FORM 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 1998
Commission File Number 1-6018
TOKHEIM CORPORATION
(Exact name of registrant as specified in its charter)
INDIANA 35-0712500
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10501 CORPORATE DR., FORT WAYNE, IN 46845
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number including area code): (219) 470-4600
NOT APPLICABLE
(Former name, former address, and former fiscal year
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
As of February 28, 1998, 8,300,748 shares of voting common stock
were outstanding.
In addition, 771,708 shares of convertible preferred stock were
held by the Retirement Savings Plan for Employees of Tokheim Corporation
and Subsidiaries.
The exhibit index is located on page 14.
FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED STATEMENT OF EARNINGS
(Amounts in thousands except amounts per share)
<TABLE>
<CAPTION>
Unaudited
-------------------------------
Three Months Ended
February 28, February 28,
1998 1997
----------- -----------
<S> <C> <C>
NET SALES.................................................. $ 90,852 $ 92,024
Cost of sales, exclusive of items listed below............. 67,074 70,391
Selling, general, and administrative expenses.............. 16,257 15,903
Depreciation and amortization.............................. 2,500 1,928
Merger and acquisition costs and other unusual items....... 5,987 --
-------- ------
OPERATING PROFIT (LOSS) (966) 3,802
--------- -------
Interest expense, net...................................... 4,011 3,740
Foreign currency (gain) loss............................... 35 (119)
Minority interest.......................................... 73 (43)
Other (income), net ....................................... 221 (69)
------ -------
Earnings (loss) before income taxes........................ (5,306) 293
Income taxes............................................... 300 167
-------- -------
NET EARNINGS (LOSS) $ (5,606) $ 126
------- -------
Preferred stock dividends.................................. $ 374 $ 383
Net loss applicable to common stock........................ $ (5,979) (257)
Loss per common share (Basic).............................. $ (0.72) $ (0.03)
======== ======
Weighted average shares outstanding..................... 8,250 7,949
Loss per common share (Diluted)............................ $ (0.72) $ (0.03)
======== ======
Weighted average shares outstanding..................... 8,250 7,949
The accompanying notes are an integral part of these financial
statements.
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED BALANCE SHEET
(Amounts in thousands) Unaudited Audited
----------------------------
February 28, November 30,
ASSETS 1998 1997
------------ -------------
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents...................................... $ 8,127 $ 6,438
Receivables, net............................................... 72,532 83,011
Inventories:
Raw materials and supplies.................................. 30,068 29,427
Work in process............................................. 29,689 27,514
Finished goods.............................................. 7,784 7,406
-------- -------
67,541 64,347
Prepaid expenses............................................... 7,040 6,705
--------- --------
Total current assets........................................... 155,240 160,501
Property, plant, and equipment, net............................ 42,086 49,791
Other tangible assets.......................................... 3,562 1,359
Goodwill, net.................................................. 64,111 62,695
Other non-current assets and deferred charges, net............. 17,352 16,273
-------- -------
Total assets................................................... $ 282,352 $ 290,619
======== =======
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED BALANCE SHEET (CONTINUED)
(Amounts in thousands) Unaudited Audited
----------------------------
February 28, November 30,
LIABILITIES AND SHAREHOLDERS' EQUITY 1998 1997
------------ -----------
CURRENT LIABILITIES:
<S> <C> <C>
Current maturities of long-term debt........................... $ 2,381 $ 2,391
Notes payable, banks........................................... 1,739 98
Cash overdraft................................................. 9,762 10,575
Accounts payable............................................... 47,614 54,597
Accrued expenses............................................... 42,223 51,190
-------- ---------
Total current liabilities...................................... 103,718 118,851
Senior subordinated notes...................................... 90,000 90,000
Long-term debt................................................. 47,177 28,487
Guaranteed Employees' Stock Ownership Plan obligation.......... 8,836 9,429
Postretirement benefit liability............................... 16,395 14,378
Minimum pension liability...................................... 2,173 2,173
Other long-term liabilities.................................... (68) 5,169
Deferred income taxes.......................................... 150 342
Minority interest.............................................. 998 1,319
--------- ---------
269,378 270,148
Redeemable convertible preferred stock......................... 24,000 24,000
Guaranteed Employees' Stock Ownership Plan obligation.......... (8,836) (9,429)
Treasury stock, at cost........................................ (4,707) (4,718)
---------- ----------
10,457 9,853
--------- ---------
Common stock................................................... 21,316 21,158
Minimum pension liability...................................... (2,173) (2,173)
Foreign currency translation adjustments....................... (20,332) (18,048)
Retained earnings.............................................. 3,854 9,821
----------- ---------
2,665 10,758
Less treasury stock, at cost................................... (148) (140)
----------- ---------
2,517 10,618
---------- -------
Total liabilities and shareholders' equity..................... $ 282,352 $ 290,619
======= =======
The accompanying notes are an integral part of these financial
statements.
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(Amounts in thousands)
Unaudited
------------------------------
Three Months Ended
February 28, February 28,
1998 1997
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net earnings (loss).......................................... $ (5,606) $ 126
Adjustments to reconcile net earnings (loss) to cash used in
operations:
Write-off of in-process research and development......... 5,879 -
Depreciation and amortization............................ 2,500 1,928
Deferred income taxes.................................... (183) 14
Changes in assets and liabilities:
Receivables, net..................................... 11,281 9,306
Inventories.......................................... (4,192) (4,311)
Prepaid expenses..................................... (451) (1,444)
Accounts payable..................................... (6,707) (5,931)
Accrued expenses..................................... (8,340) (3,074)
U.S. and foreign income taxes........................ 50 32
Other................................................ 1,924 (528)
-------- ----------
Net cash used in operations.................................. (3,845) (3,883)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in Management Solutions, Inc., net of cash
acquired..................................................... (137) --
Cash paid for acquisition of Management Solutions, Inc....... (12,000)
Plant and equipment additions................................ (1,885) (1,325)
Net cash used in investing activities........................ (14,022) (1,325)
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in term debt........................................ (122) (1,211)
Increase (decrease) in notes payable, banks.................. 20,644 (887)
Increase (decrease) in cash overdraft........................ (504) 3,944
Proceeds from issuance of common stock....................... 158 13
Treasury stock, net.......................................... 4 (51)
Preferred stock dividends.................................... (374) (383)
------- ---------
Net cash provided from financing activities.................. 19,806 1,426
-------- ---------
EFFECT OF TRANSLATION ADJUSTMENTS ON CASH.................... (250) 382
CASH AND CASH EQUIVALENTS:
Increase (decrease) in cash.................................. 1,689 (3,400)
Beginning of period.......................................... 6,438 9,814
-------- ---------
End of period................................................ $ 8,127 $ 6,414
======== =========
The accompanying notes are an integral part of these financial
statements.
</TABLE>
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
The interim financial statements are unaudited and reflect
all adjustments (consisting solely of normal recurring adjustments) that,
in the opinion of management, are necessary for a fair statement of results
of the interim periods presented. This report includes information in a
condensed form and should be read in conjunction with the audited
consolidated financial statements included in Tokheim Corporation's (the
"Company") Annual Report to Shareholders for the year ending November 30,
1997. The results of operations for the three months ended February 28,
1998 are not necessarily indicative of the results to be expected for the
full year or any other interim period.
Amounts for interim periods are unaudited. Amounts for the
year ending November 30, 1997 were derived from audited financial statements
included in the 1997 Annual Report to Shareholders.
Certain prior period amounts in these financial statements
have been reclassified to conform with current year presentation.
ACQUISITION OF MANAGEMENT SOLUTIONS, INC.
In December 1997, the Company acquired Management Solutions,
Inc. (MSI). MSI develops and distributes retail automation systems
(including point-of-sale software), primarily for the convenience store,
petroleum dispensing and fast food service industries. The Company paid
MSI's stockholders an initial amount of $12,000,000. The Company is also
obligated to make contingent payments of up to $13,200,000 over the next
three years based upon MSI's performance. The $13,200,000 consists of
$8,000,000 of additional purchase price, $2,600,000 related to a
non-compete agreement, and $2,600,000 of additional employee compensation.
The Company borrowed funds for the initial purchase price under the
Company's bank credit facility (the Bank Credit Facility). As part of the
transaction, the Company entered into an employment relationship with
Arthur S. Elston, the President of MSI, pursuant to which he will oversee
the Company's retail automation systems business.
The transaction was accounted for as a purchase. Intangible
assets of $4,800,000 were recorded and are being amortized over four
years. In process research and development (R & D) of $5,879,000 was
written off in connection with the acquisition and is included in merger
and acquisition (M & A) costs and other unusual items in the consolidated
statement of earnings. The portion of any contingent payments that does not
relate to employee compensation will be allocated to various intangible
assets and goodwill amortized over periods ranging from four to twelve
years as the payments are made.
EARNINGS PER SHARE
The Company adopted Statement of Financial Accounting
Standards (SFAS) No. 128, Earnings Per Share, for the three month period
ended February 28, 1998. Under SFAS No. 128, the Company presents two
earnings per share (EPS) amounts, basic and diluted. Basic EPS is
calculated based on income (loss) available to common shareholders and the
weighted average number of shares outstanding during the reported period.
Diluted EPS includes additional dilution from potential common stock
equivalents, such as stock issuable pursuant to the conversion of preferred
stock or the exercise of stock options outstanding. The incremental shares
from conversions of preferred stock and the exercise of stock options were
not included in computing diluted EPS since the effect of such is
antidilutive during periods when a net loss is reported. At February 28,
1998, there were 771,708 shares of convertible preferred stock outstanding
and 282,761 vested and non-vested stock options that could be exercised
which could have a dilutive effect on EPS in the future. During the three
month period ended February 28, 1998, 70,562 stock options were exercised.
No reconciliation of income (loss) available to common shareholders or
weighted average shares outstanding as of and for the three month period
ended February 28, 1998, is necessary, since no potentially dilutive
preferred shares or stock options were included in the diluted EPS
calculation. Adoption of SFAS No. 128 did not have a material effect on
reported income per share for the three month period ended February 28,
1998. EPS for the three month period ended February 28, 1997, has been
restated to apply the provisions of SFAS No. 128. Loss per common share
calculated for the three month period ended February 28, 1997, on a primary
and fully diluted basis under the provisions of Accounting Principles Board
Opinion No. 15 differs by less than one cent per share from that calculated
on a basic and diluted basis under SFAS No. 128. Subsequent to February 28,
1998, the Company issued 4,370,000 shares of common stock in an
underwritten offering which will have a material effect on the EPS
calculations in future periods.
THREE MONTHS ENDED FEBRUARY 28, 1998
Basic and Diluted EPS Computation:
Earnings (Loss) $ (5,605,563)
Preferred stock dividends ( 373,800)
Loss applicable to common stock $ (5,979,363)
Weighted-average shares 8,250,451
Basic and Diluted EPS:
Net Earnings (Loss) $ (0.72)
ACCOUNTING PRONOUNCEMENTS
SFAS No. 129 "Disclosure of Information about Capital
Structure," was adopted during the first quarter of the year ending
November 30, 1998. This statement did not have a material impact on the
Company's financial position, results of operations or cash flows as
disclosure requirements did not change for the Company with this new
statement. SFAS No. 131 "Disclosures about Segments of an Enterprise and
Related information," and SFAS No. 132 "Employers' Disclosures about
Pensions and Other Postretirement Benefits," are effective for the year
ending November 30, 1999. In the opinion of management, these statements
will not have a material impact on the Company's financial position,
results of operations, or cash flows. SFAS No. 130 "Reporting Comprehensive
Income," is effective for the year ending November 30, 1999. Due to the
significance of the foreign currency translation adjustments recorded at
February 28, 1998 and 1997, comprehensive income would have been
significantly lower than net income (loss) reported.
The American Institute of Certified Public Accountants
(AICPA) Statements of Position (SOP) No. 96-1 "Environmental Remediation
Liabilities," and SOP No. 97-2 "Software Revenue Recognition," were adopted
during the first quarter of the year ending November 30, 1998. SOP No. 96-1
provides guidance for recognizing, measuring and disclosing environmental
remediation liabilities. SOP No. 97-2 supersedes SOP No. 91-1 and provides
more specific guidance on revenue recognition related to software products.
The adoption of these statements did not have a material impact on the
Company's financial position, results of operations or cash flows. SOP No.
98-1 "Accounting for the Costs of Computer Software Developed or Obtained
for Internal Use," is effective for the year ending November 30, 2000.
Management has not yet determined the impact that this SOP will have on the
Company's financial position, results of operations or cash flows.
COMMON STOCK OFFERING
In March 1998, the Company completed the sale of 4,370,000
shares of its common stock (the Offering). Net proceeds from the Offering
totaled approximately $68,600,000. The Company will use approximately
$39,400,000 of the proceeds to redeem $35,000,000 in aggregate principal
amount of the Company's 11-1/2% Senior Subordinated Notes due 2006 (the
Notes). Following the redemption, $55,000,000 in aggregate principal amount
of the Notes will remain outstanding. The remaining $29,200,000 will be
applied toward the Bank Credit Facility and general corporate purposes. In
December 1997, approximately $12,000,000 was borrowed under the Bank Credit
Facility to finance the acquisition of MSI. This amount will be repaid as
part of the reduction of the Bank Credit Facility balance. The Company
expects to record an extraordinary loss on the extinguishment of the Notes
of approximately $5,000,000 during the second quarter of 1998. Prior to
the Company's redemption of the Notes, the proceeds had been used to
reduce the outstanding balance of the Bank Credit Facility with the
remaining amount placed in short-term investments.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
Tokheim is one of the world's largest manufacturers and
servicers of electronic and mechanical petroleum dispensing systems. These
systems include petroleum dispensers and pumps, retail automation systems
(including point-of sale (POS) systems), dispenser payment or
"pay-at-the-pump" terminals, replacement parts and upgrade kits. As a
result of its acquisition of the petroleum dispenser business (Sofitam) of
Sofitam S.A. in September 1996, Tokheim has positioned itself as a global
competitor in the petroleum dispenser business, with the ability to provide
both products and services to customers in over 80 countries. Tokheim is a
leading supplier of petroleum dispensing systems in the United States,
France, Canada, Mexico, and Africa, and has strong market positions in
Italy, the United Kingdom, Germany, and Spain. The Company also has
operations established in Asia, eastern Europe, and Latin America.
RESULTS OF OPERATIONS
Consolidated sales for the first quarter of 1998 were
$90,852,000, which would have exceeded the $92,024,000 amount reported in
the same period in 1997 by approximately $4,000,000, if exchange rates had
remained the same as the prior year.
Merger and acquisition ("M&A") costs include a $5,879,000
non-recurring write-off for in process R & D that was purchased in
connection with the acquisition of MSI. This amount represents the
estimated fair value of acquired incomplete R & D projects as determined by
an independent appraisal. Giving effect to M&A costs and other unusual
items, the Company reported a net loss of $5,606,000, or $0.68 per share
diluted, compared to net earnings of $126,000, or $0.02 per share diluted
for the first quarter of fiscal year 1997. After payment of preferred stock
dividends, the net loss was $0.72 per share diluted compared to a net loss
of $0.03 per share diluted in the first quarter of the prior year.
Gross margin excluding depreciation and amortization during
the first quarter of 1998 was 26.2% compared to 23.5% in the first quarter
of 1997. The improvement was attributed to increased margins in both
domestic and international businesses as a result of continued cost
reduction efforts started in fiscal 1997 and the positive contribution of
MSI.
Selling, general, and administrative expenses as a percent
of sales increased slightly to 17.9% in the first quarter of 1998 compared
to 17.3% in the first quarter of 1997. The increase was attributed to the
acquisition of MSI.
Net interest expense for the first quarter of 1998 was
$4,011,000 versus $3,740,000 reported in the first quarter of 1997. The
increase was due to additional borrowings related to the MSI acquisition.
In addition, interest for the first quarter of 1997 is net of approximately
$500,000 of interest income accrued for estimated tax refund claims.
Depreciation and amortization expense for the first quarter
of 1998 was $2,500,000 versus $1,928,000 reported in the first quarter of
1997. The majority of the increase between periods is due to increased
amortization expense related to intangible assets recorded in connection
with the acquisition of MSI, as well as additional depreciation expense on
fixed assets acquired.
As a result of the Sofitam acquisition, the Company acquired
entities that have minority ownership. The amount recorded for minority
interest and the changes in the amounts between periods is not material.
Other expense for the first quarter of 1998 was $221,000
versus income of $69,000 reported in the first quarter of 1997. Other
income was higher in 1997 as a result of certain favorable legal
settlements.
Income taxes for the first quarter of 1998 were $300,000
versus $167,000 in the first quarter of 1997. This increase is due to
higher foreign pretax earnings for the first quarter of 1998.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operations for the first quarter of 1998 was
$3,845,000 versus $3,883,000 in the first quarter of 1997. The major cause
of the cash usage was due to a decrease in accounts payable of $6,707,000
and accrued expenses of $8,340,000. The cash uses in the first quarter are
due primarily to the seasonal nature of domestic shipments. The first
quarter traditionally is the lowest level of domestic shipments as compared
to the fourth quarter which is the strongest. As such, there is a decrease
in payables and accrued expenses recorded during the strong activity in the
fourth quarter.
Cash used in investing activities relate to $12,000,000 in
cash paid for MSI and capital expenditures of $1,885,000.
In March 1998 the Company sold 4,370,000 shares of its
common stock through a public offering which raised approximately
$68,600,000 in net proceeds. The Company plans to use a portion of the net
proceeds from the Offering to redeem $35,000,000 in aggregate principal
amount of its 11-1/2% Senior Subordinated Notes due 2006, to repay other
bank debt and to fund the Company's growth plans.
No cash dividends on common stock were declared or paid
during the period. Currently the Bank Credit Facility and the indenture
governing the 11-1/2% Senior Subordinated Notes restrict the payment of
dividends.
The Company incurred a foreign translation loss during the
first quarter of 1998 of $2,284,000 which was recorded in foreign currency
translation adjustments in shareholders' equity. This was due primarily to
the decline of the French Franc against the U.S. Dollar on long-term
intercompany loans.
The Company was in compliance with all bank covenants during
the first quarter of 1998.
EXHIBITS
(a) Exhibits:
2 Stock Purchase Agreement, dated as of December 29, 1997 between
the Registrant and Arthur S. ("Rusty") Elston, Ronald H. Elston,
Eric E. Burwell and Curt E. Burwell (incorporated by reference to
the Registrant's Current Report on Form 8-K, dated December 31,
1997).
3.1 Restated Articles of Incorporation of the Registrant, as amended,
as filed with the Indiana Secretary of State on February 5, 1997
(incorporated by reference to the Registrant's Annual Report on
Form 10-K/A for the year ended November 30, 1996).
3.2 Bylaws of the Registrant, as restated on July 12, 1995
(incorporated by reference to the Registrant's Annual Report on
Form 10-K/A, for the year ended November 30, 1995, filed
November 20, 1996).
4.1 Rights Agreement, dated as of January 22, 1997, between the
Registrant and Harris Trust and Savings Bank, as Rights Agent
(incorporated by reference to the Registrant's Current
Report on Form 8-K, filed February 23, 1997).
4.2 Indenture, dated as of August 23, 1996, between the Registrant and
Harris Trust and Savings Bank, as Trustee (incorporated by
reference to the Registrant's Current Report on
Form 8-K, filed September 23, 1996).
10.1 Tokheim Corporation 1992 Stock Incentive Plan, established
December 15, 1992 (incorporated by reference to the Registrant's
Registration Statement on Form S-8, File No. 33-52167, dated
February 4, 1994).
10.2 Tokheim Corporation 1996 Key Management Incentive Bonus Plan
(incorporated by reference to the Registrant's Report on Form
10-Q/A, for the quarter ended February 29, 1996, filed November
20, 1996).
10.3 Employment Agreement, dated December 10, 1997, between the
Registrant and Douglas K. Pinner (incorporated by reference to the
Registrant's Annual Report on 10-K for the year ended November 30,
1997).
10.4 Employment Agreement, dated December 23, 1997, between the
Registrant and John A. Negovetich (incorporated by reference to
the Registrant's Annual Report on 10-K for the year ended November
30, 1997).
10.5 Employment Agreement, dated December 23, 1997, between the
Registrant and Jacques St- Denis (incorporated by reference to the
Registrant's Annual Report on 10-K for the year ended November 30,
1997).
10.6 Employment Agreement, dated December 23, 1997, between the
Registrant and Norman L. Roelke (incorporated by reference to the
Registrant's Annual Report on 10-K for the year ended November 30,
1997).
10.7 Employment Agreement, dated December 23, 1997, between the
Registrant and Scott A. Swogger (incorporated by reference to the
Registrant's Annual Report on 10-K for the year ended November 30,
1997).
10.8 Technology License Agreement, effective as of December 1, 1997,
between Registrant and Gilbarco, Inc. (incorporated by reference
to the Registrant's Annual Report on 10-K for the year ended
November 30, 1997).
10.9 Tokheim Corporation 1997 Incentive Plan (incorporated by reference
to the Registrant's Annual Report on 10-K for the year ended
November 30, 1997).
10.10 Employment Agreement, dated December 31, 1997, between Management
Solutions, Inc. and Arthur S. Elston (incorporated by reference to
the Registrant's Annual Report on 10-K for the year ended November
30, 1997).
10.11 Amendment No. 4 to Credit Agreement, dated as of September 3,
1996, among the Registrant, certain subsidiaries of the
Registrant, certain banks and NBD Bank, N.A. (the "Credit
Agreement") , dated as of December 29, 1997 (incorporated by
reference to the registrant's annual report on Form 10-K for the
year ended November 30, 1997)
10.12 Amendment No. 5 to Credit Agreement, dated as of March 20, 1998
11 Statement Regarding Computation of Per Share Earnings.
27 Financial Data Schedule.
(b) Reports on Form 8-K:
The Company filed a report on Form 8-K dated December 31, 1997
describing the MSI acquisition. An amendment to that Form 8-K dated
December 31, 1997, included financial statements of MSI and unaudited pro
forma financial statements. The Company filed a Form 8-K dated March 17,
1998 containing an exhibit to the registration statement for the Offering.
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.
TOKHEIM CORPORATION
Date: May 14, 1998 /s/ Douglas K. Pinner
----------------------
Chairman, President and
Chief Executive Officer
Date: May 14, 1998 /s/ John A. Negovetich
-----------------------
Executive Vice President,
Finance and Administration
EXHIBIT INDEX
NO. DESCRIPTION
2 Stock Purchase Agreement, dated as of December 29, 1997 between
the Registrant and Arthur S. ("Rusty") Elston, Ronald H. Elston,
Eric E. Burwell and Curt E. Burwell (incorporated by reference to
the Registrant's Current Report on Form 8-K, dated December 31,
1997).
3.1 Restated Articles of Incorporation of the Registrant, as amended,
as filed with the Indiana Secretary of State on February 5, 1997
(incorporated by reference to the Registrant's Annual Report on
Form 10-K/A for the year ended November 30, 1996).
3.2 Bylaws of the Registrant, as restated on July 12, 1995
(incorporated by reference to the Registrant's Annual Report on
Form 10-K/A, for the year ended November 30, 1995, filed
November 20, 1996).
4.1 Rights Agreement, dated as of January 22, 1997, between the
Registrant and Harris Trust and Savings Bank, as Rights Agent
(incorporated by reference to the Registrant's Current
Report on Form 8-K, filed February 23, 1997).
4.2 Indenture, dated as of August 23, 1996, between the Registrant and
Harris Trust and Savings Bank, as Trustee (incorporated by
reference to the Registrant's Current Report on
Form 8-K, filed September 23, 1996).
10.1 Tokheim Corporation 1992 Stock Incentive Plan, established
December 15, 1992 (incorporated by reference to the Registrant's
Registration Statement on Form S-8, File No. 33-52167, dated
February 4, 1994).
10.2 Tokheim Corporation 1996 Key Management Incentive Bonus Plan
(incorporated by reference to the Registrant's Report on Form
10-Q/A, for the quarter ended February 29, 1996, filed November
20, 1996).
10.3 Employment Agreement, dated December 10, 1997, between the
Registrant and Douglas K. Pinner (incorporated by reference to the
Registrant's Annual Report on 10-K for the year ended November 30,
1997).
10.4 Employment Agreement, dated December 23, 1997, between the
Registrant and John A. Negovetich (incorporated by reference to
the Registrant's Annual Report on 10-K for the year ended November
30, 1997).
10.5 Employment Agreement, dated December 23, 1997, between the
Registrant and Jacques St- Denis (incorporated by reference to the
Registrant's Annual Report on 10-K for the year ended November 30,
1997).
10.6 Employment Agreement, dated December 23, 1997, between the
Registrant and Norman L. Roelke (incorporated by reference to the
Registrant's Annual Report on 10-K for the year ended November 30,
1997).
10.7 Employment Agreement, dated December 23, 1997, between the
Registrant and Scott A. Swogger (incorporated by reference to the
Registrant's Annual Report on 10-K for the year ended November 30,
1997).
10.8 Technology License Agreement, effective as of December 1, 1997,
between Registrant and Gilbarco, Inc. (incorporated by reference
to the Registrant's Annual Report on 10-K for the year ended
November 30, 1997).
10.9 Tokheim Corporation 1997 Incentive Plan (incorporated by reference
to the Registrant's Annual Report on 10-K for the year ended
November 30, 1997).
10.10 Employment Agreement, dated December 31, 1997, between Management
Solutions, Inc. and Arthur S. Elston (incorporated by reference to
the Registrant's Annual Report on 10-K for the year ended November
30, 1997).
10.11 Amendment No. 4 to Credit Agreement, dated as of September 3,
1996, among the Registrant, certain subsidiaries of the
Registrant, certain banks and NBD Bank, N.A. (the "Credit
Agreement") , dated as of December 29, 1997 (incorporated by
reference to the registrant's annual report on Form 10-K for the
year ended November 30, 1997)
10.12 Amendment No. 5 to Credit Agreement, dated as of March 20, 1998
11 Statement Regarding Computation of Per Share Earnings.
27 Financial Data Schedule.
Exhibit 10.12
Execution Copy
AMENDMENT NO. 5 TO CREDIT AGREEMENT
Dated as of March 20, 1998
THIS AMENDMENT NO. 5 TO CREDIT AGREEMENT ("Amendment") is made
as of March 20, 1998 by and among TOKHEIM CORPORATION, an Indiana
corporation (the "Company"), certain of the Company's Subsidiaries listed
on the signature pages hereof (the "Other Borrowers"), the financial
institutions listed on the signature pages hereof (the "Lenders") and NBD
BANK, N.A., in its individual capacity as a Bank and as agent (the "Agent")
on behalf of the Lenders under that certain Credit Agreement dated as of
September 3, 1996, by and among the Company, the Other Borrowers, the
Lenders and the Agent (as amended, the "Credit Agreement"). Defined terms
used herein and not otherwise defined herein shall have the meaning given
to them in the Credit Agreement.
WITNESSETH
WHEREAS, the Company, the Other Borrowers, the Lenders and the
Agent are parties to the Credit Agreement;
WHEREAS, the Company has requested that the Lenders amend the
Credit Agreement in certain respects; and
WHEREAS, the Lenders and the Agent are willing to amend the
Credit Agreement on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth
above, the terms and conditions contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company, the Other Borrowers, the Lenders and the Agent
have agreed to the following amendments to the Credit Agreement.
1. Amendment to Credit Agreement. Effective as of March 30, 1998, and
subject to the satisfaction of the conditions precedent set forth in
Section 2 below, the Credit Agreement is hereby amended as follows:
1.1 Section 6.2 of the Credit Agreement is hereby amended by
adding the following at the end of the first sentence thereof:
*and to purchase Senior Subordinated Notes to the extent
permitted in Section 6.30."
1.2 Section 6.30 of the Credit Agreement is hereby amended by
deleting the language added pursuant to Amendment No. 2 dated as of June
30, 1997, and substituting the following therefor:
*except that the Company may purchase Senior Subordinated Notes
in the original principal amount of up to $45,000,000 provided the
aggregate amount paid for such Senior Subordinated Notes does not exceed
$54,000,000.
2. Conditions of Effectiveness. This Amendment shall become effective
and be deemed effective as of March 20, 198, if, and only if, the Agent
shall have received each of the following:
(a) duly executed originals of this Amendment from the Company,
the Other Borrowers and the Required Lenders; and
(b) such other documents, instruments and agreements as the
Agent may reasonably request.
3. Representations and Warranties of the Company. The Company and the
Other Borrowers hereby represent and warrant as follows:
(a) This Amendment and the Credit Agreement as previously
executed and amended and as amended hereby, constitute legal, valid and
binding obligations of the Company and the Other Borrowers and are
enforceable against the Company and the Other Borrowers in accordance with
their terms.
(b) Upon the effectiveness of this Amendment, the Company and
the Other Borrowers hereby reaffirm all covenants, representations and
warranties made in the Credit Agreement, to the extent the same are not
amended hereby, and agree that all such covenants, representations and
warranties shall be deemed to have been remade as of the effective date of
this Amendment.
4. Reference to the Effect on the Credit Agreement.
(a) Upon the effectiveness of Section 1 hereof, on and after
the date hereof, each reference in the Credit Agreement to "this
Agreement," "hereunder," "hereof," "herein" or words of like import shall
mean and be a reference to the Credit Agreement dated as of September 3,
1996, as amended previously and as amended hereby.
(b) Except as specifically amended above, the Credit Agreement
dated as of September 3, 1996, and all other documents, instruments and
agreements executed and/or delivered in connection therewith shall remain
in full force and effect, and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of the Agent or any of the Lenders, not constitute a
waiver of any provision of the Credit Agreement or any other documents,
instruments and agreements executed and/or delivered in connection
therewith.
5. Costs and Expenses. The Company agrees to pay all reasonable
costs, fees and out-of-pocket expenses (including attorneys' fees and
expenses charged to the Agent) incurred by the Agent in connection with the
preparation, execution and enforcement of this Amendment.
6. Governing Law. This Amendment shall be governed by and construed
in accordance with the internal laws (as opposed to the conflict of law
provisions) of the State of Illinois.
7. 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.
8. Counterparts. This Amendment may be executed by one or more of the
parties to the Amendment on any number of separate counterparts and al of
said counterparts taken together shall be deemed to constitute one and the
same instrument.
IN WITNESS WHEREOF, this Amendment has been duly executed as of
the day and year first above written.
TOKHEIM CORPORATION
By:_____________________________
Title:__________________________
SOGEN S.A., as a Borrower
By:_____________________________
Title:__________________________
SOFITAM INTERNATIONAL S.A.,
as a Borrower
By:_____________________________
Title:__________________________
SOFITAM EQUIPEMENT S.A.,
as a Borrower
By:_____________________________
Title:__________________________
NBD BANK, N.A., as a Lender, an
Issuing Lender, a Swing Line
Lender and as Agent
By:_____________________________
Title:__________________________
THE FIRST NATIONAL BANK OF
CHICAGO, LONDON BRANCH, as a
Lender with respect to the
French Borrowing Subsidiaries
By:_____________________________
Title:__________________________
TOKHEIM CORPORATION AND SUBSIDIARIES
Exhibit (11) - Earnings Per Share for the three
month periods ended February 28, 1997 and 1996.
(Restated to Apply SFAS No. 128)
Basic earnings per share (EPS) is calculated based on income (loss)
available to common shareholders and the weighted average number of shares
outstanding during each period. Diluted EPS includes additional dilution
from potential common stock equivalents such as stock issued pursuant to
the conversion of preferred stock or the exercise of stock options
outstanding.
The following table presents information necessary to calculate EPS
for the three month periods ended February 28, 1997 and 1996.
BASIC AND DILUTED
---------------------------
1997 1996
---------------------------
Shares outstanding (in thousands):
Weighted average outstanding................ 7,949 7,937
Net income (loss)............................. $ 126 $ (613)
Preferred stock dividends..................... $ (383) $ (389)
------------ -----------
Loss applicable to common stock............... $ (257) $ (1,002)
============ ===========
Net loss per common share..................... $ (0.03) $ (0.13)
============ ===========
Dilutive loss per share for the three month periods ended February 28, 1997
and 1996 is considered to be the same as basic loss per share, since the
effects of potentially dilutive securities would be antidilutive.
TOKHEIM CORPORATION AND SUBSIDIARIES
Exhibit 11 - Earnings Per Share
for the three-month periods
ended May 31, 1997 and 1996
(Restated to Apply SFAS No. 128)
Basic earnings per share (EPS) is calculated based on income
available to common shareholders and the weighted average number of shares
outstanding during each period. Diluted EPS includes additional dilution
from potential common stock equivalents such as stock issued pursuant to
the conversion of preferred stock or the exercise of stock options
outstanding.
The following table presents information necessary to calculate EPS
for the three-month periods ended May 31, 1997 and May 31, 1996:
BASIC
-----------------------------
May 31, May 31,
1997 1996
---------- -----------
Shares outstanding (in thousands):
Weighted average outstanding........... 7,974 7,939
Net income ............................... 1,210 486
Preferred stock dividends................. (375) (385)
---------- -----------
Income applicable to common stock......... 835 101
========== ===========
Net income per common share............... $ 0.10 $ 0.01
========== ===========
DILUTED
-----------------------------
May 31, May 31,
1997 1996
---------- -----------
Shares outstanding (in thousands):
Weighted average outstanding........... 7,974 7,939
Share equivalents related to the
exercise of stock options............... 60 104
Conversion of preferred stock on
a weighted average basis................ 791 803
---------- -----------
Adjusted shares outstanding............... 8,825 8,846
========== ===========
Net income................................... $ 1,210 $ 486
Incremental Retirement Savings Plan
expense................................... (375) (385)
---------- -----------
Income applicable to common stock............ $ 835 $ 101
========== ===========
Net income per common share.................. $ 0.09 $ 0.01
========== ===========
TOKHEIM CORPORATION AND SUBSIDIARIES
Exhibit 11 - Earnings Per Share
for the three-month periods
ended August 31, 1997 and 1996
(Restated to apply SFAS No. 128)
Basic earnings per share (EPS) is calculated based on income (loss)
available to common shareholders and the weighted average number of shares
outstanding during each period. Diluted EPS includes additional dilution
from potential common stock equivalents such as stock issued pursuant to
the conversion of preferred stock or the exercise of stock options
outstanding.
The following table presents information necessary to calculate EPS
for the three-month periods ended August 31, 1997 and 1996.
Basic and Diluted
----------------------------
August 31, August 31,
1997 1996
--------- -----------
Shares outstanding (in thousands):
Weighted average outstanding............. 8,032 7,939
Net income (loss)........................... 152 (37)
Preferred stock dividends................... (378) (385)
--------- -----------
Loss applicable to common stock............. (226) (422)
========= ===========
Net loss per common share................... $ (0.03) $ (0.05)
========= ===========
Dilutive loss per share for the three-month periods ended August 31,
1997 and 1996 is considered to be the same as basic loss per share since
the effects of potentially dilutive securities would be antidilutive.
TOKHEIM CORPORATION AND SUBSIDIARIES
Exhibit 11 - Earnings Per Share
for the six-month period
ended May 31, 1997 and May 31, 1996
(Restated to apply SFAS No. 128)
Basic earnings per share (EPS) is calculated based on income (loss)
available to common shareholders and the weighted average number of shares
outstanding during each period. Diluted EPS includes additional dilution
from potential common stock equivalents such as stock issued pursuant to the
conversion of preferred stock or the exercise of stock options outstanding.
The following table presents information necessary to calculate EPS
for the six-month periods ended May 31, 1997 and May 31, 1996.
BASIC
-----------------------------
May 31, May 31,
1997 1996
---------- -----------
Shares outstanding (in thousands):
Weighted average outstanding............. 7,961 7,938
Net income (loss)........................... 1,335 (127)
Preferred stock dividends................... (758) (774)
---------- ----------
Income (loss) applicable to common stock.... 577 (901)
========== ==========
Net income (loss) per common share.......... $ 0.07 $ (0.11)
========== ==========
DILUTED
-----------------------------
May 31, May 31,
1997 1996
---------- -----------
Shares outstanding (in thousands):
Weighted average outstanding............. 7,961 7,938
Share equivalents related to the
exercise of stock options................. 56 0
Conversion of preferred stock on
a weighted average basis.................. 792 0
---------- ----------
Adjusted shares outstanding................. 8,809 7,938
========== ==========
Net income (loss).............................. $ 1,335 $ (127)
Incremental Retirement Savings Plan
expense..................................... (758) (774)
---------- ----------
Income (loss) applicable to common stock....... $ 577 $ (901)
========== ==========
Net income (loss) per common share............. $ 0.07 $ (0.11)
========== ==========
Dilutive loss per share for the six-month period ended May 31, 1996
is considered to be the same as basic loss per share since the effects of
potentially dilutive securities would be antidilutive.
TOKHEIM CORPORATION AND SUBSIDIARIES
Exhibit 11 - Earnings Per Share
for the nine-month periods
ended August 31, 1997 and August 31, 1996
Basic earnings per share (EPS) is calculated based on income (loss)
available to common shareholders and the weighted average number of shares
outstanding during each period. Diluted EPS includes additional dilution
from potential common stock equivalents such as stock issued pursuant to the
conversion of preferred stock or the exercise of stock options outstanding.
The following table presents information necessary to calculate EPS
for the nine-month periods ended August 31, 1997 and August 31, 1996:
BASIC
-----------------------------
August 31, August 31,
1997 1996
---------- -----------
Shares outstanding (in thousands):
Weighted average outstanding............. 7,985 7,939
Net income (loss)........................... 1,487 (164)
Preferred stock dividends................... (1,136) (1,159)
---------- ----------
Income (loss) applicable to common stock.... 351 (1,324)
========== ==========
Net income (loss) per common share.......... $ 0.04 $ (0.17)
========== ==========
DILUTED
-----------------------------
August 31, August 31,
1997 1996
---------- -----------
Shares outstanding (in thousands):
Weighted average outstanding............. 7,985 7,938
Share equivalents related to the
exercise of stock options................. 111 0
Conversion of preferred stock on
a weighted average basis.................. 788 0
---------- ---------
Adjusted outstanding........................ 8,884 7,938
========== =========
Net income (loss).............................. $ 1,487 $ (164)
Incremental Retirement Savings Plan
expense..................................... (1,136) (1,159)
---------- ----------
Income (loss) applicable to common stock....... $ 351 $ (1,323)
========== ==========
Net income (loss) per common share............. $ 0.04 $ (0.17)
========== ==========
Dilutive loss per share for the six-month period ended May 31, 1996
is considered to be the same as basic loss per share since the effects of
potentially dilutive securities would be antidilutive.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-END> FEB-28-1998
<CASH> 8127
<SECURITIES> 0
<RECEIVABLES> 76484
<ALLOWANCES> 3952
<INVENTORY> 67541 <F1>
<CURRENT-ASSETS> 155240
<PP&E> 108284 <F2>
<DEPRECIATION> 66198
<TOTAL-ASSETS> 282352
<CURRENT-LIABILITIES> 103718
<BONDS> 90000
<COMMON> 21168 <F4>
10457 <F3>
0
<OTHER-SE> (18651) <F5>
<TOTAL-LIABILITY-AND-EQUITY> 282352
<SALES> 90852
<TOTAL-REVENUES> 90852
<CGS> 67074 <F6>
<TOTAL-COSTS> 67074
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4011
<INCOME-PRETAX> (5036)
<INCOME-TAX> 300
<INCOME-CONTINUING> (5606)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5606)
<EPS-PRIMARY> (0.72)
<EPS-DILUTED> (0.72)
<FN>
<F1> Represents gross inventory net of loss reserve.
<F2> Represents gross PP&E.
<F3> Represents redeemable preferred stock of $24,000 less Guaranteed ESOP
of $8,836 and treasury stock of $4,707.
<F4> Represents common stock of $21,316 less treasury stock of $148.
<F5> Represents retained earnings of $3,854 less minimum pension liability
of $2,173 and foreign currency translation adjustments of $20,332.
<F6> Includes product development expenses and excludes depreciation and
amortization.
</TABLE>
