UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 28, 1997
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 0-2251
SCI SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 63-0583436
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o SCI Systems (Alabama), Inc.
2101 West Clinton Avenue
Huntsville, Alabama 35805
(Address of principal executive offices) (Zip Code)
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(302) 998-0592
(Registrant's telephone number, including area code)
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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. [X] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.10 par value - 59,914,010
Outstanding at January 28, 1998
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
SCI Systems, Inc.
Condensed Consolidated Balance Sheets
December 28, June 30,
1997 1997
(In thousands of dollars) (Unaudited) (*)
- --------------------------------------------------------------------------------
Assets
Current Assets
Cash and cash equivalents $ 205,793 $ 290,809
Accounts receivable 672,455 630,867
Inventories 701,778 569,846
Refundable and deferred federal and
foreign income taxes 44,197 43,950
Other current assets 17,517 12,582
-------------------------------
Total Current Assets 1,641,740 1,548,054
Property, Plant, and Equipment
(Less accumulated depreciation of $387,127 at
December 28,1997, and $347,943 at June 30, 1997) 376,407 300,997
Other Noncurrent Assets 22,494 20,801
-------------------------------
Total Assets $2,040,641 $1,869,852
===============================
* Derived from audited financial statements, but does not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
See notes to condensed consolidated financial statements.
<PAGE>
SCI Systems, Inc.
Condensed Consolidated Balance Sheets
December 28, June 30,
1997 1997
(In thousands of dollars except share data) (Unaudited) (*)
- --------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable and accrued expenses $ 822,359 $ 713,377
Accrued payroll and related expenses 30,975 28,084
Federal, foreign and state income taxes 38,998 47,977
Current maturities of long-term debt 1,837 4,394
-------------------------------
Total Current Liabilities 894,169 793,832
Deferred Income Taxes 10,149 9,901
Noncurrent Pension Liability 5,133 5,133
Deferred Compensation 15,320 12,015
Long-term Debt - Note C
Industrial revenue bonds 21,297 21,310
Long-term notes 140,523 150,801
Convertible subordinated notes 282,535 282,197
-------------------------------
Total Long-term Debt 444,355 454,308
Shareholders' Equity
Preferred stock, 500,000 shares authorized
but unissued -0- -0-
Common stock, $.10 par value: authorized
200,000,000; issued 59,908,010 shares at
December 28, 1997, and 59,774,790 shares
at June 30,1997 5,991 5,978
Capital in excess of par value 175,951 172,910
Retained earnings 494,804 420,863
Currency translation adjustment (4,890) (4,747)
Treasury stock of 59,366 shares, at cost (341) (341)
-------------------------------
Total Shareholders' Equity 671,515 594,663
-------------------------------
Total Liabilities and Shareholders' Equity $2,040,641 $1,869,852
===============================
* Derived from audited financial statements, but does not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
See notes to condensed consolidated financial statements.
<PAGE>
SCI Systems, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
Quarter Ended:
December 28, December 29,
(In thousands of dollars except share data) 1997 1996
- --------------------------------------------------------------------------------
Net sales $1,786,423 $1,481,837
Costs and expenses 1,718,318 1,428,419
-------------------------------
Operating Income 68,105 53,418
Other income (expense):
Interest expense (net of interest income of
$2,624 in fiscal year 1998 and $3,147 in
fiscal year 1997) (5,142) (4,561)
Other, net 161 943
-------------------------------
Income before Income Taxes 63,124 49,800
Income taxes - Note B 25,565 20,169
-------------------------------
Net Income $ 37,559 $ 29,631
===============================
Earnings per share - Note C:
Basic $.63 $.50
Diluted $.55 $.44
Weighted average number of shares used in computation:
Basic 59,799,900 59,469,520
Diluted 72,608,255 72,137,060
See notes to condensed consolidated financial statements.
<PAGE>
SCI Systems, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
Six Months Ended:
December 28, December 29,
(In thousands of dollars except share data) 1997 1996
- --------------------------------------------------------------------------------
Net sales $3,528,188 $2,901,842
Costs and expenses 3,394,704 2,800,935
-------------------------------
Operating Income 133,484 100,907
Other income (expense):
Interest expense (net of interest income of
$6,150 in fiscal year 1998 and $4,155 in
fiscal year 1997) (9,354) (10,345)
Other, net 141 1,296
-------------------------------
Income before Income Taxes 124,271 91,858
Income taxes - Note B 50,330 37,202
-------------------------------
Net Income $ 73,941 $ 54,656
===============================
Earnings per share - Note C:
Basic $1.24 $.92
Diluted $1.08 $.82
Weighted average number of shares used in computation:
Basic 59,765,530 59,354,438
Diluted 72,571,613 72,026,829
See notes to condensed consolidated financial statements.
<PAGE>
SCI Systems, Inc.
Condensed Consolidated Statements Of Cash Flows
(Unaudited)
Six Months Ended:
December 28, December 29,
(In thousands of dollars) 1997 1996
- --------------------------------------------------------------------------------
Operating Activities
Net income $ 73,941 $ 54,656
Adjustments to reconcile net income to net cash
provided by operations:
Depreciation and amortization 46,997 37,098
Changes in current assets and liabilities:
Accounts receivable (41,790) (126,232)
Inventories (131,723) 32,705
Other current assets (4,935) 7,862
Accounts payable and accrued expenses 112,199 220,745
Income taxes (7,022) 8,377
Other non cash items - net (1,908) (957)
-------------------------------
Net Cash Provided by Operating Activities 45,759 234,254
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Investing Activities
Purchase of property, plant, and equipment (121,414) (44,378)
Other 1,103 1,969
-------------------------------
Net Cash Used for Investing Activities (120,311) (42,409)
-------------------------------
Financing Activities
Payments on long-term debt (18,018) (57,055)
Proceeds from long-term debt 4,848 157,611
Issuance of common stock 1,097 2,053
-------------------------------
Net Cash (Used for)Provided by Financing Activities (12,073) 102,609
-------------------------------
Effect of exchange rate changes on cash 1,609 778
-------------------------------
Net (decrease)increase in cash and cash equivalents (85,016) 295,232
Cash and cash equivalents at beginning of period 290,809 46,493
-------------------------------
Cash and Cash Equivalents at End of Period $ 205,793 $ 341,725
===============================
Cash equivalents consist of short-term deposits and liquid marketable securities
which are stated at cost that approximates market value.
See notes to condensed consolidated financial statements.
<PAGE>
Notes to Condensed Consolidated Financial Statements
December 28, 1997
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include
the accounts of the Company and its wholly owned subsidiaries after elimination
of significant intercompany accounts and transactions. The financial statements
have been prepared in accordance with instructions to Form 10-Q and do not
include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. Independent auditors
have not examined the statements (and all other information in this report), but
in the opinion of the Company all adjustments, which consist of normal recurring
accruals necessary for a fair presentation of the results for the period, have
been made. The results of operations for the period ended December 28, 1997 are
not necessarily indicative of the results of operations for the year ending June
30, 1998. For further information, refer to the consolidated financial
statements and footnotes included in the Company's annual report on Form 10-K
for the year ended June 30, 1997.
Note B - Income Taxes
U.S. income taxes are not provided on certain undistributed earnings of foreign
subsidiaries aggregating approximately $42 million at December 28, 1997, which
are considered permanently invested. Otherwise, approximately $11 million of
cumulative deferred income taxes would have been provided. Income tax provision
for fiscal year 1998 differs from the U.S. statutory income tax rate primarily
due to state income taxes.
Note C - Earnings per Share
In the second quarter of fiscal 1998, the Company adopted the new earnings per
share computations required by FASB Statement No. 128. Basic earnings per share
is computed by dividing reported net income for the period by the weighted
average number of common stock outstanding during the period. A reconciliation
of the net income and weighted average number of shares used for the diluted
earnings per share computations follows:
Quarter Ended: Six Months Ended:
(In thousands of dollars, December 28, December 29, December 28, December 29,
except share data) 1997 1996 1997 1996
----------------------------------------------------
Net income $37,559 $29,631 $73,941 $54,656
Add back after-tax interest
expense for convertible
subordinated notes 2,191 2,238 4,383 4,476
----------------------------------------------------
Adjusted net income $39,750 $31,869 $78,324 $59,132
====================================================
Weighted average number of
shares outstanding during
period 59,799,900 59,469,520 59,765,530 59,354,438
Applicable number of shares
for stock options outstand-
ing for period 1,013,483 872,668 1,011,211 877,519
Number of shares if convert-
ible subordinated notes
were converted 11,794,872 11,794,872 11,794,872 11,794,872
----------------------------------------------------
Weighted average number of
shares 72,608,255 72,137,060 72,571,613 72,026,829
====================================================
Diluted earnings per share $.55 $.44 $1.08 $.82
====================================================
Note D - Changes in Amount Outstanding of Securities or Indebtedness
At December 28, 1997 the Company had approximately $15 million of certain
accounts receivable sold under its asset securitization agreement, compared with
approximately $36 million at June 30, 1997. The Company can sell up to $200
million of certain accounts receivable with limited recourse under its asset
securitization agreement.
Total unused credit facilities available to the Company at December 28, 1997,
including that available under the asset securitization agreement, approximated
$658 million. The initial renewal date for the Company's credit facility has
been extended to December 8, 2002.
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
From time to time, the Company may publish forward-looking statements relating
to such matters as anticipated financial performance, business prospects, plant
expansions, technological developments, new products, and similar matters. The
Private Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements. In compliance with such safe harbor terms, the
Company notes that a variety of factors could cause the Company's actual results
and experience to differ materially from anticipated results or other
expectations expressed in the Company's forward-looking statements or from past
performances. The risks and uncertainties that may affect operations,
performance, development and results of the Company's business include future
cash use and other factors noted in Item 1. of SCI Systems, Inc.'s Annual Report
on Form 10-K for the fiscal year ended June 30, 1997.
Results of Operations
Sales for the second quarter were $1.79 billion compared to $1.48 billion in the
same period a year earlier, a 20.6% increase. Net income increased 26.8% to
$37.6 million from $29.6 million in the same quarter of fiscal 1997. Basic and
diluted earnings per share for the quarter were $.63 and $.55, respectively,
compared with $.50 and $.44 per share a year earlier. Return on average
shareholders' equity for the second quarter remained at 23.0%, the same level as
that experienced in fiscal 1997's second quarter.
Sales for the first six months of fiscal 1998 increased 21.6% to $3.53 billion
from $2.90 billion for the first six months of the prior fiscal year. Net income
increased 35.3% to $73.9 million compared with $54.7 million a year earlier.
Basic and diluted earnings per share for the first six months were $1.24 and
$1.08, respectively, compared with $.92 and $.82 per share for the prior fiscal
year's first six months. Return on average shareholders' equity improved to
23.3% for the first six months of fiscal 1998 from 21.8% for the comparable
period in fiscal 1997.
Increased volume led to higher sales in fiscal 1998's second quarter and first
six months compared with the same periods in fiscal 1997. Finished product
assembly accounted for approximately one half of the Company's sales in the
first six months of fiscal 1998. Foreign sales increased to 31% of consolidated
sales in fiscal 1998's first six months in comparison to 25% in total for fiscal
1997. The current Asian Regional economic conditions have thus far had a small
effect on the Company. However, Asian price competition may become more severe.
This Region's sales are transacted primarily in U.S. dollars, and most products
manufactured in the Region are exported.
Operating margin for the second quarter of fiscal 1998 improved to 3.81% from
3.60% for the prior fiscal year's second quarter. Operating margin for the first
six months of fiscal 1998 improved to 3.78% from 3.48% for the same period in
last fiscal year. Improved cost efficiencies, especially in the Company's
foreign operations, generated this improvement. Immediate term operating margin
growth may be affected by sizeable current expansion programs.
Net interest expense decreased slightly to .29% of sales for fiscal 1998's
second quarter compared with .31% in fiscal 1997's second quarter. For the first
six months of fiscal 1998, net interest expense declined to .27% of sales from
the .36% experienced in fiscal 1997's first six months. Increased interest
income earned on temporary investment of cash not currently required to fund
existing operations generated the lower net interest expense for the first six
months. The Company anticipates that quarterly interest income will continue to
decline as the year progresses due to reduced investment of excess cash as it is
used to fund planned expansion.
Estimated effective income tax rate differs from the U.S. statutory rate
primarily due to the effects of state income taxes.
Net income as a percent of sales improved marginally to 2.1% in fiscal 1998's
second quarter from 2.0% for fiscal 1997's second quarter. Net income as a
percent of sales improved to 2.1% in fiscal 1998's first six months from 1.9%
for the same period last fiscal year. These improvements resulted from improved
operating margin and lower net interest expense sales percentage.
Capital Resources and Liquidity
December 28, 1997's working capital of $748 million approximated June 30, 1997's
$754 million. The current ratio (1.8) at December 28, 1997 declined slightly
from June 30, 1997's ratio (2.0).
Available liquidity at December 28, 1997 was $864 million, comprised of $658
million in unused credit facilities and $206 million in cash and cash
equivalents. Lower available liquidity is anticipated during the remainder of
fiscal 1998 as cash is used to fund working capital and capital expenditures in
support of planned capacity expansion and revenue growth. The Company believes
that existing liquidity is sufficient to support near term growth. Fiscal 1998's
capital expenditures may be as high as $200 million, $100 million more than
estimated depreciation and amortization.
Order backlog believed by the Company to be firm at December 28, 1997 was $3.09
billion, compared with $2.76 billion a year earlier. The Company's backlog is
being affected by normal seasonality, shorten component lead times and
continuing average selling price declines.
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
At the Company's annual meeting of shareholders held on October 24, 1997, the
following individuals were elected as Class III Directors:
Votes Against
Votes in Favor and Withheld
-------------- -------------
Olin B. King 58,760,953 76,698
Howard H. Callaway 58,762,172 75,479
The other matters voted on at the meeting were:
Votes Against
Votes in Favor and Withheld Abstentions Broker Nonvotes
-------------- ------------- ----------- ---------------
Amendment of
Certificate of
Incorporation to
increase authorized
number of shares 56,427,729 2,308,818 101,104 -0-
Selection of Ernst
& Young LLP as the
Company's independent
auditors for the
fiscal year ending
June 30, 1998 58,745,676 19,712 72,263 -0-
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(1) Exhibit 3 - Certificate of Amendment to the Company's Second Restated
Certificate of Incorporation
(2) Exhibit 10 - Fourth Modification of Amended and Restated Credit
Agreement (dated as of August 3, 1995) made as of December 31, 1997
between the Registrant, its Obligated Subsidiaries and its Lenders
(3) Exhibit 27 - Financial Data Schedule
(b) Reports
The Company filed no reports on Form 8-K during the period of September 29, 1997
to December 28, 1997.
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.
SCI Systems, Inc.
(Registrant)
Date: February 11, 1998 By: /s/ Olin B. King
-------- --- ---- --- ---- -- ----
Olin B. King
Chairman of the Board
and Chief Executive Officer
(Principal Executive Officer and
Principal Financial and Accounting Officer)
CERTIFICATE OF AMENDMENT TO THE
SECOND RESTATED CERTIFICATE OF INCORPORATION OF
SCI SYSTEMS, INC.
(FORMERLY SPACE CRAFT, INC.)
SCI SYSTEMS, INC., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, does hereby
certify:
FIRST: That at a meeting of the Board of Directors of SCI
Systems, Inc., a resolution was duly adopted setting forth a proposed amendment
to the Second Restated Certificate of Incorporation of SCI Systems, Inc.
(formerly Space Craft, Inc.), declaring said amendment to be advisable, and
declaring that approval of said amendment be considered at the next Annual
Meeting of Stockholders.
SECOND: The Board of Directors at said meeting of the Board of
Directors resolved that Article Fourth of the Second Restated Certificate of
Incorporation of SCI Systems, Inc. should be amended by deleting Section (a) of
Article Fourth in its entirety and by substituting in lieu thereof the
following:
"FOURTH. (a) The aggregate number of shares which the
corporation shall have the authority to issue is Two Hundred
Million (200,000,000) shares of common stock with par value
of ten cents ($0.10) per share (hereinafter called the
"Common Stock") and Five Hundred Thousand (500,000) shares
of preferred stock without par value (hereinafter called the
"Preferred Stock"). At every meeting of the stockholders,
every holder of stock of the corporation, be it Common
Stock or Preferred Stock, shall be entitled to one vote, in
person or by proxy, for each share of Common Stock or
Preferred Stock standing in his name on the books of the
corporation. The Common Stock and the Preferred Stock shall
vote together as one class unless otherwise expressly required
by law."
THIRD: That thereafter, pursuant to resolution of its Board of
Directors, and upon notice in accordance with Section 222 of the General
Corporation Law of the State of Delaware, a meeting was held at which meeting
the necessary number of shares as required by statute were voted in favor of
said amendment.
FOURTH: That said amendment was duly adopted in accordance
with the provisions of Section 242 of the General Corporation Law of the State
of Delaware.
IN WITNESS WHEREOF, SCI Systems, Inc. has caused this Certificate to be
signed by A. Eugene Sapp, Jr., its President and authorized officer, and
attested by Michael M. Sullivan, its Secretary, this 15th day of December, 1997.
SCI SYSTEMS, INC.
By: /s/ A.Eugene Sapp, Jr.
A. Eugene Sapp, Jr., President
Attested:
By: /s/ Michael M. Sullivan
Michael M. Sullivan, Secretary
FOURTH MODIFICATION OF AMENDED AND RESTATED
CREDIT AGREEMENT
THIS FOURTH MODIFICATION OF AMENDED AND RESTATED CREDIT
AGREEMENT (this "Modification") is made as of this 31st day of December, 1997,
by and among SCI SYSTEMS, INC., a Delaware corporation (the "Borrower"), the
banks and other financing institutions listed on Annex I attached to the Credit
Agreement as modified by this Modification (the "Banks"), CITIBANK, N.A., acting
in its capacity as agent for the Banks (the "Agent") and ABN- AMRO BANK N.V.,
acting through its Atlanta Agency and in its capacity as co-agent for the Banks
(the "Co-Agent").
Statement of Facts
Borrower, the Agent, the Co-Agent and the Banks are parties to that certain
Amended and Restated Credit Agreement, dated as of August 3, 1995, as amended by
the First Modification of Amended and Restated Credit Agreement dated as of
December 8, 1995, the Second Modification of Amended and Restated Credit
Agreement dated as of March 29, 1996 and the Third Modification of Amended and
Restated Credit Agreement dated as of June 28, 1996 (as same may hereinafter be
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), pursuant to which the Banks committed to loan certain
amounts to the Borrower and the Co-Agent (acting for the Commercial Paper Banks,
as defined in the Credit Agreement) has issued a Letter of Credit for the
benefit of the Borrower.
Borrower has requested that the Agent, the Co-Agent and the Banks consent to (i)
an extension of the Credit Expiration Date (as defined in the Credit Agreement)
to December 8, 2002, (ii) an amendment of the definition of "Applicable Margin"
and "Commitment Fee Percentage" as such terms are defined in the Credit
Agreement, (iii) an amendment to the Applicable Letter of Credit Rate; (iv) an
amendment to Section 10.03A of the Credit Agreement to permit Borrower or any
Subsidiary to engage in transactions involving the acquisition of any interest
in or acquisition of all or substantially all of the assets of any Person so
long as such acquisition is consistent with the Borrower's present business
operations and does not exceed $150,000,000 during any Fiscal Year, (v) an
amendment to the Credit Agreement to permit the issuance of replacement Letters
of Credit from time to time and (vi) such other amendments set forth herein, and
the Agent, the Co-Agent and the Banks are willing to give their consent, subject
to the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the premises, the covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties do hereby agree as
follows:
Statement of Terms
Definitions. All capitalized terms used in this Modification but not otherwise
defined or limited herein shall have the meanings set forth in the Credit
Agreement, as amended hereby.
2. Amendments to Credit Agreement. Subject to the fulfillment of the conditions
precedent to the effectiveness of this Modification which are set forth below,
the parties hereby agree as follows:
(a) The Credit Agreement is hereby modified by amending the definitions of the
terms "Amount", "Applicable Margin", "Commitment Fee Percentage" and "Permitted
Transaction" in Section 1.01 in their entirety to read as follows:
Amount: (i) The amount of Indebtedness secured by any Lien arising from any
Permitted Transaction under Section 10.01, (ii) the amount of Indebtedness
arising from any Permitted Transaction under Section 10.02, or (iii) (a) the
amount of Indebtedness arising from any Permitted Transaction under Section
10.03, or (b) the amount paid (including deferred payments) to own, purchase or
acquire any stocks, obligations (other than accounts receivable generated in the
ordinary course of business) or securities of any Person or to acquire any
interest in, to make any capital contribution to, or to acquire any assets of
any Person, arising in connection with any Permitted Transaction under Section
10.03.
Applicable Margin: (i) With respect to Base Rate Advances, zero percent (0%) per
annum, and (ii) with respect to Eurodollar Rate Advances, (x) .575% per annum if
the sum of the Outstanding principal balance of the Loans and the outstanding
principal balance of all loans under the Bid Facility are less than 50% of the
Total Revolving Credit Commitment or (y) .625% if the sum of the Outstanding
principal balance of the Loans and the outstanding principal balance of all
loans under the Bid Facility are greater than or equal to 50% of the Total
Revolving Credit Commitment, each of which is subject to adjustment as provided
in Section 3.04(e).
Commitment Fee Percentage: The rate per annum equal to the
percentage determined by reference to the table set forth below and the Debt
Rating (or if there is no Debt Rating, the percentage set forth under Level 7
below):
LEVEL
CRITERIA
COMMITMENT FEE
PERCENTAGE LEVEL 1
A Debt Rating of At Least A by Standard & Poor's Or
A2 by Moody's
0.07%LEVEL 2
A Debt Rating of Less Than Level 1 But At Least A-
by Standard & Poor's Or A-3 by Moody's
0.08%LEVEL 3
A Debt Rating of Less Than Level 2 But At Least
BBB+ by Standard & Poor's Or Bad by Moody's
0.09%LEVEL 4
A Debt Rating of Less Than Level 3 But At Least BBB
by Standard & Poor's Or Baa2 by Moody's
0.125%LEVEL 5
A Debt Rating of Less Than Level 4 But At Least
BBB- by Standard & Poor's Or Baa3 by Moody's
0.15%LEVEL 6
A Debt Rating of Less Than Level 5 But At Least BB+
by Standard & Poor's And Ba1 by Moody's
0.175%LEVEL 7
No Debt Rating or A Debt Rating Lower than Level 6
0.25%
The Commitment Fee Percentage shall be adjusted each fiscal quarter of Borrower
based on the Borrower's Debt Rating as of the end of such fiscal quarter. The
adjustment to the Commitment Fee Percentage shall be effective as of the first
(1st) Business Day after the last day on which the financial statements for such
fiscal quarter are required to be delivered to the Agent, the Co-Agent and the
Banks, pursuant to Section 9.12(a)(i) or 9.12(a)(ii), as appropriate, and shall
remain in effect until the next quarterly determination. From the effective date
of the Fourth Modification of Amended and Restated Credit Agreement among
Borrower, the Agent, the Co-Agent and the Banks signatory thereto until the next
quarterly determination, the applicable Commitment Fee Percentage is 0.125%.
Notwithstanding the foregoing, if the Debt Rating assigned by Standard & Poor's
and the Debt Rating assigned by Moody's are at different levels (including
numerical modifiers and (+) and (-) as levels) on any date of determination, the
higher of the two Debt Ratings shall apply (provided, that in the event the
differential of the Debt Ratings is greater than one level (including numerical
modifiers and (+) and (-) as levels), the Debt Rating immediately below the
highest Debt Rating shall apply) and if only one of Standard & Poor's or Moody's
rates the Borrower's long-term senior unsecured debt, the Debt Rating of such
rating Person shall apply.
Permitted Transaction: Any action by the Borrower or any of its Subsidiaries
which (i) would be prohibited by Section 10.01, Section 10.02, Section 10.03 but
for Section 10.01(viii) (in the case of Section 10.01), Section 10.02(x) (in the
case of Section 10.02) or Section 10.03(viii) (in the case of Section 10.03) and
(ii) involves, directly or indirectly, any Amount not in excess of $25,000,000.
(b) The Credit Agreement is hereby further modified by adding to Section 1.01
the following new definitions:
Debt Rating means, at any date of determination, the rating of the Borrower's
long-term senior unsecured debt by Moody's or Standard & Poor's, as the case may
be.
Moody's means Moody's Investor Services, Inc.
Standard & Poor's means Standard & Poor's Ratings Service.
(c) The Credit Agreement is further modified by deleting the date "December 8,
2000" appearing in the first line of the definition of "Credit Expiration Date"
in Section 1.01 and replacing it with the date "December 8, 2002".
(d) The Credit Agreement is further modified by deleting the first five
sentences of Section 3.01(e) thereof in their entirety and by substituting in
lieu thereof the following new sentences:
(e) The initial Credit Expiration Date shall be December 8, 2002. The Borrower
may, however, request an extension of the initial Credit Expiration Date by
submitting a written request to the Agent no earlier than September 30, 2001,
and no later than October 31, 2001. Upon such request, the initial Credit
Expiration Date may be extended by one additional year upon written consent of
the Required Banks. The Agent will give written notice to the Borrower, not more
than sixty (60) days after receipt of request for extension from the Borrower,
stating either that (i) the Required Banks have given their written consent to a
new Credit Expiration Date, which shall be specified in such notice, or (ii) the
Required Banks have not given their consent to the requested extension. Any
Credit Expiration Date subsequent to the initial Credit Expiration Date may be
extended by one additional year by following the same procedure as for extension
of the Credit Expiration Date, with the Borrower requesting such extension no
earlier than September 30 and no later than October 31 of each year subsequent
to 2001.
(e) The Credit Agreement is hereby further modified by adding to Section 4
thereof the following new Section 4.12:
4.12 Voluntary Reduction in Stated Amount to Zero. In the event that Borrower
delivers to the Co-Agent, the Depositary and the Dealer a Notice of Requested
Change in Stated Amount requesting a reduction in the Stated Amount to zero, the
Commercial Paper Banks hereby authorize the Co-Agent to amend the Letter of
Credit to reflect a Stated Amount of zero or, alternatively, to request the
Depositary to return the Letter of Credit to the Co-Agent for cancellation. Upon
receipt of the Letter of Credit from the Depositary, the Co-Agent is authorized
to cancel the Letter of Credit. If a Letter of Credit has been canceled pursuant
to this Section 4.12, Borrower may send written notice to the Co-Agent no
earlier than 30 days prior to the end of a calendar quarter of Borrower and no
later than 10 days prior to the end of such quarter, directing the Co- Agent to
issue a replacement Letter of Credit in an amount not to exceed the Total
Commercial Paper Commitment. Subject to the terms and conditions of this
Agreement, the Co-Agent shall issue a replacement Letter of Credit upon the
satisfaction of the following conditions:
(i) All applicable conditions precedent set forth in Section 7.02 and Section
7.03 hereof have been satisfied;
(ii) The Co-Agent, the Depositary and the Dealer shall have received written
confirmation from each of Moody's and Standard & Poor's that the rating assigned
to the Commercial Paper Notes by such Person following delivery of the
replacement Letter of Credit satisfy the requirements of Section 7.03(e) hereof;
(iii) The Borrower shall have delivered such other documents, agreements or
opinions as may be required by Moody's and Standard & Poor's as a condition to
such Person's execution and delivery of the confirmation described in clause
(ii) above;
(iv) The Co-Agent, the Depositary and the Dealer shall have received an opinion
of counsel for the Borrower that the Drawings under the replacement Letter of
Credit will not constitute voidable preferences under the Bankruptcy Code in the
event of the bankruptcy of the Borrower;
(v) The Co-Agent, the Depositary and the Dealer shall have received an opinion
of counsel for the Co-Agent (rendered at the cost and expense of the Borrower,
which cost and expense shall be reasonable) that the replacement Letter of
Credit is a legally valid, binding and enforceable obligation of the Co-Agent
and that the issuance thereof is exempt from registration under the Federal
Securities Laws; and
(vi) The Co-Agent shall have received such other documents, certificates,
opinions (including reliance letters), approvals and filings as the Agent, the
Co-Agent or any of their counsel may reasonably request and which are customary
for transactions of this type, including without limitation, such agreements
from the Depositary as the Agent, the Co-Agent or any of their counsel may
reasonably request.
The Borrower agrees not to request, or permit, the authentication and delivery
of, any Commercial Paper Notes unless and until a Letter of Credit has been
issued and is outstanding and, in connection therewith, the foregoing conditions
precedent have been satisfied.
(f) The Credit Agreement is further modified by adding to the end of Section
9.12(a), the following new sentence:
Simultaneously with the delivery of each set of financial statements referred to
in clause (i) or (ii) above, the Borrower shall also deliver to the Agent, the
Co- Agent and the Banks (x) a certificate from the Chairman, President,
Treasurer or Chief Financial Officer of the Borrower certifying to the
Borrower's Debt Ratings as of the date of such financial statements, and (y) a
copy of rating letters, if any, from Standard & Poor's and Moody's confirming
such Debt Ratings.
(g) The Credit Agreement is further modified by deleting the reference to
"10.03A(i)" from Section 10.02(x) and 10.03(viii), respectively.
(h) The Credit Agreement is further modified by deleting clause (i) of Section
10.03A in its entirety and by substituting in lieu thereof the following new
clause (i):
(i) Engage, directly or indirectly, in a transaction involving the acquisition
of any interest in or acquisition of all or substantially all of the assets of
any Person so long as such acquisition is consistent with the Borrower's present
business operations and so long as the aggregate amount of such transactions
described in this Section 10.03A(i) does not exceed $150,000,000 during any
Fiscal Year of the Borrower; provided, however, for purposes of this Section
10.03A(i) only, the purchase price of any such transaction attributable to the
purchase of inventory by Borrower or any Subsidiary shall be excluded when
calculating the purchase price of such transaction; or
(i) The Credit Agreement is hereby further modified by deleting clause (b), (c)
and (d) from Section 15.02 thereof and by substituting, in lieu thereof, the
following new clause (b), (c) and (d):
(b) With respect to the Agent:
Citibank, N.A.
c/o Citicorp North America, Inc.
400 Perimeter Center, N.E.
Suite 600
Atlanta, Georgia 30346
Attn: Kirk P. Lakeman
Telephone: (770) 668-8120
Telecopier: (770) 668-8137
with a copy to:
Kilpatrick Stockton LLP
Suite 2800
1100 Peachtree Street
Atlanta, Georgia 30309-4530
Attn: Dennis L. Zakas, Esq.
Telephone: (404) 815-6409
Telecopier: (404) 815-6555
(c) With respect to the Co-Agent:
ABN-AMRO Bank N.V.
Atlanta Agency
One Ravinia Drive, Suite 1200
Atlanta, Georgia 30346
Attn: Patrick Thom
Telephone: (770) 396-0066
Telecopier: (770) 399-7397
Telex: 6827258
Answerback: ABNBANKATL
with a copy to:
Kilpatrick Stockton LLP
Suite 2800
1100 Peachtree Street
Atlanta, Georgia 30309-4530
Attn: Dennis L. Zakas, Esq.
Telephone: (404) 815-6409
Telecopier: (404) 815-6555
(d) With respect to the Depositary:
The Chase Manhattan Bank
formerly known as Chemical Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Attn: Bill Dodge
Telephone: (212) 946-3341
Telecopier: (212) 946-8575
(j) The Credit Agreement is hereby further modified by deleting clause (a)(ii)
from Section 10.14 in its entirety and by substituting in lieu thereof the
following new clause (a)(ii):
(ii) the maturity date of such Permitted Subordinated Debentures occurs at least
six months after the then current Credit Expiration Date.
(k) The Credit Agreement is hereby further modified by deleting clause (iii)
from Section 10.15(c) in its entirety and by substituting in lieu thereof the
following new clause (iii):
cause the maturity date of the Term Note Facility to occur earlier than June 8,
2003;
(l) The Credit Agreement is hereby further modified by deleting the date
"December 8, 2000" in Section 10.16 and by substituting in lieu thereof the date
"June 8, 2003".
(m) The Credit Agreement is hereby further modified by adding to Article XIV the
following new Section 14.11:
Section 14.11 Additional Co-Agent. Bank of America (Illinois) is hereby
designated as an additional co-agent under this Agreement. In acting as an
additional co-agent under this Agreement, Bank of America (Illinois) shall have
no duties or functions other than as a Bank. Nothing in this Agreement, express
or implied, is intended to or shall be so construed as to impose upon Bank of
America (Illinois) any obligations in respect of this Agreement except in its
capacity as a Bank.
(n) The Credit Agreement is hereby further modified by deleting Annex I and
Annex IV attached thereto and by substituting in lieu thereof Annex I and Annex
IV attached hereto and incorporated herein and therein by reference.
(o) The Credit Agreement is hereby further modified by deleting Schedule 8.01 in
its entirety and by substituting in lieu thereof Schedule 8.01 attached hereto
and incorporated herein by reference.
3. No Other Amendments. Except for the amendments expressly set forth and
referred to in Section 2 above, the Credit Agreement remains unchanged and in
full force and effect; provided, however that the Banks, the Agent and the
Co-Agent hereby authorize the Agent to enter into or obtain from the Credit
Parties such modifications to the Credit Documents as the Agent may deem to be
necessary or appropriate in order to reflect the amendments set forth herein.
Nothing in this Modification is intended, or shall be construed, to constitute a
novation or an accord and satisfaction of any of the Borrower's indebtedness or
any indebtedness of any other Credit Party to the Banks, the Agent or the
Co-Agent under or in connection with the Credit Agreement (collectively, the
"Obligations") or to modify, affect or impair the perfection or continuity of
the security interests in, security titles to or other liens on any collateral
for the Obligations.
4. Representations and Warranties of Borrower. To induce the Agent, the Co-Agent
and the Banks to enter into this Modification, the Borrower does hereby warrant,
represent and covenant to such parties that: (a) each representation or warranty
of the Borrower set forth in the Credit Agreement is hereby restated and
reaffirmed as true and correct on and as of the date hereof as if such
representation or warranty were made on and as of the date hereof (except to the
extent that any such representation or warranty expressly relates to a prior
specific date or period), and no Default or Event of Default has occurred and is
continuing as of this date under the Credit Agreement as amended by this
Modification; (b) Borrower has the power and is duly authorized to execute,
deliver and perform its obligations under this Modification and this
Modification is the legal, valid and binding obligation of Borrower enforceable
against it in accordance with its terms; and (c) no Subordinated Debt (including
without limitation, any Permitted Subordinated Debentures) which is currently
outstanding on the date hereof has a maturity date prior to June 8, 2003.
5. Conditions Precedent to Effectiveness of this Modification. The effectiveness
of this Modification and the amendments provided in Section 2 above are subject
to the fulfillment of the following additional conditions precedent:
(a) the Agent shall have received one or more counterparts of this Modification
duly executed by the Borrower, the Agent, the Co-Agent and the Banks;
(b) receipt by the Agent (for the benefit of the Banks) of the unpaid
Commitment Fees which have accrued through the effective date of the Fourth
Modification of Amended and Restated Credit Agreement among the Borrower, the
Agent, the Co-Agent and the Banks signatory thereto;
(c) the Agent shall have received (i) a Reaffirmation of Pledge Agreement from
Borrower and (ii) a Confirmation of Guaranty and Reaffirmation of Pledge
Agreement from the Guarantors, each in form and substance satisfactory to the
Agent;
(d) the Agent shall have received one or more counterparts of an Officer's
Certificate in form and substance acceptable to the Agent executed by the
Borrower and each Guarantor;
(e) the Agent shall have received opinions of (i) Borrower's and the Guarantors'
counsel in form and substance reasonably satisfactory to the Agent and (ii)
in-house counsel to the Borrower and the Guarantors in form and substance
reasonably satisfactory to the Agent;
(f) the Agent shall have received certificates of good standing for each of the
Borrower and the Guarantors in the jurisdictions set forth on Schedule 8.01;
(g) Each and every representation and warranty of the Borrower set forth in
Section 4 above shall be true and correct in all material respects as of the
date of and after giving effect to this Modification; and
(h) There shall not exist as of the date of, and after giving effect to, this
Modification, any Default or Event of Default under the Credit Agreement as
amended by this Modification.
Notwithstanding the foregoing, the extension of the Credit Expiration Date as
set forth in Section (2)(c) above is also subject to (i) the Agent's receipt of
a fully executed counterpart of an amendment to the Letter of Credit extending
the expiry date to December 8, 2002 (which amendment shall be signed by the
Depositary consenting to such amendment) or a copy of a fully executed
replacement Letter of Credit with an expiry date of December 8, 2002 and (ii)
the Agent's receipt of written confirmation from Moody's Investor Services, Inc.
and Standard & Poor's Rating Service of their ratings of at least "P-1" and "A-1
plus", respectively, after giving effect to the extension of the Credit
Expiration Date as contemplated by this Modification.
6. Additional Provisions. In connection with the Borrower's formation or
acquisition of SCI del Centro S.A. de C.V., a corporation organized under the
laws of Mexico, SCI del Sud, S.A., a corporation organized under the laws of
Mexico, SCI del Norte S.A., a corporation organized under the laws of Mexico,
SCI Hungary Ltd., a corporation organized under the laws of Hungary, Advanced
Electronic Technology Ltda., a corporation organized under the laws of Brazil
and Advanced Electronic Integration Ltda., a corporation organized under the
laws of Brazil (hereinafter, the "New Foreign Subsidiaries"), the Borrower shall
execute and deliver, or cause to be executed and delivered, the documents
required to be delivered pursuant to Section 9.13 of the Credit Agreement on or
before the 90th day after the effective date of this Modification (or such later
date to which such deadline may be extended in writing by the Agent and the
Co-Agent in their discretion); provided, however, that Borrower shall not be
required to deliver or cause to be delivered such documents with respect to any
New Foreign Subsidiary which is dissolved or merged into an existing Credit
Party prior to the 90th day after the effective date of this Modification (or
such later date to which such deadline may be extended in writing by the Agent
and the Co-Agent in their discretion). In no event shall the Borrower make, or
permit any Subsidiary of Borrower to make, any Intercompany Loan to any New
Foreign Subsidiary unless and until such New Foreign Subsidiary has become a
Credit Party to the Credit Agreement and the Borrower has executed and
delivered, or caused to be executed and delivered, the documents set forth in
Section 9.13 of the Credit Agreement with respect to such New Foreign
Subsidiary. The failure of the Borrower to comply with this Section 6 shall be
deemed to be an Event of Default under the Credit Agreement.
7. Counterparts. This Modification may be executed in multiple counterparts,
each of which shall be deemed to be an original and all of which when taken
together shall constitute one and the same instrument.
8. GOVERNING LAW. THIS MODIFICATION SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE.
IN WITNESS WHEREOF, the parties hereto have caused this Modification to be
duly executed and delivered as of the day and year specified at the beginning
hereof.
BORROWER:
SCI SYSTEMS, INC.
(CORPORATE SEAL)
Attest:
By:
Name:
Title:
AGENT:
CITIBANK, N.A.
By:
Name:
Title:
CO-AGENT:
ABN-AMRO BANK N.V., ATLANTA
AGENCY
By:
Name:
Title:
By:
Name:
Title:
BANKS:
ABN-AMRO BANK N.V., ATLANTA
AGENCY
By:
Name:
Title:
By:
Name:
Title:
BANK OF AMERICA ILLINOIS
By:
Name:
Title:
BANK OF IRELAND
By:
Name:
Title:
CITIBANK, N.A.
By:
Name:
Title:
COMMERZBANK
AKTIENGESELLSCHAFT, ATLANTA
AGENCY
By:
Name:
Title:
By:
Name:
Title:
REGIONS BANK
By:
Name:
Title:
MELLON BANK, N.A.
By:
Name:
Title:
THE FIRST NATIONAL BANK OF
CHICAGO
By:
Name:
Title:
PNC BANK, KENTUCKY, INC.
By:
Name:
Title:
THE BANK OF TOKYO-MITSUBISHI,
LTD., ATLANTA AGENCY
By:
Name:
Title:
THE DEVELOPMENT BANK OF
SINGAPORE, LTD.
By:
Name:
Title:
THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED
By:
Name:
Title:
Schedule 8.01
SCI SYSTEMS, INC. AND SUBSIDIARIES OF SCI SYSTEMS, INC. JURISDICTION OF
INCORPORATION AND QUALIFICATION
Corporate Name
Jurisdiction of Incorporation Borrower:
SCI Systems, Inc.
Delaware Subsidiaries:
SCI Irish Holdings
Ireland
SCI Alpha Limited
Ireland
SCI Systems Limited (Thailand)
Thailand
SCI Foreign Sales, Inc.
U.S. Virgin Islands
SCI Systems (Alabama), Inc.
Alabama
SCI Systems (Canada), Inc.
Canada
SCI Holdings, Inc.
Delaware
SCI Ireland Limited
Ireland
SCI Technology, Inc.
Alabama
Scimex, Inc.
Alabama
Interagency, Inc.
Delaware
SCI Systems Colorado, Inc.
Colorado
**SCI Funding, Inc.
Alabama
*Dabetan Company Limited
Hong Kong
SCI Systems de Mexico, S.A. de
C.V. (formerly known as Adelantos
de Tecnologia, S.A. de C.V.
Mexico
SCI del Centro S.A. de C.V.
Mexico
SCI del Sud, S.A.
Mexico
SCI del Norte S.A.
Mexico
SCI Manufacturing Singapore Pte.
Ltd.
Singapore
Newport, Inc.
Georgia
SCI Manufacturing (Malaysia) SDN
BHD
Malaysia
SCI Hungary Ltd.
Hungary
Advanced Electronic Technology
Ltda.
Brazil
Advanced Electronic Integration
Ltda.
Brazil
SCI Holding France, S.A.
France
SCI France, S.A.
France
*SCI UK Limited
Guernsey
*Newmoor Industries Limited
(formerly known as Cambridge
Computer Limited)
England
* In liquidation and not Credit Parties.
** Special purpose subsidiary and not a Credit Party
ANNEX I
TO
CREDIT AGREEMENT
BANK INFORMATION
1. Name of Bank
CITIBANK, N.A.
Domestic Lending Office and
Eurodollar Lending Office:
CITIBANK, N.A.
c/o Citicorp North America, Inc.
400 Perimeter Center Terrace
Suite 600
Atlanta, Georgia 30346
Address for Notices:
CITIBANK, N.A.
c/o Citicorp North America, Inc.
400 Perimeter Center Terrace
Suite 600
Atlanta, Georgia 30346
Attention: Kirk P. Lakeman
Telecopy No.: (404) 668-8137
with a copy to:
Citicorp Securities, Inc.
399 Park Avenue
New York, New York 10043
Attention: Robert H. Johnson, Jr.
Telecopy No.: (212) 583-7185
Revolving Credit Commitment:
US $35,000,000
Commercial Paper Commitment:
US $10,000,000
BANK INFORMATION
2. Name of Bank
ABN AMRO BANK N.V.
Domestic Lending Office and
Eurodollar Lending Office:
ABN AMRO Bank N.V.
One Ravinia Drive
Suite 1200
Atlanta, Georgia 30346
Address for Notices:
ABN AMRO Bank N.V.
135 South LaSalle Street
Suite 625
Chicago, Illinois 60603
Attention: Credit Administration
Telecopy No.: (312) 904-8840
with a copy to:
ABN AMRO Bank, N.V.
One Ravinia Drive
Suite 1200
Atlanta, Georgia 30348
Attention: Patrick Thom
Telecopy: (770) 398-7397
Revolving Credit Commitment:
US $10,000,000
Commercial Paper Commitment:
US $30,000,000
BANK INFORMATION
3. Name of Bank
BANK OF AMERICA (ILLINOIS)
Domestic Lending Office and
Eurodollar Lending Office:
Bank of America (Illinois)
231 South LaSalle Street
Chicago, Illinois 60697
Address for Notices:
Bank of America (Illinois)
1230 Peachtree Street, N.W.
Suite 3800
Atlanta, Georgia 30309-3592
Attention: Michael J. McKenney
Vice President
Telecopy No.: (404) 249-6938
with a copy to:
Bank of America (Illinois)
555 California Street
41st Floor
San Francisco, California 94014
Attention: Michael McCutchin
Telecopy No.: (415) 622-2514
Revolving Credit Commitment:
US $30,000,000
Commercial Paper Commitment:
US $10,000,000
BANK INFORMATION
4. Name of Bank
BANK OF IRELAND
Domestic Lending Office and
Eurodollar Lending Office:
Bank of Ireland
Head Office, Lower Baggot Street
Dublin 2, Ireland
Address for Notices:
Bank of Ireland
Head Office, Lower Baggot Street
Dublin 2, Ireland
Attention: Tom Hayes
Telecopy No.: 011 353 1 604 4100
Revolving Credit Commitment:
US $20,000,000
Commercial Paper Commitment:
US $-0-
BANK INFORMATION
5. Name of Bank
COMMERZBANK AKTIENGESELLSCHAFT,
ATLANTA AGENCY
Domestic Lending Office and
Eurodollar Lending Office:
Commerzbank Aktiengesellschaft,
Atlanta Agency
Promenade 2
Suite 3500
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309
Address for Notices:
Commerzbank Aktiengesellschaft,
Atlanta Agency
Promenade 2
Suite 3500
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309
Attention: Eric Kagerer
Telecopy No.: (404) 888-6539
Revolving Credit Commitment:
US $20,000,000
Commercial Paper Commitment:
US $10,000,000
BANK INFORMATION
6. Name of Bank
REGIONS BANK (formerly known as First
Alabama Bank)
Domestic Lending Office and
Eurodollar Lending Office:
Regions Bank
216 West Side Square
P. O. Box 680 (35804)
Huntsville, Alabama 35801
Address for Notices:
Regions Bank
216 West Side Square
P. O. Box 680 (35804)
Huntsville, Alabama 35801
Attention: Steve Monger
President
Edwin Wilson
Vice President
Telecopy No.: (205) 535-0312
Revolving Credit Commitment:
US $25,000,000
Commercial Paper Commitment:
US $10,000,000
BANK INFORMATION
7. Name of Bank
MELLON BANK, N.A.
Domestic Lending Office and
Eurodollar Lending Office:
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258-0001
Address for Notices:
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258-0001
Attention: Charles H. Staub
Telecopy No.: (412) 236-1914
Revolving Credit Commitment:
US $25,000,000
Commercial Paper Commitment:
US $10,000,000
BANK INFORMATION
8. Name of Bank
THE FIRST NATIONAL BANK OF
CHICAGO
Domestic Lending Office and
Eurodollar Lending Office:
The First National Bank of Chicago
One First National Plaza
Suite 0634
1 FNP - 10th Floor
Chicago, Illinois 60670
Address for Notices:
The First National Bank of Chicago
One First National Plaza
Suite 0634
1 FNP - 10th Floor
Chicago, Illinois 60670
Attention: David T. McNeela
Telecopy No.: (312) 732-5296
Revolving Credit Commitment:
US $35,000,000
Commercial Paper Commitment:
US $-0-
BANK INFORMATION
9. Name of Bank
PNC BANK, KENTUCKY, INC.
Domestic Lending Office and
Eurodollar Lending Office:
PNC Bank, Kentucky, Inc.
Citizens Plaza
Louisville, Kentucky 40296
Address for Notices:
PNC Bank, Kentucky, Inc.
Citizens Plaza
Louisville, Kentucky 40296
Attention: Benjamin A. Willingham
Telecopy No.: (502) 581-2302
Revolving Credit Commitment:
US $20,000,000
Commercial Paper Commitment:
US $10,000,000
BANK INFORMATION
10. Name of Bank
THE BANK OF TOKYO-MITSUBISHI, LTD.,
ATLANTA AGENCY
Domestic Lending Office and
Eurodollar Lending Office:
The Bank of Tokyo-Mitsubishi, Ltd.,
Atlanta Agency
133 Peachtree Street, N.E.
Suite 5050, Georgia Pacific Center
Atlanta, Georgia 30303
Address for Notices:
The Bank of Tokyo-Mitsubishi, Ltd.,
Atlanta Agency
133 Peachtree Street, N.E.
Suite 5050, Georgia Pacific Center
Atlanta, Georgia 30303
Attention: Bill Otott
Telecopy No.: (404) 577-1155
Revolving Credit Commitment:
US $10,000,000
Commercial Paper Commitment:
US $25,000,000
BANK INFORMATION
11. Name of Bank
THE DEVELOPMENT BANK OF
SINGAPORE, LTD.
Domestic Lending Office and
Eurodollar Lending Office:
The Development Bank of Singapore, Ltd.
New York Agency
420 Fifth Avenue
New York, New York 10048
Address for Notices:
The Development Bank of Singapore, Ltd.
New York Agency
420 Fifth Avenue
New York, New York 10048
Attention: Robert Joslowski
Telecopy No.: (212) 997-5713
Revolving Credit Commitment:
US $20,000,000
Commercial Paper Commitment:
US $10,000,000
BANK INFORMATION
12. Name of Bank
THE LONG TERM CREDIT BANK OF
JAPAN, LIMITED
Domestic Lending Office and
Eurodollar Lending Office:
The Long Term Credit Bank of Japan, Limited
165 Broadway
New York, New York 10006
Address for Notices:
The Long Term Credit Bank of Japan, Limited
165 Broadway
New York, New York 10006
Attention: Philip A. Marsden
Telecopy No.: (212) 608-2371
with a copy to:
The Long Term Credit Bank of Japan, Limited
245 Peachtree Center Avenue
Suite 2801
Atlanta, Georgia 30303
Attn: Becky Sedlar Silbert
Telecopy No.: (404) 658-9751
Revolving Credit Commitment:
US $10,000,000
Commercial Paper Commitment:
US $25,000,000
ANNEX IV
APPLICABLE LETTER OF CREDIT RATE MATRIX
If the ratio of Borrower's Total Debt to Total Capital as of the end of any
fiscal quarter is within a particular range described in the left column below,
and if the Borrower's ratio of EBIT to Interest Expense as of the end of such
fiscal quarter is within a particular range described in the top row below, then
the Applicable Letter of Credit Rate shall be the amount specified where such
ranges intersect below on the effective date pursuant to Section 3.06(c):
EBIT to Interest Expense RatioTotal Debt to
Total Capital Ratio
<0- 62>1.25:1;
<=2.5:1
<0- 62>2.5:1;
<=5.5:1
<0- 62>5.5:1<0- 62>.575:1
0.825% per annum
0.575% per annum
0.475% per annum>=.35:1; <=.575:1
0.725% per annum
0.475% per annum
0.375% per annum<0- 60>.35:1
0.625% per annum
0.375% per annum
0.25% per annum
For example, if Borrower's ratio of Total Debt to Total Capital as of the end of
one fiscal quarter is .75:1.0 and the Borrower's ratio of EBIT to Interest
Expense as of the end of such quarter is 1.5:1.0, then the Applicable Letter of
Credit Rate shall be 0.825% per annum for the immediately succeeding quarterly
computation period. From the effective date of the Fourth Modification of
Amended and Restated Credit Agreement among SCI Systems, Inc., Citibank, N.A.,
as Agent, ABN AMRO Bank N.V., as Co-Agent, and the Banks which are signatories
thereto until the next quarterly determination, the Applicable Letter of Credit
Rate is 0.375% per annum.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM DECEMBER 28,
1997's BALANCE SHEET AND THE INCOME STATEMENT FOR THE SIX MONTHS THEN ENDED, AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-1-1997
<PERIOD-END> DEC-28-1997
<CASH> 205,793
<SECURITIES> 0
<RECEIVABLES> 683,654
<ALLOWANCES> 11,199
<INVENTORY> 701,778
<CURRENT-ASSETS> 1,641,740
<PP&E> 763,534
<DEPRECIATION> 387,127
<TOTAL-ASSETS> 2,040,641
<CURRENT-LIABILITIES> 894,169
<BONDS> 444,355
0
0
<COMMON> 5,991
<OTHER-SE> 665,524
<TOTAL-LIABILITY-AND-EQUITY> 2,040,641
<SALES> 3,528,188
<TOTAL-REVENUES> 3,528,188
<CGS> 3,394,704
<TOTAL-COSTS> 3,394,704
<OTHER-EXPENSES> (6,291)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,504
<INCOME-PRETAX> 124,271
<INCOME-TAX> 50,330
<INCOME-CONTINUING> 73,941
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 73,941
<EPS-PRIMARY> 1.24
<EPS-DILUTED> 1.08
<FN>
<F1> EPS-PRIMARY represents Basic EPS per FASB Statement No.128
</FN>
</TABLE>
