SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended June 30, 1995
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 1-8101
DDL ELECTRONICS, INC.
(Exact name of Registrant as specified in its Charter)
Delaware 33-0213512
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7320 SW Hunziker Rd., Suite 300, Tigard, Oregon 97223-2302
(Address of Principal Executive Offices)
Registrant's telephone number, including area code
(503) 620-1789
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on
which registered
Common Stock, .01 Par Value New York Stock Exchange
Pacific Stock Exchange
7% Convertible Subordinated
Debentures due May 15, 2001 New York Stock Exchange
8-1/2% Convertible Subordinated
Debentures due August 1, 2008 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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 by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in this Form 10-K or any amendment to this Form 10-K.
[ ]
The aggregate market value of the voting stock held by
non-affiliates of the registrant based on the closing price as
reported by the New York Stock Exchange on September 15, 1995:
$34,637,179
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of September 15, 1995: 16,299,849
DOCUMENTS INCORPORATED BY REFERENCE
The Annual Report to Stockholders for the fiscal year ended June
30, 1995, is incorporated by reference in Part I and II hereof.
The Proxy Statement for the December 11, 1995 Annual Meeting of
Shareholders is incorporated by reference in Part III hereof.
EXHIBIT INDEX
See page 24
PART I
Item 1. Business
DDL Electronics, Inc. ("DDL" or the "Company") is an
independent provider of electronic contract manufacturing ("ECM")
services and a fabricator of printed circuit boards ("PCB") for
use primarily in the computer, communications, and
instrumentation industries. The Company provides ECM services
for manufacturers of electronic equipment and fabricates
multilayer PCBs at its operations in Northern Ireland primarily
for customers in Europe.
The Company entered the ECM business by acquiring its
domestic ECM operations in 1985 and by organizing its European
ECM operations in 1990. In its PCB fabrication business, the
Company manufactures PCBs ranging from simple single and
double-sided boards to multilayer boards with more than 20
layers. Since the mid-1980s, the Company has increasingly
focused on the fabrication of advanced multilayer PCBs.
Management believes the market for these boards offers the
opportunity for more attractive margins than the market for less
complex, single and double-sided boards. Since 1985, the Company
has made substantial capital expenditures in its Northern Ireland
ECM and PCB fabrication facilities. In fiscal 1995, the Company
liquidated or sold many assets associated with its United States
PCB fabrication facility and its ECM operations. The Company
maintains its corporate headquarters in Tigard, Oregon.
The Company also has divested its non-ECM and non-PCB
businesses in recent years, including its communications
business, its pressure gauge and hose manufacturing operations,
its emergency lighting equipment manufacturing operations and its
engineering services operations.
RECENT DEVELOPMENTS
The Company incurred substantial operating losses in recent
years that have impaired operations and positive cash flows.
These losses totaled $4,970,000, $6,948,000, and $5,067,000, in
the fiscal years ended June 30, 1995, 1994, and 1993,
respectively. The Company realized net profits of $75,000 and
$1,073,000 in 1995 and 1993, respectively, and incurred a net
loss of $8,354,000 in the 1994 fiscal year. The fiscal 1995 net
profit, however, included an extraordinary gain of $2,441,000
recognized as a result of the extinguishment of the Company's
senior debt in fiscal year 1995, and a gain of $3,317 on a sale
of assets in fiscal year 1995. The fiscal 1993 net profit
included an extraordinary gains from exchanges of the Company's
7% and 8-1/2% convertible subordinated debentures ("CSDs") for
equity, and a $603,000 gain from the sale of a discontinued
business.
The losses in the Company's ECM and PCB fabrication
businesses have resulted from certain Company-specific factors,
including yield and quality problems, facility underutilization,
delays in meeting delivery schedules, collection problems and
management turnover, as well as from excess production capacity
in the industry putting extreme downward pressure on the
Company's prices and production volume. As a result, the Company
sold or liquidated its unprofitable United States operations and
concentrated efforts on its profitable European operations.
In addition to improving its operations, the Company must
also increase sales volume and improve margins in order to
maintain its continuing operations in a profitable position.
Notwithstanding the steps that have been taken to address the
Company's operating problems during the past several years, the
Company has only recently realized operating profits from its
continuing operations and there can be no assurance that such
profits will continue. Maintaining profitability while managing
the Company's working capital is required in order to ensure the
Company's liquidity and the Company's cash balances are at levels
required to operate its business. For management's response to
these operating issues, together with other significant events
and conditions occurring during the last three years, see the
1995 Annual Report to Stockholders under the caption
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" on pages 3 to 12 thereto.
In December 1994, the Company successfully consummated an
integrated plan retiring over $12,000,000 of its senior debt upon
the sale of certain assets of the Company's Aeroscientifc Corp.
subsidiary, located in Beaverton, Oregon, to Yamamoto
Manufacturing (USA), Inc. In addition, the liens of the
Company's two major senior lenders were contemporaneously
eliminated. The release of liens was achieved by the Company
concluding termination agreements with Sanwa Bank California
("Sanwa") which covered Sanwa's term loan to the Company, and
with The Tokai Bank Ltd. ("Tokai") regarding its letter of credit
issued to First Interstate Bank of Oregon, N.A. in connection
with Industrial Revenue Bonds ("IRBs") issued by the State of
Oregon.
The January 17, 1994 Los Angeles earthquake caused major
structural damage to two leased buildings in Chatsworth,
California housing the Company's subsidiary, A.J. Electronics,
Inc. (A.J.). In August 1994, after three months of review, the
Small Business Administration Disaster Assistance Division
("SBA") denied A.J.'s request for economic financial assistance
regarding damage suffered in the Los Angeles earthquake. A.J.
was unable to recover from the effects of the earthquake and
incurred substantial operating losses and cash outlays since the
January earthquake. In its financial plan, A.J. predicted that
it would not recover economically until sometime in fiscal year
1996. Management concluded, after the SBA's decision to deny
A.J. assistance, that A.J. would be a substantial economic burden
on the consolidated group considering the limited working capital
available to the Company. On January 17, 1995, the Company sold
virtually all of A.J.'s operating assets to Raven Industries,
Inc., an entity unaffiliated with the Company.
A program of acquisitions and mergers is being pursued in an
effort to accelerate the turnaround of the Company's operating
position and to improve shareholder value. Given current and
anticipated market conditions, management believes that the
Company must develop faster ways of rebuilding and expanding its
customer base to withstand the impact of continued downsizing at
major customers. No assurance can be given that the revised
strategic plan will be successful.
FINANCIAL INFORMATION BY BUSINESS SEGMENT AND GEOGRAPHICAL AREA
The Company is principally engaged in two lines of business,
e.g., the provision of ECM services and the fabrication of PCBs.
Information for each of the Company's last three fiscal years,
with respect to the amounts of revenues from sales to
unaffiliated customers, operating profit or loss and identifiable
assets of these segments is set forth under the caption "Selected
Financial Data" appearing on pages 2 and 33 of the Company's 1995
Annual Report to Shareholders. Such information is incorporated
herein by this reference and is made a part hereof.
ELECTRONIC CONTRACT MANUFACTURING AND PRINTED CIRCUIT BOARD
FABRICATION BUSINESSES
The ECM and PCB fabrication industries and the markets in
which the Company's customers compete are characterized by rapid
technological change and product obsolescence. As a result, the
end services provided and products made by the Company's ECM and
PCB fabrication customers have relatively short product lives.
The Company believes that its future success in these industries
is dependent on its ability to continue to incorporate new
technology into its ECM and fabrication processes, to satisfy
increasing customer demands for quality and timely delivery, and
to be responsive to future changes in this dynamic market.
The PCB fabrication market is highly fragmented. Numerous
factors, however, have caused a shift toward consolidation in the
PCB fabrication industry, including extreme competition,
substantial excess production capacity experienced by the
industry prior to the current fiscal year, the greatly increased
capital and technical requirements to service the advanced
multilayer PCB fabrication market, and the inability of many PCB
fabricators to keep up with the changing demands and expectations
of customers on matters such as technical board characteristics,
quality, and timely delivery of product.
Description of Products and Services--ECM. The Company's ECM
operation provides turnkey ECM services using both surface mount
and through-hole interconnection technologies. Under the turnkey
process, the Company procures customer-specified components from
suppliers, assembles the components onto PCBs, and performs
post-assembly testing. The Company conducts the ECM portion of
its business through its DDL Electronics Limited ("DDL-E")
subsidiary servicing customers in Western Europe. DDL-E does not
fabricate any of the components or PCBs used in these processes.
However, it has, in the past, procured PCBs from the Company's
PCB fabricator. The ECM business represented approximately 47%,
59% and 55% of the Company's consolidated sales for the fiscal
years ended June 30, 1995, 1994, and 1993, respectively.
Since turnkey electronic contract manufacturing may be a
substitute for all or some portion of a customer's captive ECM
capability, continuous communication between the Company and the
customer is critical. To facilitate such communication, the
Company maintains a customer service department whose personnel
work closely with the customer throughout the assembly process.
The Company's engineering and service personnel coordinate with
the customer on the implementation of new and re-engineered
products, thereby providing the customer with feedback on such
issues as ease of assembly and anticipated production lead times.
Component procurement is commenced after component specifications
are verified and approved sources are confirmed with the
customer. Concurrently, assembly routing and procedures for
conformance with the workmanship standards of the Institute for
Interconnecting and Packaging Electronic Circuits ("IPC") are
defined and planned. Additionally, "in-circuit" test fixturing
is designed and developed. "In-circuit" tests are normally
performed on all assembled circuit boards for turnkey projects.
Such tests verify that components have been properly inserted and
meet certain functional standards and that electrical circuits
are properly completed. In addition, under protocols specified
by the customer, the Company performs customized functional tests
designed to ensure that the board or assembly will perform its
intended function. The Company's personnel monitor all stages of
the assembly process in an effort to provide flexible and rapid
responses to the customer's requirements, including changes in
design, order size, and delivery schedule.
The materials procurement element of the Company's turnkey
services consists of the planning, purchasing, expediting, and
financing of the components and materials required to assemble a
PCB or system-level assembly. Customers have increasingly
required the Company and other independent providers of ECM
services to purchase all or some components directly from
component manufacturers or distributors and to finance the
components and materials. In establishing a turnkey relationship
with an independent provider of ECM services, a customer must
incur expenses in qualifying that provider of ECM services and,
in some cases, its sources of component supply, refining product
design and ECM processes, and developing mutually compatible
information and reporting systems. With this relationship
established, the Company believes that customers experience
significant difficulty in expeditiously and effectively
reassigning a turnkey project to a new assembler or in taking on
the project themselves. Alternatively, the Company faces the
obstacle of attracting new customers away from existing ECM
providers or from performing services in-house.
Production of product for a customer is only performed when a
firm order is received. Revenue is recognized when product is
shipped. Customer cancellation of orders are infrequent and are
subject to cancellation charges. More often a customer will
delay shipment of orders based on its actual or anticipated
needs. Customer orders are produced based on one of two
production methods, either "Turnkey" (where DDL-E provides all
materials, labor and equipment associated with producing the
customers' product) or "Consigned" (DDL-E provides labor and
equipment only for manufacturing product). Material costs
customarily represents 70% of the turnkey method's sales price.
In other words, a change from turnkey to consigned orders at
DDL-E can result in a decline in sales volume without a reduction
in profit margin.
Description of Products and Services--PCB Fabrication. The
Company fabricates and sells advanced, multilayer PCBs based on
designs and specifications provided by the Company's customers.
These specifications are developed either solely through the
design efforts of the customer or through the design efforts of
the customer working together with the Company's design and
engineering staff. Customers submit requests for quotations on
each job and the Company prepares bids based on its own cost
estimates. The Company currently conducts the fabrication
portion of its PCB business through its Northern Ireland,
Irlandus Circuits Limited ("Irlandus") subsidiary. The Company's
fabrication facilities in Anaheim, California were shut down in
fiscal year 1992 and its Beaverton, Oregon facility was sold in
the current fiscal year. The PCB fabrication business
represented approximately 53%, 41% and 45% of DDL's consolidated
sales for the fiscal years ended June 30, 1995, 1994, and 1993,
respectively, with four or more layer boards constituting a
substantial portion of those sales.
PCBs range from simple single and double-sided boards to
multilayer boards with more than 20 layers. When PCBs are joined
with electronic components in the assembly process, they comprise
the basic building blocks for electronic equipment. Single-sided
PCBs are used in electronic games and automobile ignition
systems, whereas multilayer PCBs are used in more advanced
applications such as computers, office equipment, communications,
instrumentation, and defense systems.
PCBs consist of fine lines of a conductive material, such as
copper, which are bonded to a non-conductive panel, typically
rigid laminated epoxy glass. The conductive pathways in the PCBs
form electrical circuits and replace wire as a means of
connecting electronic components. On technologically advanced
multilayer boards, conductive pathways between layers are
connected with traditional plated through-holes and may
incorporate surface mount technology. "Through-holes" are holes
drilled entirely through the board that are plated with a
conductive material and constitute the primary connection between
the circuitry on the different layers of the board and the
electronic components attached to the boards later. "Surface
mount" boards are boards on which electrical components are
soldered instead of being inserted into through-holes. Although
substantially more complex and difficult to produce, surface
mount boards can substantially reduce wasted space associated
with through-hole technology and permit greatly increased surface
and inner layer densities. Complex boards may also have "via" or
"blind-via" holes that connect inner layers of multi-layer board
or connect an inner layer to the outside of the board.
The development of increasingly sophisticated electronic
equipment, which combines higher performance and reliability with
reduced size and cost, has created a demand for increased
complexity, miniaturization, and density in electronic circuitry.
In response to this demand, multilayer technology is advancing
rapidly on many fronts, including the widespread use of surface
mount technology. More sophisticated boards are being created by
decreasing the width of the tracks on the board and increasing
the amount of circuitry that can be placed on each layer.
Fabricating advanced multilayer PCBs requires high levels of
capital investment and complex, rapidly changing production
processes.
As the sophistication and complexity of PCBs increase,
manufacturing yields typically fall. Historically, the Company
relied on tactical quality procedures, in which defects are
assumed to exist and quality inspectors examine product lot by
lot and board by board to identify deficiencies, using automated
optical inspection and electrical test equipment. This
traditional approach to quality control is not adequate to
produce acceptably high yields in an advanced multilayer PCB
fabrication environment, as it focuses on identifying, rather
than preventing, defects. In recognition of this limitation,
Irlandus is striving to create a positive environment
encompassing management's awareness, process understanding, and
operator involvement in identifying and correcting production
problems before defects occur.
The International Standards Organization ("ISO") has
published internationally recognized standards of workmanship and
quality. Both Irlandus and DDL-E, the Company's ECM and PCB
operations in Northern Ireland, have achieved ISO 9002
certification which will be increasingly necessary to attract
business.
ECM Facilities. DDL-E conducts its operations from a 67,000
square foot facility in Northern Ireland that was purchased in
1989. Prior to DDL-E commencing operations in the Spring of
1990, approximately 1,600,000 pounds sterling (approximately
$2,700,000) was
expended on auto-insertion equipment, surface mount device
placement equipment, wave solder equipment, visual inspection
equipment, and automated test equipment. The Company believes
that this facility possesses the technology to compete
effectively and that the facility is capable of supporting
projected growth for up to the next two years.
Fabrication Facilities. Irlandus occupies a 63,000 square
foot production facility and an adjacent 9,000 square foot office
and storage facility. Irlandus' existing capacity is expected to
be adequate to meet anticipated order levels for the next three
years. Aeroscientific stopped recognizing revenue at its 44,000
square foot Beaverton, Oregon facility when it was sold to
Yamamoto in December 1994.
Marketing and Customers. The Company's sales in the ECM and
fabrication businesses and the percentage of its consolidated
sales to the principal end-user markets it serves for the last
three fiscal years were as follows (dollars in thousands):
Year Ended June 30,
Markets 1995 1994 1993
Computer $7,115 24.1% $23,905 49.3% $25,479 44.0%
Communications 6,926 23.4 8,396 17.3 14,881 25.7
Financial 2,067 7.0 - - - -
Industrial &
Instrumentation 6,044 20.4 6,196 12.8 6,555 11.3
Medical 4,668 15.8 6,533 13.4 6,582 11.4
Automotive 175 .6 889 1.8 1,035 1.8
Government/
Military 1,362 4.6 1,411 2.9 1,509 2.6
Other 1,219 4.1 1,199 2.5 1,842 3.2
Total $29,576 100.0% $48,529 100.0% $57,883 100.0%
The Company markets its ECM and PCB fabrication services
through both a direct sales force and independent manufacturers'
representatives. The Company's marketing strategy is to develop
close relationships with, and to increase sales to, certain
existing and new major ECM and fabrication customers. This
includes becoming involved at an early stage in the design of
PCBs for these customers' new products. DDL believes that this
strategy is necessary to keep abreast of rapidly changing
technological needs and to develop new ECM and fabrication
processes, thereby enhancing the Company's ECM and fabrication
capabilities and its position in the industry. As a result of
this strategy, however, fluctuations experienced by one or more
of these customers in demand for their products may have and have
had adverse effects on the Company's sales and profitability.
At the end of the fiscal year ended June 30, 1995, the
Company's ECM business had approximately 16 customers, all of
which were located in Western Europe, compared to 60 in fiscal
1994 and 37 in fiscal year 1993. At the end of fiscal year 1995,
the Company fabricated PCBs for approximately 98 customers,
substantially all of which are located in Western Europe,
compared to 211 in fiscal year 1994 and 169 in fiscal year 1993.
The Company's five largest customers accounted for 21%, 45% and
39% of consolidated sales during fiscal years 1995, 1994, and
1993, respectively. For all three fiscal years , no single PCB
fabrication customer accounted for more than 4% of the Company's
consolidated sales. The Company's largest European ECM customer
accounted for approximately 8% of consolidated sales in fiscal
year 1994. Dataproducts Corporation, the largest customer of the
Company's former domestic ECM operation, accounted for 13% of
consolidated sales in both fiscal years 1993 and 1994. No single
customer of the Company's domestic PCB or ECM discontinued
businesses accounted for more than 2% of consolidated sales in
fiscal year 1995.
Two customers of the Company's European ECM operation made
combined purchases equal to or in excess of 12% and 10% of
consolidated sales during fiscal years 1995 and 1994,
respectively. These two customers, GE Medical Systems, a General
Electric Company ("GE Medical") and DeLaRue Fortronic, LTD,
("Fortronic") comprised almost 90% of the Company's European ECM
sales in fiscal year 1994. This amount dropped in fiscal year
1995 to 36%. Sales to both of these customers diminished in the
latter part of fiscal year 1994. Fortronic's purchases declined
due to reduced orders of its magnetic card reader products in the
European market, while orders from GE Medical have been reduced
as that company relocated its headquarters to the United States.
Weakness in orders from these two customers continued into the
first half of fiscal year 1995, but orders increased in the last
half of fiscal year 1995.
The decreased number of customers in both the ECM and PCB
businesses reflects the impact of the Company's discontinuance of
business at several of its subsidiaries. The number of European
customers, however, has increased reflecting the Company's
change in marketing activities to increase its customer base in
smaller, higher margin entities and reduce the Company's
dependency on large run volume, low margin customers.
Raw Materials and Suppliers. In its ECM business, the
Company uses numerous suppliers of electronic components and
other materials. The Company's customers may specify the
particular manufacturers and components, such as the Intel 80486
microprocessor, to be used in the ECM process. To the extent
these components are not available on a timely basis or are in
short supply because of allocations imposed by the component
manufacturer, and the customer is unwilling to accept a
substitute component, delays may occur. Such delays are
experienced in the ECM business from time to time and have caused
sales and inventory fluctuations at the Company's ECM business.
The principal materials used by the Company in its
fabrication processes are copper laminate, epoxy glass, copper
alloys, gold and various chemicals, all of which are readily
available to the Company from various sources. The Company
believes that its sources of materials for its fabrication
business are adequate for its needs and that it is not
substantially dependent upon any one supplier.
Industry Conditions and Competition. The markets in which
the ECM and PCB fabrication businesses operate are intensely
competitive and have experienced excess production capacity
during the past few years. Seasonality is not a factor in the
ECM and PCB fabrication businesses. There has been significant
downward pressure on the prices that the Company is able to
charge for its ECM and fabrication services. More recently,
market conditions have improved which has resulted in an increase
in product demand. While the Company believes that market
conditions will continue to improve, it does not believe that
prices will increase as quickly. ECM and fabrication customers
are increasing their orders, but are reluctant to pay more for
such services primarily due to the industry's excess capacity and
price competition. Additionally, competition is principally
based on price, product quality, technical capability, and the
ability to deliver products on schedule. Both the price of and
the demand for ECM services and PCBs are sensitive to economic
conditions, changing technologies, and other factors. The
technology used in the ECM services and fabrication of PCBs is
widely available, and there are a large number of domestic and
foreign competitors. Many of these firms are larger than the
Company and have significantly greater financial, marketing, and
other resources. In addition, the Company faces a competitive
disadvantage against better financed competitors because the
Company's current financial situation causes certain customers to
be reluctant to do business with the Company's operating
subsidiaries. Many of the Company's competitors have also made
substantial capital expenditures in recent years and operate
technologically advanced ECM and fabrication facilities. In
addition, some of the Company's customers have substantial
in-house ECM capability, and to a lesser extent, PCB fabrication
capacity. There is a risk that when these customers are
operating at less than full capacity they will use their own
facilities rather than purchase from the Company. Despite this
risk, management believes that the Company has not experienced a
significant loss of business to in-house fabricators or
assemblers. There also are risks that other customers,
particularly in the ECM market, will develop their own in-house
capabilities, that additional competitors will acquire the
ability to produce advanced, multilayer boards in commercial
quantities, or the ability to provide ECM services, and that
foreign firms, including large, technologically advanced Japanese
firms, will increase their share of the United States or European
market.
Price competition in the computer marketplace which comprises
the Company's largest market is intense. This has caused price
erosion and lower margins, particularly in the Company's PCB
fabrication business. Significant improvement in the Company's
PCB gross margins may not be achieved in the near future due to
excess PCB production capacity worldwide and substantial
competitive pressures in the Company's principal market.
Generally, the Company's customers are reducing inventory levels
and seeking lower prices from their vendors, such as the Company,
to compete effectively.
GENERAL
Backlog. At June 30, 1995, 1994, and 1993, the Company's ECM
and PCB fabrication businesses had combined backlogs of
$9,247,000, $6,902,000 and $19,612,000, respectively. Backlog is
comprised of orders believed to be firm for products that have
scheduled shipment dates during the next 12 months. Some orders
in the backlog may be canceled under certain conditions.
Historically, a substantial portion of the Company's orders have
been for shipment within 90 days of the placement of the order
and, therefore, backlog information as of the end of a particular
period is not necessarily indicative of trends in the Company's
business. In addition, the timing of orders from major customers
may result in significant fluctuations in the Company's backlog
and operating results from period to period.
Backlog at June 30, 1995 included only the Company's European
subsidiaries. The increase from fiscal year 1994 reflects higher
order demand from existing ECM customers and new outstanding
orders from new ECM customers. The Company's European PCB
backlog increased slightly from the last fiscal year. The
fabrication group has and is expected to further increase sales
volume, but will not increase backlog as the sales increase is
expected to come from quick turn orders that are completed within
a one month accounting cycle and would, therefore, not be
included in the period end backlog.
Backlog at June 30, 1994 had declined from previous years
primarily due to the following reasons:
1. Loss of large customers and their projected orders in
the Company's ECM business. Total backlog for the Company's ECM
operations was $4,214,000 at fiscal year end 1994 versus
$17,612,000 at fiscal year end 1993.
2. Change in customer base in both the Company's ECM and
PCB units to a larger customer base with smaller, higher margin
purchase orders. Many of these customers have short notice,
quick turn requirements, and few orders in the Company's backlog
therefore extend beyond a one to two month period. Many of last
year's backlogged orders covered an eight to 12 month period.
On July 1, 1993, the largest customer at the Company's
domestic ECM operation in fiscal year 1993, Dataproducts
Corporation, ("Dataproducts") issued a temporary stop work order
on the bulk of its existing purchase orders. Dataproducts' total
purchases for the year ended June 30, 1993, were approximately
$7,703,000, or approximately 13% of the Company's consolidated
revenues for the year and $6,322,000 or 13% of fiscal year 1994
consolidated sales. Dataproducts' order backlog as of June 30,
1993 was approximately $5,747,000 or approximately 29% of the
Company's consolidated backlog at such date. Approximately
$700,000 of the Dataproducts backlog was canceled as a result of
the stop work order and the remaining orders were rescheduled for
delivery during the first six months of fiscal year 1994. There
were no Dataproducts orders in the fiscal year end 1994 backlog.
Because of the Dataproducts cancellation and reschedules, the
level of A.J.'s revenues were adversely affected in that year.
Events of this nature can materially delay or undermine the
Company's ability to complete a successful turnaround and achieve
operating profitability which is critical to the Company's
viability.
Environmental Regulation. Federal, state, and local
provisions relating to the protection of the environment affect
the Company's ECM and PCB fabrication businesses. Aeroscientific
has used or uses chemicals in the manufacture of their products
that are classified by the Environmental Protection Agency
("EPA") as hazardous substances. In the past, some of these
chemicals were either treated on site or removed from the
Company's facilities and disposed of elsewhere by arrangement
with the owners or operators of disposal sites. The Company's
current operation treats all hazardous substances on site and
reclaims, as reusable material, virtually 100% of the byproducts
produced. In late 1982, Aeroscientific-Anaheim received notice
from the EPA that it was regarded as a potentially responsible
party ("PRP") under federal environmental laws in connection with
a waste disposal site known as the "Stringfellow Superfund Site"
in Riverside County, California, which is presently being
considered by governmental authorities for remediation.
Aeroscientific-Anaheim has been named as a third party defendant
by other PRPs in a case brought in U.S. District Court for the
Southern District of California in 1984, by the United States
Government. The information developed during discovery and
investigation thus far indicates that Aeroscientific-Anaheim
supplied relatively small amounts of waste to the site as
compared to the many other defendants. As part of the currently
proposed Settlement Agreement, de minimis polluters would pay a
fixed amount plus an amount that varies based on volume of
material dumped at the site. Under these guidelines, the
Company's probable liability will be $120,000. Final settlement
and timing of payment are currently undeterminable, and no
assurances can be given that any settlement will be achieved.
The Company, however, has accrued sufficient liability reserves
to cover the proposed settlement as of fiscal year end 1995. Any
further remedial costs or damage awards in these cases may be
significant and management believes that the Company's allocated
share of such costs or damages could have a material adverse
effect on the Company's business or financial condition. The
actions are still in the pre-trial and discovery stages and a
prediction of outcome is difficult. There is, as in the case of
most environmental litigation, the theoretical possibility of
joint and several liability being imposed upon Aeroscientific for
damages which may be awarded. Total estimated cleanup costs for
the Stringfellow site have been estimated at $600 million. The
Company's possible range of liability is undeterminable, and the
reliability and precision of estimated cleanup costs are subject
to a myriad of factors which are not currently measurable.
The Company is aware of certain chemicals that exist in the
ground at its previously leased facility at 1240-1244 South
Claudina Street, Anaheim, California. The Company has notified
the appropriate governmental agencies and is proceeding with
remediation and investigative studies regarding soil and
groundwater contamination. The Company believes that it will be
required to implement a continuing remedial program for the site,
the cost of which is currently unknown. The installation of
water and soil extraction wells was completed in August 1994. A
plan for soil remediation was completed about the same time and
was submitted to regulatory authorities. The full extent of
potential ground water pollution could not be determined given
preliminary estimates. The Company retained the services of
Harding Lawson and Associates in May 1995 to begin the vapor
extraction of pollutant from the soil and to perform exploratory
hydro-punch testing to determine the full extent and cost of the
potential ground water contamination. These processes are in
their preliminary stages and a complete and accurate estimate of
the full and potential costs cannot be determined at this time.
The Company believes that the resolution of these matters will
require a significant cash outlay. Initial estimates from
Harding Lawson indicate that it could cost as much as $3,000,000
for full remediation of the site and take over ten years to
complete. The Company and Aeroscientific entered into an
agreement to share the costs of environmental remediation with
the landlord at the Anaheim facility. Under this agreement, the
Company is obligated to pay 80% of the site's total remediation
costs up to $725,000 (i.e., up to the Company's share of
$580,000) with any costs above $725,000 being shared equally
between the Company and the landlord. To date, the Company has
paid $239,000 as its share of the remediation costs. The Company
anticipates that its share of the final remediation cost should
approximate the amount it has presently reserved. Under the
current remediation agreement, the Company is making monthly
payments of approximately $18,000 through the end of the current
fiscal year. Management believes that the Company has the
ability to make these payments when due.
From time to time the Company is also involved in other waste
disposal remediation efforts and proceedings associated with its
other facilities. Based on information currently available to
the Company, management does not believe that the costs of such
efforts and proceedings will have a material adverse effect on
the Company's business or financial condition.
Headquarters Operations
The Company maintains its corporate headquarters in a 3,000
square foot leased building located in Tigard, Oregon. In
addition to executive officers, 5 employees work in the Company's
headquarters. The Company's headquarters operations include the
management of the Company's operating subsidiaries on a
consolidated basis, the arranging of financing for those
operations and capital expenditures and the management of the
remaining assets of the Company's discontinued United States
operations.
Employees. The Company currently employs approximately 340
persons.
Item 2. Properties
The following table lists principal plants and properties of
the Company and its subsidiaries:
Owned
Square or
Location Footage Leased
ECM and PCB fabrication businesses:
Tigard, Oregon 3,000 Leased
Chatsworth, California (sublet during
fiscal 1995) 48,000 Leased
Craigavon, Northern Ireland 63,000 Owned
Craigavon, Northern Ireland 67,000 Owned
Craigavon, Northern Ireland 9,000 Owned
The Northern Ireland properties are pledged as security
for installment loans payable to the Industrial Development Board
for Northern Ireland from which the properties were purchased.
These loans had an aggregate outstanding balance of approximately
$1,350,000 at June 30, 1995.
The Company's Tigard, Oregon headquarters facility is
leased for a two year term expiring on January 6, 1997 from an
unaffiliated third party. Rent on the headquarters is paid
monthly in advance. Management believes that the Tigard
facilities are adequate to meet the Company's needs for the
foreseeable future.
Item 3. Legal Proceedings
As to other litigation matters that are not specifically
described under the caption "General - Environmental Regulation',
Item 1 above, no material legal proceedings are presently pending
to which the Company or any of its property is subject, other
than ordinary routine litigation incidental to the Company's
business
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Shareholders on May 31, 1995, Bernee
D.L. Strom and Erven Tallman were elected as Class II directors
by the shareholders, replacing former Class II directors Rockell
N. Hankin and John F. Coyne. Election of Directors was the only
matter proposed at the Annual Meeting of Shareholders. The
results of the election are as follows:
FOR WITHHELD
John F. Coyne 2,743,980 42,782
Rockell N. Hankin 2,744,980 41,782
Bernee D. L. Strom 9,988,812 28,458
Erven Tallman 9,988,812 28,458
In recognition of the shareholder vote, and prior to the
certification of the results by the independent inspectors of
election, John F. Coyne and Rockell N. Hankin resigned from the
Board of Directors immediately following the Annual Meeting of
Shareholders. At a meeting of the Board, the remaining Directors
accepted these resignations and elected Bernee D. L. Strom and
Erven Tallman to fill the vacancies and to serve as directors
pending certification of the election results. Solicitation for
election of Ms. Strom and Mr. Tallman as Class II Directors was
made by an opposition shareholder committee known as
"Shareholders Committee to Remove a Moribund Management"
("SCRMM"). A Settlement Agreement was entered into between the
departing Board members of management and SCRMM that, among other
things, provided for the election, without dispute, of Ms. Strom
and Mr. Tallman as Directors, required the resignation, without
dispute, of William E. Cook, the acceptance and recognition by
SCRMM of prior company employment and severance agreements with
management, and provision for payment of proxy solicitation
expenses of DDL up to $150,000 paid by the Company and a similar
amount paid for SCRMM's proxy solicitation expenses.
PART II
Item 5. Market for Registrant's Common Stock and Related
Stockholder Matters
The information set forth under the caption "Market
Information" on page 35 of the Company's 1995 Annual Report to
Shareholders is incorporated herein by reference and made a part
hereof.
Item 6. Selected Financial Data
The information set forth under the caption "Selected
Financial Data" on page 2 of the Company's 1995 Annual Report to
Shareholders is incorporated herein by reference and made a part
hereof.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The information set forth under the caption "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" on pages 3 through 12 of the Company's 1995 Annual
Report to Shareholders is incorporated herein by reference and
made a part hereof.
Item 8. Financial Statements and Supplementary Data
The consolidated financial statements set forth on page 14
through 34 of the Company's 1995 Annual Report to Shareholders,
and the report of independent public accountants set forth on
page 13 of said Annual Report, with respect to the consolidated
financial statements, are incorporated herein by reference and
made a part hereof.
Item 9. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure
Effective June 13, 1994, Price Waterhouse was dismissed as
DDL Electronic's Inc.'s independent accountants for fiscal
year-end 1994.
Price Waterhouse's report on the financial statements for the
fiscal years 1993 and 1992 contained no adverse opinion or
disclaimer of opinion, nor was it qualified or modified as to
audit scopes or accounting principles, except that as follows:
Price Waterhouse's report dated September 4, 1992 for the
fiscal year ended June 30, 1992 included the following
explanatory paragraph:
"The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. As
discussed in Note 1 to the financial statements, the Company has
suffered recurring losses from operations, has few alternative
financing sources, and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are also
described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty."
The Company's management was given approval by its Board of
Directors and the Board's Audit Committee to retain another
certified accountant after Price Waterhouse required an 80%
increase in its annual service fees.
There has never been any and continues to be no disagreements
between the Company and Price Waterhouse on any matter of
accounting principles or practices, financial statement
disclosure or audit scope or procedure, including up until the
time of Price Waterhouse's dismissal. The Company has given
Price Waterhouse unlimited authority to discuss its audit
practices of the Company with the Company's successor auditor.
The Company retained KPMG Peat Marwick LLP as its new
independent auditors effective June 13, 1994. The Company did not
consult with KPMG Peat Marwick LLP on any accounting or tax
matter prior to Peat Marwick's appointment.
Attached to the Company's Form 8-K, filed June 13, 1994, was
Price Waterhouse's letter addressed to the Commission regarding
its response to Regulation S-K, Item 304. Furthermore, Price
Waterhouse was informed that statements in the Company's 8-K/A,
Item 4(a)(1)(iv) included the period up until the time of Price
Waterhouse's dismissal.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information called for in Item 10 is omitted because the
Company intends to file with the Securities and Exchange
Commission not later than 120 days after the close of the fiscal
year ended June 30, 1995 a definitive Proxy Statement pursuant to
Regulation 14A of the Commission.
Item 11. Executive Compensation
Information called for in Item 10 is omitted because the
Company intends to file with the Securities and Exchange
Commission not later than 120 days after the close of the fiscal
year ended June 30, 1995 a definitive Proxy Statement pursuant to
Regulation 14A of the Commission.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Information called for in Item 10 is omitted because the
Company intends to file with the Securities and Exchange
Commission not later than 120 days after the close of the fiscal
year ended June 30, 1995 a definitive Proxy Statement pursuant to
Regulation 14A of the Commission.
Item 13. Certain Relationships and Related Transactions
Information called for in Item 10 is omitted because the
Company intends to file with the Securities and Exchange
Commission not later than 120 days after the close of the fiscal
year ended June 30, 1995 a definitive Proxy Statement pursuant to
Regulation 14A of the Commission.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
Reference (Page)
Form 10K 1995 Annual
Report to
Stockholders
(a)(1) List of Financial statements:
List of data incorporated by reference:
Consolidated balance sheet at June 30, 1995, and 1994* 14
Consolidated statement of operations for the years
ended June 30, 1995, 1994, and 1993 15
Consolidated statement of stockholders' equity for
the years ended June 30, 1995, 1994, and 1993 17
Consolidated statement of cash flows for the years
ended June 30, 1995, 1994, and 1993 16
Notes to consolidated financial statements 18
Report of KPMG Peat Marwick LLP on consolidated
financial statements 13
* The Company utilizes a 52-53 week fiscal year ending on the
Friday closest to June 30, which, for fiscal years 1995 and 1994,
fell on June 30 and July 1, respectively. For 10K filing
purposes, June 30, 1995, is utilized for the Company's fiscal
year end.
(a)(2) List of Financial statement schedules for the years
ended June 30, 1995, 1994, and 1993:**
Reports of KPMG Peat Marwick LLP and
Price Waterhouse on
financial statement schedules 14
VIII - Valuation and Qualifying
Accounts and Reserves 15
IX - Short-Term Bank Borrowings None
** Schedules other than those listed are omitted since they are
not applicable, not required, or the information required to be
set forth therein is included in the consolidated financial
statements or in the notes thereto.
(a)(3) List of Exhibits:
Exhibit Index 17
(b) Reports on Form 8-K:
During the fourth fiscal quarter, the following reports on
Form 8-K were filed:
On April 11, 1995, a Form 8-K/A was filed pursuant to item 2,
Acquisition or Disposition of Assets, for filing of pro forma
financial information pursuant to Regulation S-X.
On April 20, 1995, a Form 8-K was filed pursuant to item 5,
Other Events, for a press release announcing that William E.
Cook, the Company's Chairman and CEO, had exercised stock options
to purchase 300,000 shares of the Company's common stock.
On May 11, 1995, a Form 8-K was filed pursuant to item 5,
Other Events, for a press release that announced the Company's
fiscal third quarter ended March 31, 1995 operating results.
On June 7, 1995, a Form 8-K was filed pursuant to item 5,
Other Events, for a press release issued June 1, 1995 announcing
the resignation of William E. Cook, the Company's Chairman and
CEO and the results of the Company's annual meeting of
shareholders on May 31, 1995 in which five new directors were
added to the board replacing Mr. Cook and two existing directors.
On June 21, 1995, a Form 8-K was filed pursuant to item 1,
Changes in Control of Registrant, that announced the results of
the Company's May 31, 1995 annual meeting of shareholders and the
change in the Company's Board of Directors and management.
REPORT OF INDEPENDENT
AUDITORS' ON FINANCIAL STATEMENT SCHEDULES
The Board of Directors
DDL Electronics, Inc.
Under date of August 18, 1995, we reported on the consolidated
balance sheets of DDL Electronics, Inc. and subsidiaries as of
June 30, 1995 and 1994, and the related consolidated statements
of operations, stockholders equity, and cash flows for the years
then ended, as contained in the 1995 annual report to
stockholders. These consolidated financial statements and our
report thereon are incorporated by reference in the Annual Report
on Form 10K for the year 1995. In connection with our audit of
the aforementioned consolidated financial statements, we also
audited the related consolidated financial statement schedule as
listed in Item 14(a)(2) of this Form 10K. This financial
statement schedule is the responsibility of the Company's
management. Our responsibility is to express and opinion on this
financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial
statements taken as a whole, present fairly, in all material
respects, the information set forth therein.
KPMG PEAT MARWICK LLP
Portland, Oregon
August 18, 1995
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the
Registration Statement on Form S-8 pertaining to the 1975
Nonqualified Stock Option Plan, the 1980 Employee Stock Option
Plan, the 1981 Incentive Stock Plan, and the 1985 and 1987 Stock
Incentive Plans (No. 33-18356) and the 1991 Nonstatutory Stock
Option Plan (No. 33-45102) of DDL Electronics, Inc. of our Report
dated August 20, 1993, which is incorporated in this Annual
Report on Form 10-K. We also consent to the incorporation by
reference of our report on the Financial Statement Schedules,
which appears in this Form 10-K
Price Waterhouse LLP
September 28, 1995
DDL ELECTRONICS, INC. AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND
QUALIFYING ACCOUNTS AND RESERVES
Balance at Charged to Balance
Beginning Costs and at End
of Period Expenses Deductions of Period
Allowance for doubtful accounts -
Year ended:
June 30, 1993 $748,000 $570,000 $(373,000) $945,000
June 30, 1994 945,000 293,000 (705,000) 533,000
June 30, 1995 533,000 95,000 (446,000) 182,000
Inventory reserves -
Year ended:
June 30, 1993 $275,000 $780,000 $(881,000) $174,000
June 30, 1994 174,000 266,000 (56,000) 384,000
June 30, 1995 384,000 62,000 (290,000) 156,000
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, DDL Electronics, Inc. has duly
caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
DDL Electronics, Inc.
By__/s/ Don A. Raig____________
Don A.Raig Date: September 28, 1995
Interim President and Chief Operating
Officer and Director
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the
dates indicated.
By___/s/ Don A. Raig_____________
Don A.Raig Date: September 28, 1995
Interim President and Chief Operating
Officer and Director
(Principal Financial and Accounting Officer)
_/s/___Erven Tallman_______________
Erven Tallman Date: September 28, 1995
Acting Chairman, Chief Executive Officer and Director
/s/___Rob Wilson____________________
Rob Wilson Date: September 28, 1995
Interim Vice President and Director
/s/____Philip H. Alspach____________
Philip H. Alspach Date: September 28, 1995
Director
/s/____Bernee D. L. Strom__________
Bernee D.L. Strom Date : September 28, 1995
Director
/s/____Melvin Foster______________
Melvin Foster Date: September 28, 1995
Director
EXHIBIT INDEX
3-a Amended and Restated Certificate of Incorporation of
the Company (incorporated by reference to Exhibit 4.2 of the
Company's Registration Statement on Form S-8, Commission File No.
33-7440)
3-b Bylaws of the Company, amended and restated, effective
March 1995
3-c Certificate of Amendment of Certificate of
Incorporation of the Company to increase authorized number of
common shares (incorporated by reference to Exhibit 3-c of the
Company's 1990 Annual Report on Form 10-K)
3-d Certificate of Designation, Preferences and Rights of
Series A Junior Participating Preferred Stock of the Company
(incorporated by reference to Exhibit 4.2 of the Company's
Registration Statement on Form S-8, Commission File No. 33-7440)
3-e Certificate of Designation, Preferences and Rights of
Series B Convertible Preferred Stock of the Company (incorporated
by reference to Exhibit 4.2 of the Company's Registration
Statement on Form S-8, Commission File No. 33-7440)
4-a Indenture dated July 15, 1988, applicable to the
Company's 8-1/2% Convertible Subordinated Debentures due August
1, 2008 (incorporated by reference to Exhibit 4-c of the
Company's 1988 Annual Report on Form 10-K)
4-b Supplemental Indenture relating to the Company's 8-1/2%
Convertible Subordinated Debentures due August 1, 2008
(incorporated by reference to Exhibit 4-b of the Company's 1991
Annual Report on Form 10-K)
4-c Indenture relating to the Company's 7% Convertible
Subordinated Debentures due 2001 (incorporated by reference to
Exhibit 4-c of the Company's 1991 Annual Report on Form 10-K)
4-d Rights Agreement dated as of June 10, 1989, between the
Company and Bank of America, as Rights Agent (incorporated by
reference to Exhibit 1 to the Company's Report on Form 8-K dated
June 15, 1989)
4-e Amendment to Rights Agreement dated as of February 21,
1991, amending the Rights Agreement dated as of June 10, 1989,
between the Company and Bank of America, as Rights Agent
(incorporated by reference to Exhibit 4.7 of Registration
Statement No. 33-39115)
10-a Intentionally not used
10-b 1980 Employee Stock Option Plan (incorporated by
reference to Exhibit 1 of Registration Statement No. 2-69580)
10-c 1981 Incentive Stock Option Plan (incorporated by
reference to Exhibit 4 of Registration Statement No. 2-79576)
10-d 1985 Stock Incentive Plan (incorporated by reference to
Exhibit 4a of Registration Statement No. 33-3172)
10-e 1987 Stock Incentive Plan (incorporated by reference to
Exhibit 4a of Registration Statement No. 33-18356)
10-f Form of Indemnity Agreement with officers and directors
(incorporated by reference to Exhibit 10-o of the Company's 1987
Annual Report on Form 10-K)
10-g Consulting Agreement dated March 26, 1990, between the
Company and Thomas C. Beiseker (incorporated by reference to
Exhibit 10-s of the Company's 1990 Annual Report on Form 10-K)
10-h Standard Industrial Lease-Net dated August 1,
1984, among the Company, Aeroscientific Corp., and Bradmore
Realty Investment Company, Ltd. (incorporated by reference to
Exhibit 10-w of the Company's 1990 Annual Report on Form 10-K)
10-i Net Lease Agreement dated December 2, 1985, among the
Company, Catel Telecommunications, Inc. and Phoenix Mutual life
Insurance Company (incorporated by reference to Exhibit 10-x of
the Company's 1990 Annual Report on Form 10-K)
10-j Agreement dated March 10, 1992, between Irlandus
Circuits Limited and the Industrial Development Board for
Northern Ireland amending the Grant Agreement dated September 16,
1987, between Irlandus and the Industrial Development Board
(incorporated by reference to Exhibit 10-br of the Company's 1992
Annual Report on Form 10-K)
10-k Agreement dated September 10, 1991, between DDL
Electronics Limited and the Industrial Development Board for
Northern Ireland amending the Grant Agreement dated August 29,
1989, between DDL Electronics and the Industrial Development
Board (incorporated by reference to Exhibit 10-bt of the
Company's 1992 Annual Report on Form 10-K)
10-l Agreement dated November 22, 1991, between DDL
Electronics Limited and the Industrial Development Board for
Northern Ireland amending the Grant Agreement dated August 29,
1989, between DDL Electronics and the Industrial Development
Board (incorporated by reference to Exhibit 10-bu of the
Company's 1992 Annual Report on Form 10-K)
10-m Agreement dated March 9, 1992, between DDL Electronics
Limited and the Industrial Development Board for Northern Ireland
amending the Grant Agreement dated August 29, 1989, between DDL
Electronics and the Industrial Development Board (incorporated by
reference to Exhibit 10-bv of the Company's 1992 Annual Report on
Form 10-K)
10-n Agreement dated June 22, 1992, between DDL Electronics
Limited and the Industrial Development Board for Northern Ireland
amending the Grant Agreement dated August 29, 1989, between DDL
Electronics and the Industrial Development Board (incorporated by
reference to Exhibit 10-bw of the Company's 1992 Annual Report on
Form 10-K)
10-o Standard Offer, Agreement and Escrow Instructions for
Purchase of Real Estate dated July 15, 1992, between Mark Lainer
and/or Nominee and the Company's A.J. Electronics, Inc.
subsidiary (incorporated by reference to Exhibit 10.1 of the
Company's Quarterly Report on Form 10-Q for the quarter ended
October 2, 1992)
10-p Standard Industrial Lease - Net dated October 15, 1992,
between L.N.M. Corporation-Desert Land Managing Corp. and the
Company's A.J. Electronics, Inc. subsidiary (incorporated by
reference to Exhibit 10.2 of the Company's Quarterly Report on
Form 10-Q for the quarter ended October 2, 1993)
10-q Standard Offer, Agreement and Escrow Instructions for
Purchase of Real Estate dated October 19, 1992, between Business
Ventures Corporation and the Company (incorporated by reference
to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q
for the quarter ended January 1, 1993)
10-r Form of Exchange Agreement between certain holders of
the Company's 7% and 8-1/2% Convertible Subordinated Debentures
and the Company dated as of November 11, 1992 (incorporated by
reference to Exhibit 10.2 of the Company's Quarterly Report on
Form 10-Q for the quarter ended January 1, 1993)
10-s Warrant Agreement by and between the Company and
American Stock Transfer & Trust Company dated as of November 11,
1992 (incorporated by reference to Exhibit 28.2 of the Company's
Current Report on Form 8-K dated January 7, 1993)
10-t Lease Modification and Termination Agreement and
Promissory Note, dated April 28, 1993, between the Company and
Phoenix Home Life Mutual Insurance Company (incorporated by
reference to Exhibit 10.1 of the Company's Quarterly Report on
Form 10-Q for the quarter ended April 2, 1993)
10-u Form of Exchange Agreement between certain holders of
the Company's 7% and 8-1/2% Convertible Subordinated Debentures
and the Company dated May 14, 1993 (incorporated by reference to
Exhibit 28.2 of the Company's Current Report on Form 8-K dated
May 19, 1993)
10-v Amendment to Lease Modification and Termination
Agreement, dated June 11, 1993, between the Company and Phoenix
Home Life Mutual Insurance Company (incorporated by reference to
Exhibit 10-bz of Registration Statement No 33-63618)
10-w Form of Exchange Agreement between certain holders of
the Company's 7% and 8-1/2% Convertible Subordinated Debentures
and the Company dated June 24, 1993 (incorporated by reference to
Exhibit 10-ca of Registration Statement No. 33-63618)
10-x Stock Purchase Agreement, dated July 7, 1993, between
Meret Optical Communications, Inc. and the Company (incorporated
by reference to Exhibit 10-cb of Registration Statement No.
33-63618)
10-y Second Amendment to Lease among Bradmore Realty
Investment Company, Ltd., the Company and the Company's
Aeroscientific Corp. subsidiary, dated July 2, 1993 (incorporated
by reference to Exhibit 10-cd of Registration Statement No.
33-63618)
10-z 1991 General Nonstatutory Stock Option Plan adopted on
December 31, 1991 (incorporated by reference to Exhibit 10-cf of
the Company's 1993 Annual Report on Form 10-K)
10-aa Form of Series B preferred Stock Purchase
Agreement between the Company and the Industrial Development
Board for Northern Ireland (incorporated by reference to Exhibit
10.2 to the Company's Report on Form 8-K dated October 22, 1993)
10-ab Data-Design Laboratories, Inc. 1993 Stock
Incentive Plan (incorporated by reference to Exhibit 4.7 of the
Company's Registration Statement on Form S-8, Commission file No.
33-74400)
10-ac Data-Design Laboratories, Inc. Non-Employee
Directors Stock Option Plan (incorporated by reference to Exhibit
4.8 of the Company's Registration Statement on Form S-8,
Commission File No. 33-74400)
10-ad Form of Land Registry for the Company's Northern
Ireland subsidiaries dated November 4, 1993 (incorporated by
reference to Exhibit 10.1 of the Company's Quarterly Report of
Form 10-Q for the quarter ended September 30, 1993)
10-ae Form of Guaranty by the Company's Northern Ireland
subsidiaries dated November 4, 1993 in favor of The Tokai Bank,
Ltd. and First Interest Bank of Oregon (incorporated by reference
to Exhibit 10.2 of the Company's Quarterly Report of Form 10-Q
for the quarter ended September 30, 1993)
10-af Form of Guaranty by the Company's Northern Ireland
subsidiaries dated November 4, 1993 in favor of Sanwa Bank
California (incorporated by reference to Exhibit 10.3 of the
Company's Quarterly Report of Form 10-Q for the quarter ended
September 30, 1993)
10-ag Form of Severance Agreement for Key Employees of
the Company (incorporated by reference to the Company's 1994
Annual Report on Form 10-K)
10-ah Subscription Agreement for 760,000 shares of DDL
Electronics, Inc.'s Common Stock (incorporated by reference to
Exhibit 10a of the Company's Quarterly Report of Form 10Q for the
quarter ended September 30, 1994)
10-ai Asset Purchase Agreement by and between Yamamoto
Manufacturing USA Inc. ("Buyer") and Aeroscientific Corp.
("Seller") (incorporated by reference to Exhibit 10a of the
Company's Report on Form 8K dated November 2, 1994)
10-aj Asset Purchase Agreement by and between Raven
Industries, Inc., A.J. Electronics, Inc. and DDL Electronics,
Inc. (incorporated by reference to Exhibit 2.1 of the Company's
Report on Form 8K dated January 17, 1995)
10-ak Closing Settlement Statement executed by A.J.
Electronics Inc., DDL Electronics, Inc. and Raven Industries,
Inc. (incorporated by reference to Exhibit 2.2 of the Company's
Report on Form 8K dated January 17, 1995)
10-al Non-Competition and Non-Disclosure Agreement
between A.J. Electronics and Raven Industries, Inc. (incorporated
by reference to Exhibit 2.3 of the Company's Report of Form 8K
dated January 17, 1995)
10-am Payoff Agreement between Sanwa Bank California and
the Company dated December 29, 1994
10-an Termination Agreement between First Interstate
Bank of Oregon, N.A., the Tokai Bank Ltd. and the Company dated
December 29, 1994
10-ao Employment Agreement between DDL Electronics, Inc.
and William E. Cook
10-ap Settlement Agreement between DDL Electronics, Inc.
and opposition shareholders committee (SCRMM)
11 Statement re: Computation of Per Share Earnings.
13 Annual Report to security holders
16 Letter from Price Waterhouse regarding dismissal as
independent accountants (incorporated by reference to Exhibit 16
of the Company's 1994 Annual Report on Form 10K)
21 Subsidiaries of the Registrant
23a Consent of KPMG Peat Marwick, LLP
23b Consent of Price Waterhouse, LLP
27 Financial Schedule for electronic filers
99 Undertaking for Form S-8 Registration Statement