<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
{X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1995
--------------------------------------
OR
{_} TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-14951
-------
BUTLER INTERNATIONAL, INC.
--------------------------
(Exact name of registrant as specified in its charter)
MARYLAND 06-1154321
------------------------------ ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
110 Summit Avenue, Montvale, New Jersey 07645
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 573-8000
--------------
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 _____.
-----
As of November 13, 1995, 5,993,783 shares of the registrant's common stock, par
value $.001 per share, were outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
--------------------
(A) Consolidated Balance Sheets - September 30, 1995 (Unaudited) and
December 31, 1994
(B) Consolidated Statements of Operations (Unaudited) - quarter ended
September 30, 1995 and quarter ended September 30, 1994
(C) Consolidated Statements of Operations (Unaudited) - nine months ended
September 30, 1995 and nine months ended September 30, 1994
(D) Consolidated Statements of Cash Flows (Unaudited) - nine months ended
September 30, 1995 and nine months ended September 30, 1994
(E) Notes to Consolidated Financial Statements (Unaudited)
2
<PAGE>
BUTLER INTERNATIONAL, INC.
--------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
(in thousands except share data)
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
---------- ----------
(Unaudited)
<S> <C> <C>
ASSETS
- ------
Current assets:
Cash and cash equivalents $ 4,380 $ 2,285
Accounts receivable, net 81,192 63,149
Other current assets 4,486 3,119
-------- --------
Total current assets 90,058 68,553
Property and equipment, net 15,170 13,237
Other assets and deferred charges 672 1,303
Excess cost over net assets of
business acquired, net 24,396 24,717
-------- --------
Total assets $130,296 $107,810
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accounts payable and accrued liabilities $ 27,273 $ 17,535
Current portion of long-term debt 3,730 2,863
-------- --------
Total current liabilities 31,003 20,398
-------- --------
Long-term debt 56,561 45,746
-------- --------
Other long-term liabilities 3,867 4,268
-------- --------
Stockholders' equity:
Preferred stock, par value $.001 per share,
authorized 5,000,000: Series B Cumulative Convertible,
authorized 2,400,000; issued 2,368,329 at September 30, 1995
and 2,288,878 at December 31, 1994 (Aggregate
liquidations preference $2,368,329 at September 30, 1995
and $2,288,878 at December 31, 1994) 2 2
Common stock, par value $.001 per share, authorized
83,333,333; issued and outstanding 5,968,783 at
September 30, 1995 and 5,903,658 at December 31, 1994 6 6
Additional paid-in capital 92,695 92,635
Accumulated deficit (53,070) (54,650)
Cumulative foreign currency translation adjustment (768) (595)
-------- --------
Total stockholders' equity 38,865 37,398
-------- --------
Total liabilities and stockholders' equity $130,296 $107,810
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
BUTLER INTERNATIONAL, INC.
--------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(in thousands except share and per share data)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Quarter
ended ended
September 30, September 30,
1995 1994
---- ----
<S> <C> <C>
Net sales $ 108,222 $ 100,234
Cost of sales 92,776 86,387
---------- ----------
Gross margin 15,446 13,847
Depreciation and amortization 682 636
Selling, general and administrative expenses 13,031 11,217
---------- ----------
Income before other income (expense)
and income taxes 1,733 1,994
Other income (expense):
Interest and other 168 97
Interest expense (1,835) (1,120)
---------- ----------
Income before income taxes 66 971
Income taxes (benefits) (17) 199
---------- ----------
Net income $ 83 $ 772
========== ==========
Net income per share:
Primary $ .01 $.13
Assuming full-dilution $ .01 $.12
Average number of common shares and
common stock equivalents outstanding:
Primary 6,354,258 5,648,581
Assuming full-dilution 7,004,219 6,659,243
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
BUTLER INTERNATIONAL, INC.
--------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(in thousands except share and per share data)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
ended ended
September 30, September 30,
1995 1994
---- ----
<S> <C> <C>
Net sales $ 335,030 $ 281,655
Cost of sales 288,458 242,312
---------- ----------
Gross margin 46,572 39,343
Depreciation and amortization 2,004 1,882
Selling, general and administrative expenses 38,056 32,832
---------- ----------
Income before other income (expense)
and income taxes 6,512 4,629
Other income (expense):
Interest and other 442 235
Interest expense (4,832) (2,960)
---------- ----------
Income before income taxes 2,122 1,904
Income taxes 421 417
---------- ----------
Net income $ 1,701 $ 1,487
========== ==========
Net income per share:
Primary $ .25 $ .23
Assuming full-dilution $ .24 $ .23
Average number of common shares and
common stock equivalents outstanding:
Primary 6,281,293 5,579,187
Assuming full-dilution 6,982,273 6,608,237
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
BUTLER INTERNATIONAL, INC.
--------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
ended ended
September 30, September 30,
1995 1994
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,701 $ 1,487
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation and excess purchase
price amortization 2,003 1,882
Amortization of deferred financing
and employee stock purchase
plan loans 453 262
Foreign currency translation (173) 89
(Increase) decrease in assets,
increase (decrease) in liabilities:
Accounts receivable (18,043) (13,122)
Other current assets (1,367) (534)
Other assets 187 (710)
Current liabilities 9,796 2,511
Other long-term liabilities (401) (532)
-------- --------
Net cash used in operating activities (5,844) (8,667)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures - net (3,196) (1,875)
Cost of business acquired (419) (322)
Expenses paid in conjunction with
discontinued operations (108) (571)
-------- --------
Net cash used in investing activities (3,723) (2,768)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under financing
agreements 11,755 10,652
Net proceeds from the issuance of
common stock 106 884
Net payments in conjunction with
headquarters building purchase (73) (800)
Payment of dividends on preferred stock - (50)
Repurchase common stock (126) -
-------- --------
Net cash provided by financing activities 11,662 10,686
-------- --------
Net increase (decrease) in cash and
cash equivalents 2,095 (749)
Cash and cash equivalents,
beginning of period 2,285 1,908
-------- --------
Cash and cash equivalents,
end of period $ 4,380 $ 1,159
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
BUTLER INTERNATIONAL, INC.
--------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(Unaudited)
NOTE 1 - PRESENTATION:
The consolidated financial statements include the accounts of Butler
International, Inc. ("the Company") and its wholly-owned subsidiaries.
Significant intercompany balances and transactions have been eliminated.
Certain amounts from prior period condensed consolidated financial statements
have been reclassified in the accompanying consolidated financial statements to
conform with current period presentation.
The accompanying financial statements are unaudited, but, in the opinion of
management, reflect all adjustments, which include normal recurring accruals,
necessary to present fairly the financial position, results of operations and
cash flow at September 30, 1995 and for all periods presented.
Certain information and footnote disclosures normally included in financial
statements prepared in conformity with generally accepted accounting principles
have been condensed or omitted. Accordingly, this report should be read in
conjunction with the Company's annual report on Form 10-K for the period ended
December 31, 1994. The results of operations for the three and nine months
ended September 30, 1995 are not necessarily indicative of operating results for
the full year.
NOTE 2 - CREDIT FACILITY:
In May, 1994, certain of the Company's U.S and Canadian operating subsidiaries
entered into a three-year Credit Facility with General Electric Capital
Corporation ("GECC"). This Credit Facility provides the Company with up to
$55.0 million in loans including $6.0 million for letters of credit. The sum of
the aggregate amount of loans outstanding under the Credit Facility plus the
aggregate amount available for letters of credit may not exceed the lessor of
(i) $55.0 million or (ii) an amount equal to 85% of eligible receivables plus
75% of eligible pending receivables (which percentages are subject to adjustment
from time to time by the Company's principal lender - GECC). The interest rate
chargeable to the Company is fixed at the beginning of each month based upon the
30 day commercial paper rate in effect at the close of the last business day of
each month, plus three hundred basis points. The interest rate in effect on
September 30, 1995 was 8.84%, and the average rate since January 1, 1995 was
9.03%. The Company and Butler Service Group - Canada Ltd. have each guaranteed
all obligations incurred or created under the Credit Facility. The Company is
also required to comply with certain affirmative and financial covenants as
amended. The Company is in compliance with the aforementioned covenants.
NOTE 3 - COMMON STOCK:
In the nine months ended September 30, 1995, the Company issued 85,083 shares of
common stock upon the exercise of various stock options and repurchased and
retired 19,958 shares of common stock.
NOTE 4 - PREFERRED STOCK:
On June 30, 1995, approximately $80,000 of dividends in kind were paid to
holders of Series B Preferred Stock.
NOTE 5 - EARNINGS PER SHARE:
Primary earnings per share are determined by dividing net earnings (after
deducting preferred stock dividends) by the weighted average number of common
shares outstanding and common stock equivalents. On a fully-diluted basis, both
earnings and shares outstanding are adjusted to assume the conversion of
convertible preferred stock.
7
<PAGE>
NOTE 6 - CONTINGENCIES:
The Company and its subsidiaries are parties to various legal proceedings and
claims incidental to its normal business operations. In June, 1995, the Company
filed a complaint against CIGNA Property and Casualty Insurance Company in the
Court of Common Pleas of Philadelphia County, Pennsylvania alleging negligence,
breach of contract, breach of fiduciary duty, and negligent misrepresentation
arising out of CIGNA's and other defendants' acts and omissions in the
processing, handling and investigation of claims against the Company under
general liability and workmen's compensation insurance contracts. On August 31,
1995, the defendants filed an answer, new matter and counterclaim denying the
Company's allegations, asserting certain affirmative defenses, and alleging that
the Company has failed to pay retrospective premiums amounting to approximately
$7.0 million. In the opinion of management, based on the advice of counsel, all
of the proceedings and claims in which the Company and its subsidiaries are
involved with can ultimately be defended and resolved without a material adverse
effect on the financial position or results of operations of the Company.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations and
-----------------------------------------------------------------
Financial Condition
-------------------
RESULTS OF OPERATIONS
- ---------------------
Net sales for the quarter ended September 30, 1995 were $108.2 million compared
to $100.2 million, representing an 8.0% increase over the third quarter of 1994.
Net income was approximately $0.1 million, or $.01 per share, as compared to
$0.8 million, or $.13 per share for the same period in 1994. For the nine
months ended September 30, 1995, net sales of $335.0 million were 19% above the
$281.7 million recorded in the first nine months of 1994. Net income for the
first nine months of 1995 was $1.7 million, or $.25 per share compared to $1.5
million, or $.23 per share for the same period in 1994. Operating cash flow was
$4.2 million for the nine months ended September 30, 1995 as compared to $3.6
million for the same period in 1994. Average common stock and common stock
equivalents outstanding for the first nine months of 1995 increased to 6.3
million in 1995 from 5.6 million in 1994.
Operating profits from the Company's various business groups, before interest,
taxes and corporate expenses were greater than 1994 by $0.5 million and $3.5
million for the third quarter and year-to-date, respectively. Operating profits
for Company were $1.9 million for the quarter compared to $2.1 million for the
same period in 1994. Operating profits for the nine months were $7.0 million, a
$2.1 million increase over 1994. The $2.1 million increase was offset by a $1.9
million increase in interest expense.
Interest expenses were up $0.7 million and $1.9 million for the quarter and
year-to-date, respectively, primarily due to the increased use of the Company's
credit facility to finance working capital requirements. The Company's
relocation of its billing, collection and certain other administrative
operations from Montvale, NJ to Lake St. Louis, MO earlier in the year has
negatively impacted the billing and collection process, resulting in
significantly higher accounts receivable which are financed by the credit
facility.
The Company has taken significant actions to rectify the processing
inefficiencies in the Lake St. Louis operation. Some of these actions include
dedicating a senior financial officer, on site, hiring a new officer to take
direct charge of the day-to-day operations, upgrading current staff personnel,
expanding training, and further dedication of certain personnel from the
operating groups. The Company anticipates interest expense will decrease as the
billing and collection process gets back to normal and the Days Sales
Outstanding returns to a normalized level.
Company-wide selling, general and administrative expenses were up by $1.8
million and $5.2 million over 1994 for the third quarter and year-to-date,
respectively. Major contributors to the increases were expanded field
operations which supported a 19% increase in year-to-date sales and the Lake St.
Louis relocation and operation.
Income taxes consist of federal, state and foreign income taxes.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company's primary sources of funds are generated from operations and
borrowings under its Credit Facility. As of September 30, 1995, $49.6 million
was outstanding under the Credit Facility, and an additional $4.3 million was
used to collateralize letters of credit. Proceeds from the Credit Facility were
used by the Company to finance working capital, capital expenditures and other
business related expenses.
In May, 1994, certain of the Company's U.S and Canadian operating subsidiaries
entered into a three-year Credit Facility with General Electric Capital
Corporation ("GECC"). This Credit Facility provides the Company with up to
$55.0 million in loans including $6.0 million for letters of credit. The sum of
the aggregate amount of loans outstanding under the Credit Facility plus the
aggregate amount available for letters of credit may not exceed the lessor of
(i) $55.0 million or (ii) an amount equal to 85% of eligible receivables plus
75% of eligible pending receivables (which percentages are subject to adjustment
from time to time by the Company's principal lender - GECC). The interest rate
chargeable to the Company is fixed at the beginning of each month based upon the
30 day commercial paper rate in effect at the close of the last business day of
each month, plus three hundred basis points. The interest rate in effect on
September 30, 1995 was 8.84%, and the average rate since January 1, 1995 was
9.03%. The Company and Butler Service Group - Canada Ltd. have each guaranteed
all obligations incurred or created under the Credit Facility. The Company is
also required to comply with certain affirmative and financial covenants as
amended. The Company is in compliance with the aforementioned covenants.
9
<PAGE>
Discussions are currently underway with GECC and other potential lenders to
address the Company's financial needs for the short and medium term.
Cash and cash equivalents increased by $2.1 million in the nine months of 1995.
Principal sources of cash inflows consisted of: borrowings under the Credit
Facility of $10.6 million, borrowings under short-term financing agreements of
$1.1 million and net income before depreciation and amortization of $4.2
million. Cash outflows consisted of: increased working capital requirements of
$10.0 million, capital expenditures of $3.2 million and other expenditures of
$0.6 million.
10
<PAGE>
PART II - OTHER INFORMATION
Item
1. Legal Proceedings - None
2. Changes in Securities - None
3. Defaults Upon Senior Securities - None
4. Submission of Matters to a Vote of Security Holders - None
5. Other Information - None
6. Exhibits and Reports on Form 8-K
(a) Exhibits - 10.42(c) Third Amendment Agreement, dated May 15, 1995
and effective as of March 31, 1995, among Butler Service
Group, Inc., the Company, Butler Service Group Canada,
Ltd., and General Electric Capital Corporation, filed
herewith as Exhibit 10.42(c).
10.42(d) Fourth Amendment Agreement, dated August 3, 1995
and effective as of June 1, 1995, among Butler Service
Group, Inc., the Company, Butler Service Group Canada,
Ltd., and General Electric Capital Corporation, filed
herewith as Exhibit 10.42(d).
10.42(e) Fifth Amendment Agreement, dated October 4, 1995
and effective as of September 30, 1995, among Butler
Service Group, Inc., the Company, Butler Service Group
Canada, Ltd., and General Electric Capital Corporation,
filed herewith as Exhibit 10.42(e).
27 Financial Data Schedule
(b) Reports on Form 8-K - None
11
<PAGE>
SIGNATURES
Pursuant to the requirement 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.
BUTLER INTERNATIONAL, INC.
--------------------------
(Registrant)
November 13, 1995 By: /s/ Edward M. Kopko
-------------------------
Edward M. Kopko,
Chairman and Chief Executive
Officer
November 13, 1995 By: /s/ Warren F. Brecht
-------------------------
Warren F. Brecht
Vice President, Secretary,
and Treasurer
November 13, 1995 By: /s/ Michael C. Hellriegel
----------------------------
Michael C. Hellriegel
Vice President and
Controller
12
<PAGE>
EXHIBIT 10.42(C)
THIRD AMENDMENT AGREEMENT
-------------------------
AGREEMENT, dated May 15, 1995, to be effective as of March 31, 1995, among
BUTLER SERVICE GROUP, INC. a New Jersey corporation, BUTLER INTERNATIONAL, INC.,
a Maryland corporation, BUTLER SERVICE GROUP CANADA, LTD., a Canadian
corporation, and GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation.
Background
----------
A. Capitalized terms not otherwise defined shall have the meanings
ascribed to them in the Credit Agreement dated as of May 31, 1994, between
Butler Service Group, Inc. and General Electric Capital Corporation (as amended
or supplemented from time to time, the "Credit Agreement").
----------------
B. The Lender has caused to be issued for the account of the Borrower or
one of its Subsidiaries or Affiliates, Letters of Credit in favor of, among
others, National Union Fire Insurance of Pittsburgh, PA, and the Lender has
agreed to incur obligations in connection with the Letters of Credit in the form
of guaranties by the Lender of the Borrower's reimbursement obligations under
the Letters of Credit.
C. Under the terms of the Credit Agreement, the Borrower's ability to
borrow under the Revolving Loan is reduced by an amount equal to the aggregate
undrawn face amount of each Letter of Credit.
D. The Borrower has requested Lender to consider increasing its Borrowing
Base availability under the Credit Agreement by the undrawn amount of Eligible
Supporting Letters of Credit (as defined herein) which could be drawn upon by
Lender if there is a draw upon certain Letters of Credit issued under the terms
of the Credit Agreement.
E. The Lender has agreed to the Borrower's request subject to the terms
and conditions of this Agreement.
Agreement
---------
In consideration of the foregoing Background, which is incorporated by
reference, the parties, intending to be legally bound, agree as follows:
1. Modifications. All the terms and provisions of the Credit Agreement
-------------
and the other Loan Documents shall remain in full force and effect except as
follows:
(a) Section 2.01 of the Credit Agreement is amended to add the phrase
"(reduced by the amount then remaining available for draw under any Eligible
Supporting Letter of Credit)" after the phrase "Letters of Credit" in the
penultimate line of such Section.
<PAGE>
-2-
(b) Section 2.07 of the Credit Agreement is amended to add the phrase
"Eligible Supporting Letter of Credit" between the existing phrases "Eligible
Accounts," and "Eligible Pending Accounts Receivable" appearing therein.
(c) The first sentence of Section 2.10 of the Credit Agreement is deleted
and the following is substituted therefor:
Section 2.10 Letters of Credit. Subject to the terms and conditions
-----------------
hereof, the Lender shall cause the issuance of the Letters of Credit and
the Lender shall incur obligations therewith in the form of guaranties by
the Lender of the Borrower's reimbursement obligations under the Letters of
Credit to support the payment of Letter of Credit Obligations, provided
--------
however, that Lender will not be required to cause to be issued any Letters
-------
of Credit to the extent that the face amount of such Letters of Credit
would then cause either (A) the sum of (i) outstanding Revolving Loans plus
----
(ii) outstanding Letters of Credit (with the requested Letter of Credit
being deemed to be outstanding for purposes of this calculation) to exceed
the Maximum Revolving Loan or (B) the sum of (i) outstanding Revolving
Loans plus (ii) outstanding Letters of Credit (reduced by the lesser of (X)
One Million Two Hundred Thousand Dollars ($1,200,000) and (Y) the amount
then remaining available for drawing under any Eligible Supporting Letters
of Credit, but with the requested Letter of Credit being deemed to be
outstanding) to exceed the Borrowing Base.
(d) The following new definition is added to Schedule 1.01 to the Credit
Agreement immediately after the definitions of "Eligible Pending Accounts
Receivable and Fixed Contract Accounts Receivable" appearing therein:
"Eligible Supporting Letters of Credit" means one or more irrevocable
-------------------------------------
letters of credit (including any renewals, extensions or replacements
thereof) which may be issued (i) in favor of Lender as the beneficiary
thereunder, (ii) for a minimum term of at least six months (and renewed or
extended for minimum terms of at least six months), (iii) to support
Lender's obligations with respect to certain Letters of Credit outstanding
under the Credit Agreement (the "Primary Letter of Credit"), and accepted
------------------------
by the Lender in its sole discretion for such purpose, (iv) in form and
substance satisfactory to Lender in its sole discretion, (v) without any
obligation, whether direct, indirect, absolute of contingent, of the
Borrower or any of its Subsidiaries or Affiliates other than Frederick H.
Kopko, Mary Elizabeth Kopko, Hugh G. McBreen or Michelle McBreen to the
issuer thereof or any account party thereunder arising out of or in
connection with such letter of credit, and (vi) by a bank acceptable to
Lender in its sole discretion, provided that at the time of such issuance,
the Lender receives from each of the issuer thereof and the account party
thereunder, a signed certificate, in form and content acceptable to the
Lender, that neither the issuer nor any account party has any claim arising
out of or in connection with such letter of credit against the Borrower or
any of its Subsidiaries or Affiliates other than Frederick H. Kopko, Mary
Elizabeth Kopko, Hugh G. McBreen or Michelle McBreen, or the assets of any
of them, whether direct, indirect, absolute or
<PAGE>
-3-
contingent, and provided further that such letter of credit shall remain an
Eligible Supporting Letter of Credit only for so long as (A) there are no
less than fifteen (15) days remaining before the expiry date of such letter
of credit (as the same may be renewed or extended), (B) such letter of
credit remains enforceable, available to drawings by Lender and otherwise
acceptable to Lender in its sole discretion, (C) the issuer thereof remains
acceptable to Lender in its sole discretion, and (D) the Primary Letter of
Credit which is supported thereby remains outstanding. In no event shall
any letter of credit be deemed to be an Eligible Supporting Letter of
Credit to the extent that it may exceed the undrawn amount of the Primary
Letter of Credit which is supports.
(e) The definition of "Tangible Net Worth", contained in Schedule "1.01" to
the Credit Agreement ,is deleted and the following is substituted therefor:
"Tangible Net Worth" means, at a particular date, all amounts which,
------------------
in accordance with GAAP, would be included under stockholders' equity on a
consolidated balance sheet for the Parent at such date less the aggregate
of all intangibles, in conformity with GAAP, including goodwill, patents,
organization expenses, treasury stock, trademarks, tradenames, all deferred
financing and unamortized debt discount expense. For purposes of
determining Tangible Net Worth, amounts set forth under the Cumulative
Foreign Currency Translation Adjustment Account under the consolidated
balance sheet for the Parent shall be excluded therefrom.
(f) The covenant "5.5:1" for the Fiscal Quarter ended June 30, 1995,
contained in subsection (d) of Schedule "6.02(u)" to the Credit Agreement is
deleted and the covenant "6.3:1" is substituted therefor.
2. Conditions Precedent. The Lender's obligations under this Agreement
--------------------
are contingent upon the Lender's receipt of the following, all in form, scope
and content acceptable to the Lender in its sole discretion:
(a) this Agreement duly executed by the parties hereto;
(b) the Commitment Fee (as defined below); and
(c) such other agreements and instruments as the Lender shall require.
3. Commitment Fee. In consideration of the Lender's execution and
--------------
delivery of this Agreement, and the performance of the terms thereof, the
Borrower is simultaneously paying to the Lender the amount of $50,000, (the
"Commitment Fee"), which Commitment Fee shall be deemed one of the Fees.
- ---------------
4. Reaffirmation By Borrower. The Borrower acknowledges and agrees, and
-------------------------
reaffirms, that it is legally, validly and enforceable indebted to the Lender
under the Revolving
<PAGE>
-4-
Note without defense, counterclaim or offset, and that it is legally, validly
and enforceable liable to the Lender for all costs and expenses of collection
and attorneys' fees related to or in any way arising out of this Agreement, the
Credit Agreement, the Revolving Note and the other Loan Documents. The Borrower
hereby restates and agrees to be bound by all covenants contained in the Credit
Agreement and the other Loan Documents and hereby reaffirms that all of the
representations and warranties contained in the Credit Agreement remain true and
correct in all material respects except as disclosed in connection with the
execution and delivery of the First Amendment Agreement dated December 14, 1994
(the "First Amendment Agreement"). The Borrower represents that except as set
-------------------------
forth in the Credit Agreement and the First Amendment Agreement, there are not
pending or to the Borrower's knowledge threatened, legal proceedings to which
the Borrower or either of the Guarantors is a party, or which materially or
adversely affect the transactions contemplated by this Agreement or the ability
of the Borrower or either of the Guarantors to conduct its business. The
Borrower acknowledges and represents that the resolutions of the Borrower dated
May 25, 1994, remain in full force and effect and have not been amended,
modified, rescinded or otherwise abrogated.
5. Reaffirmation by Guarantors. Each of the Guarantors acknowledges that
---------------------------
each is legally and validly indebted to the Lender under the Guaranty of each
without defense, counterclaim or offset. Each of the Guarantors affirms that
the Guaranty of each remains in full force and effect and acknowledges that the
Guaranty of each encompasses, without limitation, the amount of the Maximum
Revolving Loan.
6. Other Representations By Borrower and Guarantors. The Borrower and
------------------------------------------------
the Guarantors each represent and confirm that (a) no Default or Event of
Default has occurred and is continuing and the Lender has not given its consent
to or waived any Default or Event of Default and (b) the Credit Agreement and
the other Loan Documents are in full force and effect and enforceable against
the Borrower and Guarantors in accordance with the terms thereof. The Borrower
and the Guarantors each represent and confirm that as of the date hereof, each
has no claim or defense (and the Borrower and the Guarantors each hereby waive
every claim and defense) against the Lender arising out of or relating to the
Credit Agreement and the other Loan Documents or the marking, administration of
enforcement of the Revolving Loan and the remedies provided for under the Loan
Documents.
7. No Waiver By Lender. Each of the Borrower and the Guarantors
-------------------
acknowledges that (a) by the execution by each of this Agreement, the Lender is
not waiving any Default, whether now existing or hereafter occurring, disclosed
or undisclosed, by the Borrower under the Loan Documents and (b) the Lender
reserves all rights and remedies available to it under the Loan Documents and
otherwise.
<PAGE>
-5-
The parties have executed this agreement on the date first written above to
be effective as of March 31, 1995.
BUTLER SERVICE GROUP, INC.
By:/s/ Raymond J. Lacroix
----------------------------
Raymond J. Lacroix
Its Senior Vice President
and Chief Financial Officer
BUTLER INTERNATIONAL, INC.
By:/s/ Raymond J. Lacroix
----------------------------
Raymond J. Lacroix
Its Senior Vice President
and Chief Financial Officer
BUTLER SERVICE GROUP CANADA, LTD.
By:/s/ Raymond J. Lacroix
----------------------------
Raymond J. Lacroix
Its Senior Vice President
and Chief Financial Officer
GENERAL ELECTRIC CAPITAL
CORPORATION
By:/s/ Martin S. Greenberg
----------------------------
Martin S. Greenberg
Its Duly Authorized Signatory
<PAGE>
Exhibit 10.42(D)
FOURTH AMENDMENT AGREEMENT
--------------------------
AGREEMENT, dated August 3, 1995, to be effective as of June 1, 1995, among
BUTLER SERVICE GROUP, INC. a New Jersey corporation, BUTLER INTERNATIONAL, INC.,
a Maryland corporation, BUTLER SERVICE GROUP CANADA, LTD., a Canadian
corporation, and GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation.
Background
----------
A. Capitalized terms not otherwise defined shall have the meanings
ascribed to them in the Credit Agreement dated as of May 31, 1994, between
Butler Service Group, Inc. and General Electric Capital Corporation (as amended
or supplemented from time to time, the "Credit Agreement").
----------------
B. The Borrower has requested that the Lender increase, from $50,000,000
to $55,000,000, the Maximum Revolving Loan.
C. The Lender has agreed to the Borrower's request subject to the terms
and conditions of this Agreement.
Agreement
---------
In consideration of the Background, which is incorporated by reference, the
parties, intending to be legally bound, agree as follows:
1. Modifications. All the terms and provisions of the Credit Agreement
-------------
and the other Loan Documents shall remain in full force and effect except as
follows:
(a) Section 3.01(b) of the Credit Agreement is deleted and the
following is substituted therefor:
(b) Interest Rate. The Borrower shall be obligated to pay
-------------
interest to the Lender on the outstanding balance of the Revolving Loan,
based on the sum of (X) the outstanding balance of the Revolving Loan and
(Y) the aggregate undrawn face amount of all Letters of Credit, at an
annual floating rate as follows:
Sum of Outstanding Balance
of Revolving Loan and
Undrawn Face Amount of
Letters of Credit Interest Rate
----------------- -------------
(i) Less than or equal Three hundred basis points (3.00%)
to $50,000,000 above the Index rate
<PAGE>
-2-
(ii) Greater than $50,000,000 Five hundred basis points (5.00%)
above the Index rate
(b) The foregoing is added as Section 3.17 of the Credit Agreement:
3.17 Overadvance Fee. The Borrower agrees to pay to the Lender
---------------
the Overadvance Fee for each calendar day that there exists an Overadvance.
(c) The definition of "Fees" contained in Schedule "1.01" to the
Credit Agreement is deleted and the following is substituted therefor:
"Fees" means the Closing Fee, the Letter of Credit Fees, the Early
----
Termination Fee, the Unused Facility Fee, the Overadvance Fee and the
Transaction Expenses; all Fees shall be computed on the actual number of days
elapsed in a year of 360 days, where applicable, and the Borrower acknowledges
and agrees that the Lender shall have the right to charge the Fees to the
Revolving Loan Account.
(d) The definition of Maximum Revolving Loan contained in Schedule
"1.01" to the Credit Agreement is deleted and the following is substituted
therefor:
"Maximum Revolving Loan" shall mean the agreement of the Lender
to make Advances to the Borrower up to the maximum aggregate amount
outstanding of $55,000,000. Notwithstanding the foregoing, the Maximum
Revolving Loan shall be reduced to $50,000,000 upon the sooner to occur of
(i) the Lender enters into a written agreement with a third party to
purchase a participation interest in the Revolving Loan, on terms and
conditions satisfactory to the Lender, (ii) the Borrower or the Parent
receives proceeds from an offering of its equity securities or the
placement of subordinated indebtedness, on terms and conditions
satisfactory to the Lender, and (iii) September 30, 1995.
(e) The following are added after the definition of "Environmental
Liabilities and Costs" contained in Schedule "1.01" to the Credit Agreement:
"Equity Offering" means the offering by the Parent of 50,000
---------------
shares, Series A 5% Cumulative Preferred Stock, $0.001 par value, $100 per
share, pursuant to the Confidential Private Placement Memorandum dated June
27, 1995.
"Equity Offering Proceeds" means the cash proceeds received by
------------------------
the Borrower or an affiliate in connection with the Equity Offering.
(f) The following are added after the definition of "Organic
Documents" contained in Schedule "1.01" to the Credit Agreement:
<PAGE>
-3-
"Overadvance" means, on any calendar day subsequent to May 31,
-----------
1995, an amount equal to the outstanding balance of the Revolving Loan (up to
the amount of the Maximum Revolving Loan) in excess of the Borrowing Base, but
in no event shall such amount exceed the amount of $2,000,000.
"Overadvance Fee" means the amount of $2,000, which amount shall
---------------
be due and payable for each Overadvance.
(g) Section 6.02(c) of the Credit Agreement is deleted and the
following is substituted therefor:
(c) Certificate of Incorporation. Except for the Articles
----------------------------
Supplementary to the Articles of Incorporation to be filed in connection with
the Equity Offering, amend or otherwise modify any material term or provision of
its certificate of incorporation or bylaws, or change its fiscal year for
financial purposes, or permit any Subsidiary to do any of the following:
(h) Section 6.02(o) of the Credit Agreement is deleted and the
following is substituted therefor:
(o) Capital Structure. The Borrower shall not: (i) make any
-----------------
changes in any of its business objectives, purposes or operations which could in
any way adversely affect the repayment of the Obligations or have or result in a
Material Adverse Effect, or (ii) except for the consummation of the Equity
Offering, make any change in its capital structure as described on
Schedule "4.01(v)" (including, without limitation, the issuance of any shares of
- ------------------
stock, warrants or other securities convertible into stock or any revision of
the terms of its outstanding Stock).
(i) Section 6.02(z) of the Credit Agreement is deleted and the
following is substituted therefor:
(z) Dividends and Distributions. Except for (X) dividends or
---------------------------
distributions in the aggregate of up to $350,000 in cash or kind and (Y)
dividends in connection with the Stock to be issued upon the consummation
of the Equity Offering, declare or pay, directly or indirectly, any
dividend or make any other distribution (by reduction of capital or
otherwise), whether in cash, property, securities or a combination thereof,
with respect to any shares of its capital stock or directly or indirectly
redeem, purchase, retire or otherwise acquire for value (or permit any
Subsidiary or Affiliate to purchase or acquire) any of its shares for any
such purposes; notwithstanding the foregoing, the payment of the foregoing
dividends shall be prohibited if the payment of such dividends would
constitute a Default.
<PAGE>
-4-
2. Consent of Lender. The Lender hereby consents to the consummation of
-----------------
the proposed transaction by the Parent with respect to the offering of 50,000
shares, Series A 5% Cumulative Convertible Preferred Stock, $100 per share.
3. Conditions Precedent. The Lender's obligations under this Agreement
--------------------
are contingent upon the Lender's receipt of the following, all in form, scope
and content acceptable to the Lender in its sole discretion:
(a) Amendment Agreement. This Agreement duly executed by the parties
-------------------
hereto.
(b) Allonge. The Second Allonge To Revolving Promissory Note of this
-------
date, to be effective as of June 1, 1995, duly drawn to the Lender.
(c) Other. Such other agreements and instruments as the Lender shall
-----
require.
4. Reaffirmation By Borrower. The Borrower acknowledges and agrees, and
-------------------------
reaffirms, that it is legally, validly and enforceably indebted to the Lender
under the Revolving Note without defense, counterclaim or offset, and that it is
legally, validly and enforceably liable to the Lender for all costs and expenses
of collection and attorneys' fees related to or in any way arising out of this
Agreement, the Credit Agreement, the Revolving Note and other Loan Documents.
The Borrower hereby restates and agrees to be bound by all covenants contained
in the Credit Agreement and the other Loan Documents and hereby reaffirms that
all of the representations and warranties contained in the Credit Agreement
remain true and correct in all material respects except as disclosed in
connection with the execution and delivery of the First Amendment Agreement
dated December 14, 1994 (the "First Amendment Agreement"). The Borrower
-------------------------
represents that except as set forth in the Credit Agreement and the First
Amendment Agreement, there are not pending or to the Borrower's knowledge
threatened, legal proceedings to which the Borrower or either of the Guarantors
is a party, or which materially or adversely affect the transactions
contemplated by this Agreement or the ability of the Borrower or either of the
Guarantors to conduct its business. The Borrower acknowledges and represents
that the resolutions of the Borrower dated May 25, 1994, remain in full force
and effect and have not been amended, modified, rescinded or otherwise
abrogated.
5. Reaffirmation by Guarantors. Each of the Guarantors acknowledges that
---------------------------
each is legally and validly indebted to the Lender under the Guaranty of each
without defense, counterclaim or offset. Each of the Guarantors affirms that
the Guaranty of each remains in full force and effect and acknowledges that the
Guaranty of each encompasses, without limitation, the amount of the Maximum
Revolving Loan, as modified herein.
6. Other Representations By Borrower and Guarantors. The Borrower and
------------------------------------------------
the Guarantors each represents and confirms that (a) no Default or Event of
Default has occurred
<PAGE>
-5-
and is continuing and the Lender has not given its consent to or waived any
Default or Event of Default and (b) the Credit Agreement and the other Loan
Documents are in full force and effect and enforceable against the Borrower and
Guarantors in accordance with the terms thereof. The Borrower and the Guarantors
each represent and confirm that as of the date hereof, each has no claim or
defense (and the Borrower and the Guarantors each hereby waive every claim and
defense) against the Lender arising out of or relating to the Credit Agreement
and the other Loan Documents or the making, administration or enforcement of the
Revolving Loan and the remedies provided for under the Loan Documents.
7. No Waiver By Lender. The Borrower and the Guarantors each
-------------------
acknowledges that (a) by the execution by each of this Agreement, the Lender is
not waiving any Default, whether now existing or hereafter occurring, disclosed
or undisclosed, by the Borrower under the Loan Documents and (b) the Lender
reserves all rights and remedies available to it under the Loan Documents and
otherwise.
[THIS SPACE INTENTIONALLY LEFT BLANK]
<PAGE>
-6-
The parties have executed this Agreement on the date first written above to
be effective as of August 3, 1995.
BUTLER SERVICE GROUP, INC.
By:/s/ Raymond J. Lacroix
-----------------------
Raymond J. Lacroix
Its Senior Vice President and Chief
Financial Officer
BUTLER INTERNATIONAL, INC.
By:/s/ Raymond J. Lacroix
-----------------------
Raymond J. Lacroix
Its Senior Vice President and Chief
Financial Officer
BUTLER SERVICE GROUP CANADA, LTD.
By:/s/ Raymond J. Lacroix
-----------------------
Raymond J. Lacroix
Its Senior Vice President and Chief
Financial Officer
GENERAL ELECTRIC CAPITAL
CORPORATION
By:/s/ Martin S. Greenberg
----------------------------
Martin S. Greenberg
Its Duly Authorized Signatory
<PAGE>
Exhibit 10.42(E)
FIFTH AMENDMENT AGREEMENT
--------------------------
AGREEMENT, dated October 4, 1995, to be effective as of September 30, 1995,
among BUTLER SERVICE GROUP, INC. a New Jersey corporation, BUTLER INTERNATIONAL,
INC., a Maryland corporation, BUTLER SERVICE GROUP CANADA, LTD., a Canadian
corporation, and GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation.
Background
----------
A. Capitalized terms not otherwise defined shall have the meanings
ascribed to them in the Credit Agreement dated as of May 31, 1994, between
Butler Service Group, Inc. and General Electric Capital Corporation (as amended
or supplemented from time to time, the "Credit Agreement").
B. The Borrower has requested that the Lender extend the date on which
the Maximum Revolving Loan shall be reduced to $50,000,000.
C. The Lender has agreed to the Borrower's request subject to the terms
and conditions of this Agreement.
Agreement
---------
In consideration of the Background, which is incorporated by reference, the
parties, intending to be legally bound, agree as follows:
1. Modifications. All the terms and provisions of the Credit Agreement
-------------
and the other Loan Documents shall remain in full force and effect except that
the definition of Maximum Revolving Loan contained in Schedule "1.01" to the
Credit Agreement is deleted and the following is substituted therefor:
"Maximum Revolving Loan" shall mean the agreement of the Lender
to make Advances to the Borrower up to the maximum aggregate amount
outstanding $55,000,000. Notwithstanding the foregoing, the Maximum
Revolving Loan shall be reduced to $50,000,000 upon the sooner to occur of
(I) the Lender enters into a written agreement with a third party to
purchase a participation interest in the Revolving Loan, on terms and
conditions satisfactory to the Lender, (ii) the Borrower or the Parent
receives proceeds from an offering of its equity securities or the
placement of subordinated indebtedness, on terms and conditions
satisfactory to the Lender, and (iii) November 30, 1995.
2. "Fees" (a) In consideration of the Lender's extension of the date on
------
which the Maximum Revolving Loan shall be reduced to $50,000,000, the Borrower
agrees to pay the following fees to the Lender:
<PAGE>
-2-
(i) $5,000 simultaneously with the extension and delivery of this
Agreement which shall be in consideration of the Lender's agreement to
extend such date through October 31, 1995; and
(ii) $10,000 if the Maximum Revolving Loan has not been reduced to
$50,000,000 (or less) on or before November 1, 1995; and
(iii) $5,000 if the Maximum Revolving Loan has not been reduced to
$50,000,000 (or less) on or before November 15, 1995; and
(iv) $7,000 if the Maximum Revolving Loan has not been reduced to
$50,000,000 (or less) on or before November 22, 1995.
(b) The Borrower agrees that the fees set forth under subsection (a) above
shall be deemed "Fees" under the Credit Agreement.
(c) The Borrower agrees that in no event shall the conditions to the
reduction of the Maximum Revolving Loan to $50,000,000 extend beyond November
30, 1995.
3. Conditions Precedent. The Lender's obligations under this Agreement
--------------------
are contingent upon the Lender's receipt of the following, all in form, scope
and content acceptable to the Lender in its sole discretion:
(a) Amendment Agreement. This Agreement duly executed by the parties
-------------------
hereto.
(b) Other. Such other agreements and instruments as the Lender shall
-----
require.
4. Reaffirmation By Borrower. The Borrower acknowledges and agrees, and
-------------------------
reaffirms, that it is legally, validly and enforceably indebted to the Lender
under the Revolving Note without defense, counterclaim or offset, and that it is
legally, validly and enforceably liable to the Lender for all costs and expenses
of collection and attorneys' fees related to or in any way arising out of this
Agreement, the Credit Agreement, the Revolving Note and other Loan Documents.
The Borrower hereby restates and agrees to be bound by all covenants contained
in the Credit Agreement and the other Loan Documents and hereby reaffirms that
all of the representations and warranties contained in the Credit Agreement
remain true and correct in all material respects except as disclosed in
connection with the execution and delivery of the First Amendment Agreement
dated December 14, 1994 (the "First Amendment Agreement"). The Borrower
-------------------------
represents that except as set forth in the Credit Agreement and the First
Amendment Agreement, there are not pending or to the Borrower's knowledge
threatened, legal proceedings to which the Borrower or either of the Guarantors
is a party, or which materially or adversely affect the transactions
contemplated by this Agreement or the ability of the Borrower or either of the
Guarantors to conduct its business. The Borrower acknowledges and represents
that the
<PAGE>
-3-
resolutions of the Borrower dated May 25, 1994, remain in full force and effect
and have not been amended, modified, rescinded or otherwise abrogated.
5. Reaffirmation by Guarantors. Each of the Guarantors acknowledges that
---------------------------
each is legally and validly indebted to the Lender under the Guaranty of each
without defense, counterclaim or offset. Each of the Guarantors affirms that
the Guaranty of each remains in full force and effect and acknowledges that the
Guaranty of each encompasses, without limitation, the amount of the Maximum
Revolving Loan, as modified herein.
6. Other Representations By Borrower and Guarantors. The Borrower and
------------------------------------------------
the Guarantors each represents and confirms that (a) no Default or Event of
Default has occurred and is continuing and the Lender has not given its consent
to or waived any Default or Event of Default and (b) the Credit Agreement and
the other Loan Documents are in full force and effect and enforceable against
the Borrower and Guarantors in accordance with the terms thereof. The Borrower
and the Guarantors each represent and confirm that as of the date hereof, each
has no claim or defense (and the Borrower and the Guarantors each hereby waive
every claim and defense) against the Lender arising out of or relating to the
Credit Agreement and the other Loan Documents or the making, administration or
enforcement of the Revolving Loan and the remedies provided for under the Loan
Documents.
7. No Waiver By Lender. The Borrower and the Guarantors each
-------------------
acknowledges that (a) by the execution by each of this Agreement, the Lender is
not waiving any Default, whether now existing or hereafter occurring, disclosed
or undisclosed, by the Borrower under the Loan Documents and (b) the Lender
reserves all rights and remedies available to it under the Loan Documents and
otherwise.
[THIS SPACE INTENTIONALLY LEFT BLANK]
<PAGE>
-4-
The parties have executed this Agreement on the date first written above to
be effective as of September 30, 1995.
BUTLER SERVICE GROUP, INC.
By: /s/ Raymond J. Lacroix
------------------------
Raymond J. Lacroix
Its Senior Vice President
and Chief Financial Officer
BUTLER INTERNATIONAL, INC.
By: /s/ Raymond J. Lacroix
------------------------
Raymond J. Lacroix
Its Senior Vice President
and Chief Financial Officer
BUTLER SERVICE GROUP CANADA, LTD.
By: /s/ Raymond J. Lacroix
------------------------
Raymond J. Lacroix
Its Senior Vice President
and Chief Financial Officer
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ Martin S. Greenberg
-------------------------
Martin S. Greenberg
Its Duly Authorized Signatory
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BUTLER
INTERNATIONAL, INC. FORM 10-Q FOR PERIOD ENDED SEPTEMBER 30, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 4,380
<SECURITIES> 0
<RECEIVABLES> 82,249
<ALLOWANCES> 1,057
<INVENTORY> 0
<CURRENT-ASSETS> 90,058
<PP&E> 28,262
<DEPRECIATION> 13,092
<TOTAL-ASSETS> 130,296
<CURRENT-LIABILITIES> 31,003
<BONDS> 0
<COMMON> 6
0
2
<OTHER-SE> 38,857
<TOTAL-LIABILITY-AND-EQUITY> 130,296
<SALES> 335,030
<TOTAL-REVENUES> 335,030
<CGS> 288,458
<TOTAL-COSTS> 288,458
<OTHER-EXPENSES> 39,618
<LOSS-PROVISION> 184
<INTEREST-EXPENSE> 4,832
<INCOME-PRETAX> 2,122
<INCOME-TAX> 421
<INCOME-CONTINUING> 1,701
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,701
<EPS-PRIMARY> .25
<EPS-DILUTED> .24
</TABLE>
