UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the period ended April 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________ to _____________________
Commission file number 0-14812
EDISON CONTROL CORPORATION
(Exact name of registrant as specified in its charter)
New Jersey 22-2716367
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
777 Maritime Drive
PO Box 308
Port Washington, WI 53074-0308
(Address of principal executive offices)
(Zip Code)
(414) 268-6800
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (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
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, $.01 par value: 2,346,933 as of April 30, 1999
- -------------------------------------------------------------
<PAGE>
EDISON CONTROL CORPORATION AND SUBSIDIARIES
INDEX
Form 10-Q
Page Number
-----------
Part I Financial Information
Item 1 Financial Statements
Consolidated Balance Sheets Pages 2 & 3
April 30, 1999 (Unaudited) and
January 31, 1999
Consolidated Statements of Operations Page 4
Three months ended April 30,
1999 and 1998 (Unaudited)
Consolidated Statements of Cash Flows Pages 5 & 6
Three months ended April 30,
1999 and 1998 (Unaudited)
Notes to Consolidated Financial Statements Pages 7 - 9
(Unaudited)
Item 2 Management's Discussion and Analysis of Pages 9 - 12
Operations and Financial Condition
Item 3 Quantitative and Qualitative Disclosures
About Risk Pages 12 - 13
Part II Other Information
Item 6 Exhibits Page 13 and
Exhibit Index
1
<PAGE>
PART I.
Item 1
Financial Statements
EDISON CONTROL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
April 30, 1999 and January 31, 1999
<TABLE>
<CAPTION>
April 30, January 31,
1999 1999
---- ----
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 913,976 $ 468,072
Investments 95,000 190,000
Trading securities 1,053,113 3,616,314
Trade accounts receivable, net 3,565,017 3,513,342
Receivable from affiliate 74,583 93,575
Inventories, net 7,493,390 7,619,746
Prepaid expenses and other assets 250,051 193,650
Refundable income taxes 0 120,505
Deferred income taxes 77,000 2,000
Assets held for sale 1,032,200 1,032,200
Deferred financing costs 0 389,236
----------- -----------
Total current assets 14,554,330 17,238,640
Investment in and advances to affiliate 436,263 421,263
Other Assets:
Prepaid pension 122,488 151,477
Deferred income taxes 279,000 129,000
----------- -----------
Total other assets 401,488 280,477
Property, plant and equipment, net 8,038,803 8,187,899
Goodwill (net of amortization) 8,632,252 8,690,318
Organizational/finance costs (net of
amortization) 62,816 84,400
----------- -----------
TOTAL ASSETS $32,125,952 $34,902,997
=========== ===========
(Continued)
See Accompanying Notes.
</TABLE>
2
<PAGE>
EDISON CONTROL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
April 30, 1999 and January 31, 1999
(Continued)
<TABLE>
<CAPTION>
April 30, January 31,
1999 1999
---- ----
(Unaudited)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable $ 1,011,789 $ 1,939,917
Accrued compensation 460,676 739,938
Taxes other than income taxes 40,953 21,325
Other accrued expenses 508,771 522,694
Income taxes payable 236,280 0
Deferred compensation 754,250 754,250
Current maturities on long-term debt 933,439 530,423
----------- -----------
Total current liabilities 3,946,158 4,508,547
Long-term debt, less current maturities 11,858,589 14,211,178
----------- -----------
Total Liabilities 15,804,747 18,719,725
Shareholders' Equity:
Preferred stock, $.01 par value: 1,000,000 shares
authorized, none issued 0 0
Common stock, $.01 par value: 20,000,000 shares
authorized, 2,346,933 shares issued
and outstanding 23,469 23,469
Additional paid-in capital 10,323,225 10,323,225
Retained earnings 5,921,670 5,760,823
Accumulated other comprehensive income 52,841 75,755
----------- -----------
Total Shareholders' Equity 16,321,205 16,183,272
----------- -----------
TOTAL LIABILITIES AND EQUITY $32,125,952 $34,902,997
=========== ===========
See Accompanying Notes.
</TABLE>
3
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EDISON CONTROL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED APRIL 30, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
NET SALES $6,117,533 $6,725,614
COST OF GOODS SOLD 3,997,597 4,453,433
---------- ----------
GROSS PROFIT 2,119,936 2,272,181
OTHER OPERATING EXPENSES:
Selling, engineering and
administrative expenses 1,204,640 1,192,549
Goodwill and organizational/
finance cost amortization 79,650 79,646
---------- ----------
Total other operating expenses 1,284,290 1,272,195
---------- ----------
OPERATING INCOME 835,646 999,986
OTHER EXPENSE (INCOME):
Interest expense 251,409 268,203
Realized (gains) losses on trading securities (260,953) 12,250
Unrealized losses (gains) on trading securities 192,817 (622,780)
Stock warrant amortization 389,236 245,833
Miscellaneous income (28,886) (39,171)
---------- ----------
Total other expense (income) 543,623 (135,665)
---------- ----------
INCOME BEFORE INCOME TAXES 292,023 1,135,651
INCOME TAXES 131,176 480,906
---------- ----------
NET INCOME 160,847 654,745
OTHER COMPREHENSIVE (LOSS) INCOME-
Foreign currency translation adjustment (22,914) 87,837
---------- ----------
COMPREHENSIVE INCOME $ 137,933 $ 742,582
========== ==========
Net income per share - basic $ .07 $ .29
Net income per share - diluted $ .06 $ .23
See Accompanying Notes.
</TABLE>
4
<PAGE>
EDISON CONTROL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED APRIL 30, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 160,847 $ 654,745
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 693,589 510,955
Provision for doubtful accounts 66,044 36,929
Realized (gain) loss on sales of trading securities (260,953) 12,250
Unrealized loss (gain) on trading securities 192,817 (622,780)
Purchases of trading securities (650,438)
Proceeds from the sale of trading securities 2,631,337 147,750
Equity in earnings of affiliate (15,000) (20,000)
Changes in assets and liabilities:
Accounts receivable (117,719) (734,862)
Receivable from affiliate 18,992 (26,592)
Inventories 126,356 (301,187)
Prepaid expenses and other assets (27,412) 83,690
Trade accounts payable (928,128) 180,206
Accrued compensation (279,262) (340,317)
Taxes other than income taxes 19,628 42,301
Other accrued expenses (13,923) 29,040
Deferred income taxes (148,000) 420,000
Income taxes payable 279,785 43,411
----------- -----------
Total adjustments 2,238,151 (1,189,644)
----------- -----------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 2,398,998 (534,899)
----------- -----------
INVESTING ACTIVITIES:
Additions to plant and equipment (75,607) (60,917)
Maturity of certificate of deposit 95,000
Payments received from affiliate 30,000
----------- -----------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 19,393 (30,917)
----------- -----------
(Continued)
See Accompanying Notes.
</TABLE>
5
<PAGE>
EDISON CONTROL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED APRIL 30, 1999 AND 1998
(Unaudited)
(Continued)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt $ 5,157,183 $ 500,000
Payments on long-term debt (7,106,756) (315,793)
----------- -----------
NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES (1,949,573) 184,207
----------- -----------
EFFECT OF EXCHANGE RATE CHANGES
ON CASH (22,914) 87,837
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 445,904 (293,772)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 468,072 1,037,288
----------- -----------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 913,976 $ 743,516
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes $ 0 $ 17,495
Cash paid during the period for interest 257,374 249,740
See Accompanying Notes.
</TABLE>
6
<PAGE>
EDISON CONTROL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
Note 1 - Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, these statements do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal, recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three month period
ending April 30, 1999 are not necessarily indicative of the results that may be
expected for other interim periods or the year ended January 31, 2000. For
further information, refer to the financial statements and footnotes thereto
included in the Company's annual report on Form 10-K for the year ended January
31, 1999.
Note 2 - Nature of Business and Accounting Policies
Principles of Consolidation - The consolidated financial statements include the
accounts of Edison Control Corporation ("Edison") and subsidiaries, all of which
subsidiaries are wholly owned by Edison (collectively, the "Company"). All
material intercompany accounts and transactions have been eliminated in
consolidation.
Nature of Operations - The Company is currently comprised of the following
operations. Construction Forms ("ConForms") is a leading manufacturer and
distributor of systems of pipes, couplings and hoses and other equipment used
for the pumping of concrete. ConForms manufactures a wide variety of finished
products which are used to create appropriate configurations of systems for
various concrete pumps. Ultra Tech manufactures abrasion resistant piping
systems for use in industries such as mining, pulp and paper, power and waste
treatment. Gilco produces a line of concrete and plaster/mortar mixers. JABCO
primarily leases property and equipment to the Company.
Trading Securities - Debt and equity securities purchased and held principally
for the purpose of sale in the near term are classified as "trading securities"
and reported at fair value with unrealized gains and losses included in
earnings. The cost of individual securities sold is based on the first-in,
first-out method.
Estimates - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reported
period. Actual results could differ from those estimates.
7
<PAGE>
Translation of Foreign Currencies - Assets and liabilities of foreign operations
are translated into United States dollars at current exchange rates. Income and
expense accounts are translated into United States dollars at average rates of
exchange prevailing during the year. Adjustments resulting from the translation
of financial statements of the foreign operations are included as foreign
currency translation adjustments in other comprehensive income.
Net income per share - Reconciliation of the numerator and denominator of the
basic and diluted per share computations for the three months ended April 30,
1999 and 1998 are summarized as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Net income per share - basic:
Net income (numerator) $ 160,847 $ 654,745
Weighted average shares outstanding (denominator) 2,346,933 2,275,933
Net income per share - basic $ .07 $ .29
Net income per share - diluted:
Net income (numerator) $ 160,847 $ 654,745
Weighted average shares outstanding (denominator) 2,346,933 2,275,933
Effect of dilutive securities:
Stock options 177,949 186,778
Stock warrants 392,025 352,679
---------- ----------
Weighted average shares outstanding (denominator) 2,916,907 2,815,390
Net income per share - diluted $ .06 $ .23
</TABLE>
Reclassifications - Certain reclassifications have been made to the prior
periods' financial statements to conform with the current year presentation.
Note 3 - Long-Term Debt
On April 30, 1999, Edison refinanced its bank debt and amended its master credit
agreement with LaSalle National Bank of Chicago. As part of the refinancing,
Edison liquidated approximately $2,600,000 of its existing trading security
portfolio and utilized these funds to reduce its outstanding debt. Also, as part
of the refinancing, LaSalle paid the subordinated bank loan holder in full
(approximately $6,800,000).
8
<PAGE>
The Company's amended master credit agreement expires April 30, 2004 and allows
for revolving credit borrowings not to exceed $6,000,000 ($4,325,000 outstanding
at April 30, 1999). Borrowings, which are based on qualified assets, bear
interest at either the prime rate or the LIBOR rate plus 2%.
The Company also maintains a $5,750,000 term loan under the amended master
credit agreement. Quarterly principal payments of $200,000 are required by the
agreement. Borrowings bear interest at either the prime rate or the LIBOR rate
plus 2.25%. The agreement calls for an additional annual principal payment based
on excess cash flow as defined in the agreement.
The terms of the amended master credit agreement, among other provisions,
require the Company to maintain a minimum current ratio, tangible net worth, and
debt service coverage ratio, and restricts the Company to a maximum funded debt
to EBITDA ratio. Substantially all of the Company's assets are collateralized
under the amended master credit agreement. The LIBOR spread may be reduced or
increased annually based on the achievement of a certain "funded debt to EBITDA"
ratio.
Note 4 - Segment Information
The Company's operating segments are organized based on the nature of products
and services provided. A description of the nature of the segment's operations
and their accounting policies are contained in Note 2.
Segment information for the quarters ended April 30, 1999 and 1998 follows:
1999 1998
---- ----
Net Operating Net Operating
Sales Income Sales Income
----- ------ ----- ------
ConForms $5,082,901 $953,762 $5,091,558 $960,239
Ultra Tech 466,689 91,999 1,140,154 171,467
Gilco 567,943 (115,789) 493,902 (25,465)
Edison (94,326) (106,255)
---------- -------- ---------- --------
Total $6,117,533 $835,646 $6,725,614 $999,986
Item 2.
Management's Discussion and Analysis of Operations and Financial Condition
Certain matters discussed in this Quarterly Report on Form 10-Q are
"forward-looking statements" intended to qualify for the safe harbors from
liability established by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such because the
context of the statement will include words such as the Company "believes",
"anticipates", "expects", or words of similar import. Similarly, statements that
describe the Company's future plans, objectives or goals are also
forward-looking statements. Such forward-looking statements are subject to
certain risks and uncertainties, including, but not limited to, new product
advancements by competition, significant changes in industry technology,
economic or political conditions in the countries in which the Company does
business, the continued availability of sources of supply, the availability and
consummation of favorable acquisition opportunities, increasing competitive
pressures on pricing and other contract terms, economic factors affecting the
Company's customers, stock price variations
9
<PAGE>
affecting the Company's securities trading portfolio and issues related to Year
2000 problems. These factors could cause actual results to differ materially
from those anticipated as of the date of this report. Shareholders, potential
investors and other readers are urged to consider these factors in evaluating
the forward-looking statements and are cautioned not to place undue reliance on
such forward-looking statements. The forward-looking statements included herein
are only made as of the date of this report and the Company undertakes no
obligation to publicly update such forward-looking statements to reflect
subsequent events or circumstances.
Net sales for the quarter ended April 30, 1999 decreased $608,081 (9.0%) to
$6,117,533 when compared with the same period of the prior year. The principal
reason for the change was due to the decrease in large project sales at Ultra
Tech. Ultra Tech's sales volume will continue to fluctuate based on its ability
to attain large project sales in the industries it serves.
As a percentage of net sales, gross margin for the quarter increased to 34.7%
from 33.8% due to improved results from foreign operations and fewer lower
margin project sales at Ultra Tech. Selling, engineering and administrative
expenses increased by $12,091 (1%).
Interest expense decreased to $251,409 for the quarter ended April 30, 1999
compared to $268,203 for the quarter ended April 30, 1998. Interest expense is
expected to decrease due to the debt refinancing described in Note 3 of the
Notes to Consolidated Financial Statements and the anticipated principal
reductions in the future.
The $68,136 net gain on trading securities compared to last year's net gain of
$610,530 accounted for a majority of the change in pre-tax income. During the
quarter ended April 30, 1999, the Company sold $2,631,337 of its trading
securities and realized a net gain of $260,953 on these sales. Trading
securities at April 30, 1999 consisted of the following:
Number of Market
Name of Issuer/Title of Issue Shares Value
- ----------------------------- ------ -----
Common Stocks:
Glenayre Technologies, Inc. 40,000 $ 132,500
Panavision Inc. 304 2,632
Sun International Hotels 100 4,231
US Trust Corporation 10,000 913,750
-----------
Total $ 1,053,113
===========
Although the Company has no established formal investment policies or practices
for its trading securities portfolio, the Company generally pursues an
aggressive trading strategy, focusing primarily on generating near-term capital
appreciation from its investments in common equity securities. Securities held
in the Company's portfolio at the end of each period are reported at fair value,
with unrealized gains and losses included in earnings for that period. These
factors, combined with the relative size of the Company's trading portfolio, has
led, and will likely continue to lead, to significant period-to-period earnings
volatility depending upon the capital appreciation or
10
<PAGE>
depreciation of the Company's trading securities portfolio as of the end of each
reporting period. The Company does not use or buy derivative securities.
The amortization of goodwill, financing costs and stock warrants created a total
non-cash charge of $468,886 for the first quarter compared to $325,479 for the
prior year first quarter. Due to the repayment of the subordinated bank loan,
the guarantee provided by the principal shareholder of Edison was canceled.
Accordingly, all remaining deferred financing costs ($143,403), related to the
warrant issued to the principal shareholder for providing the guarantee, were
expensed in the first quarter of fiscal 1999. The total amortization of all
these non-cash charges for the year ended January 31, 2000 is expected to
approximate $660,000.
The Company recorded tax expense of $131,176 for the three months ended April
30, 1999, which represents the estimated annual effective rate of 44.9% applied
to pre-tax book income. Deferred income taxes reflect the net tax effects of
temporary differences between the carrying amount of assets and liabilities for
financial statement reporting purposes and the amounts used for income tax
purposes.
Net income of $160,847, or $.07 and $.06 per share, basic and diluted,
respectively, for the first quarter of 1999 was a decrease of $493,898 (75.4%),
from net income of $654,745, or $.29 and $.23 per share, basic and diluted, for
the comparable period of the prior year. This change was principally due to the
reduction of the net gain on trading securities and the increase in amortization
of the non-cash charges described above.
Liquidity and Capital Resources
The Company generated $2,398,998 in cash from operations during the first three
months of 1999, compared to cash flow used in operations of $534,899 for the
same period last year. This change was due largely to the net proceeds of
$2,631,337 received from sales of trading securities during the period. The
Company used $75,607 in cash to acquire capital equipment and received $95,000
in cash from the maturity of a certificate of deposit. As described in Note 3 of
the Notes to Consolidated Financial Statements, the Company refinanced its bank
debt resulting in a net debt reduction of $1,949,573 in the quarter compared to
a net debt increase of $184,207 in the prior comparable period. The result was a
net increase in cash and cash equivalents of $445,904 for the first quarter of
fiscal 1999 compared to a net decrease of $293,772 in the prior year first
quarter.
The Company believes that it can fund proposed capital expenditures and
operational requirements from operations and currently available cash and cash
equivalents, investments, trading securities and existing bank credit lines.
Proposed capital expenditures for the fiscal year ending January 31, 2000 are
expected to total approximately $900,000, compared to $3,082,725 for fiscal
1998. The significant decrease is due principally to the completion in fiscal
year 1998 of construction of an addition at the Company's Port Washington
facility and the implementation of a new enterprise resource planning system.
The Company also intends to sell its Cedarburg facility. The Company's asking
price for the facility is $1,295,000, although there can be no assurance as to
when or if this facility may be sold.
11
<PAGE>
The Company intends to continue to expand its businesses, both internally and
through potential acquisitions. The Company currently anticipates that any
potential acquisitions would be financed primarily by internally generated funds
or additional borrowings or the issuance of the Company's stock.
Year 2000 Issues
During fiscal 1998, the Company engaged in a comprehensive project to select and
implement a new enterprise resource planning ("ERP") system that will properly
recognize the Year 2000 problem. This project involved replacing certain
hardware and software maintained by the Company. The Company has received a
representation from the ERP software provider that its software is Year 2000
compliant. On February 1, 1999, the Company started operating with the new ERP
system. Contingency plans have been developed and will be implemented if Year
2000 problems are encountered with the new ERP system.
The total cumulative cost of the project was approximately $530,000. Purchased
ERP system hardware and software, approximately $385,000 of the total estimated
cost, was capitalized in fiscal 1998. Personnel and all other remaining costs
related to the project were expensed as incurred in fiscal 1998.
The Company has not formally communicated with all its customers and suppliers
to determine the extent to which the Company is vulnerable to those third
parties' failure to address Year 2000 issues. The Company's business operations
could be affected by the Year 2000 readiness of its customers and suppliers in
such areas as the delay in receipt of cash from customers, the interruption of
utilities and the inability of suppliers to deliver in a timely manner. The
Company does not anticipate any materially adverse affect on its business due to
Year 2000 problems encountered by its customers or suppliers; however, there can
be no assurance that its business will not be materially adversely affected by
such problems.
Item 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to interest rate risk, foreign currency risk and equity
price risk. These risks include changes in U.S interest rates, changes in
foreign currency exchange rates as measured against the U.S. dollar and changes
in the prices of stocks traded on the U.S. markets.
Interest Rate Risk
The Company's revolving credit borrowings and variable rate term loans, which
total $12,792,028 as of April 30, 1999, are subject to interest rate risk. Most
of the borrowings float at either the prime rate or LIBOR plus a certain amount
of basis points. Based on the April 30, 1999 balance, an increase of one percent
in the interest rate on the Company's loans would cause an increase in interest
expense of approximately $128,000, or $.03 per diluted share, on an annual
basis. The Company currently does not use derivatives to fix variable rate
interest obligations.
12
<PAGE>
Foreign Currency Risk
The Company has foreign operations in the United Kingdom and Malaysia. Sales and
purchases are typically denominated in the British pound, Malaysian ringgit,
German mark, Singapore dollar or U.S. dollar, thereby creating exposures to
changes in exchange rates. The changes in exchange rates may positively or
negatively affect the Company's sales, gross margins and retained earnings. The
Company does not enter into foreign exchange contracts but attempts to minimize
currency exposure risk through working capital management. There can be no
assurance that such an approach will be successful, especially in the event of a
significant and sudden decline in the value of a currency.
Equity Price Risk
Approximately 3% of the Company's total assets as of April 30, 1999 are invested
in trading securities of various domestic companies. The market value of these
investments is subject to fluctuation. This factor, combined with the relative
size of the Company's trading portfolio ($1,053,113 at April 30, 1999), has led
and will likely continue to lead, to significant period-to-period earnings
volatility depending upon the capital appreciation or depreciation of the
Company's trading securities portfolio. A 10% decrease in the quoted market
price of these trading securities would decrease the fair market value of these
securities by approximately $105,000, or $0.02 per diluted share. Although the
Company has no established formal investment policies or practices for its
trading securities portfolio, the Company generally pursues an aggressive
trading strategy, focusing primarily on generating near-term capital
appreciation from its investments in common equity securities. Securities held
in the Company's portfolio at the end of each period are reported at fair value,
with unrealized gains and losses included in earnings for that period. These
factors, combined with the relative size of the Company's trading portfolio, has
led, and will likely continue to lead, to significant period-to-period earnings
volatility depending upon the capital appreciation or depreciation of the
Company's trading securities portfolio as of the end of each reporting period.
The Company does not use or buy derivative securities.
PART II.
Item 6.
Exhibits
The Exhibits filed or incorporated by reference herein are as specified in the
Exhibit Index.
Reports on Form 8-K
The Company filed no reports on Form 8-K during the quarter to which the report
relates.
13
<PAGE>
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.
EDISON CONTROL CORPORATION
(Registrant)
Date: June 4, 1999 /s/ Jay R. Hanamann
-----------------------
Jay R. Hanamann
(Chief Financial Officer)
14
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Edison Control Corporation
Exhibit Index
-------------
Exhibit No. Description
- ----------- -----------
4. Amendment No. 1 to Master Credit Agreement dated April 30,
1999 between Construction Forms, Inc. and LaSalle National
Bank.
27. Financial Data Schedule.
15
AMENDMENT NO. 1 TO MASTER CREDIT AGREEMENT
THIS AMENDMENT NO. 1 TO MASTER CREDIT AGREEMENT is made as of April 30,
1999, by and among CONSTRUCTION FORMS, INC., a Wisconsin corporation (the
"Company"), CF ULTRA TECH, INC., a Wisconsin corporation ("Ultra") and CF GILCO,
Inc., a Wisconsin corporation ("Gilco") and LASALLE NATIONAL BANK, a national
banking association (the "Bank").
In consideration of the mutual covenants, conditions and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed that:
ARTICLE I
DEFINITIONS
When used herein, the following terms shall have the following meanings
specified:
1.1 "Amendment" shall mean this Amendment No. 1 to Master Credit
Agreement
1.2 "Credit Agreement" shall mean the Master Credit Agreement dated as of
June 21, 1996 by and among the Company, Ultra, Gilco and the Bank as amended
pursuant to a waiver and amendment letter dated April 2, 1998 of Bank in favor
of the Company.
ARTICLE II
AMENDMENTS
The Credit Agreement is hereby amended as follows:
2.1 Amendments.
(a) Ultra and Gilco, which were merged into the Company effective as
of February 1, 1998, are hereby removed as parties to the Credit Agreement.
(b) Each reference to "Overadvance Term" contained in the Credit
Agreement and all Related Documents is amended in its entirety to read "Term."
(c) The following definitions contained in Section 1.1 of the Credit
Agreement are hereby amended in their entirety as follows:
"Borrowing Base" shall mean, as of any date, the sum of (a) 60% of
Qualified Accounts of CF Europe and CF Asia, each a division of the
Company, plus (b) 85% of all other Qualified Accounts, plus (c) 30% of
Qualified Inventory of CF Europe and CF Asia, plus (d) 50% of all other
Qualified Inventory.
<PAGE>
"Borrowing Base Certificate" shall mean a schedule of the Bank's
collateral in the form of Exhibit A separately setting forth accounts
receivable, Qualified Accounts, inventory and Qualified Inventory.
"Excess Cash Flow Payment" shall mean an amount equal to 50% of Excess
Cash Flow for the relevant period of determination.
"LIBOR Spread" shall mean, subject to the final sentence of this
definition, for any period, the applicable of the following percentages
in effect with respect to such period based on the ratio of (a) Funded
Debt outstanding on the January 31 prior to the date of determination, to
(b) EBITDA computed as of the January 31 prior to the date of
determination as follows:
LIBOR LIBOR
Spread for Spread for
Funded Debt to EBITDA Revolving Loans Term Loan
--------------------- --------------- ---------
Equal to or
Greater than less than
------------ ----------
2.25 to 1.00 __________ 2.25% 2.50%
2.00 to 1.00 2.25 to 1.00 2.00% 2.25%
1.75 to 1.00 2.00 to 1.00 1.75% 2.00%
__________ 1.75 to 1.00 1.50% 1.75%
The LIBOR Spread shall be adjusted, if necessary, annually on
April 30 of each year; provided, however, that the LIBOR Spread may not
change during a Loan Period. Notwithstanding anything to the contrary
contained herein, until October 31, 1999, the LIBOR Spread shall be
calculated as if the ratio of Funded Debt to EBITDA was 2.01 to 1.00,
regardless of the actual ratio of Funded Debt to EBITDA.
"'Qualified Account' shall mean an account (as that term is defined in
the UCC and by GAAP) owing solely to the Company which is not subject to
any assignment, claim, lien, encumbrance or security interest whatsoever
other than those securing any of the Company's obligations to the Bank,
excluding any reserve for bad debts and uncollectible finance charges;
provided, however, that an account shall not be a Qualified Account if
the Company has any notice or knowledge of the bankruptcy, insolvency, or
similar proceeding of the account debtor thereunder, or of the inability
of the account debtor thereunder to pay its debts as they become due, or
of anything which might impair the credit standing of the account
debtor."
2
<PAGE>
"'Qualified Inventory' shall mean inventory (as that term is defined in
the UCC and by GAAP) solely owned by the Company which meets the
following requirements and continues to meet the same until sold or
otherwise disposed of as permitted by this Agreement: (a) it is not
subject to any assignment, claim, lien, or security interest whatsoever
other than those securing the Obligations; (b) it is not obsolete, is in
good condition and is either currently usable or saleable; (c) it is raw
materials or finished goods; and (d) it is valued at the lower of cost
(on a FIFO basis) or market value."
"Related Documents" shall mean the Master Revolving Credit Note, the
Master Term Note, the Security Agreements, the Guaranty, the Collateral
Assignments, the Mortgages, the Pledge Agreement, the Assignment, the IRB
Documentation, the Subordination Agreement dated as of April 30, 1999 of
the City of Port Washington, Wisconsin in favor of the Bank and all other
certificates, resolutions, or other documents required or contemplated
hereunder.
"Revolving Loan Commitment" shall mean an aggregate principal amount not
to exceed $6,000,000, or such lesser amount to which the Revolving Loan
Commitment is reduced under Section 2.1(e).
"Restricted Payments" shall mean (a) dividends or other distributions by
any Company based upon the stock of the Company (except dividends payable
solely in stock of the Company), (b) purchases, redemptions or other
acquisitions, direct or indirect, by the Company, of stock of the
Company, whether now or hereafter outstanding, (c) any other distribution
by the Company in respect of stock of the Company, whether now or
hereafter outstanding, either directly or indirectly, whether in cash or
property or otherwise, and (d) payment of management fees in an aggregate
amount which exceeds $300,000 annually by the Company to one or more
Affiliates, either directly or indirectly, whether in cash or property or
otherwise.
"Termination Date" shall mean, as to the Revolving Loans April 30, 2004,
and as to the Term Loan April 30, 2004, or such earlier date on which the
Obligations shall terminate as provided in Section 7.2.
(d) The following definitions shall be added to Section 1.1 of the Credit
Agreement and shall be placed in alphabetical order therein:
3
<PAGE>
"EBITDA" shall mean, with respect to the Company for any period, the net
income from the Company's operations before interest, taxes, depreciation
and amortization, determined in accordance with GAAP and applied in a
manner consistent with the financial statements for such period and prior
periods.
"Gilco" shall mean CF Gilco, Inc., a Wisconsin corporation which was
merged into the Company effective as of February 1, 1998.
"Ultra" shall mean CF Ultra Tech, Inc., a Wisconsin corporation which was
merged into the Company effective as of February 1, 1998.
(e) The definition of "Marketable Securities" contained in Section 1.1 of
the Credit Agreement is hereby deleted in its entirety.
(f) Section 2.1 of the Credit Agreement is hereby amended in its entirety
to read as follows:
" 2.1 Revolving Loans.
(a) Prior to the Termination Date and so long as no Default has
occurred and is continuing, the Bank agrees on the terms and conditions
set forth in this Agreement to extend to the Company Revolving Loans from
time to time in amounts not to exceed in the aggregate at any one time
outstanding the lesser of (i) the Revolving Loan Commitment, and (ii) the
Borrowing Base. Subject to the terms of this Agreement, the Company may
borrow, repay (in whole or in part) and reborrow the Revolving Loans
prior to the Termination Date for Revolving Loans. The Revolving Loans
made by the Bank to the Company shall be evidenced by the Master
Revolving Credit Note.
(b) From the date of the first Revolving Loan and until all
Revolving Loans are paid in full, the Company shall pay all accrued and
unpaid interest on (i) any portion of the Revolving Loans which are LIBOR
Rate Loans on the last day of the Loan Period, or (ii) any portion of the
Revolving Loans which are not LIBOR Rate Loans on the first day of each
month, commencing on the last day of May, 1999. Prior to an Event of
Default, interest shall accrue on the aggregate unpaid principal amount
from time to time outstanding under the Master Revolving Credit Note at a
rate per annum equal to (i) the applicable LIBOR Rate on each LIBOR Rate
Loan, and (ii) the Prime Rate on Revolving Loans which are not LIBOR Rate
Loans. Interest shall be computed and adjusted daily based on the actual
number of days elapsed in a year of 360 days. All outstanding unpaid
principal and accrued interest on the Revolving Loans shall be due and
payable on the Termination Date for the Revolving Loans.
4
<PAGE>
(c) The Company may obtain Revolving Loans by making a request
therefor to the Bank, orally or in writing. Such request shall specify a
Business Day prior to the Termination Date on which such Revolving Loans
are to be made (the "Borrowing Date"), shall be received by the Bank by
12:00 Noon (Milwaukee time) three Business Days before the Borrowing Date
in the case of LIBOR Rate Loans or otherwise by 12:00 Noon (Milwaukee
time) of the Borrowing Date, and shall specify the amount of the
Revolving Loans requested, whether the Revolving Loans are to be LIBOR
Rate Loans and, if so, the requested Loan Period; provided, however, that
within three days after any oral request for a Revolving Loan, the Bank
shall receive from the Company a written confirmation in form acceptable
to the Bank confirming the Company's Revolving Loan request, and the
Bank's obligation to make further Revolving Loans hereunder to the
Company shall be suspended until such confirmation has been received by
the Bank. In the event of any inconsistency between the telephonic notice
and the written confirmation thereof, the telephonic notice shall
control. The Company shall be obligated to repay all Revolving Loans
notwithstanding the failure of the Bank to receive written confirmation,
and notwithstanding the fact that the person requesting the Revolving
Loan was not in fact authorized to do so. No Revolving Loan request shall
be modified, altered or amended without the prior written consent of the
Bank. Each Revolving Loan shall be in the principal amount of the lesser
of (i) $25,000 or a multiple thereof, or (ii) the Maximum Available
Commitment; provided, however, that the Companies may not request LIBOR
Rate Loans in an amount less than $250,000 per request (and additional
increments of $100,000). Upon fulfillment of the conditions specified in
Section 4.2, the Bank shall promptly deposit the amount of such Revolving
Loan in the general deposit account of the Company maintained at the
Bank.
(d) Revolving Loans which are not LIBOR Rate Loans may be
converted (in increments of $250,000 (and additional increments of
$100,000)) into LIBOR Rate Loans by notice from the Company to the Bank
meeting the requirements of, Section 2.1(c). At the end of each
respective Loan Period, LIBOR Rate Loans shall become Revolving Loans
which are not LIBOR Rate Loans unless and until the Company converts such
Revolving Loans to LIBOR Rate Loans.
(e) On the final day of each fiscal quarter, the
5
<PAGE>
Company may, upon five Business Days' prior written notice to the Bank,
permanently reduce the aggregate amount of the Revolving Loan Commitment;
provided that no such reduction shall reduce the aggregate amount of the
Revolving Loan Commitment to an amount less than the aggregate unpaid
principal balance of the Master Revolving Credit Note on the effective
date of such reduction. Each reduction in the Revolving Loan Commitment
shall be in a minimum amount of $250,000 and in integral multiples of
$250,000 above such minimum."
(g) Section 2.2 of the Credit Agreement is hereby amended in its entirety
to read as follows:
"2.2 Term Loan.
(a) On the date hereof, the Bank agrees to continue to extend to
the Company the Term Loan in an aggregate principal amount of $5,750,000
and such Term Loan shall be subject to all of the terms and conditions
set forth in this Agreement. The Term Loan made by the Bank to the
Company pursuant hereto shall be evidenced by the Master Term Note.
(b) The Company shall pay all accrued and unpaid interest on (i)
any portion of the Term Loan which is a LIBOR Rate Loan on the last day
of the Loan Period, or (ii) any portion of the Term Loan which is not a
LIBOR Rate Loan on the first day of each month, commencing on the last
day of May, 1999, and continuing until the Term Loan is paid in full.
Prior to an Event of Default, interest shall accrue on the aggregate
unpaid principal amount outstanding under the Term Note at a rate per
annum equal to (i) the applicable LIBOR Rate if the Term Loan is a LIBOR
Rate Loan, and (ii) the Prime Rate if the Term Loan is not a LIBOR Rate
Loan. Notwithstanding the foregoing, and so long as no Default has
occurred and is continuing, the Company may elect to fix the interest
rate on all, but not less than all, of the outstanding Term Loan
(provided that no such portion of the Term Loan at the time of such
conversion may be LIBOR Rate Loans) at the Fixed Term Rate by delivering
an irrevocable written notice to the Bank at least three Business Days
prior to the effective date of such election as specified therein (the
"Fixed Term Rate Borrowing Date"); and, thereafter, interest shall accrue
on the aggregate unpaid principal amount of the Term Loan at a rate per
annum equal to the Fixed Term Rate. Interest shall be computed and
adjusted daily based on the actual number of days elapsed in a year of
360 days. The Company shall pay principal outstanding under such Term
Note in twenty equal quarterly installments of
6
<PAGE>
principal of $200,000 each payable commencing on the last day of July,
1999 and on the last day of each July, October, January and April
thereafter, and a final payment of the balance of all unpaid principal
and accrued interest on the Termination Date for such Term Loan. Amounts
paid or prepaid on the Term Loan may not be reborrowed.
(c) So long as no Default has occurred and is continuing and
provided that the Company has not elected to convert the Term Loan to the
Fixed Term Rate pursuant to Section 2.2(b), the portion of the Term Loan
which is not a LIBOR Rate Loan may be converted into a LIBOR Rate Loan of
at least $250,000 (and additional increments of $100,000) by written
notice from the Company to the Bank and received by Bank by 12:00 p.m.
(Milwaukee time) three Business Days before the requested conversion date
(such date which shall be prior to the Termination Date for the Term
Loan); such notice which shall specify the amount of the Term Loan to be
converted and the requested Loan Period. No Term Loan conversion request
shall be modified, altered or amended without the prior written consent
of the Bank. At the end of each respective Loan Period, each LIBOR Rate
Loan shall become a Term Loan which is not a LIBOR Rate Loan unless and
until the Company converts such Term Loan to a LIBOR Rate Loan."
(h) Section 3.12 of the Credit Agreement is hereby amended in its
entirety to read as follows:
" 3.12 Places of Business. The principal place of business and the
chief executive office of the Company is located at the address specified
in Section 8.6, and the books and records of the Company and all records
of account are located and hereafter shall continue to be located at such
principal place of business and chief executive office."
(i) A new Section 3.20 is added to the Credit Agreement to read as
follows:
7
<PAGE>
" 3.20 Year 2000 Compliance. All material computer hardware,
software and databases used by the Company are Year 2000 Compliant and
the Company will not after the date hereof be materially and adversely
affected by, incur any material cost, material liability or material
expense which arises from the failure of the Company's hardware, software
and databases to be Year 2000 Compliant. For purposes of this Section,
"Year 2000 Compliant" shall mean, as to all computer hardware, software
and databases, that such hardware, software or database operates, and
will operate, accurately and without interruption, prior to and after
December 31, 1999, when referring to, or involving, any year or date in
the twentieth or twenty-first centuries."
(j) The reference to "50 days" contained in Section 5.3(a) of the Credit
Agreement is hereby amended in its entirety to read "60 days."
(k) Section 5.3(b) of the Credit Agreement is hereby amended in its
entirety to read as follows:
" (b) as soon as available, and in any event within 90 days after
the close of each fiscal year of Edison Control Corporation, copies of
(i) the detailed annual audit report for such year and accompanying
consolidated financial statements for Edison Control Corporation and its
Subsidiaries as of the end of such year (including consolidating
information for the Company), containing balance sheets and statements of
income, retained earnings and cash flows for such year and for the
previous fiscal year, as audited by independent certified public
accountants of recognized standing selected by Edison Control Corporation
and satisfactory to the Bank, which report shall be accompanied by (A)
the unqualified opinion of such accountants to the effect that the
statements present fairly, in all material respects, the financial
position of Edison Control Corporation and its Subsidiaries as of the end
of such year and the results of its operations and its cash flows for the
year then ended in conformity with GAAP; (B) a certificate of such
accountants showing their calculation of the financial covenants
contained herein and stating that their review disclosed no Default or
that their review disclosed a Default and specifying the same and the
action taken or proposed to be taken with respect thereto; and (C) any
supplementary comments and reports submitted by such accountants to
Edison Control Corporation including the management letter, if any; and
(ii) unaudited internally-prepared financial statements for CF and its
Subsidiaries as of the end of such year, containing balance sheets and
statements of income, retained earnings and cash flows for
8
<PAGE>
such year and for the previous fiscal year;"
(l) The reference to "15 days" contained in Section 5.3(d) of the Credit
Agreement is hereby amended in its entirety to read "30 days."
(m) Section 5.5 of the Credit Agreement is hereby amended in its entirety
to read as follows:
" 5.5 Use of Proceeds. Use the entire proceeds of the Obligations as
follows:
(a) the proceeds of the Revolving Loans shall be used for working
capital and general corporate purposes only; and
(b) the proceeds of the Term Loan shall be used to refinance (i)
all of the Company's existing term debt and a portion of the Company's
existing revolving debt to the Bank, and (ii) to refinance all
indebtedness related to the Subordinated Loan Transaction."
(n) Section 6.8 of the Credit Agreement is hereby amended in its entirety
to read as follows:
"6.8 Fixed Asset Expenditures. Purchase, become obligated for,
invest in, acquire or otherwise expend for the acquisition of real
estate, machinery, equipment or other fixed assets (including capitalized
lease obligations) during any fiscal year an amount exceeding
$1,000,000."
(o) Section 6.10 of the Credit Agreement is hereby amended in its
entirety to read as follows:
" 6.10 Tangible Net Worth. Permit Tangible Net Worth at the end of
any fiscal quarter of the Companies to be less than (a) $3,250,000, plus
(b) 75.0% of the Company's Net Income (but not Net Loss) for each fiscal
year of the Company ending on or after January 31, 2000."
(p) Section 6.11 of the Credit Agreement is hereby amended in its
entirety to read as follows:
" 6.11 Funded Debt to EBITDA. Permit the ratio of Funded Debt to
EBITDA to exceed (a) 2.50 to 1 at the end of any fiscal quarter of the
Companies from July 31, 1999 through January 31, 2000, (b) 2.25 to 1 at
the end of any fiscal quarter of the Companies from April 30, 2000
through January 31, 2001, and (c) 2.0 to 1 at the end of any fiscal
quarter thereafter."
9
<PAGE>
(q) Section 6.13 of the Credit Agreement is hereby amended in its
entirety to read as follows:
" 6.13 Debt Service Coverage Ratio. As of the end of any fiscal
quarter, permit the ratio of (a) EBITDA of the Companies for the most
recent four fiscal quarters, to (b) all scheduled principal payments and
interest expense paid or accrued by any Company during the most recent
four fiscal quarters, to be less than (i) 2.0 to 1 at the end of any
fiscal quarter of the Companies from July 31, 1999 through January 31,
2000, (ii) 2.25 to 1 at the end of any fiscal quarter of the Companies
from April 30, 2000 through January 31, 2001, and (iii) 2.5 to 1 at the
end of any fiscal quarter thereafter."
(r) Section 8.6 of the Credit Agreement is amended by deleting the
current notice information for the Companies and replacing it with the
following:
"if to the Companies: Construction Forms, Inc.
777 Maritime Drive
P.O. Box 308
Port Washington, WI 53074
Attn: Mr. Alan Kastelic,
President
FAX: (414) 268-1946"
2.2 Miscellaneous Amendments. The Credit Agreement, the Related Documents
and all other agreements and instruments executed and delivered heretofore or
hereafter pursuant to the Credit Agreement are amended hereby so that any
reference therein to the Credit Agreement shall be deemed to be a reference to
such agreements and instruments as amended by or pursuant to this Amendment.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Bank that:
3.1 Credit Agreement. All of the representations and warranties made by
the Company in the Credit Agreement are true and correct in all material
respects on the date of this Amendment. No Default or Event of Default under the
Credit Agreement has occurred and is continuing as of the date of this Amendment
(after giving effect to the limited waiver contained in Section 4.8 hereof).
10
<PAGE>
3.2 Authorization; Enforceability. The making, execution and delivery of
this Amendment and performance of and compliance with the terms of the Credit
Agreement has been duly authorized by all necessary corporate action by the
Company. This Amendment is the valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
3.3 Absence of Conflicting Obligations. The making, execution and
delivery of this Amendment and performance of and compliance with the terms of
the Credit Agreement, as amended, do not violate any presently existing
provision of law or the articles or certificate of incorporation or bylaws of
the Company or any agreement to which the Company is a party or by which it or
any of its assets is bound.
ARTICLE IV
MISCELLANEOUS
4.1 Continuance of Credit Agreement. Except as specifically amended by
this Amendment, the Credit Agreement shall remain in full force and effect.
4.2 Survival. All agreements, representations and warranties made in this
Amendment or in any documents delivered pursuant to this Amendment shall survive
the execution of this Amendment and the delivery of any such document.
4.3 Governing Law. This Amendment shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Wisconsin applicable to
agreements made and wholly performed within such state.
4.4 Counterparts; Headings. This Amendment may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same agreement. Article and section
headings in this Amendment are inserted for convenience of reference only and
shall not constitute a part hereof.
4.5 Severability. Any provision of this Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Amendment in such jurisdiction or affecting the
validity or enforceability of any provision in any other jurisdiction.
4.6 Conditions. The effectiveness of this Amendment is subject to the
Bank having received on or before the date hereof, each of the following, in
form and substance satisfactory to the Bank and its counsel:
11
<PAGE>
(i) a certificate of an officer of the Company and dated the date
hereof certifying: (A) the adoption and continuing effect of
resolutions of the Board of Directors of the Company authorizing
the execution and delivery of this Amendment and the documents to
be executed and delivered in connection with this Amendment; (B)
that its bylaws have not been amended since the date of the last
delivery of the bylaws to the Bank on June 21, 1996; and (C) that
an attached copy of its Articles of Incorporation, recently
certified by the Department of Financial Institutions of Wisconsin
are in full force and effect on the date hereof and have not be
amended since the date of certification by the Department of
Financial Institutions;
(ii) the Subordination Agreement attached hereto as Exhibit L of the
City of Port Washington, Wisconsin in favor of the Bank;
(iii) the Amended and Restated Master Revolving Note;
(iv) the Amended and Restated Master Term Note;
(v) an opinion of counsel to the Companies in form and substance
satisfactory to the Bank;
(vi) evidence satisfactory to the Bank in its sole discretion that all
of the conditions outlined in the letter of the Bank to the
Company, dated September 4, 1998, have occurred;
(vii) an amendment fee in the amount of $10,000; and
12
<PAGE>
(viii) such additional supporting documents and materials as the Bank may
reasonably request.
4.7 Other Capitalized Terms. All capitalized terms used in this Amendment
and not specifically defined herein shall have the definitions assigned to such
terms in the Credit Agreement.
4.8 Waiver. The Banks hereby waive compliance by the Company with
Sections 6.1(a) and (c) of the Credit Agreement (as in effect prior to giving
effect to this Amendment) as they apply to the sale of the portion of the City
of Port Washington property commonly known as "Outlot B" to the City of Port
Washington. This limited waiver shall be effective only for the specific
purposes set forth in this Section and shall not be deemed to be a further or
continuing waiver of any other Section of the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1
to Credit Agreement as of the day and year first written above.
CONSTRUCTION FORMS, INC.
By:
-------------------------------
---------------, ------------
CF GILCO, INC.
By: CONSTRUCTION FORMS, INC.
By:
-------------------------------
---------------, ------------
CF ULTRA TECH, INC.
By: CONSTRUCTION FORMS, INC.
By:
-------------------------------
---------------, ------------
LASALLE NATIONAL BANK
By:
-------------------------------
James A. Meyer,
First Vice President
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF EDISON CONTROL CORPORATION, INC. AS OF AND FOR THE THREE MONTHS
ENDED APRIL 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-2000
<PERIOD-END> APR-30-1999
<CASH> 913976
<SECURITIES> 1148113
<RECEIVABLES> 3973644
<ALLOWANCES> 334044
<INVENTORY> 7493390
<CURRENT-ASSETS> 14554330
<PP&E> 9862376
<DEPRECIATION> 1823573
<TOTAL-ASSETS> 32125952
<CURRENT-LIABILITIES> 3946158
<BONDS> 11858589
0
0
<COMMON> 23469
<OTHER-SE> 16297736
<TOTAL-LIABILITY-AND-EQUITY> 32125952
<SALES> 6117533
<TOTAL-REVENUES> 6117533
<CGS> 3997597
<TOTAL-COSTS> 1284290
<OTHER-EXPENSES> 543623
<LOSS-PROVISION> 66044
<INTEREST-EXPENSE> 251409
<INCOME-PRETAX> 292023
<INCOME-TAX> 131176
<INCOME-CONTINUING> 160847
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 160847
<EPS-BASIC> .07
<EPS-DILUTED> .06
</TABLE>
