SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: April 25, 1998
--------------
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 0-15046
-------
Westerbeke Corporation
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 04-1925880
- ------------------------------------- --------------------------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) Identification No.)
Avon Industrial Park, Avon, Massachusetts 02322
- ------------------------------------------- --------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (508) 588-7700
--------------
No Change
- -------------------------------------------------------------------------------
(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 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.
Outstanding at
Class June 5, 1998
---------------------------- --------------
Common Stock, $.01 par value 1,917,812
Page 1 of 19
WESTERBEKE CORPORATION AND SUBSIDIARY
INDEX
<TABLE>
<CAPTION>
Page
------
<S> <C>
Part I - Financial Information
Item 1 - Consolidated Financial Statements
Consolidated Balance Sheets as of April 25, 1998 and October
25, 1997 3
Consolidated Statements of Operations for the three months
ended April 25, 1998 and April 26, 1997 4
Consolidated Statements of Operations for the six months
ended April 25, 1998 and April 26, 1997 5
Consolidated Statements of Cash Flows for the six months
ended April 25, 1998 and April 26, 1997 6
Notes to Consolidated Financial Statements 7-8
Item 2 -
Management's Discussion and Analysis of Financial Condition
and Results of Operations 9-10
Part II - Other Information 11-12
Signatures 13
</TABLE>
WESTERBEKE CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
April 25, October 25,
1998 1997
----------- -----------------
(Unaudited) (Derived from
Audited Financial
Statements)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 67,300 $ 156,900
Accounts receivable, net of allowance for doubtful accounts
of $63,800 and $63,900, respectively 3,583,000 1,949,000
Inventories (Note 2) 5,777,000 6,254,300
Prepaid expenses and other assets 321,900 301,600
Prepaid income taxes 142,400 212,000
Deferred income taxes 532,200 532,200
-----------------------------
Total current assets 10,423,800 9,406,000
Property, plant and equipment, net 2,220,900 2,139,300
Other assets, net 1,800,200 1,597,100
Investments in marketable securities 1,831,800 1,545,500
Note receivable - related party 115,600 122,800
-----------------------------
$16,392,300 $14,810,700
=============================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 202,400 $ 213,100
Revolving demand note payable 2,100,000 600,000
Accounts payable 1,815,200 2,227,900
Accrued expenses and other liabilities 818,600 564,600
-----------------------------
Total current liabilities 4,936,200 3,605,600
-----------------------------
Deferred income taxes 321,300 304,200
Deferred compensation 309,500 159,600
Long-term debt, net of current portion 508,400 605,400
-----------------------------
1,139,200 1,069,200
-----------------------------
Stockholders' equity:
Common stock, $.01 par value; authorized 5,000,000 shares;
issued 2,185,950 shares at April 25, 1998 and 2,156,950
shares at October 25, 1997 21,900 21,600
Additional paid-in-capital 6,025,300 5,996,600
Unrealized gain on marketable securities 274,100 240,700
Retained earnings 4,751,600 4,633,000
-----------------------------
11,072,900 10,891,900
Less - Treasury shares 268,138 at cost 756,000 756,000
-----------------------------
Total stockholders' equity 10,316,900 10,135,900
-----------------------------
$16,392,300 $14,810,700
=============================
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
WESTERBEKE CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
--------------------------
April 25, April 26,
1998 1997
----------- -----------
(Unaudited)
<S> <C> <C>
Net sales $ 7,224,700 $ 6,974,700
Cost of sales 5,652,000 5,347,500
--------------------------
Gross profit 1,572,700 1,627,200
Selling, general and administrative expense 956,400 871,400
Research and development expense 268,600 237,600
--------------------------
Income from operations 347,700 518,200
Interest expense, net 58,300 34,900
--------------------------
Income before income taxes 289,400 483,300
Provision for income taxes 116,500 194,300
--------------------------
Net income $ 172,900 $ 289,000
==========================
Income per common share, basic $ .09 $ .14
==========================
Income per common share, diluted $ .08 $ .13
==========================
Weighted average common shares outstanding 1,917,812 2,042,927
==========================
Weighted average common shares and potentially
dilutive common shares 2,072,941 2,226,620
==========================
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
WESTERBEKE CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Six Months Ended
--------------------------
April 25, April 26,
1998 1997
----------- -----------
(Unaudited)
<S> <C> <C>
Net sales $12,184,200 $12,169,300
Cost of sales 9,726,300 9,449,400
--------------------------
Gross profit 2,457,900 2,719,900
Selling, general and administrative expense 1,725,300 1,604,300
Research and development expense 527,100 471,300
--------------------------
Income from operations 205,500 644,300
Interest expense (income), net 7,000 (200)
--------------------------
Income before income taxes 198,500 644,500
Provision for income taxes 79,900 267,500
--------------------------
Net income $ 118,600 $ 377,000
==========================
Income per common share, basic $ .06 $ .18
==========================
Income per common share, diluted $ .06 $ .17
==========================
Weighted average common shares outstanding 1,911,279 2,059,760
==========================
Weighted average common shares and potentially
dilutive common shares 2,073,302 2,241,673
==========================
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
WESTERBEKE CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
--------------------------
April 25, April 26,
1998 1997
----------- -----------
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 118,600 $ 377,000
Reconciliation of net income to net cash provided (used) by operating
activities:
Depreciation and amortization 215,200 222,400
Deferred income taxes 17,100 --
Changes in operating assets and liabilities:
Accounts receivable (1,634,000) (852,900)
Inventories 477,300 (1,145,600)
Prepaid expenses and other assets (20,300) 67,400
Other assets (214,000) (206,300)
Accounts payable (412,700) 852,200
Accrued expenses and other liabilities 254,000 (72,900)
Deferred compensation 149,900 98,500
Income taxes payable 69,600 (43,700)
--------------------------
Net cash used by operating activities (979,300) (703,900)
--------------------------
Cash flows from investing activities:
Purchase of property, plant and equipment (285,900) (335,200)
Proceeds from payment of note receivable - related party 7,200 6,700
Investment in marketable securities, net (252,900) (219,500)
--------------------------
Net cash used in investing activities (531,600) (548,000)
--------------------------
Cash flows from financing activities:
Net borrowings under revolving demand note 1,500,000 1,750,000
Proceeds from exercise of employee stock options 29,000 --
Purchase of treasury stock -- (587,800)
Principal payments on long-term debt and capital lease obligations (107,700) (79,400)
--------------------------
Net cash provided in financing activities 1,421,300 1,082,800
--------------------------
Decrease in cash and cash equivalents (89,600) (169,100)
Cash and cash equivalents, beginning of period 156,900 200,500
--------------------------
Cash and cash equivalents, end of period $ 67,300 $ 31,400
==========================
Supplemental cash flow disclosures:
Interest paid $ 64,400 $ 49,100
Income taxes paid $ 10,000 $ 311,100
Supplemental disclosures of non-cash flow items:
Increase (decrease) in unrealized gains on marketable securities $ 33,400 $ (63,100)
Equipment purchase under capital lease -- $ 175,000
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
WESTERBEKE CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Significant Accounting Policies:
-------------------------------------------
A. Financial Statements
--------------------
The condensed consolidated financial statements included herein have been
prepared by Westerbeke Corporation ("the Company"), without audit,
pursuant to the rules and regulations of the Securities and Exchange
Commission. While certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
such rules and regulations, the Company believes that the disclosures
made herein are adequate to make the information presented not
misleading. It is recommended that these condensed statements be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the fiscal year
ended October 25, 1997.
In the opinion of the Company, all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the financial position
of Westerbeke Corporation and Subsidiary as of April 25, 1998, the
results of their operations for the three and six months ended April 25,
1998 and April 26, 1997, and the cash flows for the six months then
ended, have been included.
B. Basis of Presentation
---------------------
The condensed consolidated financial statements include the accounts of
the Company and its wholly owned subsidiary, Westerbeke International,
Inc. (a Foreign Sales Corporation). All significant intercompany
transactions and accounts have been eliminated. Westerbeke International,
Inc., has been inactive since fiscal year 1987.
In February 1997, the Financial Accounting Standards Board (FASB) issued
Financial Accounting Standard No. 128, "Earnings per Share" (FAS 128).
FAS 128 supersedes Accounting Principles Board Opinion No. 15 and
specifies the computation, presentation and disclosure requirements for
earnings per share. FAS 128 is effective for financial Statements for
both interim and annual periods ending after December 15, 1997.
Accordingly, the Company has applied FAS 128 for the quarter ended April
25, 1998 and has restated prior period information as required under the
statement.
In June 1997, the FASB issued Financial Accounting Standards No. 130,
"Reporting Comprehensive Income" and No. 131, "Disclosure about Segments
of an Enterprise and Related Information," which are effective for fiscal
years beginning after December 15, 1997. The Company is currently
evaluating the effects of these new standards.
2. Inventories
-----------
The Company uses the last-in, first-out (LIFO) method to value inventory.
Inventories are comprised of the following:
<TABLE>
<CAPTION>
April 25, October 25,
1998 1997
---------- -----------
<S> <C> <C>
Raw materials $4,815,700 $5,065,400
Work-in-process 600,700 601,400
Finished goods 360,600 587,500
-------------------------
$5,777,000 $6,254,300
=========================
</TABLE>
The Company has estimated both the year-end inventory levels and the
inflation/deflation which will occur during the fiscal year.
The Company anticipates an increase in its LIFO valuation account as of
October 24, 1998. Accordingly, the Company has recorded an increase of
$30,000, on a pro rata basis, in the LIFO reserve during the first six
months of fiscal 1998. During the first six months of 1997, the Company
recorded, on a pro rata basis, an increase of $30,000 in the LIFO
reserve. Inventories would have been $1,195,000 higher at April 25, 1998
and $1,165,000 higher as of October 25, 1997, if the first- in, first-out
(FIFO) method had been used. Inventory cost determination on the FIFO
method approximates replacement or current cost.
Item 2 - Management's Discussion and Analysis
Of Financial Condition and Results Of Operations
------------------------------------------------
Results of Operations -
- -----------------------
Net sales increased by $250,000, or 4%, during the second quarter of fiscal
1998 and increased $14,900 for the first six months of fiscal 1998 as compared
to the same periods in fiscal 1997. The increase in second quarter net sales is
primarily attributable to higher unit volume of the Company's marine generator
products.
Gross profit decreased $54,500 or 3% during the second quarter and decreased
$262,000 or 10% for the first six months of fiscal 1998 as compared to the same
periods in fiscal 1997. As a percentage of net sales, gross profit was 22%
during the second quarter of fiscal year 1998, as compared to 23% for the
second quarter of fiscal 1997. For the six months ended April 25, 1998 gross
profit was 20% compared to 22% for the same period ended April 26, 1997.
Operating expenses increased $116,000 or 10% for the second quarter and
$176,800 or 9% in the first six months of fiscal 1998, as compared to the same
periods in fiscal 1997. Research and development costs have increased due to
the addition of personnel and higher costs related to achieving compliance with
federal and state exhaust emission requirements. Selling and administrative
expenses have increased primarily due to higher advertising, legal and
personnel costs.
Net interest expense increased $23,400 during the second quarter and increased
$7,200 for the first six months of fiscal 1998 as compared to the same periods
in fiscal 1997. The increase in interest expense in the second quarter and the
six months ended April 25, 1998 is primarily due to interest expense incurred
on the $4,000,000 Credit Agreement.
For the second quarter ended April 25, 1998, the Company reported net income of
$172,900, compared to a net income of $289,000 for the same period in fiscal
1997. For the six months ended April 25, 1998, the Company reported net income
of $118,600 as compared to net income of $377,000 for the six-months ended
April 26, 1997.
One of the Company's vendors of "long block" engines stopped supplying engines
to the Company in fiscal 1997. The Company's existing inventory of this
vendor's engines was exhausted during the first quarter of fiscal 1998. The
Company was able to obtain similar "long block" engines from another source,
but there have been, and will continue to be, added costs associated with
making this change. Costs to obtain replacement "long block" engines from
another supplier and to develop replacement products based on those engines are
reflected in the decreased gross profit as a percentage of sales and in the
increased research and development costs experienced in the first six months of
fiscal 1998. The Company anticipates that there will be added costs during
fiscal 1998 associated with bringing the new products into full production and
introducing them to the market, which will adversely affect gross margins and
research and development costs.
WESTERBEKE CORPORATION AND SUBSIDIARY
Liquidity and Capital Resources
- -------------------------------
During the first six months of fiscal 1998, net cash used by operations was
$979,300, compared to net cash used by operations of $703,900 for the first six
months in fiscal 1997. The decrease in cash flow from operations is primarily
attributable to the decrease in net income for the six-month period ended April
25, 1998, as compared to the same period in fiscal 1997.
During the six months ended April 25, 1998, the Company purchased property,
plant and equipment of $285,900. The Company plans to spend approximately
$145,000 more on machinery and equipment during the remainder of the year.
The Company has a $4,000,000 Credit Agreement with State Street Bank and Trust
Company, collateralized by inventory, accounts receivable and general
intangibles. At April 25, 1998, the Company had $2,100,000 in outstanding
borrowings under the Credit Agreement and approximately $373,300 committed to
cover the Company's reimbursement obligations under certain letters of credit.
The Credit Agreement expires on March 31, 1999.
On January 23, 1996, the Company entered into a $500,000 revolving line of
credit agreement (the "Revolving Line of Credit") and term loan facility with
State Street Bank and Trust Company, collateralized by various emission testing
and product development equipment and subject to working capital and equity
covenants. On July 31, 1996, the Revolving Line of Credit terminated and
automatically converted into a five year term loan in the principal amount of
$491,600 bearing a fixed interest rate of 8.96%. At April 25, 1998, the
outstanding principal amount was $325,000.
On April 25, 1997, the Company entered into a $300,000 revolving line of credit
agreement (the "1997 Revolving Line of Credit") and term loan facility with
State Street Bank and Trust Company, collateralized by various items of
emission testing and product development equipment and subject to working
capital and equity covenants. On June 30, 1997, the 1997 Revolving Line of
Credit terminated and automatically converted into a five year term loan
bearing a fixed interest rate of 8.75%. At April 25, 1998, the outstanding
principal was $250,000.
Management believes cash flow from operations and borrowings available under
the Credit Agreement will provide for working capital needs, principal payments
on long-term debt, and capital and operating leases through fiscal 1998.
Domestic inflation is not expected to have a material impact on the Company's
operations.
The cost of engine blocks and other components is subject to foreign currency
fluctuations (primarily the Japanese yen). Exchange rate fluctuations have had
a minimal impact on the Company during the first two fiscal quarters of 1998.
Part II. Other Information
Item 1 Legal Proceedings
-------------------------
The Company has initiated arbitration with the American Arbitration
Association in New York against Daihatsu Motor Company, Ltd.
("Daihatsu") for breach of contract and other claims. The Company is
seeking damages based on Daihatsu's breach of a Component Sales
Agreement which also granted the Company rights to certain engines
including an engine Daihatsu began marketing in 1993 through a joint
venture with Briggs & Stratton Corporation. In a separate but related
case pending in the Federal District Court for the District of
Massachusetts, the Company is seeking damages from Briggs & Stratton
Corporation for tortious interference with the Company's Agreement
with Daihatsu and other related claims.
Item 2 Changes in Securities
------------------------------
None to report
Item 3 Default Upon Senior Securities
--------------------------------------
None to report
Item 4 Submissions of Matters to a Vote of Security Holders
------------------------------------------------------------
(a) The Annual Meeting of Stockholders (the "Meeting") of the
Company was held March 27, 1998.
(b) Not applicable because:
(I) proxies for the Meeting were solicited pursuant to
Regulation 14 under the Securities Exchange Act of 1934;
(ii) there was no solicitation in opposition to
management's nominees as listed in the Company's proxy
statement dated March 5, 1998; and (iii) all such nominees
were elected.
(c) The matters voted upon at the Meeting were as follows:
(i) The election of two Class C directors of the Company.
John H. Westerbeke, Jr.
FOR 1,752,233
WITHHOLD AUTHORITY 18,457
John H. Westerbeke, Sr.
FOR 1,750,733
WITHHOLD AUTHORITY 19,957
(ii) A proposal to ratify the Board of Directors' selection of
KPMG Peat Marwick LLP to serve as the Company's independent
auditors for the Company's fiscal year ending October 24,
1998.
FOR 1,766,190
AGAINST 2,500
ABSTENTIONS AND BROKER NON-VOTES 2,000
Item 5 Other Information
-------------------------
None to report
Item 6 Exhibits and Reports on Form 8-K
----------------------------------------
(a) Exhibits
10 (a) Loan Facility Agreement dated April 23, 1998 between
the Company and State Street Bank and Trust Company.
10 (b) Note of the Company dated April 3, 1998 due March 31,
1999 in the principal amount of $4,000,000 payable to
the order of State Street Bank and Trust Company.
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the
period covered by this report.
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.
WESTERBEKE CORPORATION
(Registrant)
Dated June 8, 1998 /s/ John H. Westerbeke, Jr.
--------------- ----------------------------------------
John H. Westerbeke, Jr.
Chairman of the Board, President and
Principal Executive Officer
Dated June 8, 1998 /s/ Carleton F. Bryant III
--------------- ----------------------------------------
Carleton F. Bryant III
Executive Vice President, Chief
Operating Officer and Principal
Financial and Accounting Officer
Exhibit 10(a)
STATE STREET BANK 225 Franklin Street
Boston, MA 02110-0804
April 23, 1998
Westerbeke Corporation
Avon Industrial Park
Avon, MA 02322
RE: Loan Facility
-------------
Ladies and Gentlemen:
State Street Bank and Trust Company (the "Bank") has made available to
Westerbeke Corporation, a corporation organized under the laws of The
Commonwealth of Massachusetts (the "Borrower") a $4,000,000 revolving line of
credit (the "Line of Credit") as described in a letter agreement dated March
20, 1996, as amended from time to time, including by a letter amendment dated
April 25, 1997 (as amended, the "Letter Agreement"). All obligations of the
Borrower arising under the Line of Credit are evidenced by a Time Note in the
original principal amount of $3,000,000 dated June 4, 1992 from the Borrower to
the order of the Bank, as amended and increased by a letter amendment dated
April 25, 1997 (as amended, the "Note") and secured by collateral as described
in a Security Agreement (Inventory and Accounts Receivable) dated June 4, 1992
as amended from time to time, including by a letter amendment dated April 25,
1997 (as amended, the "Security Agreement"). The Borrower has requested, and
the Bank has agreed, to renew the Line of Credit as set forth herein.
Therefore, for good and valuable consideration, the receipt of which is hereby
acknowledged, the Borrower and the Bank hereby agree as follows:
I. Amendments to Letter Agreement.
-------------------------------
The Letter Agreement is hereby amended by deleting the following
therefrom: "March 31, 1998" and substituting the following therefor: "March 31,
1999".
II. Replacement of Note.
--------------------
The Borrower has executed a Time Note dated April 3, 1998 in the
original principal amount of $4,000,000 ("1998 Note"). The 1998 Note shall
supersede and replace the Note and all amounts outstanding under the Note shall
be deemed to be outstanding under the 1998 Note.
III. Amendments to Security Agreement
--------------------------------
The Security Agreement is hereby amended by deleting the following
from Rider 1 thereto: "a promissory note dated of even date herewith in the
original principal amount of $4,000,000" and substituting the following
therefore: "a promissory note dated April 3, 1998 in the original principal
amount of $4,000,000".
IV. Miscellaneous.
--------------
1. As amended hereby, all terms and conditions of the Letter
Agreement, Security Agreement and all related documents are ratified and
affirmed as of the date hereof and shall continue in full force and effect. The
Borrower represents and warrants that no default or event of default has
occurred under the 1998 Note or the Security Agreement as of the date hereof.
2. Upon receipt of a fully executed copy of this letter amendment and
such other documents or instruments as the Bank may reasonably request, this
letter amendment shall be deemed to be an instrument under seal and an
amendment to the Letter Agreement and Security Agreement to be governed by the
laws of the Commonwealth of Massachusetts.
3. This letter agreement may be executed in counterparts each of which
shall be deemed to be an original document.
Sincerely,
STATE STREET BANK AND TRUST COMPANY
By: /s/ Suzanne L. Dwyer
------------------------------------
Suzanne L. Dwyer
Assistant Vice President
Acknowledged and accepted:
WESTERBEKE CORPORATION
By: /s/ Carleton F. Bryant III
------------------------------------
Carleton F. Bryant III
Executive VP and COO
Exhibit 10(b)
TIME NOTE - GRID - FLUCTUATING INTEREST
$4,000,000.00 April 3, 1998
- ------------- -------------
Boston, Massachusetts
On March 31, 1999, for value received, Westerbeke Corporation (the
"Borrower") promises to pay to the order of STATE STREET BANK AND TRUST COMPANY
("Bank") at the office of Bank located at 225 Franklin Street, Boston,
Massachusetts 02110, or such other place as the holder hereof shall designate,
Four Million DOLLARS or, if less, the aggregate unpaid principal amount of all
loans made by the Bank to the Borrower, together with interest on unpaid
balances payable monthly in arrears on the first day of each calendar month and
on the due date hereof, at a fluctuating interest rate per annum equal to
Zero% above Bank's Prime Rate in effect from time to time. Each change in such
interest rate shall take effect simultaneously with the corresponding change in
such Prime Rate. "Prime Rate" shall mean the rate of interest announced by Bank
in Boston from time to time as its "Prime Rate". Interest shall be calculated
on the basis of actual days elapsed and a 360-day year. If this note is not
paid in full on the due date, whether as stated or by acceleration, interest on
unpaid balances shall thereafter be payable on demand at a fluctuating interest
rate per annum equal to 4% above the Prime Rate in effect from time to time.
All loans hereunder and all payments on account of principal and interest
hereof shall be recorded by the Bank and prior to any transfer hereof, endorsed
on the grid on the reverse hereof which is part of this note. The entries on
the records of the Bank (including any appearing on this note) shall be prima
facie evidence of amounts outstanding hereunder.
This note shall, at the option of the holder, become immediately due and
payable without notice or demand upon the occurrence of any of the following
events:
(a) Failure to make any payment of interest when due;
(b) Failure for 90 days to discharge any attachment or levy on any
property of the Borrower;
(c) Default in the payment or performance of any liability, obligation
or agreement of any maker hereof to or with the holder hereof;
(d) Occurrence of any of the following with respect to the Borrower or
any endorser or guarantor hereof: admission in writing of his or
its inability, or be generally unable, to pay his or its debts as
they become due, death, dissolution, termination of existence,
cessation of normal business operations, insolvency, appointment of
a receiver of any part of the property of, legal or equitable
assignment, conveyance or transfer of property for the benefit of
creditors by, or the commencement of any proceedings under any
bankruptcy or insolvency laws by or against, such person.
Any deposits or other sums at any time credited by or due from the holder
to the Borrower, or to any endorser or guarantor hereof, and any securities or
other property of the Borrower or any endorser or guarantor at any time in the
possession of the holder may at all times be held and treated as collateral for
the payment of this note and any and all other liabilities (direct or indirect,
absolute or contingent, sole, joint or several, secured or unsecured, due or to
become due, now existing or hereafter arising) of the Borrower to the holder.
Regardless of the adequacy of collateral, the holder may apply or set off such
deposits or other sums against such liabilities at any time in the case of the
Borrower, but only with respect to matured liabilities in the case of endorsers
and guarantors.
The Borrower and every endorser and guarantor of this note hereby waive
presentment, demand, notice, protest and all other demands and notices in
connection with the delivery, acceptance, performance, default or enforcement
hereof and consent that this note may be extended from time to time and that no
extension or other indulgence, and no substitution, release or surrender of
collateral and no discharge or release of any other party primarily or
secondarily liable hereon, shall discharge or otherwise affect the liability of
the Borrower or any such endorser or guarantor. No delay or omission on the
part of the holder in exercising any right hereunder shall operate as a waiver
of such right or of any other right hereunder, and a waiver of any such right
on any one occasion shall not be construed as a bar to or waiver of any such
right on any future occasion.
This note is secured by any and all collateral at any time granted to
Bank to secure any obligations of any maker hereof.
The Borrower and every endorser and guarantor of this note agree to pay
on demand all costs and expenses (including legal costs and attorneys' fees)
incurred or paid by the holder in enforcing this note on default.
This note shall take effect as a sealed instrument and shall be governed
by the laws of the Commonwealth of Massachusetts.
Address Westerbeke Corporation
- ------------------------ ----------------------------------
Borrower's Name (print or type)
Avon Industrial Park By /s/ Carleton F. Bryant III
- ------------------------ ----------------------------------
Carleton F. Bryant III
Executive VP and COO
Avon, MA 02322
- ------------------------
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000796502
<NAME> WESTERBEKE CORP.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-24-1998
<PERIOD-END> APR-25-1998
<CASH> 67,300
<SECURITIES> 0
<RECEIVABLES> 3,583,000
<ALLOWANCES> 63,800
<INVENTORY> 5,777,000
<CURRENT-ASSETS> 10,423,800
<PP&E> 6,014,600
<DEPRECIATION> 3,793,700
<TOTAL-ASSETS> 16,392,300
<CURRENT-LIABILITIES> 4,936,200
<BONDS> 0
0
0
<COMMON> 21,900
<OTHER-SE> 10,295,000
<TOTAL-LIABILITY-AND-EQUITY> 16,392,300
<SALES> 12,184,200
<TOTAL-REVENUES> 12,184,200
<CGS> 9,726,300
<TOTAL-COSTS> 9,726,300
<OTHER-EXPENSES> 2,252,400
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,000
<INCOME-PRETAX> 198,500
<INCOME-TAX> 79,900
<INCOME-CONTINUING> 118,600
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 118,600
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
