<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
{ X } QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
FOR THE PERIOD ENDED JUNE 27, 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 33-49830
COINMACH CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 53-0188589
(STATE OR OTHER JURISDICTION OF (I. R. S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
55 LUMBER ROAD, ROSLYN, NEW YORK 11576
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (516) 484-2300
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 .
--- ---
AS OF THE CLOSE OF BUSINESS ON AUGUST 6, 1997, COINMACH CORPORATION HAD
OUTSTANDING 100 SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE (THE "COMMON
STOCK"), ALL OF WHICH SHARES WERE HELD BY COINMACH LAUNDRY CORPORATION.
<PAGE>
COINMACH CORPORATION
INDEX
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PART I.
Financial Information Page No.
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Item 1. Financial Statements
Condensed Consolidated Balance Sheets-
June 27, 1997 (Unaudited) and March 28, 1997 3
Condensed Consolidated Statements of Operations (Unaudited)-
Three Months Ended June 27, 1997 and June 28, 1996 4
Condensed Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended June 27, 1997 and June 28, 1996 5
Notes to Condensed Consolidated Financial Statements
(Unaudited) 6-8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9-13
PART II.
Other Information 14
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Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signature Page 15
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COINMACH CORPORATION
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PART I. FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS
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CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(In thousands of dollars)
<TABLE>
<CAPTION>
June 27, 1997 March 28, 1997/1/
-------------- ------------------
(Unaudited)
ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 13,148 $ 10,110
Receivables, net 6,467 6,894
Inventories 10,304 7,959
Prepaid expenses 3,993 3,170
Advance rental payments 43,975 38,472
Property and equipment, less accumulated
depreciation of $48,077 and $42,017 126,855 112,116
Contract rights, less accumulated amortization of
$24,252 and $19,815 208,367 180,557
Goodwill, less accumulated amortization of $7,204 and
$5,574 104,246 95,771
Other assets 11,981 12,501
-------- --------
Total assets $529,336 $467,550
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY:
Accounts payable $ 10,745 $ 8,946
Accrued commissions 13,090 10,573
Accrued interest 4,261 9,712
Other accrued expenses 10,329 8,986
Due to Coinmach Laundry Corporation 20,931 22,432
Deferred income taxes 74,570 65,650
11-3/4% Senior Notes 196,655 196,655
Credit facility 188,000 130,000
Other Long-term debt 2,255 2,623
Stockholder's equity:
Common stock and capital in excess of par value 41,391 41,391
Notes receivable from management (254) (254)
Accumulated deficit (32,637) (29,164)
-------- --------
Total stockholder's equity 8,500 11,973
-------- --------
Total liabilities and stockholder's equity $529,336 $467,550
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
______
1. The March 28, 1997 Balance Sheet has been derived from the audited financial
statement as of that date.
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COINMACH CORPORATION
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
(UNAUDITED)
-----------
(In thousands of dollars)
Three Months Ended
----------------------------
June 27, June 28,
1997 1996
----------------------------
REVENUES $72,095 $47,940
COSTS AND EXPENSES:
Laundry operating expenses 48,236 32,580
General and administrative expenses 1,463 1,016
Depreciation and amortization 16,475 9,810
Stock-based compensation charge 104 -
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66,278 43,406
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OPERATING INCOME 5,817 4,534
INTEREST EXPENSE, NET 10,090 6,121
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LOSS BEFORE INCOME TAXES (4,273) (1,587)
------- -------
PROVISION (BENEFIT) FOR INCOME TAXES:
Currently payable 50 50
Deferred (850) (450)
------- -------
(800) (400)
------- -------
NET LOSS $(3,473) $(1,187)
======= =======
The accompanying notes are an integral part of these financial statements.
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COINMACH CORPORATION
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(UNAUDITED)
-----------
(In thousands of dollars)
<TABLE>
<CAPTION>
Three Months Ended
------------------------------
June 27, 1997 June 28, 1996
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (3,473) $ (1,187)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 16,475 9,810
Deferred income taxes (850) (450)
Stock-based compensation charge 104 -
Amortization of debt discount and debt issuance costs 138 130
Increase or decrease in operating assets and liabilities,
net of business acquired:
Decrease (increase) in other assets 870 (841)
Decrease in receivables, net 896 1,109
Increase in inventories and prepaid expenses (1,810) (1,409)
Decrease in accounts payable (167) (134)
Decrease in accrued interest (5,451) (4,610)
Increase in accrued expenses, net 1,912 1,494
-------- --------
Net cash provided by operating activities 8,644 3,912
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (9,429) (5,942)
Advance rental payments to location owners (3,639) (2,628)
Additions to net assets related to acquisitions of businesses (47,548) (16,722)
-------- --------
Net cash used for investing activities (60,616) (25,292)
--------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayments of bank and other borrowings (225) 4,887
Net advances to parent (1,605) -
Deferred debt issuance costs (900) 79
Proceeds from issuance of term loans from credit facility 58,000 -
Principal payments on capitalized lease obligations (260) (108)
-------- --------
Net cash provided by financing activities 55,010 4,858
-------- --------
Net increase (decrease) in cash and cash equivalents
3,038 (16,522)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 10,110 19,723
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 13,148 $ 3,201
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION: $ 15,428 $ 10,714
Interest paid ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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COINMACH CORPORATION
--------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. DESCRIPTION OF BUSINESS
Coinmach Corporation (the "Company"), a Delaware corporation, is primarily
engaged in providing coin-operated laundry equipment services to multi-family
housing properties throughout the United States. After giving effect to the
National Coin Acquisition (as hereinafter defined), the Company owns and
operates approximately 414,000 coin-operated washers and dryers in over 40,000
locations on routes in 31 states, the District of Columbia and Mexico and in 151
retail laundromats located throughout Texas. Coinmach Corporation, through its
wholly-owned subsidiary, Super Laundry Equipment Corp., a New York corporation
("Super Laundry"), also is a construction and laundromat equipment distribution
company. Coinmach Corporation is a wholly-owned subsidiary of Coinmach Laundry
Corporation, a Delaware corporation ("Coinmach Laundry"). Unless otherwise
specified herein, references to the "Company" shall mean Coinmach Corporation
and Super Laundry. On July 17, 1997, the Company completed the acquisition of
the route businesses of National Coin Laundry, Inc. and Whitmer Vend-O-Mat
Laundry Services, Inc. and the distribution business of National Laundry
Equipment Company for an aggregate cash purchase price of approximately $19.0
million, excluding transaction costs (the "National Coin Acquisition"). See
Note 7, "Subsequent Events." The results of operations for the three month
period ended June 27, 1997 do not take into account the National Coin
Acquisition.
2. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of the
Company have been prepared in conformity with generally accepted accounting
principles ("GAAP") for interim financial reporting and pursuant to the rules
and regulations of the Securities and Exchange Commission. Accordingly, such
financial statements do not include all of the information and footnotes
required by GAAP for complete financial statements. GAAP requires the Company's
management to make estimates and assumptions that affect the amounts reported
therein. Actual results could vary from such estimates. The interim results
presented herein are not necessarily indicative of the results to be expected
for the entire year.
In the opinion of management of the Company, these unaudited condensed
consolidated financial statements contain all adjustments of a normal recurring
nature necessary for a fair presentation of the financial statements for the
interim periods presented.
These unaudited condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements included in the
Company's Annual Report on Form 10-K for the year ended March 28, 1997.
3. LONG-TERM DEBT
At June 27, 1997, the Company had long-term debt consisting of (a) approximately
$196.7 million of 11 3/4% Senior Notes due 2005 (the "Senior Notes") and (b)
$188 million of term loans. The outstanding term loans were made pursuant to a
senior financing arrangement obtained by the Company in January, 1997 consisting
of a $190 million term loan facility and a $70 million revolving credit facility
(the "New Credit Facility"). Indebtedness under the New Credit Facility is
secured by
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COINMACH CORPORATION
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
3. LONG-TERM DEBT (continued)
all of the Company's real and personal property. Coinmach Laundry has
guaranteed the indebtedness under the New Credit Facility and pledged to Bankers
Trust Company, as Collateral Agent, its interests in all of the issued and
outstanding shares of capital stock of the Company. In addition to certain
terms and provisions, events of default, as defined, and customary restrictive
covenants and agreements, the New Credit Facility contains covenants including,
but not limited to, a maximum leverage ratio, a minimum consolidated interest
coverage ratio, and limitations on indebtedness, capital expenditures, advances,
investments and loans, mergers and acquisitions, dividends, stock issuances and
transactions with affiliates. Also, the Senior Notes and the New Credit
Facility limit the Company's ability to pay dividends. At June 27, 1997, there
were no amounts outstanding under the Company's revolving credit facility.
4. INITIAL PUBLIC OFFERING OF COINMACH LAUNDRY
During July and August 1996, Coinmach Laundry completed its initial public
offering (the "Offering") of 4,183,642 shares of its Class A Common Stock, par
value $.01 per share (the "CLC Common Stock") at a price of $14.00 per share.
Proceeds from the Offering and over-allotment option were approximately $54.5
million, after underwriting discounts and commissions and before expenses.
After giving effect to the redemption of shares of Coinmach Laundry Series A
preferred stock, proceeds from the Offering were approximately $35.3 million,
before expenses. Part of the proceeds from the Offering were invested in the
Company.
5. RELATED PARTY TRANSACTIONS
Prior to the Offering, Coinmach Laundry issued, in privately negotiated
transactions, 79,029 shares of its Class B common stock to certain members of
management of the Company. The Company recorded a stock based compensation
charge in an amount of approximately $887,000 attributable to the issuance of
such stock in July 1996. In addition, approximately $83,000 of outstanding
receivables relating to loans to management in connection with prior purchases
of common stock of Coinmach Laundry were forgiven and had been accounted for as
a stock-based compensation charge in July 1996.
During July and September 1996, in connection with the Offering, Coinmach
Laundry granted certain nonqualified options (the "Options") to certain members
of management (collectively, the "Option Holders") to purchase up to 739,437
shares of CLC Common Stock at 85% of the initial offering price of the CLC
Common Stock. The Options vest in equal annual installments (20% vest on the
date of grant and the remainder over a four year period) commencing on July 23,
1996, the effective date of the Offering. With respect to Options granted to
employees of the Company, the Company will record the difference between the
exercise price and the initial offering price of CLC Common Stock as a stock-
based compensation charge over the applicable vesting period.
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COINMACH CORPORATION
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
For the three months ended June 27, 1997, the Company has recorded a stock-based
compensation charge of approximately $104,000 related to the Options.
6. ACQUISITION
On April 23, 1997, pursuant to the terms and conditions of a Merger Agreement
dated as of March 20, 1997, the Company completed the acquisition and merger of
Reliable Holding Corp. ("Reliable") and its subsidiaries Reliable Laundry
Service Inc., Girard-Hopkins Acquisition Corp., Maquilados Automaticas S.A. de
C.V., and Automatica S.A. de C.V. (collectively, the "Reliable Entities") with
and into the Company, for $44 million in cash (excluding transaction expenses).
The Reliable Entities provide coin-operated laundry equipment services to multi-
family dwellings in California and Mexico.
7. SUBSEQUENT EVENT
On July 17, 1997, the Company consummated the National Coin Acquisition,
pursuant to which it acquired 100% of the outstanding voting securities
of National Coin Laundry Holding, Inc., an Ohio Corporation ("NCLH") and
National Laundry Equipment Company, an Ohio corporation ("NLEC"). NCLH is the
parent of National Coin Laundry, Inc., an Ohio corporation ("NCL"). In a
related transaction, the Company acquired substantially all of the assets of
Whitmer Vend-O-Mat Laundry Services, Inc., an Indiana corporation ("Whitmer")
that is an affiliate of NCLH, NLEC and NCL. The Company acquired NCLH, NLEC, NCL
and Whitmer (collectively, the "NCL Entities") for an aggregate purchase price
of approximately $19.0 million in cash. The NCL Entities provide coin-operated
laundry equipment services to multi-family dwellings in the states of Ohio,
Indiana, Kentucky, Michigan, West Virginia, Pennsylvania, Georgia, Tennessee,
Illinois and Florida, as well as distributing exclusive lines of commercial coin
and non-coin laundry machines and parts, and selling service contracts.
Subsequent to the acquisition of Whitmer and of the other NCL Entities, such
other entities were merged with and into the Company.
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COINMACH CORPORATION
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Except for the historical information contained herein, certain matters
discussed in this document are forward-looking statements that involve certain
risks and uncertainties, including the risks and uncertainties discussed below,
as well as other risks set forth in the Company's Annual Report on Form 10-K for
the year ended March 28, 1997. The results of operations for the three month
period ended June 27, 1997 do not take into account the National Coin
Acquisition.
GENERAL
The Company is principally engaged in the business of supplying coin-operated
laundry equipment services to multi-family housing properties in 31 states, the
District of Columbia and Mexico operating in 151 retail laundromats located
throughout Texas. The most significant revenue source is derived from its
routes, which, giving effect to the National Coin Acquisition, are currently
comprised of over 40,000 locations containing approximately 414,000 coin-
operated washing machines and dryers. The Company provides coin-operated laundry
equipment services to locations by leasing designated laundry rooms in buildings
on a long-term basis. The Company is a wholly owned subsidiary of Coinmach
Laundry.
The Company also owns and operates Super Laundry. Super Laundry's business
consists of constructing complete turnkey laundromat retail stores, retrofitting
existing laundromat retail stores, distributing exclusive and non-exclusive
lines of commercial coin and non-coin laundry machines and parts, and selling
service contracts.
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the attached
unaudited condensed consolidated financial statements and notes thereto and with
the Company's audited consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K as of and for the year
ended March 28, 1997.
COMPARISON OF THE THREE MONTH PERIOD ENDED JUNE 27, 1997 AND JUNE 28, 1996
Revenues increased by approximately 50% for the three months ended June 27,
1997, as compared to the prior year's corresponding period. The improvement in
revenues for the three month period consisted primarily of increased route
revenues resulting from internal expansion, the acquisition of the route and
laundromat business of Kwik Wash Laundries L.P. in January 1997 ("the Kwik Wash
Acquisition") and the acquisition of the route business of Reliable Holding
Corp. in April 1997 (the "Reliable Acquisition"). During the three month period
ended June 27, 1997, the Company's installed base increased by approximately
5,500 machines from internal growth (excluding the machines added from the
Reliable Acquisition) as compared to an increase of approximately 2,200 machines
during the prior year period.
Laundry operating expenses increased by approximately 48%, for three month
period ended June 27, 1997, as compared to the prior year's corresponding
period. The increase was due primarily to an increase in laundry operating
expenses related to the Kwik Wash Acquisition and the Reliable
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COINMACH CORPORATION
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS (continued)
Acquisition. Such increase in laundry operating expenses was offset partially
by the implementation of cost savings programs in the Company's field operations
and the consolidation of certain operating regions relating to certain
acquisitions during the prior year period.
General and administrative expenses increased by approximately $0.4 million, for
the three month period ended June 27, 1997, as compared to the prior year's
corresponding period. The increase for the period was due to various expenses
associated with (i) the implementation of the Company's acquisition strategy,
(ii) the development and implementation of procedures for the management of
investor relations, and (iii) systems development, refinement and integration,
in each case, resulting from Coinmach Laundry's recent acquisitions.
Depreciation and amortization increased by approximately 68% for the three
month period ended June 27, 1997, as compared to the prior year's corresponding
period, due primarily to the contract rights and goodwill associated with the
Kwik Wash Acquisition and the Reliable Acquisition as well as an increase in
capital expenditures for the installed base of machines. As a result of the
Company's acquisition activity since early 1995, the Company incurred
approximately $8.7 million in non-cash purchase accounting related depreciation
and amortization charges for the current year period as compared to $5.8 million
for the prior year's corresponding period.
Coinmach Laundry granted Options to certain members of management to purchase
shares of CLC Common Stock at a 15% discount to the initial offering price of
the CLC Common Stock. With respect to such options granted to its employees,
the Company will record such discount as a stock-based compensation charge over
the applicable four year vesting period. During the three months ended June 27,
1997, the Company recorded a stock-based compensation charge of approximately
$104,000 relating to such options.
As a result of the above, operating income margins were approximately 8% for the
three month period ended June 27, 1997, as compared to approximately 9%, for the
three month period ended June 28, 1996.
Interest expense, net increased by approximately 65% for the three month period
ended June 27, 1997, as compared to the prior year's corresponding period, due
primarily to interest on indebtedness under the New Credit Facility. Partially
offsetting this increase in interest expense was interest income earned on
excess cash balances generated from operations.
EBITDA (earnings before deductions for interest, income taxes, depreciation and
amortization) was approximately $22.4 million (before deduction for stock-based
compensation charges) for the three months ended June 27, 1997, as compared to
approximately $14.3 million for the corresponding period in 1996, representing
an improvement of approximately 56%. EBITDA margins improved to approximately
31% for the three months ended June 27, 1997, compared to approximately 30% for
the prior year's corresponding period. EBITDA is used by certain investors as an
indicator of a company's historical ability to service debt. Management believes
that an increase in EBITDA is an indication of the Company's improved ability to
service existing debt, to sustain potential
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COINMACH CORPORATION
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)
RESULT OF OPERATIONS (continued)
future increases in debt and to satisfy capital requirements. However, EBITDA
is not intended to represent cash flows for the period, nor has it been
presented as an alternative to either (a) operating income (as determined by
GAAP) as an indicator of operating performance or (b) cash flows from operating,
investing and financing activities (as determined by GAAP) as a measure of
liquidity. Given that EBITDA is not a measurement determined in accordance with
GAAP and is thus susceptible to varying calculations, EBITDA as presented may
not be comparable to other similarly titled measures of other companies.
The Company's effective income tax rate differs from the amount computed by
applying the U.S. federal statutory rate to loss before income taxes as a result
of state taxes and permanent book/tax differences (largely attributable to
goodwill and contract rights amortization).
LIQUIDITY AND CAPITAL RESOURCES
The Company continues to have substantial indebtedness and debt service
requirements. At June 27, 1997, the Company had outstanding long-term debt
(excluding advances from Coinmach Laundry) of approximately $386.9 million and
stockholder's equity of approximately $8.5 million.
The Company's level of indebtedness will have several important effects on its
future operations, including, but not limited to, the following: (a) a
significant portion of the Company's cash flow from operations will be required
to pay interest on its indebtedness and will not be available for other
purposes; (b) the financial covenants contained in certain of the agreements
governing the Company's indebtedness will require the Company to meet certain
financial tests and will limit its ability to borrow additional funds or to
dispose of assets; (c) the Company's ability to obtain additional financing in
the future for working capital, capital expenditures, acquisitions or general
corporate purposes may be impaired; and (d) the Company's ability to adapt to
changes in the coin-operated laundry equipment services industry and to economic
conditions in general will be limited. At June 27, 1997, there was no amount
outstanding under the Company's revolving credit facility.
The Company anticipates that it will continue to utilize cash flows from
operations to finance its capital expenditures and working capital needs,
including interest payments on its outstanding indebtedness. Capital
expenditures for the three months ended June 27, 1997 were approximately $60.6
million. Of such amount, the Company spent approximately $47.6 million in
acquisition and related transaction costs, including the Reliable Acquisition,
and approximately $3.9 million related to the net increase in the installed base
of machines. The balance was used to maintain the existing machine base and for
general corporate purposes. The full impact on revenues and EBITDA generated
from capital expended on acquisitions and the net increase in the installed base
of machines are not expected to be reflected in the Company's financial results
until subsequent reporting periods, depending on certain factors including the
timing of the capital expended.
The Company's working capital requirements are, and are expected to continue to
be, minimal since a significant portion of the Company's operating expenses are
not paid until after cash is collected from
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COINMACH CORPORATION
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)
LIQUIDITY AND CAPITAL RESOURCES (continued)
the installed machines. In connection with certain of the financing agreements
governing the Company's indebtedness, the Company is required to make monthly
cash interest payments under the New Credit Facility and semi-annual cash
interest payments on the 11 3/4% Senior Notes due 2005 (the "Senior Notes").
Effective June 2, 1997, the Company entered into an amendment to the New Credit
Facility with Bankers Trust Company, First Union National Bank of North
Carolina, Lehman Commercial Paper, Inc. and certain other lending institutions
named therein, to increase the principal amount of the Tranche B term loan by
$60 million. The New Credit Facility, as amended and prior to giving effect to
payment of principal installments, consists of a $70 million revolving credit
facility and a $190 million term loan facility, which is comprised of a Tranche
A term loan in the amount of $30 million and Tranche B term loan in the amount
of $160 million. The New Credit Facility also provides for up to $10 million of
letter of credit financing and short term borrowings under a swing line facility
of up to $5 million.
In connection with the Company's January 1997 acquisition of KWL, Inc. ("KWL")
and Kwik-Wash Laundries, Inc. ("Kwik Wash"), the sole partners of Kwik Wash
Laundries, L.P., Coinmach Laundry issued a $15 million promissory note (the
"Kwik Wash Note") in partial payment of the purchase price for the outstanding
voting securities of KWL and Kwik Wash.
Management believes that the Company's future operating activities will generate
sufficient cash flow to repay borrowings under the Senior Notes, the New Credit
Facility and the Kwik Wash Note or to permit any necessary refinancings thereof.
An inability of the Company, however, to comply with covenants or other
conditions contained in the indenture governing the Senior Notes or in the New
Credit Facility could result in an acceleration of all amounts due under the
indenture and the New Credit Facility. If the Company is unable to meet its debt
service obligations, it could be required to take certain actions such as
reducing or delaying capital expenditures, selling assets, refinancing or
restructuring its indebtedness, selling additional equity capital or other
actions. There is no assurance that any of such actions could be effected on
commercially reasonable terms, if at all, or on terms permitted under the New
Credit Facility or the indenture governing the Senior Notes.
The Company's depreciation and amortization expenses (aggregating approximately
$16.5 million for the three months ended June 27, 1997) have the effect of
reducing net income but not operating cash flow. In accordance with GAAP, a
significant amount of the purchase price of businesses acquired by the Company
is allocated to "contract rights", which are amortized over periods of up to 15
years. Although such accounting treatment can have a favorable effect on
operating cash flow by reducing taxes, such treatment also reduces net income.
On July 17, 1997, the Company consummated the National Coin Acquisition,
pursuant to which it acquired 100% of the outstanding voting securities
of NCLH and NLEC. NCLH is the parent of NCL. In a related transaction, the
Company acquired substantially all of the assets of Whitmer, an affiliate of
NCLH, NLEC and NCL. The Company acquired the NCL Entities for an aggregate
purchase price of approximately $19.0 million in cash. The NCL Entities provide
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COINMACH CORPORATION
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)
LIQUIDITY AND CAPITAL RESOURCES (continued)
coin-operated laundry equipment services to multi-family dwellings in the states
of Ohio, Indiana, Kentucky, Michigan, West Virginia, Pennsylvania, Georgia,
Tennessee, Illinois and Florida, as well as distributing exclusive lines of
commercial coin and non-coin laundry machines and parts, and selling service
contracts. Subsequent to the acquisition of Whitmer and of the other NCL
Entities, such other entities were merged with and into the Company. The New
Credit Facility was used to fund the National Coin Acquisition.
As part of its business strategy, the Company will continue to evaluate
opportunities to acquire local, regional and multi-regional route businesses.
There can be no assurance that the Company will find attractive acquisition
candidates, successfully complete such transactions or effectively manage the
integration of acquired businesses into its existing business.
INFLATION AND SEASONALITY
In general, the Company's laundry operating expenses and general and
administrative expenses are affected by inflation, and the effects of inflation
may be experienced by the Company in future periods. Management believes that
such effects have not been nor will be material to the Company. The Company's
business generally is not seasonal.
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COINMACH CORPORATION
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PART II. OTHER INFORMATION
-----------------
ITEM 1. LEGAL PROCEEDINGS
From time to time, the Company has been, and expects to continue to
be, subject to legal proceedings and claims in the ordinary course of its
business. Although the amount of any liability that could arise with respect to
these actions can not be accurately predicted, management believes that any such
liability, individually or in the aggregate, will not have a material adverse
effect on the financial condition and results of operations of the Company.
ITEM 2. CHANGE IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDER
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
--------
10.55 Amendment Number One and Waiver, dated as of June 2, 1997,
to the Credit Agreement, dated as of January 8, 1997,
among the Company, Coinmach Laundry, the Lending
Institutions named therein, Bankers Trust Company,
First Union National Bank of North Carolina and Lehman
Commercial Paper, Inc.
27.1 Financial Data Schedule
(b) Reports on Form 8-K
-------------------
None
-14-
<PAGE>
COINMACH CORPORATION
--------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: August 11, 1997
COINMACH CORPORATION
/s/ ROBERT M. DOYLE
------------------------------
Robert M. Doyle
Senior Vice President and Chief Financial Officer
(On behalf of registrant and as Principal
Financial Officer)
-15-
<PAGE>
EXHIBIT 10.55
AMENDMENT NUMBER ONE AND WAIVER, dated as of June 2, 1997
("Amendment"), to the Credit Agreement dated as of January 8, 1997 (the "Credit
Agreement"), among COINMACH CORPORATION, a Delaware corporation (the
"Borrower"), COINMACH LAUNDRY CORPORATION, a Delaware corporation ("Holdings"),
the lending institutions from time to time party thereto (each a "Bank" and
collectively, the "Banks"), BANKERS TRUST COMPANY, as Administrative Agent,
FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as Syndication Agent and LEHMAN
COMMERCIAL PAPER, INC., as Documentation Agent (the "Agents"). Capitalized
terms used and not otherwise defined herein shall have the meanings assigned to
them in the Credit Agreement.
WHEREAS, the Borrower has requested that the Agent and the Banks
amend certain provisions of the Credit Agreement;
WHEREAS, the Agents and the Banks have considered and agreed to the
Borrower's requests, upon the terms and conditions set forth in this Amendment;
WHEREAS, the consent of the Requisite Banks is necessary to effect
this Amendment;
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION ONE - WAIVER.
----------- ------
The Banks hereby waive compliance by the Borrower of Section 4.02(f)
of the Credit Agreement with respect to the Additional Tranche B Term Loan.
SECTION TWO - AMENDMENTS TO CREDIT AGREEMENT.
----------- ------------------------------
Section One, effective as of June 2, 1997 (the "Amendment Effective Date").
2.1. Amendments to Section 1 of the Credit Agreement
-----------------------------------------------
(a) Section 1.01 shall be amended by deleting clause (b) thereof
in its entirety and substituting in its place the following:
<PAGE>
-2-
"(b) Subject to and upon the terms and conditions set forth herein,
each Bank with an Initial Tranche B Term Loan Commitment ("Initial Tranche
---------------
B Term Loan Banks") severally agrees to make on the Effective Date a term
------------------
loan (each such term loan, a "Initial Tranche B Term Loan" and,
---------------------------
collectively, the "Initial Tranche B Term Loans") to the Borrower, which
----------------------------
Initial Tranche B Term Loans (i) shall be made and initially maintained as
a single Borrowing of Base Rate Loans (subject to the option to convert
such Initial Tranche B Term Loans pursuant to Section 1.06); provided that,
except as otherwise specifically provided in Section 1.10(b), all Initial
Tranche B Term Loans comprising the same Borrowing shall at all times be of
the same Type, and (ii) shall equal for each Bank, in initial aggregate
principal amount, an amount which equals the Initial Tranche B Term Loan
Commitment of such Bank on the Effective Date (before giving effect to any
reductions thereto on such date pursuant to Section 3.03(b)). Once repaid,
Initial Tranche B Term Loans incurred hereunder may not be reborrowed."
(b) Section 1.01 shall be further amended by inserting the
following at the end of Section 1.01(e):
"(f) Subject to and upon the terms and conditions set forth herein,
each Bank with an Additional Tranche B Term Loan Commitment ("Additional
----------
Tranche B Term Loan Banks") severally agrees to make on the Amendment
---------------------------
Effective Date a term loan (each such term loan, an "Additional Tranche B
Term Loan" and, collectively, the "Additional Tranche B Term Loans") to the
Borrower, which Tranche B Term Loans (i) shall be made and initially
maintained as a single Borrowing of Base Rate Loans (subject to the option
to convert such Tranche B Term Loans pursuant to Section 1.06); provided
that, except as otherwise specifically provided in Section 1.10(b), all
Tranche B Term Loans comprising the same Borrowing shall at all times be of
the same Type, and (ii) shall equal for each Bank, in initial aggregate
principal amount, an amount which equals the Additional Tranche B Term Loan
Commitment of such Bank on the Amendment Effective Date (before giving
effect to any reductions thereto on such date pursuant to Section 3.03(b)).
Once repaid, Additional Tranche B Term Loans incurred hereunder may not be
reborrowed."
<PAGE>
-3-
(c) Section 1.05(a) shall be amended by inserting the word "Initial"
before the terms "Tranche B Term Loans" and "Tranche B Term Notes" in its clause
(ii) and deleting the "and" before clause (iv) and adding the following
additional clause at the end thereto: "and (v) if an Additional Tranche B Term
Loan, by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B-5 with blanks appropriately completed in
-----------
conformity herewith (each, an "Additional Tranche B Term Note" and,
------------------------------
collectively, the "Additional Tranche B Term Notes")."
---------------------------------
(d) Section 1.05(c) shall be amended by inserting the word "Initial"
before the terms "Tranche B Term Note" and "Tranche B Term Loans".
(e) Section 1.05 shall be amended by inserting the following at the
end of Section 1.05(f):
"(g) The Additional Tranche B Term Note issued to each Bank shall (i)
be executed by the Borrower, (ii) be payable to the order of such Bank and
be dated the Amendment Effective Date, (iii) be in a stated principal
amount equal to the Additional Tranche B Term Loans made by such Bank on
the Amendment Effective Date and be payable in the principal amount of
Additional Tranche B Term Loans evidenced thereby, (iv) mature on the
Tranche B Term Loan Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayments as provided in Section 4.01 and mandatory repayment
as provided in Section 4.02 and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents."
2.2. Amendment to Section 4 of the Credit Agreement
----------------------------------------------
(a) Section 4.02(d) shall be amended by deleting the table
contained thereof in its entirety and substituting the following tables
therefor:
"Initial Tranche B Scheduled Repayment Date Amount
------------------------------------------ ------
Semi-Annual Payment Date in June, 1997 $ 500,000
Semi-Annual Payment Date in Dec., 1997 $ 500,000
Semi-Annual Payment Date in June, 1998 $ 500,000
<PAGE>
-4-
Semi-Annual Payment Date in Dec., 1998 $ 500,000
Semi-Annual Payment Date in June, 1999 $ 500,000
Semi-Annual Payment Date in Dec., 1999 $ 500,000
Semi-Annual Payment Date in June, 2000 $ 500,000
Semi-Annual Payment Date in Dec., 2000 $ 500,000
Semi-Annual Payment Date in June, 2001 $ 500,000
Semi-Annual Payment Date in Dec., 2001 $ 500,000
Semi-Annual Payment Date in June, 2002 $ 500,000
Semi-Annual Payment Date in Dec., 2002 $ 500,000
Semi-Annual Payment Date in June, 2003 $ 31,333,333
Semi-Annual Payment Date in Dec., 2003 $ 31,333,333
Semi-Annual Payment Date in June, 2004 $ 31,333,334
Additional Tranche B Scheduled Repayment Date Amount
- --------------------------------------------- ------
Semi-Annual Payment Date in Dec., 1997 $ 300,000
Semi-Annual Payment Date in June, 1998 $ 300,000
Semi-Annual Payment Date in Dec., 1998 $ 300,000
Semi-Annual Payment Date in June, 1999 $ 300,000
Semi-Annual Payment Date in Dec., 1999 $ 300,000
Semi-Annual Payment Date in June, 2000 $ 300,000
Semi-Annual Payment Date in Dec., 2000 $ 300,000
Semi-Annual Payment Date in June, 2001 $ 300,000
Semi-Annual Payment Date in Dec., 2001 $ 300,000
Semi-Annual Payment Date in June, 2002 $ 300,000
Semi-Annual Payment Date in Dec., 2002 $ 300,000
Semi-Annual Payment Date in June, 2003 $ 18,900,000
Semi-Annual Payment Date in Dec., 2003 $ 18,900,000
Semi-Annual Payment Date in June, 2004 $ 18,900,000"
<PAGE>
-5-
2.3. Amendments to Section 11 of the Credit Agreement
------------------------------------------------
(a) Section 11.01 shall be amended by adding the following new
definitions, in the appropriate alphabetical order.
"'Additional Tranche B Term Loan' shall have the meaning provided in
Section 1.01(f)."
"'Additional Tranche B Term Note' shall have the meaning provided in
Section 1.05(a)."
"'Amendment No. 1' shall mean Amendment Number One and Waiver dated
as of June 2, 1997 to this Agreement.'
"'Initial Tranche B Term Loan' shall have the meaning provided in
Section 1.01(b)."
"'Initial Tranche B Term Note shall have the meaning provided in
Section 1.05(a)."
(b) Section 11.01 shall be amended as follows:
"Permitted Acquisition" shall be amended by deleting the definition
thereof and replacing it with the following:
"'Permitted Acquisition' shall mean (a) the merger or consolidation of
any Person into Holdings or any Wholly Owned Subsidiary of Holdings or (b) the
acquisition by Holdings or its Subsidiaries of all or substantially all of the
assets of any Person (or all or substantially all of the assets of a product
line or division of any Person) not already a Subsidiary of Holdings or 100% of
the capital stock of any such Person; provided that any such merger,
--------
consolidation or acquisition shall only be a Permitted Acquisition so long as
(A) no Default or Event of Default exists (or will result from such
acquisitions), (B) pro forma for such acquisitions and the financings incurred
and conforming accounting adjustments made in connection therewith, (x) the
Consolidated Adjusted Senior Leverage Ratio of Holdings is less than 2.25:1.00;
and (y) the Consolidated Adjusted Leverage Ratio of Holdings is less than
4.50:1.00; and (C) such Permitted Acquisition is funded with (i) cash and Cash
Equivalents as reflected on the consolidated balance sheet of Holdings as of the
date of such Permitted Acquisition, (ii) Revolving Loans in an aggregate
principal amount at any time outstanding not to exceed $45,000,000, (iii)
Holdings Common Stock or (iv) as to any Permitted Acquisition
<PAGE>
-6-
consummated within one year of the Effective Date, proceeds of either
Indebtedness incurred pursuant to Section 9.04(h) or the sale or issuance of
equity securities (subject to the provisions of 4.02(e)) (v) any Indebtedness
permitted by Section 9.04, or (vi) any combination of these items referred to in
subclauses (i), (ii), (iii) or (iv) of this clause (c); provided, however, that
for any Permitted Acquisition funded solely in accordance with either subclause
(i), (ii), (v) or (vi) of this clause (C), the total consideration, after the
first anniversary of the Effective Date, shall be limited to $20,000,000 unless
otherwise agreed to by the Agents; and provided further, that to the extent any
such Permitted Acquisition or series of Permitted Acquisitions funded pursuant
to subclause (iv) of this clause (C) is not made by the Borrower or any of its
Subsidiaries or is not contributed by Holdings to either the Borrower or any of
its Subsidiaries, neither the Borrower nor any of its Subsidiaries shall incur
any Indebtedness (including Guarantees) with respect thereto. Notwithstanding
anything to the contrary contained in the immediately preceding sentence, an
acquisition shall be a Permitted Acquisition only if all requirements of Section
9.02(j) with respect to Permitted Acquisitions are met with respect thereto."
"Tranche B Term Loan" shall be amended by deleting the definition
thereof and replacing it with the following:
"'Tranche B Term Loan' shall mean the Initial Tranche B Term Loans
and the Additional Tranche B Term Loans."
"Tranche B Term Note" shall be amended by deleting the definition
thereof and replacing it with the following:
"'Tranche B Term Note' shall mean each Initial Tranche B Term Note
and Additional Tranch B Term Note."
2.4. Amendments to Section 8 of the Credit Agreement
-----------------------------------------------
(a) Section 8.01(a) shall be amended by deleting "and consolidating"
immediately before the words "balance sheets" and "statements of operations" in
clause (i) thereof.
(b) Section 8.01(c) shall be amended by inserting the words "and
consolidating" immediately before the words "statements of operations" and by
inserting "(except for the consolidating balance sheets and statements of
operations)" immediately after the words "and certified" in clause (i) thereof.
<PAGE>
-7-
2.5. Amendments to Section 9 of the Credit Agreement
-----------------------------------------------
(a) Section 9.02(h) shall be amended by inserting the words "if
any" after the words "the security interests" in clause (ii) thereof.
(b) Section 9.02(j) shall be amended to change the reference
therein from "30 days" to 10 days" and shall be further amended by inserting at
the end of clause (ii) thereof the following:
; provided, that with respect to Permitted Acquisitions in respect of which
--------
the total consideration payable is less than $5,000,000 such Permitted
Acquisition Notice and certificate of Chief Financial Officer of Holdings
may be delivered to the Agents promptly after the closing of such Permitted
Acquisition.
(c) Section 9.02 shall be amended by adding at the end thereof
the following:
"(o) In connection with any Permitted Acquisition, a Person may merge
or consolidate with and into Holdings or any Wholly Owned Subsidiary of
Holdings."
(d) Section 9.08 shall be amended by adding at the end thereof
before the ":" the following:
"provided, however, that for purposes of this Section 9.08 the Consolidated
--------
Adjusted Leverage Ratio for any Test Period may be determined on a pro
forma basis as if any Permitted Acquisition (or other acquisition or
transaction with respect to which the requisite consents of the Lenders
have been obtained) that occurred during or subsequent to such Test Period
(and the incurrence, assumption and/or repayment of any Indebtedness in
connection with any such Permitted Acquisition or acquisition or other
transaction), as the case may be, had occurred on the first day of such
Test Period (and such Indebtedness, if any, had remained outstanding (or
had not been outstanding, as the case may be) throughout such Test Period),
it being understood that, in calculating the Consolidated Adjusted Leverage
Ratio in connection with each and every Permitted Acquisition or
acquisition or other transaction, Consolidated EBITDA shall include the
results of operations of the Person or
<PAGE>
-8-
assets acquired pursuant to each such Permitted Acquisition or acquisition
or other transaction on a pro forma basis as if such acquisition or other
transaction had occurred on the first day of the respective Test Period and
shall include any conforming accounting adjustments made in connection
therewith".
(e) Section 9.10 shall be amended by adding at the end thereof
before the ":" the following:
"; provided, however, that for purposes of this Section 9.10 Consolidated
-------- -------
EBITDA for any Test Period may give pro forma effect to a Permitted
Acquisition (or other acquisition or transaction with respect to which the
requisite consents of the Lenders have been obtained) as if such Permitted
Acquisition (or acquisition or other transaction) had occurred on the first
day of such Test Period."
(f) Section 9.15 shall be amended to change the reference therein
from "15 days" to "10 days" and shall be further amended by inserting after the
words "so long as" appearing in the first sentence thereof the following: ",
except in the case of any Subsidiary that will be merged with and into Holdings
or any of its Wholly Owned Subsidiaries as promptly as practicable after an
Investment made pursuant to Sections 9.05(i), (k), (l) or (n)" and shall further
be amended by deleting clause (iii) thereof in its entirety and substituting in
its place the following:
"(iii) such new Subsidiary promptly executes a counterpart of the
Guaranty, the Pledge Agreement and the Security Agreement; provided,
---------
however, that notwithstanding the foregoing, such Subsidiary shall in no
-------
event be required to guarantee the Obligations in excess of the amounts
permitted under the indenture pursuant to which the 11 3/4 Notes were
issued (the "Indenture"); and provided, further that as long as the
Indenture is in effect no new Subsidiary established, created or acquired
after the Effective Date shall have total assets having a fair market value
in excess of $20,000,000 and, notwithstanding Section 9.05, such assets
(other than a de minimis amount for the purpose of forming a new
subsidiary) shall be held by such new subsidiary solely as the result of a
Permitted Acquisition occurring after the Effective Date."
<PAGE>
-9-
2.6. Amendment to the Annexes of the Credit Agreement
------------------------------------------------
Annex I shall be amended by the addendum to Annex I attached hereto as
Exhibit I.
SECTION THREE - REPRESENTATIONS AND WARRANTIES.
------------- ------------------------------
Holdings hereby confirms, reaffirms and restates the representations
and warranties made by it in Section 7 of the Credit Agreement and all such
representations and warranties are true and correct in all material respects as
of the date hereof (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be required to
be true and correct only as of such specified date), except such
representations and warranties need not be true and correct to the extent that
changes in the facts and conditions on which such representations and
warranties are based are required or permitted under the Credit Agreement or
such changes arise out of events not prohibited by the covenants set forth in
Sections 8 and 9 of the Credit Agreement or otherwise permitted by consents or
waivers. Holdings further represents and warrants (which representations and
warranties shall survive the execution and delivery hereof) to the Agents and
each Lender that:
(a) Holdings and the Borrower each has the corporate power and
authority to execute, deliver and perform this Amendment and has taken all
corporate actions necessary to authorize the execution, delivery and
performance of this Amendment;
(b) No consent of any person other than all of the Lenders or
the Agents, and no consent, permit, approval or authorization of, exemption by,
notice or report to, or registration, filing or declaration with, any
governmental authority is required in connection with the execution, delivery,
performance, validity or enforceability of this Amendment;
(c) This Amendment has been duly executed and delivered on
behalf of each of Holdings and the Borrower by a duly authorized officer or
attorney-in-fact of Holdings and the Borrower, as the case may be, and
constitutes a legal, valid and binding obligation of Holdings and the Borrower,
as the case may be, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by (a) bankruptcy, insolvency, fraudulent
conveyance, preferential transfer, reorganization, moratorium or other similar
<PAGE>
-10-
laws now or hereafter in effect relating to or affecting creditors' rights and
remedies generally, (b) general principles of equity (whether such
enforceability is considered in a proceeding in equity or at law), and by the
discretion of the court before which any proceeding therefor may be brought, or
(c) public policy considerations or court administrative, regulatory or other
governmental decisions that may limit rights to indemnification or contribution
or limit or affect any covenants or agreements relating to competition or
future employment; and
(d) The execution, delivery and performance of this Amendment
will not violate (i) any provision of law applicable to Holdings or the
Borrower or (ii) contractual obligation of either Holdings or the Borrower,
except in the case of clause (i) or (ii), such violations that would not
reasonably be expected to result in, singly or in the aggregate, a Material
Adverse Effect.
SECTION FOUR - CONDITIONS PRECEDENT.
------------ --------------------
Upon the fulfillment of the following conditions the amendments
contemplated by this Amendment No. 1 shall become effective as of the Amendment
Effective Date:
(a) Holdings and the Borrower shall have delivered to the
Administrative Agent a certificate of the Secretary of Holdings and the
Borrower, dated the Amendment Effective Date and attaching resolutions of its
Board of Directors in form and substance satisfactory to the Agent approving
and authorizing the execution, delivery and performance of this Amendment No.
1, signature and incumbency certificates and such other documents that the
Agents may reasonably request.
(b) The Additional Tranche B Term Loans made by each Bank shall be
evidenced by Additional Tranche B Term Notes, each duly executed and delivered
by the Borrower to each such Bank substantially in the form of Exhibit B-5
hereto, dated the Amendment Effective Date, with blanks appropriately completed
in conformity herewith and in conformity with the Credit Agreement.
(c) Holdings and the Borrower shall take any and all actions and
agree to execute and deliver all such instruments and documents as the
Collateral Agent shall reasonably deem necessary or desirable to effect the
transactions contemplated by this Amendment.
<PAGE>
-11-
SECTION FIVE - MISCELLANEOUS.
------------ -------------
(a) Except as herein expressly amended, the Credit Agreement
and all other agreements, documents, instruments and certificates executed in
connection therewith, except as otherwise provided herein, are ratified and
confirmed in all respects and shall remain in full force and effect in
accordance with their respective terms.
(b) This Amendment may be executed by the parties hereto in one
or more counterparts, each of which shall be an original and all of which shall
constitute one and the same agreement.
(c) THIS AMENDMENT SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS.
(d) This Amendment shall not constitute a consent or waiver to
or modification of any other provision, term or condition of the Credit
Agreement. All terms, provisions, covenants, representations, warranties,
agreements and conditions contained in the Credit Agreement, as amended
hereby, shall remain in full force and effect.
<PAGE>
-12-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the date first above written.
COINMACH LAUNDRY CORPORATION
By: /s/ ROBERT M. DOYLE
-----------------------------------
Name: Robert M. Doyle
Title: Senior Vice President
COINMACH CORPORATION
By: /s/ ROBERT M. DOYLE
-----------------------------------
Name: Robert M. Doyle
Title: Senior Vice President
<PAGE>
-13-
BANKERS TRUST COMPANY,
Individually and as
Administrative Agent
By: /s/ PATRICIA HOGAN
-----------------------------------
Name: Patricia Hogan
Title: Vice President
<PAGE>
-14-
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
Individually and as Syndication Agent
By: /s/ MARK B. FELKER
-----------------------------------
Name: Mark B. Felker
Title: Senior Vice President
<PAGE>
-15-
LEHMAN COMMERCIAL PAPER INC.,
Individually and as Documentation Agent
By: /s/ DENNIS J. DEE
-----------------------------------
Name: Dennis J. Dee
Title: Authorized Signatory
<PAGE>
-16-
FLEET NATIONAL BANK,
as a Lender
By: /s/ ERIC C. VANDER MEL
-----------------------------------
Name: Eric C. Vander Mel
Title: Vice President
<PAGE>
-17-
BANKBOSTON, N.A. as a Lender
By: /s/ TIMOTHY H. BARNES
-----------------------------------
Name: Timothy H. Barnes
Title: Division Executive
<PAGE>
-18-
BANK OF SCOTLAND, as a Lender
By: /s/ ANNIE CHIN TAT
-----------------------------------
Name: Annie Chin Tat
Title: Vice President
<PAGE>
-19-
CREDIT LYONNAIS NEW YORK BRANCH,
as a Lender
By: /s/ ATTILA KOC
-----------------------------------
Name: Attila Koc
Title: Vice President
<PAGE>
-20-
HELLER FINANCIAL, as a Lender
By: /s/ LINDA W. WOLF
-----------------------------------
Name: Linda W. Wolf
Title: Senior Vice President
<PAGE>
-21-
THE ING CAPITAL SENIOR SECURED HIGH INCOME FUND,
L.P.
By: /s/ MICHAEL D. HATLEY
---------------------------------------
Name: Michael D. Hatley
Title: Vice President & Portfolio Manager
<PAGE>
-22-
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: /s/ JOHN B. JOYCE
-----------------------------------
Name: John B. Joyce
Title: Managing Director
<PAGE>
-23-
MERRILL LYNCH SENIOR FLOATING RATE FUND, INC.
By: /s/ ANTHONY R. CLEMENTE
-----------------------------------
Name: Anthony R. Clemente
Title: Authorized Signatory
<PAGE>
-24-
THE NIPPON CREDIT BANK, LTD.,
as a Lender
By:
-----------------------------------
Name:
Title:
<PAGE>
-25-
PILGRIM AMERICA PRIME RATE TRUST
By: /s/ THOMAS C. HUNT
-----------------------------------
Name: Thomas C. Hunt
Title: Portfolio Analyst
<PAGE>
-26-
PRIME INCOME TRUST,
as a Lender
By: /s/ RAFAEL SCOLARI
-----------------------------------
Name: Rafael Scolari
Title: V.P. Portfolio Manager
<PAGE>
-27-
RESTRUCTURED OBLIGATIONS
Backed by Senior Assets B.V.
By: Chancellor LGT Senior
Secured Management, Inc.
as Portfolio Advisor
By:
-----------------------------------
Name:
Title:
<PAGE>
-28-
SENIOR DEBT PORTFOLIO
By: Boston Management and
Research as Investment Advisor
By: /s/ SCOTT H. PAGE
-----------------------------------
Name: Scott H. Page
Title: Vice President
<PAGE>
Exhibit I to
Amendment One
COMMITMENTS
-----------
Bank Additional Tranche B
---- Term Loan Commitment
--------------------
Bankers Trust Company $20,500,000
First Union National Bank of North 4,500,000
Carolina
Lehman Commercial Paper Inc. 4,500,000
Fleet National Bank 2,100,000
BankBoston, N.A. 2,100,000
Bank of Scotland 2,100,000
Credit Lyonnais New York Branch 2,100,000
Heller Financial 2,100,000
The ING Capital Senior Secured High 4,000,000
Income Fund L.P.
Massachusetts Mutual Life Insurance 4,000,000
Company
Merrill Lynch Senior Floating Rate 4,000,000
Fund, Inc.
The Nippon Credit Bank, LTD. -- 0 --
Pilgrim America Prime Rate Trust 4,000,000
Prime Income Trust 4,000,000
Chancellor LGT Senior Secured Management - 0 -
Senior Debt Portfolio - 0 -
-----------
TOTAL $60,000,000
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-27-1998
<PERIOD-START> MAR-29-1997
<PERIOD-END> JUN-27-1997
<CASH> 13,148
<SECURITIES> 0
<RECEIVABLES> 6,917
<ALLOWANCES> 0
<INVENTORY> 10,304
<CURRENT-ASSETS> 0
<PP&E> 174,932
<DEPRECIATION> 48,077
<TOTAL-ASSETS> 529,336<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 386,910<F2>
0
0
<COMMON> 41,391
<OTHER-SE> (32,891)
<TOTAL-LIABILITY-AND-EQUITY> 529,336<F3>
<SALES> 0
<TOTAL-REVENUES> 72,095
<CGS> 0
<TOTAL-COSTS> 48,236
<OTHER-EXPENSES> 18,042<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,090
<INCOME-PRETAX> (4,273)
<INCOME-TAX> (800)<F5>
<INCOME-CONTINUING> (3,473)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,473)<F6>
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Includes Advance Rental Payments of $43,975, Contract Rights of $208,367 and
Goodwill of $104,246 each net of accumulated amortization, for the three months
ended June 27, 1997.
<F2>Includes $196,655 of 11 3/4% senior notes as well as debt outstanding under
a credit facility of $188,000 for the three months ended June 27, 1997.
<F3>Includes Accrued Commissions of $13,090 and Accrued Interest of $4,261, for
the three months ended June 27, 1997.
<F4>Other Expenses includes stock based compensation charges of $104 for the
three months ended June 27, 1997.
<F5>The provision (benefit) for income taxes consists of $50 currently payable
and ($850) deferred, for the three months ended June 27, 1997.
<F6>In addition, EDBITA (earnings before interest, income taxes, depreciation
and amortization) of $22,396 (before the deduction for the stock-based
compensation charge) was generated for the reported period. EDBITA is a
meaningful measure of a company's ability to service debt.
</FN>
</TABLE>
