SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 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 0-18198
DeVlieg-Bullard, Inc.
(Exact name of registrant as specified in its charter)
Delaware 62-1270573
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Gorham Island, Westport, CT 06880
(Address of principal executive offices) (Zip Code)
203-221-8201
(Registrant's telephone number, including area code)
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___
The number of shares of common stock outstanding as of March 1, 1998 was
12,309,900.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DeVlieg-Bullard, Inc.
Balance Sheets
(in thousands, except share data)
<TABLE>
<CAPTION>
January 31, July 31,
1998 1997
----------- ---------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 471 $ 637
Accounts receivable, net 24,726 25,798
Inventories, net 38,703 38,195
Other current assets 1,824 1,519
--------- ---------
Total current assets 65,724 66,149
Property, plant and equipment, net 12,599 12,657
Engineering drawings 17,184 18,039
Goodwill 11,884 11,948
Other assets 12,326 12,651
--------- ---------
Total assets $ 119,717 $ 121,444
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable $ 12,378 $ 9,751
Accrued expenses and other current liabilities 6,727 11,969
Revolving credit agreement 27,417 22,525
Current portion of long-term debt 2,857 3,631
--------- ---------
Total current liabilities 49,379 47,876
Long-term debt (related party $4,227) 13,558 14,179
Postretirement benefit obligation 21,304 21,999
Other noncurrent liabilities 11,898 11,677
--------- ---------
Total liabilities 96,139 95,731
Stockholders' equity:
Common stock, $0.01 par value; authorized
30,000 shares; issued and outstanding
12,297,900 and 12,275,400 shares 123 123
Additional paid-in capital 34,151 34,096
Excess purchase price over net assets acquired from
related parties (16,242) (16,242)
Retained earnings 5,680 7,844
Cumulative translation adjustment (134) (108)
--------- ---------
Total stockholders' equity 23,578 25,713
--------- ---------
Total liabilities and stockholders' equity $ 119,717 $ 121,444
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
DeVlieg-Bullard, Inc.
Statement of Operations
(unaudited - in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
January 31, January 31,
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $ 28,008 $ 31,363 $ 54,491 $ 63,497
Cost of sales 23,605 23,455 42,100 47,254
-------- -------- -------- --------
Gross profit 4,403 7,908 12,391 16,243
Operating expenses:
Engineering 509 395 1,005 786
Selling 2,927 2,680 5,671 5,349
General and administrative 3,607 2,207 6,575 4,965
-------- -------- -------- --------
Total E S G & A expenses 7,043 5,282 13,251 11,100
Anticipated loss on disposal 250 -- 250 --
Other expense/(income), net (7) 52 (18) 98
-------- -------- -------- --------
Total operating expenses 7,286 5,334 13,483 11,198
-------- -------- -------- --------
Operating (loss)/income (2,883) 2,574 (1,092) 5,045
Interest expense (including related party interest
of $185, $171, $370 and $341) 1,317 1,274 2,637 2,491
-------- -------- -------- --------
(Loss)/income before income taxes (4,200) 1,300 (3,729) 2,554
(Benefit)/provision for income taxes (1,764) 546 (1,565) 1,071
-------- -------- -------- --------
Net (loss)/income $ (2,436) $ 754 $ (2,164) $ 1,483
======== ======== ======== ========
Income per common share:
Basic $ (0.17) $ 0.05 $ (0.15) $ 0.11
======== ======== ======== ========
Diluted $ (0.17) $ 0.05 $ (0.15) $ 0.10
======== ======== ======== ========
Average number of shares outstanding:
Basic 14,065 14,032 14,062 14,031
======== ======== ======== ========
Diluted 14,065 15,120 14,062 15,058
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
DeVlieg-Bullard, Inc.
Statements of Cash Flows
(unaudited - in thousands)
<TABLE>
<CAPTION>
Six Months Ended
January 31,
1998 1997
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ (2,164) $ 1,483
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,595 2,525
Provision for losses on accounts receivable 134 (46)
Loss on disposal of assets held for sale 250 --
Changes in assets and liabilities, net of effects from acquisitions
Decrease/(increase) in accounts receivable 938 (6,365)
(Increase)/decrease in inventories (508) 4,223
Increase in other current assets (305) (187)
Increase in accounts payable 2,627 487
(Decrease)/increase in accrued expenses and
other current liabilities (5,242) 543
Other, net (450) (289)
-------- --------
Net cash provided by operating activities (2,125) 2,374
Cash flows from investing activities:
Purchase of business -- (6,863)
Capital expenditures (810) (714)
-------- --------
Net cash used for investing activities (810) (7,577)
Cash flows from financing activities:
Borrowings under revolving credit agreement 60,307 62,026
Repayments under revolving credit agreement (55,415) (60,801)
Proceeds from issuance of long-term debt -- 6,100
Payments of long-term debt (2,152) (1,858)
Debt issuance costs -- (129)
Proceeds from exercise of stock options 55 --
-------- --------
Net cash provided by (used for) financing activities 2,795 5,338
Effect of exchange rate changes on cash (26) 58
-------- --------
Net increase in cash and cash equivalents (166) 193
Cash and cash equivalents at beginning of period 637 768
-------- --------
Cash and cash equivalents at end of period $ 471 $ 961
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 2,305 $ 2,027
Income taxes, net of refunds 254 118
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
Supplemental disclosure of cash flow information (continued):
During the six months ended January 31, 1998 and 1997, the Company entered into
capital leases for computer equipment totaling $475 and $192, respectively,
which were financed by capital lease obligations.
5
<PAGE>
DeVlieg-Bullard, Inc.
Notes to Financial Statements
NOTE 1: Basis of Presentation
Pursuant to the rules and regulations of the Securities and Exchange Commission
for Form 10-Q, the financial statements, footnote disclosures and other
information normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed. The financial
statements contained in this report are unaudited but, in the opinion of
DeVlieg-Bullard, Inc. (the "Company"), reflect all adjustments, consisting of
only normal recurring adjustments, necessary to fairly present the financial
position as of January 31, 1998 and the results of operations and cash flows for
the interim periods of the fiscal year ending July 31, 1998 ("fiscal 1998") and
the fiscal year ended July 31, 1997 ("fiscal 1997") presented herein. The
results of operations for any interim period are not necessarily indicative of
results for the full year. These financial statements, footnote disclosures and
other information should be read in conjunction with the financial statements
and the notes thereto included in the Company's annual report on Form 10-K for
the year ended July 31, 1997. Certain amounts in the fiscal 1997 financial
statements have been reclassified to conform to the fiscal 1998 presentation.
The financial statements include all accounts of the Company after elimination
of all significant interdivision transactions and balances. Amounts in these
notes, except per share data, are expressed in thousands.
NOTE 2: Inventories
January 31, July 31,
Inventories consisted of: 1998 1997
---------- --------
(unaudited)
Raw materials $ 1,464 $ 1,448
Work-in-process 11,799 11,452
Finished goods 25,440 25,295
------- -------
$38,703 $38,195
======= =======
Valuation reserves for obsolete, excess and slow-moving inventory aggregated
$10,684 and $10,504 at January 31, 1998 and July 31, 1997, respectively.
Inventories valued using LIFO were $12,834 and $12,819 at January 31, 1998 and
July 31, 1997, respectively. There was no LIFO reserve against those
inventories. The financial accounting basis for the inventories of acquired
companies exceeds the tax basis by $12,224 at January 31, 1998 and July 31,
1997.
NOTE 3: Earnings per Share
Effective with the quarter ended January 31, 1998, the Company adopted Statement
of Financial Accounting Standards No. 128 "Earnings per Share" ("SFAS 128"). In
accordance with the provisions of SFAS 128, all prior periods have been
restated. The diluted earnings per share under SFAS 128 is not materially
different from the earnings per share the Company previously reported. In
accordance with the provisions of SFAS 128, the number of basic shares includes
the average of shares outstanding and the stock purchase warrants that are not
contingently issuable (the Class A and Class B Warrants). The contingently
issuable stock purchase warrants and stock options are included in the number of
shares to be used in the diluted earnings per share calculation. Loss per share
is computed by dividing net loss by the number of basic shares outstanding
during the period. Stock options and contingently issuable stock purchase
warrants are not included in this calculation, as they would be antidilutive.
6
<PAGE>
NOTE 4: Long-Term Debt
On March 11, 1998, the Company amended its credit facility with its senior
lender to increase the term loan by $2,500. The new term loan was consolidated
with the existing term loans for an aggregate term loan of $7,600. The proceeds
from the new term loan will be used to repay a portion of the outstanding
revolving credit agreement. Payments on the term loan are $200 monthly, starting
March 31, 1998.
7
<PAGE>
DeVlieg-Bullard, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Summarized below is a discussion of the results of operations of the Company,
including its Machine Tool, Tooling Systems and Industrial operating groups.
Amounts, except per share data, are expressed in thousands.
Three months ended January 31, 1998 compared to three months ended January 31,
1997. Net sales for the second quarter of fiscal 1998 were $28,008 compared to
$31,363 for the second quarter of fiscal 1997, a decrease of $3,355, or 10.7%.
The decrease in net sales was primarily new and rebuilt machines in the Machine
Tool Group. As more fully discussed as part of the Machine Tool Group business
segment below, the decline in sales in the second quarter of fiscal 1998 was the
result of inadequate inventory levels to support the Company during a transition
to outsourcing a major portion of machine and/or aftermarket parts that had
previously been produced internally. The inadequate levels of inventory led to
disruptions in production and meeting shipping schedules of machines and
aftermarket sales during the quarter. The Industrial Group's net sales for the
second quarter were even with the prior year, while second quarter net sales
were 6.1% lower for the Tooling Systems Group and 15.9% lower for the Machine
Tool Group.
Gross profit for the second quarter of fiscal 1998 was $4,403 compared to $7,908
for the second quarter of fiscal 1997, a decrease of $3,505, or 44.3%. The
Tooling Systems Group and the Industrial Group were basically even with the
prior year, while the Machine Tool Group was down 69.1% from the prior year as a
result of the production and shipping problems in the new and rebuilt machines
business of the Machine Tool Group.
E S G & A expenses were $7,043, or 25.1% of net sales, and $5,342, or 17.0% of
net sales, in the second quarter of fiscal 1998 and fiscal 1997, respectively.
The increase in operating expenses is primarily an increase in the international
sales effort and computer costs related to upgrading systems and making them
year 2000 compliant, as well as increases in personnel costs related to the
fiscal 1997 acquisition and temporary help related to the transition to
outsourcing the Machine Tool Group parts production. The increase in the
operating expenses as a percent to sales is the result of a decline in sales as
discussed above, as well as the increase in expenses.
Interest expense was $1,317 in the second quarter of fiscal 1998 compared to
$1,274 in fiscal 1997's second quarter. The increase in interest expense is a
result of increased debt.
An income tax benefit of $1,764 was recorded for the second quarter of fiscal
1998 compared to tax expense of $546 for the same period last year, reflecting
the loss in fiscal 1998.
Operating Results by Business Segment
Machine Tool Group. On August 1, 1997, the Machine Tool Group implemented a
change to outsourcing a major portion of National Acme's parts, which had been
produced internally prior to August 1, 1997. The outsourced parts are used in
the manufacture of new Acme-Gridley machines and are also sold separately in the
aftermarket. As a result of planning difficulties encountered during the
changeover to outsourcing, including delays in vendor parts deliveries, which
resulted in inadequate inventory levels to support the Company during the
transition, the Machine Tool Group encountered disruptions in production which
extended through the second quarter. Due to this inadequate supply of
8
<PAGE>
parts needed for new machine production and aftermarket sales, fiscal 1998
second quarter sales were $16,243, or $3,063 lower than the $19,306 reported in
the second quarter of fiscal 1997. An operating loss of $1,999 was recorded for
the second quarter of fiscal 1998 compared to operating income of $2,423 in the
second quarter of the prior year. This is the result of the reduction in sales
volume, as well as lower productivity levels due to the difficulties mentioned
above. Operating expenses for the second quarter were higher than the first
quarter as a result of an increase in computer costs related to upgrading
systems and making them year 2000 compliant, as well as increases in temporary
help related to the transition to outsourcing the parts production. In addition,
during the second quarter of fiscal 1998, the Machine Tool Group incurred a $250
charge for the write-down of property and plant that was being held for sale to
the current market value.
The operational problems discussed above have been addressed and aggressive
action has been taken to correct the problems, including replacing senior
management of the Machine Tool Group who were responsible for the initial
planning errors, scheduling a portion of the parts production at the Tooling
Systems Group and adding key people to our engineering and purchasing staff to
quickly bring this transition to a close.
Tooling Systems Group sales were $5,028 in the second quarter of fiscal 1998,
compared to $5,352 in the second quarter of the prior year, a decrease of $324,
or 6.1%. The decline from the prior year is primarily one large order for HSK
Tools that was not repeated during fiscal 1998. Operating income for the second
quarter of fiscal 1998 was $75, compared with $179 the second quarter of the
prior year. The reduction in operating income is due to the volume changes.
Industrial Group sales were $6,737 in the second quarter of fiscal 1998,
compared to $6,705 in the second quarter of the prior year, an increase of $32.
Operating income was $268 for the second quarter of fiscal 1998, compared to
$367 in the same period a year ago. The decline in operating income is the
result of higher operating expenses primarily costs related to upgrading
computer systems and making them year 2000 compliant.
New Accounting Pronouncements
During the second quarter of fiscal 1998, the Company adopted Statement of
Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128"). The
diluted earnings per share calculation under SFAS 128 is not materially
different from the earnings per share the Company had previously reported. In
accordance with SFAS 128, prior periods have been restated.
Six months ended January 31, 1998 compared to six months ended January 31, 1997.
Net sales for the first six months of fiscal 1998 were $54,491 compared to
$63,497 for the first six months of fiscal 1997, a decrease of $9,006, or 14.2%.
The decrease in net sales was primarily new and rebuilt machines and related
aftermarket sales in the Machine Tool Group. As more fully discussed as part of
the Machine Tool Group business segment below, the decline in sales in the first
six months of fiscal 1998 was the result of inadequate inventory levels to
support the Company during a transition to outsourcing a major portion of
machine and/or aftermarket parts that had previously been produced internally.
The inadequate levels of inventory led to disruptions in production and meeting
shipping schedules of machines and aftermarket parts during the first half of
the year. Net sales for the first six months of fiscal 1998 compared to the
prior year were 6.5% higher for the Industrial Group and 23.9% lower for the
Machine Tool Group, while the Tooling Systems Group was even with the prior
year.
Gross profit for the first six months of fiscal 1997 was $12,391 compared to
$16,243 for the first six months of fiscal 1997, a decrease of $3,852, or 23.7%.
Gross profit for the Tooling Systems Group
9
<PAGE>
increased 26.6% and the Industrial Group increased 20.7% over the prior year,
while the Machine Tool Group was down 45.1% from the prior year as a result of
the production and shipping problems.
E S G & A expenses were $13,251, or 24.3% of net sales, and $11,221, or 17.7% of
net sales, in the first six months of fiscal 1998 and fiscal 1997, respectively.
The increase in operating expenses is primarily an increase computer costs
related to upgrading systems and making them year 2000 compliant, as well as
increases in temporary help related to the transition to outsourcing the Machine
Tool Group parts production. The increase in the operating expenses as a percent
to sales is the result of a decline in sales as discussed above, as well as the
increase in expenses.
Interest expense was $2,637 in the first six months of fiscal 1998 compared to
$2,491 in the same period in fiscal 1997. The increase in interest expense is a
result of increased debt.
An income tax benefit of $1,565 was recorded for the first six months of fiscal
1998 compared to tax expense of $1,071 for the same period last year, reflecting
the loss in fiscal 1998.
Operating Results by Business Segment
Machine Tool Group. On August 1, 1997, the Machine Tool Group implemented a
change to outsourcing a major portion of National Acme's parts, which had been
produced internally prior to August 1, 1997. The outsourced parts are used in
the manufacture of new Acme-Gridley machines and are also sold separately in the
aftermarket. As a result of planning difficulties encountered during the
changeover to outsourcing, which resulted in inadequate inventory levels to
support the Company during the transition, the Machine Tool Group encountered
disruptions in production during the period. Due to this inadequate supply of
parts needed for new machine production and aftermarket sales, fiscal 1998 first
six months sales were $31,336, or $9,841 lower than the $41,177 reported in the
first six months of fiscal 1997. Operating income was a loss of $585 for the
first six months of fiscal 1998 compared to operating income of $5,352 in the
first six months of the prior year. This is the result of the reduction in sales
volume, as well as lower productivity levels due to the difficulties mentioned
above. Operating expenses for the six months ended January 1998 were higher than
the fiscal 1997 first six months as a result of an increase in the computer
costs related to upgrading systems and making them year 2000 compliant, as well
as increases in temporary help related to the transition to outsourcing the
parts production. In addition, during the first six months of fiscal 1998, the
Machine Tool Group incurred a $250 charge for the write-down of property and
plant that was being held for sale to the current market value.
These problems have been addressed and aggressive action has been taken to
correct the problems, including replacing senior management of the Machine Tool
Group who were responsible for the initial planning errors, scheduling a portion
of the parts production at the Tooling Systems Group and adding key people to
our engineering and purchasing staff to quickly bring this transition to a
close.
Tooling Systems Group sales were $10,350 in the first six months of fiscal 1998,
compared to $10,297 in the first six months of the prior year, an increase of
$53. Operating income for the first six months of fiscal 1998 was $888, compared
with $394 the first six months of the prior year. The increase in operating
income is due to productivity improvements and reductions in benefit costs from
changes in the postretirement medical program.
Industrial Group sales were $12,805 in the first six months of fiscal 1998,
compared to $12,023 in the first six months of the prior year, an increase of
$782, or 6.5%. Operating income was $668 for the first six months of fiscal
1998, compared to $447 in the same period a year ago. The increase in operating
income is the result of increased volume and improved productivity, offset by
increased operating expenses related to computer systems.
10
<PAGE>
Liquidity and Capital Resources
Cash Flows
Historically, the Company's continuing operations have been financed by
internally generated funds. Acquisitions have been funded with increases in
indebtedness, while funds from divestitures have generally been used to reduce
indebtedness.
Net cash used by operating activities was $2,125 for the six months ended
January 31, 1998, compared to net cash provided by operating activities of
$2,374 for the first six months of fiscal 1997.
Cash used for capital expenditures was $810 and $714 for the first six months of
fiscal 1998 and 1997, respectively. The Company currently has no material
commitments for specific capital expenditures. Cash of $6,863 was used for
acquisitions during January 1997.
Financing and Investing
The balance outstanding under the Company's revolving credit agreement was
$27,417 at January 31, 1998, compared to $22,525 at July 31, 1997. Long-term
debt, including current maturities, at January 31, 1998, was $16,415, compared
to $17,810 at July 31, 1997, a decrease of $1,395. The Company's total
indebtedness was $43,832 and $40,335 at January 31, 1998 and July 31, 1997,
respectively, an increase of $3,497. The increase in debt was used to finance
working capital needs, particularly those of the Machine Tool Group as the
Company works through the current difficulties, as discussed above. Cash and
equivalents at January 31, 1998 were $471, a decrease of $166 compared to July
31, 1997. Net cash provided by financing activities was $2,795 in the first half
of fiscal 1998 compared to a use of $762 in the first six months of the prior
year.
The senior credit facility aggregating $40,000 is comprised of $5,086 in term
loans and a revolving credit agreement, which provides for borrowings up to
$30,000. Interest on the outstanding borrowings under the revolving credit
agreement is payable monthly in arrears at 1% above the prime rate or, at the
Company's option, at alternative rates based on LIBOR. The effective rate based
on LIBOR was 8.59% at January 31, 1998. The amount the Company may borrow under
the revolving credit agreement is based upon a formula related to the Company's
eligible accounts receivable and inventories, reduced by outstanding letters of
credit. On March 11, 1998, the Company increased the existing term loans by
$2,500 and consolidated all term loans together for a new term loan of $7,600.
The proceeds from the new term loan will be used to repay a portion of the
outstanding revolving credit agreement. Payments on the new term loan are $200
monthly, starting March 31, 1998. Unused borrowings available at February 28,
1998, after the effects of the new term loan, were approximately $3,500.
Interest on the term loans is payable monthly at 1.25% above prime rate or, at
the Company's option, at alternative rates based on LIBOR. The effective rate
based on LIBOR was 8.84% at January 31, 1998.
Pursuant to the subordinated debt facility, the Company issued Subordinated
Debentures in May 1994 in the principal amount of $12,000. Of this amount,
$4,000 was replaced by Junior Subordinated Debentures. Interest payments on the
Subordinated Debentures of 11.5% per annum are payable quarterly in arrears
commencing July 1, 1994. The Subordinated Debentures provide for the repayment
of principal of $2,000 in fiscal 1999 and fiscal 2000 and $4,000 in fiscal 2001.
Interest on the Junior Subordinated Debentures accrues at 14.5%, and the cash
interest of 11% per annum is payable quarterly in arrears commencing January 1,
1996. The Junior Subordinated Debentures provide for the repayment of principal
of $4,000 and unpaid interest in June 2001 or thirty days after the payment of
the Subordinated Debentures.
11
<PAGE>
The Company expects to continue to provide liquidity and finance its ongoing
operational needs primarily through internally generated funds.
Outlook
As more fully described above in Operating Results by Business Segment under the
heading Machine Tool Group, difficulties encountered during the changeover to
outsourcing on August 1, 1997, caused fiscal 1998 second quarter and first six
months net sales and net earnings per share to be significantly lower than in
the comparable periods in fiscal 1997. The difficulties encountered were
primarily the result of inadequate levels of parts inventory needed for first
and second quarter new machine production and aftermarket sales. As discussed
above, the Company has taken steps to address the problems, and expects improved
results in the third and fourth quarters of fiscal 1998. It is anticipated that
full year fiscal 1998 net sales and earnings will be significantly below those
reported in fiscal 1997.
The Company plans to continue expanding product and service offerings, both
internally and through strategic acquisitions, and to identify and implement
additional cost savings measures.
A number of factors may affect future results, liquidity and capital resources;
actual results may differ materially from those reflected by forward-looking
statements made by the Company. These factors are discussed in the Company's
Annual Report on Form 10-K for the year ended July 31, 1997.
12
<PAGE>
PART II - Other Information
Item 4: Submission of Matters to a Vote of Security Holders
The annual meeting of stockholders of DeVlieg-Bullard, Inc. was held on December
10, 1997, at which meeting the stockholders elected all directors to hold office
until the next annual meeting and until their successors are duly elected and
qualified.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Third Amendment to Amended and Restated Financing and Security Agreement
dated December 29, 1997 among DeVlieg-Bullard, Inc., the CIT Group/Business
Credit, Inc. and BNY Financial Corporation.
10.2 Fourth Amendment to Amended and Restated Financing and Security Agreement
dated March 11, 1998 among DeVlieg-Bullard, Inc., the CIT Group/Business
Credit, Inc. and BNY Financial Corporation.
10.3 Amended and Restated Term Loan Promissory Note dated March 11, 1998 in the
principal amount of $4,750,000 between the DeVlieg-Bullard, Inc. and the
CIT Group/Business Credit, Inc.
10.4 Amended and Restated Term Loan Promissory Note dated March 11, 1998 in the
principal amount of $2,850,000 between the DeVlieg-Bullard, Inc. and BNY
Financial Corporation.
10.5 Fourth Amendment to Investment Agreement dated September 17, 1997 among
DeVlieg-Bullard, Inc., Banc One Capital Partners Corporation, PNC Capital
Corp., Charles E. Bradley and John G. Poole.
10.6 Fifth Amendment to Investment Agreement dated March 11, 1998 among
DeVlieg-Bullard, Inc., Banc One Capital Partners Corporation, PNC Capital
Corp., Charles E. Bradley and John G. Poole.
10.7 Amendment to Intercreditor Agreement dated March 11, 1998 between the CIT
Group/Business Credit, Inc., Charles E. Bradley, John G. Poole, Banc One
Capital Partners Corporation, and PNC Capital Corp.
11 Computation of Earnings per Share
27 Financial Data Schedules (SEC use only)
(b) Reports on Form 8-K
During the quarter ended January 31, 1998, the Company did not file any reports
on Form 8-K.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amended report to be signed on its behalf by the
undersigned thereunto duly authorized.
DeVlieg-Bullard, Inc.
(Registrant)
Date: October 9, 1998 By: /s/ Thomas V. Gilboy
----------------------------------------
Thomas V. Gilboy
Vice President and Chief Financial Officer
(Principal Accounting Officer)
14
Exhibit 11
DeVlieg-Bullard, Inc.
Computation of Earnings per Share
(unaudited - in thousands, except per share data) (a)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
January 31, January 31,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net (loss) income $ (2,436) $ 754 $ (2,164) $ 1,483
======== ======== ======== ========
Shares for basic earnings per share:
Average number of common shares
outstanding 12,281 12,250 12,278 12,250
Dilutive effect of outstanding stock
purchase warrants (b):
Class A 1,496 1,494 1,496 1,494
Class B (c) 288 288 288 287
-------- -------- -------- --------
Total Basic shares outstanding 14,065 14,032 14,062 14,031
======== ======== ======== ========
Basic earnings per share $ (0.17) $ 0.05 $ (0.15) $ 0.11
======== ======== ======== ========
Additional shares for dilution:
Basic shares outstanding 14,065 14,032 14,062 14,031
Dilutive effect of outstanding options (b) (e) 341 (e) 280
Dilutive effect of outstanding stock
purchase warrants - Class C (b) (d) (e) 747 (e) 747
-------- -------- -------- --------
Total shares used in calculation of
diluted earnings per share 14,065 15,120 14,062 15,058
======== ======== ======== ========
Diluted earnings per share $ (0.17) $ 0.05 $ (0.15) $ 0.10
======== ======== ======== ========
</TABLE>
Notes:
(a) In accordance with the provisions of SFAS 128, "Earnings per Share," the
prior year has been restated.
(b) As determined by application of the treasury stock method.
(c) A total of 289 Class B stock purchase warrants were issuable May 1997 using
a formula based on the average closing stock price for the 90 days prior to
issuance. The Class B warrants became issuable on March 18, 1996, but at
that time, the number of shares was unknown.
(d) In connection with the refinancing of the senior debt facility in October
1995, 750 Class C stock purchase warrants ("Class C Warrants") were issued.
The Company has the opportunity to earn back these warrants based on
earnings as defined in the agreement. For the three months and six ended
January 31, 1998 and 1997, the Company did not meet the defined earnings
level, therefore all Class C Warrants were considered outstanding.
(e) Not included in calculation as effect would be antidilutive.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary fiancial information extracted from Form 10-Q for
the Quarter ended January 31, 1998 and is qualified in its entirety by reference
to such Form 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> JAN-31-1998
<CASH> 471
<SECURITIES> 0
<RECEIVABLES> 16,054
<ALLOWANCES> (997)
<INVENTORY> 38,703
<CURRENT-ASSETS> 65,724
<PP&E> 28,519
<DEPRECIATION> (15,920)
<TOTAL-ASSETS> 119,717
<CURRENT-LIABILITIES> 49,379
<BONDS> 0
0
0
<COMMON> 123
<OTHER-SE> 23,455
<TOTAL-LIABILITY-AND-EQUITY> 119,717
<SALES> 54,491
<TOTAL-REVENUES> 54,491
<CGS> 42,100
<TOTAL-COSTS> 42,100
<OTHER-EXPENSES> 232
<LOSS-PROVISION> 134
<INTEREST-EXPENSE> 2,637
<INCOME-PRETAX> (3,729)
<INCOME-TAX> (1,565)
<INCOME-CONTINUING> (2,164)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,164)
<EPS-PRIMARY> (.15)
<EPS-DILUTED> (.15)
</TABLE>
