<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
--------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from__________ to__________
Commission file number 1-2257
------
TRANS-LUX CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-1394750
- - - - - - - - - - - - - ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
110 Richards Avenue, Norwalk, CT 06856-5090
- - - - - - - - - - - - - --------------------------------------- ----------
(Address of principal executive offices) (Zip code)
(203) 853-4321
----------------------------------------------------
(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
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Date Class Shares Outstanding
05/10/99 Common Stock - $1.00 Par Value 996,415
05/10/99 Class B Stock - $1.00 Par Value 296,005
(Immediately convertible into a like
number of shares of Common Stock.)
<PAGE>
TRANS-LUX CORPORATION AND SUBSIDIARIES
Index
Part I - Financial Information Page No.
--------
Consolidated Balance Sheets - March 31, 1999 (unaudited) and
December 31, 1998 1
Consolidated Statements of Income - Three Months Ended
March 31, 1999 and 1998 (unaudited) 2
Consolidated Statements of Cash Flows - Three Months Ended
March 31, 1999 and 1998 (unaudited) 3
Notes to Consolidated Financial Statements (unaudited) 4
Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 9
Signatures 10
<PAGE>
Part I - Financial Information
------------------------------
TRANS-LUX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
In thousands, except share data March 31 December 31
1999 1998
- - - - - - - - - - - - - ------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 937 $ 1,298
Available-for-sale securities 4,899 4,914
Receivables 7,225 7,287
Unbilled receivables 102 374
Inventories 5,243 5,381
Prepaids and other 554 360
----------- -----------
Total current assets 18,960 19,614
----------- -----------
Equipment on rental 72,540 70,654
Less accumulated depreciation 29,852 28,289
----------- -----------
42,688 42,365
----------- -----------
Property, plant and equipment 32,198 30,816
Less accumulated depreciation and amortization 8,904 8,433
----------- -----------
23,294 22,383
Prepaids, intangibles and other 5,949 5,986
Maintenance contracts, net 759 798
----------- -----------
$91,650 $91,146
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
- - - - - - - - - - - - - ------------------------------------
Current liabilities:
Accounts payable and accruals $7,036 $6,167
Income taxes payable -- 275
Current portion of long-term obligations 692 258
----------- -----------
Total current liabilities 7,728 6,700
----------- -----------
Long-term obligations:
7 1/2% convertible subordinated notes due 2006 30,625 31,625
9 1/2% subordinated debentures due 2012 1,057 1,057
Obligations payable 17,987 16,841
----------- -----------
49,669 49,523
Deferred revenue, deposits and other 3,906 4,254
Deferred income taxes 4,623 4,818
----------- -----------
Stockholders' equity:
Capital stock
Common - $1.00 par value
Authorized - 5,500,000 shares
Issued - 2,444,400 shares in 1999 and 2,443,119 in 1998 2,444 2,443
Class B - $1.00 par value
Authorized - 1,000,000 shares
Issued - 296,005 shares in 1999 and 297,286 in 1998 296 297
Additional paid-in-capital 13,901 13,901
Retained earnings 20,815 20,821
Accumulated other comprehensive income (loss) (121) --
----------- -----------
37,335 37,462
Less treasury stock - at cost
1,448,016 shares in 1999 and 1998
(excludes additional 296,005 shares in 1999 and 297,286 in
1998 for conversion of Class B stock) 11,611 11,611
----------- -----------
Total stockholders' equity 25,724 25,851
----------- -----------
$91,650 $91,146
=========== ===========
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
</TABLE>
1
<PAGE>
TRANS-LUX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31
---------------------------
In thousands, except share data 1999 1998
- - - - - - - - - - - - - ------------------------------------------------------------------------------
<S> <C> <C>
Revenues:
Equipment rentals and maintenance $ 5,857 $ 5,762
Equipment sales 6,148 8,614
Theatre receipts and other 1,480 1,580
---------- ----------
Total revenues 13,485 15,956
---------- ----------
Operating expenses:
Cost of equipment rentals and maintenance 3,247 3,158
Cost of equipment sales 4,059 5,654
Cost of theatre receipts and other 1,202 1,282
---------- ----------
Total operating expenses 8,508 10,094
---------- ----------
Gross profit from operations 4,977 5,862
General and administrative expenses 4,192 4,476
---------- ----------
785 1,386
Interest income 121 174
Interest expense (984) (1,005)
Other income 147 72
---------- ----------
Income before income taxes 69 627
Provision for income taxes 31 282
---------- ----------
Net income $ 38 $ 345
========== ==========
Earnings per share:
Basic $0.03 $0.27
Diluted $0.03 $0.19
Average common shares outstanding:
Basic 1,292 1,289
Diluted 1,298 3,581
Cash dividends per share:
Common stock $0.035 $0.035
Class B stock $0.0315 $0.0315
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
</TABLE>
2
<PAGE>
TRANS-LUX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
-----------------------------
In thousands 1999 1998
- - - - - - - - - - - - - --------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 38 $ 345
Adjustment to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,256 1,997
Net income of joint venture (2) (49)
Deferred income taxes (188) (354)
Gain on sale of securities -- (23)
Gain on purchase of Company's 7 1/2% convertible subordinated notes (145) --
Changes in operating assets and liabilities:
Receivables 62 (2,998)
Unbilled receivables 272 571
Inventories 138 (869)
Prepaids and other (361) (139)
Accounts payable and accruals 756 1,188
Income taxes payable (275) 50
Deferred revenue, deposits and other (348) 1,129
----------- -----------
Net cash provided by operating activities 2,203 848
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Equipment manufactured for rental (1,886) (2,022)
Purchases of property, plant and equipment (1,382) (833)
Proceeds from joint venture 23 23
Redemption of available-for-sale securities -- 762
----------- -----------
Net cash used in investing activities (3,245) (2,070)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term obligations 3,900 1,000
Repayment of long-term obligations (2,320) (946)
Purchase of Company's 7 1/2% convertible subordinated notes (855) --
Proceeds from exercise of stock options -- 7
Cash dividends (44) (44)
----------- -----------
Net cash provided by financing activities 681 17
----------- -----------
Net decrease in cash and cash equivalents (361) (1,205)
Cash and cash equivalents at beginning of year 1,298 1,843
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $937 $638
=========== ===========
- - - - - - - - - - - - - --------------------------------------------------------------------------------------------------------
Interest paid $361 $128
Interest received 147 194
Income taxes paid 411 238
- - - - - - - - - - - - - --------------------------------------------------------------------------------------------------------
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
</TABLE>
3
<PAGE>
TRANS-LUX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999
(unaudited)
Note 1 - Basis of Presentation
Financial information included herein is unaudited, however, such information
reflects all adjustments which are, in the opinion of management, necessary for
the fair presentation of the consolidated financial statements for the interim
periods. The results for the interim periods are not necessarily indicative of
the results to be expected for the full year. It is suggested that the March
31, 1999 consolidated financial statements be read in conjunction with the
consolidated financial statements and notes included in the Company's Annual
Report and Form 10-K for the year ended December 31, 1998. Certain
reclassifications of prior years' amounts have been made to conform to the
current year's presentation.
Note 2 - Inventories
Inventories consist of the following:
<TABLE>
<CAPTION>
March 31 December 31
In thousands 1999 1998
- - - - - - - - - - - - - -------------------------------------------------------------------------------
<S> <C> <C>
Raw materials and spare parts $3,032 $3,230
Work-in-progress 1,171 1,218
Finished goods 1,040 933
----- -----
$5,243 $5,381
====== ======
</TABLE>
Note 3 - Reporting Comprehensive Income
The components of comprehensive income for the Company are foreign currency
translation adjustments relating to the Company's foreign subsidiaries and
unrealized holding gains or losses on the Company's available-for-sale
securities. Comprehensive income is a loss of $46,000 and income of $327,000
for the three months ended March 31, 1999 and 1998, respectively.
4
<PAGE>
Note 4 - Earnings per Share
The following table represents the computation of basic and diluted earnings per
common share for the three months ended March 31, 1999 and 1998:
<TABLE>
<CAPTION>
In thousands, except share data 1999 1998
- - - - - - - - - - - - - -------------------------------------------------------------------------------
<S> <C> <C>
Basic earnings per share computation:
Net income $ 38 $ 345
--- ----
Weighted average common shares outstanding 1,292 1,289
----- -----
Basic earnings per common share $ 0.03 $ 0.27
===== =====
Diluted earnings per share computation:
Net income $ 38 $ 345
Add: After tax interest expense applicable
to convertible debt* - 352
Add: After tax changes to income applicable
to assumed conversion* - (26)
--
Adjusted net income $ 38 $ 671
==== =====
Weighted average common shares outstanding 1,292 1,289
Assumes exercise of options reduced by the number
of shares which could have been purchased
with the proceeds from exercise of such options 6 35
Assumes conversion of 7 1/2% convertible subordinated
notes* - 2,257
----- -----
Total weighted average common shares 1,298 3,581
===== =====
Diluted earnings per common share $ 0.03 $ 0.19
====== ======
<FN>
* The 1999 diluted earnings per share calculation does not include the assumed
conversion of the Company's 7 1/2% convertible subordinated notes, as the effect
is antidilutive.
</FN>
</TABLE>
Note 5 - Business segment data
The Company evaluates segment performance and allocates resources based upon
operating income. The Company's operations have been classified into three
reportable business segments. The Display Division comprises two operating
segments, indoor display and outdoor display. Both design, produce, lease, sell
and service large-scale, multi-color, real-time electronic information displays
and both are conducted on a global basis, primarily through operations in the
U.S. The Company also has operations in Canada and Australia. The indoor
display and outdoor display segments are differentiated primarily by the
customers they serve. The Entertainment and Real Estate Division owns a chain
of motion picture theatres in the southwestern U.S. and owns real estate used
for both corporate and income-producing purposes in the U.S. and Canada.
Segment operating income is shown after general and administrative expenses
directly associated with the segment and includes the operating results of the
joint venture activities. Corporate items relate to resources and costs which
are not directly identifiable with a segment. There are no intersegment sales.
5
<PAGE>
Information about the Company's operations in its three business segments for
the three months ended March 31, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
In thousands 1999 1998
- - - - - - - - - - - - - ---------------------------------------------------------------------------
<S> <C> <C>
Revenues:
Indoor display $ 5,207 $ 7,489
Outdoor display 6,798 6,887
Entertainment and real estate 1,480 1,580
------- -------
Total revenues $13,485 $15,956
------- -------
Operating income:
Indoor display $ 1,437 $ 2,094
Outdoor display 638 768
Entertainment and real estate 73 141
------- -------
$ 2,148 $ 3,003
Other income 145 23
Corporate general and administrative expenses (1,361) (1,568)
Interest expense-net (863) (831)
------- -------
Income before income taxes $ 69 $ 627
======= =======
</TABLE>
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998
The Company's total revenues for the three months ended March 31, 1999 decreased
15.5% to $13.4 million from $16.0 million for the three months ended March 31,
1998. Revenues from equipment rentals and maintenance increased $94,000 or
1.6%. Indoor display rental and maintenance revenues increased 6.0%, which was
offset by the 5.0% continued expected decline, although the decline was less
than originally planned, from the outdoor lease and maintenance bases previously
acquired. Revenues from equipment sales decreased $2.5 million or 28.6% in
1999. This decrease was primarily in the indoor display segment. Last year's
quarter included a multi-million dollar order from a major exchange being
recognized on a percentage of completion basis, which did not recur this
quarter. Revenues from theatre receipts and other decreased $100,000 or 6.3% in
1999, tracking the national theatrical market, which was lower during the
quarter compared to last year due to the film product.
Gross profit as a percentage of revenues was 36.9% in 1999 compared to 36.7% in
1998. Cost of equipment rentals and maintenance, includes field service
expenses, plant repair costs and maintenance and depreciation. The indoor
display cost of equipment rental and maintenance increased slightly. The
outdoor display cost of equipment rental and maintenance increased 4.2%,
principally due to field service expenses. The cost of equipment rentals and
maintenance represented 55.4% of related revenues for the three months ended
March 31, 1999 compared to 54.8% in 1998. Cost of equipment sales decreased
$1.6 million or 28.2%. The indoor display cost of equipment sales decreased
62.4%, primarily due to a large indoor sale in the first quarter of 1998 that
did not recur in 1999. The outdoor display cost of equipment sales decreased
6.0%, primarily due to lower volume due to seasonality. The cost of equipment
sales represented 66.0% of related revenues for the three months ended March 31,
1999 compared to 65.6% in 1998. Cost of theatre receipts and other, which
includes film rental costs, decreased $80,000 or 6.3% in 1999, mainly due to
lower volume. The cost of theatre receipts and other represented 81.2% of
related revenues for the three months ended March 31, 1999 and 1998.
Total general and administrative expenses decreased $284,000 or 6.3%. The
indoor display general and administrative expenses decreased 17.1%, primarily
due to control of certain administrative costs. The outdoor display general and
administrative expenses increased 15.4%, primarily due to expanded sales and
marketing efforts relate to the sports sector. The entertainment and real
estate general and administrative expenses remained level. Corporate general
and administrative expenses decreased 13.2%, primarily due to control of certain
administrative costs.
Interest income decreased $53,000, primarily attributable to the utilization of
investments to acquire rental equipment and construct new theatres. Interest
expense decreased $21,000. Other income primarily relates to the gain on the
purchase of $1 million principal amount of the Company's 7 1/2% convertible
subordinated notes in January 1999 at a discount.
The effective tax rate at March 31, 1999 and 1998 was 45.0%.
7
<PAGE>
Accounting Standards
The Company will adopt the provisions of Statement of Financial Accounting
Standards No. 133 "Accounting for Derivative Instruments and Hedging
Activities" (SFAS 133) effective January 1, 2000. The standard requires
companies to recognize all derivatives as either assets or liabilities and
measure those instruments at fair value. Gains or losses resulting from changes
in the values of those derivatives would be accounted for depending on the use
of the derivative and whether it qualifies for hedge accounting. The Company
does not expect the adoption of SFAS 133 to have a material impact on its
consolidated financial statements.
Liquidity and Capital Resources
The regular quarterly cash dividend for the first quarter of 1999 of $0.035 per
share on the Company's Common Stock and $0.0315 per share on the Company's Class
B Stock was declared by the Board of Directors on March 23, 1999 payable to
stockholders of record as of April 5, 1999 and was paid April 16, 1999.
The Company has a $15.0 million revolving credit facility with its bank which is
available to June 2001, at which time the outstanding balance would convert into
a five-year term loan. At March 31, 1999 the Company had $13.2 million
borrowing capacity available under such facility. The Company believes that
cash generated from operations together with the cash and cash equivalents on
hand and the availability under the revolving credit facility will be sufficient
to fund its anticipated near term cash requirements.
Cash and cash equivalents decreased $361,000 for the three months ended March
31, 1999 compared to a decrease of $1.2 million in 1998. The decrease in 1999
is primarily attributable to a decrease in receivables, and cash utilized for
investment in rental equipment, construction of theatres and purchases of
equipment. The decrease in 1998 is primarily attributable to an increase in
receivables which primarily related to a certain significant contract being
recorded on the percentage of completion basis and cash utilized for investment
in rental equipment.
The Company utilizes its revolving credit facility to finance the expansion of
its theatre operations until long-term financing is in place. The $3.9 million
proceeds from long-term obligations relates to the construction of a new
theatre.
The Company has limited involvement with derivative financial instruments and
does not use them for trading purposes; they are only used to manage and fix
well-defined interest rate risks. The Company has two interest rate swap
agreements having a notional value of $8.7 million to reduce exposure to
interest fluctuations.
8
<PAGE>
Year 2000 Considerations
Many currently installed computer systems and software products are coded to
accept only two-digit entries in the date code field and cannot distinguish 21st
century dates from 20th century dates. These date code fields will need to
distinguish 21st century dates from 20th century dates and, as a result, many
companies' software and computer systems may need to be upgraded or replaced in
order to comply with such Year 2000 requirements. For the Company, the Year
2000 process involves modifying or replacing certain hardware and software. The
Company has received software updates from its software vendors to make the
software licensed to the Company Year 2000 compliant. The Company is utilizing
both internal and external resources to reprogram, replace and test all of its
software for Year 2000 compliance. The Company expects to complete the project
by mid 1999 and believes that its level of preparedness is appropriate. The
total cost for this project is estimated to be $350,000, of which $250,000 will
be capitalized. This cost is being funded through operating cash flows and are
not expected to have a material impact on the Company's cash flows, results of
operations or financial condition. In addition, the Company is communicating
with others with whom it does significant business to determine their Year 2000
compliance readiness and the extent to which the Company is vulnerable to any
third-party Year 2000 issues. Failure by the Company and/or vendors and
customers to complete Year 2000 compliance work in a timely manner could have a
material adverse effect on certain of the Company's operations. The Company is
in the process of developing contingency plans in the event it does not complete
all phases of its Year 2000 project. The costs of this project and the expected
completion dates are based on management's best estimates.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
The Company may, from time to time, provide estimates as to future performance.
These forward looking statements will be estimates, and may or may not be
realized by the Company. The Company undertakes no duty to update such forward
looking statements. Many factors could cause actual results to differ from
these forward looking statements, including loss of market share through
competition, introduction of competing products by others, pressure on prices
from competition or purchasers of the Company's products, and interest rate and
foreign exchange fluctuations.
<PAGE>
Part II - Other Information
---------------------------
Item 6. Exhibits and Reports on Form 8-K
- - - - - - - - - - - - - -------
(a)
10 Seventh Amendment Agreement to the Credit Agreement with
First Union National Bank dated as of March 31, 1999.
27 Financial Data Schedule, which is submitted
electronically to the Securities and Exchange Commission
for information only and not filed.
(b) No reports on Form 8-K were filed during the quarter covered by
this report.
9
<PAGE>
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.
TRANS-LUX CORPORATION
(Registrant)
Date: May 12, 1999
By /s/ Angela D. Toppi
-------------------------
Angela D. Toppi
Senior Vice President and
Chief Financial Officer
by /s/ Robert P. Bosworth
---------------------------------
Robert P. Bosworth
Vice President and
Chief Accounting Officer
10
<PAGE>
SEVENTH AMENDMENT AGREEMENT
AGREEMENT, made as of March 31, 1999, among TRANS-LUX CORPORATION, a
Delaware corporation, TRANS-LUX DISPLAY CORPORATION, a Delaware corporation,
TRANS-LUX MONTEZUMA CORPORATION, a New Mexico corporation, INTEGRATED SYSTEMS
ENGINEERING, INC., a Utah corporation, and FIRST UNION NATIONAL BANK, a national
banking association.
Background
----------
A. Capitalized terms not otherwise defined shall have the meanings
ascribed to them in the Credit Agreement dated as of August 28, 1995, among
Trans-Lux Corporation, Trans-Lux Consulting Corporation, Trans-Lux Sign
Corporation, Trans-Lux Montezuma Corporation, Integrated Systems Engineering,
Inc., and First Fidelity Bank of Connecticut (predecessor in interest to First
Union National Bank) (as amended, modified or supplemented from time to time,
the "Credit Agreement").
B. Pursuant to the Merger Agreement dated December 10, 1998,
Trans-Lux Sign Corporation merged with and into Trans-Lux Consulting Corporation
and, contemporaneously therewith, changed its name to Trans-Lux Display
Corporation.
C. The Borrowers have requested that the Lender, among other
things, (i) increase from $10,000,000 to $15,000,000, the amount of the Lender's
commitment under Loan C, (ii) extend from June 30, 2000 to June 30, 2001, the
Loan C Commitment Termination Date, and revise the amortization schedule with
respect to Loan C, (iii) extend the Loan C Maturity Date to June 30, 2006 and
(iv) extend from August 27, 2002 to August 27, 2004, the Term Loan Maturity Date
and revise the amortization schedule with respect to Loan A.
D. The Lender has agreed to the requests of the Borrowers subject
to the terms and conditions of this Agreement.
Agreement
---------
In consideration of the foregoing Background, which is incorporated by
reference, the parties, intending to be legally bound, agree as follows:
1. Modifications to Credit Agreement. All of the terms and
provisions of the Credit Agreement and the other Loan Documents shall remain in
full force and effect except as follows:
(a) The definition of "Loan C" set forth in Annex "A" to the
Credit Agreement is deleted and the following is substituted therefor:
"Loan C" shall mean the revolving loan facility extended
by Lender to TLX in the original principal amount of $15,000,000, evidenced by
Note C.
(b) The definition of "Loan C Commitment Termination Date"
contained in Annex "A" of the Credit Agreement is deleted and the following is
substituted therefor:
"Loan C Commitment Termination Date" shall mean the
earliest of (i) June 30, 2001, (ii) the date of the termination
of Loan C pursuant to Section 8.2, and (iii) the date of the
termination of Loan C in accordance with the provisions of
Section (a)(iii)(E) of Schedule 1.1.
(c) The definition of "Loan C Maturity Date" contained in
Annex "A" of the Credit Agreement is deleted and the following is substituted
therefor:
"Loan C Maturity Date" shall mean June 30, 2006.
(d) The definition of "Term Loan Maturity Date" contained in
Annex "A" of the Credit Agreement is deleted and the following is substituted
therefor:
"Term Loan Maturity Date" shall mean August 27, 2004.
(e) The figure "$10,000,000" contained in subparagraph
(a)(iii) of Schedule 1.1 to the Credit Agreement is deleted and the figure
"$15,000,000" is substituted therefor
(f) Subparagraph (a)(ii) of Schedule 1.2 of the Credit
Agreement is deleted and the following is substituted therefor:
(ii) The aggregate principal amount of Note A shall be
payable in quarterly installments (consisting of principal) as
follows:
Payment Date Amount of Payment
------------ -----------------
October 1, 1995 - July 1, 2004 $ 133,333
Term Loan Maturity Date $3,200,012
(g) Subparagraph (c)(iii) of Schedule 1.2 of the Credit
Agreement is deleted and the following is substituted therefor:
(iii) On June 30, 2001, the then outstanding indebtedness
under Note C shall be payable in nineteen (19) equal payments
each in the amount of one-twentieth (1/20) of the amount then
outstanding under Note C, beginning on October 1, 2001, and
continuing on the first day of each successive Fiscal Quarter
and a final payment on June 30, 2006 of all amounts then
outstanding under Note C.
2. Conditions Precedent. The obligation of the Lender under this
Agreement is subject to the receipt and review, to the satisfaction of the
Lender, of the following:
(a) Amendment Agreement. This Agreement duly executed by
the parties hereto;
(b) Allonge. The Fourth Allonge to Revolving Promissory
Note, in the form of Exhibit A hereto, duly drawn to the order of Lender;
(c) Amendment Fee. Payment to the Lender of the Amendment
Fee in the amount of $5,000 in consideration of the Lender's execution, delivery
and performance of this Agreement; and
(d) Other. Such other agreements as the Lender shall require.
4. Reaffirmation by the Borrowers. The Borrowers acknowledge that
each is legally, validly and enforceably jointly and severally indebted to the
Lender under the Notes, without defense, counterclaim or offset, and that each
is legally, validly and enforceably liable to the Lender for all costs and
expenses of collection and reasonable attorneys' fees related to or in any way
arising out of this Agreement, the Notes, the Credit Agreement and the other
Loan Documents. The Borrowers hereby restate and agree to be bound by all
covenants contained in the Credit Agreement and the other Loan Documents and
reaffirm that all of the representations and warranties contained in the Credit
Agreement and the other Loan Documents remain true and correct in all material
respects with the exception that the financial statements described therein are
deemed true as of the date made. The Borrowers represent that except as set
forth in the Credit Agreement and the other Loan Documents, there are no
pending, or to each Borrower's knowledge threatened, legal proceedings to which
any of the Borrowers or any of the Guarantors is a party which materially and
adversely affect the transactions contemplated by this Agreement or the ability
of the Borrowers or any of the Guarantors to conduct its business on a
consolidated basis. The Borrowers and Guarantors acknowledge and represent that
the resolutions of each dated July 27, 1995 (except for resolutions of Trans-
Lux Midwest Corporation which are dated February 13, 1997), remain in full force
and effect and have not been modified, amended, rescinded or otherwise
abrogated.
5. Reaffirmation by the Guarantors. The Guarantors acknowledge
that each is legally and validly indebted to the Lender under the Guaranty of
each without defense, counterclaim or offset, and affirms that each Guaranty
remains in full force and effect and includes, without limitation, the
indebtedness, liabilities and obligations arising under or in any way connected
with the Loans, this Agreement and the other Loan Documents, whether now
existing or hereafter arising.
6. Reaffirmation re: Collateral. The Borrowers and the Guarantors
reaffirm the liens, security interests and pledges granted to the Lender
pursuant to the Loan Documents to secure the obligations of each thereunder.
7. Other Representations by Borrower and Guarantors. Each of the
Borrowers and the Guarantors represents and confirms that (a) no Event of
Default has occurred and is continuing and that the Lender has not given its
consent to or waived any Default or Event of Default and (b) the Credit
Agreement and the other Loan Documents are in full force and effect and
enforceable against the Borrowers and the Guarantors in accordance with the
terms thereof. Each of the Borrowers and Guarantors represents and confirms
that as of the date hereof, each has no claim or defense (and each of the
Borrowers and the Guarantors hereby waives every claim and defense as of the
date hereof) against the Lender arising out of or relating to the Credit
Agreement, this Agreement and the other Loan Documents or the making,
administration or enforcement of the Loans and the remedies provided for under
the Loan Documents.
8. No Waiver by Lender. Each of the Borrowers and the Guarantors
acknowledges that (a) by execution of this Agreement, the Lender is not waiving
any Default, whether now existing or hereafter occurring, disclosed or
undisclosed, by the Borrower or the Guarantors under the Loan Documents and (b)
the Lender reserves all rights and remedies available to it under the Loan
Documents and otherwise.
9. Prejudgment Remedy Waiver; Waivers. EACH OF THE BORROWERS AND
THE GUARANTORS ACKNOWLEDGES THAT THE LOANS AND THE TRANSACTIONS EVIDENCED BY THE
NOTES, THE CREDIT AGREEMENT, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ARE
COMMERCIAL TRANSACTIONS AND EACH WAIVES ITS RIGHTS TO NOTICE AND HEARING PRIOR
TO THE ISSUANCE OF ANY PREJUDGMENT REMEDY, OR AS OTHERWISE ALLOWED BY ANY STATE
OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE LENDER MAY
DESIRE TO USE, AND FURTHER WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT,
NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF ANY RENEWALS OR EXTENSIONS. EACH OF
THE BORROWERS AND THE GUARANTORS ACKNOWLEDGES THAT IT MAKES THIS WAIVER
KNOWINGLY, WILLINGLY, VOLUNTARILY AND WITHOUT DURESS, AND ONLY AFTER
CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
10. Jury Trial Waiver. EACH OF THE BORROWERS AND THE GUARANTORS
WAIVES TRIAL BY JURY IN ANY COURT IN ANY SUIT, ACTION OR PROCEEDING ON ANY
MATTER ARISING IN CONNECTION WITH, OR IN ANY WAY RELATED TO, THE FINANCING
TRANSACTIONS OF WHICH THE NOTES, THE CREDIT AGREEMENT, THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS IS A PART OR THE ENFORCEMENT OF ANY OF THE LENDER'S RIGHTS.
EACH OF THE BORROWERS AND THE GUARANTORS ACKNOWLEDGES THAT IT MAKES THIS WAIVER
KNOWINGLY, WILLINGLY, VOLUNTARILY AND WITHOUT DURESS, AND ONLY AFTER
CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
11. Miscellaneous.
(a) This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
(b) This Agreement and the rights and obligations of the
parties hereunder shall be governed by and construed in accordance with, the law
of the State of Connecticut.
(c) This Agreement shall be deemed a Loan Document under the
Credit Agreement for all purposes. The parties have executed this Agreement on
the date first written above.
BORROWERS:
---------
TRANS-LUX CORPORATION
By /s/ Victor Liss
--------------------------------------
Victor Liss
Title: President
By /s/ Angela Toppi
--------------------------------------
Angela Toppi
Title: Senior Vice President and
Chief Financial Officer
TRANS-LUX DISPLAY CORPORATION
By /s/ Victor Liss
--------------------------------------
Victor Liss
Title: President
By /s/ Angela Toppi
--------------------------------------
Angela Toppi
Title: Senior Vice President and
Chief Financial Officer
TRANS-LUX MONTEZUMA CORPORATION
By /s/ Victor Liss
--------------------------------------
Victor Liss
Title: President
By /s/ Angela Toppi
--------------------------------------
Angela Toppi
Title: Senior Vice President and
Chief Financial Officer
INTEGRATED SYSTEMS ENGINEERING, INC.
By /s/ Victor Liss
-------------------------------------
Victor Liss
Title: President
By /s/ Angela Toppi
--------------------------------------
Angela Toppi
Title: Senior Vice President and
Chief Financial Officer
GUARANTORS:
TRANS-LUX DISPLAY CORPORATION
TRANS-LUX CANADA, LTD.
TRANS-LUX COCTEAU CORPORATION
TRANS-LUX COLORADO CORPORATION
TRANS-LUX DURANGO CORPORATION
TRANS-LUX EXPERIENCE CORPORATION
TRANS-LUX HIGH FIVE CORPORATION
TRANS-LUX INVESTMENT CORPORATION
TRANS-LUX LOMA CORPORATION
TRANS-LUX LOVELAND CORPORATION
TRANS-LUX MIDWEST CORPORATION
TRANS-LUX MONTEZUMA CORPORATION
TRANS-LUX MULTIMEDIA CORPORATION
TRANS-LUX PENNSYLVANIA CORPORATION
TRANS-LUX PTY, LTD.
TRANS-LUX SEAPORT CORPORATION
TRANS-LUX SERVICE CORPORATION
TRANS-LUX SOUTHWEST CORPORATION
TRANS-LUX STORYTELLER CORPORATION
TRANS-LUX SYNDICATED PROGRAMS
CORPORATION
TRANS-LUX TAOS CORPORATION
TRANS-LUX THEATRES CORPORATION
INTEGRATED SYSTEMS ENGINEERING, INC.
SAUNDERS REALTY CORPORATION
By /s/ Victor Liss
-------------------------------------
Victor Liss
Title: President
By /s/ Angela Toppi
--------------------------------------
Angela Toppi
Title: Senior Vice President and
Chief Financial Officer
LENDER:
FIRST UNION NATIONAL BANK
/s/ Richard J. Klouda
By______________________________________
Richard J. Klouda
Title: Senior Vice President
EXHIBIT A
TO SEVENTH AMENDMENT AGREEMENT
FOURTH ALLONGE TO REVOLVING PROMISSORY NOTE
-------------------------------------------
1. THIS FOURTH ALLONGE TO REVOLVING PROMISSORY NOTE (the "Allonge")
is dated as of March 31, 1999, to be attached to, modify, and be a part of the
Revolving Promissory Note dated as of August 28, 1995, in the original principal
amount of $10,000,000 (as renewed, reissued, exchanged, consolidated, amended,
modified, replaced or supplemented from time to time, the "Note") of TRANS-LUX
CORPORATION, a Delaware Corporation (the "Maker") in favor of FIRST FIDELITY
BANK (now known as First Union National Bank, a national banking association)
(the "Lender").
2. The Maker agrees that all of the terms of the Note remain in
full force and effect except as follows:
(a) The figure $10,000,000 contained in the upper left corner
of the Note is deleted and the figure $15,000,000 is substituted
therefor.
(b) The phrase "FIRST FIDELITY BANK" contained in the second
line of Section 1 of the Note is deleted and the phrase "FIRST UNION
NATIONAL BANK" is substituted therefor.
(c) The phrase "TEN MILLION DOLLARS ($10,000,000)" contained in
the fifth line of Section 1 of the Note is deleted and the phrase
"FIFTEEN MILLION DOLLARS ($15,000,000)" is substituted therefor.
3. The Maker has executed and delivered this Allonge as of the date
first written above.
TRANS-LUX CORPORATION
By /s/ Victor Liss
--------------------------------------
Victor Liss
Title: President
By /s/ Angela Toppi
--------------------------------------
Angela Toppi
Title: Senior Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF INCOME FILED AS
PART OF THE QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS ON FORM 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 937
<SECURITIES> 4,899
<RECEIVABLES> 7,327
<ALLOWANCES> 0
<INVENTORY> 5,243
<CURRENT-ASSETS> 18,960
<PP&E> 104,738
<DEPRECIATION> 38,756
<TOTAL-ASSETS> 91,650
<CURRENT-LIABILITIES> 7,728
<BONDS> 31,682
<COMMON> 2,740
0
0
<OTHER-SE> 22,984
<TOTAL-LIABILITY-AND-EQUITY> 91,650
<SALES> 6,148
<TOTAL-REVENUES> 13,485
<CGS> 4,059
<TOTAL-COSTS> 8,508
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 984
<INCOME-PRETAX> 69
<INCOME-TAX> 31
<INCOME-CONTINUING> 38
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 38
<EPS-PRIMARY> 0.03
<EPS-DILUTED> 0.03
</TABLE>
