<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For The Quarter Ended December 31, 1997
Commission File Number 0-19544
AUTOCAM CORPORATION
A Michigan Corporation
I.R.S. Employer Identification No. 38-2790152
4070 East Paris Avenue, Kentwood, Michigan 49512
Telephone: (616) 698-0707
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, and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
---- ----
The number of Common Shares outstanding at February 2, 1998 was
6,040,257.
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION PAGE NO.
<S> <C> <C>
Item 1. Financial Statements
Consolidated Balance Sheets as of December 31 and
June 30, 1997 3
Consolidated Statements of Operations for the Three and Six
Months Ended December 31, 1997 and 1996 4
Consolidated Statements of Cash Flows for the Three and Six
Months Ended December 31, 1997 and 1996 5
Notes to Consolidated Financial Statements 6 - 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9 - 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - None.
Item 2. Changes in Securities - None.
Item 3. Default Upon Senior Securities - None.
Item 4. Submission of Matters to a Vote of Security Holders - None.
Item 5. Other Information - None.
Item 6. Exhibits and Reports on Form 8-K - The Company filed a Form 8-K Report, dated January 30, 1998 and filed
February 6, 1998, to report under Item 2 of the Form 8-K the investment in Qualipart Industria E Comercio Ltda.
("Qualipart"), a precision-machining manufacturer, headquartered in Pinhal-SP, Brazil. The Company purchased a
51% interest in Qualipart, a supplier of gasoline and diesel fuel injector components to leading global
automotive and heavy construction original equipment manufacturers and their tier-one suppliers. Qualipart has
annual sales of approximately $15 million.
</TABLE>
2
<PAGE> 3
AUTOCAM CORPORATION & SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, 1997 JUNE 30, 1997
----------------- -------------
(UNAUDITED)
-----------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and equivalents $ 266,424 $ 2,510,500
Accounts receivable 10,531,516 8,841,516
Inventories 4,999,843 5,444,420
Prepaid expenses and other 1,170,802 722,020
----------- -----------
TOTAL CURRENT ASSETS 16,968,585 17,518,456
PROPERTY, PLANT AND EQUIPMENT, NET 54,609,772 53,291,418
RESTRICTED CASH AND EQUIVALENTS 8,921,250
OTHER LONG-TERM ASSETS 15,520,988 12,827,954
----------- -----------
TOTAL ASSETS $96,020,595 $83,637,828
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term obligations $ 6,361,640 $ 5,905,541
Accounts payable 6,520,865 4,398,050
Accrued liabilities 3,485,869 2,911,939
----------- -----------
TOTAL CURRENT LIABILITIES 16,368,374 13,215,530
LONG-TERM OBLIGATIONS, NET OF CURRENT MATURITIES 30,753,845 25,191,778
DEFERRED TAXES 8,352,000 7,802,000
DEFERRED CREDITS AND OTHER 642,386 813,550
SHAREHOLDERS' EQUITY:
Preferred stock - 200,000 shares authorized; no
shares issued or outstanding
Common stock - 10,000,000 shares authorized;
6,027,520 and 5,711,587 shares issued and
outstanding as of December 31 and June 30,
1997, respectively 30,986,518 26,270,940
Deferred compensation (568,333) (645,833)
Retained earnings 9,485,805 10,989,863
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 39,903,990 36,614,970
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $96,020,595 $83,637,828
=========== ===========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
AUTOCAM CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
---------------------------- --------------------------
1997 1996 1997 1996
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Sales $21,794,971 $15,269,710 $39,223,953 $29,917,529
Cost of sales 16,479,932 11,643,080 30,499,977 22,960,293
----------- ----------- ----------- -----------
Gross profit 5,315,039 3,626,630 8,723,976 6,957,236
Selling, general and administrative 1,324,206 894,335 2,320,126 1,690,370
Other operating expenses 51,875 51,875 103,750 103,750
----------- ----------- ----------- -----------
Income from operations 3,938,958 2,680,420 6,300,100 5,163,116
Interest and other expense, net 647,088 313,774 1,254,908 640,537
----------- ----------- ----------- -----------
Income before tax provision 3,291,870 2,366,646 5,045,192 4,522,579
Tax provision 1,187,900 825,600 1,805,700 1,577,739
----------- ----------- ----------- -----------
NET INCOME $ 2,103,970 $ 1,541,046 $ 3,239,492 $ 2,944,840
=========== =========== =========== ===========
BASIC NET INCOME PER SHARE $ .35 $ .26 $ .54 $ .49
=========== =========== =========== ===========
DILUTED NET INCOME PER SHARE $ .34 $ .25 $ .52 $ .49
=========== =========== =========== ===========
Basic weighted average shares 6,023,987 5,986,709 6,013,981 5,986,709
Diluted weighted average shares
6,206,684 6,064,916 6,181,344 6,054,921
Dividends declared per share $ .02 $ .02 $ .04 $ .04
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
AUTOCAM CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
FOR THE SIX MONTHS ENDED
DECEMBER 31,
--------------------------
1997 1996
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,239,492 $ 2,944,840
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 3,538,658 2,632,994
Deferred taxes and other 589,094 500,000
Changes in assets and liabilities that provided
(used) cash:
Accounts receivable (1,732,632) 890,570
Inventories 444,577 (305,286)
Prepaid expenses and other (74,816) (29,750)
Other long-term assets 207,029 102,629
Accounts payable 1,242,975 (565,862)
Accrued liabilities 1,577,967 465,177
Deferred credits and other (98,128) (55,659)
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 8,934,216 6,579,653
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures and deposits on equipment (6,797,183) (5,091,289)
Proceeds from sale of equipment 226,740 1,350
Investments in subsidiaries (1,221,620)
Payment of life insurance premiums and other (274,263) (241,220)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (8,066,326) (5,331,159)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments on line of credit, net (634,452)
Proceeds from issuance of long-term obligations 9,625,000 1,550,000
Increase in restricted cash and equivalents (8,921,250)
Principal payments of long-term obligations (2,972,382) (1,946,650)
Debt issue costs (180,911)
Cash dividends paid (230,654) (109,681)
Proceeds from exercise of employee stock options 202,683 30,597
----------- -----------
NET CASH USED IN FINANCING ACTIVITIES (3,111,966) (475,734)
----------- -----------
Net increase (decrease) in cash (2,244,076) 772,760
Cash and equivalents at beginning of period 2,510,500 1,466,751
----------- -----------
Cash and equivalents at end of period $ 266,424 $ 2,239,511
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 1,352,040 $ 652,258
Income taxes 130,250 828,000
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
AUTOCAM CORPORATION & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements
(the "Financial Statements") of Autocam Corporation and its wholly-owned
subsidiaries (together, the "Company") have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission.
Accordingly, the Financial Statements do not include all the information
and footnotes normally included in the annual consolidated financial
statements prepared in accordance with generally accepted accounting
principles. All significant intercompany accounts and transactions have
been eliminated in consolidation.
In the opinion of management, the Financial Statements reflect all
adjustments (consisting only of normal recurring adjustments) necessary
to present fairly such information in accordance with generally accepted
accounting principles. These Financial Statements should be read in
conjunction with the financial statements and footnotes thereto included
in the Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1997.
Weighted average shares outstanding and earnings per share for the three
and six months ended December 31, 1996 have been restated to give effect
to a 5% share dividend declared on October 21, 1997 and paid on November
17, 1997 to shareholders of record on November 3, 1997.
RECLASSIFICATIONS - Certain reclassifications have been made to the
Balance Sheet as of June 30, 1997 in order to conform to the December
31, 1997 presentation.
2. INVENTORIES
Inventories are summarized as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1997 JUNE 30, 1997
----------------- -------------
(UNAUDITED)
-----------
<S> <C> <C>
Raw materials $1,186,998 $1,389,735
Production supplies 1,205,090 1,163,588
Work in-process 1,887,855 2,073,987
Finished goods 719,900 817,110
---------- ----------
TOTAL INVENTORIES $4,999,843 $5,444,420
========== ==========
</TABLE>
6
<PAGE> 7
AUTOCAM CORPORATION & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1997
3. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment is summarized by major classification as
follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1997 JUNE 30, 1997
----------------- -------------
(UNAUDITED)
-----------------
<S> <C> <C>
Land and improvements $ 1,895,138 $ 1,842,781
Buildings and improvements 7,148,606 6,869,861
Leasehold improvements 417,866 340,014
Machinery and equipment 62,338,724 59,268,918
Furniture and fixtures 2,960,602 2,543,855
Construction in progress 508,304 57,546
------------ ------------
TOTAL 75,269,240 70,922,975
Accumulated depreciation and amortization (20,659,468) (17,631,557)
------------ ------------
PROPERTY, PLANT AND EQUIPMENT, NET $ 54,609,772 $ 53,291,418
============ ============
</TABLE>
4. LONG-TERM OBLIGATIONS
Long-term obligations consist of the following (interest rates are as of
December 31, 1997):
<TABLE>
<CAPTION>
DECEMBER 31, 1997 JUNE 30, 1997
----------------- -------------
(UNAUDITED)
-----------------
<S> <C> <C>
Term notes with banks, 6.4% to 9.25% $19,994,306 $21,599,739
Industrial Revenue Bonds, 4.1% 9,000,000
Mortgage payable to bank, 9.35% 994,210 1,039,234
Second mortgage payable to bank, 7% 978,568 1,007,829
Revolving credit note with bank, 8% 6,148,401 6,782,853
Capital lease obligation 667,664
----------- -----------
TOTAL 37,115,485 31,097,319
Less current maturities 6,361,640 5,905,541
----------- -----------
LONG-TERM $30,753,845 $25,191,778
=========== ===========
</TABLE>
In December 1997, the Company issued Industrial Revenue Bonds totaling
$9 million through the Michigan Strategic Fund in order to partially
fund the construction of a new manufacturing facility in Marshall,
Michigan and to purchase certain new equipment for that facility.
Principal payments are due annually (amortizing over a 15-year period),
with variable interest payments due monthly. The interest rate on the
bonds resets weekly and was set at 4.1% per annum as of December 31,
1997. The net proceeds from this bond offering are included in Restricted Cash
and Equivalents.
7
<PAGE> 8
AUTOCAM CORPORATION & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
DECEMBER 31, 1997
5. INCOME TAXES
Income taxes were provided at effective rates of 36.1% and 35.8% for the
three and six months ended December 31, 1997 versus 34.9% for both
respective periods in fiscal 1997. These amounts include provisions for
California Unitary and South Carolina State income taxes.
6. SUBSEQUENT EVENT
Effective January 1, 1998, the Company purchased a 51% interest in the
business of Qualipart Industria E Comercio Ltda. ("Qualipart"), a
precision-machining manufacturer, headquartered in Pinhal-SP, Brazil,
for $10.2 million. Qualipart is a supplier of gasoline and diesel fuel
injector components to leading global automotive and heavy construction
original equipment manufacturers and their tier-one suppliers.
8
<PAGE> 9
AUTOCAM CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
DECEMBER 31, 1997
Certain matters discussed in the following pages include forward looking
statements which include risks and uncertainties including but not
limited to economic, competitive, governmental and technological factors
affecting Autocam Corporation and its wholly-owned subsidiaries'
(together, the "Company") operations, markets, products, services and
prices.
RESULTS OF OPERATIONS
The following table presents, for the periods indicated, the components
of the Company's Consolidated Statements of Operations as a percentage
of sales:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------- ------------------
1997 1996 1997 1996
--------- --------- -------- --------
<S> <C> <C> <C> <C>
Sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 75.6% 76.2% 77.8% 76.7%
----- ----- ----- -----
Gross profit 24.4% 23.8% 22.2% 23.3%
Selling, general and administrative 6.1% 5.9% 5.9% 5.7%
Other operating expenses .2% .3% .2% .4%
----- ----- ----- -----
Income from operations 18.1% 17.6% 16.1% 17.2%
Interest and other expense, net 3.0% 2.1% 3.2% 2.1%
----- ----- ----- -----
Income before tax provision 15.1% 15.5% 12.9% 15.1%
Tax provision 5.5% 5.4% 4.6% 5.3%
----- ----- ----- -----
NET INCOME 9.6% 10.1% 8.3% 9.8%
===== ===== ===== =====
</TABLE>
9
<PAGE> 10
AUTOCAM CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
DECEMBER 31, 1997
SALES
The following table indicates the Company's sales (in thousands) and
percentage of total sales by product application for the three and six
month periods ended December 31, 1997 and 1996:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED DECEMBER 31, FOR THE SIX MONTHS ENDED DECEMBER 31,
---------------------------------------------- ----------------------------------------------
1997 1996 1997 1996
---------------------- ---------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Transportation:
Fuel systems $12,610 57.9% $11,165 73.1% $22,781 58.1% $21,866 73.1%
Braking systems 4,035 18.5 1,606 10.5 8,078 20.6 3,320 11.1
Other 466 2.1 418 2.7 894 2.3 639 2.1
------- ------ ------- ----- ------- ------ ------- -----
Total transportation 17,111 78.5 13,189 86.3 31,753 81.0 25,825 86.3
Medical devices 2,453 11.3 1,665 10.9 4,323 11.0 3,293 11.0
Computer electronics 1,950 8.9 416 2.8 2,620 6.7 794 2.7
Other 281 1.3 528 1.3 6
</TABLE>
Sales of components for fuel system applications were $12,610,000 and
$22,781,000 for the three and six months ended December 31, 1997,
respectively, representing increases of 13% and 4% over sales of the
same respective periods in the prior year. The Company continues to
benefit from increasing demand from its fuel systems customers as their
new injector programs expand. Growth in the six month period was
hampered slightly by longer than expected model changeover shutdowns and
labor work stoppages at certain of the Company's largest customer's
facilities during the first quarter of fiscal 1998. Sales of fuel
systems components to its two largest customers in this area represented
47% of total Company sales during the three and six months ended
December 31, 1997.
Sales of braking system components for the three and six months ended
December 31, 1997 were $4,035,000 and $8,078,000, respectively. The
increases in sales of these components can be attributed almost entirely
to sales generated by facilities acquired as part of the Company's
purchase of The Hamilton Group ("Hamilton") on June 30, 1997.
Sales of medical device components were $2,453,000 and $4,323,000 for
the three and six months ended December 31, 1997, respectively,
representing increases of 47% and 31% as compared to the same respective
periods in the prior year. During the second half of fiscal 1997, the
Company began manufacturing precision-machined metal components for
innovative cardiovascular surgical device manufacturers, commonly known
as coronary stents. The sale of these components is the primary reason
for the sales increase between the periods presented.
Sales of components for computer electronic applications were $1,950,000
and $2,620,000 during the three and six months ended December 31, 1997,
respectively. The increases in sales of these components are
attributable to the production and sale of key components used in
computer microprocessor subassemblies during the first two quarters of
fiscal 1998. This new program began in July 1997.
10
<PAGE> 11
AUTOCAM CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
DECEMBER 31, 1997
SALES - CONCLUDED
Management believes that year-over-year sales growth in fiscal 1998 will
approximate 45%. Growth is expected to be generated primarily from
increasing sales of fuel and braking system and computer electronics
components. The January 1998 acquisition of a controlling interest in
Qualipart Industria E. Comercio Ltda. ("Qualipart"), a
precision-machining manufacturer, headquartered in Pinhal-SP, Brazil, is
expected to generate an additional $7 million, primarily in fuel systems
components sales to gasoline and diesel fuel injection customers in
Brazil and the United States. Braking system component sales increases
are expected to be driven by shipments of components from facilities
acquired in the Hamilton acquisition; such sales should approximate $13
million in fiscal 1998. Sales increases to the computer electronics
industry are expected to be generated by shipments of computer
microprocessor subassembly components. The Company expects sales of
these components to grow significantly over the next six months.
GROSS PROFIT
Gross profit for the three and six months ended December 31, 1997
represented 24.4% and 22.2% of sales, respectively, verses 23.8% and
23.3% for the same respective periods of fiscal 1997. The increase in
margins when comparing the three-month periods presented can be
attributed to increases in sales of higher margin medical device
components and better labor and equipment utilization due to growth in
demand for new fuel systems and computer electronics program components.
The decline in margins when comparing the six-month periods presented
can be attributed to larger than previously experienced declines in
orders from the Company's largest automotive customer due to seasonal
model changeover shutdowns and labor work stoppages at customer
facilities during the first quarter of fiscal 1998. Also during the
first quarter of fiscal 1998, the Company was in the midst of several
new program start-ups for fuel systems customers. Typically, margins
are lower in the early stages of a new program and improve as the
Company's continuous improvement methodology streamlines manufacturing
processes.
Management expects that fiscal 1998 gross profit, as a percentage of
sales, will continue to improve slightly over the remainder of the
fiscal year, as compared to the second quarter of fiscal 1998. The
Company believes that those trends that resulted in profit margin
improvement during the second quarter will continue for the balance of
the fiscal year. Management also believes that the integration of
Hamilton's and Qualipart's operations and the implementation of
continuous improvement concepts employed by Autocam are expected to
result in improved margins on products manufactured in those facilities.
11
<PAGE> 12
AUTOCAM CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
DECEMBER 31, 1997
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses, as a percentage of sales,
were 6.1% and 5.9% during the three and six months ended December 31,
1997, respectively, versus 5.9% and 5.7% for the same respective periods
in the prior year. These expenses increased monetarily and as a
percentage of sales due to the Hamilton acquisition. Management expects
selling, general and administrative expenses, as a percentage of sales,
to remain consistent with second quarter of 1998 levels for the balance
of fiscal 1998.
OTHER OPERATING EXPENSES
Other operating expenses represent the straight-line amortization of
employment and deferred compensation agreements between the Company and
a key employee.
INTEREST AND OTHER EXPENSE, NET
Net interest and other expense for the three and six months ended
December 31, 1997 was 3.0% and 3.2%, respectively, as compared to 2.1%
for the fiscal 1997 periods presented. This increase is due primarily
to an increase in average borrowings outstanding during the fiscal 1998
periods presented in order to finance the Hamilton acquisition.
Management anticipates that interest expense over the next six months
will increase monetarily over second quarter levels; however, as a
percentage of sales, interest expense should remain consistent with
second quarter levels. The Company borrowed $10.2 million on January
30, 1998 to finance the acquisition of Qualipart that will generate
interest expense during the last six months of fiscal 1998 of
approximately $425,000. As a percentage of sales, however, this
increase is expected to be offset by lower interest costs due to planned
debt reduction over the next six months.
TAX PROVISION
Income taxes were provided at effective rates of 36.1% and 35.8% for the
three and six months ended December 31, 1997 versus 34.9% for both
respective periods in fiscal 1997. These amounts include appropriate
provisions for California Unitary and South Carolina State income taxes.
Management expects the Company's effective tax rate to approximate 36%
for the remainder of fiscal 1998.
12
<PAGE> 13
AUTOCAM CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONCLUDED
DECEMBER 31, 1997
LIQUIDITY AND CAPITAL RESOURCES
New equipment placed into service and deposits paid on future equipment
purchases during the six months ended December 31, 1997 totaling $9.6
million were financed through operating cash flows, bank borrowings
($625,000) and operating lease agreements ($2.8 million).
In order to meet demand primarily from transportation and computer
electronics customers, management will purchase $9.1 million of
equipment and invest $1.6 million in facilities over the next six months
(on which deposits of $3.3 million had been placed as of December 31,
1997). Management expects to finance these purchases with cash on hand
(generated from the issuance of Industrial Revenue Bonds), operating
cash flows, operating leases, and/or bank borrowings, including its
equipment line of credit ($5,375,000 in availability as of December 31,
1997) which allows the Company to retire borrowings over a period not to
exceed six years with either variable or fixed interest rates. On
December 23, 1997, the Company issued Industrial Revenue Bonds totaling
$9 million through the Michigan Strategic Fund in order to partially
fund the construction of a new manufacturing facility in Marshall,
Michigan and to purchase new equipment for that facility. Principal
payments are due annually (amortizing over a 15-year period), with
variable interest payments due monthly. The interest rate on the bonds
resets weekly and was set at 4.1% per annum as of December 31, 1997.
The January 1998 Qualipart acquisition (now Autocam do Brasil) was
financed through bank borrowings and a note to the seller of $5.2
million and $5 million, respectively. The funds used to complete the
acquisition were obtained through an acquisition term note with the
Company's primary lending institution and will be paid in 60 equal
monthly principal installments, plus interest at 7.1% per annum. The
note to the seller bears interest at 12% per annum to be paid annually.
Annual principal obligations under the note are required to begin in
2003, but may be prepaid through a capital contribution made directly to
Autocam do Brasil.
Management believes that the Company has adequate credit facilities and
cash available to meet its working capital needs through fiscal 1998.
As of December 31, 1997, the Company had $4,950,000 in availability
under its revolving line of credit. Management anticipates retiring
current maturities of long-term obligations with future operating cash
flows. As of December 31, 1997, $15.1 million of the Company's
long-term debt was subject to variable interest rates.
13
<PAGE> 14
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 thereunto duly authorized.
Date: February 6, 1998
Autocam Corporation
/s/ John C. Kennedy
------------------------
John C. Kennedy
Principal Executive Officer
/s/ Warren A. Veltman
------------------------
Warren A. Veltman
Principal Financial and
Accounting Officer
14
<PAGE> 15
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 266,424
<SECURITIES> 0
<RECEIVABLES> 10,531,516
<ALLOWANCES> 0
<INVENTORY> 4,999,843
<CURRENT-ASSETS> 16,968,585
<PP&E> 75,269,240
<DEPRECIATION> 20,659,468
<TOTAL-ASSETS> 96,020,595
<CURRENT-LIABILITIES> 16,368,374
<BONDS> 30,753,845
0
0
<COMMON> 30,986,518
<OTHER-SE> 8,917,472
<TOTAL-LIABILITY-AND-EQUITY> 96,020,595
<SALES> 39,223,953
<TOTAL-REVENUES> 39,223,953
<CGS> 30,499,977
<TOTAL-COSTS> 30,499,977
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,215,329
<INCOME-PRETAX> 5,045,192
<INCOME-TAX> 1,805,700
<INCOME-CONTINUING> 3,239,492
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,239,492
<EPS-PRIMARY> .54
<EPS-DILUTED> .52
</TABLE>
