statements.
Reference should be made to the notes to Crown Andersen Inc.'s annual financial
statements set forth in its Form 10-K for the year ended September 30, 1999.
2. Earnings per share:
------------------
Earnings per share is computed based on the weighted average of common
shares, common stock options and warrants (using the treasury stock method) in
accordance with FAS 128 "Earnings Per Share."
3. Stock options and warrants:
--------------------------
As of March 31, 2000, options to purchase 271,233 shares at an average
price of $4.42 were outstanding under the Company's stock option plan.
The Company also has outstanding warrants to purchase 300,000 shares of
common stock under the Directors Stock Warrant Plan at $4.45 per share. Of the
total 300,000 warrants outstanding, only 36,000 are vested.
4. Revenue recognition:
-------------------
Revenues from contracts are reported on the percentage-of-completion
method. Under this method, the percentage of contract revenue to be recognized
currently is based on the ratio of costs incurred to date to total estimated
contract costs, after giving effect to the most recent estimate of costs to
complete. Revenues other than contracts are recorded when the product is shipped
or the service is rendered to the customers.
5. Inventories:
-----------
Inventories were $2,265,839 and $2,364,616 as of March 31, 2000 and
September 30, 1999. Included in inventories is approximately $870,000 related to
incineration equipment purchased from a former competitor.
6. Restricted cash:
---------------
As of March 31, 2000, $1,036,000 of the Company's short-term
investments were held by banks as collateral for an outstanding letter of
credit. The letter of credit expires in June 2000.
7. Equipment held for resale:
-------------------------
On September 30, 1992, the Company sold a soil processor unit under a
financing-type lease arrangement. As a result of the customer's default, the
Company, during 1994, terminated the lease and repossessed the equipment. On
September 30, 1994, the Company reclassified this asset as equipment held for
resale and reduced its carrying value from approximately $2.1 million to $1.8
million. The Company employs an outside appraiser and reviews the carrying value
of this unit on a periodic basis. Through March 31, 2000, the carrying value of
this unit has been reduced to $490,000.
6
<PAGE>
8. Commitments and contingencies:
------------------------------
There are no significant changes to the information discussed in the
Company's annual report on Form 10K for the year ended September 30, 1999.
As discussed in Note 13 to Consolidated Financial Statements in the
Company's 1999 Annual Report, on June 17, 1999, the Company filed a claim for
arbitration in Singapore seeking to settle a contractual dispute with a customer
in connection with the sale of equipment in Indonesia. The equipment has been
delivered, installed and, in management's opinion, has operated in accord with
the contract. The customer his claiming the equipment has not met certain
performance specifications, but has provided no evidence to support this
position. The Company's claim is for $2.3 million. As of March 31, 2000, the
Company has recorded $1.9 million in accounts receivable and costs and estimated
earnings in excess of billings on uncompleted contracts associated with this
customer. Management believes that it will prevail and recover the amount
claimed in this dispute. Accordingly, no specific reserve has been established
for this matter. The inability of management to satisfactorily resolve this
matter with the customer and collect the outstanding receivable could have a
material unfavorable effect on the Company's financial position and liquidity.
The Company had a $5.0 million line of credit and a term loan with a
U.S. bank. During 1999, the Company's bank notified the Company that the bank
was not going to renew the line of credit beyond September 30, 1999 and was
reducing the available borrowing limit to $2.0 million. As of March 31, 2000,
there were no amounts outstanding under the line of credit. However, there was
$625,000 outstanding on the term loan and $196,000 on a letter of credit issued
by this bank and guaranteed by the line of credit. This letter of credit will
expire in July 2000. Since September 30, 1999, the Company has continued to make
scheduled debt payments to this bank. On January 14, 2000, the bank agreed to
extend the term loan to June 15, 2000 with no further advances allowed under the
line of credit.
The Company has been actively seeking financing from other sources
since mid September 1999 to replace this line of credit. The discussions for
other financing include banks with similar collateral requirements and mortgage
loans on the Company's real estate holdings. The Company has reviewed the
current collateral available to it and has determined that there exists
sufficient collateral to refinance its loan obligation and obtain the necessary
cash to fund operations in fiscal 2000. The Company's cash flow projections for
fiscal 2000 indicate a need for about $900,000 of working capital in excess of
anticipated bank balances. This is projected to occur in May and June 2000 as
the Company incurs costs associated with payments on the term loan, tax deposits
and investments in its contracts. The inability of the Company to be able to
obtain necessary financing within a timely fashion could have an unfavorable
impact on the Company's ability to maintain projected operating levels and to
meet certain obligations when they become due.
9. Litigation settlement:
---------------------
During fiscal 1998, the Company settled the litigation over principal
and interest for certain Kansas property formerly occupied by Struthers
Thermo-Flood Corporation, a former Crown Andersen subsidiary. Under terms of the
settlement, the Company paid $1,630,000 in cash and issued a one year,
non-interest bearing promissory note and the amount of $670,000. The note was
paid in May 1999. In exchange, the Company received the rights (without further
obligation) to transfer title of this property to a purchaser or to the Company.
The estimated value of these assets is presently $1,500,000. This transaction
was recorded as of June 30, 1998 and the Company recognized a net loss of
approximately $900,000. The Company's March 31, 2000 balance sheet includes
these assets as "property held for sale."
10. Acquisition of business:
-----------------------
On December 16, 1998 the Company purchased all the outstanding shares
of stock of Griffin Environmental Company Inc. ("Griffin"). Griffin is a
manufacturer of fabric filter and cartridge dust collector pollution control
equipment. Griffin sells its pollution control equipment to a wide variety of
industries, including concrete, steel, other metals, clays, paper, glass, and
other industries.
7
<PAGE>
The Company purchased Griffin for $2.6 million. This was comprised of
cash of $2.3 million and a one-year promissory note of $273,000 secured by a
second mortgage on the real estate. The note bears interest at 4.33% payable
monthly. The note was paid on December 16, 1999.
The acquisition included the purchase of assets comprised primarily of
inventories, accounts receivable, and property, plant, and equipment.
Liabilities assumed in the acquisition consist primarily of trade accounts
payable, customer deposits, long term debt , and other accrued liabilities. The
transaction was accounted for under the purchase method of accounting whereby
all assets and liabilities were valued at their current fair market value at
December 16, 1998.
* * *
The financial information included in this report is unaudited,
however, such financial information reflects all adjustments which are, in the
opinion of management, necessary for a fair presentation of the results for the
interim period. Nevertheless, the results shown are for interim periods and are
not necessarily indicative of results to be expected for the year.
8
<PAGE>
CROWN ANDERSEN INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------
Introduction:
- ------------
Crown Andersen Inc. (Crown Andersen or the Company) is a
publicly-traded holding company for Andersen 2000 Inc. (Andersen) and Griffin
Environmental Company, Inc. (Griffin). Through Andersen, the Company owns all of
the outstanding stock of Montair Andersen bv (Montair). The Company is engaged
exclusively in the pollution control, product recovery, and waste processing
equipment businesses.
Liquidity and Capital Resources:
- -------------------------------
Cash and cash equivalents of $1,586,609 at March 31, 2000 decreased
$66,907 from the September 30, 1999 balance of $1,653,516. The decrease was
attributable to an increase in accounts receivable of $354,003 and capital
expenditures of $244,891. Costs and estimated earnings in excess of billings on
uncompleted contracts, net of billings in excess of costs, increased $1,380,312.
This increase was offset by net income plus depreciation of $375,193 and
increases in payables of $1,600,801. Cash provided by operating activities
amounted to $214,693.
Cash used for investing activities totaled $228,891. This amount
includes capital expenditures (mostly at Griffin) of $244,891 net of proceeds
from sale of fixed assets of $16,000.
Cash used for financing activities totaled $25,326. This amount
reflects a reduction of long-term debt of $50,214, offset by an increase in
notes payable of $6,829 and sale of common stock of $18,059.
All operations were profitable in the first six months of fiscal 2000.
Montair realized a positive cash flow from operations which offset negative
operating cash flows at Andersen and Griffin.
As disclosed in Note 7 to the Consolidated Financial Statements, during
1994 the Company repossessed certain equipment sold under a lease arrangement.
The Company has reduced the carrying value of this asset to $490,000 as of
September 30, 1998 and it is reflected as equipment held for resale in the
accompanying consolidated balance sheet. The Company is attempting to market
this equipment for sale and has active negotiations underway for its sale.
As discussed in Note 13 to Consolidated Financial Statements in the
Company's 1999 Annual Report, on June 17, 1999, the Company filed a claim for
arbitration in Singapore seeking to settle a contractual dispute with a customer
in connection with the sale of equipment in Indonesia. The equipment has been
delivered, installed and, in management's opinion, has operated in accord with
the contract. The customer is claiming the equipment has not met certain
performance specifications, but has provided no evidence to support this
position. The Company's claim is for $2.3 million. As of March 31, 2000, the
Company has recorded $1.9 million in accounts receivable and costs and estimated
earnings in excess of billings on uncompleted contracts associated with this
customer. Management believes that it will prevail and recover the amount
claimed in this dispute. Accordingly, no specific reserve has been established
for this matter. The inability of management to satisfactorily resolve this
matter with the customer and collect the outstanding receivable could have a
material unfavorable effect on the Company's financial position and liquidity.
The Company had a $5.0 million line of credit and a term loan with a
U.S. bank. During 1999, the Company's bank notified the Company that the bank
was not going to renew the line of credit beyond September 30, 1999 and was
reducing the available borrowing limit to $2.0 million. As of March 31, 2000,
there were no amounts outstanding under the line of credit. However, there was
$625,000 outstanding on the term loan and $196,000 on a letter of credit issued
by this bank and guaranteed by the line of credit. This letter of credit will
expire in July 2000. Since September 30, 1999, the Company has continued to make
9
<PAGE>
scheduled debt payments to this bank. On January 14, 2000, the bank agreed to
extend the term loan to June 15, 2000 with no further advances allowed under the
line of credit.
The Company has been actively seeking financing from other sources
since mid September 1999 to replace this line of credit. The discussions for
other financing include banks with similar collateral requirements and mortgage
loans on the Company's real estate holdings. The Company has reviewed the
current collateral available to it and has determined that there exists
sufficient collateral to refinance its loan obligation and obtain the necessary
cash to fund operations in fiscal 2000. The Company's cash flow projections for
fiscal 2000 indicate a need for about $900,000 of working capital in excess of
anticipated bank balances. This is projected to occur in May and June 2000 as
the Company incurs costs associated with payments on the term loan, tax deposits
and investments in its contracts. The inability of the Company to be able to
obtain necessary financing within a timely fashion could have an unfavorable
impact on the Company's ability to maintain projected operating levels and to
meet certain obligations when they become due.
Under the current loan agreement, the Company is required to obtain the
bank's consent to pay cash dividends, purchase treasury stock, or to sell assets
which constitute collateral. The Company obtained permission to purchase up to
$400,000 of treasury stock. A total of 262,675 of net treasury stock purchases
is reflected in the Company's balance sheet as of March 31, 2000.
As of March 31, 2000, the Company's equity in its Montair operation had
decreased in value by $178,383 from September 30, 1999 as a result of a decrease
in the foreign currency translation adjustment, reflecting a 12% increase in the
U.S. dollar against the Dutch guilder.
The Company experienced no disruptions in its operations as a result of
the year 2000 issue.
Results of Operations:
- ---------------------
Revenues.
- ---------
Revenues for the first six months of fiscal 2000 were $10,595,827
compared with $9,143,984 for the first six months of fiscal 1999. For the second
quarter of fiscal 2000, revenues were $5,193,642 compared with $5,013,054 for
the comparable figure in 1999 and $5,402,185 for the first three months of
fiscal 2000. Foreign sales (including export sales by Andersen and sales by
Montair) were $2.8 million and $2.6 million for the first six months of 2000 and
1999, respectively, and accounted for 26.5% and 28.5% of revenues. All changes
in revenues are related to the quantity of products sold, not to pricing
changes.
Six month revenues in 2000 increased $1,451,843 (16%) from 1999.
Revenue increases at Griffin and Montair of $2,668,026 and $280,495,
respectively, offset a decline in revenues at Andersen of $1,496,678.
The Company continues to rely on the international market for some of
its revenues. Demand for the Company's products in the domestic market has
remained low over the last five years because of uncertainty in changes in
United States regulations. However, the Company experienced an increase in
domestic business during fiscal 1999. Domestic revenues accounted for 71.5% of
total revenues in fiscal 1999 and 73.5% for the first six months of fiscal 2000.
This trend is expected to continue in fiscal 2000 as a result of the additional
revenues generated by Griffin.
Second quarter 2000 revenues increased $180,588 (3.6%) from the
comparable period in 1999. The increase reflects higher revenues at Griffin and
Montair, which offset a decline in revenues of $1,485,566 at Andersen.
Second quarter 2000 revenues decreased $208,543 (3.9%) from the
preceding fiscal quarter, primarily as a result of lower revenues at Andersen,
partially offset by higher revenues at Griffin.
10
<PAGE>
Cost of Sales.
- -------------
For the first six months of fiscal 2000, cost of sales totaled
$8,056,199 as compared with $7,444,327 for the first six months of fiscal 1999.
Second quarter cost of sales were $3,787,888 as compared with $4,070,733 for the
second quarter of 1999 and $4,268,311 for the first quarter of fiscal 2000.
Cost of sales for the first six months of fiscal 2000 increased
$611,872 (8.2%) from the similar period in 1999. The increase reflects an
increase in revenues of 15.9% and an improvement in operating margin of 5.4% -
from 18.6% in 1999 to 24.0% in 2000.
For the second quarter of fiscal 2000, cost of sales increased $232,183
(26.3%) from the comparable period in 1999, also as a result of higher revenues
and a margin improvement of 8.3%.
Second quarter 2000 cost of sales decreased $480,423 (11.2%) from the
preceding fiscal quarter, as a result of a decline in revenues of $208,543 and
as improvement in operating margins.
Selling, General and Administrative Costs.
- ------------------------------------------
Selling, general and administrative costs for the first six months of
fiscal 2000 were $2,196,527 compared with $1,609,072 for the first six months of
1999. For the second quarter of 2000, selling, general and administrative costs
were $1,120,447, as compared with $888,264 in the comparable period of 1999 and
$1,076,080 for the first quarter of 2000. As a percentage of revenues, selling,
general and administrative costs were 20.7%, 17.6%, 21.6%, 17.7% and 19.9% of
revenues for the first six months of 2000 and 1999, the second quarter of 2000
and 1999, and the first quarter of 2000, respectively. The current period
increases of $587,455 (36.5%) and $232,183 (26.1%) from the comparable six
months and second quarter periods of 1999 reflect increases in salaries,
commissions, professional fees and royalties. The increases also reflect the
inclusion of six months operations for the Griffin subsidiary, compared to four
months in fiscal 1999.
Second quarter expenses increased $44,267 (4.1%) from the first
quarter, primarily as a result of higher costs recorded by Griffin.
Interest and Other (Income) Expenses.
- -------------------------------------
Interest and other (income) expenses for the first six months of fiscal
2000 totaled $10,316 (credit), compared to a credit of $7,759 for the comparable
period in 1999. For the second quarter of 2000, interest and other expenses were
$6,609, compared to a credit of $11,321 for the second quarter of 1999 and a
credit of $17,025 for the first quarter of fiscal 2000. The lower credit of
$2,557 in the six month period of fiscal 2000, as compared to the six months of
fiscal 1999, reflects a gain in disposition of assets recorded by Griffin,
offset by an increase in net interest costs. The expense increase of $17,930 for
the second quarter of 2000 reflects an increase in net interest costs. The
expense increase of $23,634, as compared to the preceding fiscal quarter, is due
to a gain in disposition of assets recorded in the first quarter of fiscal 2000,
offset by an increase in bad debt expense.
Taxes on Income.
- ----------------
The effective income tax rate for all periods are:
First 6 months of 2000 - 40.0%
First 6 months of 1999 - 35.3%
Second quarter of 2000 - 41.3%
Second quarter of 1999 - 34.0%
First quarter of 2000 - 35.3%
11
<PAGE>
Net Income.
- -----------
Net income for the first six months of fiscal 2000 was $212,117 or
$0.12 per share (basic) and $0.11 (diluted), compared with $63,644 or $0.04 per
share (basic and diluted) for the first six months of fiscal 1999. For the
second quarter of 2000, net income was $163,698 or $0.09 per share (basic) and
$0.08 per share (diluted), compared with $43,178 or $0.02 per share (basic and
diluted) for the second quarter of 1999 and $48,419 or $0.03 per share (basic)
and $0.02 (diluted) for the first quarter of 2000.
Net income increased $148,473 in the current six month period,
primarily as a result of a 16% increase in revenues and improvement in operating
margins. The Griffin operation reported net income of $123,183 - an increase of
$116,346 over the 1999 period. Andersen and Montair reported slight increases in
net income over the prior year.
In the second quarter of fiscal 2000, Griffin reported net income of
$107,990 - an increase of $86,879 over the 1999 quarter. Net income increased
$115,279 over the preceding fiscal quarter, primarily as the result of
operations at Griffin.
Shares Outstanding.
- ------------------
The average shares and equivalent shares outstanding were:
Basic Diluted
----- -------
First 6 months of 2000 1,835,526 1,955,447
First 6 months of 1999 1,707,584 1,761,233
Second quarter of 2000 1,837,819 1,957,740
Second quarter of 1999 1,825,403 1,882,011
First quarter of 2000 1,833,233 1,961,420
Forward-Looking Statements.
- ---------------------------
Certain forward-looking statements are made in this Management's
Discussion and Analysis. The Company's results may differ materially 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 factors include, but are not limited to,
changes in the regulatory environment, general conditions in the environmental
industry, the Company's competitive position, and economic conditions in
international markets.
12
<PAGE>
CROWN ANDERSEN INC. AND SUBSIDIARIES
PART II
OTHER INFORMATION
-----------------
ITEM 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
(a) The Annual Meeting of Stockholders of the registrant was held
on February 9, 2000. At the Annual Meeting of Stockholders,
proxies were solicited under Regulation 14 of the Exchange Act
and all management nominees for the directors listed in the
proxy statement were elected. There was no solicitation in
opposition to management's nominees. In addition, the
following proposals were approved.
The appointment of BDO Seidman, LLP, as independent
accountants of the Company for the fiscal year ending
September 30, 2000.
ITEM 6. Exhibits and Reports on Form 8-K
--------------------------------
1. Exhibit 27 Financial data Schedule
2. Exhibit 10aa Modification and Extension Agreement dated January
14, 2000, by and among Crown Andersen Inc., Andersen
2000 Inc. and Southtrust Bank, N.A.
3. No reports on Form 8-K were filed during the quarter ended March
31, 2000.
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.
CROWN ANDERSEN INC.
Dated: May 11, 2000 By: /s/ Jack D. Brady
-------------- -----------------
Jack D. Brady
Chairman of the Board
(Duly Authorized Officer)
Dated: May 11, 2000 By: /s/ Milton Emmanuelli
-------------- ---------------------
Milton Emmanuelli
Treasurer
(Principal Financial Officer)
13
<PAGE>
Exhibit 10(a)(a)
MODIFICATION AND EXTENSION AGREEMENT
------------------------------------
This SECOND MODIFICATION AND EXTENSION AGREEMENT (the "Agreement") is
made and entered effective January 14, 2000 by and among CROWN ANDERSEN INC., a
Delaware corporation and ANDERSEN 2000 INC., a Delaware corporation (hereinafter
sometimes either individually or collectively as the context requires referenced
as the "Borrower"), and SOUTHTRUST BANK, N.A. (the "Lender").
R E C I T A L S:
----------------
A. On June 28, 1996, the Borrower obtained a loan from Lender in the
original principal amount of up to $5,000,000.00 (the "Revolving Loan"), which
Revolving Loan is evidenced by that certain Commercial Revolving Note of same
date in the principal face amount of up to $5,000,000.00 (the "Revolving Note");
B. On June 28, 1996, the Borrower obtained a loan from the Lender in
the original principal amount of $1,000,000.00 (the "Term Loan ") which Term
Loan is evidenced by that certain Commercial Promissory Note of same date in the
principal amount of $1,000,000.00 (the "Term Note") (the Revolving Loan and the
Term Loan may hereinafter sometimes collectively be referred to as the "Loan");
C. The Revolving Note and the Term Note (hereinafter collectively the
"Note") are secured by that certain General Security Agreement from Borrower (as
"Debtor") to Lender (as "Secured Party") dated June 28, 1996 (the "Security
Agreement") encumbering certain personal property as described therein (the
"Personal Property"), and that certain Deed to Secure Debt, Assignment of Rents
and Security Agreement from Borrower (as "Grantor" therein) to Lender (as
"Grantee" therein) dated June 28, 1996, recorded in Book 1076, page 234, Fayette
County, Georgia records (the "Security Deed") encumbering certain real property
as described therein (the "Property"). The Note, Security Agreement, Security
Deed and certain other documents related thereto are collectively referred to as
the "Loan Documents," as that term is defined in that certain Commercial Loan
Agreement between Borrower and Lender dated June 28, 1996 (the "Loan Agreement")
(the Revolving Loan and the Term Loan are hereinafter collectively the "Loan")
and Loan Documents have previously been amended by certain documents, to-wit:
that certain Loan Documents Modification Agreement dated February 28, 1997 and
recorded in Deed Book 1134, page 694, Fayette County, Georgia records; that
certain Loan Documents Modification Agreement dated February 28, 1998 and
recorded in the aforesaid records; that certain Loan Documents Modification
Agreement dated March 29, 1998 and recorded in the aforesaid records; that
certain Amendment of Commercial Revolving Note and Related Loan Documents dated
as of April 26, 1999 and recorded in the aforesaid records; and that certain
Amendment of Commercial Revolving Note and Related Loan Documents dated June 24,
1999 and recorded in the aforesaid records which provided for a maturity of
September 30, 1999.
D. Borrower has now requested that Lender modify and extend the Loan
and Loan Documents; and
[1]
<PAGE>
E. The Revolving Loan currently serves as collateral for certain
existing letters of credit previously issued by Lender on Borrower's behalf and
heretofore secured by the Revolving Note (the "Letters of Credit").
F. On the conditions that (1) Borrower execute this Agreement and
related documents, and (2) Borrower pay all accrued and unpaid interest to date,
Lender has agreed to modify and extend the Loan.
NOW, THEREFORE, in consideration of the foregoing recitals, which are
hereby incorporated into and shall be deemed a part of this Agreement, the
covenants and agreements hereinafter set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto intending to be legally bound do hereby agree that the Loan
Documents shall be modified as follows:
1. Recitals. The Recitals are hereby incorporated into and made a part
of this Agreement.
2. Outstanding Balance. Borrower hereby acknowledges and agrees that
the outstanding principal balance under the Revolving Loan as of January 20,
2000, including all accrued and unpaid interest as of said date, is zero and
no/100 dollars ($0.00), but that letters of credit have been issued by Lender
for the account of Borrower in the aggregate amount of $516,000.00. Borrower
hereby acknowledges and agrees that the outstanding principal balance under the
Term Loan as of January 20, 2000 is $650,002.03. Borrower and Lender acknowledge
and agree that no interest is included in said principal balance.
3. No Further Advance; Cancellation of Revolving Note. Borrower and
Lender hereby modify and amend the Loan Documents to provide that from this day
forward there shall be no further eligibility under either the Term Loan or
Revolving Loan for additional borrowing advances. Borrower and Lender agree that
upon the execution of this Agreement, Lender will cancel and terminate the
Revolving Loan and Revolving Note.
4. Modification of Final Maturity. Borrower and Lender hereby modify
and amend the Loan Documents to provide that all principal and accrued interest,
as well as any other amounts which may be owed under the Term Note or any other
of the Loan Documents, shall be due and payable in full on June 15, 2000.
5. Real Property and Personal Property as Security for the Letters of
Credit. Borrower and Lender hereby acknowledge and agree that the Letters of
Credit are and shall be secured by the Property, the furniture, fixtures and
equipment related or affixed thereto or located thereon, and all other personal
property of Borrower as such personal property may be described in the Security
Agreement.
6. Release of Personal Property Upon Termination of Letters of Credit.
Lender agrees to release as collateral for the Loan, all property of Borrower of
a personal nature except the Property and furniture, fixtures and equipment
related or affixed thereto or located thereon and to release Borrower from the
Security Agreement, after Borrower produces evidence satisfactory to Lender that
all of the Letters of Credit have been terminated, cancelled, or otherwise
disposed of to Lender's satisfaction.
[2]
<PAGE>
7. No Defense. Borrower hereby agrees that the modification of the
terms of the Loan Documents as contemplated by this Agreement shall not,
independently or solely by virtue of the modification, be raised as or
constitute a defense or a claim to any subsequent action instituted by Lender
with respect to the Loan, as previously or herein modified or amended.
8. Security Interest. Borrower hereby acknowledges that Lender has
valid security interests in and security title to all real and personal property
pledged as collateral for the Loan (the "Loan Collateral") and agree not to
contest the validity of said security interests and title.
9. Validity of Loan Documents; Release. Borrower acknowledges and
agrees that this Agreement and all other Loan Documents are valid, binding and
enforceable obligations of Borrower, and that Borrower does not have any
setoffs, defenses or counterclaims of any kind or nature whatsoever against
Lender with respect to any Loan Documents or the obligations hereunder
concerning the Loan.
Without limiting the generality of the foregoing, Borrower
hereby waives, releases and forever discharges Lender, its successors, assigns,
affiliates, shareholders, partners, officers, directors, attorneys, employees,
agents and servants from and against any and all rights, claims or causes of
action against Lender arising out of Lender's actions or inactions with respect
to any of the Loan Documents or any security interest, liens or collateral in
connection therewith concerning the Loan.
10. Good Standing.
(a) Crown Andersen Inc. is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and Crown
Andersen Inc. is validly registered to do business in the State of Georgia.
Milton Emmanuelli, acting alone, has the full power and authority to execute and
deliver this Agreement on behalf of Crown Andersen Inc., as well as all
documents and instruments contemplated herein. Crown Andersen Inc. is
simultaneously furnishing Lender a corporate resolution which provides that
Milton Emmanuelli has the sole power to bind Crown Andersen Inc.
(b) Andersen 2000 Inc. is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and
Andersen 2000 Inc. is validly registered to do business in the State of Georgia.
Milton Emmanuelli, acting alone, has the full power and authority to execute and
deliver this Agreement on behalf of Andersen 2000 Inc., as well as all documents
and instruments contemplated herein. Andersen 2000 Inc. is simultaneously
furnishing Lender a corporate resolution which provides that Milton Emmanuelli
has the sole power to bind Andersen 2000 Inc.
11. Ratification of Loan Documents. Except as expressly modified and
amended herein, the Loan Documents are and shall remain in full force and
effect. As of the date hereof, Borrower hereby respectively reaffirms, restates,
and reinstates the Loan Documents, the Note, and the other Loan Documents, and
reaffirms and restates each and every warranty and representation set forth in
the Loan Agreement and the other Loan Documents. This Agreement is not intended
to be nor shall it constitute a novation of the Loan Documents or of the
indebtedness secured thereby. Borrower hereby ratifies, confirms and approves
the Loan Documents, as modified and amended herein, and Borrower agrees that the
Loan Documents, as so modified and amended,
[3]
<PAGE>
constitute valid and binding obligations and agreements of Borrower enforceable
by Lender in accordance with their respective terms.
12. No Novation. Borrower and Lender hereby agree that this Agreement
shall not constitute a novation of the indebtedness evidenced by the Loan
Documents and further that the terms and provisions of the Loan Documents shall
remain valid and in full force and effect except as may be hereinabove modified
and amended.
13. Time. Time is of the essence of this Agreement.
14. Binding Effect. The terms and conditions, covenants, agreements,
powers, privileges and notices of authorization contained herein shall be
binding upon and shall inure to the benefit of Lender and Borrower and their
respective successors, assigns, agents, and attorneys.
15. Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under any such law, such provision shall be ineffective to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision, or the remaining provisions of this Agreement.
16. Construction of this Agreement. The parties acknowledge and agree
that this Agreement has been negotiated and executed in the State of Georgia and
this Agreement shall be construed in accordance with the laws of the State of
Georgia. This Agreement constitutes the entire agreement among Borrower and
Lender regarding the terms of this Agreement. Any prior agreements, promises,
negotiations, or representations regarding only the modification terms of this
Agreement are of no force and effect. Any provision of this Agreement which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction. Any warranty or representation made in this
Agreement shall be deemed to be material and shall survive and remain in full
force and effect after any transfer, conveyance or foreclosure of the Loan
Collateral to Lender, and nothing herein shall impair, affect or limit any right
or claim of Lender which it might have against Borrower or breach of any such
warranty or representation.
17. Default. In the event that Borrower fails to comply with the terms
and conditions set forth in this Agreement, or file any bankruptcy proceedings
or other legal proceedings intended to stop, delay or impair Lender in
exercising any of its remedies under the Loan Documents, the provisions of this
Agreement which create any forbearance or extension obligation on the part of
Lender shall become null and void. Borrower further understands that in the
event of any default under the terms of this Agreement, Lender shall have the
unfettered right to pursue immediately all its legal rights, including but not
limited to the right to proceed with a suit on the Note and Loan Documents.
18. Counterparts. This Agreement may be executed in any number of
counterparts, all of which when taken together shall constitute one and the same
instrument and any of the parties or signatories hereto may execute this
Agreement by signing any such counterpart.
[4]
<PAGE>
IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to
be executed under seal effective as of the date first above written, this ___
day of January, 2000.
BORROWER:
CROWN ANDERSEN INC.,
Signed, sealed and delivered a Delaware corporation
in the presence of:
- ----------------------------- By:
Unofficial Witness ----------------------------------
Milton Emmanuelli, Treasurer/Chief
Financial Officer
- -----------------------------
Notary Public
[NOTARY SEAL] [CORPORATE SEAL]
My Commission expires:
ANDERSEN 2000 INC.,
Signed, sealed and delivered a Delaware corporation
in the presence of:
- ----------------------------- By:
Unofficial Witness ----------------------------------
Milton Emmanuelli, Secretary/Chief
Financial Officer
- ----------------------------- [CORPORATE SEAL]
Notary Public
[NOTARY SEAL]
My Commission expires:
LENDER:
Signed, sealed and delivered SOUTHTRUST BANK, N.A., f/k/a SouthTrust
in the presence of: Bank of Georgia, N.A.
- ----------------------------- By:
Unofficial Witness ----------------------------------
Title:
- ----------------------------- -------------------------------
Notary Public [BANK SEAL]
[NOTARY SEAL]
[5]
<PAGE>
Clerk: cross reference to Deed Book
Book 1076, Page 234, Fayette County,
Georgia records
After recording return to:
- -------------------------
M. Todd Westfall, Esq.
Macey, Wilensky, Cohen, Wittner & Kessler, LLP
285 Peachtree Center Avenue, N.E.
Suite 600 Marquis Two Tower
Atlanta, Georgia 30303-1229
STATE OF GEORGIA
COUNTY OF FULTON
EXTENSION AGREEMENT
-------------------
This EXTENSION AGREEMENT is made and entered into effective September
30, 1999, by and between CROWN ANDERSEN INC., a Delaware corporation and
ANDERSEN 2000 INC., a Delaware corporation (hereinafter collectively referenced
as the "Borrower") and SOUTHTRUST BANK, N.A., f/k/a SouthTrust Bank, N.A., whose
address is 2000 RiverEdge Parkway, Second Floor, RE024, Atlanta, Georgia 30328
(the "Lender").
R E C I T A L S:
- - - - - - - -
A. Borrower executed and delivered, inter alia, that certain Deed to
Secure Debt, Assignment of Rents and Security Agreement in favor of Lender dated
June 28, 1996, recorded in Book 1076, beginning at page 234, in the Office of
the Clerk of Superior Court of Fayette County, Georgia (the "Security Deed"),
encumbering certain real property and improvements as more particularly
described therein; and
B. Borrower and Lender desire to modify and amend further the Security
Deed as previously amended, to reflect the extension of the maturity date, as
provided in a certain Modification and Extension Agreement of even date
herewith.
NOW, THEREFORE, for and in consideration of the foregoing premises, and
the sum of TEN AND NO/100 DOLLARS ($10.00) cash in hand paid by each party
hereto to the other, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower and Lender hereby agree
as follows:
[1]
<PAGE>
1. Recitals Incorporated. The Recitals are hereby incorporated into
this Extension Agreement.
2. Modification of Security Deed. The Security Deed is hereby modified
and amended to reflect the following:
The maturity date referenced in the Security Deed is being
modified to reflect that the final payment of unpaid principal
and interest is due and payable in full on June 15, 2000.
IN WITNESS WHEREOF, the parties hereto have executed this Extension
Agreement either individually or through their authorized officers, effective as
of the day, month, and year first above written, this ___ day of January, 2000.
BORROWER:
CROWN ANDERSEN INC.,
Signed, sealed and delivered a Delaware corporation
in the presence of:
- ----------------------------- By:
Unofficial Witness ----------------------------------
Milton Emmanuelli, Treasurer/Chief
Financial Officer
- -----------------------------
Notary Public
[NOTARY SEAL] [CORPORATE SEAL]
My Commission expires:
ANDERSEN 2000 INC.,
Signed, sealed and delivered a Delaware corporation
in the presence of:
- ----------------------------- By:
Unofficial Witness ----------------------------------
Milton Emmanuelli, Secretary/Chief
Financial Officer
- ----------------------------- [CORPORATE SEAL]
Notary Public
[NOTARY SEAL]
My Commission expires:
[2]
<PAGE>
LENDER:
Signed, sealed and delivered SOUTHTRUST BANK, N.A., f/k/a SouthTrust
in the presence of: Bank of Georgia, N.A.
- ----------------------------- By:
Unofficial Witness ----------------------------------
Title:
- ----------------------------- -------------------------------
Notary Public [BANK SEAL]
[NOTARY SEAL]
[3]
<PAGE>
CORPORATE RESOLUTION DULY ADOPTED
BY THE BOARD OF DIRECTORS OF
CROWN ANDERSEN INC.
January __, 2000
I, RANDALL H. MORGAN, Secretary of CROWN ANDERSEN INC., a Delaware
corporation (the "Corporation"), whose address is 306 Dividend Drive, Peachtree
City, Georgia 30269, do hereby certify that I am the keeper of the records and
the minutes of the proceedings of the Board of Directors of the Corporation and
that on the 21st day of October, 1999, there was held a special meeting of the
Board of Directors of the Corporation, which was duly called and held in
accordance with the laws of the State of Delaware and the Bylaws of the
Corporation, which was held by unanimous consent of the Directors, for which
actions were taken:
THAT, WHEREAS, the directors have determined that the Corporation will
achieve a benefit by entering into, consummating and ratifying loan modification
with SouthTrust Bank, N.A. f/k/a SouthTrust Bank of Georgia, N.A., as
contemplated by that certain Modification and Extension Agreement being an
effective date of January 14, 2000 by and between Crown Andersen Inc., Andersen
2000 Inc. and SouthTrust Bank, N.A. f/k/a SouthTrust Bank of Georgia, N.A;
NOW, THEREFORE, BE IT RESOLVED that the Chief Financial Officer of the
Corporation is hereby authorized, empowered and directed, for and on behalf and
in the name of the Corporation to do and perform such acts and deeds and execute
and deliver without attestation of the Secretary of the Corporation or the
fixation of the corporate seal, such deeds, affidavits, agreements and closing
statements as shall be required to consummate the aforementioned Loan
Modification.
The undersigned certifies that the Corporation is duly incorporated in
the State of Delaware, is in good standing and is registered to do business in
the State of Georgia, and that RANDALL H. MORGAN is currently serving as the
duly elected Secretary of the Corporation and MILTON EMMANUELLI is currently
serving as the duly elected Chief Financial Officer of the Corporation.
IN TESTIMONY WHEREOF, I hereunto set my hand as Secretary of the
Corporation as of this _____ day of January, 2000.
------------------------------------
RANDALL H. MORGAN, Secretary
<PAGE>
CORPORATE RESOLUTION DULY ADOPTED
BY THE BOARD OF DIRECTORS OF
ANDERSEN 2000 INC.
January __, 2000
I, MILTON EMMANUELLI, Secretary of ANDERSEN 2000 INC., a Delaware
corporation (the "Corporation"), whose address is 306 Dividend Drive, Peachtree
City, Georgia 30269, do hereby certify that I am the keeper of the records and
the minutes of the proceedings of the Board of Directors of the Corporation and
that on the 21st day of October, 1999, there was held a special meeting of the
Board of Directors of the Corporation, which was duly called and held in
accordance with the laws of the State of Delaware and the Bylaws of the
Corporation, which was held by unanimous consent of the Directors, for which
actions were taken:
THAT, WHEREAS, the directors have determined that the Corporation will
achieve a benefit by entering into, consummating and ratifying loan modification
with SouthTrust Bank, N.A. f/k/a SouthTrust Bank of Georgia, N.A., as
contemplated by that certain Modification and Extension Agreement being an
effective date of January 14, 2000 by and between Crown Andersen Inc., Andersen
2000 Inc. and SouthTrust Bank, N.A. f/k/a SouthTrust Bank of Georgia, N.A;
NOW, THEREFORE, BE IT RESOLVED that the Chief Financial Officer of the
Corporation is hereby authorized, empowered and directed, for and on behalf and
in the name of the Corporation to do and perform such acts and deeds and execute
and deliver without attestation of the Secretary of the Corporation or the
fixation of the corporate seal, such deeds, affidavits, agreements and closing
statements as shall be required to consummate the aforementioned Loan
Modification.
The undersigned certifies that the Corporation is duly incorporated in
the State of Delaware, is in good standing, is registered to do business in the
State of Georgia, and that MILTON EMMANUELLI is currently serving as the duly
elected Secretary of the Corporation and MILTON EMMANUELLI is currently serving
as the Chief Financial Officer of the Corporation.
IN TESTIMONY WHEREOF, I hereunto set my hand as Secretary of the
Corporation as of this _____ day of January, 2000.
------------------------------------
MILTON EMMANUELLI, Secretary
[1]
<PAGE>
CORPORATE OFFICER'S AFFIDAVIT AS TO CORPORATE OWNERSHIP
-------------------------------------------------------
STATE OF GEORGIA
COUNTY OF FULTON
Personally appeared before me the undersigned officer, MILTON
EMMANUELLI who, being duly sworn according to law, deposes and says on oath as
follows:
1. That he is presently an officer of CROWN ANDERSEN INC., a corporation
organized and existing under the laws of the State of Delaware.
2. That he holds the title of Chief Financial Officer and as such officer
has personal knowledge of the facts sworn to in this Affidavit, and is
authorized on behalf of said corporation to make this Affidavit.
3. That said corporation is the owner of certain real estate, descriptions
of which are set forth in EXHIBIT "A" attached hereto and made a part
hereof (the "Property").
4. That said corporation is in open, exclusive, notorious, continuous,
adverse and peaceable possession of the Property and that the title
thereto has never been disputed, questioned or rejected or title
insurance thereon refused, to the best knowledge of the undersigned.
5. That the Charter of said corporation is in full force and effect and no
proceeding is pending for its dissolution or annulment and the
corporation is in good standing with the office of the Secretary of
State of Delaware and is otherwise qualified to do business in the
State of Georgia. All licenses and franchise taxes due and payable by
said corporation have been paid in full.
6. That there is no outstanding indebtedness for equipment, appliances, or
other fixtures attached to the Property, except as may be set forth on
EXHIBIT "B".
7. That the lines and corners of the Property are clearly marked or are
discernable, and there are no disputes concerning the location of the
lines and corners, to the best knowledge of the undersigned.
8. That there are no past due bills for utilities or unpaid bills of any
other nature including bills for services of any architect, engineer or
surveyor, or for labor or materials for any improvements or repairs
that have been made on the Property, including without limitation
improvements or repairs made during the ninety-five (95) days
immediately preceding this date, and that there are no fixtures now
installed in said buildings that have not been paid for in full.
9. That there are no pending suits, judgments, bankruptcies, executions,
liens for past due taxes, assessments, or encumbrances that could in
any way affect the title to the Property, or constitute a lien thereon,
nor are there any loan deeds, trust deeds, mortgages or liens of any
nature whatsoever which have not been paid and which are against the
Property, except as set forth in EXHIBIT "B" attached hereto and made a
part hereof.
[1]
<PAGE>
10. That the proceeds from the renewal of this loan will be used for
business purposes only and that the Property is not occupied as a
primary residence.
This Affidavit is made to induce SOUTHTRUST BANK, N.A. f/k/a SouthTrust
Bank of Georgia, N.A. to modify and extend a loan to CROWN ANDERSEN INC. and
ANDERSEN 2000 INC., secured by the Property, to induce any title insurance
company to issue a mortgagee's title insurance policy insuring said loan, and to
induce any attorneys certifying title to so certify.
Sworn to and subscribed
before me, this ____ day
of January, 2000
_____________________________ ______________________________[SEAL]
Notary Public Milton Emmanuelli
[NOTARY SEAL]
My Commission expires:
[2]
<PAGE>
CORPORATE OFFICER'S AFFIDAVIT AS TO CORPORATE OWNERSHIP
-------------------------------------------------------
STATE OF GEORGIA
COUNTY OF FULTON
Personally appeared before me the undersigned officer, MILTON
EMMANUELLI who, being duly sworn according to law, deposes and says on oath as
follows:
1. That he is presently an officer of ANDERSEN 2000 INC., a corporation
organized and existing under the laws of the State of Delaware.
2. That he holds the title of Secretary and as such officer has personal
knowledge of the facts sworn to in this Affidavit, and is authorized on
behalf of said corporation to make this Affidavit.
3. That said corporation is the owner of certain real estate, descriptions
of which are set forth in EXHIBIT "A" attached hereto and made a part
hereof (the "Property").
4. That said corporation is in open, exclusive, notorious, continuous,
adverse and peaceable possession of the Property and that the title
thereto has never been disputed, questioned or rejected or title
insurance thereon refused, to the best knowledge of the undersigned.
5. That the Charter of said corporation is in full force and effect and no
proceeding is pending for its dissolution or annulment and the
corporation is in good standing with the Office of the Secretary of
State of Delaware and is otherwise qualified to do business in the
State of Georgia. All licenses and franchise taxes due and payable by
said corporation have been paid in full.
6. That there is no outstanding indebtedness for equipment, appliances, or
other fixtures attached to the Property, except as may be set forth on
EXHIBIT "B".
7. That the lines and corners of the Property are clearly marked or are
discernable, and there are no disputes concerning the location of the
lines and corners, to the best knowledge of the undersigned.
9. That there are no past due bills for utilities or unpaid bills of any
other nature including bills for services of any architect, engineer or
surveyor, or for labor or materials for any improvements or repairs
that have been made on the Property, including without limitation
improvements or repairs made during the ninety-five (95) days
immediately preceding this date, and that there are no fixtures now
installed in said buildings that have not been paid for in full.
9. That there are no pending suits, judgments, bankruptcies, executions,
liens for past due taxes, assessments, or encumbrances that could in
any way affect the title to the Property, or constitute a lien thereon,
nor are there any loan deeds, trust deeds, mortgages or liens of any
nature whatsoever which have not been paid and which are against the
Property, except as set forth in EXHIBIT "B" attached hereto and made a
part hereof.
[1]
<PAGE>
10. That the proceeds from the renewal of this loan will be used for
business purposes only and that the Property is not occupied as a
primary residence.
This Affidavit is made to induce SOUTHTRUST BANK, N.A. f/k/a SouthTrust
Bank of Georgia, N.A. to modify and extend a loan to CROWN ANDERSEN INC. and
ANDERSEN 2000 INC., secured by the Property, to induce any title insurance
company to issue a mortgagee's title insurance policy insuring said loan, and to
induce any attorneys certifying title to so certify.
Sworn to and subscribed
before me, this ____ day
of January, 2000
_____________________________ ______________________________[SEAL]
Notary Public Milton Emmanuelli
[NOTARY SEAL]
My Commission expires:
[2]
<PAGE>
EXHIBIT "B"
-----------
Permitted Exceptions
--------------------
1. State and County ad valorem taxes for 2000 and subsequent years.
2. Those matters listed on Schedule B of that certain First American
Mortgage Title Insurance Policy bearing Policy No. FA-31-170802, as
amended.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,586,609
<SECURITIES> 0
<RECEIVABLES> 5,350,253
<ALLOWANCES> 211,333
<INVENTORY> 2,265,839
<CURRENT-ASSETS> 13,761,909
<PP&E> 2,843,077
<DEPRECIATION> 0
<TOTAL-ASSETS> 21,586,916
<CURRENT-LIABILITIES> 8,135,694
<BONDS> 0
0
0
<COMMON> 187,592
<OTHER-SE> 12,976,698
<TOTAL-LIABILITY-AND-EQUITY> 21,586,916
<SALES> 10,595,827
<TOTAL-REVENUES> 10,595,827
<CGS> 8,056,199
<TOTAL-COSTS> 10,242,410
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (10,316)
<INCOME-PRETAX> 353,417
<INCOME-TAX> 141,300
<INCOME-CONTINUING> 212,117
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 212,117
<EPS-BASIC> 0.12
<EPS-DILUTED> 0.11
</TABLE>
