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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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 29,June 28, 1996
/ / Transition report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the transition period from to
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Commission File Number 0-6890
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MECHANICAL TECHNOLOGY INCORPORATED
(Exact name of registrant as specified in its charter)
New York 14-1462255
- ------------------------------- ----------------------------------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
968 Albany-Shaker Road, Latham, New York 12110
- ---------------------------------------- ---------------------------------------------------- -------------
(Address of principal executive offices) (Zip Code)
(518) 785-2211
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(Registrant's telephone number, including area code)
Not Applicable
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(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
--- ---
Class Outstanding at March 29,June 28, 1996
_____________________________ _____________________________- ----------------------------- -----------------------------
Common Stock, $1.00 Par Value 3,565,8684,899,201 Shares
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1
MECHANICAL TECHNOLOGY INCORPORATED AND SUBSIDIARIES
INDEX
Page No.
--------
Part I Financial Information
Consolidated Balance Sheets - March 29,June 28, 1996
and September 30, 1995 3 - 4
Consolidated Statements of Income -
Three months and sixnine months ended
March 29,June 28, 1996 and AprilJuly 1, 1995 5
Consolidated Statements of Cash Flows -
SixNine months ended March 29,June 28, 1996
and AprilJuly 1, 1995 6
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8 - 1110
Part II Other Information 11 - 12
Signature 13
2
PART I FINANCIAL INFORMATION
MECHANICAL TECHNOLOGY INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of March 29,June 28, 1996 (Unaudited) and
September 30, 1995 (Derived from audited financial statements)
(Dollars in thousands)
March 29,June 28, Sept. 30,
1996 1995
-------- --------
ASSETS
Current Assets:
Cash and cash equivalents $ 1151,907 $ 78
Trade accounts 6,2686,264 6,896
Other receivables 3758 17
------- -------
Gross receivables 6,3056,322 6,913
Allowance for doubtful accounts (70)(112) (120)
------- -------
Net receivables 6,2356,210 6,793
Inventories:
Raw materials and components 1,9962,187 2,116
Work in process 1,7202,357 1,119
Finished goods 188127 249
------- -------
Total inventories 3,9044,671 3,484
Escrow deposit - 750
Prepaid expenses & other
current assets 193689 461
------- -------
Total Current Assets 10,44713,477 11,566
Other Assets:
Excess of cost over net assets of
acquired companies, net 5654 59
Other 3630 60
Property, Plant and Equipment:
Cost 19,28319,430 19,115
Accumulated depreciation (16,615)(16,760) (16,317)
------- -------
Net Property, Plant and Equipment 2,6682,670 2,798
------- -------
TOTAL ASSETS $ 13,20716,231 $ 14,483
======= =======
The accompanying notes are an integral part of the consolidated financial
statements.
3
MECHANICAL TECHNOLOGY INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
As of March 29,June 28, 1996 (Unaudited) and
September 30, 1995 (Derived from audited financial statements)
(Dollars in thousands)
March 29,June 28, Sept.30,
1996 1995
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Line-of-Credit $ 2001,021 $ 1,446
Note Payable 3,000 -
Current installments on long-term debt 604 738
Income taxes payable 13 13
Accounts payable 1,7422,056 2,290
Accrued liabilities 3,7013,649 3,342
Net liabilities of discontinued operations 2,7561,131 2,756
Payroll and other taxes withheld
and accrued 327476 387
------- -------
Total Current Liabilities 12,34311,950 10,972
Line-of-Credit, net of current portion 1,600 1,962
Note Payable - 3,000
Long-term debt, net of current maturities 1,008857 1,260
Deferred income taxes and other credits 764 779
------- -------
Total Liabilities 15,71515,171 17,973
Shareholders' Equity:
Common stock 3,5694,902 3,569
Paid-in capital 12,85613,423 12,856
Retained earnings - beginning of year (19,837) (22,759)
- current year 9842,646 2,922
Foreign currency translation adjustment (25)(20) (20)
Treasury stock (29) (29)
Restricted stock grants (26)(25) (29)
------- -------
Total Shareholders' Equity (2,508)1,060 (3,490)
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 13,20716,231 $ 14,483
======= =======
The accompanying notes are an integral part of the consolidated financial
statements.
4
MECHANICAL TECHNOLOGY INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share)
Three months ended SixNine months ended
March 29, AprilJune 28, July 1, March 29, AprilJune 28, July 1,
1996 1995 1996 1995
-------- -------- -------- --------
Product revenue $ 4,9394,772 $ 4,3163,411 $ 10,33615,108 $ 11,39514,806
Research & development revenue 2,925 2,063 4,929 4,5772,018 3,247 6,947 7,824
------- ------- ------- -------
Total revenue $ 7,8646,790 $ 6,3796,658 $ 15,26522,055 $ 15,97222,630
Product cost of sales 2,992 2,651 6,341 6,6743,038 2,437 9,379 9,111
Research & development contract
costs 1,805 1,887 3,214 3,9751,375 2,355 4,589 6,330
Selling, general and administrative
expenses 2,224 1,806 4,122 3,9592,118 1,678 6,240 5,637
Product development and
research costs 378 268 569 742325 264 894 1,006
------- ------- ------- -------
Operating (loss) income
(loss)from continuing operations $ 465(66) $ (233)(76) $ 1,019953 $ 622546
Interest expense (160) (222) (423) (583)(195) (231) (618) (814)
Gain on sale of subsidiary, ProQuip 750- - 750 6,779
Other (expense) income, net (302) (66) (346) (113)(184) (42) (530) (155)
------- ------- ------- -------
Income (loss)(Loss) income from continuing
operations before income taxes $ 753(445) $ (521)(349) $ 1,000555 $ 6,7056,356
Income tax expense 936 11 52 79
------- ------- ------- -------
(Loss) income from continuing
operations $ (481) $ (360) $ 503 $ 6,277
Income from discontinued
operations 2,143 - 16 682,143 -
------- ------- ------- -------
Net income (loss) $ 7441,662 $ (521)(360) $ 9842,646 $ 6,6376,277
======= ======= ======= =======
Earnings (loss) per share:
Continuing operations $ (.14) $ (.10) $ .14 $ 1.76
Discontinued operations .60 .00 .60 .00
------- ------- ------- -------
Earnings (loss) per share $ .21.46 $ (.15)(.10) $ .28.74 $ 1.871.76
======= ======= ======= =======
The accompanying notes are an integral part of the consolidated financial
statements.
5
MECHANICAL TECHNOLOGY INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
SixNine months ended
March 29, AprilJune 28, July 1,
1996 1995
-------- --------
OPERATING ACTIVITIES
Net income from continuing operations $ 984503 $ 6,6376,277
Adjustments to reconcile net income to net
cash provided (used) :by continuing operations:
Depreciation and amortization 351 411503 548
Gain on sale of subsidiary (750) (6,779)
Provision for deferred income taxes (15) 1
Accounts receivable reserve (50) 3(8) 16
Asset valuation reserve 134144 -
Foreign currency translation (5) 13- 7
Other - 1 12
Changes in operating assets and liabilities:liabilities
of continuing operations:
Accounts receivable 608 1,860591 2,066
Inventories (420) (643)(1,187) (1,063)
Escrow deposit 750 -
Prepaid expenses and other current assets 268 (82)(228) (34)
Accounts payable (548) (531)(234) 137
Income taxes (15) 28- 326
Accrued liabilities 299 (1,145)396 (1,501)
------- -------
Net cash provided (used)by continuing operations $ 466 $ 13
------- -------
Discontinued operations:
Income from discontinued operations 2,143 -
Changes in net liabilities of
discontinued operations (1,625) -
------- -------
Net cash provided by discontinued operations $ 518 $ -
------- -------
Net cash provided by operations $ 1,606984 $ (227)13
------- -------
INVESTING ACTIVITIES
Purchases of property, plant & equipment $ (325)(481) $ (337)(584)
Proceeds from sale of subsidiary, ProQuip,
net of cash balance and expenses 750 9,125
------- -------
Net cash provided in investing activities $ 425269 $ 8,7888,541
------- -------
FINANCING ACTIVITIES
Net payments under line-of credit agreement $ (1,608)(787) $ (1,864)(1,418)
Principal payments of long-term debt ( 386) (8,500)(537) (8,750)
Private placement of common stock,
net of expenses 1,900 -
------- -------
Net cash usedprovided (used) in financing activities $( 1,994) $(10,364)$ 576 $(10,168)
------- -------
Increase (decrease) in cash and cash equivalents $ 371,829 $ (1,803)(1,614)
Cash and cash equivalents - beginning of period 78 1,820
------- -------
Cash and cash equivalents - end of period $ 1151,907 $ 17206
======= =======
The accompanying notes are an integral part of the consolidated financial
statements.
6
MECHANICAL TECHNOLOGY INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The management of the Company believes the accompanying unaudited
consolidated financial statements contain all adjustments (consisting
primarily of normal recurring accruals) necessary to fairly present the
financial position as of March 29,June 28, 1996 and results of operations and changes
in financial position for the sixnine months then ended.
2. The results of operations for the six-monthnine-month period ended March 29,June 28, 1996 are
not necessarily indicative of the results to be expected for the full year.
3. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested that
these consolidated financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's Form 10-K
Report for the fiscal year ended September 30, 1995.
7
MECHANICAL TECHNOLOGY INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company's United Telecontrol Electronics, Inc. ("UTE") subsidiary filed for
voluntary bankruptcy under Chapter 11 of the Federal Bankruptcy Code in April
1994 and commenced an orderly liquidation in October 1994. The Company expectsFinal court approval
occurred during the third quarter of fiscal 1996 and final financial adjustments
were consequently made at that time to record the finalcomplete liquidation of UTE.
However, the remaining balance of "Net liabilities of discontinued operations"
represents a $1.1 million estimated maximum potential obligation associated with
a majority owned subsidiary of UTE and related court approval will occur during
calendar year 1996. At that time any final adjustments will be made.which has not been resolved. (For further
information on this bankruptcy see the discussion in Item 7:Management's
Discussion and Analysis of Financial Condition and Results of Operations, and
Note 16 to the Consolidated Financial Statements, in the Company's Form 10-K
Report for the fiscal year ended September 30, 1995 which are incorporated
herein by reference).
The following is management's discussion and analysis of certain significant
factors which have affected the Company's earnings during the periods included
in the accompanying consolidated statements of income. Prior year information
contains ProQuip, Inc. ("ProQuip") results through its sale date (November 22,
1994) and the $6.8 million gain on its sale. (For further information on this
transaction, see the discussion under the caption "Results of Operations: 1995
in Comparison with 1994", in Item 7: Management's Discussion and Analysis of
Financial Condition and Results of Operations, and Note 17 to the Consolidated
Financial Statements, in the Company's Form 10-K Report for the fiscal year
ended September 30, 1995 which are incorporated herein by reference).
RESULTS OF OPERATIONS
- ---------------------
(Dollars in thousands)
SALES
SixNine months ended
--------------------
BUSINESS SEGMENT: 3/29/6/28/96 4/7/01/95 Change
- ----------------- -------- -------- ------
Technology $ 4,9396,994 $ 4,887 $ 528,163 $(1,169)
Test & Measurement 10,326 11,085 (759)15,061 14,467 594
------ ------ ------
TOTAL $15,265 $15,972$22,055 $22,630 $ (707)(575)
====== ====== ======
OPERATING
INCOME (LOSS)
SixNine months ended
--------------------
BUSINESS SEGMENT: 3/29/6/28/96 4/7/01/95 Change
- ----------------- -------- -------- ------
Technology $ 225(92) $ (934)(528) $ 1,159436
Test & Measurement 794 1,556 (762)1,045 1,074 (29)
------ ------ ------
TOTAL $ 1,019953 $ 622546 $ 397407
====== ====== ======
8
MECHANICAL TECHNOLOGY INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Sales for the first sixnine months of fiscal year 1996 versus the same
period of fiscal year 1995 have decreased while operating income for the same
period increased. However, excludingExcluding ProQuip results from the prior year, both sales and
operating income for the first sixnine months of fiscal year 1996 have increased.
The effect each business segment had on this change is outlined in the above
table and discussed below.
8
MECHANICAL TECHNOLOGY INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
TECHNOLOGY
- ----------
The Technology segment reported a modest increase$1,169 thousand decline in sales as compared
to the corresponding period last year, and generatedhas incurred an operating incomeloss of $225$92
thousand for the first halfthree quarters of the current fiscal year. ThisThe drop in
sales is a significantdue to delays in the receipt of expected orders. The resulting
operating loss is an improvement from the $934$528 thousand operating loss recorded
by the segment for the first sixnine months of the previous fiscal year. A 15% rise inhigher
yielding sales mix and lower indirect expenses offset increased research and
development costs to reduce the Machinery &
Components business arealevel of the Technology division has contributed to the
current growth in sales, while improved productivity and a favorable change in
the blend of cost of sales components increased profitability. Furthermore,operating loss. In addition, prior year
results had been negatively impacted by a contract overrun of approximately $186
thousand, a $150 thousand inventory write-off, $105 thousand in losses from a
business unit being deactivated, and a margin reversal of $42 thousand due to a
customer bankruptcy.
TEST AND MEASUREMENT
- --------------------
The Test & Measurement segment reported a 7% decrease4% increase in revenues and a
49%
reduction$29k decline in operating income compared to the same period last year. These
decreases are attributable to the sale ofPrior
year results include ProQuip, a subsidiary which was sold by the Company in
November 1994. ProQuip accounted for $2,584 thousand in sales and $714 thousand
of operating profit during the comparable period in fiscal 1995. Excluding
ProQuip, sales in fiscal 1996 have increased $1,825$3,178 thousand, or 21%27%, in
comparison to last year, with Ling Electronics ("Ling"), the Advanced Products
Division, and the LAB Division all reporting higher sales levels. Operating
income, when excluding ProQuip, is $48$685 thousand or 6%, lessgreater than the first nine
months of last year. Advanced Products and LAB have produced an operating profit
in each quarter.quarter of fiscal 1996, while Ling incurred an operating loss during the second quarter, primarily
due to inadequate margins, and, therefore, has incurred an operating loss for the
first six months ofsecond consecutive quarter. Inadequate margins continue to negatively impact
Ling, and consequently contribute to Ling's operating loss for the fiscal year,resulting in the 6% decline in operating
income for the segment as a whole.year.
As previously announced, the Company has reached an agreement in principle
to sell Ling for an amount, to be paid in cash at closing, that approximates
Ling's net book value; any resulting gain or loss on the transaction is not
expected to be material. Proceeds of the sale will be used to reduce debt and
as additional working capital. The transaction is subject to negotiation and
execution of a definitive agreement and to the purchaser's completion of a "due
diligence" review of Ling's business and assets, and is expected to be completed
within the current fiscal year.
9
MECHANICAL TECHNOLOGY INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OTHER
- -----
In addition to the matters noted above, the Company's results for the first
halfnine months of fiscal 1996 were further enhanced during the third quarter by the
final court approval of the liquidation of the Company's UTE subsidiary, which
generated $2,143 thousand in income from a discontinued operation. Furthermore,
results were favorably impacted by decreased interest expense, as a
result ofdue to lower rates
and reduced indebtedness, and by recognition of a $750 thousand contingency gain
on the sale of ProQuip resultingProQuip. Moreover, the Company continues to benefit from the expiration
on February 22, 1996 of the escrow agreement in connection with the sale.net
operating loss carryforwards and therefore has no federal income tax provision.
These were partially offset by a $175 thousand accrual for settlement of a
lawsuit, the establishment of a $134$144 thousand asset valuation reserve at Ling, and $99$134
thousand worth of one time labor charges being accrued.
Also, the Company
continues to benefit from net operating loss carryforwards and therefore has no
federal income tax provision.9
MECHANICAL TECHNOLOGY INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
- -------------------
On November 22, 1994, the Company sold its ProQuip subsidiary for
approximately $13.3 million, of which $750 thousand was placed in escrow for
fifteen months to provide a fund for indemnity payments. As of February 22, 1996
(the escrow expiration date),no claims had been filed, nor was the Company aware
of any circumstances which might give rise to future claims. Accordingly, the
Company recognized the remaining $750 thousand gain from the sale during the
second quarter of fiscal 1996.
NegativeOn June 4, 1996, the Bankruptcy Court confirmed UTE's plan of liquidation
under which the Company is released from all remaining liabilities related to
UTE's bankruptcy. This resulted in the Company recording $2,143 thousand in
income from discontinued operations during the third quarter of fiscal 1996.
However, the remaining balance of "Net liabilities of discontinued operations"
represents a $1.1 million estimated maximum potential obligation associated with
a majority owned subsidiary of UTE which has not been resolved.
Also in June 1996, the Company successfully raised $1.9 million (net of
$100,000 in expenses) in new capital through a private placement of 1,333,333
shares of Common Stock, which sold at an offering price of $1.50 per share.
Positive working capital of $1,896$1,527 thousand at March 29, 1996June 28,1996 reflects a $2,490$933
thousand declineincrease from September 30, 1995. The change in classificationFinal liquidation of the Company's
UTE subsidiary and the private placement of restricted common stock on June 28,
1996 have contributed to this favorable increase. Working capital, however, was
negatively impacted by the reclassification of the $3.0 million Note Payable
(due December 31, 1996), from long-term to current liabilities, is the principal factor contributing to the decline in working
capital.liabilities. The Company
anticipates that it will be able to meet its liquidity needs during the balance
of the fiscal year (including all payments due on its indebtedness during fiscal
1996) from cash flow generated by its operations, from the pending sale of its
Ling subsidiary (discussed under "Test and Measurement" above), and from
borrowing under its existing line of credit. However, it
presently does not expect those sources to generate sufficient funds to pay the
Note Payable balance due on December 31, 1996. An extension or restructuring of
the Note Payable will be required unless another source of financing can be
secured. Moreover, the Company's ability to
meet its liquidity needspay the balance due under the Note Payable on the December 31,1996 maturity date
is dependent upon the orderly liquidation of UTE,restructuring of the Note Payable, completion of the sale of Ling and attaining overall
profitability and positive cash flowflow.
First Albany Companies Inc. ("FAC")(which controls approximately 21% of the
Company's outstanding Common Stock) has acquired certain rights relating to an
obligation of the Company's creditor on the Note Payable and proposed to
exchange its rights to that obligation for 1 million shares of the Company's
Common Stock as part of a transaction in which the Company would be released
from operations.its obligation on the Note Payable and the Company's creditor on the Note
Payable would be released from the obligation FAC has acquired. The creditor has
not indicated a willingness to accept the proposal and the Company is not
optimistic that the creditor's position will change in the near future. Unless a
restructuring like that proposed by FAC is consummated, the Company will require
a further extension, restructuring, or another source of financing to pay the
balance due on December 31, 1996. There is no assurance that the Company will
be able
to achieve these objectives. (For further information, see the discussion under
the caption "Liquidity and Capital Resources", in Item 7:Management's Discussion
and Analysis of Financial Conditions and Results of Operations, and Note 13 to
the Consolidated Financial Statements, in the Company's Form 10-K Report for the
fiscal year ended September 30, 1995).
10
MECHANICAL TECHNOLOGY INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION (continued)
- -------------------
In May 1996, First Albany Companies ("FAC") completed its previously
announced purchase of 909,091 shares of the Company's common stock (representing
about 25% of the Company's outstanding shares) and certain rights relating to
the Company's Note Payable (the outstanding balance of which, with accrued
interest, is approximately $3.9 million). In connection with obtaining the
approval of the Company's Board of Directors foraccomplish this transaction, FAC indicated
that it was its intention to assist in the recapitalization of the Company by,
among other things, negotiating a restructuring of the Note Payable on terms
which could include, among others, conversion of the obligation to preferred or
common stock of the Company(at a price of not less than $1.50 per common share),
and by raising approximately $2.0 million in additional equity capital for the
Company through a private placement. However, no specific terms for a
restructuring of the Note Payable agreement, or for the infusion of new equity
capital, have yet been proposed, and no agreement has been reached on such
matters; there is no assurance that any agreements will be reached for a
restructuring of the Note Payable agreement or for the infusion of new equity
capital, or that the terms of any such agreements that may be reached will be
favorable to the Company. Any agreements that may be reached on these matters
will be subject to approval by a majority of disinterested members of the
Company's Board of Directors.objective.
At March 29,June 28, 1996, cash and cash equivalents were $115$1,907 thousand versus $78
thousand at September 30, 1995. Net cash provided from operations,including the
release of the ProQuip escrow monies, was used to reduce, among other things,the
line-of-credit and long-term debt, and to purchase capital equipment for the Company.
11Company,
and to build inventory balances in the manufacturing divisions.
10
PART II OTHER INFORMATION
Item 1. Legal Proceedings
United Telecontrol Electronics, Inc. Bankruptcy
-----------------------------------------------
The Company's wholly owned subsidiary, United Telecontrol Electronics, Inc.
("UTE") of Asbury Park, New Jersey, filed for voluntary bankruptcy under Chapter
11 of the Federal Bankruptcy Code in April 1994. During October 1994, UTE
commenced an orderly liquidation.
On June 4, 1996, the United States Bankruptcy Court for the District of New
Jersey confirmed the Plan of Liquidation of UTE. The Company recorded final
liquidation adjustments during this current fiscal quarter which resulted in
$2,143 thousand in income from discontinued operations. However, the remaining
balance of "Net liabilities of discontinued operations"represents a $1.1 million
estimated maximum potential obligation associated with a majority owned
subsidiary of UTE which has not been resolved.
Lawrence Group Inc. Lawsuit
---------------------------
Lawrence Group Inc. ("LGI") (which controls approximately 17% of the
Company's outstanding Common Stock) on May 10, 1996 filed suit in Supreme Court
in Schenectady County, New York against the Company and FAC, alleging that the
approval by the Company's Board of Directors of FAC's purchase of 909,091 shares
of the Company's Common Stock was a nullity,and that FAC violated the disclosure
requirements of federal securities laws in connection with its purchase of the
shares. On May 15, 1996, the case was moved to United States District Court -
Northern District of New York.
The Company believes the LGI lawsuit to be without merit and is vigorously
opposing it; it has filed a motion to dismiss all claims therein, but to date
there has been no ruling on the motion.
Item 4. Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Shareholders, which had been scheduled foradjourned on
March 28, 1996, was adjourned before a vote was taken on the matters being
submitted to shareholders. The adjourned meeting will reconvenereconvened on May 16, 1996
at 10 A.M.1996.The following were the results of
the voting for the nominees for election to the Company's Board of Directors at
the Company's Corporate HeadquartersAnnual Meeting. Having received the largest vote totals in Latham, New York, at which
time shareholders will votefavor of their
election, Messrs. Apkarian, Diesel, Landgraf, O'Connor, Goldberg, and McNamee
were elected to hold office for the ensuing year.
Nominee In Favor Withheld
------- ------------ ----------
Harry Apkarian 3,290,765 13,282
R. Wayne Diesel 3,299,098 2,973
Stanley I. Landgraf 3,301,485 2,673
Albert W. Lawrence 1,245,968 12,358
E. Dennis O'Connor 3,297,924 6,573
Lawrence A. Shore 1,245,653 12,723
Alan P. Goldberg 2,046,521 0
George C. McNamee 2,048,772 0
11
Item 4. Submission of Matters to a Vote of Security Holders (continued)
The results of the voting on the electionproposal to approve the reappointment of
Directors and on ratification ofCoopers & Lybrand as the Board's selection of auditors.Company's auditors were as follows:
In Favor Opposed Abstained
---------- ----------- -----------
3,296,974 810 6,763
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. Description
----------- -----------
27 Financial Data Schedule
(b) No ReportsTwo reports on Form 8-K were filed by the Company during the quarter ending March 29,June 28, 1996.
Subsequent to the end of the quarter, theThe Company filed a Form 8-K Report, dated April 18, 1996, reporting under Item
5 thereof the Company's issuance of two press releases. The press releases
related to (1) the approval that had been granted by the Company's Board of
Directors, for purposes of Section 912 of the New York Business Corporation Law,
with respect to the proposed purchase by First Albany Companies of 909,091
shares of the Company's common stock (representing about 25% of the Company's
outstanding shares) and approximately $3.9 million of the Company's debt, and
(2) an agreement in principle that had been reached for the sale of the
Company's Ling Electronics,Inc. subsidiary. Copies of the press releases were
filed as ExhibitsExhibit 20.2 and 20.3 to the Form 8-K Report. No financial statements
were filed as part of that report.
The Company filed a Form 8-K Report, dated May 16, 1996, reporting under Item 1
thereof a change in control of the registrant. As previously reported, First
Albany Companies, Inc. ("FAC") in May 1996 acquired 909,091 shares of the
Company's common stock, as a result of which FAC became the Company's largest
shareholder. (For further information on this transaction, see the discussion
in Part I: Management's Discussion and Analysis of Financial Condition and
Results of Operations in the Company's Form 10-Q Report for the quarter ending
March 29, 1996). At the registrant's Annual Shareholders' Meeting held on
May 16, 1996, Messrs. George C. McNamee and Alan P. Goldberg, Co-Chief Executive
Officers of FAC, were elected to the registrant's Board of Directors. Incumbent
Directors Albert W. Lawrence and Lawrence A. Shore were not re-elected to the
Board, and accordingly their terms as Directors of the registrant expired at the
meeting; all other incumbent Directors were re-elected to the Board. The newly
constituted Board elected George C. McNamee as its Chairman, re-elected R. Wayne
Diesel as President and Chief Executive Officer, and voted to increase the
number of Directors from 6 to 7. The Board then elected Dr. Beno Sternlicht, a
co-founder of the Company, to fill the newly-created position. No financial
statements were filed as part of that report.
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SIGNATURE
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.
MECHANICAL TECHNOLOGY INCORPORATED
5-13-968-8-96 /s/ R. WAYNE DIESEL
- --------- ------------------------------------
(Date) R. Wayne Diesel
President & Chief Executive Officer
5-13-968-8-96 /s/ STEPHEN T. WILSON
- --------- ------------------------------------
(Date) Stephen T. Wilson
Chief Financial Officer
13