<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________
FORM 10-Q
Quarterly Report Pursuant to section 13 or 15(d) of
the Securities and Exchange Act of 1934
____________________
For the Quarter ended Commission File Number
March 31, 1995 0-14903
Baldwin Piano & Organ Company
(Exact name of registrant as specified in its charter)
Delaware 31-1091812
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
422 Wards Corner Road
Loveland, Ohio 45140-8390
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (513) 576-4500
Indicate by check mark whether the registrant (1) has filed
all documents and 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 .
--- ---
The number of shares of the Common Stock outstanding of
Baldwin Piano & Organ Company ("Company"), as of May 1, 1995 is
3,415,196.
<PAGE>
BALDWIN PIANO & ORGAN COMPANY
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
March 31, 1995 and December 31, 1994
Condensed Consolidated Statements of Earnings
for the three months ended
March 31, 1995 and 1994
Condensed Consolidated Statements of Cash Flows
for the three months ended
March 31, 1995 and 1994
Notes to Condensed Consolidated Financial
Statements, March 31, 1995
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote
of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
______________
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 1995 and December 31, 1994
(in thousands of dollars)
March 31, December 31,
ASSETS 1995 1994
----------- ------------
Current assets:
Cash ................................. $ 459 $ 344
Receivables, net ..................... 13,638 12,860
Inventories .......................... 48,172 47,036
Other current assets ................. 7,152 8,557
------- -------
Total current assets ........... 69,421 68,797
------- -------
Installment receivables,
less current portion ................. 9,609 8,621
Property, plant and equipment, net ...... 13,973 13,855
Other assets ............................ 6,265 6,187
------- -------
Total assets ................... $99,268 $97,460
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt .... $19,450 $16,746
Accounts payable ..................... 5,575 7,218
Income taxes payable ................. 1,940 1,522
Accrued liabilities .................. 6,638 6,871
------- -------
Total current liabilities ...... 33,603 32,357
------- -------
Long-term debt, less current portion .... 4,925 5,000
Other liabilities ....................... 9,771 9,949
------- -------
Total liabilities .............. 48,299 47,306
------- -------
Shareholders' equity:
Common stock ......................... 41 41
Additional paid-in capital ........... 12,002 12,002
Retained earnings .................... 45,133 44,318
------- -------
57,176 56,361
Less cost of treasury shares ......... (6,207) (6,207)
------- -------
Total shareholders' equity ..... 50,969 50,154
_______ _______
Total liabilities and
shareholders' equity ........... $99,268 $97,460
======= =======
[FN]
See accompanying Notes to Condensed Consolidated Financial Statements.
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
______________
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Three months ended
March 31, 1995 and 1994
(in thousands of dollars, except net earnings per share)
1995 1994
------- -------
Net sales ................................. $29,760 $25,572
Cost of goods sold ........................ 23,521 19,337
------- -------
Gross profit ........................ 6,239 6,235
Income on the sale of
installment receivables ................ 1,223 1,389
Interest income on installment receivables. 156 122
Other operating income, net ............... 786 776
------- -------
8,404 8,522
Operating expenses:
Selling, general and administrative .... 6,359 6,621
Provision for doubtful accounts ........ 253 335
------- -------
Operating profit .................... 1,792 1,566
Interest expense .......................... 522 397
------- -------
Earnings before income taxes ........ 1,270 1,169
Income taxes .............................. 455 464
------- -------
Net earnings ........................ $ 815 $ 705
======= =======
Net earnings per share $ .24 $ .21
===== =====
Average number of common shares outstanding 3,415 3,415
===== =====
[FN]
See accompanying Notes to Condensed Consolidated Financial Statements.
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
______________
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended
March 31, 1995 and 1994
(in thousands of dollars)
INCREASE (DECREASE) IN CASH 1995 1994
- --------------------------- -------- --------
Net cash used in operating activities ...... $ (666) $ (5,051)
Net cash used in investing activities ...... (673) (543)
Cash flows from financing activities:
Installment contract
receivables written ................. (14,747) (10,608)
Installment receivables liquidated ..... 1,328 1,375
Proceeds from sale of
installment receivables ............. 12,244 8,705
Borrowing under long-term debt 2,629 5,591
Other .................................. -- (82)
-------- --------
Net cash provided by
financing activities ........... 1,454 4,981
-------- --------
Net increase (decrease) in cash ........... 115 (613)
Cash at beginning of quarter .............. 344 1,203
-------- --------
Cash at end of quarter .................... $ 459 $ 590
======== ========
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION
------------------------
Cash paid during the quarter for:
Interest ............................... $ 576 $ 409
======== ========
Income taxes ........................... $ 55 $ 255
======== ========
[FN]
See accompanying Notes to Condensed Consolidated Financial Statements.
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
______________
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1995
(in thousands of dollars)
(1) BASIS OF REPORTING FOR CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited condensed consolidated financial statements included
herein have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain informa-
tion and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have
been omitted pursuant to such rules and regulations, although the Company
believes that the disclosures are adequate to make the information
presented not misleading. These financial statements should be read in
conjunction with the financial statements and notes thereto included in
the Company's Annual Report and Form 10-K for the year ended December 31,
1994.
The financial statements presented herewith reflect all adjustments
(consisting of normal and recurring accruals) which, in the opinion of
management, are necessary to fairly state the results of operations for
the three month periods ended March 31, 1995 and 1994. Results of
operations for interim periods are not necessarily indicative of results
to be expected for an entire year.
(2) INVENTORIES
Inventories consist of the following (in thousands of dollars):
March 31, December 31,
1995 1994
-------- --------
FIFO cost:
Raw material ......................... $ 13,305 $ 11,790
Work-in-process ...................... 7,881 7,465
Finished goods ....................... 37,813 38,325
-------- --------
58,999 57,580
Excess of FIFO cost
over LIFO inventory value ............ (10,827) (10,544)
-------- --------
Net inventories ................ $ 48,172 $ 47,036
======== ========
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
________________
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
1995 COMPARED TO 1994
Net earnings were $.8 million compared to $.7 million in 1994. Net
earnings progress came from improved control of expenses and continued
strong performance from the retail installment business.
Net sales increased to $29.8 million from $25.6 million in 1994. All
strategic business groups -- acoustic pianos, digital pianos, church
organs and contract electronics -- showed year-to-year sales progress.
Piano sales were disproportionately higher than a year ago because an end-
of-year 1993 dealer incentive program depressed first quarter 1994 sales.
Strong Factory Direct sales and Wurlitzer digital products, not in
existence last year, positively impacted 1995 sales.
Gross profit for 1995 remained constant with the comparable period
for 1994 due to lower margins in both the piano business and contract
electronics business.
The Company values a substantial portion of its inventory on the
last-in, first-out (LIFO) method. The first quarter 1995 gross profit is
$.3 million less than the amount that would have been presented had the
first-in, first-out (FIFO) method been used.
Income on the sale of installment receivables generated by the
Company's financing operation for 1995 declined $.2 million from 1994.
This decrease is primarily the result of higher interest costs under the
floating interest rate provision of the sale agreement, partially offset
by lower interest costs under the $20 million interest rate modification
agreement. See "Liquidity and Capital Resources."
Selling, general and administrative expenses for 1995 decreased $.3
million from 1994. This decrease was primarily due to reduced selling
expenses.
The provision for doubtful accounts declined $.1 million due to
continued reductions in losses experienced.
Interest expense for the first quarter of 1995 increased $.1 million
from the comparable period in 1994 due to both higher interest rates and
higher average borrowing.
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
________________
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
-----------------------------------------------------------
INFLATION, OPERATIONS AND INTEREST RATES
The impact of inflation on manufacturing and operating costs can
affect the Company's results. However, the Company has generally been
able to offset the effects of inflation by price increases and operating
efficiencies.
The operations of the Company and its predecessors are subject to
federal, state and local laws regulating the discharge of materials into
the environment. Although on several occasions the Company has been the
subject of inquiries from government agencies and/or persons who may be
held responsible for environmental liabilities relating to the sites in
question, the Company has been made a party to actual proceedings on only
one occasion to date. The Company's actual liability in such matter was
not material. The Company does not anticipate that any environmental
matters currently known to the Company will result in additional
proceedings against the Company or in any material liability.
The Company and its subsidiaries' operating results are sensitive to
changes in interest rates primarily because of fixed interest rates on
installment receivables and floating interest rates on a substantial
portion of indebtedness. Additionally, the buyer of the installment
receivables earns interest on the outstanding principal balance of the
contracts based upon a floating interest rate provision.
The Company can partially offset the effect of interest rate changes
by adjusting display fees on its consigned inventory and interest rates on
its new installment receivable contracts. In December 1994, the Company
entered into a two year interest rate modification agreement to reduce the
potential impact of increases in interest rates on $40.0 million of
floating-rate long-term debt. The agreement entitles the Company to
receive from the counterparty, on a monthly basis, interest income to the
extent the one-month commercial paper rate exceeds 12%. The Company is
exposed to credit losses in the event of non-performance by the counter-
party to its interest rate cap, but has no off-balance sheet credit risk
of accounting loss. The Company anticipates, however, that the counter-
party will be able to fully satisfy their obligations under the contract.
The Company does not obtain collateral or other security to support
financial instruments subject to credit risk but monitors the credit
standing of the counterparty.
Effective February 15, 1994, the annual rate of interest under the
revolving line of credit (Revolver) is 150 basis points plus the greater
of the LIBOR on three month deposits or the rate on 60 day high grade
commercial paper. As of March 31, 1995, the interest rate was 7.75%.
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
________________
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
-----------------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES
The Company and its wholly-owned finance subsidiary (Finance) require
significant working capital to support their operations. Working capital
requirements fluctuate throughout the year.
The Company ships musical instruments to its Baldwin dealer network
on a consignment basis. Management believes the consignment program
creates a competitive advantage for its dealers. Dealers are able to
display a larger and more comprehensive product line than they may
otherwise be able to without the Company's financial support. Also the
consignment program is advantageous to the Company for income tax
purposes, and management believes the consignment method minimizes losses
from dealers.
Because the Company finances inventory on consignment to Baldwin
dealers, the Company's borrowing is higher than comparable companies not
operating on the consignment basis. Management believes the advantages of
the consignment program are greater than the risks associated with the
higher leverage.
Under the Revolver, the lender will make available a line of credit
based upon certain percentages of the value of the Company's inventories
and trade accounts receivable. At March 31, 1995, the Company had
approximately $20.6 million of additional borrowing available under this
line of credit.
The Company's debt agreements contain covenants that restrict, among
other things, the payment of dividends, the repurchase of the Company's
common stock and the Company's ability to incur new indebtedness and to
enter new businesses. Such agreements permit the payment of dividends or
repurchase of the Company's common stock equal to the lesser of (i) 50% of
the Company's cumulative net earnings since January 1, 1986 or (ii) the
amount of unused borrowing available under the Company's Revolver, reduced
by the unpaid portion of the term loan. Accordingly, at March 31, 1995,
approximately $15.6 million is available for the payment of dividends or
the repurchase of the Company's common stock. The Company's debt
agreements contain provisions by which a default under one agreement
constitutes a default under the other agreements. The Company is in
compliance with these covenants.
In December 1994, Finance amended its agreements with an independent
entity to sell substantially all of its installment receivable contracts
up to a maximum outstanding principal amount of $82.0 million from $72.0
million. Certain installment receivables are not eligible for sale and
are retained by Finance. Finance continues to service all installment
receivables sold.
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
________________
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
----------------------------------------------------------
At the time of each installment receivable sale, Finance receives
cash equal to the unpaid principal balance of the contracts, less a
holdback of 10% of the principal balance of the contracts sold.
The buyer of the installment receivables earns interest on the
outstanding principal balance of the contracts based upon a floating
interest rate provision. Over the life of the contracts, the difference
between the actual yield on the installment contracts sold, using the
interest method, and the amount retained by the buyer, is remitted to
Finance as a service fee. In February 1994, Finance entered into a five
year interest rate modification agreement on $20.0 million whereby,
Finance will receive interest income to the extent the floating rate
retained by the buyer exceeds 6% or will pay interest expense to the
extent the floating rate is less than 6%. Finance is exposed to credit
losses in the event of non-performance by the counterparty to its interest
rate swap, but has no off-balance sheet credit risk of accounting loss.
Finance anticipates, however, that the counterparty will be able to fully
satisfy their obligations under the contract. Finance does not obtain
collateral or other security to support financial instruments subject to
credit risk but monitors the credit standing of the counterparty.
Proceeds from sale of installment receivables amounted to $12.2
million for the first quarter of 1995 compared to $8.7 million for the
same period of 1994.
Under the sale agreements, Finance is required to repurchase accounts
that become more than 120 days past due or accounts that are deemed
uncollectible. The repurchase price is equal to the remaining unpaid
principal balance of the contract on the date repurchased, less the
related 10% holdback. Finance remains contingently liable on approximate-
ly $67.9 million of installment receivables as of March 31, 1995. The
Company believes the financial statements contain adequate reserves for
any uncollectible installment receivables.
Certain Wurlitzer dealers finance their inventory with floor plan
loans from an independent bank. Dealers can borrow money from the bank
based upon the value of the inventory purchased from Wurlitzer, with the
keyboard instruments pledged as collateral. The dealers are required to
pay the bank monthly interest payments and pay principal balance after
inventory is sold or held longer than twelve months. The bank may request
Wurlitzer to repurchase notes due from delinquent dealers. If Wurlitzer
does not repurchase such notes, the bank can terminate the floor plan
agreement with the dealers and require Wurlitzer to repurchase up to $2.2
million of the outstanding dealer notes. The Company believes the
financial statements contain adequate provisions for any loss that may be
incurred as a result of this commitment.
<PAGE>
BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
________________
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
----------------------------------------------------------
Baldwin's Stock Repurchase Plan permits the Company to purchase an
amount of the Company's common stock not to exceed the lesser of 1,033,000
shares or $12.4 million in dollar value. From the date the plan was
adopted in November 1987 through May 3, 1995, the Company has repurchased
701,300 shares of its common stock at an aggregate purchase price of $5.7
million under the plan.
Capital expenditures amounted to $.7 million in the first quarter of
1995 and $.5 million in the comparable period of 1994. At March 31, 1995,
the Company had no significant outstanding capital commitments.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in litigation arising in its normal course of
business. The Company does not believe that any existing claim or suit
will have a material adverse effect on the business or financial condition
of the Company.
ITEM 2. CHANGES IN SECURITIES
No changes have been made to the instruments defining the right of
the holders of the Company's common stock or to the rights of such
shareholders.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The Company is not in default nor has it defaulted on any indebted-
ness. The Company is not obligated to pay any dividends or other payment
to any of its shareholders.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters have been submitted to a vote of security holders during
the first quarter of 1995.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
--------
10.1 Amendment #5 to Revolving Credit and Security
Agreement.
10.2 Amendment No. 1 to Amended and Restated General
Loan and Security Agreement.
19.1 1995 First Quarter Report to Shareholders of the
Company.
27.1 Financial Data Schedule.
99.1 Press Release dated April 24, 1995.
------------------------------
Index to Exhibits appears on sequentially numbered page 15.
(b) Reports on Form 8-K
-------------------
The Company filed no reports on Form 8-K during the first
quarter of 1995.
<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.
BALDWIN PIANO & ORGAN COMPANY
DATE: May 4, 1995 BY: KAREN L. HENDRICKS
--------------------- ------------------------------
Karen L. Hendricks, Chief
Executive Officer (Principal
Executive Officer) and
President
DATE: May 4, 1995 BY: CHARLES R. JUENGLING
--------------------- ------------------------------
Charles R. Juengling, Vice
President/Treasurer/Secretary
(Chief Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Exhibit
- -------------- -------
10.1 Amendment #5 to Revolving Credit
and Security agreement.
10.2 Amendment No. 1 to Amended and
Restated General Loan and
Security Agreement.
19.1 1995 First Quarter Report to
Shareholders of the Company.
99.1 Press Release dated
April 24, 1995.
27.1 Financial Data Schedule.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 458,647
<SECURITIES> 0
<RECEIVABLES> 18,040,704
<ALLOWANCES> 4,402,231
<INVENTORY> 48,171,953
<CURRENT-ASSETS> 69,420,847
<PP&E> 29,111,789
<DEPRECIATION> 15,138,576
<TOTAL-ASSETS> 99,268,356
<CURRENT-LIABILITIES> 33,602,944
<BONDS> 5,000,000
<COMMON> 41,649
0
0
<OTHER-SE> 50,927,645
<TOTAL-LIABILITY-AND-EQUITY> 99,268,356
<SALES> 29,760,059
<TOTAL-REVENUES> 31,925,747
<CGS> 23,521,412
<TOTAL-COSTS> 23,521,412
<OTHER-EXPENSES> 6,358,968
<LOSS-PROVISION> 253,522
<INTEREST-EXPENSE> 521,615
<INCOME-PRETAX> 1,270,230
<INCOME-TAX> 455,000
<INCOME-CONTINUING> 815,230
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 815,230
<EPS-PRIMARY> .24
<EPS-DILUTED> .24
</TABLE>
BALDWIN
FIRST QUARTER REPORT 1995
To Our Shareholders
May 1, 1995
First quarter sales increased 16% to $29.8 million, up from $25.6 million in
1994. All strategic business groups - acoustic pianos, digital pianos, church
organs and contract electronics - showed year-to-year sales progress. Piano
sales were disproportionately higher than a year ago because an end-of-year
1993 dealer incentive program depressed first quarter 1994 sales. Strong
Factory Direct sales and Wurlitzer digital products, not in existence last
year, positively impacted 1995 sales.
Net earnings increased 16% to $.8 million, up from $.7 million in the first
quarter 1994. Net earnings per share rose correspondingly, from $.21 to $.24
in 1995. Earnings progress came from improved control of expenses and
continued strong performance from our retail installment business. However,
cost of goods sold increased, offsetting the potential impact of improved
sales on the bottomline.
Focus on our core businesses as well as control of costs will continue to be
essential to strong sales and earnings performance by our Company.
Karen L. Hendricks
Chief Executive Officer
and President
Consolidated Summary of Earnings (unaudited)
(in thousands, except earnings per share)
Three Months Ended
March 31,
-----------------------
1995 1994
--------- ----------
Net sales $ 29,760 $ 25,572
Cost of goods sold 23,521 19,337
--------- ----------
Gross profit 6,239 6,235
Income on the sale of installment receivables 1,223 1,389
Interest income on installment receivables 156 122
Other operating income 786 776
Selling, general and administrative expenses (6,612) (6,956)
Interest expense (522) (397)
--------- ----------
Earnings before income taxes 1,270 1,169
Income taxes 455 464
--------- ----------
Net earnings $ 815 $ 705
--------- ----------
Net earnings per share $ .24 $ .21
========= ==========
Average number of shares outstanding (000) 3,415 3,415
========= ==========
<PAGE>
Consolidated Summary Balance Sheets (unaudited)
(in thousands)
March 31,
-----------------------
1995 1994
Assets --------- ----------
Receivables, net $ 13,638 $ 11,079
Inventories 48,172 49,783
Other current assets 7,611 6,464
--------- ----------
Total current assets 69,421 67,326
Installment receivables, less current portion 9,609 7,490
Property, plant and equipment, net 13,973 13,610
Other assets 6,265 5,998
--------- ----------
Total assets $ 99,268 $ 94,424
========= ==========
Liabilities and Shareholders' Equity
Current portion of long-term debt $ 19,450 $ 16,275
Other current liabilities 14,153 14,111
--------- ----------
Total current liabilities 33,603 30,386
Long-term debt, less current portion 4,925 5,000
Other liabilities 9,771 8,524
Shareholders' equity 50,969 50,514
--------- ----------
Total liabilities and shareholders' equity $ 99,268 $ 94,424
========= ==========
<PAGE>
Businesses
- ----------
Manufacturing
Acoustic pianos and electronic keyboards
Actions, cabinets, pinblocks, bridges, cables, keys, etc. for piano industry
Printed circuit boards and electro-mechanical assemblies for manufacturers
outside music industry
Variety of wood products
Retailing
Company owned outlets in Atlanta, Georgia; Chicago, Illinois;
Cincinnati,Ohio; Indianapolis, Indiana; Lexington and Louisville,
Kentucky
Independent keyboard dealers (800)
Financing
Consumer installment financing and dealer consignment
Home Office
422 Wards Corner Road, Loveland, OH 45140, (513)576-4500
Manufacturing Locations
Conway, Fayetteville and Trumann, Arkansas; Greenwood, Mississippi;
Juarez,Mexico
Registrar and Transfer Agent
The Provident Bank, One East Fourth Street, Cincinnati, OH 45202
Baldwin Piano & Organ Company common stock is traded on The NASDAQ National
Market; Symbol: BPAO
Photo of Model 226 with caption: Baldwin Artist Grand
EXHIBIT 10.1
AMENDMENT #5 TO REVOLVING CREDIT AND SECURITY AGREEMENT
AMENDMENT # (this "Amendment"), dated as of March 28, 1994, to
that certain Revolving Credit and Security Agreement, dated as of
June 15, 1984 and Restated as of October 25, 1990, between Baldwin
Piano & Organ Company and General Electric Capital Corporation (as
heretofore amended, the "Agreement," terms not defined herein being
used herein as therein defined).
W I T N E S S E T H:
WHEREAS, Borrower and the Lender wish to amend the terms of
the Agreement as set forth herein;
NOW THEREFORE, in consideration of the premises and mutual
covenants contained herein, the parties hereto hereby agree as
follows:
SECTION 1. Amendments and Waiver
(a) Section 10.1 (o) of the agreement is hereby amended in
its entirety to read as follows:
(o) Mr. R. S. Harrison shall cease to be the Chairman of the
Board of Borrower or his duties or powers shall be substantially
reduced.
(b) Section 10.1 (p) of the Agreement is hereby amended by
removing the words "and Mr. Harry F. Forbes" each time it appears
in such Section.
(c) Lender hereby waives compliance by Borrower (i) with the
provisions of Section 7.17 (c) of the Agreement between October 1,
1994 and December 12, 1994 and (ii) with the provisions of Section
8.24 of the Agreement between November 1, 1994 and March 2, 1995.
SECTION 2. Conditions of Effectiveness. Section 1 of this
Amendment shall become effective when, and only when, Lender shall
have received a copy of this Amendment executed by each of the
parties hereto.
SECTION 3. Representations and Warranties. Borrower
represents and warrants to Lender as follows:
(a) All of the representations and warranties of Borrower
contained in the Agreement and in each of the other Loan Documents
are true and correct on the date hereof, except to the extent any
such representation or warranty expressly relates to an
earlier date. No Event of Default has occurred and is continuing.
(b) The execution, delivery and performance by Borrower of
this amendment have been duly authorized by all necessary or proper
corporate action and do not require the consent or approval of any
Person which has not been obtained.
(c) This amendment has been duly executed and delivered by
Borrower and constitutes a legal, valid and binding obligation of
Borrower, enforceable against Borrower in accordance with its
terms.
SECTION 4. Reference to the Effect on the Loan Documents.
(a) Upon the effectiveness of Section 1 hereof, on and after
the date hereof, each reference in the Agreement to "this
Agreement," "hereunder," "hereof,""herein," or words of like
import, and each reference in the other Loan Documents to the
Agreement shall mean and be a reference to the Agreement as
amended hereby.
(b) Except as specifically amended herein, the Agreement and
all other Loan Documents shall remain in full force and effect and
are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate
as a waiver of any right, power or remedy of Lender under any of
the Loan Documents, nor constitute a waiver of any provision of
any of the Loan Documents.
SECTION 5. Costs and Expenses. Borrower hereby agrees to pay
on demand all costs and expenses of Lender in this Amendment,
including, without limitation, the reasonable fees and out-of-
pocket expenses of counsel for Lender with respect thereto.
SECTION 6. Execution in Counterparts. This Amendment may be
executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which, when so executed
and delivered, shall be deemed to be an original and all of which
taken together shall constitute but one and the same instrument.
SECTION 7. Governing Law. This Amendment shall be governed
by and construed in accordance with the laws of the State of New
York applicable to contracts made and performed in New York,
without regard to the principles thereof regarding conflict of law.
SECTION 8. Headings. Section headings in this Amendment
are included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose.
GENERAL ELECTRIC CAPITAL CORPORATION
By: DANIEL W. PORTER
Title:
BALDWIN PIANO & ORGAN COMPANY
By: HARRY F. FORBES, JR.
Title: Vice President
EXHIBIT 10.2
AMENDMENT NO. 1 TO AMENDED AND RESTATED
GENERAL LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 1 ("Amendment") dated as of April 3, 1995
to that certain Amended and Restated General Loan and Security
Agreement by and between BALDWIN PIANO & ORGAN COMPANY, a Delaware
corporation ("Debtor"), and THE FIFTH THIRD BANK ("Lender"), dated
as of June 15, 1989 and restated as of February 24, 1994 (the
"Agreement").
WHEREAS, Debtor and Lender have agreed to amend the Agreement
on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, intending to be legally bound the parties
hereto agree as follows:
A. Capitalized terms used and not otherwise defined herein
are used with the meaning set forth in the Agreement.
B. Pursuant to Section 5.17 of the Agreement, Lender hereby
acknowledges the retirement of Harry F. Forbes, Jr. and affirms
that Debtor has replaced Harry F. Forbes, Jr. with a person
satisfactory to lender.
C. The Support Letter agreement dated February 24, 1994 from
Harry F. Forbes, Jr. to Lender is hereby terminated.
D. Except as expressly modified hereby, the Agreement remains
unaltered and in full force and effect. Debtor acknowledges that
Lender has made no oral representations to Debtor with respect to
the Agreement and this Amendment thereto and that all prior
understandings between the parties are merged into the Agreement as
amended by this writing.
E. This Amendment shall be considered an integral part of the
Agreement, and all references to the Agreement in the Agreement
itself or any document referring thereto shall, on and after the
date of execution of this Amendment, be deemed to be references to
the Agreement as amended by this Amendment.
IN WITNESS WHEREOF, the parties have caused this Amendment to
be executed as of the date first above written.
BALDWIN PIANO & ORGAN COMPANY
By: C. R. JUENGLING
Its: Vice President
THE FIFTH THIRD BANK
By: ANDREW G. BOWES
Its: Assistant Vice President
CONSENT OF GUARANTOR
The undersigned hereby consent to the execution by BALDWIN
PIANO & ORGAN COMPANY (the "Debtor"), of Amendment No. 1 of even
date to the Amended and Restated General Loan and Security
Agreement between Debtor and The Fifth Third Bank dated as of June
15, 1989 and restated as of February 24, 1994 (the "Agreement"),
and agree that the General Continuing Guaranty of each of the
undersigned dated as of June 15, 1989 is applicable to all of the
obligations under the Agreement as amended by such Amendment No. 1.
Dated: April 3, 1995
INMOBILIARIA TECNICA INDUSTRIAL, S.A.
By: C. R. JUENGLING
Its: Vice President
Dated: April 3, 1995 FABRICANTES TECNICOS, S.A.
By: C. R. JUENGLING
Its: Vice President
Dated: April 3, 1995 THE BALDWIN PIANO COMPANY
(CANADA) LIMITED
By: C. R. JUENGLING
Its: Vice President
BALDWIN
BALDWIN PIANO & ORGAN COMPANY
422 Wards Corner Road
Loveland, Ohio 45140-8390
(513) 576-4500
FOR IMMEDIATE RELEASE
- ---------------------
LOVELAND, OHIO, APRIL 24, 1995 - Baldwin Piano & Organ Company's 1995
first quarter net sales increased 16% to $29.8 million from $25.6 million
in 1994, reflecting a 19% increase in the unit volume of keyboard
instruments sold. Net earnings for the first quarter of 1995 also
increased 16% to $.8 million ($.24 per share) from $.7 million ($.21 per
share) in 1994. The increase in net earnings is primarily the result of
reductions in selling and administrative expenses.
(in thousands, except Three Months Ended
net earnings per share) March 31,
1995 1994
---- ----
Net sales $29,760 $25,572
Net earnings $815 $705
Net earnings per share $0.24 $0.21
Average number of shares
outstanding 3,415 3,415
Baldwin Piano & Organ Company is the largest domestic manufacturer of
keyboard musical instruments, and also manufactures printed circuit
boards and a variety of wood products.
###
CONTACT: Charles Juengling (513) 576-4522
