SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO FORM 10-K
ON
FORM 10-K/A
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934
For the fiscal year ended December 31, 1998 [ X ]
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OR THE
SECURITIES ACT OF 1934
For the transition period from ........................to .....................
Commission file number 0-12489
SPECTRAN CORPORATION
............................................................................
(Exact name of the registrant as specified in its charter)
Delaware 04-2729372
..................................... .............
State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization
50 Hall Road, Sturbridge, Massachusetts 01566
...................................................... ............
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (508) 347-2261
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange Title of each class which registered
None Not Applicable
.......... ..................
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 par value
. ..............................................................................
(Title of class)
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 the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]
15 - Acquisitions/Joint Venture
a) Applied Photonic Devices, Inc.
On May 23, 1995 the Company purchased all the outstanding capital stock
of Applied Photonic Devices, Inc. ("APD") for cash and common stock worth
approximately $3.9 million. The Company also retired approximately $600,000 of
APD bank debt. The purchase method of accounting was used and the results of
operations of APD are included in the consolidated financial statements from May
23, 1995. Goodwill of $3.3 million resulted from the purchase and was being
amortized over 15 years. Amortization expense amounted to $217,000 in 1996.
In December 1996, the Company announced the formation of General
Photonics, a 50-50 joint venture between the Company and General Cable. General
Cable purchased certain assets of the Company's optical fiber cable subsidiary,
APD, for approximately $5.8 million and then contributed them to General
Photonics for a 50% equity interest. APD contributed its remaining assets to
General Photonics in exchange for its 50% equity interest. The net assets,
including goodwill, of General Photonics totaled $10.2 million at December 31,
1996. The Company accounts for its interest in the joint venture under the
equity method and no gain or loss was recognized as a result of this
transaction.
The following pro forma statement of operations for the year ended
December 31, 1996 presents the results of operations as if the Company had
entered into the joint venture as of January 1, 1996 (in thousands):
Statement of Operations (unaudited)
1996
Sales $51,413
Net Income $ 3,716
-------
Net income per Share of Common Stock $ .63
=======
b) General Photonics, LLC.
The following is summarized financial information for the Company's
joint venture.
1998 1997
---- ----
Currents Assets $ 4,600 $ 7,006
Other Assets 4,480 3,908
Current Liabilities 1,853 1,640
Total Revenues $ 9,507 $12,583
Net Income $(2,047) $ (708)
17 - Quarterly Financial Information (unaudited)
In thousands of dollars except per share data
Quarters First Second Third Fourth
- ----------------------------------------- ---------- ------------ ------------ ----------
1998
Net Sales (See A) $15,112 $16,358 $19,288 $20,098
Gross Profit 5,111 2,553 5,414 5,801
Net Income 864 (1,393) 504 536
Earnings per Common
Share-Basic .(20) .07 .08 .12
Earnings per Common
Share-Diluted (.20) .07 .08 .12
1997
Net Sales $16,228 $15,881 $15,638 $14,310
Gross Profit 6,542 5,777 4,795 6,162
Net Income 1,122 1,151 1,239 1,330
Earnings per Common
Share-Basic .18 .19 .17 .18
Earnings per Common
Share-Diluted .17 .18 .16 .17
A) Due to a change in accounting treatment of certain fiber sales, sales and
cost of sales for the first three quarters of 1998 were reduced by
$115,000, $674,000 and $775,000, respectively. This change had no effect on
previously reported net income or earnings per share.
SIGNATURES
"Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SPECTRAN CORPORATION
REGISTRANT
Dated:
June 30, 1999 /s/Charles B. Harrison
Charles B. Harrison
President,
Chief Executive Officer and
Chairman of the Board of Directors
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
General Photonics, LLC:
We have audited the accompanying balance sheets of General Photonics, LLC (a
joint venture) as of December 31, 1998 and 1997, and the related statements of
operations, partners' equity, and cash flows for the year ended December 31,
1998 and for the period from December 23, 1996 (date of incorporation) to
December 31, 1997. These financial statements are the responsibility of General
Photonics, LLC's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of General Photonics, LLC at December 31, 1998
and 1997, and the results of its operations, its partners' equity and its cash
flows for the year ended December 31, 1998 and for the period from December 23,
1996 (date of incorporation) to December 31, 1997 in conformity with generally
accepted accounting principles.
The accompanying financial statements for the year ended December 31, 1998 have
been prepared assuming that the Joint Venture will continue as a going concern.
As discussed in Note 3 to the financial statements, the Joint Venture's
recurring losses, the demand notes due the Joint Venture partners and its
dependence on its Joint Venture partners as both sources of funding and as key
suppliers/customers, raise substantial doubt about its ability to continue as a
going concern. Management's plans concerning these matters are also described in
Note 3. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
As described in Note 3, the Joint Venture is dependent on its partners for a
majority of its sales, its inventory purchases, its support activities and its
short-term cash flow needs. The accompanying financial statements may not
necessarily be indicative of the conditions that would have existed or the
results of operations had the Joint Venture been operated as an unaffiliated
entity.
February 16, 1999
GENERAL PHOTONICS, LLC (A Joint Venture)
BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
ASSETS 1998 1997
CURRENT ASSETS:
Cash $ 924,234 $ 622,627
Accounts receivable - Joint Venture Partners 913,297 1,292,590
Accounts receivable - trade (net of allowance for doubtful accounts
of $214,000 and $367,000 in 1998 and 1997, respectively) 246,363 231,511
Inventories 2,487,561 4,845,334
Other current assets 28,778 13,869
----------- ----------
Total current assets 4,600,233 7,005,931
PLANT AND EQUIPMENT, Net 1,970,252 1,188,511
GOODWILL, Net of accumulated amortization of $433,999 and $215,999
in 1998 and 1997, respectively 2,477,565 2,695,565
OTHER NONCURRENT ASSETS 31,749 23,719
TOTAL ASSETS $ 9,079,799 $ 10,913,726
============ ============
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES:
Notes payable to Joint Venture partners $ 650,000 $ 400,000
Accounts payable -Joint Venture Partners 560,323 274,480
Accounts payable - trade 340,666 708,204
Accrued payroll 207,226 235,606
Accrued liabilities 95,709 22,089
------------- ----------
Total current liabilities 1,853,924 1,640,379
PARTNERS' EQUITY 7,225,875 9,273,347
----------- -----------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 9,079,799 $ 10,913,726
=========== ============
See notes to financial statements.
Exhibit 10.122
GENERAL PHOTONICS, LLC (A Joint Venture)
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998 AND
PERIOD FROM DECEMBER 23, 1996 (DATE OF
INCORPORATION) TO DECEMBER 31, 1997
1998 1997
SALES:
Joint Venture Partners $ 8,184,940 $ 7,809,691
Other 1,322,134 4,773,628
----------- ----------
Total sales 9,507,074 12,583,319
COST OF SALES 9,085,011 10,549,476
----------- ----------
GROSS PROFIT 422,063 2,033,843
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 2,425,468 2,724,792
----------- ----------
OPERATING LOSS (2,003,405) (690,949)
INTEREST EXPENSE (44,067) (17,000)
----------- ----------
NET LOSS $(2,047,472) $ (707,949)
=========== ============
See notes to financial statements.
GENERAL PHOTONICS, LLC (A Joint Venture)
STATEMENTS OF PARTNERS' EQUITY
YEAR ENDED DECEMBER 31, 1998 AND
PERIOD FROM DECEMBER 23, 1996 (DATE OF
INCORPORATION) TO DECEMBER 31, 1997
General Applied
Cable Photonic
Industries Devices, Inc. Total
PERCENTAGE INTEREST 50% 50% 100%
DECEMBER 23, 1996 (Date of incorporation) $ -- $ -- $ --
Contribution of assets 5,900,891 4,080,405 9,981,296
Net loss for the period from December 23, 1996 (date of
incorporation) to December 31, 1997 (353,975) (353,974) (707,949)
--------- ---------- ----------
DECEMBER 31, 1997 5,546,916 3,726,431 9,273,347
Net loss for the year ended December 31, 1998 (1,023,736) (1,023,736) (2,047,472)
---------- ----------- ----------
DECEMBER 31, 1998 $ 4,523,180 $ 2,702,695 $ 7,225,875
=========== =========== ===========
See notes to financial statements.
GENERAL PHOTONICS, LLC (A Joint Venture)
STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1998 AND
PERIOD FROM DECEMBER 23, 1996 (DATE OF
INCORPORATION) TO DECEMBER 31, 1997
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (2,047,472) $ (707,949)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 528,242 431,573
Loss on sale of equipment 1,498 --
Changes in operating assets and liabilities:
Accounts receivable, trade (14,852) 2,090,192
Accounts receivable - Joint Venture Partners 379,293 (1,292,590)
Inventories 2,357,773 (723,263)
Other assets (22,939) 19,014
Accounts payable and accrued expenses (322,298) 377,434
Accounts payable - Joint Venture Partners 285,843 274,480
------------- ------------
Net cash provided by operating activities 1,145,088 468,891
------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment (1,101,481) (446,264)
Proceeds from sale of equipment 8,000 --
------------- -----------
Net cash used in investing activities (1,093,481) (446,264)
------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from demand notes payable to Joint Venture Partners 250,000 400,000
Contribution of cash by Joint Venture Partners -- 200,000
------------- ------------
Net cash provided by financing activities 250,000 600,000
------------- ------------
INCREASE IN CASH 301,607 622,627
CASH, BEGINNING OF PERIOD 622,627 --
CASH, END OF PERIOD $ 924,234 $ 622,627
============ =============
See notes to financial statements.
GENERAL PHOTONICS, LLC (A Joint Venture)
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998 AND PERIOD FROM DECEMBER 23, 1996
(DATE OF INCORPORATION) TO DECEMBER 31, 1997
- --------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
General Photonics, LLC (the "Joint Venture") is a joint venture
incorporated on December 23, 1996 between General Cable Industries ("GCI")
(a wholly owned subsidiary of General Cable Corporation ("General Cable"))
and Applied Photonic Devices, Inc. ("APD") (a wholly owned subsidiary of
SpecTran Corporation ("SpecTran")) with each owning a fifty percent equity
interest in the Joint Venture. The Joint Venture engages in the
development, design, manufacture and marketing of fiber-optic cable for
the communication and electrical markets. At December 31, 1998, the Joint
Venture operated one manufacturing facility in the state of Connecticut,
which also included the Joint Venture's corporate office.
The Joint Venture is also provided certain administrative, technical and
marketing support by the Joint Venture partners under services and support
agreements and has been dependent on its partners to finance its
operations. The accompanying financial statements may not necessarily be
indicative of the conditions that would have existed or the results of
operations had the Joint Venture been operated as an unaffiliated entity.
2. SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition - Revenue is generally recognized when shipments are
made or when title and risk of loss passes to the customer.
Inventories - Inventories are stated at the lower of cost or market value,
cost being determined using the first-in, first-out method.
Goodwill - Goodwill associated with the assets contributed to the Joint
Venture is recorded at its carryover basis and is being amortized on a
straight-line basis over its remaining life of twelve and one-half years.
The Joint Venture evaluates the carrying value of goodwill based upon
current and anticipated operations and undiscounted cash flows, and
recognizes an impairment when it is probable that such estimated future
net income and/or cash flows will be less than the carrying value of
goodwill. Measurement of the amount of impairment, if any, is based upon
the difference between carrying value and estimated fair value.
Plant and Equipment - Plant and equipment contributed to the Joint Venture
have been recorded at its carryover basis from APD. Plant and equipment
acquired subsequent to December 23, 1996 are recorded at cost.
Depreciation is provided using the straight-line method over the remaining
useful lives of the related assets as follows:
Years
Leasehold improvements Remaining life of leases
Machinery and equipment 1-5 years
Other 1-5 years
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Concentration of Credit Risk - The Joint Venture sells a majority of its
product through GCI, and as a result, a majority of the Joint Venture's
trade receivables are due from GCI. Sales to GCI approximated 86% and 62%
of total sales for the year ended December 31, 1998 and for the period
from December 23, 1996 to December 31, 1997, respectively, and comprised
77% and 83% of net accounts receivable at December 31, 1998 and 1997,
respectively.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Income Tax Status - The Joint Venture has claimed special tax status as a
limited liability corporation. Under present income tax regulations, the
Joint Venture pays no federal or state income tax. Any income or loss for
tax purposes is included in the tax returns of the Joint Venture's
partners.
New Accounting Pronouncements - On January 1, 1998, the Joint Venture
adopted the provisions of Statement of Financial Accounting Standard
("SFAS") No. 130, "Reporting Comprehensive Income." Statement No. 130
requires the reporting of comprehensive income in addition to net income
from operations. Comprehensive income is a more inclusive financial
reporting methodology that includes disclosure of certain financial
information that historically has not been recognized in the calculation
of net income. Comprehensive income encompasses all changes in partners'
capital (except those arising from transactions with partners). The Joint
Venture had no other components of comprehensive income. As this new
standard only requires additional information in the financial statements,
it does not affect the Joint Venture's financial position or results of
operations.
In June 1998, the Financial Accounting Standards Board (the "FASB") issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," which the Joint Venture is required to adopt effective
January 1, 2000. SFAS No. 133 will require the Joint Venture to record all
derivatives on the balance sheet at fair value. The impact of SFAS No. 133
on the Joint Venture's financial statements will depend on a variety of
factors, including future interpretative guidance from the FASB and the
extent of the Joint Venture's derivative instruments and hedging
activities.
Reclassifications - Certain amounts within the 1997 financial statements
have been reclassified to conform with the presentation in 1998.
3. FUNDING OF OPERATIONS
As shown in the financial statements, the Joint Venture incurred net
losses of $2,047,472 and $707,949 for the year ended December 31, 1998 and
the period from December 23, 1996 to December 31, 1997, respectively. The
Joint Venture's operating losses and working capital needs have been
funded principally by the initial capital infusion and loans from the
Joint Venture partners. As discussed in Note 10, the Joint Venture
purchases a substantial portion of its inventory from one of the venture
partners and sells and distributes its products through its other venture
partner. Such transactions are solely in the control of the Joint Venture
partners since the purchase and sale obligations are not contractual as to
amounts. In addition, the Joint Venture partners have not committed to
continue funding the losses of the Joint Venture, nor have they asserted
that existing short-term loans will not be called.
During 1998, management took a series of steps to reduce expenses and
inventory levels and restructure operations in response to a downturn in
the fiber-optic industry. This resulted in cash flow from operating
activities of $1,145,088 for 1998. Management will continue to reduce
expenses and inventory levels in 1999. This inventory reduction, coupled
with preliminary projections of orders from one of its Joint Venture
partners and third parties, leads management to conclude that positive
cash flow will result from operations. These projections exclude a
reduction of cash flows associated with the demand notes due to the Joint
Venture partners.
As a result of these steps, management believes that the Joint Venture
will have sufficient capital to fund operations through December 31, 1999.
However, given the above-mentioned dependence on the Joint Venture
partners, the outstanding demand notes due to the partners, and the
uncertainty concerning the intentions of the partners relative to the
Joint Venture, there is no assurance that management's projections can be
achieved.
4. FORMATION OF THE JOINT VENTURE
On December 23, 1996, GCI and APD contributed certain assets and
transferred certain liabilities to create the Joint Venture. The assets
and liabilities contributed were recorded by the Joint Venture at the
carryover basis of the two Joint Venture partners.
Contributed to the Joint Venture by GCI were:
Cash $ 100,000
Accounts receivable 1,678,820
Inventory 4,122,071
-----------
$5,900,891
Contributed to the Joint Venture by APD were:
Cash $ 100,000
Accounts receivable 642,883
Prepaid expenses 44,915
Plant and equipment, net 957,821
Goodwill 2,911,564
Other assets 11,687
Accounts payable (542,032)
Accrued expenses (46,433)
----------
$4,080,405
The Joint Venture was incorporated as a limited liability corporation by
GCI and APD, subject to a contractual agreement (the "LLC Agreement"). The
duration of the Joint Venture is perpetual; however, provisions in the LLC
Agreement provide for the dissolution of the Joint Venture dependent upon
certain events and approval of the other Joint Venture partners. Gains and
losses resulting from the Joint Venture's operations are allocated equally
to the partners' capital accounts. The Joint Venture is required to
distribute cash to the Joint Venture partners, subject to certain
financial ratios. No such amounts were due to the Joint Venture partners
at December 31, 1998 and 1997.
5. INVENTORIES
The following comprised inventories at December 31:
1998 1997
---- ----
Raw materials $ 356,143 $ 1,649,286
Work in process 1,186,188 1,953,867
Finished goods 945,230 1,242,181
--------------- -------------
Total $ 2,487,561 $ 7,845,334
-------------- -------------
6. PLANT AND EQUIPMENT
The following comprised plant and equipment at December 31:
1998 1997
Leasehold improvements $ 121,635 $ 92,337
Machinery and equipment 2,168,136 706,134
Other 143,291 154,488
Construction in progress 54,696 451,126
-------------- ------------
Total $ 2,487,758 $ 1,404,085
Less accumulated depreciation 517,506 215,574
Plant and equipment, net $ 1,970,252 $ 1,188,511
============= ============
7. DEMAND NOTES PAYABLE TO PARTNERS
On June 5, 1997, the Joint Venture entered into two separate $200,000
demand promissory notes with both GCI and SpecTran. The notes bear
interest at 7.5% annually with interest due each calendar quarter and the
full note payable on demand. One payment of interest has been made to
date. SpecTran was paid $4,792 for the period June 5, 1997 to September
30, 1997. On April 2, 1998, the Joint Venture entered into two additional
and separate $125,000 demand promissory notes with both GCI and SpecTran
under similar terms. Accrued interest of $56,275 and $12,208 is included
in accrued liabilities at December 31, 1998 and 1997, respectively.
8. LEASES
The Joint Venture is obligated for lease payments for one facility located
in Dayville, Connecticut. Future minimum payments required under operating
leases approximate $242,000 in the years 1999 and 2000 and $40,000 in
2001.
In addition to the base rent above, the lease contains requirements for
"common charges" to be paid monthly. Common charges were fixed at $4,400
per month with an annual reconciliation to actual expenses due in the
first quarter of each year. Total rent expense and common charges charged
to operations for operating leases approximated $296,000 and $193,000 for
the year ended December 31, 1998 and for the period December 23, 1996 to
December 31, 1997, respectively.
9. COMMITMENTS
The Joint Venture had issued purchase orders totaling $68,000 prior to
December 31, 1998 to procure capital equipment. As of December 31, 1998,
the equipment had not yet been received and no payments have been made.
10. RELATED-PARTY TRANSACTIONS
The Joint Venture has entered into the following agreements with GCI and
SpecTran and/or its affiliates:
Optical Fiber Purchases - Under a fiber supply agreement, the Joint
Venture is required to purchase all of its optical fiber from SpecTran
Communication Fiber Technologies, Inc. ("SCFT") (a wholly owned
subsidiary of SpecTran). Pursuant to the fiber supply agreement, SCFT
may purchase optical fiber from other companies and resell such fiber
to the Joint Venture. Under the fiber supply agreement, all purchases
of fiber from SCFT by the Joint Venture are to be at the lowest price
offered by SCFT to other customers for substantially the same or
comparable products based upon similar volume and product mix.
Purchases by the Joint Venture totaled approximately $2,424,000 and
$4,449,000 for the year ended December 31, 1998 and for the period
December 23, 1996 to December 31, 1997, respectively. Amounts owed to
SCFT for purchases of optical fiber at December 31, 1998 and 1997 were
approximately $484,000 and $274,000, respectively.
Fiber-Optic Cable Sales - Under a product purchase agreement, the Joint
Venture is required to supply GCI with all of its fiber-optic cable
requirements. The selling price to GCI is dependent upon prevailing
market rates and a standard sales discount to GCI. In accordance with
the product purchase agreement, the discount offered to GCI for 1998
and 1997 ranged from 6.3% to 12.1% off the market price and will be
reset in the first quarter of 1999. Sales under the product purchase
agreement totaled approximately $8,185,000 and $7,809,000 for the year
ended December 31, 1998 and the period December 23, 1996 to December
31, 1997, respectively. At December 31, 1998 and 1997, GCI's inventory,
approximating $900,000 and $425,000, respectively, was stored at the
Joint Venture for the convenience of GCI. A fee is charged for such
storage in the form of a reduced sales discount of 5.8%. Outstanding
receivables due from sales of products to GCI at December 31, 1998 and
1997 totaled approximately $897,000 and $1,268,000, respectively.
Administrative Services and Technical Assistance - Under an
administrative services and technical assistance agreement, each of the
Joint Venture partners provides certain assistance to the Joint
Venture. Through the years ended December 31, 1998 and 1997, GCI
provided corporate tax assistance and SpecTran provided administrative
and management information services assistance. No fees were charged or
are due to the partners under this agreement.
Sales and Marketing Support - Under a sales and marketing support
agreement, GCI Joint Venture. The Joint Venture's obligations under
this agreement include providing GCI with product training, product
inspection and field service support. This agreement is effective until
the termination of the LLC Agreement. No fees were charged or are due
to GCI under this agreement.
Other - The Joint Venture purchases certain raw materials from GCI and
sells inventory to SpecTran. Purchases from GCI in 1998 approximated
$106,000, and $75,700 is included in accounts payable at December 31,
1998. No amounts were purchased from GCI in 1997. Sales to SpecTran
totaled $35,400 and $58,600 during 1998 and 1997, respectively. Amounts
totaling $16,173 and $24,100 are included in accounts receivable for
SpecTran purchases at December 31, 1998 and 1997, respectively.
11. PENSION PLAN
The Joint Venture sponsors the General Photonics, LLC 401(k) Plan (the
"Plan"), under which employees may make contributions to their respective
accounts. The Plan generally covers all full-time employees of the Joint
Venture who have completed ninety days of service and have reached the age
of twenty-one. The Joint Venture, at its discretion, may make matching
contributions equal to 100% of the employees' savings contributions up to
3% of their compensation, plus 50% of their salary savings contributions
in excess of 3% of compensation but not to exceed 5% of their
compensation. The Joint Venture may (but is not required to) make
additional 401(k) employer contributions to participants' accounts.
Employer contributions were approximately $42,100 and $47,600 for the year
ended December 31, 1998 and for the period December 23, 1996 to December
31, 1997, respectively.
The Plan commenced June 5, 1997. Prior to this date, employees were
covered under the SpecTran retirement plan. Employee account balances
under the SpecTran retirement plan were transferred to the Plan.
12. EVENT (UNAUDITED) SUBSEQUENT TO THE DATE OF THE INDEPENDENT AUDITORS' REPORT
On June 30, 1999, BICC General Cable Industries (formerly General Cable
Industries) purchased APD's 50% interest in the Joint Venture for
$2,367,200. Additionally, loans totaling $325,000 were repaid to APD by
the Joint Venture. Pursuant to this sale, the LLC Agreement was terminated
and the Joint Venture was dissolved.
Exhibit 10.123
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in (i) Registration Statement No.
333-60965 on Form S-8, and (ii) Registration Statement No. 33-46581 on Form S-8,
of our report dated February 16, 1999 on the financial statements of General
Photonics LLC, appearing in Exhibit 10.122 to the Annual Report on Form 10-K/A
of SpecTran Corporation for the year ended December 31, 1998 as filed on, or
about, July 14, 1999.
Boston, Massachusetts
July 14, 1999