FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended DECEMBER 26, 1999
----------------------------------
Commission File Number: 0-23400
DT INDUSTRIES, INC.
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 44-0537828
- ----------------------------- -------------------------
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization
1949 E. Sunshine, Suite 2-300, Springfield, Missouri 65804
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(417) 890-0102
- ------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- ------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
Yes X No
--- ---
The number of shares of Common Stock, $0.01 par value, of the
registrant outstanding as of JANUARY 28, 2000 was 10,107,274.
<PAGE>
DT INDUSTRIES, INC.
INDEX
PAGE 1
- ------------------------------------------------------------------------------
Page
Number
------
Part I Financial Information
Item 1. Financial Statements (Unaudited, except as noted)
Consolidated Balance Sheets at December 26, 1999
and June 27, 1999 (Audited) 2
Consolidated Statement of Operations for the three and
six months ended December 26, 1999 and December
27, 1998 3
Consolidated Statement of Changes in Stockholders'
Equity for the six months ended December 26,
1999 4
Consolidated Statement of Cash Flows for the six
months ended December 26, 1999 and December
27, 1998 5-6
Notes to Consolidated Financial Statements 7-12
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13-21
Item 3. Quantitative and Qualitative Disclosures About Market
Risk 22
Part II Other Information
Item 4. Submission of Matters to a Vote of Security Holders 22
Item 5. Other Information 22
Item 6. Exhibits and Reports on Form 8-K 23
Signature
<PAGE>
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
PAGE 2
- -------------------------------------------------------------- ----------------
December 26, June 27,
1999 1999
(Unaudited)
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $17,798 $10,487
Accounts receivable, net 61,674 50,691
Costs and estimated earnings in excess of
amounts billed on uncompleted contracts 66,182 64,894
Inventories, net 63,682 56,876
Prepaid expenses and other 11,349 12,320
----------- -----------
Total current assets 220,685 195,268
Property, plant and equipment, net 75,455 77,402
Goodwill, net 178,804 180,066
Other assets, net 4,341 4,051
----------- -----------
$479,285 $456,787
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $686 $384
Accounts payable 28,941 37,507
Customer advances 26,159 21,903
Accrued liabilities 35,434 32,418
----------- -----------
Total current liabilities 91,220 92,212
----------- -----------
Long-term debt 124,822 103,659
Deferred income taxes 10,088 8,376
Other long-term liabilities 3,330 3,400
----------- -----------
Total long-term obligations 138,240 115,435
----------- -----------
Commitments and contingencies (See Note 11)
Company-obligated, mandatorily redeemable
convertible preferred securities of
subsidiary DT Capital Trust holding solely
convertible junior subordinated debentures of
the Company 70,000 70,000
----------- -----------
Stockholders' equity:
Preferred stock, $0.01 par value;
1,500,000 shares authorized; no shares
issued and outstanding
Common stock, $0.01 par value; 100,000,000
shares authorized; 10,107,274 shares
outstanding at December 26, 1999 and
June 27, 1999, respectively 113 113
Additional paid-in capital 133,348 133,348
Retained earnings 78,519 77,984
Cumulative translation adjustment (1,377) (1,527)
Less -
Treasury stock (1,268,488 shares at
December 26, 1999 and June 27, 1999,
respectively), at cost (30,778) (30,778)
----------- -----------
Total stockholders' equity 179,825 179,140
----------- -----------
$479,285 $456,787
=========== ===========
[FN]
See accompanying Notes to Consolidated Financial Statements.
</FN>
<PAGE>
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
PAGE 3
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three months ended Six months ended
December 26, December 27, December 26, December 27,
1999 1998 1999 1998
---------- ------------ ------------ ---------------
<S> <C> <C> <C> <C>
Net sales $107,982 $111,627 $208,951 $224,534
Cost of sales 82,835 86,052 160,921 170,734
---------- ------------ ------------ ---------------
Gross profit 25,147 25,575 48,030 53,800
Selling, general and
administrative
expenses 19,372 20,524 39,218 39,305
---------- ------------ ------------ ---------------
Operating income 5,775 5,051 8,812 14,495
Interest expense 2,642 2,023 4,440 4,059
Dividends on Company-
obligated, mandatorily
redeemable convertible
preferred securities
of subsidiary DT
Capital Trust holding
solely convertible
junior subordinated
debentures of the
Company, at 7.16% per
annum 1,275 1,253 2,528 2,506
---------- ------------ ------------ ---------------
Income before
provision for
income taxes 1,858 1,775 1,844 7,930
Provision for income 985 683 1,309 3,053
taxes
---------- ------------ ------------ ---------------
Net income $873 $1,092 $535 $4,877
========== ============ ============ ===============
Net earnings per common share:
Basic $0.09 $0.11 $0.05 $0.48
Diluted $0.09 $0.11 $0.05 $0.47
========== ============ ============ ===============
Weighted average
common shares outstanding:
Basic 10,107,274 10,066,888 10,107,274 10,191,387
Diluted 10,119,824 10,190,146 10,134,038 10,354,495
========== ============ ============ ===============
</TABLE>
[FN]
See accompanying Notes to Consolidated Financial Statements.
</FN>
<PAGE>
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED DECEMBER 26, 1999
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
PAGE 4
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Accumulated
other Additional
Retained comprehensive Common paid-in Treasury
earnings income stock capital stock Total
---------- ---------------- ----------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Balance, June 27, 1999 $77,984 $(1,527) $113 $133,348 $(30,778) $179,140
Comprehensive income:
Net income (unaudited) 535
Foreign currency translation(unaudited) 150
Total comprehensive income (unaudited) 685
---------- ---------------- ----------- ------------ ------------- ------------
Balance, December 26, 1999 (unaudited) $78,519 $(1,377) $113 $133,348 $(30,778) $179,825
========== ================ =========== ============ ============= ============
</TABLE>
[FN]
See accompanying Notes to Consolidated Financial Statements.
</FN>
<PAGE>
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
PAGE 5
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended
December 26, December 27,
1999 1998
----------------- ------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 535 $4,877
Adjustments to reconcile net income to net cash
(used) provided by operating activities:
Depreciation 5,528 5,040
Amortization 2,973 2,687
Deferred income tax provision 264 321
(Increase) decrease in current assets, excluding the
effect of acquisitions:
Accounts receivable (10,983) 6,204
Costs and earnings in excess of amounts billed (1,288) (7,648)
Inventories (5,095) (4,813)
Prepaid expenses and other 3,972 (226)
Increase (decrease) in current liabilities, excluding the
effect of acquisitions:
Accounts payable (8,566) (5,113)
Customer advances 4,122 567
Accrued liabilities 2,496 (1,934)
Other 74 88
------------- --------------
Net cash (used) provided by operating activities (5,968) 50
------------- --------------
Cash flows from investing activities:
Capital expenditures (3,419) (8,543)
Acquisition of C.E. King net assets (2,116) ---
Acquisition of Scheu & Kniss net assets --- (10,352)
Other (528) (1,429)
------------- -------------
Net cash used by investing activities (6,063) (20,324)
------------- --------------
(continued)
</TABLE>
[FN]
See accompanying Notes to Consolidated Financial Statements.
</FN>
<PAGE>
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
(CONTINUED)
PAGE 6
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended
December 26, December 27,
1999 1998
----------------- ------------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings from revolving loans $21,369 $27,104
Proceeds from issuance of debt --- 5,175
Payments on borrowings (396) (98)
Financing costs (1,664) ---
Exercise of stock options --- 119
Payments for repurchase of stock --- (9,985)
Dividends --- (410)
----------- ----------
Net cash provided by financing activities 19,309 21,905
----------- -----------
Effect of exchange rate changes 33 (128)
----------- -----------
Net increase in cash 7,311 1,503
Cash and cash equivalents at beginning of period 10,487 6,915
----------- -----------
Cash and cash equivalents at end of period $17,798 $8,418
=========== ===========
</TABLE>
[FN]
See accompanying Notes to Consolidated Financial Statements.
</FN>
<PAGE>
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
PAGE 7
- ------------------------------------------------------------------------------
1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements of DT
Industries, Inc. (DTI or the Company) have been prepared in accordance
with the instructions for Form 10-Q and do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. However, in the opinion of
management, the information includes all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of the
results of operations for the periods presented. Operating results for any
quarter are not necessarily indicative of the results for any other
quarter or for the full year. These statements should be read in
conjunction with the consolidated financial statements and notes to the
consolidated financial statements included in the Company's Form 10-K
Annual Report for the fiscal year ended June 27, 1999.
2. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. All significant intercompany
transactions and balances have been eliminated.
The accounts of the Company's foreign subsidiaries are maintained in their
respective local currencies. The accompanying consolidated financial
statements have been translated and adjusted to reflect U.S. dollars in
accordance with U.S. generally accepted accounting principles.
3. ACQUISITIONS
In July 1999, the Company completed the acquisition of certain net assets
of C. E. King, Ltd. (King), a manufacturer of tablet counting, liquid
filling and capping equipment located in Chertsey, England. The purchase
price of $2,116 million was primarily financed by borrowings under the
Company's revolving credit facility. The purchase price has been
preliminarily allocated to the acquired assets and assumed liabilities
based on their estimated fair value at the date of acquisition. The excess
of purchase price over the estimated fair value of net assets acquired has
been recorded as goodwill. The accompanying consolidated financial
statements include the results of King from the date of acquisition.
In August 1998, the Company completed the acquisition of certain net
assets of Scheu & Kniss, Inc. (S&K). See the consolidated financial
statements and notes thereto included in the Company's Form 10-K Annual
Report for the fiscal year ended June 27, 1999 for additional information
relating to this acquisition.
The pro forma effects of the above acquisitions are not material to the
Company's financial results for the three and six months ended December
26, 1999 and December 27, 1998.
<PAGE>
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
PAGE 8
- ------------------------------------------------------------------------------
4. FINANCING
As of December 26, 1999 and June 27, 1999, long-term debt consisted of the
following:
December June 27,
26, 1999 1999
(Unaudited)
------------- ------------
Term loan $10,000 $10,000
Revolving loans 107,747 85,765
Other long-term debt and capital lease
obligations 7,761 8,278
------------- ------------
125,508 104,043
Less-current portion of long-term debt 686 384
------------- ------------
$124,822 $103,659
============= ============
In September 1999, the Company completed an amendment to its $175,000
credit facility. The credit facility, as amended, was $135,000, including a
$125,000 revolving credit facility and a $10,000 term credit facility. In
accordance with the amended credit agreement, the total credit facility
increased to $140,000 as the Company met certain operating cash flow
targets during the six months ended December 26, 1999. Borrowings under the
amended credit facility bear interest at floating rates based on the prime
rate plus 1 7/8% or LIBOR plus 3% (at the option of DTI). The credit
facility, as amended, matures April 2, 2001. Borrowings under the amended
credit facility are secured by substantially all of the assets of DTI and
its domestic subsidiaries. The amendment to the credit facility established
a revised set of financial and other covenants and restrictions, including
prohibition of acquisitions and payment of dividends without the consent of
the lenders. The Company was in compliance with the amended credit
facility's financial and other covenants at December 26, 1999. Total
borrowing availability under the amended credit facility as of December 26,
1999 was $18,863.
<PAGE>
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
PAGE 9
- ------------------------------------------------------------------------------
5. COMPANY-OBLIGATED, MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED
SECURITIES OF SUBSIDIARY DT CAPITAL TRUST HOLDING SOLELY CONVERTIBLE
JUNIOR SUBORDINATED DEBENTURES OF THE COMPANY (CONVERTIBLE PREFERRED
SECURITIES)
On June 12, 1997, the Company completed a private placement to
institutional investors of 1,400,000 7.16% Convertible Preferred
Securities (liquidation preference of $50 per Convertible Preferred
Security). The placement was made through the Company's wholly owned
subsidiary, DT Capital Trust (Trust), a newly-formed Delaware business
trust. The securities represent undivided beneficial ownership interests
in the Trust. The sole asset of the Trust is the $72,165 aggregate
principal amount of the 7.16% Convertible Junior Subordinated Deferrable
Interest Debentures Due 2012 of the Company, which were acquired by the
Trust with the proceeds from the offering as well as the sale of Common
Securities of the Trust to the Company. The Company's obligations under
the Convertible Junior Subordinated Debentures, the Indenture pursuant to
which they were issued, the Amended and Restated Declaration of Trust of
the Trust and the Guarantee of DTI, taken together, constitute a full and
unconditional guarantee by DTI of amounts due on the Convertible Preferred
Securities. The Convertible Preferred Securities are convertible at the
option of the holders at any time into the common stock of DTI at an
effective conversion price of $38.75 per share, are redeemable at DTI's
option after June 1, 2000 and are mandatorily redeemable in 2012. The net
proceeds of the offering of approximately $67,750 were used by DTI to
retire indebtedness. A registration statement relating to resales of the
Convertible Preferred Securities was declared effective by the Securities
and Exchange Commission on September 2, 1997. In conjunction with the
amendment of the credit facility as discussed in Note 4, the Company
elected to defer interest payments on the Convertible Junior Subordinated
Debentures. As a result, quarterly distributions on the Convertible
Preferred Securities have also been deferred and DTI will not declare or
pay dividends on its common stock. Dividends on the Convertible Preferred
Securities in the amount of $2,528 have been deferred and accrued as of
December 26, 1999.
6. BUSINESS SEGMENTS
The Company adopted Statement of Financial Accounting Standards No. 131
(SFAS 131), "Disclosures about Segments of an Enterprise and Related
Information", effective June 27, 1999. SFAS 131 requires disclosure of
segment information on the basis that it is used internally for evaluating
segment performance and deciding how to allocate resources to segments.
Accordingly, segment information for the three and six months ended
December 27, 1998 has been restated to conform with the requirements of
SFAS 131.
Financial information for the Company's reportable segments consisted of
the following:
Three Months Ended Six Months Ended
December December December December
26, 1999 27, 1998 26, 1999 27, 1998
------------ ----------- ------------ -----------
Net sales
Automation $66,975 $73,920 $127,768 $156,816
Packaging 32,109 29,122 63,817 50,228
Other 8,898 8,585 17,366 17,490
------------ ----------- ------------ -----------
$107,982 $111,627 $208,951 $224,534
Consolidated total ============ =========== ============ ===========
<PAGE>
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
PAGE 10
- ------------------------------------------------------------------------------
The reconciliation of segment operating income to consolidated income
before income taxes consisted of the following:
Three Months Ended Six Months Ended
December 26, December 27, December 26, December 27,
1999 1998 1999 1998
----------- ------------ ----------- ------------
Automation $2,124 $4,414 $2,247 $13,741
Packaging 5,053 2,222 9,968 4,166
----------- ------------ ----------- ------------
Operating income
for reportable
segments 7,177 6,636 12,215 17,907
Operating income for
immaterial businesses 599 767 823 1,167
Corporate (2,001) (2,352) (4,226) (4,579)
Interest expense, net (2,642) (2,023) (4,440) (4,059)
Dividends on Company-
obligated, mandatorily
redeemable convertible
preferred securities (1,275) (1,253) (2,528) (2,506)
----------- ------------ ----------- ------------
Consolidated income
before income taxes $1,858 $1,775 $1,844 $7,930
=========== ============ =========== ============
7. RESTRUCTURING RESERVE
In fiscal 1999, the Company recorded a restructuring charge of $2,500
associated with management changes and workforce reductions, idle facility
costs and non-cash asset writedowns. The breakdown of the restructuring
reserve as of December 26, 1999 and June 27, 1999 was as follows:
Charges to
June 27, 1999 Reserve December 26, 1999
---------------- ------------ -----------------
Severance costs $1,493 $(1,223) $270
Idle facility costs 264 (203) 61
Asset writedowns and
other 361 (291) 70
--------------- ------------ -----------------
$2,118 $(1,717) $401
================ ============ =================
The Company has completed the restructuring plans as developed in fiscal
1999. The remaining restructuring reserve relates primarily to several
management changes for which payments under severance programs extend
beyond December 26, 1999. The remaining balance of the restructuring
reserve is expected to be fully utilized during fiscal 2000.
<PAGE>
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
PAGE 11
- ------------------------------------------------------------------------------
8. SUPPLEMENTAL BALANCE SHEET INFORMATION
December 26, June 27,
1999 1999
(Unaudited)
-------------- ------------
Inventories, net:
Raw materials $23,411 $21,835
Work in process 32,335 25,418
Finished goods 7,936 9,623
-------------- ------------
$63,682 $56,876
============== ============
Accrued liabilities:
Accrued employee compensation
and benefits $12,891 $12,291
Accrued warranty 3,991 4,409
Dividends on convertible
preferred securities 2,528 ---
Other 16,024 15,718
-------------- ------------
$35,434 $32,418
============== ============
The Company has 1,268,488 shares of treasury stock at a total cost of
$30,778, as reflected in the stockholders' equity section of the
consolidated balance sheet. The repurchased shares are being used
primarily for employee stock option programs. In conjunction with the
negotiation of the amendment to the credit facility as discussed in Note
4, the Company has agreed that it will make no further repurchases of its
common stock.
9. STOCK OPTION PLANS
A summary of stock option transactions pursuant to the 1994 Employee Stock
Option Plan, the 1994 Directors Non-Qualified Stock Option Plan and the
1996 Long-Term Incentive Plan follows:
AVERAGE SHARES SUBJECT
PRICE TO OPTION
------------------ ---------------
Options outstanding at
June 27, 1999 $17.43 1,011,938
Options granted $6.25 246,000
Options exercised --- ---
Options forfeited $14.88 (29,000)
---------------
Options outstanding at
December 26, 1999 $15.24 1,228,938
===============
Exercisable at December 26, $16.19 564,483
1999 ===============
10. COMPREHENSIVE INCOME
Statement of Financial Accounting Standards No. 130 (SFAS 130), "Reporting
Comprehensive Income", establishes standards for the reporting and display
of comprehensive income and its components in a full set of
general-purpose financial statements. Comprehensive income represents net
income plus certain items that are charged directly to stockholders'
equity. The only component of other comprehensive income for the Company
relates to foreign currency translation adjustments.
<PAGE>
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
PAGE 12
- ------------------------------------------------------------------------------
11. COMMITMENTS AND CONTINGENCIES
The Company is a party to certain lawsuits involving employee matters,
product liability and other matters. Management does not expect the
outcome of any litigation to have a material adverse effect on the
Company's financial position, results of operations or liquidity.
<PAGE>
DT INDUSTRIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PAGE 13
- ------------------------------------------------------------------------------
GENERAL OVERVIEW
The following discussion summarizes the significant factors affecting the
consolidated operating results and financial condition of DT Industries, Inc.
(DTI or the Company) for the three and six months ended December 26, 1999
compared to the three and six months ended December 27, 1998. This discussion
should be read in conjunction with the consolidated financial statements and
notes to the consolidated financial statements included in the Company's Form
10-K for the fiscal year ended June 27, 1999.
The Company primarily operates in two business segments, Automation and
Packaging. The Automation segment designs and builds integrated systems for the
assembly, test and handling of discrete products. The Packaging segment
manufactures tablet processing, counting and liquid filling systems and plastics
processing equipment including thermoforming, blister packaging, heat-sealing
and foam extrusion.
The percentage of completion method of accounting is used by the Company to
recognize revenues and related costs. Under the percentage of completion method,
revenues for customer contracts are measured based on the ratio of engineering
and manufacturing labor hours incurred to date compared to total estimated
engineering and manufacturing labor hours or, for certain customer contracts,
the ratio of total costs incurred to date to total estimated costs. Any
revisions in the estimated total costs or values of the contracts during the
course of the work are reflected when the facts that require the revisions
become known.
Costs and related expenses to manufacture the products are recorded as cost of
sales when the related revenue is recognized. Provisions for estimated losses on
uncompleted contracts are made in the period in which such losses are
determined.
Gross margins may vary in a given period as a result of the variations in
profitability of contracts for large orders of automated production systems or
special machines. In addition, changes in the product mix in a given period
affect gross margins.
In the fourth quarter of fiscal 1999, the Company recorded $10.5 million of
special charges related to cost, performance and collection issues on four
automation projects. The Company continues to attempt resolution of outstanding
issues with these customers, including collections of outstanding accounts
receivable, billings of final project costs and estimated warranty costs
expected in the initial period of production. The Company believes the remaining
reserves related to these projects at December 26, 1999 are adequate.
Certain information contained in this report, particularly the information
appearing under the headings "Results of Operations", "Liquidity and Capital
Resources", "Backlog", "Market Risk" and "Year 2000 Compliance" includes
forward-looking statements. These statements, comprising all statements which
are not historical, are based upon the Company's interpretation of what it
believes are significant factors affecting its businesses, including many
assumptions regarding future events, and are made pursuant to the safe harbor
provisions of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. References to "opportunities", "growth
potential", "objectives" and "goals", the words "anticipate", "believe",
"estimate", "expect", and similar expressions used herein indicate
forward-looking statements. Actual results could differ materially from those
anticipated in any forward-looking statements as a result of various factors,
including economic downturns in industries or markets served, delays or
cancellations of customer orders, delays in shipping dates of products, excess
product warranty expenses, collectability of past due customer receivables,
significant cost overruns on certain projects, significant restructuring or
other special, non-recurring charges, foreign currency exchange rate
fluctuations, delays in achieving anticipated cost savings or in fully
implementing project and information management systems, availability of
financing at acceptable terms, changes in interest rates, increased inflation
and availability of skilled labor. Additional information regarding important
factors that could cause actual results of operations or outcomes of other
events to differ materially from any forward-looking statement also appears
elsewhere in this report, including under the heading "Seasonality and
Fluctuations in Quarterly Results".
<PAGE>
DT INDUSTRIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PAGE 14
- ------------------------------------------------------------------------------
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the percentage of
consolidated net sales represented by certain items reflected in the Company's
consolidated statement of operations:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 26, December 27, December 26, December 27,
1999 1998 1999 1998
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 76.7 77.1 77.0 76.0
----------- ------------ ----------- ------------
Gross profit 23.3 22.9 23.0 24.0
Selling, general and
administrative expenses 18.0 18.4 18.8 17.5
----------- ------------ ----------- ------------
Operating income 5.3 4.5 4.2 6.5
Interest expense 2.4 1.8 2.1 1.8
Dividends on
Company-obligated,
mandatorily redeemable
convertible preferred
securities of subsidiary
DT Capital Trust 1.2 1.1 1.2 1.1
----------- ------------ ----------- ------------
Income before provision
for income taxes 1.7 1.6 0.9 3.6
Provision for income taxes 0.9 0.6 0.6 1.4
----------- ------------ ----------- ------------
Net income 0.8% 1.0% 0.3% 2.2%
=========== ============ =========== ============
</TABLE>
<PAGE>
DT INDUSTRIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PAGE 15
- ------------------------------------------------------------------------------
THREE MONTHS ENDED DECEMBER 26, 1999
COMPARED TO THREE MONTHS ENDED DECEMBER 27, 1998
Consolidated net sales for the three months ended December 26, 1999 were $108.0
million, a decrease of $3.6 million, or 3.3%, from $111.6 million for the three
months ended December 27, 1998. Net sales by segment were as follows (in
millions):
Three Months Ended Three Months Ended Increase
December 26, 1999 December 27, 1998 (Decrease)
------------------ -------------------- --------------
Automation $67.0 $73.9 $(6.9)
Packaging 32.1 29.1 3.0
Other 8.9 8.6 0.3
------------------ -------------------- --------------
$108.0 $111.6 $(3.6)
================== ==================== ==============
Automation segment sales decreased primarily as a result of lower sales to the
automotive industry. Soft order activity during the second half of fiscal 1999
due to the deferral of capital spending programs by automotive customers
resulted in revenues from the automotive industry that were significantly below
those recorded during the second quarter of fiscal 1999. These decreases were
partially offset by an increase in revenues for build-to-print machinery for the
tire industry and material handling systems for the heavy equipment market.
Increased Packaging segment sales reflect a combination of significantly higher
sales of plastics processing equipment and the incremental increase in sales as
a result of the acquisition of C.E. King in July 1999, partially offset by the
lower sales of other packaging equipment to the pharmaceutical market. The
increased sales of plastics processing equipment resulted primarily from
increased sales of extrusion and thermoforming systems.
Gross profit decreased $0.5 million, or 1.7%, to $25.1 million for the three
months ended December 26, 1999 from $25.6 million for the three months ended
December 27, 1998. The gross margin increased to 23.3% from 22.9%. The increase
in gross margin primarily reflects the significant increase in margins on
plastics processing equipment which had been adversely affected by cost overruns
and inefficiencies in the first half of fiscal 1999. This increase was partially
offset by lower margins on other packaging machinery sales primarily reflecting
the unfavorable manufacturing volume variances occurring at one of the
businesses. The margins in the Automation segment were down slightly from the
prior year primarily reflecting inefficiencies related to the lower utilization
of manufacturing resources due to the decrease in sales noted above.
SG&A expenses decreased $1.1 million, or 5.6%, to $19.4 million for the three
months ended December 26, 1999 from $20.5 million for the three months ended
December 27, 1998. Excluding the incremental costs of approximately $0.7 million
associated with newly-acquired and start-up businesses, operating expenses
decreased approximately 9% from the prior year quarter. The decrease was
primarily due to the restructuring and cost containment measures taken in fiscal
1999 and fiscal 2000 across all business segments and at the Corporate office.
The cost cutting measures implemented included headcount reductions and lower
discretionary spending in the general and administrative and sales and marketing
functions. The incremental costs associated with newly-acquired and start-up
businesses resulted from the acquisition of C.E. King in July 1999, the July
1999 start-up of an advanced automation engineering group on the West Coast
targeting the high-growth medical and electronics markets and the additional
costs being incurred as a result of an agreement to assume the marketing and
distribution of a standard product line manufactured by the Company. Due to the
lower expenses as compared to the prior year, SG&A expenses as a percentage of
consolidated net sales decreased to 18.0% from 18.4%.
<PAGE>
DT INDUSTRIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PAGE 16
- ------------------------------------------------------------------------------
Operating income increased $0.7 million, or 14.3%, to $5.8 million for the three
months ended December 26,1999 from $5.1 million for the three months ended
December 27, 1998, as a result of the factors noted above. The operating margin
increased to 5.3% from 4.5% in the prior year.
Interest expense increased $0.6 million, or 30.6% to $2.6 million for the three
months ended December 26, 1999 primarily from the increase in interest rates on
outstanding borrowings. Dividends on the convertible preferred securities were
$1.3 million for each of the three months ended December 26, 1999 and December
27, 1998. The dividends are currently being deferred and accrued in conjunction
with the amendment to the credit facility.
The provision for income taxes increased to $1.0 million for the three months
ended December 26, 1999 from $0.7 million for the three months ended December
27, 1998, reflecting an effective tax rate of approximately 53.0% and 38.5% for
each period, respectively. These rates differ from statutory rates due to
permanent differences primarily related to the effects of non-deductible
goodwill amortization on certain acquisitions and other tax benefit optimization
factors.
Net income decreased $0.2 million to $0.9 million for the three months ended
December 26, 1999 from $1.1 million for the three months ended December 27,
1998. Basic and diluted earnings per share were $0.09 for the three months ended
December 26, 1999 compared to basic and diluted earnings per share of $0.11 for
the three months ended December 27, 1998. Basic weighted average shares
outstanding for each of the three months ended December 26, 1999 and December
27, 1998 were 10.1 million. Diluted weighted average shares outstanding for the
three months ended December 26, 1999 were 10.1 million versus 10.2 million for
the three months ended December 27, 1998.
SIX MONTHS ENDED DECEMBER 26, 1999
COMPARED TO SIX MONTHS ENDED DECEMBER 27, 1998
Consolidated net sales for the six months ended December 26, 1999 were $208.9
million, a decrease of $15.6 million, or 6.9%, from $224.5 million for the six
months ended December 27, 1998. Net sales by segment were as follows (in
millions):
Six Months Ended Six Months Ended Increase
December 26, 1999 December 27, 1998 (Decrease)
------------------ -------------------- ------------------
Automation $127.7 $156.8 $(29.1)
Packaging 63.8 50.2 13.6
Other 17.4 17.5 (0.1)
-------------------- ------------------- ------------------
$208.9 $224.5 $(15.6)
==================== ==================== ==================
Automation segment sales decreased primarily as a result of lower sales to the
automotive industry. Soft order activity during the second half of fiscal 1999
due to the deferral of capital spending programs by automotive customers
resulted in revenues from the automotive industry that were significantly below
those recorded during the first half of fiscal 1999. Revenues were also down in
the electronics and recreational products markets reflecting some larger
projects in fiscal 1999. These decreases in revenues were partially offset by an
increase in revenues for build-to-print machinery for the tire industry and
material handling systems for the heavy equipment market. The Company did
receive significant bookings in the second quarter from the electronics industry
which are expected to provide favorable revenue comparisons regarding sales to
the electronics market for the second half of the fiscal year.
Increased Packaging segment sales reflect a combination of significantly higher
sales of plastics processing equipment and the incremental increase in sales as
a result of the acquisition of C.E. King in July 1999 and Scheu & Kniss (S&K) in
August 1998. The increased sales of plastics processing equipment resulted
primarily from the increased sales of extrusion and thermoforming systems.
<PAGE>
DT INDUSTRIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PAGE 17
- ------------------------------------------------------------------------------
Gross profit decreased $5.8 million, or 10.7%, to $48.0 million for the six
months ended December 26, 1999 from $53.8 million for the six months ended
December 27, 1998. The gross margin decreased to 23.0% from 24.0%. The decrease
in gross margin reflects the decrease in margins in the Automation segment
partially offset by the increase in gross margins on plastics processing
equipment. The margins in the Automation segment were down from the prior year
reflecting inefficiencies related to the lower utilization of manufacturing
resources, lower margins on new business and the incremental manufacturing
overhead costs associated with the start-up of the advanced engineering group.
Packaging gross margins were up sharply from the prior year which had been
adversely affected by cost overruns and inefficiencies on plastics processing
equipment. This increase was partially offset by lower margins on other
packaging machinery sales primarily reflecting the unfavorable manufacturing
volume variances occurring at one of the businesses and an unfavorable product
mix.
SG&A expenses decreased $0.1 million to $39.2 million for the six months ended
December 26, 1999 from $39.3 million for the six months ended December 27, 1998.
Incremental costs associated with newly-acquired and start-up businesses were
offset by cost cutting across business segments and the Corporate office,
including headcount reductions and lower discretionary spending in the general
and administrative and sales and marketing functions . The incremental costs
associated with newly-acquired and start-up businesses resulted from the
acquisitions of S&K in August 1998 and C.E. King in July 1999, the July 1999
start-up in of an advanced automation engineering group on the West Coast
targeting the high-growth medical and electronics markets and the additional
costs being incurred as a result of an agreement to assume the marketing and
distribution of a standard product line manufactured by the Company. Due to the
lower revenues, SG&A expenses as a percentage of consolidated net sales
increased to 18.8% from 17.5%.
Operating income decreased $5.7 million, or 39.2%, to $8.8 million for the six
months ended December 26,1999 from $14.5 million for the six months ended
December 27, 1998, as a result of the factors noted above. The operating margin
decreased to 4.2% from 6.5% in the prior year.
Interest expense increased $0.4 million, or 9.4%, to $4.4 million for the six
months ended December 26, 1999 primarily from the increase in interest rates on
outstanding borrowings. Dividends on the convertible preferred securities were
$2.5 million for each of the six months ended December 26, 1999 and December 27,
1998. The dividends are currently being deferred and accrued in conjunction with
the amendment to the credit facility.
The provision for income taxes decreased to $1.3 million for the six months
ended December 26, 1999 from $3.1 million for the six months ended December 27,
1998, reflecting an effective tax rate of approximately 71.0% and 38.5% for each
period, respectively. These rates differ from statutory rates due to permanent
differences primarily related to the effects of non-deductible goodwill
amortization on certain acquisitions and other tax benefit optimization factors.
Net income decreased $4.4 million to $0.5 million for the six months ended
December 26, 1999 from $4.9 million for the six months ended December 27, 1998.
Basic and diluted earnings per share were $0.05 for the six months ended
December 26, 1999 compared to basic and diluted earnings per share of $0.48 and
$0.47 for the six months ended December 27, 1998, respectively. Basic weighted
average shares outstanding were 10.1 million versus 10.2 million for the six
months ended December 26, 1999 and December 27, 1998, respectively. Diluted
weighted average shares outstanding were 10.1 million versus 10.4 million for
the six months ended December 26, 1999 and December 27, 1998, respectively.
<PAGE>
DT INDUSTRIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PAGE 18
- ------------------------------------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES
Net income plus non-cash operating charges provided $9.3 million of operating
cash flow for the six months ended December 26, 1999. Net increases in working
capital balances used operating cash of $15.3 million, resulting in net cash
used by operating activities of $6.0 million for the six months ended December
26, 1999. The higher working capital balances reflect: (1) increased accounts
receivable, largely in the Automation segment, primarily due to the shipment of
a few large projects in the second quarter; (2) increased inventories, primarily
in the Automation segment, from the purchase of stock in connection with an
agreement to assume the marketing and distribution of a standard product line
manufactured by the Company, and the inventory build-up associated with the
production of build-to-print machinery for the tire market; and (3) deincreased
trade accounts payable levels resulting from the timing of purchases and the
lower overall volume of manufacturing activity as compared to June 1999. These
unfavorable changes were partially offset by an increase in customer advances
related to higher order activity in the first six months of the fiscal year.
During the six months ended December 26, 1999, the Company borrowed $21.0
million on its revolving credit facility. The funds were used for working
capital requirements, the acquisition of C. E. King for $2.1 million, capital
expenditures of $3.4 million and financing costs of $1.7 million. The Company
did have a large increase in cash at December 26, 1999, the result of some
significant customer payments received during the last few days of the quarter.
During the six months ended December 27, 1998, cash used to fund the net
increases in working capital balances of $12.8 million offset the cash provided
by net income plus non-cash operating charges of $12.9 million. The increase in
working capital resulted from the unfavorable changes in costs and earnings in
excess of amounts billed, inventories and trade payables, partially offset by
the decrease in trade receivables. The increase in current assets was attributed
to generally less favorable payment terms and collections which were delayed
pending customer acceptance of equipment. Inventories increased primarily in the
Packaging segment as the Company was building and stocking more standard
packaging machines to allow for quicker deliveries. Current liabilities
decreased from the June 1998 level due primarily to the decreased manufacturing
activity across the Company and the timing of significant component purchases.
During the six months ended December 27, 1998, the Company borrowed $27.0
million on its revolving credit facility and raised another $5.2 million
primarily through the issuance of Bonds, as discussed below. The funds were used
to finance the purchase of S&K for $10.4 million, repurchase $10.0 million of
the Company's stock, fund capital expenditures of $8.5 million and pay dividends
of $0.4 million.
Working capital balances can fluctuate significantly between periods as a result
of the significant costs incurred on individual contracts and the relatively
large amounts invoiced and collected by the Company for a number of large
contracts, and the amounts and timing of customer advances or progress payments
associated with certain contracts.
<PAGE>
DT INDUSTRIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PAGE 19
- ------------------------------------------------------------------------------
In September 1999, the Company completed an amendment to its $175 million credit
facility. The total credit facility, as amended, was $135 million, including a
$125 million revolving credit facility and a $10 million term credit facility.
In accordance with the amended credit agreement, the total credit facility
increased to $140 million based on the Company meeting certain operating cash
flow targets during the six months ended December 26, 1999. Borrowings under the
amended credit facility bear interest at floating rates based on the prime rate
plus 1 7/8% or LIBOR plus 3% (at the option of DTI). The credit facility, as
amended, matures on April 2, 2001. Borrowings under the amended credit facility
are secured by substantially all of the assets of DTI and its domestic
subsidiaries. The amendment to the credit facility established a revised set of
financial and other covenants and restrictions, including prohibition of
acquisitions and payment of dividends without the consent of the lenders. The
Company was in compliance with the amended credit facility's financial and other
covenants at December 26, 1999. Total borrowing availability under the amended
credit facility as of December 26, 1999 was $18.9 million.
In conjunction with the negotiation of the amended credit facility, the Company
elected to defer interest payments on the Convertible Junior Subordinated
Debentures. The amended credit facility requires that the deferral continue
until the maturity of the credit facility. As a result, quarterly distributions
on the Convertible Preferred Securities will also be deferred and DTI will not
declare or pay any dividends on its common stock. Dividends on the Convertible
Preferred Securities in the amount of $2.5 million have been deferred and
accrued as of December 26, 1999.
Management anticipates that capital expenditures in the current fiscal year will
be approximately $10 million to $12 million. This includes recurring replacement
or refurbishment of machinery and equipment, and purchases to improve production
methods or processes or to expand manufacturing capabilities. Funding for
capital expenditures is expected to be provided by cash from operating
activities and through the Company's credit facilities.
In July 1999, the Company completed the acquisition of certain net assets of C.
E. King, Ltd., a manufacturer of tablet counting, liquid filling and capping
equipment located in Chertsey, England. The purchase price of $2.1 million was
primarily financed by borrowings under the Company's revolving credit facility.
The purchase price has been preliminarily allocated to the acquired assets and
assumed liabilities based on their estimated fair value at the date of
acquisition. The excess of purchase price over the estimated fair value of net
assets acquired has been recorded as goodwill. The accompanying consolidated
financial statements include the results of C. E. King from the date of
acquisition.
Based on its ability to generate funds from operations and the availability of
funds under its current credit facilities, the Company believes that it will
have sufficient funds available to meet its currently anticipated operating and
capital expenditure requirements.
<PAGE>
DT INDUSTRIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PAGE 20
- ------------------------------------------------------------------------------
BACKLOG
The Company's backlog is based upon customer purchase orders that the Company
believes are firm. As of December 26, 1999, the Company had $253.3 million of
orders in backlog, which compares to a backlog of approximately $190.2 million
as of December 27, 1998.
The backlog for the Automation segment at December 26, 1999 was $206.6 million,
which increased $57.5 or 38.6% million from a year ago. The increase is a result
of significant bookings in the second quarter primarily from the electronics and
tire industries. This increase was partially offset by a lower backlog with
automotive customers, reflecting a continuation of capital spending reduction
and deferral in this industry through December 1999. Backlog for the Packaging
segment was $37.3 million, an increase of $0.5 million over the comparable
period in fiscal 1999. The increase is a result of the incremental backlog of
C.E.King, acquired in July 1999.
The level of backlog at any particular time is not necessarily indicative of the
future operating performance of the Company. Additionally, certain purchase
orders are subject to cancellation by the customer upon notification. Certain
orders are also subject to delays in completion and shipment at the request of
the customer. The Company believes that a majority of the orders in the backlog
will be recognized as sales during the current fiscal year. The Company's
backlog does have a higher level of orders for long-lead time machinery, which
are expected to translate into revenues in the 2001 fiscal year .
SEASONALITY AND FLUCTUATIONS IN QUARTERLY RESULTS
In general, the Company's business is not subject to seasonal variations in
demand for its products. However, because orders for certain of the Company's
products can be several million dollars, a relatively limited number of orders
can constitute a meaningful percentage of the Company's revenue in any one
quarterly period. As a result, a relatively small reduction or delay in the
number of orders can have a material impact on the timing of recognition of the
Company's revenues. Certain of the Company's revenues are derived from fixed
price contracts. To the extent that original cost estimates prove to be
inaccurate, profitability from a particular contract may be adversely affected.
Gross margins may vary between comparable periods as a result of the variations
in profitability of contracts for large orders of special machines as well as
product mix between the various types of custom and proprietary equipment
manufactured by the Company. Accordingly, results of operations of the Company
for any particular quarter are not necessarily indicative of results that may be
expected for any subsequent quarter or related fiscal year.
RECENT ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standards No. 133 (SFAS 133), "Accounting for
Derivative Instruments and Hedging Activities", establishes accounting and
reporting standards for derivative instruments and for hedging activities and
requires recognition of all derivatives on the balance sheet at fair value. SFAS
133 is effective for all fiscal quarters beginning after June 15, 2000. The
Company is continuing to evaluate the provisions of SFAS 133 to determine its
impact on financial position and results of operations. The Company holds no
material derivative financial instruments at December 26, 1999.
<PAGE>
DT INDUSTRIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PAGE 21
- ------------------------------------------------------------------------------
YEAR 2000 COMPLIANCE
The Company successfully completed all work to resolve the potential impact of
year 2000 on the processing of date-sensitive information by the Company's
computerized information systems and equipment with embedded chips. The Company
has not experienced any material disruption from the year 2000 issue relating to
the century rollover. The Company will continue to monitor all critical systems
for the appearance of delayed year 2000 related issues, problems relative to the
leap year and problems encountered through suppliers, customers and other third
parties with whom the Company deals.
For substantially all of the Company's internal systems, the remediation phase
of its year 2000 plan was an incidental consequence of the ongoing
implementation of new integrated core business systems at several of the
Company's divisions. The total incremental cost of these projects, comprised
primarily of the costs of the implementation of the new integrated core business
systems, includes costs of approximately $3.5 million incurred in fiscal year
1998, expenditures in fiscal year 1999 of approximately $4.0 million and costs
of approximately $0.6 million in the six months ended December 26, 1999, all of
which was included in the Company's capital expenditures plans.
MARKET RISK
In the ordinary course of business, the Company is exposed to foreign currency
and interest rate risks. These exposures primarily relate to having investments
in assets denominated in foreign currencies and to changes in interest rates.
Fluctuations in currency exchange rates can impact operating results, including
net sales and operating expenses. The Company hedges certain of its foreign
currency exposure by borrowing in the local functional currency in countries
where the Company has significant assets denominated in foreign currencies. Such
borrowings include Pounds Sterling, Canadian dollars and Deutsche Marks in the
United Kingdom, Canada and Germany, respectively. The Company may utilize
derivative financial instruments, including forward exchange contracts and swap
agreements to manage certain of its foreign currency and interest rate risks
that it considers practical to do so. The Company holds no material derivative
financial instruments at December 26, 1999. The Company does not enter into
derivative financial instruments for trading purposes. Market risks that the
Company currently has elected not to hedge primarily relate to its floating-rate
debt.
<PAGE>
DT INDUSTRIES, INC.
PART II. OTHER INFORMATION
PAGE 22
- ------------------------------------------------------------------------------
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See Management's Discussion and Analysis of Financial Condition and
Results of Operations - Market Risk.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On November 10, 1999, the Annual Meeting of the Stockholders of DTI
was held, at which the following matters were voted upon:
1. Election of Directors. Each of the following nominees received
the number of votes set forth opposite his name:
FOR WITHHELD
------------ -------------
Class III William H.T. Bush 7,507,036 60,444
(term expires 2002) Charles A. Dill 7,507,036 60,444
Graham L. Lewis 7,506,936 60,544
2. Ratification of Appointment of Accountants for the fiscal year
ending June 25, 2000. The vote to ratify the appointment of
PricewaterhouseCoopers LLP as independent accountants for the
fiscal year ending June 25, 2000 was 7,562,888 for, 2,962 against
and 1,630 abstaining.
ITEM 5. OTHER INFORMATION
On January 21, 2000, the Board of Directors of the Company amended the
Company's By-laws. The specific amendments to the By-laws and the full
text of the Amended and Restated By-laws are attached as Exhibits 3.1
and 3.2, respectively. Specifically, the By-laws were amended to (i)
provide that special meetings of the stockholders may be called only by
the chairman of the board, the president or a majority of the board of
directors; (ii) set up procedures for stockholder action taken by written
consent; (iii) set up procedures for advance notice to the Company of
stockholder proposals for presentation at the annual meeting; (iv) allow
the board of directors to approve rules for the conduct of stockholder
meetings; and (v) set up procedures to be followed for stockholder
nominations of directors. Under the Company's By-laws, as amended, in
order for a stockholder to bring business before, or propose director
nominations at, the Company's annual meeting of stockholders, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the Company not less than ninety days nor
more than one hundred fifty days prior to the date of the annual meeting.
The By-law requirements for advance notice of stockholder proposals are
separate and apart from the requirements of SEC Rule 14 a-8 (17 C.F.R.
ss. 240.14 a-8) that a stockholder must meet in order to have a
stockholder proposal included in the Company's proxy statement and form
of proxy.
<PAGE>
DT INDUSTRIES, INC.
PART II. OTHER INFORMATION
PAGE 23
- ------------------------------------------------------------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 3.1 Amendments to By-Laws of the Company
Exhibit 3.2 Amended and Restated By-Laws of the Company
Exhibit 10 Fifth Amendment to Fourth Amended and Restated Credit
Facilities Agreement, dated as of December 1, 1999,
among Bank of America, N.A., formerly NationsBank,
N.A., as Administrative Agent, and Bank of America,
N.A. and the other Lenders listed therein and
DT Industries, Inc. and the other Borrowers listed
therein.
Exhibit 11 - Statement Regarding Computation of Earnings Per Share
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K:
On September 29, 1999, a Current Report on Form 8-K was filed to
report, pursuant to Item 5 thereof, the release of the Company's
earnings for the three and twelve months ended June 27, 1999.
<PAGE>
DT INDUSTRIES, 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.
DT INDUSTRIES, INC.
Date: February 9, 2000 /s/ BRUCE P. ERDEL
------------------------
(Signature)
Bruce P. Erdel
Senior Vice President - Finance
and Administration
(Principal Financial and Accounting
Officer)
<PAGE>
EXHIBIT INDEX
Exhibit 3.1 Amendments to By-Laws of the Company
Exhibit 3.2 Amended and Restated By-Laws of the Company
Exhibit 10 Fifth Amendment to Fourth Amended and Restated Credit Facilities
Agreement, dated as of December 1, 1999 among Bank of America, N.A.,
formerly NationsBank, N.A., as Administrative Agent, and Bank of
America, N.A. and the other Lenders listed therein and DT
Industries, Inc. and the other Borrowers listed therein.
Exhibit 11 Statement Regarding Computation of Earnings Per Share
Exhibit 27 Financial Data Schedule
EXHIBIT 3.1
AMENDMENTS TO BY-LAWS
EFFECTIVE JANUARY 21, 2000
1. Article II, Section 5 was deleted in its entirety and replaced with
the following:
"Section 5. Special meetings of the stockholders may be called at
any time by the chairman of the board or the president, or at any time
upon the written request of a majority of the board of directors. Each
call for a special meeting of the stockholders shall state the time,
the day, the place and the purpose of such meeting and shall be in
writing, signed by the persons making the same and delivered to the
secretary. No business shall be transacted at a special meeting other
than such as is included in the purposes stated in the call."
2. The following paragraph was added to Article II, Section 11:
"In order that the corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting,
the board of directors may fix a record date in accordance with
Article VI, Section 5 of these by-laws. Any stockholder of record
seeking to have the stockholders authorize or take corporate action by
written consent shall, by written notice to the secretary, request the
board of directors to fix a record date. The notice shall specify in
reasonable detail the action proposed to be taken by written consent.
If no record date has been fixed by the board of directors within
thirty (30) days of the date on which such a request is received, the
record date for determining stockholders entitled to consent to
corporate action in writing without a meeting, when no prior action by
the board of directors is required by applicable law, shall be the
first date on which a signed written consent setting forth the action
taken or proposed to be taken is delivered to the corporation by
delivery to its registered office in the State of Delaware, its
principal place of business, or any officer or agent of the
corporation having custody of the book in which proceedings of
stockholders meetings are recorded, to the attention of the secretary
of the corporation. Delivery shall be by hand or certified or
registered mail, return receipt requested. If no record date has been
fixed by the board of directors and prior action by the board of
directors is required by applicable law, the record date for
determining stockholders entitled to consent to corporate action in
writing without a meeting shall be at the close of business on the
date on which the board of directors adopts the resolution taking such
prior action."
3. The following sections were added at the end of Article II:
"Section 12. In the event of the delivery, in the manner provided
by Section 11 of this Article II, to the corporation of the requisite
written consent or
<PAGE>
consents to take corporate action and/or any related revocation or
revocations, the board of directors may appoint inspectors of
elections for the purpose of performing promptly a ministerial review
of the validity of the consents and revocations. For the purpose of
permitting the inspectors, if appointed, to perform such review, no
action by written consent without a meeting shall be effective until
such date as the inspectors certify to the corporation that the
consents delivered to the corporation in accordance with Section 11
represent at least the minimum number of votes that would be necessary
to take the corporate action. Nothing contained in this Section 12
shall in any way be construed to suggest or imply that the board of
directors or any stockholder shall not be entitled to contest the
validity of any consent or revocation thereof, whether before or after
such certification by the independent inspectors, or to take any other
action (including, without limitation, the commencement, prosecution,
or defense of any litigation with respect thereto, and the seeking of
injunctive relief in such litigation).
Section 13. Every written consent shall bear the date of
signature of each stockholder who signs the consent, and no written
consent shall be effective to take the corporate action referred to
therein unless, within sixty (60) days of the earliest dated written
consent received in accordance with Section 11 of this Article II, a
written consent or consents signed by a sufficient number of holders
to take such action are delivered to the corporation in the manner
prescribed in Section 11.
Section 14. No business may be transacted at an annual meeting of
stockholders, other than business that is either (a) specified in the
notice of meeting (or any supplement thereto) given by or at the
direction of the board of directors (or any duly authorized committee
thereof), (b) otherwise properly brought before the annual meeting by
or at the direction of the board of directors (or any duly authorized
committee thereof), or (c) otherwise properly brought before the
annual meeting by any stockholder of the Corporation (i) who is a
stockholder of record on the date of the giving of the notice provided
for in this Section 14 and on the record date for the determination of
stockholders entitled to vote at such annual meeting, and (ii) who
complies with the notice procedures set forth in this Section 14.
In addition to any other applicable requirements, for business to
be properly brought before an annual meeting by a stockholder, such
stockholder must have given timely notice thereof in proper written
form to the secretary of the Corporation.
To be timely, a stockholder's notice to the secretary must be
delivered to or mailed and received at the principal executive offices
of the Corporation not less than ninety (90) days nor more than one
hundred fifty (150) days prior to the date of the annual meeting;
PROVIDED, HOWEVER, that in the event that less than one hundred (100)
days' notice or prior public disclosure of the date of the annual
meeting is given or made to stockholders, notice by the stockholder in
order to be timely must be received not later than the close of
business on the tenth day
2
<PAGE>
following the day on which such notice of the date of the annual
meeting was mailed or such public disclosure of the date of the annual
meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the
secretary must set forth as to each matter such stockholder proposes
to bring before the annual meeting (i) a brief description of the
business desired to be brought before the annual meeting and the
reasons for conducting such business at the annual meeting, (ii) the
name and record address of such stockholder, (iii) the class or series
and number of shares of capital stock of the Corporation which are
owned beneficially or of record by such stockholder, (iv) a
description of all arrangements or understandings between such
stockholder and any other person or persons (including their names) in
connection with the proposal of such business by such stockholder and
any material interest of such stockholder in such business, and (v) a
representation that such stockholder intends to appear in person or by
proxy at the annual meeting to bring such business before the meeting.
No business shall be conducted at the annual meeting of
stockholders, except business brought before the annual meeting in
accordance with the procedures set forth in this Section 14; PROVIDED,
HOWEVER, that once business has been properly brought before the
annual meeting in accordance with such procedures, nothing in this
Section 14 shall be deemed to preclude discussion by any stockholder
of any such business. If the chairman of an annual meeting determines
that business was not properly brought before the annual meeting in
accordance with the foregoing procedures, the chairman shall declare
to the meeting that the business was not properly brought before the
meeting and such business shall not be transacted.
For purposes of these by-laws, "public disclosure" shall mean
disclosure in a press release reported by the Dow Jones, Associated
Press, Reuters or comparable national news service, or in a document
publicly filed by the corporation with the Securities and Exchange
Commission pursuant to Sections 13, 14 or 15(d) of the Securities
Exchange Act of 1934, as amended.
Section 15. The board of directors of the Corporation may adopt
by resolution such rules or regulations for the conduct of meetings of
the stockholders as it shall deem appropriate. Except to the extent
inconsistent with such rules and regulations as adopted by the board
of directors, the chairman of any meeting of stockholders shall have
the right and authority to prescribe such rules, regulations and
procedures and to do all such acts as, in the judgment of such
chairman, are appropriate for the proper conduct of the meeting. Such
rules, regulations or procedures, whether adopted by the board of
directors or prescribed by the chairman of the meeting, may include,
without limitation, the following: (1) the establishment of an agenda
or order of business for the meeting, (2) rules and procedures for
maintaining order at the meeting and the safety of those present, (3)
limitations on attendance at or participation in the meeting to
3
<PAGE>
stockholders of record of the Corporation, their duly authorized and
constituted proxies or such other persons as the chairman shall
permit, (4) restrictions on entry to the meeting after the time fixed
for the commencement thereof and (5) limitations on the time allotted
to questions or comments by participants. Unless, and to the extent
determined by the board of directors or the chairman of the meeting,
meetings of the stockholders shall not be required to be held in
accordance with rules of parliamentary procedure."
4. The following Section 15 was added at the end of Article III:
"Section 15. Nominations of persons for election to the board of
directors may be made at any annual meeting of stockholders (a) by or
at the direction of the board of directors (or any duly authorized
committee thereof) or (b) by any stockholder of the Corporation (i)
who is a stockholder of record on the date of the giving of the notice
provided for in this Section 15 and on the record date for the
determination of stockholders entitled to vote at such annual meeting
and (ii) who complies with the notice procedures set forth in this
Section 15. Persons nominated by a stockholder of the Corporation
shall only be eligible for election as directors of the Corporation if
such persons are nominated in accordance with the following
procedures.
In addition to any other applicable requirements, for a
nomination to be made by a stockholder, such stockholder must have
given timely notice thereof in proper written form to the secretary of
the Corporation.
To be timely, a stockholder's notice to the secretary must be
delivered to or mailed and received at the principal executive offices
of the Corporation not less than ninety (90) days nor more than one
hundred fifty (150) days prior to the date of the annual meeting;
PROVIDED, HOWEVER, that in the event that less than one hundred (100)
days' notice or prior public disclosure of the date of the annual
meeting is given or made to stockholders, notice by the stockholder in
order to be timely must be so received not later than the close of
business on the tenth day following the day on which such notice of
the date of the annual meeting was mailed or such public disclosure of
the date of the annual meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the
secretary must set forth (a) as to each person whom the stockholder
proposes to nominate for election as a director (i) the name, age,
business address and residence address of the person, (ii) the
principal occupation or employment of the person, (iii) the class or
series and number of shares of capital stock of the Corporation which
are owned beneficially or of record by the person and (iv) any other
information relating to the person that would be required to be
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (the
"Exchange Act"); and (b) as to the stockholder giving the notice (i)
the name and
4
<PAGE>
record address of such stockholder, (ii) the class or series and
number of shares of capital stock of the Corporation which are owned
beneficially or of record by such stockholder, (iii) a description of
all arrangements or understandings between such stockholder and each
proposed nominee and any other person or persons (including their
names) pursuant to which the nomination(s) are to be made by such
stockholder, (iv) a representation that such stockholder intends to
appear in person or by proxy at the annual meeting to nominate the
persons named in its notice and (v) any other information relating to
such stockholder that would be required to be disclosed in a proxy
statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section
14 of the Exchange Act. Such notice must be accompanied by a written
consent of each proposed nominee to be named as a nominee and to serve
as a director if elected.
No person nominated by a stockholder of the Corporation shall be
eligible for election as a director of the Corporation unless
nominated in accordance with the procedures set forth in this Section
15. If the chairman of the annual meeting determines that a nomination
was not made in accordance with the foregoing procedures, the chairman
shall declare to the meeting that the nomination was defective and
such defective nomination shall be disregarded."
5
Effective 1/21/00
DT INDUSTRIES, INC.
AMENDED AND RESTATED BY-LAWS
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of Wilmington,
County of New Castle, State of Delaware.
Section 2. The corporation may also have offices at other places
both within and without the State of Delaware as the board of directors may from
time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election of
directors shall be held in the City of Lebanon, State of Missouri, at such place
as may be fixed from time to time by the board of directors or at such other
places either within or without the State of Delaware as shall be designated
from time to time by the board of directors and stated in the notice of the
meeting.
Section 2. Annual meetings of stockholders, commencing with the year
1994, shall be held on the last Wednesday of the fourth month of the fiscal year
if not a legal holiday, and if a legal holiday, then on the next secular day
following, at 10 A.M., or at such other date and time as shall be designated
time to time by the board of directors and stated in the notice of the meeting,
at which they shall elect by a plurality vote a board of directors, and transact
such other business as may properly be brought before the meeting.
Section 3. Written notice of the annual meeting stating the place,
date and hour of the meeting shall be given to each stockholder entitled to vote
at such meeting not less than ten nor more than sixty days before the date of
the meeting.
Section 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of stockholders entitled to vote at the meeting,
arranged in alphabetical order, and showing the address of each stockholder and
the number of shares registered in the name of each stockholder. Such list shall
be open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten days prior
to the meeting, either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held.
<PAGE>
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof and may be inspected by any stockholder who is
present.
Section 5. Special meetings of the stockholders may be called at any
time by the chairman of the board or the president, or at any time upon the
written request of a majority of the board of directors. Each call for a special
meeting of the stockholders shall state the time, the day, the place and the
purpose of such meeting and shall be in writing, signed by the persons making
the same and delivered to the secretary. No business shall be transacted at a
special meeting other than such as is included in the purposes stated in the
call.
Section 6. Written notice of a special meeting stating the place,
date and hour of the meeting and the purpose or purposes for which the meeting
is called, shall be given not less than ten nor more than sixty days before the
date of the meeting, to each stockholder entitled to vote at such meeting.
Section 7. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
Section 8. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
Section 9. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the certificate of incorporation, a different vote is required, in which case
such express provision shall govern and control the decision of such question.
Section 10. Unless otherwise provided in the certificate of
incorporation each stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power held by such stockholder, but no proxy shall be voted on
after three years from its date, unless the proxy provides for a longer period.
Section 11. Unless otherwise provided in the certificate of
incorporation, any action required to be taken at any annual or special meeting
of stockholders of the corporation, or any action which may be taken at any
annual or special meeting of such stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting
2
<PAGE>
forth the action so taken, shall be signed by the holders of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted. Prompt notice of the taking of the corporate
action without a meeting by less than unanimous written consent shall be given
to those stockholders who have not consented in writing.
In order that the corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the board
of directors may fix a record date in accordance with Article VI, Section 5 of
these by-laws. Any stockholder of record seeking to have the stockholders
authorize or take corporate action by written consent shall, by written notice
to the secretary, request the board of directors to fix a record date. The
notice shall specify in reasonable detail the action proposed to be taken by
written consent. If no record date has been fixed by the board of directors
within thirty (30) days of the date on which such a request is received, the
record date for determining stockholders entitled to consent to corporate action
in writing without a meeting, when no prior action by the board of directors is
required by applicable law, shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is delivered to
the corporation by delivery to its registered office in the State of Delaware,
its principal place of business, or any officer or agent of the corporation
having custody of the book in which proceedings of stockholders meetings are
recorded, to the attention of the secretary of the corporation. Delivery shall
be by hand or certified or registered mail, return receipt requested. If no
record date has been fixed by the board of directors and prior action by the
board of directors is required by applicable law, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the date on which the
board of directors adopts the resolution taking such prior action.
Section 12. In the event of the delivery, in the manner provided by
Section 11 of this Article II, to the corporation of the requisite written
consent or consents to take corporate action and/or any related revocation or
revocations, the board of directors may appoint inspectors of elections for the
purpose of performing promptly a ministerial review of the validity of the
consents and revocations. For the purpose of permitting the inspectors, if
appointed, to perform such review, no action by written consent without a
meeting shall be effective until such date as the inspectors certify to the
corporation that the consents delivered to the corporation in accordance with
Section 11 represent at least the minimum number of votes that would be
necessary to take the corporate action. Nothing contained in this Section 12
shall in any way be construed to suggest or imply that the board of directors or
any stockholder shall not be entitled to contest the validity of any consent or
revocation thereof, whether before or after such certification by the
independent inspectors, or to take any other action (including, without
limitation, the commencement, prosecution, or defense of any litigation with
respect thereto, and the seeking of injunctive relief in such litigation).
Section 13. Every written consent shall bear the date of signature
of each stockholder who signs the consent, and no written consent shall be
effective to take the corporate action referred to therein unless, within sixty
(60) days of the earliest dated written consent received in accordance with
Section 11 of this Article II, a written consent or consents signed by a
sufficient number of holders to take such action are delivered to the
corporation in the manner prescribed in Section 11.
3
<PAGE>
Section 14. No business may be transacted at an annual meeting of
stockholders, other than business that is either (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the board of
directors (or any duly authorized committee thereof), (b) otherwise properly
brought before the annual meeting by or at the direction of the board of
directors (or any duly authorized committee thereof), or (c) otherwise properly
brought before the annual meeting by any stockholder of the Corporation (i) who
is a stockholder of record on the date of the giving of the notice provided for
in this Section 14 and on the record date for the determination of stockholders
entitled to vote at such annual meeting, and (ii) who complies with the notice
procedures set forth in this Section 14.
In addition to any other applicable requirements, for business to be
properly brought before an annual meeting by a stockholder, such stockholder
must have given timely notice thereof in proper written form to the secretary of
the Corporation.
To be timely, a stockholder's notice to the secretary must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than ninety (90) days nor more than one hundred fifty (150)
days prior to the date of the annual meeting; PROVIDED, HOWEVER, that in the
event that less than one hundred (100) days' notice or prior public disclosure
of the date of the annual meeting is given or made to stockholders, notice by
the stockholder in order to be timely must be received not later than the close
of business on the tenth day following the day on which such notice of the date
of the annual meeting was mailed or such public disclosure of the date of the
annual meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the
secretary must set forth as to each matter such stockholder proposes to bring
before the annual meeting (i) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting such business
at the annual meeting, (ii) the name and record address of such stockholder,
(iii) the class or series and number of shares of capital stock of the
Corporation which are owned beneficially or of record by such stockholder, (iv)
a description of all arrangements or understandings between such stockholder and
any other person or persons (including their names) in connection with the
proposal of such business by such stockholder and any material interest of such
stockholder in such business, and (v) a representation that such stockholder
intends to appear in person or by proxy at the annual meeting to bring such
business before the meeting.
No business shall be conducted at the annual meeting of
stockholders, except business brought before the annual meeting in accordance
with the procedures set forth in this Section 14; PROVIDED, HOWEVER, that once
business has been properly brought before the annual meeting in accordance with
such procedures, nothing in this Section 14 shall be deemed to preclude
discussion by any stockholder of any such business. If the chairman of an annual
meeting determines that business was not properly brought before the annual
meeting in accordance with the foregoing procedures, the chairman shall declare
to the meeting that the business was not properly brought before the meeting and
such business shall not be transacted.
For purposes of these by-laws, "public disclosure" shall mean
disclosure in a press release reported by the Dow Jones, Associated Press,
Reuters or comparable national news
4
<PAGE>
service, or in a document publicly filed by the corporation with the Securities
and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Securities
Exchange Act of 1934, as amended.
Section 15. The board of directors of the Corporation may adopt by
resolution such rules or regulations for the conduct of meetings of the
stockholders as it shall deem appropriate. Except to the extent inconsistent
with such rules and regulations as adopted by the board of directors, the
chairman of any meeting of stockholders shall have the right and authority to
prescribe such rules, regulations and procedures and to do all such acts as, in
the judgment of such chairman, are appropriate for the proper conduct of the
meeting. Such rules, regulations or procedures, whether adopted by the board of
directors or prescribed by the chairman of the meeting, may include, without
limitation, the following: (1) the establishment of an agenda or order of
business for the meeting, (2) rules and procedures for maintaining order at the
meeting and the safety of those present, (3) limitations on attendance at or
participation in the meeting to stockholders of record of the Corporation, their
duly authorized and constituted proxies or such other persons as the chairman
shall permit, (4) restrictions on entry to the meeting after the time fixed for
the commencement thereof and (5) limitations on the time allotted to questions
or comments by participants. Unless, and to the extent determined by the board
of directors or the chairman of the meeting, meetings of the stockholders shall
not be required to be held in accordance with rules of parliamentary procedure.
ARTICLE III
DIRECTORS
Section 1. The number of directors of the corporation shall be not
less than three (3) nor more than eleven (11), the exact number of directors to
be determined from time to time by resolution adopted by a majority of the
entire board. The directors shall be elected at the annual meeting of the
stockholders, except as provided in Section 2 of this Article, and each director
elected shall hold office until his successor is elected and qualified.
Directors need not be stockholders. Any director may resign at any time upon
written notice to the corporation.
Section 2. Vacancies and newly created directorships resulting from
any increase in the authorized number of directors may be filled by a majority
of the directors then in office, though less than a quorum, or by a sole
remaining director, and each of the directors so chosen shall hold office until
the next annual election and until his successor is duly elected and qualified
or until his earlier resignation or removal. No decrease in the board shall
shorten the term of any incumbent director. If, at the time of filling any
vacancy or any newly created directorship, the directors then in office shall
constitute less than a majority of the whole board (as constituted immediately
prior to any such increase), the Court of Chancery may, upon application of any
stockholder or stockholder holding at least ten percent of the total number of
the shares at the time outstanding having the right to vote for such directors,
summarily order an election to be held to fill any such vacancies or newly
created directorships, or to replace the directors chosen by the directors then
in office.
5
<PAGE>
Section 3. The business of the corporation shall be managed by or
under the direction of its board of directors which may exercise all such powers
of the corporation and do all such lawful acts and things as are not by statute
or by the certificate of incorporation or by these by-laws directed or required
to be exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the corporation may hold
meetings, both regular and special, either within or without the State of
Delaware.
Section 5. The first meeting of each newly elected board of
directors shall be held at such time and place as shall be fixed by the vote of
the stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of the
stockholders to fix the time or place of such first meeting of the newly elected
board of directors, or in the event such meeting is not held at the time and
place so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 6. Regular meetings of the board of directors may be held
without notice at such time and at such place as shall from time to time be
determined by the board.
Section 7. Special meetings of the board may be called by the
chairman of the board or the president, and the chairman of the board or the
president or the secretary shall call a special meeting upon the written request
of two directors unless the board consists of only one director; in which case
special meetings shall be called by the chairman of the board or the president
or secretary on the written request of the sole director. If given personally,
by telephone or by telegram, the notice shall be given at least two days prior
to the meeting. Notice may be given by mail if it is mailed at least three days
before the meeting.
Section 8. At all meetings of the board a majority of the directors
shall constitute a quorum for the transaction of business and the act of a
majority of the directors present at any meeting at which there is a quorum
shall be the act of the board of directors, except as may be otherwise
specifically provided by statute or by the certificate of incorporation. If a
quorum shall not be present at any meeting of the board of directors the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 9. Unless otherwise restricted by the certificate of
incorporation or these by-laws, any action required or permitted to be taken at
any meeting of the board of directors or of any committee thereof may be taken
without a meeting, if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.
Section 10. Unless otherwise restricted by the certificate of
incorporation or these by-laws, members of the board of directors, or any
committee designated by the board of directors, may participate in a meeting of
the board of directors, or any committee, by means of
6
<PAGE>
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and such participation
in a meeting shall constitute presence in person at the meeting.
COMMITTEES OF DIRECTORS
Section 11. The board of directors may, by resolution passed by a
majority of the whole board, designate one or more committees, each committee to
consist of one or more of the directors of the corporation. The board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee.
In the absence or disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the board of directors to act at the meeting in the place of
any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the
board of directors, shall have and may exercise all the powers and authority of
the board of directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the corporation's property and
assets, recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or amending the by-laws of the corporation; and,
unless the resolution or the certificate of incorporation expressly so provide,
no such committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock. Such committee or committees shall have such
name or names as may be determined from time to time by resolution adopted by
the board of directors.
Section 12. Each committee shall keep regular minutes of its
meetings and report the same to the board of directors when required.
COMPENSATION OF DIRECTORS
Section 13. Unless otherwise restricted by the certificate of
incorporation or these by-laws, the board of directors shall have the authority
to fix the compensation of directors. The directors may be paid their expenses,
if any, of attendance at each meeting of the board of directors and may be paid
a fixed sum for attendance at each meeting of the board of directors and/or a
stated salary as director. No such payment shall preclude any director from
serving the corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be allowed like
compensation for attending committee meetings.
7
<PAGE>
REMOVAL OF DIRECTORS
Section 14. Unless otherwise restricted by the certificate of
incorporation or by-laws, any director or the entire board of directors may be
removed, with or without cause, at any time by the holders of a majority of
shares then entitled to vote at an election of directors, and the vacancy in the
board of directors caused by such removal may be filled by the stockholders at
the time of such removal.
NOMINATION OF DIRECTORS
Section 15. Nominations of persons for election to the board of
directors may be made at any annual meeting of stockholders (a) by or at the
direction of the board of directors (or any duly authorized committee thereof)
or (b) by any stockholder of the Corporation (i) who is a stockholder of record
on the date of the giving of the notice provided for in this Section 15 and on
the record date for the determination of stockholders entitled to vote at such
annual meeting and (ii) who complies with the notice procedures set forth in
this Section 15. Persons nominated by a stockholder of the Corporation shall
only be eligible for election as directors of the Corporation if such persons
are nominated in accordance with the following procedures.
In addition to any other applicable requirements, for a nomination
to be made by a stockholder, such stockholder must have given timely notice
thereof in proper written form to the secretary of the Corporation.
To be timely, a stockholder's notice to the secretary must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than ninety (90) days nor more than one hundred fifty (150)
days prior to the date of the annual meeting; PROVIDED, HOWEVER, that in the
event that less than one hundred (100) days' notice or prior public disclosure
of the date of the annual meeting is given or made to stockholders, notice by
the stockholder in order to be timely must be so received not later than the
close of business on the tenth day following the day on which such notice of the
date of the annual meeting was mailed or such public disclosure of the date of
the annual meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the
secretary must set forth (a) as to each person whom the stockholder proposes to
nominate for election as a director (i) the name, age, business address and
residence address of the person, (ii) the principal occupation or employment of
the person, (iii) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by the person and (iv)
any other information relating to the person that would be required to be
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors pursuant to
Section 14 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (the "Exchange Act"); and (b) as to the
stockholder giving the notice (i) the name and record address of such
stockholder, (ii) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by such stockholder,
(iii) a description of all arrangements or understandings between such
stockholder and each proposed nominee and any other person or persons (including
their names) pursuant to which the nomination(s) are to be made by such
stockholder, (iv) a representation that such stockholder intends to appear in
person or by proxy at the annual meeting to nominate
8
<PAGE>
the persons named in its notice and (v) any other information relating to such
stockholder that would be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitations of proxies for
election of directors pursuant to Section 14 of the Exchange Act. Such notice
must be accompanied by a written consent of each proposed nominee to be named as
a nominee and to serve as a director if elected.
No person nominated by a stockholder of the Corporation shall be
eligible for election as a director of the Corporation unless nominated in
accordance with the procedures set forth in this Section 15. If the chairman of
the annual meeting determines that a nomination was not made in accordance with
the foregoing procedures, the chairman shall declare to the meeting that the
nomination was defective and such defective nomination shall be disregarded.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these by-laws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram.
Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of incorporation or of these
by-laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the
board of directors as soon as practicable after each annual meeting of
stockholders and shall be a president, a secretary and a treasurer. Any number
of offices may be held by the same person, unless the certificate of
incorporation or these by-laws otherwise provide.
Section 2. The board of directors may appoint such other officers
and agents as it shall deem necessary, including a chairman of the board, a vice
chairman of the board, one or more vice presidents and one or more assistant
secretaries and assistant treasurers, who shall hold their offices for such term
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board.
Section 3. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors.
9
<PAGE>
Section 4. The officers of the corporation shall hold office at the
pleasure of the board of directors. Each officer shall hold his office until his
successor is elected and qualified or until his earlier resignation or removal.
Any officer may resign at any time upon written notice to the corporation. Any
officer elected or appointed by the board of directors may be removed at any
time by the affirmative vote of a majority of the board of directors. Any
vacancy occurring in any office of the corporation by death, resignation,
removal or otherwise shall be filled by the board of directors.
THE CHAIRMAN OF THE BOARD
Section 5. The chairman of the board shall be a member of the board
and shall preside at its meetings and at all meetings of stockholders. The
chairman of the board shall exercise such other powers and perform such other
duties as may from time to time be assigned to him by the board or prescribed by
the by-laws.
THE PRESIDENT
Section 6. The president shall, subject to the director and under
the supervision of the board, be the principal executive officer of the
corporation and shall have general charge of the business and affairs of the
corporation and shall keep the board fully advised. At the direction of the
board, he shall have power in the name of the corporation and on its behalf to
execute any instruments in writing. He shall employ and discharge employees and
agents of the corporation, except such as shall hold their offices by
appointment of the board, but he may delegate these powers to other officers as
to employees under their immediate supervision. He shall have such powers and
perform such duties as generally pertain to the office of president, as well as
such further powers and duties as may be prescribed by the board.
THE VICE-PRESIDENTS
Section 7. In the absence of the president or in the event of his
inability or refusal to act, the vice-president (or in the event there be more
than one vice-president, the vice-presidents in the order designated by the
directors, or in the absence of any designation, then in the order of their
election) shall perform the duties of the president, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
president. The vice-presidents shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 8. The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors or
president, under whose supervision he shall be. He shall have custody of the
corporate seal of the corporation and he, or an assistant secretary, shall have
authority to affix the same to any instrument requiring it and when so affixed,
it may be attested by his signature or by the signature of such assistant
10
<PAGE>
secretary. The board of directors may give general authority to any other
officer to affix the seal of the corporation and to attest the affixing by his
signature.
Section 9. The assistant secretary, or if there be more than one,
the assistant secretaries in the order determined by the board of directors (or
if there be no such determination, then in the order of their election) shall,
in the absence of the secretary or in the event of his inability or refusal to
act, perform the duties and exercise the powers of the secretary and shall
perform such other duties and have such other powers as the board of directors
may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURER
Section 10. The treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and-to the credit of the corporation in
such depositories as may be designated by the board of directors.
Section 11. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the board of directors, at
its regular meetings, or when the board of directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.
Section 12. If required by the board of directors, he shall give the
corporation a bond (which shall be renewed every six years) in such sum and with
such surety or sureties as shall be satisfactory to the board of directors for
the faithful performance of the duties of his office and for the restoration to
the corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
Section 13. The assistant treasurer, or if there be more than one
the assistant treasurer in the order determined by the board of directors (or if
there be no such determination, then in the order of their election) shall, in
the absence of the treasurer or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the treasurer and shall perform
such other duties and have such other powers as the board of directors may from
time to time prescribe.
ARTICLE VI
CERTIFICATE OF STOCK
Section 1. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the corporation by,
the chairman or vice-chairman of the board of directors, or the president or a
vice-president and the treasurer, or the secretary or an assistant secretary of
the corporation, certifying the number of shares owned by him in the
corporation.
11
<PAGE>
Section 2. Any of or all the signatures on the certificate may be
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer, transfer agent or registrar at the date of issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the board of directors may, in its
discretion and as a condition precedent to issuance thereof, require the owner
of such lost, stolen or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require and/or
give the corporation a bond in such sum as it may direct as indemnity against
any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
TRANSFER OF STOCK
Section 4. Upon surrender to the corporation or the transfer agent
of the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignation or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
FIXING RECORD DATE
Section 5. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the board of directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the board of directors may fix a new record date for the adjourned
meeting.
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
12
<PAGE>
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation,
subject to the provisions of the certificate of incorporation, if any, may be
declared by the board of directors at any regular or special meeting, pursuant
to law. Dividends may be paid in cash, in property, or in shares of the capital
stock, subject to the provisions of the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set aside
out of any funds of the corporation available for dividends such sum or sums as
the directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purposes as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
EXECUTION OF DOCUMENTS
Section 3. Unless otherwise authorized by the board of directors,
all contracts, leases, deeds, deeds of trust, mortgages, powers of attorney to
transfer stock and for other purposes, and all other documents requiring the
seal of the corporation shall be executed for and on behalf of the corporation
by the president or any vice president and the corporate seal shall be affixed
and attested by the secretary or an assistant secretary, or the treasurer or an
assistant treasurer.
ANNUAL STATEMENT
Section 4. The board of directors shall present at each annual
meeting, and at any special meeting of the stockholders when called for by vote
of the stockholders, a full and clear statement of the business and condition of
the corporation.
CHECKS
Section 5. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
FISCAL YEAR
Section 6. The fiscal year of the corporation shall be fixed by
resolution of the board of directors.
13
<PAGE>
SEAL
Section 7. The corporate seal shall have inscribed thereon the name
of the corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
INDEMNIFICATION
Section 8. (a) Each person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she or a person
of whom he or she is the legal representative, is or was a director or officer
of the corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans (hereinafter an "indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity as a director, officer,
employee or agent or in any other capacity while serving as a director, officer,
employee or agent, shall be indemnified and held harmless by the corporation to
the fullest extent permitted by the Delaware General Corporation Law, as the
same exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the corporation to provide
broader indemnification rights than said law permitted the corporation to
provide prior to such amendment), against all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such indemnitee in connection therewith. Such indemnification shall continue as
to an indemnitee who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of his or her heirs, executors and administrators;
provided, however, that, except as provided in subparagraph (b) hereof, the
corporation shall indemnify any such indemnitee seeking indemnification in
connection with a proceeding (or part thereof) initiated by such indemnitee only
if such proceeding (or part thereof) was authorized by the board of directors of
the corporation. The right to indemnification conferred in this Section 8 shall
be a contract right and shall include the right to be paid by the corporation
the expenses incurred in defending any such proceeding in advance of its final
disposition (an "expense advancement"); provided, however, that, if the Delaware
General Corporation Law so requires, the payment of such expenses incurred by an
indemnitee in his or her capacity as a director or officer of the corporation
(and not in any other capacity in which service was or is rendered by such
indemnitee while a director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of a
proceeding, shall be made upon delivery to the corporation of an undertaking, by
or on behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal that such indemnitee is not entitled to be indemnified
under this Section 8 or otherwise; and provided, further, that no expense
advancement shall be paid by the corporation if independent legal counsel shall
advise the board of directors in a written opinion that based upon the facts
known to such counsel at the time, (i) the indemnitee acted in bad faith or
deliberately breached his or her duty to the corporation or its stockholders,
and (ii) as a result of such conduct by the indemnitee, it is more likely than
not that it will ultimately be determined that such indemnitee has not met the
standards of conduct which make it permissible under the
14
<PAGE>
Delaware General Corporation Law for the corporation to indemnify such
indemnitee. The corporation may, by action of its board of directors, provide
indemnification to employees and agents of the corporation with the same scope
and effect as the foregoing indemnification of directors and officers.
(b) If a claim under subparagraph (a) of this Section 8 is not paid in
full by the corporation within 30 days after a written claim has been received
by the corporation, the indemnitee may at any time thereafter bring suit against
the corporation to recover the unpaid amount of the claim. If successful in
whole or in part in any such suit, or in a suit brought by the corporation to
recover an expense advancement, the indemnitee shall also be entitled to be paid
the expense of prosecuting or defending such suit. It shall be a defense to any
such action that the indemnitee has not met the standards of conduct which make
it permissible under the Delaware General Corporation Law for the corporation to
indemnify the claimant for the amount claimed, but the burden of proving such
defense shall be on the corporation. Neither the failure of the corporation
(including its board of directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the indemnitee is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the corporation
(including its board of directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
indemnitee has not met the applicable standard of conduct; provided, however,
that a determination by the board of directors denying an expense advancement
based upon the written opinion of independent legal counsel as provided for in
subparagraph (a) above shall be a complete defense to any action seeking an
expense advancement, but such determination shall not be a defense or create a
presumption that the indemnitee is not entitled to be indemnified hereunder upon
the final disposition of the proceeding.
(c) The right to indemnification and the payment of expense incurred in
defending a proceeding in advance of its final disposition conferred in this
Section 8 shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of the Amended and Restated
Certificate of Incorporation, by-law, agreement, vote of stockholders or
disinterested directors or otherwise.
(d) The corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss under the Delaware General
Corporation Law.
ARTICLE VIII
AMENDMENTS
Section 1. These by-laws may be altered, amended or repealed or new
by-laws may be adopted by the stockholders or by the board of directors, when
such power is conferred upon the board of directors by the certificate of
incorporation, at any regular meeting of the stockholders or of the board of
directors or at any special meeting of the stockholders or of the
15
<PAGE>
board of directors if notice of such alteration, amendment, repeal or adoption
of new by-laws be contained in the notice of such special meeting. If the power
to adopt, amend or repeal by-laws is conferred upon the board of directors by
the certificate of incorporation it shall not divest or limit the power of the
stockholders to adopt, amend or repeal by-laws.
16
FIFTH AMENDMENT TO FOURTH AMENDED AND RESTATED CREDIT
FACILITIES AGREEMENT
THIS FIFTH AMENDMENT TO FOURTH AMENDED AND RESTATED CREDIT FACILITIES
AGREEMENT (this "AMENDMENT") is entered into as of December 1, 1999, by and
among DT INDUSTRIES, INC., a Delaware corporation ("DOMESTIC BORROWER"), DT
INDUSTRIES (UK) II LIMITED, ASSEMBLY TECHNOLOGIE & AUTOMATION GMBH, KALISH
INC., formerly Kalish Canada Inc., and DT CANADA INC. (together with Domestic
Borrower, separately and collectively, "BORROWER"), BANK OF AMERICA, N.A.,
formerly NationsBank, N.A., as administrative agent ("ADMINISTRATIVE AGENT"),
and the other lenders listed on the signature pages hereof (the "LENDERS").
RECITALS
(a) Borrower, Administrative Agent and the Lenders are parties to that certain
Fourth Amended and Restated Credit Facilities Agreement dated as of July
21,1997 (as amended through the date hereof, the "CREDIT AGREEMENT"; terms
defined in the Credit Agreement and not otherwise defined herein shall be
used herein as defined in the Credit Agreement).
(b) Borrower, Administrative Agent, and the Lenders desire to amend the Credit
Agreement as described below, subject to the terms and conditions
contained herein.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are all hereby acknowledged, the parties
hereto covenant and agree as follows:
1. AMENDMENT TO THE CREDIT AGREEMENT. The Credit Agreement is hereby
amended by entirely amending the fourth sentence of Section 19.2. thereof, as
follows:
The foregoing notwithstanding, no such amendment, modification,
waiver or consent shall release any of the Collateral or any Covered
Person or any Guarantor from its obligations under the Loan
Documents in connection with any sale, disposition or refinancing of
assets (other than in connection with sales or dispositions
permitted under Section 14.6. and upon compliance with Section
6.2.3.) unless signed by authorized officers of Borrower and any one
or more Lenders whose shares of Lenders' Exposure at the relevant
time aggregate at least 80%, and no such amendment, modification,
waiver or consent shall, unless signed by authorized officers of
Borrower and of all the Lenders: (i) increase any Revolving Loan
Commitment of any Lender, or increase the Letter of Credit
Commitment or subject any Lender or the Letter of Credit Issuer to a
greater obligation than expressly provided for in this Agreement,
(ii) reduce or forgive the repayment of principal of any Advance or
the reimbursement of any draw on a Letter of Credit or decrease the
rate, or change the mechanism for determining the rate, of interest
on any Advance
<PAGE>
or any fees or other amounts payable by Borrower hereunder, (iii)
change to a later date the regularly scheduled dates for payments of
principal or interest of any Advance or other fees or amounts payable
to any Lender under the Loan Documents (including, without limitation,
the Revolving Loan Maturity Date), (iv) change the provisions of
Section 17 to the detriment of any Lender, (v) change the definition
of Required Lenders herein, (vi) change the provisions of this
Section, (vii) change any provisions of this Agreement requiring
ratable distributions to Lender, (viii) release any of the Collateral
or any Covered Person or any Guarantor from its obligations under the
Loan Documents in connection with any transaction or other event or
circumstance other than a sale, disposition or refinancing of a
Covered Person's assets, or (ix) subordinate the Loan Obligations to
any other Indebtedness.
2. ACKNOWLEDGMENT OF THE BORROWER. The Borrower acknowledges and agrees
that the Lenders executing this Amendment have done so in their sole discretion
and without any obligation. The Borrower further acknowledges and agrees that
any action taken or not taken by the Lenders or the Administrative Agent prior
to, on or after the date hereof shall not constitute a waiver or modification of
any term, covenant or provision of any Loan Document or prejudice any rights or
remedies which the Administrative Agent or any Lender now has or may have in the
future under any Loan Document, Applicable Law or otherwise, all of which rights
and remedies are expressly reserved by the Administrative Agent and the Lenders.
3. SUBSIDIARIES ACKNOWLEDGMENT. By signing below, each of the Domestic
Borrower's Subsidiaries which has executed a guaranty of the Loan Obligations
(a) consents and agrees to this Amendment's execution and delivery, (b) ratifies
and confirms its obligations under its guaranty, (c) acknowledges and agrees
that its obligations under its guaranty are not released, diminished, impaired,
reduced, or otherwise adversely affected by this Amendment, and (d) acknowledges
and agrees that it has no claims or offsets against, or defenses or
counterclaims to, its guaranty.
4. RELEASE.
(a) Upon this Amendment becoming effective, the Domestic Borrower and
each of its Subsidiaries hereby unconditionally and irrevocably remises,
acquits, and fully and forever releases and discharges the Administrative
Agent and the Lenders and all respective affiliates and subsidiaries of the
Administrative Agent and the Lenders, their respective officers, servants,
employees, agents, attorneys, principals, directors and shareholders, and
their respective heirs, legal representatives, successors and assigns
(collectively, the "RELEASED LENDER PARTIES") from any and all claims,
demands, causes of action, obligations, remedies, suits, damages and
liabilities (collectively, the "BORROWER CLAIMS") of any nature whatsoever,
whether now known, suspected or claimed, whether arising under common law,
in equity or under statute, which the Domestic Borrower or any of its
Subsidiaries ever had or now has against the Released Lender Parties which
may have arisen at any time on or prior to the date of this Amendment and
which were in any manner related to any of the Loan Documents or the
enforcement or attempted enforcement by the Administrative Agent or the
Lenders of rights, remedies or recourses related thereto.
2
<PAGE>
(b) Upon this Amendment becoming effective, the Domestic Borrower and
each of its Subsidiaries covenants and agrees never to commence,
voluntarily aid in any way, prosecute or cause to be commenced or
prosecuted against any of the Released Lender Parties any action or other
proceeding based upon any of the Borrower Claims which may have arisen at
any time on or prior to the date of this Amendment and were in any manner
related to any of the Loan Documents.
(c) The agreements of the Domestic Borrower and each of its
Subsidiaries set forth in this SECTION 4 shall survive termination of this
Amendment and the other Loan Documents.
5. CONDITIONS OF EFFECTIVENESS. This Amendment shall be effective as of
December 1, 1999, so long as Administrative Agent shall have received executed
counterparts of this Amendment from each of the parties listed on the signature
pages hereof.
6. REFERENCE TO CREDIT AGREEMENT. Upon the effectiveness of this Amendment,
each reference in the Credit Agreement to "this Agreement," "hereunder," or
words of like import shall mean and be a reference to the Credit Agreement, as
affected and amended by this Amendment.
7. COUNTERPARTS; EXECUTION VIA FACSIMILE. This Amendment may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. This Amendment
may be validly executed and delivered by facsimile or other electronic
transmission.
8. GOVERNING LAW: BINDING EFFECT. This Amendment shall be governed by and
construed in accordance with the laws of the State of Texas and shall be binding
upon the Borrower, the Administrative Agent, each Lender and their respective
successors and assigns.
9. HEADINGS. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
10. LOAN DOCUMENT. This Amendment is a Loan Document and is subject to all
provisions of the Credit Agreement applicable to Loan Documents, all of which
are incorporated in this Amendment by reference the same as if set forth in this
Amendment verbatim.
11. NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as the
date first above written.
BORROWER:
DT INDUSTRIES, INC., KALISH INC. formerly Kalish Canada Inc.,
a Delaware corporation a New Brunswick, Canada corporation
By: /s/ Bruce P. Erdel By: /s/ Bruce P. Erdel
- -------------------------------- ---------------------------------------
Bruce P. Erdel, Senior Vice President- Bruce P. Erdel, Vice President and
Finance and Administration Treasurer
DT CANADA INC., ASSEMBLY TECHNOLOGIE &
a New Brunswick, Canada corporation AUTOMATION GMBH, a German
limited liability company
By: /s/ Bruce P. Erdel By: /s/ Bruce P. Erdel
---------------------------------- ---------------------------------------
Bruce P. Erdel, Vice President Bruce P. Erdel, Geschaftsfuhrer
and Treasurer
DT INDUSTRIES (UK) II LIMITED,
a corporation of England and Wales
By: /s/ Bruce P. Erdel
----------------------------------
Bruce P. Erdel, Director
SUBSIDIARIES:
ADVANCED ASSEMBLY AUTOMATION, INC. ASSEMBLY TECHNOLOGY & TEST, INC.
By: /s/ Bruce P. Erdel By: /s/ Bruce P. Erdel
---------------------------------- --------------------------------
Name: Bruce P. Erdel Name: Bruce P. Erdel
Title: Vice President Title: Vice President
<PAGE>
DETROIT TOOL AND ENGINEERING CO. MID-WEST AUTOMATION SYSTEMS, INC.
By: /s/ Bruce P. Erdel By: /s/ Bruce P. Erdel
---------------------------------- --------------------------------
Name: Bruce P. Erdel Name: Bruce P. Erdel
Title: Vice President Title: Vice President
DETROIT TOOL METAL PRODUCTS CO. SENCORP SYSTEMS, INC.
By: /s/ Bruce P. Erdel By: /s/ Bruce P. Erdel
---------------------------------- --------------------------------
Name: Bruce P. Erdel Name: Bruce P. Erdel
Title: Vice President Title: Vice President
HANSFORD MANUFACTURING CORPORATION ARMAC INDUSTRIES, CO.
By: /s/ Bruce P. Erdel By: /s/ Bruce P. Erdel
---------------------------------- --------------------------------
Name: Bruce P. Erdel Name: Bruce P. Erdel
Title: Vice President Title: Vice President
PHARMA GROUP, INC. ASSEMBLY MACHINES, INC.
By: /s/ Bruce P. Erdel By: /s/ Bruce P. Erdel
---------------------------------- --------------------------------
Name: Bruce P. Erdel Name: Bruce P. Erdel
Title: Vice President Title: Vice President
MID-WEST AUTOMATION ENTERPRISES, INC. VANGUARD TECHNICAL SOLUTIONS, INC.
By: /s/ Bruce P. Erdel By: /s/ Bruce P. Erdel
---------------------------------- -------------------------------
Name: Bruce P. Erdel Name: Bruce P. Erdel
Title: Vice President Title: Vice President
<PAGE>
ADMINISTRATIVE AGENT AND LENDERS:
BANK OF AMERICA, N.A., formerly DRESDNER BANK AG, NEW YORK
NationsBank, N.A., as Administrative Agent AND GRAND CAYMAN BRANCHES
and a Lender
By: /s/ William E. Livingstone, IV By: /s/ John W. Sweeney
---------------------------------- ---------------------------------
William E. Livingstone, IV Name: John W. Sweeney
Managing Director Title: Vice President
By: /s/ John R. Morrison
---------------------------------
Name: John R. Morrison
Title: Vice President
THE BANK OF NEW YORK THE BANK OF NOVA SCOTIA
By: /s/ Edward J. DeSalvo By: /s/ M.D. Smith
--------------------------------- ---------------------------------
Name: Edward J. DeSalvo Name: M.D. Smith
Title: Vice President Title: Agent
THE SAKURA BANK, LIMITED MERCANTILE BANK NATIONAL ASSOCIATION
By: /s/ Yoshikazu Nagura By: /s/ Timothy N. Scheer
--------------------------------- ---------------------------------
Name: Yoshikazu Nagura Name: Timothy N. Scheer
Title: Senior Vice President Title: Vice President
GENERAL ELECTRIC CAPITAL THE SUMITOMO BANK, LIMITED
CORPORATION
By: /s/ Gregory Hong By: /s/ Suresh S. Tata
--------------------------------- ---------------------------------
Name: Gregory Hong Name: Suresh S. Tata
Title: Duly Authorized Signatory Title: Senior Vice President
NATIONAL CITY BANK
By: /s/ Jeffrey C. Geeding
---------------------------------
Name: Jeffrey C. Geeding
Title: Senior Vice President
<TABLE>
<CAPTION>
Exhibit 11
DT INDUSTRIES, INC.
COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)
Three Months Ended Six Months Ended
December 26, December 27, December 26, December 27,
1999 1998 1999 1998
---------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C>
Net income $ 873 $ 1,092 $ 535 $ 4,877
================ =============== =============== ================
Basic:
Basic weighted average shares
outstanding 10,107 10,067 10,107 10,191
Basic net income per share $ 0.09 $ 0.11 $ 0.05 $ 0.48
================ =============== =============== ================
Diluted:
Weighted average shares
outstanding 10,107 10,067 10,107 10,191
Add dilutive effect of stock
options based on treasury
stock method using average
market price 13 123 27 163
---------------- --------------- --------------- ----------------
10,120 10,190 10,134 10,354
================ =============== =============== ================
Diluted net income per share $ 0.09 $ 0.11 $ 0.05 $ 0.47
================ =============== =============== ================
</TABLE>
[FN]
NOTE:For the three and six months ended December 26, 1999 and December 27, 1998,
respectively, the convertible preferred securities were antidilutive and
have been excluded from the computation of diluted earnings per share.
</FN>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information (in thousands except per
share data) extracted from the unaudited Consolidated Balance Sheet at December
26, 1999 and the unaudited Consolidated Statement of Operations for the Six
Months Ended December 26, 1999 and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<CIK> 0000918999
<NAME> DT INDUSTRIES, INC.
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-25-2000
<PERIOD-START> JUN-28-1999
<PERIOD-END> DEC-26-1999
<EXCHANGE-RATE> 1
<CASH> 17,798
<SECURITIES> 0
<RECEIVABLES> 64,643
<ALLOWANCES> 2,969
<INVENTORY> 63,682
<CURRENT-ASSETS> 220,685
<PP&E> 113,950
<DEPRECIATION> 38,495
<TOTAL-ASSETS> 479,285
<CURRENT-LIABILITIES> 91,220
<BONDS> 124,822
0
0
<COMMON> 113
<OTHER-SE> 179,712
<TOTAL-LIABILITY-AND-EQUITY> 479,285
<SALES> 208,951
<TOTAL-REVENUES> 208,951
<CGS> 160,921
<TOTAL-COSTS> 160,921
<OTHER-EXPENSES> 39,178
<LOSS-PROVISION> 40
<INTEREST-EXPENSE> 6,968
<INCOME-PRETAX> 1,844
<INCOME-TAX> 1,309
<INCOME-CONTINUING> 535
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 535
<EPS-BASIC> 0.05
<EPS-DILUTED> 0.05
</TABLE>
