<PAGE> 1
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
[ X ] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 For the Period Ended FEBRUARY 28, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 For the Transition Period From_____to_______.
COMMISSION FILE NUMBER 0 -25068.
HASKEL INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-4107640
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
100 EAST GRAHAM PLACE
BURBANK, California 91502
(Address of principal executive offices) (Zip Code)
(818) 843-4000
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, 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 periods 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 Issuers Involved in Bankruptcy
Proceedings During the Preceding Five Years
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by the court. Yes . 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 practical date.
AS OF APRIL 10, 1997 THE REGISTRANT HAD 4,692,230 SHARES OF CLASS A COMMON
STOCK, AND 40,000 SHARES OF CLASS B COMMON STOCK OUTSTANDING.
<PAGE> 2
INDEX
HASKEL INTERNATIONAL, INC.
PART I. FINANCIAL INFORMATION
PAGE
Item 1. Financial Statements (Unaudited)
<TABLE>
<S> <C>
Consolidated balance sheets - February 28, 1997 and May 31, 1996 ............ 3
Consolidated statements of operations - Three months ended February 28,
1997 and February 29, 1996; Nine months ended February 28, 1997 and
February 29, 1996............................................................ 5
Consolidated statements of cash flows - Nine months ended February 28,
1997 and February 29, 1996................................................... 6
Notes to consolidated financial statements - February 28, 1997............... 7
Item 2. Management's discussion and analysis of financial condition and
results of operations................................................... 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K....................................... 12
</TABLE>
2
<PAGE> 3
HASKEL INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
February 28, May 31,
1997 1996
------------ ------------
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 7,137,000 $ 8,239,000
Accounts receivable, net 10,889,000 9,581,000
Inventory, net 10,414,000 10,532,000
Prepaid expenses and other current assets 556,000 356,000
Assets held for sale 1,934,000 --
Deferred income taxes 1,260,000 1,260,000
----------- -----------
TOTAL CURRENT ASSETS 32,190,000 29,968,000
PROPERTY, PLANT & EQUIPMENT, Net 5,685,000 5,526,000
PURCHASED TECHNOLOGY, Net -- 6,569,000
GOODWILL, Net 395,000 3,248,000
DEFERRED INCOME TAXES 2,193,000 --
OTHER ASSETS 37,000 49,000
----------- -----------
TOTAL $40,500,000 $45,360,000
=========== ===========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
HASKEL INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Unaudited)
<TABLE>
<CAPTION>
February 28, May 31,
1997 1996
------------ -------
<S> <C> <C>
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 979,000 $ 985,000
Accounts payable 3,696,000 3,510,000
Dividends payable 331,000 331,000
Accrued liabilities 2,458,000 3,089,000
Income taxes payable 89,000 162,000
----------- -----------
TOTAL CURRENT LIABILITIES 7,553,000 8,077,000
LONG-TERM DEBT 1,620,000 2,381,000
DEFERRED INCOME TAXES -- 334,000
OTHER ACCRUED LIABILITIES 2,277,000 2,348,000
COMMITMENTS & CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred Stock: 2,000,000 shares authorized;
none issued and outstanding
Common Stock:
Class A, without par value; 20,000,000 shares
authorized; 4,692,230 and 4,688,230 issued
and outstanding at February 28, 1997 and 13,458,000 13,436,000
May 31, 1996, respectively
Class B, without par value; 40,000 shares
authorized, issued and outstanding at
February 28, 1997 and May 31, 1996 19,000 19,000
Retained Earnings 15,601,000 18,951,000
Cumulative foreign currency translation adjustment (28,000) (186,000)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 29,050,000 32,220,000
----------- -----------
TOTAL $40,500,000 $45,360,000
=========== ===========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
HASKEL INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
February 28, February 29, February 28, February 29,
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
SALES $12,401,000 $11,111,000 $37,626,000 $30,372,000
COST OF SALES 6,670,000 5,893,000 20,373,000 16,842,000
----------- ----------- ----------- -----------
GROSS PROFIT 5,731,000 5,218,000 17,253,000 13,530,000
EXPENSES
Selling 1,938,000 1,892,000 5,877,000 5,387,000
General and Administrative 1,842,000 1,846,000 4,928,000 4,756,000
Engineering design, research and development 292,000 289,000 777,000 717,000
----------- ----------- ----------- -----------
Total 4,072,000 4,027,000 11,582,000 10,860,000
----------- ----------- ----------- -----------
OPERATING INCOME 1,659,000 1,191,000 5,671,000 2,670,000
OTHER INCOME 104,000 125,000 202,000 330,000
----------- ----------- ----------- -----------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 1,763,000 1,316,000 5,873,000 3,000,000
PROVISION FOR INCOME TAXES 727,000 524,000 2,294,000 1,182,000
----------- ----------- ----------- -----------
INCOME FROM CONTINUING OPERATIONS 1,036,000 792,000 3,579,000 1,818,000
DISCONTINUED OPERATIONS:
Income (loss) from operations, less applicable
income taxes (175,000) (529,000) 220,000
Estimated loss on disposal of segment (5,406,000)
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 1,036,000 $ 617,000 $(2,356,000) $ 2,038,000
=========== =========== =========== ===========
INCOME (LOSS) PER SHARE:
Continuing operations $0.21 $0.16 $0.74 $0.38
Discontinued operations:
Loss from operations (0.03) (0.11) 0.05
Estimated loss on disposal (1.12)
----------- ----------- ----------- -----------
Total $0.21 $0.13 ($0.49) $0.43
=========== =========== =========== ===========
DIVIDEND PER SHARE $0.07 $0.07 $0.21 $0.21
=========== =========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
HASKEL INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
February 28, February 29,
1997 1996
------------ ------------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by continuing operations $ 3,220,000 $ 448,000
Net cash provided by (used in) discontinued operations (334,000) 853,000
------------ ------------
Net cash provided by operating activities 2,886,000 1,301,000
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,255,000) (984,000)
Proceeds from sale of property 71,000 -
Acquisitions (net of cash and cash equivalents acquired) (1,172,000) (159,000)
------------ ------------
Net cash used in investing activities (2,356,000) (1,143,000)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt (767,000) (139,000)
Proceeds from issuance of
common stock 22,000 -
Dividends declared (994,000) (993,000)
------------ ------------
Net cash used in financing activities (1,739,000) (1,132,000)
------------ ------------
EFFECT OF EXCHANGE RATE ON
CASH AND CASH EQUIVALENTS 107,000 (72,000)
------------ ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,102,000) (1,046,000)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 8,239,000 8,806,000
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 7,137,000 $ 7,760,000
============ ============
SUPPLEMENTAL DISCLOSURE OF CASHFLOW INFORMATION:
Cash paid for:
Interest
Continuing operations $ 23,000 $ 22,000
============ ============
Discontinued operations $ 132,000 $ 176,000
============ ============
Income taxes $ 1,720,000 $ 2,123,000
============ ============
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES-
On June 3, 1996, the Company's foreign subsidiary, Haskel Systems, Limited ("HESL"),
acquired all of the outstanding stock of Hydraulic Mobile Equipment Limited ("HME") for
$851,000 ($814,000 in cash and $37,000 in acquisition costs) plus liabilities.
Fair value of assets acquired $ 1,067,000
Cash paid (851,000)
------------
Liabilities assumed $ 216,000
============
On November 30, 1995, HESL acquired certain assets of Armaturenbau GmbH for $412,000
($159,000 in cash and a note payable of $253,000).
See notes to consolidated financial statements.
</TABLE>
6
<PAGE> 7
PART I. FINANCIAL INFORMATION
HASKEL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (which
comprise only normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the period ended February
28, 1997 are not necessarily indicative of the results that may be expected for
the year ending May 31, 1997. For further information, refer to the consolidated
financial statements and notes thereto for the year ended May 31, 1996.
NOTE B - INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
February 28, May 31,
1997 1996
----------- -----------
<S> <C> <C>
Raw Materials $ 2,350,000 $ 3,335,000
Work in Process 1,575,000 2,032,000
Finished Products 6,489,000 5,165,000
----------- -----------
$10,414,000 $10,532,000
=========== ===========
</TABLE>
NOTE C - ACQUISITIONS
On June 3, 1996, the Company's foreign subsidiary, Haskel Energy Systems, Ltd.,
acquired all of the outstanding stock of Hydraulic Mobile Equipment Limited in
exchange for $814,000 in cash and $37,000 in acquisition costs plus liabilities.
The business is located in Manchester, England.
On December 4, 1996, the Company acquired certain assets of Hogan Fluid Power,
Inc. for approximately $380,000 in cash and $50,000 in acquisition costs. The
business is located in Houston, Texas.
7
<PAGE> 8
PART I. FINANCIAL INFORMATION
HASKEL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
NOTE D - INSURANCE REIMBURSEMENTS
The general and administrative expenses for the nine months ended February 28,
1997 include reimbursements of approximately $676,000 from the Company's
insurance carriers representing the recovery of legal expenses relating to
environmental matters.
NOTE E - DISCONTINUED OPERATIONS
On January 10, 1997, the Company adopted a plan to dispose of its Electronic
Products Group ("EPG"). A formal plan of disposal was approved by the Board of
Directors, and it is anticipated that the disposal will be completed within
twelve months.
The plan of disposal of the EPG was accounted for as a discontinued operation as
of November 30, 1996 and, accordingly, its assets (liabilities) have been
segregated from continuing operations in the accompanying consolidated balance
sheets, and its operating results are segregated and reported as discontinued
operations in the accompanying consolidated statements of operations and cash
flows. The income (loss) from discontinued operations reflected in the
accompanying consolidated statements of operations are net of income tax
benefits of $73,000 for the three months ended February 29, 1996, and net of
income tax benefits for the nine months ended February 28, 1997 and February 29,
1996 of $220,000 and $242,000, respectively.
The estimated loss on disposal of segment included in the statement of
operations for the nine months ended February 28, 1997 reflects the net amount
of the following components: the write-down of the net assets of the EPG to the
expected market value; disposal costs; anticipated operating income of the EPG
through the expected date of disposal; and an income tax benefit of $2,414,000
from the reversal of related deferred tax liabilities. The estimated net
realizable value of the EPG has been reclassified on the balance sheet as
"Assets held for sale."
Sales from these operations for the three and nine months ended February 29,
1996 were $2,831,000 and $12,775,000, respectively. The actual operating results
for the discontinued operations for the three months ended February 28, 1997
approximated amounts estimated for in the loss on disposal of segment accrued
for at November 30, 1996.
8
<PAGE> 9
HASKEL INTERNATIONAL, INC.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This Report contains forward-looking statements that involve risks and
uncertainties. The Company's actual results and timing of certain events could
differ materially from those discussed in the forward-looking statements.
Factors that could cause or contribute to such differences include, but are not
limited to, the integration of acquired operations, the sale of the Electronic
Products Group ("EPG"), management of growth and other factors.
DISCONTINUED OPERATIONS
The Company adopted a plan to dispose of its Electronic Products Group ("EPG")
on January 10, 1997, and, as a result, the Company has accounted for the EPG as
a discontinued operation as of November 30, 1996. The estimated loss on disposal
of segment of $5,406,000 included in the statement of operations for the nine
months ended February 28, 1997 reflects the net amount of the following
components: the write-down of the net assets of the EPG to the expected market
value; disposal costs; anticipated operating income of the EPG through the
expected date of disposal; and an income tax benefit of $2,414,000 from the
reversal of related deferred tax liabilities. The Company recognized a loss from
discontinued operations for the three months ended February 29, 1996 of $175,000
and income from discontinued operations of $220,000 for the nine months ended
February 29, 1996. The actual operating results for the discontinued business
for the three months ended February 28, 1997 approximated amounts estimated for
as part of the estimated loss from disposal of $5,406,000 as discussed above.
The loss from discontinued operations for the nine months ended February 28,
1997 were $529,000 which included $240,000 in restructuring costs incurred in
the first quarter of fiscal year 1997. The decrease in income from discontinued
operations for the nine months ended February 28, 1997 as compared to the prior
year is the result of weakened market conditions and increased competition
within the electronics industry.
RESULTS OF CONTINUING OPERATIONS
Sales for the third quarter ended February 28, 1997 increased $1,290,000, or
11.6%, to $12,401,000, as compared with sales of $11,111,000 for the same period
in the prior year. For the first nine months of fiscal year 1997, sales were
$37,626,000, or $7,254,000 (23.9%) higher than the same period in fiscal year
1996. These results reflect operations by the Industrial Products Group ("IPG")
and include increased sales from new and expanded operations principally in its
international markets, particularly in Europe and the Pacific Rim, and increased
demand for the Company's value-added systems. Sales for the three and nine
months ended February 28, 1997, included approximately $370,000 and $2,140,000,
respectively, which are attributable to activities of businesses acquired in
Germany and the United Kingdom and the opening of an office in the Netherlands.
Except for Germany, which was acquired in November 1996, none of these
operations were in place during the first nine months of fiscal year 1996. Sales
of value-added
9
<PAGE> 10
HASKEL INTERNATIONAL, INC.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
systems increased approximately $750,000 and $3,000,000 for the three and nine
months ended February 28, 1997 as compared to the same periods in the prior
year. Approximately $1,200,000 of the sales increase for the nine months ended
February 28, 1997 represents a single order in the second quarter to the
automotive safety products sector.
Gross profit for the third quarter ended February 28, 1997 increased $513,000 to
$5,731,000, or 46.2 % of sales, as compared with gross profit of $5,218,000, or
47.0% of sales, for the same period in fiscal year 1996. Gross profit for the
first nine months of fiscal year 1997 was $17,253,000 (45.9% of sales) as
compared to $13,530,000 (44.5% of sales) for the comparable period in fiscal
year 1996. Gross profit for the third quarter of fiscal 1997 as compared to the
prior year changed principally as a result of sales volume and a change in the
sales mix. The gross profit as a percentage of sales for the nine months ended
February 28, 1997 increased compared to the prior year as the Company reduced
product costs through improved manufacturing processes and lower material costs.
General and administrative expenses for the nine months ended February 28, 1997
include a settlement received in the second quarter of approximately $676,000
from the Company's insurance carriers representing the recovery of prior year's
legal expenses relating to environmental matters. Selling, general and
administrative, and engineering ("operating") expenses were $4,072,000 or 32.8%
of sales for the third quarter ended February 28, 1997 as compared to $4,027,000
or 36.2% of sales for the comparable period in fiscal year 1996. For the nine
months ended February 28, 1997, these expenses, excluding the insurance
reimbursements, were $12,258,000 or 32.6% of sales as compared to $10,860,000 or
35.8% of sales for the prior year. Operating expenses for the three and nine
months ended February 28, 1997 included approximately $300,000 and $900,000,
respectively, attributable to activities of new businesses acquired and started.
The remaining increase in operating costs is the direct result of increased
expenses to support the Company's growth.
Income from continuing operations for the third quarter ended February 28, 1997
increased $244,000 or 30.8% to $1,036,000 (8.4% of sales) as compared with
$792,000 (7.1% of sales) for the comparable prior period. For the nine months
ended February 28, 1997, income from continuing operations increased $1,761,000
(96.9%) to $3,579,000 (9.5% of sales) as compared to $1,818,000 (6.0% of sales)
for the same period in fiscal year 1996. The increase in income from continuing
operations is due to the significant increase in sales levels, improvement in
gross margins, and insurance reimbursements as discussed above. The increased
income from
10
<PAGE> 11
HASKEL INTERNATIONAL, INC.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
continuing operations as a percentage of sales is a direct result of the
Company's efforts to contain operating expenses while expanding its operations.
LIQUIDITY AND SOURCES OF CAPITAL
For the nine months ended February 28, 1997, net cash provided by operating
activities included $3,220,000 from continuing operations as compared to
$448,000 for the same period in the prior year. Net cash of $334,000 was used in
discontinued operations in the first nine months of fiscal year 1997 as compared
to net cash provided by discontinued operations of $853,000 in the prior year.
The net cash provided by continuing operations as noted above resulted
principally from net income in the period and effects of exchange rate
fluctuations on net assets held in foreign subsidiaries.
During the nine months ended February 28, 1997 and February 29, 1996, cash used
for investing activities consisted primarily of cash used to acquire new
subsidiaries and capital expenditures. Cash used in financing activities for the
nine months ended February 28, 1997 and February 29, 1996 consisted principally
of payments on long-term debt and dividends paid to shareholders.
To insure the availability of funds to meet its various needs, the Company has a
comprehensive credit facility with its bank. The credit facility includes a
$5,000,000 revolving line of credit; a $4,000,000 acquisition line of credit
available for use in making acquisitions or capital expenditures; and a
$3,000,000 term loan. At February 28, 1997, the Company had no outstanding
balances under the revolving credit or acquisition lines. As of February 28,
1997, the balance of the term debt was $2,152,000, which bears interest at the
LIBOR rate plus 1-3/4 % (7.219% at February 28, 1997.) This debt is directly
associated with the discontinued operations of the EPG and the Company intends
to use the proceeds from the disposition of this business to reduce the balance
of the debt.
As of February 28, 1997, the Company had $7,137,000 in cash and cash
equivalents, and had working capital of $24,637,000, with a ratio of current
assets to current liabilities of approximately 4.3 : 1. This compares with cash
and cash equivalents of $8,239,000, and working capital of $21,891,000, with a
ratio of current assets to current liabilities of 3.7 : 1 as of May 31, 1996.
The Company believes it has adequate resources to achieve its operating goals
for at least the next 12 month period.
11
<PAGE> 12
HASKEL INTERNATIONAL, INC.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K):
10.23 Fourth Amendment dated as of November 17, 1996 to Loan Agreement
between the Company and Union Bank.
10.24 Fifth Amendment dated as of February 4, 1997 to Loan Agreement
between the Company and Union Bank
11.1 Statement Re: Computation of Earnings Per Share
27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the fiscal quarter covered by
this report on Form 10-Q.
12
<PAGE> 13
HASKEL INTERNATIONAL, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HASKEL INTERNATIONAL, INC.
(REGISTRANT)
DATE 4-11-97 /S/ R. MALCOLM GREAVES
-----------------------------------
R. Malcolm Greaves
President & Chief Executive Officer
DATE 4-11-97 /S/ LONNIE D. SCHNELL
-----------------------------------
Lonnie D. Schnell
Chief Financial Officer
13
<PAGE> 1
EXHIBIT 10.23
FOURTH AMENDMENT
TO LOAN AGREEMENT
THIS FOURTH AMENDMENT TO LOAN AGREEMENT (this "Fourth Amendment") dated as of
November 15, 1996, is made and entered into by and between HASKEL
INTERNATIONAL, INC., a California Corporation ("Borrower"), and UNION BANK OF
CALIFORNIA, N.A., a national banking association ("Bank").
RECITALS:
A. Borrower and Bank are parties to that certain Loan Agreement dated
February 21, 1995, pursuant to which Bank agreed to extend credit to Borrower
and amendments thereto dated August 30, 1995, February 13, 1996, April 16, 1996
(the "Agreement").
B. Borrower and Bank desire to amend the Agreement subject to the terms
and conditions of this Fourth Amendment.
AGREEMENT:
In consideration of the above recitals and of the mutual covenants and
conditions contained herein, Borrower and Bank agree as follows:
1. Defined Terms. Initially capitalized terms used herein which are not
otherwise defined shall have the meanings assigned thereto in the Agreement.
2. Amendments to the Agreement.
(a) Section 1.1.1 of the Agreement is hereby amended by
substituting the date "November 17, 1997" for the date "November 15, 1996".
3. Effectiveness of the Fourth Amendment. This Fourth Amendment shall
become effective as of the date hereof when, and only when, Bank shall have
received all of the following, in form and substance satisfactory to Bank:
(a) The counterpart of this Fourth Amendment, duly executed by
Borrower;
(b) Such other documents, instruments or agreements as Bank may
reasonably deem necessary.
4. Ratification. Except as specifically amended hereinabove, the Agreement
shall remain in full force and effect and is hereby ratified and confirmed.
5. Representations and Warranties. Borrower represents and warrants as
follows:
(a) Each of the representations and warranties contained in the
Agreement, as may be amended hereby, is hereby reaffirmed as of the date
hereof, each as if set forth herein;
(b) The execution, delivery and performance of the Fourth Amendment
and any other instruments or documents in connection herewith are within
Borrower's power, have been duly authorized, are legal, valid and binding
obligations of Borrower, and are not in conflict with the terms of any charter,
bylaw, or other organization papers of Borrower or with any law, indenture,
agreement or undertaking to which Borrower is a party or by which Borrower is
bound or affected;
(c) No event has occurred and is continuing or would result from
this Fourth Amendment which constitutes or would constitute an Event of Default
under the Agreement.
6. Governing Law. This Fourth Amendment and all other instruments or
documents in connection
<PAGE> 2
herewith shall be governed by and construed according to the laws of the State
of California.
7. Counterparts. This Fourth Amendment may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
WITNESS the due execution hereof as of the date first above written.
HASKEL INTERNATIONAL, INC. UNION BANK
By: /s/ R.M. Greaves By: /s/ Allison Berry
--------------------------- ---------------------------
Title: President Title: Associate Vice President
------------------------ ------------------------
By: /s/ Lonnie D. Schnell By: /s/ Anita P. Saraiya
--------------------------- ---------------------------
Title: Chief Financial Officer Title: Vice President
------------------------ ------------------------
<PAGE> 1
EXHIBIT 10.24
FIFTH AMENDMENT
TO LOAN AGREEMENT
THIS FIFTH AMENDMENT TO LOAN AGREEMENT (this "Fifth Amendment") dated as of
February 4, 1997, is made and entered into by and between HASKEL
INTERNATIONAL, INC., a California Corporation ("Borrower"), and UNION BANK OF
CALIFORNIA, N.A., a national banking association ("Bank").
RECITALS:
A. Borrower and Bank are parties to that certain Loan Agreement dated
February 21, 1995 (the "Agreement"), pursuant to which Bank agreed to extend
credit to Borrower and amendments thereto dated August 30, 1995, February 13,
1996, April 16, 1996 and November 15, 1996.
B. Borrower and Bank desire to amend the Agreement subject to the terms
and conditions of this Fifth Amendment.
AGREEMENT:
In consideration of the above recitals and of the mutual covenants and
conditions contained herein, Borrower and Bank agree as follows:
1. Defined Terms. Initially capitalized terms used herein which are not
otherwise defined shall have the meanings assigned thereto in the Agreement.
2. Amendments to the Agreement.
(a) Section 4.10 of the Agreement is hereby amended to include the
following:
"The EBITDA definition shall mean earnings before interest, taxes,
depreciation, amortization and all non-cash expenses."
3. Effectiveness of the Fifth Amendment. This Fifth Amendment shall
become effective as of the date hereof when, and only when, Bank shall have
received all of the following, in form and substance satisfactory to Bank:
(a) The counterpart of this Fifth Amendment, duly executed by
Borrower;
(b) Such other documents, instruments or agreements as Bank may
reasonably deem necessary.
4. Ratification. Except as specifically amended hereinabove, the Agreement
shall remain in full force and effect and is hereby ratified and confirmed.
5. Representations and Warranties. Borrower represents and warrants as
follows:
(a) Each of the representations and warranties contained in the
Agreement, as may be amended hereby, is hereby reaffirmed as of the date
hereof, each as if set forth herein;
(b) The execution, delivery and performance of the Fifth Amendment
and any other instruments or documents in connection herewith are within
Borrower's power, have been duly authorized, are legal, valid and binding
obligations of Borrower, and are not in conflict with the terms of any charter,
bylaw, or other organization papers of Borrower or with any law, indenture,
agreement or undertaking to which Borrower is a party or by which Borrower is
bound or affected;
(c) No event has occurred and is continuing or would result from
this Fifth Amendment which constitutes or would constitute an Event of Default
under the Agreement.
<PAGE> 2
6. Governing Law. This Third Amendment and all other instruments or
documents in connection herewith shall be governed by and construed according
to the laws of the State of California.
7. Counterparts. This Fifth Amendment may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
WITNESS the due execution hereof as of the date first above written.
HASKEL INTERNATIONAL, INC. UNION BANK
By: /s/ R.M. Greaves By: /s/ Allison Berry
--------------------------- ---------------------------
Title: President Title: Associate Vice President
------------------------ ------------------------
By: /s/ Lonnie D. Schnell By: /s/ Catherine Abe
--------------------------- ---------------------------
Title: Chief Financial Officer Title: Vice President
------------------------ ------------------------
<PAGE> 1
EXHIBIT 11.1
HASKEL INTERNATIONAL, INC.
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
(UNAUDITED)
<TABLE>
Three Months Ended Nine Months Ended
----------------------------- -----------------------------
February 28, February 29, February 28, February 29,
1997 1996 1997 1996
------------- ------------- ------------- -------------
Primary & Primary & Primary & Primary &
Fully Diluted Fully Diluted Fully Diluted Fully Diluted
------------- ------------- ------------- -------------
<C> <S> <S> <S> <S>
Primary and Fully Diluted Earnings
Income from continuing operations $1,036,000 $ 792,000 $ 3,579,000 $1,818,000
Income (loss) from discontinued operations -- (175,000) (529,000) 220,000
Loss from disposal of segment -- -- (5,406,000) --
---------- ---------- ----------- ----------
Net income $1,036,000 $ 617,000 $(2,356,000) $2,038,000
========== ========== =========== ==========
Weighted average number of shares outstanding 4,732,230 4,728,230 4,732,003 4,728,230
Dilutive effect of stock options and warrants 113,276 19,775 88,282 6,592
---------- ---------- ----------- ----------
Number of shares used to compute primary and fully
diluted earnings per share 4,845,506 4,748,005 4,820,285 4,734,822
========== ========== =========== ==========
Primary and Fully Diluted Earnings per Share
Income from continuing operations $ 0.21 $ 0.16 $ 0.74 $ 0.38
Income (loss) from discontinued operations -- (0.03) (0.11) 0.05
Loss from disposal of segment -- -- (1.12) --
---------- ---------- ----------- ----------
Net income $ 0.21 $ 0.13 $ (0.49) $ 0.43
========== ========== =========== ==========
</TABLE>
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM HASKEL
INTERNATIONAL INC'S CONSOLIDATED BALANCE SHEETS, CONSOLIDATED STATEMENTS OF
INCOME AND CONSOLIDATED STATEMENTS OF CASH FLOWS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-END> FEB-28-1997
<CASH> 7,137
<SECURITIES> 0
<RECEIVABLES> 11,483
<ALLOWANCES> 594
<INVENTORY> 10,414
<CURRENT-ASSETS> 32,190
<PP&E> 10,662
<DEPRECIATION> 4,977
<TOTAL-ASSETS> 40,500
<CURRENT-LIABILITIES> 7,553
<BONDS> 0
0
0
<COMMON> 13,477
<OTHER-SE> (28)
<TOTAL-LIABILITY-AND-EQUITY> 40,500
<SALES> 37,626
<TOTAL-REVENUES> 37,626
<CGS> 20,373
<TOTAL-COSTS> 20,373
<OTHER-EXPENSES> 11,582<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 40
<INCOME-PRETAX> 5,873
<INCOME-TAX> 2,294
<INCOME-CONTINUING> 3,579
<DISCONTINUED> (5,935)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,356)
<EPS-PRIMARY> (.49)<F2>
<EPS-DILUTED> (.49)<F2>
<FN>
<F1>Other expenses are comprised of selling, general and administrative,
engineering design, research and development.
<F2>Fully diluted earnings per share is not disclosed in the Company's consolidated
financial statements since the maximum dilutive effect is not material.
</FN>
</TABLE>
