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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of Earliest Event Reported): December 23, 1998
CALCOMP TECHNOLOGY, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-16071 06-0888312
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
2411 West La Palma Avenue, Anaheim, CA 92801
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (714) 821-2000
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events
Pursuant to a letter to the Registrant from Lockheed Martin Corporation
("Lockheed Martin") dated December 23, 1998 (the "Lockheed Martin Notice"),
Lockheed Martin notified the Registrant that it will not increase the
Registrant's credit capacity beyond the currently available $43 million to fund
the Registrant's continuing operations.
The Registrant expects to reach its credit limit during January 1999, and
does not anticipate it will be able to obtain additional funding from other
sources. Thus, the Registrant will be required to consider strategic
alternatives, including the sale of some or all of its operations, an orderly
shut-down of its operations, and should neither of these options be successfully
realized, the possible filing for protection under Chapter 11 of the Bankruptcy
Code.
A copy of the Lockheed Martin Notice is attached hereto as Exhibit 99.1.
See also the Press Release of Registrant attached hereto as Exhibit 99.2.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) EXHIBITS
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Exhibit No. Description of Exhibit
- ----------- ----------------------
99.1 Letter to the Registrant from Lockheed Martin Corporation
("Lockheed") dated December 23, 1998, notifying the Registrant
that Lockheed will not increase the existing credit it provides
to the Registrant
99.2 Press Release dated December 29, 1998 issued by Registrant
2
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Dated: December 30, 1998 CALCOMP TECHNOLOGY, INC.
By: /s/ John J. Millerick
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John J. Millerick
Chief Financial Officer
3
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
- ----------- ----------------------
99.1 Letter to the Registrant from Lockheed Martin Corporation
("Lockheed") dated December 23, 1998, notifying the Registrant
that Lockheed will not increase the existing credit it provides
to the Registrant
99.2 Press Release dated December 29, 1998 issued by Registrant
4
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EXHIBIT 99.1
[LETTERHEAD OF LOCKHEED MARTIN]
December 23, 1998
VIA FACSIMILE
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CalComp Technology, Inc.
CalComp Inc.
c/o CalComp Technology, Inc.
2411 W. LaPalma Avenue
Anaheim, California 92801
Attention: Chief Financial Officer
Re: Borrowings under (1) the Amended and Restated Revolving Credit
Agreement ("Credit Agreement") dated as of December 20, 1996, as
amended, among CalComp Technology, Inc. and CalComp Inc. as Borrowers
and Lockheed Martin Corporation as Lender and (2) the Cash Management
Agreement dated as of July 23, 1996, as amended, between CalComp
Technology, Inc. and Lockheed Martin Corporation (together with the
Credit Agreement, the "Existing Agreements").
Dear Mr. Millerick:
We understand that on or about January 10, 1999 you will be fully
drawn under the Existing Agreements. Although we have increased the credit
capacity under the Existing Agreements several times in the past to enable you
to continue operations, additional credit capacity beyond the currently
available $43,000,000 will not be forthcoming for continued funding of such
operations.
Although we have no obligation to provide additional funding or grant
waivers of the terms of the Existing Agreements, in the event you cannot find
other sources of funding, we are willing to consider negotiating an agreement
with you containing the following terms: (i) we would lend you additional funds
to assist you in a non-bankruptcy winding up of your business in an orderly
fashion (including payment of current obligations) in accordance with a plan
approved by your directors and satisfactory to us (the "Plan"); (ii) these
additional funds would be extended for six months, which should be sufficient
time for winding-up the business; (iii) you would agree to use the amount
loaned under the new agreement solely for expenses necessary for the payment of
current obligations and the orderly winding up of your business in accordance
with the Plan; and (iv) payment of amounts due and payable under the Existing
Agreements would be deferred and instead would be resolved as part of the wind-
up of the business.
Please note that nothing herein shall be construed as a waiver of
Lockheed Martin Corporation's ("Lockheed Martin") rights and remedies under the
Existing Agreements. In addition, this letter is a non-binding proposal on the
part of Lockheed Martin. Lockheed
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CalComp Technology, Inc.
December 23, 1998
Page 2
Martin makes no commitment to provide additional funding or to defer payment of
amounts due and payable under the Existing Agreements absent execution of a
definitive agreement satisfactory to Lockheed Martin.
It is imperative that we receive your response by December 28, 1998,
as the termination date of the Existing Agreements is fast approaching. In the
interim, we will continue to work with you on other alternatives, including the
sale of the business or parts thereof.
Sincerely,
/s/ PHILIP J. DUKE
Philip J. Duke
Vice President, Finance
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EXHIBIT 99.2
Company Press Release
CalComp to Consider Strategic Alternatives,
Following Notice That Funding Will Cease
ANAHEIM, Calif.--Dec. 29, 1998--CalComp Technology Inc. (Nasdaq:CLCP) said today
it has been notified by Lockheed Martin Corporation (NYSE:LMT), the company's
majority shareholder, that it will not increase CalComp's existing credit
capacity beyond the currently available $43 million to fund its continuing
operations.
CalComp also said that since it expects to reach its credit limit during January
1999, and does not anticipate it will be able to obtain additional funding from
other sources, the company will be required to consider strategic alternatives,
including the sale of some or all of its operations, an orderly shut-down of its
operations, and should neither of these options be successfully realized, the
possible filing for protection under Chapter 11 of the Bankruptcy Code.
John C. Batterton, CalComp's president and chief executive officer, said the
company has also been notified by Lockheed Martin that it will consider
providing additional funding over approximately a six-month period to assist
CalComp in a non-bankruptcy related shut-down of operations. He said such
assistance might allow CalComp to sell its proprietary CrystalJet printing
technology and liquidate other non-core related businesses in an orderly manner.
CalComp has notified Lockheed Martin of its acceptance of Lockheed Martin's
proposal to fund such a shut-down of operations in accordance with a plan
expected to be approved by both CalComp and Lockheed Martin in early January.
Batterton noted that even though no assurances can be given that an agreement
with Lockheed Martin for additional funding necessary for the orderly shut-down
will be reached, the company is optimistic that such an agreement will be
arranged by early January.
The company believes that an orderly shut-down of its operations will likely
lead to its liquidation and dissolution. Distributions, if any, to common
shareholders will be based on proceeds received from the anticipated sale of
assets and operations, offset by amounts owed to creditors.
"We appreciate Lockheed Martin's long-term support of CalComp, but understand
that our organization is not considered strategic to their primary business,"
said Batterton. "CalComp's immediate and priority focus, therefore, will be to
effect the required actions that will be in the best interests of our
shareholders, creditors, customers and employees."
Batterton added that the company expects to cease shipments of its recently
developed CrystalJet-based line of printers until current issues are resolved.
CalComp Technology is a leading developer and manufacturer of computer graphics
peripherals and supplies, for personal, business and professional applications.
As an industry leader in piezo inkjet technology, CalComp develops image marking
systems and components that support advanced digital printing applications.
Corporate offices are located in Anaheim, Calif. For more information, visit
the
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CalComp web site at www.calcomp.com, or call 800 CALCOMP (800/225-2667.)
This press release contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Such statements
include, but are not limited to, the company's ability to successfully reach an
agreement to obtain funding for an orderly shut-down of its operations.
___________________
Contact:
CalComp Technology Inc., Anaheim
John J. Millerick, 714/821-2500
