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 January 2, 2000
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 0-20686
UNIROYAL TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 65-0341868
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2 N. Tamiami Trail, Suite 900
Sarasota, FL 34236
(Address of principal executive offices) (Zip Code)
(941) 361-2100
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
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 .
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock as of the
latest practicable date.
Total number of shares of outstanding stock as of January 30, 2000
Common stock 12,371,820
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements
<TABLE>
<CAPTION>
UNIROYAL TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
ASSETS
January 2, September 26,
2000 1999
----------- -------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 128 $ 4,145
Trade accounts receivable (less estimated reserve for
doubtful accounts of $82 and $88, respectively) 3,740 4,808
Inventories (Note 2) 9,782 8,599
Deferred income taxes 2,306 2,779
Prepaid expenses and current assets 4,184 1,413
----------- -----------
Total current assets 20,140 21,744
Property, plant and equipment - net 46,195 45,304
Property, plant and equipment held for sale 4,217 4,217
Investment in preferred stock (Note 3) - 5,383
Note receivable 5,000 5,000
Goodwill - net 1,296 1,311
Deferred income taxes - net 16,680 15,350
Other assets - net 10,191 10,147
----------- -----------
TOTAL ASSETS $ 103,719 $ 108,456
=========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UNIROYAL TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
(In thousands, except share data)
LIABILITIES AND STOCKHOLDERS' EQUITY
January 2, September 26,
2000 1999
----------- -------------
<S> <C> <C>
Current liabilities:
Current portion of long-term debt $ 5,086 $ 5,282
Trade accounts payable 10,727 9,688
Net liabilities of discontinued operations (Note 5) 6,289 9,880
Accrued expenses:
Compensation and benefits 6,090 7,326
Interest 182 222
Taxes, other than income 408 388
Other 1,039 1,055
----------- -----------
Total current liabilities 29,821 33,841
Long-term debt, net of current portion 24,016 24,369
Other liabilities 15,329 15,288
----------- -----------
Total liabilities 69,166 73,498
----------- -----------
Commitments and contingencies (Note 7)
Minority interest 2,411 3,825
Stockholders' equity (Note 6):
Preferred stock:
Series C - 0 shares issued and outstanding; par value $0.01;
450 shares authorized - -
Common stock:
14,970,365 and 14,681,419 shares issued or to be issued,
respectively; par value $0.01; 35,000,000 shares authorized 150 147
Additional paid-in capital 58,597 57,671
Unrealized gain on securities available for sale - net - 100
Deficit (3,692) (6,112)
----------- -----------
55,055 51,806
Less treasury stock at cost - 2,847,183 and 2,671,987 shares,
respectively (22,913) (20,673)
----------- -----------
Total stockholders' equity 32,142 31,133
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 103,719 $ 108,456
=========== ===========
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UNIROYAL TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended
------------------------------------------
January 2, December 27,
2000 1998
------------ ------------
<S> <C> <C>
Net sales $ 15,195 $ 18,126
Costs and expenses:
Costs of goods sold 11,414 14,845
Selling and administrative (Note 9) 7,380 3,046
Depreciation and other amortization 1,004 810
Gain on sale of preferred stock (Note 3) (2,905) -
------------ ------------
Loss before interest, income taxes and minority
interest (1,698) (575)
Interest expense - net (314) (113)
------------ ------------
Loss before income taxes and minority interest (2,012) (688)
Income tax benefit (Note 4) 1,671 423
------------ ------------
Loss before minority interest (341) (265)
Minority interest in losses of consolidated subsidiary 1,414 229
------------ ------------
Income (loss) from continuing operations 1,073 (36)
Income from discontinued operations, net of income
tax expense of $1,216 and $517, respectively (Note 5) 1,347 55
------------ ------------
Net income $ 2,420 $ 19
============ ============
Net income per common share - basic (Note 8)
- --------------------------------------------
Income from continuing operations $ 0.09 $ -
Income from discontinued operations 0.11 -
------------ ------------
Net income $ 0.20 $ -
============ ============
Net income per common share - assuming dilution (Note 8)
- --------------------------------------------------------
Income from continuing operations $ 0.08 $ -
Income from discontinued operations 0.10 -
------------ ------------
Net income $ 0.18 $ -
============ ============
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UNIROYAL TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(In thousands)
Three Months Ended
-------------------------------------------
January 2, December 27,
2000 1998
------------ ------------
<S> <C> <C>
Net income $ 2,420 $ 19
Unrealized gain on securities available for sale
(net of income taxes of $1,003) - 1,568
Reclassification adjustment for gains realized in
net income (100) -
------------ ------------
Comprehensive income $ 2,320 $ 1,587
============ ============
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UNIROYAL TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Three Months Ended
--------------------------------------
January 2, December 27,
2000 1998
------------ ------------
OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 2,420 $ 19
Deduct income from discontinued operations (1,347) (55)
------------ ------------
Income (loss) from continuing operations 1,073 (36)
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 1,004 810
Deferred tax (benefit) provision (879) 65
Minority interest in net losses of consolidated joint venture (1,414) (229)
Gain on sale of preferred stock (2,905) -
Other 18 13
Changes in assets and liabilities:
Decrease in trade accounts receivable 1,068 5,619
(Increase) decrease in inventories (1,183) 689
Increase in prepaid expenses and other assets (2,796) (446)
Increase (decrease) in trade accounts payable 1,039 (2,416)
Decrease in accrued expenses (1,272) (1,807)
Increase in other liabilities 41 144
------------ ------------
Net cash (used in) provided by continuing operations (6,206) 2,406
Net cash provided by discontinued operations 347 3,487
------------ ------------
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (6,289) (6,008)
Purchase of preferred stock - (9,000)
Proceeds from sale of preferred stock 8,125 -
------------ ------------
Net cash provided by (used in) investing activities 1,836 (15,008)
------------ ------------
FINANCING ACTIVITIES (Note 10):
Repayment of term loans (4,225) (30)
Proceeds from term loan - 785
Net increase in revolving loan balances 5,542 3,440
Investment by joint venture partner - 5,000
Stock options exercised 49 182
Purchases of treasury stock (1,360) (4,282)
------------ ------------
Net cash provided by financing activities 6 5,095
------------ ------------
Net decrease in cash (4,017) (4,020)
Cash and cash equivalents at beginning of period 4,145 4,099
------------ ------------
Cash and cash equivalents at end of period $ 128 $ 79
============ ============
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
UNIROYAL TECHNOLOGY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Three Months Ended
January 2, 2000 and December 27, 1998
1. BASIS OF PRESENTATION
The interim Condensed Consolidated Financial Statements relate to
Uniroyal Technology Corporation and its wholly-owned subsidiaries
Uniroyal HPP Holdings, Inc., Uniroyal Engineered Products, Inc.,
Uniroyal Optoelectronics, Inc., Unitech NJ, Inc. and its majority owned
subsidiary, Uniroyal Liability Management Company (the "Company").
Uniroyal HPP Holdings, Inc. includes its wholly-owned subsidiary, High
Performance Plastics, Inc. ("HPPI"). Uniroyal Optoelectronics, Inc.
includes its majority-owned joint venture, Uniroyal Optoelectronics,
LLC. Uniroyal Liability Management Company includes its wholly-owned
subsidiary, BayPlas2, Inc. The interim Condensed Consolidated Financial
Statements of the Company are unaudited and should be read in
conjunction with the Company's audited financial statements and notes
thereto for the fiscal years ended September 26, 1999, September 27,
1998 and September 28, 1997.
The Company's fiscal year ends on the Sunday following the last Friday
in September. As a result, Fiscal 2000 will end on October 1, 2000 and
encompass a 53-week period as compared to Fiscal 1999 which ended on
September 26, 1999 and encompassed a 52-week period. The additional
week in Fiscal 2000 occurred in the first quarter ended January 2,
2000. Therefore, the three-month period ended January 2, 2000
encompassed 14 weeks of operations compared to 13 weeks of operations
for the three-month period ended December 27, 1998.
Certain reclassifications were made to the prior year financial
statements to conform to current period presentations. In the opinion
of the Company, all adjustments necessary for a fair presentation of
such interim Condensed Consolidated Financial Statements have been
included. Such adjustments consist only of normal recurring items.
Interim results are not necessarily indicative of results for a full
year. The interim Condensed Consolidated Financial Statements and notes
thereto are presented as permitted by the Securities and Exchange
Commission and do not contain certain information included in the
Company's annual Financial Statements and notes thereto.
2. INVENTORIES
<TABLE>
<CAPTION>
January 2, September 26,
2000 1999
------------ -------------
<S> <C> <C>
Raw materials, work in process
and supplies $ 4,023 $ 4,275
Finished goods 5,759 4,324
------------ ------------
Total $ 9,782 $ 8,599
============ ============
</TABLE>
3. INVESTMENT IN PREFERRED STOCK
During the three months ended January 2, 2000, the Company converted
the remaining 372,857 shares of its Emcore Corporation ("Emcore")
preferred stock into 372,857 shares of Emcore common stock. The common
stock was then sold in the open market for approximately $8,125,000.
This resulted in a gain of approximately $2,905,000, net of certain
transaction costs.
4. INCOME TAXES
The provisions for income tax benefit for the three months ended
January 2, 2000 and December 27, 1998 were calculated through the use
of the estimated annual income tax rates based on projected annualized
income. During the three months ended January 2, 2000, the Company
reduced the deferred tax valuation allowance relating to capital loss
carryforwards and recognized a tax benefit of $1,293,000. The capital
losses were used to offset capital gains which resulted from the sale
of the Emcore stock (Note 3).
5. DISCONTINUED OPERATIONS
On December 24, 1999, the Company entered into a definitive agreement
to sell certain net assets of its High Performance Plastics segment for
$217,500,000 in cash. Subject to certain regulatory approvals, the
Company anticipates that the sale will close in late February and will
result in a substantial gain.
<PAGE>
Net liabilities of the discontinued operations have been segregated on
the January 2, 2000 and September 26, 1999 balance sheets, the
components of which are as follows:
<TABLE>
<CAPTION>
January 2, September 26,
Net Liabilities of Discontinued Operations 2000 1999
------------------------------------------ ------------ -------------
Assets:
<S> <C> <C>
Cash $ 13 $ 37
Receivables 16,345 18,261
Inventories 30,169 30,028
Deferred income taxes 1,672 2,030
Prepaid and other assets 2,284 1,712
Property, plant and equipment - net 46,715 43,599
Intangibles and other assets 14,770 15,400
------------ ------------
Total assets 111,968 111,067
------------ ------------
Liabilities:
Current portion of long-term debt 7,141 8,805
Trade payables 11,983 13,323
Other accrued expenses 4,567 7,429
Long-term debt, net of current portion 88,082 84,552
Deferred income taxes 6,078 6,322
Other liabilities 406 516
------------ ------------
Total liabilities 118,257 120,947
------------ ------------
Net liabilities of discontinued operations $ 6,289 $ 9,880
============ ============
</TABLE>
The results of operations for all periods presented have been restated
for discontinued operations. The operating results of discontinued
operations are as follows:
<TABLE>
<CAPTION>
For the Three Months Ended
-----------------------------------
January 2, December 27,
Income from Discontinued Operations 2000 1998
----------------------------------- ------------ -------------
<S> <C> <C>
Net sales $ 33,743 $ 30,963
Costs of goods sold 24,787 22,946
Selling and administrative 2,745 3,875
Depreciation and other amortization 1,476 1,407
------------ -------------
Income before interest expense and income taxes 4,735 2,735
Interest expense (2,172) (2,163)
------------ -------------
Income before taxes 2,563 572
Tax expense (1,216) (517)
------------ -------------
Net income from discontinued operations $ 1,347 $ 55
============ =============
</TABLE>
6. STOCKHOLDERS' EQUITY
During the quarter ended January 2, 2000, the Company repurchased
126,000 shares of its common stock in the open market for approximately
$1,198,000.
During the quarter ended January 2, 2000, the Company repurchased
11,374 shares of its common stock from the Uniroyal Technology
Corporation Employee Stock Ownership Plan for approximately $162,000.
During the quarter ended January 2, 2000, the Company received 37,822
shares of its common stock in lieu of cash for the exercise of stock
options from officers and employees of the Company. These shares were
valued at approximately $880,000 (which was calculated based upon the
closing market value of the stock on the day prior to the exercise
dates) and are included as treasury shares as of January 2, 2000.
7. COMMITMENTS AND CONTINGENCIES
Litigation
The Company is engaged in litigation arising from the ordinary course
of business. Management believes the ultimate outcome of such
litigation will not have a material adverse effect upon the Company's
results of operations, cash flows or financial position.
<PAGE>
Environmental Factors
The Company is subject to a wide range of federal, state and local laws
and regulations designed to protect the environment and worker health
and safety. The Company's management emphasizes compliance with these
laws and regulations. The Company has instituted programs to provide
guidance and training and to audit compliance with environmental laws
and regulations at Company owned or leased facilities. The Company's
policy is to accrue environmental and cleanup-related costs of a
non-capital nature when it is probable both that a liability has been
incurred and that the amount can be reasonably estimated.
Based on information available as of January 2, 2000, the Company
believes that the costs of known environmental matters either have been
adequately provided for or are unlikely to have a material adverse
effect on the Company's operations, cash flows or financial position.
8. INCOME PER COMMON SHARE
The reconciliation of the numerators and denominators of the basic and
diluted earnings per share computation for the three months ended
January 2, 2000 is as follows:
<TABLE>
<CAPTION>
Three Months Ended
January 2, 2000
--------------------------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
<S> <C> <C> <C>
Income from continuing
operations $ 1,073
Basic EPS
Income available to
common stockholders $ 1,073 11,929,316 $ 0.09
=========
Effect of Dilutive Securities
Stock options 1,238,905
Warrants 371,887
----------
Diluted EPS
Income available to
common stockholders $ 1,073 13,540,108 $ 0.08
========= ========== =========
</TABLE>
For the three months ended December 27, 1998, the weighted average
number of common shares outstanding for the calculation of basic and
diluted earnings per share was 12,508,998. Inclusion of warrants to
purchase 583,150 shares of common stock at $4.375 per share and
additional stock options to purchase 1,727,564 shares of common stock
at various prices in the calculation of diluted earning per share would
have been antidilutive.
9. JOINT VENTURE
During the three months ended January 2, 2000, the Optoelectronics
segment recorded sales of approximately $614,000. The sales were a
result of product supplied by the joint venture partner, Emcore
Corporation. There were no sales by the Optoelectronics segment during
the three months ended December 27, 1998.
During the three months ended January 2, 2000 and December 27, 1998,
approximately $2,788,000 and $449,000, respectively, of joint venture
start-up costs are included in selling and administrative costs.
10. STATEMENTS OF CASH FLOWS
Supplemental disclosures of cash flow information are as follows:
Payments for income taxes and interest expense were (in thousands):
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------------
January 2, December 27,
2000 1998
---------- ------------
<S> <C> <C>
Interest payments (net of capitalized
interest) $ 3,411 $ 859
Income tax payments 190 479
</TABLE>
<PAGE>
11. SEGMENT INFORMATION
Segment information for the three months ended January 2, 2000 and
December 27, 1998 is as follows:
<TABLE>
<CAPTION>
For the Three Months Ended
--------------------------------------
January 2, December 27,
2000 1998
------------ -------------
<S> <C> <C>
Net Sales:
Coated Fabrics $ 8,705 $ 12,797
Specialty Adhesives 5,876 5,329
Optoelectronics 614 -
------------ ------------
Total $ 15,195 $ 18,126
============ ============
Operating Income (Loss):
Coated Fabrics $ 575 $ 778
Specialty Adhesives 341 177
Optoelectronics (2,929) (593)
Corporate 315 (937)
------------ ------------
Total $ (1,698) $ (575)
============ ============
Segment information as of January 2, 2000 and September 26, 1999 is as
follows:
January 2, September 26,
2000 1999
------------ ------------
Identifiable Assets:
Coated Fabrics $ 23,846 $ 23,547
Specialty Adhesives 14,930 15,972
Optoelectronics 23,359 22,474
Corporate 41,584 46,463
------------ ------------
Total $ 103,719 $ 108,456
============ ============
</TABLE>
<PAGE>
ITEM 2. Management's Discussion and Analysis Of Financial Condition and Results
of Operations
First Quarter Fiscal 2000 Compared with
the First Quarter Fiscal 1999
Net Sales. The Company's net sales from continuing operations decreased in the
first quarter of Fiscal 2000 by approximately 16% to $15,195,000 from
$18,126,000 in the first quarter of Fiscal 1999. The decrease is primarily
attributable to the Fiscal 1998 sale of the Coated Fabrics Segment's automotive
operations and the gradual phase-out of those operations. Excluding automotive
sales from both periods, sales from continuing operations increased 24% in the
first quarter of Fiscal 2000 compared to the first quarter of Fiscal 1999. The
comparison of net sales quarter to quarter is affected by the first quarter of
Fiscal 2000 containing 14 weeks as compared to 13 weeks for the first quarter of
Fiscal 1999.
Net sales by the Coated Fabrics Segment decreased in the first quarter of Fiscal
2000 approximately 32% to $8,705,000 from $12,797,000 in the first quarter of
Fiscal 1999. The decrease was principally due to the sale in Fiscal 1998 of the
Coated Fabrics Segment's automotive operations and the gradual phase-out of the
automotive operations. Automotive sales approximated $498,000 in the first
quarter of Fiscal 2000 compared to $6,257,000 in the first quarter of Fiscal
1999. Excluding the automotive sales from both periods, net sales by the Coated
Fabrics Segment increased approximately 25% as a result of an increase in volume
and selling prices for Naugahyde(R) vinyl coated fabrics.
Net sales by the Specialty Adhesives Segment increased in the first quarter of
Fiscal 2000 by approximately 10% to $5,876,000 from $5,329,000 in the first
quarter of Fiscal 1999. This increase is attributable to an increase in tolling
revenues as well as an increase in industrial adhesives sales.
Net sales by the Optoelectronics Segment were $614,000 in the first quarter of
Fiscal 2000. The Segment is in the development stage. Inventory was provided to
the Segment under a supply agreement with the Segment's joint venture partner.
The Segment did not have sales during the first quarter of Fiscal 1999.
Loss Before Interest, Income Taxes and Minority Interest. Loss before interest,
income taxes and minority interest for the first quarter of Fiscal 2000 was
$1,698,000, compared to a loss of $575,000 for the first quarter of Fiscal 1999.
The increase in the loss is attributable to start-up losses for the
Optoelectronics Segment and a loss of revenues associated with the gradual
phase-out of the automotive operations of the Coated Fabrics Segment. The loss
in Fiscal 2000 was partially offset by the gain on the sale of the preferred
stock of Emcore Corporation.
The Coated Fabrics Segment had income before interest, income taxes and minority
interest in the first quarter of Fiscal 2000 of $575,000 versus income of
$778,000 in the first quarter of Fiscal 1999. The decrease was primarily due to
the phase-out of the sales of the automotive business and certain incremental
costs related to the closure of the Port Clinton, Ohio facility used to produce
automotive products.
The Specialty Adhesives Segment had income before interest, income taxes and
minority interest in the first quarter of Fiscal 2000 of $341,000 compared to
income of $177,000 in the first quarter of Fiscal 1999. The increase is
attributable to an increase in sales of higher margin industrial products.
The Optoelectronics Segment incurred a loss before interest, income taxes and
minority interest of $2,929,000 in the first quarter of Fiscal 2000 compared to
a loss of $593,000 in the first quarter of Fiscal 1999. The losses related to
start-up costs of the Segment which have increased as the Segment gets closer to
the commencement of commercial operations.
Approximately $315,000 of other income incurred in the first quarter of Fiscal
2000 compared to $937,000 of other expenses in the first quarter of Fiscal 1999
were not allocated to any segment of the Company's business. Included in other
non-allocated income in the first quarter of Fiscal 2000 is a gain of
approximately $2,905,000 realized upon the sale of the investment in the
preferred stock of Emcore Corporation. Also during the first quarter of 2000
there were no corporate allocations to the discontinued operations of the High
Performance Plastics Segment. Prior year first quarter allocations of corporate
overhead to the High Performance Plastics Segment approximated $1,098,000.
Net income from discontinued operations of the High Performance Plastics Segment
increased to $1,347,000 in the first quarter of Fiscal 2000 compared to $55,000
in the first quarter of Fiscal 1999. The increase is attributable to the net
effect of: an increase in sales as a result of a stronger performance by the
Royalite product group; incremental sales resulting from the acquisition of
Happel Marine, Inc. in June of 1999; the suspension of a corporate allocation to
the Segment in the first quarter of Fiscal 2000; and offset by production
inefficiencies at the Polycast Stamford, Connecticut facility due to a major
plant modernization.
Interest Expense. Interest expense in the first quarter of Fiscal 2000 increased
to $314,000 from $113,000 in the first quarter of Fiscal 1999. There was an
increase in debt relating to capitalized lease obligations incurred to finance
construction and the purchase of machinery and equipment at the Optoelectronics
Segment. The increase in interest expense was partially offset by the
capitalization of approximately $287,000 of interest costs in the first quarter
of Fiscal 2000, in connection with the completion of the Optoelectronics
facility in Tampa, Florida.
Income Tax Benefit. Income tax benefit in the first quarter of Fiscal 2000 was
$1,671,000 compared to a $423,000 benefit in the first quarter of Fiscal 1999.
The provisions for income tax benefit were calculated through the use of the
estimated income tax rates based on annualized income. The first quarter of
Fiscal 2000 benefited from the reversal of a portion of the deferred tax
valuation allowance related to capital loss carryforwards. The reversal was due
to the use of the capital losses to offset the capital gains resulting from the
sale of the preferred stock of Emcore Corporation.
Liquidity and Capital Resources
For the first quarter of Fiscal 2000, continuing operations used $6,206,000 of
cash as compared to $2,406,000 provided by continuing operations during the
first quarter of Fiscal 1999. The increase in cash used by continuing operations
for the first quarter of Fiscal 2000 resulted primarily from a smaller decrease
in trade accounts receivable (the prior year benefited from collections related
to the automotive operations of the Coated Fabrics Segment), an increase in
inventories primarily at the Coated Fabrics Segment as part of a strategy to
further increase Naugahyde(R) sales, an increase in start-up costs for the
Optoelectronics Segment and an increase in other current assets due to the
timing of cash receipts from the sale of the Emcore Corporation preferred stock.
Net cash provided by investing activities for the first quarter of Fiscal 2000
was $1,836,000 as compared to $15,008,000 used in investing activities during
the first quarter of Fiscal 1999. During the first quarter of Fiscal 2000, the
purchase of machinery and equipment primarily related to the new Optoelectronics
production facility in Tampa, Florida and the modernization of the Polycast
production facility in Stamford, Connecticut. The purchases of machinery and
equipment in the first quarter of Fiscal 2000 were more than offset by the sale
of the remaining Emcore Corporation preferred stock.
Net cash provided by financing activities during the first quarter of Fiscal
2000 was $6,000 as compared to $5,095,000 of cash provided during the first
quarter of Fiscal 1999. Borrowings under the Company's revolving line of credit
facilities provided the principal source of cash during the first quarter of
Fiscal 2000 and Fiscal 1999. The borrowings in the first quarter of Fiscal 2000
were primarily used to repay term loans and to purchase Company stock in the
open market. Borrowings in the first quarter of Fiscal 1999 were used primarily
to repurchase Company stock in the open market. In the first quarter of Fiscal
1999, cash was also provided by a capital contribution to the Optoelectronics
Segment by the joint venture partner.
On January 2, 2000, the Company had approximately $128,000 in cash and cash
equivalents as compared to approximately $4,145,000 at September 26, 1999.
Working capital at January 2, 2000 was ($9,681,000) compared to ($12,097,000) at
September 26, 1999. On January 2, 2000, the Company had outstanding borrowings
of $7,232,000 under its $10,000,000 revolving credit facility with the CIT
Group/Business Credit, Inc. (subject to a borrowing base limitation of
approximately $8,492,000 at January 2, 2000). The principal uses of cash during
the first quarter of Fiscal 2000 were to repurchase Company stock for treasury
and to fund capital expenditures and operating losses for the new
Optoelectronics facility in Tampa, Florida. The Company plans to spend an
additional $10.0 - $15.0 million on capital expenditures for the Optoelectronics
Segment. The Company is also obligated to fund a capital contribution of
$5,700,000 as cash is required by the Optoelectronics Segment. The Company plans
to fund these expenditures with the proceeds from the sale of the High
Performance Plastics Segment. The Company believes that cash from its
operations, its ability to borrow under the revolving credit facility mentioned
above and proceeds from the anticipated sale of the High Performance Plastics
Segment will provide sufficient liquidity to finance its existing level of
operations and meet its debt service obligations. However, there can be no
assurance that the Company's operations together with amounts available under
the revolving credit facilities will continue to be sufficient to finance its
existing level of operations and meet its debt service obligations if the sale
of the High Performance Plastics Segment is not consummated. The Company's
ability to meet its debt service and other obligations depends on its future
performance, which in turn, is subject to general economic conditions and to
financial, business and other factors, including factors beyond the Company's
control. If the Company is unable to generate sufficient cash flow from
operations, it may be required to refinance all or a portion of its existing
debt or obtain additional financing. There can be no assurance that the Company
will be able to obtain such refinancing or additional financing.
Effects of Inflation
The markets in which the Company sells products are competitive. Thus, in an
inflationary environment the Company may not in all instances be able to pass
through to consumers general price increases; certain of the Company's
operations may be materially impacted if such conditions were to occur. The
Company has not in the past been adversely impacted by general price inflation.
Year 2000
Many software applications and operational programs written in the past were not
designed to recognize calendar dates beginning in the Year 2000. The failure of
such applications or systems to properly recognize the dates beginning in the
Year 2000 could result in miscalculations or system failures which could result
in an adverse impact on the Company's operations.
The Company instituted a Year 2000 task force that reports to the Audit
Committee of the Board of Directors. The Company also initiated a comprehensive
project, overseen by the task force, to prepare its computer systems,
communication systems and manufacturing/testing equipment for the Year 2000. The
project primarily included three phases: 1) identification and assessment of all
software, hardware and equipment that could potentially be affected by the Year
2000 issue, 2) remedial action necessary to bring such systems into compliance
and 3) further testing, if necessary. The Company completed all phases of its
project. The Company primarily used internal resources in its Year 2000 project
and incurred costs of less than $800,000.
The Company also contacted critical suppliers of products and services and
customers to determine the extent to which the Company might be vulnerable to
such parties' failure to resolve their own Year 2000 issues. The Company does
not have a concentration of dependence on these parties. The effect, if any, on
the Company's results of operations from the failure of such parties to be Year
2000 ready is not reasonably estimable.
The Company formulated contingency plans with respect to its reasonably likely
worst case scenario which is the unavailability of critical raw materials. The
contingency plans for critical raw materials include alternate materials or
sources and advance inventory purchases of certain raw materials.
As of the date of this report, the Company did not experience any significant
disruptions in any of its systems on January 1, 2000, nor has any supplier or
customer of the Company made us aware of any significant disruptions. The
Company will continue to monitor this issue through the remainder of the
calendar year.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
Market Risks
The Company is exposed to various market risks, including changes in interest
rates. The Company's earnings and cash flows are subject to fluctuations due to
changes in interest rates on its floating rate long-term debt and revolving
credit advances. The Company's risk management policy includes the use of
derivative financial instruments (interest rate swaps) to manage its interest
rate exposure. The counter parties are major financial institutions. The Company
does not enter into derivatives or other financial instruments for trading or
speculative purposes.
The Company's interest rate swaps involve the exchange of fixed and variable
interest rate payments without exchanging the notional principal amount.
Payments or receipts on the agreements are recorded as adjustments to interest
expense. At January 2, 2000, the Company had outstanding swap agreements,
maturing at various dates through 2003, with an aggregate notional amount of
$80.0 million. Under these agreements the Company receives a floating rate based
on USD-LIBOR-BBA and pays a fixed weighted average interest rate of 5.80%. These
swaps effectively change the Company's payment of interest on $80.0 million of
its $101.7 million variable rate debt (the majority of which is included in net
liabilities of discontinued operations) at January 2, 2000 to fixed rate debt.
The fair value of these interest rate swap agreements represents the estimated
receipts or payments that would be made to terminate the agreements. At January
2, 2000, the Company would have received approximately $1.0 million to terminate
the agreements. A decrease of 100 basis points in the yield curve would result
in an amount paid to terminate the agreements of approximately $328,000. The
fair value is based on dealer quotes, considering current interest rates.
At January 2, 2000, approximately $21.7 million of the Company's floating rate
long-term debt and revolving credit advances was not covered under an interest
swap agreement. For floating rate debt, interest changes generally do not affect
the fair market value but do impact future earnings and cash flows assuming
other factors are held constant. Based upon this balance, a change of one
percent in the interest rate would cause a change in interest expense of
approximately $217,000 on an annual basis.
Forward Looking Information
The information provided herein may include forward-looking statements relating
to future events, such as the development of processes, the commencement of
production, or the future financial performance of the Company. Actual operating
results may differ from such projections and are subject to certain risks,
including, without limitation, risks arising from: increased competition, delays
in developing and commercializing new products and labor actions against the
Company or the Company's customers or vendors.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
(a) The Company knows of no pending legal proceedings to which the
Company or any of its subsidiaries is a party or of which any of
their property is the subject other than routine litigation
incidental to the Company's business, an adverse outcome of which
would not be expected to have a material impact on the Company.
(b) No legal proceedings were terminated during the three months
ended January 2, 2000, other than routine litigation incidental
to the Company's business.
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
(a) Exhibits
Uniroyal Technology Corporation Amended and Restated Long Term
Growth Plan.
(b) Reports on Form 8-K
Report on Form 8-K dated December 24, 1999 related to the sale of
the High Performance Plastics Segment to Spartech Corporation.
<PAGE>
SIGNATURE
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.
DATE: February 11, 2000 By:/s/ George J. Zulanas, Jr.
----------------- --------------------------
George J. Zulanas, Jr.
Vice President, Treasurer
and Chief Financial Officer
UNIROYAL TECHNOLOGY CORPORATION
AMENDED AND RESTATED
LONG TERM GROWTH PLAN
Article I
Establishment of Plan
Uniroyal Technology Corporation adopts this amended and restated unfunded
supplemental executive retirement plan effective as of October 1, 1998, to be
known as the Uniroyal Technology Corporation Amended and Restated Long Term
Growth Plan, hereinafter referred to as the "Plan."
Article II
Definitions
As used within this document, the following words and phrases have the
meanings described in this Article II unless a different meaning is required by
the context. Some of the words and phrases used in the Plan are not defined in
this Article II, but for convenience, are defined as they are introduced into
the text. Words in the masculine gender shall be deemed to include the feminine
gender. Any headings used are included for ease of reference only, and are not
to be construed so as to alter any of the terms of the Plan.
2.1 "Beneficiary" means an individual or entity designated by a Participant
in accordance with Section 11.6.
2.2 "Board" or "Board of Directors" means the Board of Directors of the
Corporation.
2.3 "Code" means the Internal Revenue Code of 1986. Reference to a section
of the Code shall include that section and any comparable section or
sections of any future legislation that amends, supplements or
supersedes such section.
2.4 "Corporation" or "Company" means Uniroyal Technology Corporation.
2.5 "Early Retirement" shall mean a participant ceasing to be an employee
after his attainment of both age 55 and 10 years of service.
2.6 "Effective Date" means October 1, 1998.
2.7 "IRS" means the Internal Revenue Service.
2.8 "Normal Retirement" and "Normal Retirement Date" means the first day of
the month coincident with or next following attainment of age 65 and
the completion of ten (10) Years of Service for Participants elected
for participation during the Plan's first year, as specified in Article
III, Section 3.1. Future Participants must attain age 65 and complete
ten (10) Years of Participation for full benefit.
2.9 "Participant" means any individual who becomes eligible to participate
in the Plan pursuant to Article III.
2.10 "Plan" means the Uniroyal Technology Corporation Long Term Growth
Plan.
2.11 "Plan Administrator" The Plan, unless otherwise provided in the
Uniroyal Technology Corporation Long Term Growth Plan, shall be
administered by the Vice President of Human Resources and
Administration subject to the overview of the President and Chairman of
the Corporation. The decision of the President and Chairman on any
matter arising under the Plan shall be final, conclusive and binding on
all parties.
2.12 "Plan Year" means the period beginning October 1 and ending on
September 30.
2.13 "President" and "Chairman" mean the President and the Chairman of the
Board of the Corporation, respectively.
2.14 "Year of Employment" or "Year of Service" shall mean completed years
of employment with Uniroyal Technology Corporation.
2.15 "Years of Participation" means each full Plan Year during which a
Participant is enrolled in the Plan, including Years of Employment
prior to the Effective Date for those initial employees who are
eligible for participation as of the Effective Date, as specified in
Article III, Section 3.1.
<PAGE>
Article III
Eligibility
3.1 The initial participants in this Plan are the following: Howard R.
Curd, Robert L. Soran, George J. Zulanas, Jr., Oliver J. Janney, Martin
J. Gutfreund, Gary M. Hess, Lawrence E. Bressler, and James T. Elgin.
From time to time, additional key employees of the Corporation or a
subsidiary or division thereof, may be selected by the Board of
Directors of the Corporation for participation in the initial Plan.
3.2 This Plan is intended to qualify as a plan maintained by the
Corporation primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated
employees. It is the intention of the Corporation and Participants that
this Plan be unfunded for tax purposes and for purposes of Title 1 of
ERISA.
Article IV
Retirement, Death and Disability Benefits
4.1 Participants who have reached Normal Retirement will receive ten (10)
years of Plan benefits. The benefit amount will be set forth in the
Enrollment Agreement, signed by the Vice President of Human Resources
and the Participant.
4.2 If the Participant dies while employed by the Corporation, there will
be no benefit payable from this Plan.
4.3 If the Participant suffers a Disability while employed by the
Corporation, there will be no benefit payable from this Plan.
<PAGE>
Article V
Vesting
5.1 A Participant's benefit shall be one hundred percent (100%) vested or
nonforfeitable when the Participant has completed the requirements for
Normal Retirement. Until a Participant has completed the requirements
for Normal Retirement, the Participant shall be zero percent (0%)
vested in the Plan benefits.
5.2 Partial benefits may be available under the following circumstances:
If the Participant who has completed five (5) Years of Service
voluntarily terminates employment, or is terminated for any reason
other than "for cause," the Participant will receive Plan benefits
payable upon termination, as follows:
A benefit will be payable equal to:
the benefit payable at Normal Retirement multiplied by a fraction,
the numerator of which is equal to the Participant's Years of
Participation, and the denominator of which is equal to the
Participant's Total Years of Participation to his or her Normal
Retirement Date.
The result of calculation (A) shall be further adjusted to reflect
the early payment of such benefit using reasonable actuarial
assumptions selected by the Corporation.
For example, Participant has
9 years of Participation in Plan:
13 years Total Participation to Normal Retirement
$80,000 Annual Benefit
(A) $80,000 X 9/13 = $55,385
(B) $55,385 reduced by 4 years @ 8% = $40,709
Annual Benefit Payable for 10 years = $40,709
If the Participant, under certain special circumstances approved by
the President and Chairman, resigns from the Corporation with a
recognized health problem.
5.3 In the event of a change of control of the Corporation followed by a
material diminution of the duties, compensation or employment benefits
of a Participant prior to the Participant's Normal Retirement Date,
Early Retirement, or other vesting pursuant to this Article V, the
Participant shall become fully vested in the benefits under this Plan
as of the first day of the calendar month in which such diminution
became effective. For purposes of this Section, a "change in control"
shall be deemed to have occurred if the conditions set forth in any one
of the following situations shall have occurred:
Any Person is or becomes the "beneficial owner" within the meaning of
Rule 1, 3d-3 under the Securities Exchange Act of 1934 (the "Exchange
Act"), directly or indirectly, of securities of the Corporation
representing 30% or more of the combined voting power of the
Corporation's then outstanding securities; or
During any period of two consecutive years, individuals who at the
beginning of such period constitute the Board and any new director
(other than a director designated by a Person who has entered into an
agreement with the Corporation to effect a transaction described in
paragraphs (a), (c) or (d) of this subsection) whose election by the
Board or nomination for election by the Corporation's stockholders was
approved by a vote of at least two-thirds (2/3) of the directors then
still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so
approved (other than approval given in connection with an actual or
threatened proxy or election contest) cease for any reason to
constitute a majority thereof; or
The stockholders of the Corporation approve a merger or consolidation
of the Corporation with any other corporation, other than (I) a merger
or consolidation which would result in the voting securities of the
Corporation outstanding immediately prior thereto continuing to
represent (either by remaining or outstanding or by being converted
into voting securities of the surviving entity or parent entity), in
combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Corporation,
at least 50% of the combined voting power of the voting securities of
the Corporation or such surviving entity (or parent entity) outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the
Corporation (or similar transaction) in which no Person acquires more
than 30% of the combined voting power of the Corporation's then
outstanding securities.
Article VI
Early Retirement
Benefits are payable to a Participant who satisfies the conditions for
Early Retirement and elects to retire early. Early Retirement shall mean that
the Participant terminates employment with the Corporation and does not receive
in excess of $50,000 per year from future employment or consulting activities.
The Participant will receive an Early Retirement benefit equal to his or
her Normal Retirement Benefit multiplied by a fraction, the numerator of which
is equal to his or her Years of Participation, and the denominator of which is
equal to his or her Total Years of Participation to Normal Retirement Date. The
participant will receive such benefit upon Early Retirement.
For Example:
9 years of Participation in Plan
13 years of Total Participation to Normal Retirement Date
$80,000 Annual Benefit
$80,000 X 9/13 = $55,385 Annual Benefit for 10 years commencing at
Early Retirement.
Article VII
Accounts
The Plan constitutes a mere promise by the Corporation to make the benefit
payments in the future. The Plan shall not hold any actual funds or assets. The
right of any individual or entity to receive one or more payments under the Plan
shall be an unsecured claim against the general assets of the Corporation. Any
liability of the Corporation to any Participant, former Participant, or
Beneficiary with respect to a right to payment shall be based solely upon
contractual obligations created by the Plan. The Corporation, the Board of
Directors, the Corporation and any individual or entity shall not be deemed to
be a trustee of any amounts to be paid under the Plan. Nothing contained in the
Plan, and no action taken pursuant to its provisions, shall create or be
construed to create a trust of any kind, or a fiduciary relationship, between
the Corporation and a Participant, former Participant, Beneficiary, or any other
individual or entity. In no event shall the Corporation, or any other successor
of the Corporation, employee, officer, director, or stockholder of the
Corporation be liable to any individual or entity on account of any claim
arising by reason of the failure of any Participant, Beneficiary or other
individual or entity to be entitled to any particular tax consequences with
respect to the Plan or any credit or payment thereunder.
<PAGE>
Article VIII
Plan Administration
The Plan shall be administered by the Vice President of Human Resources of
the Corporation, and the Corporation may designate an agent to perform the
record keeping duties in connection with the Plan. The Corporation will construe
and interpret the Plan, including disputed and doubtful terms and provisions
and, in its sole discretion, decide all questions of eligibility and determine
the amount, manner and time of payment of benefits under the Plan. The
determinations and interpretations of the Corporation will be consistently and
uniformly applied to all Participants and Beneficiaries, including but not
limited to interpretations and determinations of amounts due under this Plan,
and shall be final and binding on all parties. The Plan at all times shall be
interpreted and administered as an unfunded deferred compensation plan, and no
provision of the Plan shall be interpreted so as to give any Participant or
Beneficiary any right in any asset of the Corporation which is a right greater
than the right of a general unsecured creditor of the Corporation.
Article IX
Nonalienation of Benefits
The interests of Participants and their Beneficiaries under this Plan are
not subject to the claims of their creditors and may not be voluntarily or
involuntarily sold, transferred, alienated, assigned, pledged, anticipated, or
encumbered, attached or garnished. Any attempt by a Participant, his
Beneficiary, or any other individual or entity to sell, transfer, alienate,
assign, pledge, anticipate, encumber, attach, garnish, charge or otherwise
dispose of any right to benefits payable shall be void. The Corporation may
cancel and refuse to pay any portion of a benefit which is sold, transferred,
alienated, assigned, pledged, anticipated, encumbered, attached or garnished.
The benefits which a Participant may accrue under this Plan are not subject to
the terms of any Qualified Domestic Relations Order (as that term is defined in
Section 414(p) of the Code) with respect to any Participant, and the Plan
Administrator, Board of Directors, and Corporation shall not be required to
comply with the terms of such order in connection with this Plan. The
withholding of taxes from Plan payments, the recovery of Plan overpayments of
benefits made to a Participant or Beneficiary, the transfer of Plan benefit
rights from the Plan to another plan, or the direct deposit of Plan payments to
an account in a financial institution (if not actually a part of an arrangement
constituting an assignment or alienation) shall not be construed as assignment
or alienation under this Article IX.
Article X
Amendment and Termination
The Corporation reserves the right to amend, alter or discontinue this Plan
at any time. Such action may be taken in writing by any officer of the
Corporation who has been duly authorized by the Corporation to perform acts of
such kind. However, no such amendment shall deprive any Participant or
Beneficiary of any portion of any benefit which would have been payable had the
Participant's employment with the Corporation terminated on the effective date
of such amendment or termination. Notwithstanding the provisions of this Article
X to the contrary, the Corporation may amend the Plan at any time, in any
manner, if the Corporation determines any such amendment is required to ensure
that the Plan is characterized as providing deferred compensation for a select
group of management or highly compensated employees and as described in ERISA
Sections 201(2), 301(a)(3) and 401(a)(1) or to otherwise conform the Plan to the
provisions of any applicable law including ERISA and the Code.
<PAGE>
Article XI
General Provisions
11.1 Any payment made in good faith in accordance with provisions of the
Plan shall be a complete discharge of any liability for the making of
such payment under the provisions of this Plan.
11.2 This Plan does not constitute a contract of employment, and
participation in the Plan will not give any Participant the right to be
retained in the employment of the Corporation.
11.3 The provisions of this Plan shall be binding upon the Corporation and
its successors and assigns and upon every Participant and his heirs,
Beneficiaries, estates and legal representatives.
11.4 Each Participant entitled to benefits shall file with the Plan
Administrator, in writing, any change of post office address. Any check
representing payment and any communication addressed to a Participant
or a former Participant at this last address filed with the Plan
Administrator, or if no such address has been filed, then at his last
address as indicated on the Corporation's records, shall be binding on
such Participant for all purposes of the Plan, and neither the Plan
Administrator nor the Corporation or other payer shall be obliged to
search for or ascertain the location of any such Participant. If the
Plan Administrator is in doubt as to the address of any Participant
entitled to benefits or as to whether benefit payments are being
received by a Participant, it shall, by registered mail addressed to
such Participant at his last known address, notify such Participant
that:
(i) All unmailed and future Plan payments shall be withheld until
Participant provides the Plan Administrator with evidence of his
continued life and his proper mailing address; and
(ii) His right to any Plan payment shall, at the option of the
Corporation, be canceled forever, if, at the expiration of five (5)
years from the date of such mailing, he shall not have provided the
Corporation with evidence of his continued life and proper mailing
address.
11.5 Each Participant shall furnish to the Plan Administrator any
information the Plan Administrator deems necessary for purposes of
administering the Plan, and the payment provisions of the Plan are
conditional upon the Participant furnishing promptly such true and
complete information as the Plan Administrator may request. Each
Participant shall submit proof of his age when required by the Plan
Administrator. The Plan Administrator will, if such proof of age is not
submitted as required, use such information as is deemed by it to be
reliable, regardless of the lack of proof, or the misstatement of the
age of individuals entitled to benefits. Any notice or information
which, according to the terms of the Plan or requirements of the Plan
Administrator, must be filed with the Plan Administrator, shall be
deemed so filed if addressed and either delivered in person or mailed
to and received by the Plan Administrator, in care of the Corporation
at:
Uniroyal Technology Corporation
Two North Tamiami Trail, Suite #900
Sarasota, Florida 34236
11.6 Each Participant shall designate, by name, on election forms provided
by the Plan Administrator, the Beneficiary(ies) who shall receive any
benefits which might be payable after such Participant's death. A
Beneficiary designation may be changed or revoked without such
Beneficiary's consent at any time or from time to time in the manner as
provided by the Plan Administrator, and the Plan Administrator shall
have no duty to notify any individual or entity designated as a
Beneficiary of any change in such designation which might affect such
individual or entity's present or future rights. If the designated
Beneficiary does not survive the Participant, all amounts which would
have been paid to such deceased Beneficiary shall be paid to any
remaining Beneficiary in that class of Beneficiaries, unless the
Participant has designated that such amounts go to the lineal
descendants of the deceased Beneficiary. If none of the designated
primary Beneficiaries survive the Participant, and the Participant did
not designate that payments would be payable to such Beneficiary's
lineal descendants, amounts otherwise payable to such Beneficiaries
shall be paid to any successor Beneficiaries designated by the
Participant, or if none, to the Participant's spouse, or, if the
Participant was not married at the time of death, the Participant's
estate.
No Participant shall designate more than five (5) simultaneous
Beneficiaries, and if more than one (1) beneficiary is named,
Participant shall designate the share to be received by each
Beneficiary. Despite the limitation on five (5) Beneficiaries, a
Participant may designate more than five (5) Beneficiaries provided
such Beneficiaries are the surviving spouse and children of the
Participant. If a Participant designates alternative, successor, or
contingent Beneficiaries, such Participant shall specify the shares,
terms and conditions upon which amounts shall be paid to such multiple,
alternative, successor or contingent Beneficiaries. Any payment made
under this Plan after the death of a Participant shall be made only to
the Beneficiary or Beneficiaries designated pursuant to this Section.
11.7 Any claim for benefits must initially be submitted in writing to the
Plan Administrator. If such claim is denied (in whole or in part), the
claimant shall receive notice from the Plan Administrator, in writing,
setting forth the specific reasons for denial, with specific reference
to applicable provisions of this Plan. Such notice shall be provided
within ninety (90) days of the date the claim for benefits is received
by the Plan Administrator, unless special circumstances require an
extension of time for processing the claim, in which event notification
of the extension will be provided to the claimant prior to the
expiration of the initial 90 day period. The extension notification
will indicate the special circumstances requiring the extension of time
and the date by which the Plan Administrator expects to render its
decision. Any such extension will not exceed 90 days. Any disagreements
about such interpretations and construction may be appealed in writing
by the claimant within sixty (60) days to the Plan Administrator. The
Plan Administrator shall respond to such appeal within sixty (60) days,
with a notice in writing fully disclosing its decision and its reasons.
If no special circumstances require an extension of time to process the
appealed claim, notification of the extension will be provided to the
claimant prior to the commencement of the extension. Any such extension
will be provided to the claimant prior to the commencement of the
extension. Any such extension will not exceed 60 days. No member of the
Board of Directors, or any Corporation thereof, shall be liable to any
individual or entity for any action taken hereunder, except those
actions undertaken with lack of good faith.
11.8 Any action required to be taken by the Board of Directors of the
Corporation pursuant to the Plan provisions may be performed by a
Committee of the Board, to which the Board of Directors of the
Corporation delegates the authority to take actions of that kind.
11.9 To the extent not superseded by the laws of the United States, the
laws of the State of Florida shall be controlling in all matters
relating to this Plan.
11.10 In the event any provision of this Plan shall be held illegal or
invalid for any reason, such illegality or invalidity shall not affect
the remaining provisions of the Plan, and the Plan shall be interpreted
and enforced as if such illegal and invalid provisions had never been
set forth.
<PAGE>
IN WITNESS WHEREOF, Uniroyal Technology Corporation has adopted the
foregoing instrument effective as of October 1, 1998, on January 17, 2000.
UNIROYAL TECHNOLOGY CORPORATION
/s/ Robert L. Soran
-------------------
By: President
ATTEST:/s/ Oliver J. Janney
----------------------
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from the Condensed
Consolidated Balance Sheet as of January 2, 2000 and the Condensed
Consolidated Statement of Operations for the three months ended January
2, 2000 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 890096
<NAME> Uniroyal Technology Corporation
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Oct-01-2000
<PERIOD-START> Sep-27-1999
<PERIOD-END> Jan-02-2000
<CASH> 128
<SECURITIES> 0
<RECEIVABLES> 3,822
<ALLOWANCES> 82
<INVENTORY> 9,782
<CURRENT-ASSETS> 20,140
<PP&E> 69,545
<DEPRECIATION> 19,133
<TOTAL-ASSETS> 103,719
<CURRENT-LIABILITIES> 29,821
<BONDS> 24,016
0
0
<COMMON> 150
<OTHER-SE> 31,992
<TOTAL-LIABILITY-AND-EQUITY> 103,719
<SALES> 15,195
<TOTAL-REVENUES> 18,100
<CGS> 11,414
<TOTAL-COSTS> 11,414
<OTHER-EXPENSES> 8,384
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 314
<INCOME-PRETAX> (2,012)
<INCOME-TAX> 1,671
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<DISCONTINUED> 1,347
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,420
<EPS-BASIC> 0.20
<EPS-DILUTED> 0.18
</TABLE>
