SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 2, 2000
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 0-20686
UNIROYAL TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 65-0341868
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2 N. Tamiami Trail, Suite 900
Sarasota, FL 34236
(Address of principal executive offices) (Zip Code)
(941) 361-2100
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X . No .
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock as of the
latest practicable date.
Total number of shares of outstanding stock as of April 30, 2000
Common stock 24,710,352
PART I - FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements
UNIROYAL TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
ASSETS
April 2, September 26,
2000 1999
----------- -------------
Current assets:
Cash and cash equivalents $ 99,478 $ 4,145
Trade accounts receivable (less estimated reserve for
doubtful accounts of $82 and $88, respectively) 5,045 4,808
Inventories (Note 2) 10,298 8,599
Deferred income taxes 4,981 2,779
Prepaid expenses and current assets 1,405 1,413
---------- ----------
Total current assets 121,207 21,744
Property, plant and equipment - net 47,915 43,804
Property, plant and equipment held for sale (Note 3) 1,871 4,217
Investment in preferred stock (Note 4) - 5,383
Note receivable (Note 5) - 5,000
Goodwill - net 1,282 1,310
Deferred income taxes - net 9,478 15,350
Other assets - net 11,948 10,148
---------- ----------
TOTAL ASSETS $ 193,701 $ 106,956
========== ==========
UNIROYAL TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
(In thousands, except share data)
LIABILITIES AND STOCKHOLDERS' EQUITY
April 2, September 26,
2000 1999
---------- -------------
Current liabilities:
Current portion of long-term debt $ 4,904 $ 5,282
Trade accounts payable 8,810 9,688
Net liabilities of discontinued operations (Note 6) 6,472 8,380
Accrued expenses:
Compensation and benefits 8,687 7,326
Interest 74 222
Taxes, other than income 408 388
Income taxes payable 15,116 -
Other 4,830 1,055
---------- ----------
Total current liabilities 49,301 32,341
Long-term debt, net of current portion 23,412 24,369
Other liabilities 22,634 15,288
---------- ----------
Total liabilities 95,347 71,998
---------- ----------
Commitments and contingencies (Note 8)
Minority interest 4,812 3,825
Stockholders' equity (Note 7):
Preferred stock:
Series C - 0 shares issued and outstanding; par value $0.01;
450 shares authorized - -
Common stock:
30,573,566 and 29,362,838 shares issued or to be issued,
respectively; par value $0.01; 35,000,000 shares authorized 306 294
Additional paid-in capital 60,053 57,524
Unrealized gain on securities available for sale - net - 100
Retained earnings (deficit) 56,533 (6,112)
---------- ----------
116,892 51,806
Less treasury stock at cost - 5,728,780 and 5,343,974 shares,
respectively (23,350) (20,673)
---------- ----------
Total stockholders' equity 93,542 31,133
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 193,701 $ 106,956
========== ==========
See notes to condensed consolidated financial statements.
UNIROYAL TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
--------------------------- ----------------------------
April 2, March 28, April 2, March 28,
2000 1999 2000 1999
----------- ---------- ------------ ------------
Net sales $ 16,103 $ 16,965 $ 31,298 $ 35,091
Costs, expenses and (other income):
Costs of goods sold 13,028 13,153 24,586 27,664
Selling and administrative (Note 9) 13,092 4,054 20,328 7,434
Depreciation and other amortization 1,114 812 2,118 1,622
Provision for uncollectible note receivable (Note 5) 5,387 - 5,387 -
Loss on assets to be disposed of (Note 3) 2,223 - 2,223 -
Gain on sale of preferred stock investment (Note 4) - - (2,905) -
----------- ----------- ----------- -----------
Loss before interest, income taxes, minority
interest and discontinued operations (18,741) (1,054) (20,439) (1,629)
Interest income (expense) - net 11 (141) (303) (254)
----------- ----------- ----------- -----------
Loss before income taxes, minority interest
and discontinued operations (18,730) (1,195) (20,742) (1,883)
Income tax benefit (Note 10) 20,184 279 21,677 484
----------- ----------- ----------- -----------
Income (loss) before minority interest and discon-
tinued operations 1,454 (916) 935 (1,399)
Minority interest in losses of consolidated
joint venture 1,653 351 3,067 580
----------- ----------- ----------- -----------
Income (loss) from continuing operations 3,107 (565) 4,002 (819)
Income from discontinued operations (net of
income taxes) (Note 6) - 1,624 1,525 1,897
Gain on disposition of discontinued operations
(net of income taxes) (Note 6) 57,118 - 57,118 -
----------- ----------- ----------- -----------
Net income $ 60,225 $ 1,059 $ 62,645 $ 1,078
=========== =========== =========== ===========
Net income per share - basic (Note 11)
- --------------------------------------
Income (loss) from continuing operations $ 0.13 $ (0.02) $ 0.16 $ (0.03)
Income from discontinued operations 2.31 0.06 2.42 0.07
----------- ----------- ----------- -----------
Net income $ 2.44 $ 0.04 $ 2.58 $ 0.04
=========== =========== =========== ===========
Net income per share - diluted (Note 11)
- ----------------------------------------
Income (loss) from continuing operations $ 0.11 $ (0.02) $ 0.14 $ (0.03)
Income from discontinued operations 1.97 0.06 2.07 0.07
----------- ----------- ----------- -----------
Net income $ 2.08 $ 0.04 $ 2.21 $ 0.04
=========== =========== =========== ===========
See notes to condensed consolidated financial statements.
UNIROYAL TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(In thousands)
Three Months Ended Six Months Ended
---------------------------- ---------------------------
April 2, March 28, April 2, March 28,
2000 1999 2000 1999
----------- ----------- ----------- -----------
Net income $ 60,225 $ 1,059 $ 62,645 $ 1,078
Unrealized (loss) gain on securities
available for sale, net of income taxes - (576) - 992
Reclassification adjustment for gains
realized in net income - - (100) -
----------- ----------- ----------- -----------
Comprehensive income (Note 12) $ 60,225 $ 483 $ 62,545 $ 2,070
=========== =========== =========== ===========
See notes to condensed consolidated financial statements.
UNIROYAL TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Six Months Ended
------------------------------------
April 2, March 28,
2000 1999
----------- -----------
OPERATING ACTIVITIES:
Net income $ 62,645 $ 1,078
Deduct income from discontinued operations (58,643) (1,897)
----------- -----------
Income (loss) from continuing operations 4,002 (819)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,118 1,622
Deferred tax provision 3,607 487
Provision for uncollectible note receivable 5,387 -
Loss on assets to be disposed of 2,223 -
Gain on sale of preferred stock investment (2,905) -
Minority interest in losses of consolidated joint venture (3,067) (580)
Other 181 45
Changes in assets and liabilities:
(Increase) decrease in trade accounts receivable (204) 4,162
(Increase) decrease in inventories (1,699) 3,001
(Increase) decrease in prepaid expenses and other assets (1,431) 1,126
Increase in trade accounts payable 974 423
Increase (decrease) in other accrued expenses 20,352 (2,167)
Increase in other liabilities 626 373
----------- -----------
Net cash provided by continuing operations 30,164 7,673
Net cash (used in) provided by discontinued operations (42,328) 7,584
----------- -----------
Net cash (used in) provided by operating activities (12,164) 15,257
----------- -----------
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (Note 13) (14,681) (6,150)
Purchase of investments (714) (9,143)
Proceeds from sale of discontinued operations 208,976 -
Proceeds from sale of preferred stock investment 8,125 -
----------- -----------
Net cash provided by (used in) investing activities 201,706 (15,293)
----------- -----------
FINANCING ACTIVITIES (Note 13):
(Decrease) increase in revolving loan balance (7,881) 2,832
Repayment of term loans (89,013) (3,386)
Proceeds from term loan - 785
Proceeds from termination of interest rate swaps 950 -
Investment by joint venture partner 2,202 5,000
Purchase of treasury stock (1,520) (6,196)
Stock options exercised 311 276
Warrants exercised 742 -
Purchase of warrants - (61)
----------- -----------
Net cash used in financing activities (94,209) (750)
----------- -----------
Net increase (decrease) in cash 95,333 (786)
Cash and cash equivalents at beginning of period 4,145 4,099
----------- -----------
Cash and cash equivalents at end of period $ 99,478 $ 3,313
=========== ===========
See notes to condensed consolidated financial statements.
UNIROYAL TECHNOLOGY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the Three Months and Six Months Ended
April 2, 2000 and March 28, 1999
1. BASIS OF PRESENTATION
The interim Condensed Consolidated Financial Statements relate to
Uniroyal Technology Corporation and its wholly-owned subsidiaries
Uniroyal HPP Holdings, Inc., Uniroyal Engineered Products, Inc.,
Uniroyal Optoelectronics, Inc., Unitech NJ, Inc., BayPlas3, Inc. and
its majority owned subsidiary, Uniroyal Liability Management Company
(the "Company"). Uniroyal HPP Holdings, Inc. includes its wholly-owned
subsidiary, High Performance Plastics, Inc. ("HPPI"). Uniroyal
Optoelectronics, Inc. includes its majority-owned joint venture,
Uniroyal Optoelectronics, LLC. Uniroyal Liability Management Company
includes its wholly-owned subsidiary, BayPlas2, Inc. The interim
Condensed Consolidated Financial Statements of the Company are
unaudited and should be read in conjunction with the Company's audited
financial statements and notes thereto for the fiscal years ended
September 26, 1999, September 27, 1998 and September 28, 1997. See Note
6 for information concerning the sale of HPPI's business.
The Company's fiscal year ends on the Sunday following the last Friday
in September. As a result, Fiscal 2000 will end on October 1, 2000 and
encompass a 53-week period as compared to Fiscal 1999 which ended on
September 26, 1999 and encompassed a 52-week period. The additional
week in Fiscal 2000 occurred in the first quarter ended January 2,
2000. Therefore, the six-month period ended April 2, 2000 encompassed
27 weeks of operations compared to 26 weeks of operations for the
six-month period ended March 28, 1999.
Certain reclassifications were made to the prior year financial
statements to conform to current period presentations. In the opinion
of the Company, all adjustments necessary for a fair presentation of
such interim Condensed Consolidated Financial Statements have been
included. Such adjustments consist only of normal recurring items.
Interim results are not necessarily indicative of results for a full
year. The interim Condensed Consolidated Financial Statements and notes
thereto are presented as permitted by the Securities and Exchange
Commission and do not contain certain information included in the
Company's annual Financial Statements and notes thereto.
2. INVENTORIES
April 2, September 26,
2000 1999
----------- -------------
Raw materials, work in process
and supplies $ 5,009 $ 4,275
Finished goods 5,289 4,324
----------- -----------
Total $ 10,298 $ 8,599
=========== ===========
3. PROPERTY, PLANT AND EQUIPMENT HELD FOR SALE
During the three month period ended April 2, 2000, the Company further
reserved against its Port Clinton, Ohio ("Port Clinton") property,
plant and equipment held for sale in the amount of $2,223,000. An
additional impairment loss was recorded based upon recent negotiations
to sell the property with a new buyer. The current fair value less
costs to sell the property approximates $851,000 at April 2, 2000. The
Company expects to dispose of the remaining Port Clinton assets during
the current year.
4. INVESTMENT IN PREFERRED STOCK
During the six months ended April 2, 2000, the Company converted the
remaining 372,857 shares of its Emcore Corporation ("Emcore") preferred
stock into 372,857 shares of Emcore common stock. The common stock was
then sold in the open market for approximately $8,125,000. This
resulted in a gain of approximately $2,905,000, net of certain
transaction costs.
5. NOTE RECEIVABLE
In March of 2000, the Company fully reserved its note receivable and
related accrued interest from RBX Group, Inc. ("RBX") in the amount of
$5,387,000. This was a result of a determination that due to recent
events at RBX, which include the effects of a prolonged strike at its
major facility, the financial condition of RBX has deteriorated such
that collectibility of the note receivable and related accrued interest
is in doubt.
6. DISCONTINUED OPERATIONS
On December 24, 1999, the Company entered into a definitive agreement
to sell certain net assets of its High Performance Plastics segment for
$217,500,000 in cash to Spartech Corporation. The transaction closed on
February 28, 2000 and resulted in cash proceeds of approximately
$208,976,000, net of certain transaction costs and working capital
adjustments and a gain on the sale of approximately $58,193,000 (net of
taxes of approximately $39,046,000). The purchase price will ultimately
be adjusted by changes in working capital and costs to complete the
modernization at the Stamford, Connecticut facility. These adjustments
have been provided for as of April 2, 2000, to the extent estimable by
the Company. Further revisions to the purchase price are not expected
to be significant. The consolidated financial statements reflect the
discontinued operations of HPPI in accordance with Accounting
Principles Board Opinion No. 30, "Reporting Results of Operations."
Net liabilities of the discontinued operations of the High Performance
Plastics Segment have been segregated on the April 2, 2000 and
September 26, 1999 balance sheets, the components of which are as
follows:
April 2, September 26,
2000 1999
----------- -------------
Net Liabilities of Discontinued Operations
------------------------------------------
Assets:
Cash $ 102 $ 37
Receivables 154 18,261
Inventories 63 30,028
Deferred income taxes 1,916 2,030
Prepaid and other assets 3,822 1,712
Property, plant and equipment - net 277 45,099
Intangibles and other assets - 15,400
----------- -----------
Total assets 6,334 112,567
----------- -----------
Liabilities:
Current portion of long-term debt 158 8,805
Trade payables 534 13,323
Accrued income taxes 2,930 -
Other accrued expenses 7,134 7,429
Long-term debt, net of current portion 158 84,552
Deferred income taxes 1,858 6,322
Other liabilities 34 516
----------- -----------
Total liabilities 12,806 120,947
----------- -----------
Net liabilities of discontinued operations $ 6,472 $ 8,380
=========== ===========
The results of operations for all periods presented have been restated
for discontinued operations. The operating results of discontinued
operations are as follows:
For the Three Months Ended
----------------------------------
April 2, March 28,
2000 1999
----------- -----------
Income from Discontinued Operations
-----------------------------------
Net sales $ 21,211 $ 32,308
Costs of goods sold 19,346 22,098
Selling and administrative 1,182 4,007
Depreciation and other amortization 999 1,420
Gain on sale of HPPI (97,239) -
----------- -----------
Income before interest expense and income taxes 96,923 4,783
Interest expense (1,447) (2,116)
----------- -----------
Income before income taxes 95,476 2,667
Income tax expense (38,358) (1,043)
----------- -----------
Net income from discontinued operations $ 57,118 $ 1,624
=========== ===========
For the Six Months Ended
----------------------------------
April 2, March 28,
2000 1999
----------- -----------
Income from Discontinued Operations
-----------------------------------
Net sales $ 54,954 $ 63,271
Costs of goods sold 44,133 45,044
Selling and administrative 3,927 7,882
Depreciation and other amortization 2,475 2,827
Gain on sale of HPPI (97,239) -
----------- -----------
Income before interest expense and income taxes 101,658 7,518
Interest expense (3,619) (4,279)
----------- -----------
Income before income taxes 98,039 3,239
Income tax expense (39,396) (1,342)
----------- -----------
Net income from discontinued operations $ 58,643 $ 1,897
=========== ===========
7. STOCKHOLDERS' EQUITY
On March 10, 2000, the Company declared a two-for-one stock split in
the form of a 100% stock dividend to its common shareholders of record
on March 20, 2000. The consolidated financial statements presented
herein retroactively reflect the effect of the split.
During the six months ended April 2, 2000, the Company repurchased
254,292 shares of its common stock in the open market for approximately
$1,218,000.
During the six months ended April 2, 2000, the Company repurchased
47,984 shares of its common stock from its benefit plans for
approximately $302,000.
During the six months ended April 2, 2000, the Company received 99,736
shares of its common stock in lieu of cash for the exercise of stock
options from officers and employees of the Company. These shares were
valued at approximately $1,194,000 (which was calculated based upon the
closing market value of the stock on the day prior to the exercise
dates) and are included as treasury shares as of April 2, 2000.
8. COMMITMENTS AND CONTINGENCIES
Litigation
The Company is engaged in litigation arising from the ordinary course
of business. Management believes the ultimate outcome of such
litigation will not have a material adverse effect upon the Company's
results of operations, cash flows or financial position.
Environmental Factors
The Company is subject to a wide range of federal, state and local laws
and regulations designed to protect the environment and worker health
and safety. The Company's management emphasizes compliance with these
laws and regulations. The Company has instituted programs to provide
guidance and training and to audit compliance with environmental laws
and regulations at Company owned or leased facilities. The Company's
policy is to accrue environmental and cleanup-related costs of a
non-capital nature when it is probable both that a liability has been
incurred and that the amount can be reasonably estimated.
In connection with the sale of substantially all of the net assets of
HPPI to Spartech on February 28, 2000, the Company conducted
environmental assessments of two of the plants of HPPI in compliance
with the laws of the states of Connecticut and New Jersey relating to
transfers of industrial real property. The environmental assessment of
the Connecticut property indicated that a separate parcel purchased by
the Company in 1995 was contaminated with total petroleum hydrocarbons
(TPHS), DDT and related pesticide chemicals. The Company has removed
approximately one-half of the soil on the property at a cost of
approximately $1.4 million (through April 30, 2000). The Company has
retained environmental consultants to review its options with regard to
the remaining soil on the premises. Testing at the Hackensack, New
Jersey, facility is still underway. In total the Company has estimated
the cost of its environmental liabilities to approximate $3.8 million.
At April 2, 2000, approximately $3.3 million is accrued for
environmental clean-up costs and is included in net liabilities of
discontinued operations.
Based on information available as of April 2, 2000, the Company
believes that the costs of known environmental matters either have been
adequately provided for or are unlikely to have a material adverse
effect on the Company's operations, cash flows or financial position.
9. JOINT VENTURE
During the three months and six months ended April 2, 2000, the
Optoelectronics segment recorded sales of approximately $902,000 and
$1,516,000, respectively. The sales were primarily a result of product
supplied by the joint venture partner, Emcore Corporation. There were
sales by the Optoelectronics segment during the three months and six
months ended March 28, 1999 of $85,000.
During the three months ended April 2, 2000 and March 28, 1999,
approximately $2,884,000, and $758,000, respectively, of joint venture
start-up costs are included in selling and administrative costs.
During the six months ended April 2, 2000 and March 28, 1999,
approximately $5,510,000 and $1,207,000, respectively, of joint venture
start-up costs are included in selling and administrative costs.
10. INCOME TAXES
The provisions for income tax benefit for the three month and six month
periods ended April 2, 2000 and March 28, 1999 were calculated through
the use of the estimated annual income tax rates based on projected
annualized income. During the three and six month periods ended April
2, 2000, the Company reduced the deferred tax valuation allowance
relating to capital loss carryforwards and recognized a tax benefit of
$12,409,000 and $13,702,000, respectively. The capital losses were used
to offset capital gains which resulted from the sale of the Emcore
stock (Note 4) and the High Performance Plastics Segment (Note 6).
11. INCOME PER COMMON SHARE
The reconciliation of the numerators and denominators of the basic and
diluted earnings per share computation for the three months and six
months ended April 2, 2000 is as follows:
Three Months Ended
April 2, 2000
--------------------------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
------------ ------------- ---------
Income from continuing
operations before dis-
continued operations $ 3,107
Basic EPS
---------
Income available to
common stockholders $ 3,107 24,729,221 $ 0.13
=======
Effect of Dilutive Securities
-----------------------------
Stock options 3,506,472
Warrants 705,297
----------
Diluted EPS
-----------
Income available to
common stockholders $ 3,107 28,940,990 $ 0.11
========= ========== =======
For the three months ended March 28, 1999, the weighted average number
of common shares outstanding for the calculation of basic and diluted
earnings per share was 24,233,436. Inclusion of warrants to purchase
1,146,300 shares of common stock at $2.1875 per share and additional
stock options to purchase 3,614,726 shares of common stock at various
prices in the calculation of diluted earning per share would have been
antidilutive.
Six Months Ended
April 2, 2000
-----------------------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
Income from continuing
operations before dis-
continued operations $ 4,002
Basic EPS
----------
Income available to
common stockholders $ 4,002 24,277,802 $ 0.16
=======
Effect of Dilutive Securities
-----------------------------
Stock options 3,329,091
Warrants 793,834
----------
Diluted EPS
-----------
Income available to
common stockholders $ 4,002 28,400,727 $ 0.14
========= ========== =======
For the six months ended March 28, 1999, the weighted average number of
common shares outstanding for the calculation of basic and diluted
earnings per share was 24,628,460. Inclusion of warrants to purchase
1,146,300 shares of common stock at $2.1875 per share and additional
stock options to purchase 3,614,726 shares of common stock at various
prices in the calculation of diluted earnings per share would have been
antidilutive.
12. COMPREHENSIVE INCOME
Comprehensive income is defined as the change in the equity of a
business during a period from transactions and other events and
circumstances from non-owner sources. It includes all changes in equity
during a period except those resulting from investments by owners and
distributions to owners. The changes in unrealized gains and losses on
equity securities available for sale are included in comprehensive
income. The unrealized (loss) gain on securities available for sale is
shown net of a tax benefit of $368,000 for the three months ended March
28, 1999 and net of tax expense of $634,000 for the six months ended
March 28, 1999. There were no unrealized gains or losses on securities
available for sale for the three months and six months ended April 2,
2000.
13. STATEMENTS OF CASH FLOWS
Supplemental disclosures of cash flow information are as follows:
Payments for income taxes and interest expense were (in thousands):
Six Months Ended
--------------------------------------
April 2, March 28,
2000 1999
--------- ----------
Interest payments (net of capitalized
interest) - continuing operations $ 1,064 $ 175
Interest payments (net of capitalized
interest ) - discontinued operations 4,667 2,681
Income tax payments - continuing operations 23 409
Income tax payments - discontinued
operations 225 331
The purchases of property, plant and equipment and net cash used in
financing activities for the six months ended April 2, 2000 and March
28, 1999 do not include $2,600,000 and $6,937,000, respectively,
related to property held under capital leases. The new leases relate to
property, plant and equipment purchased for Uniroyal Optoelectronics,
LLC.
During the six months ended April 2, 2000 and March 28, 1999, the
Company made matching contributions to its 401(k) Savings Plan of
$219,000 and $199,000, respectively, through the re-issuance of 17,206
and 19,672 common shares from treasury, respectively.
14. SEGMENT INFORMATION
Segment information for the three and six month periods ended April 2,
2000 and March 28, 1999 is as follows:
For the Three Months Ended For the Six Months Ended
------------------------------------ ----------------------------------
April 2, March 28, April 2, March 28,
2000 1999 2000 1999
----------- ----------- ----------- ----------
Net Sales:
Coated Fabrics $ 8,588 $ 10,408 $ 17,293 $ 23,205
Specialty Adhesives 6,613 6,472 12,489 11,801
Optoelectronics 902 85 1,516 85
----------- ----------- ----------- -----------
Total $ 16,103 $ 16,965 $ 31,298 $ 35,091
=========== =========== =========== ===========
Operating Income (Loss):
Coated Fabrics $ (950) $ 858 $ (375) $ 1,636
Specialty Adhesives 380 193 721 370
Optoelectronics (3,158) (889) (6,087) (1,482)
Corporate (15,013) (1,216) (14,698) (2,153)
----------- ----------- ----------- -----------
Total $ (18,741) $ (1,054) $ (20,439) $ (1,629)
=========== =========== =========== ===========
Segment information as of April 2, 2000 and September 26, 1999 is as
follows:
April 2, September 26,
2000 1999
--------- -------------
Identifiable Assets:
Coated Fabrics $ 23,336 $ 23,547
Specialty Adhesives 15,355 15,972
Optoelectronics 30,988 22,474
Corporate 124,022 44,963
----------- -----------
Total $ 193,701 $ 106,956
=========== ===========
15. SUBSEQUENT EVENT
On April 10, 2000, the Company signed a merger agreement with Sterling
Semiconductor, Inc. ("Sterling"). The merger agreement provides for the
exchange of the Company's common stock for Sterling's issued and
outstanding preferred and common stocks. The resulting merged entity
will become a wholly-owned subsidiary of the Company called Sterling
Semiconductor, Inc. The transaction is subject to the approval of
Sterling's stockholders and is expected to close in May of 2000. It is
estimated that approximately 1,469,000 shares of the Company's common
stock having a value of approximately $34,335,000 will be exchanged in
the transaction and approximately 492,000 stock options of the Company
having a value of approximately $8,236,000 will be issued to Sterling's
employees in exchange for the cancellation of existing employee stock
options under Sterling's stock option plans.
ITEM 2. Management's Discussion and Analysis Of Financial Condition and
Results Of Operations
Second Quarter Fiscal 2000 Compared with
the Second Quarter Fiscal 1999
Net Sales. The Company's net sales from continuing operations decreased in the
second quarter of Fiscal 2000 by approximately 5% to $16,103,000 from
$16,965,000 in the second quarter of Fiscal 1999. The decrease is primarily
attributable to the Fiscal 1998 sale of the Coated Fabrics Segment's automotive
operations and the gradual phase-out of those operations. Excluding automotive
sales from both periods, sales from continuing operations increased 10% in the
second quarter of Fiscal 2000 compared to the second quarter of Fiscal 1999.
Net sales by the Coated Fabrics Segment decreased in the second quarter of
Fiscal 2000 by approximately 17% to $8,588,000 from $10,408,000 in the second
quarter of Fiscal 1999. The decrease was principally due to the sale in Fiscal
1998 of the Coated Fabrics Segment's automotive operations and the gradual
phase-out of the automotive operations. Automotive sales approximated $133,000
in the second quarter of Fiscal 2000 compared to $2,505,000 in the second
quarter of Fiscal 1999. Excluding the automotive sales from both periods, net
sales by the Coated Fabrics Segment increased approximately 7% as a result of an
overall increase in volume and selling prices for Naugahyde(R) vinyl coated
fabrics.
Net sales by the Specialty Adhesives Segment increased in the second quarter of
Fiscal 2000 by approximately 2% to $6,613,000 from $6,472,000 in the second
quarter of Fiscal 1999. This increase is attributable to an increase in
industrial adhesives sales which offset a decline in roofing adhesives.
Net sales by the Optoelectronics Segment were $902,000 in the second quarter of
Fiscal 2000. The Optoelectronics Segment is in the development stage. The
Optoelectronics Segment had sales of $85,000 during the second quarter of Fiscal
1999 from inventories provided to the Optoelectronics Segment under a supply
agreement with its joint venture partner.
Loss Before Interest, Income Taxes, Minority Interest and Discontinued
Operations. Loss before interest, income taxes, minority interest and
discontinued operations for the second quarter of Fiscal 2000 was $18,741,000,
compared to a loss of $1,054,000 for the second quarter of Fiscal 1999. The
increase in the loss is attributable to a number of non-recurring and unusual
items including the write-off of a note receivable (and related accrued
interest) related to the sale of the Ensolite closed cell foam division sold in
1996, due to the deterioration of the financial condition of the buyer (RBX
Group, Inc.) as a result of a prolonged strike at its major facility
($5,387,000); a reduction in the fair value of certain property, plant and
equipment related to the Company's Port Clinton, Ohio facility which is expected
to be disposed of this year ($2,223,000); incentive payments and benefit costs
to and for officers and directors related to the achievement of certain
strategic initiatives ($5,449,000); and start-up losses for the Optoelectronics
Segment. Also during the second quarter of Fiscal 2000, there were no corporate
allocations to the discontinued operations of the High Performance Plastics
Segment. Prior year second quarter corporate allocations were $1,143,000.
The Coated Fabrics Segment had a loss before interest, income taxes, minority
interest and discontinued operations in the second quarter of Fiscal 2000 of
$950,000 versus income of $858,000 in the second quarter of Fiscal 1999. The
decrease was primarily due to a reduction in the fair value of assets to be
disposed of, the phase-out of the sales of the automotive business and certain
incremental costs related to the closure of the Port Clinton, Ohio facility
previously used to produce automotive products.
The Specialty Adhesives Segment had income before interest, income taxes,
minority interest and discontinued operations in the second quarter of Fiscal
2000 of $380,000 compared to income of $193,000 in the second quarter of Fiscal
1999. The increase is attributable to an increase in sales of higher margin
industrial products.
The Optoelectronics Segment incurred a loss before interest, income taxes,
minority interest and discontinued operations of $3,158,000 in the second
quarter of Fiscal 2000 compared to a loss of $889,000 in the second quarter of
Fiscal 1999. The losses related to start-up costs of the Optoelectronics Segment
which have increased as the Optoelectronics Segment commences commercial
production.
Approximately $15,013,000 of costs, non-recurring and unusual items recorded in
the second quarter of Fiscal 2000 were not allocated to any business segment
compared to $1,216,000 in the second quarter of Fiscal 1999. Included in the
Fiscal 2000 non-allocated items are the write-off of a note receivable (and
related accrued interest) related to the sale of the Ensolite closed cell foam
division sold in 1996, due to the deterioration of the financial condition of
the buyer (RBX Group, Inc.) as a result of a prolonged strike at its major
facility ($5,387,000); a reduction in the fair value of certain property, plant
and equipment related to the Company's Port Clinton, Ohio facility which is
expected to be disposed of this year ($1,566,000); and incentive payments and
benefit costs to and for officers and directors related to the achievement of
certain strategic initiatives ($5,449,000). Also during the second quarter of
Fiscal 2000, there were no corporate allocations to the discontinued operations
of the High Performance Plastics Segment. Prior year second quarter corporate
allocations were $1,143,000.
Net income from discontinued operations of the High Performance Plastics Segment
increased to $57,118,000 in the second quarter of Fiscal 2000 from $1,624,000 in
the second quarter of Fiscal 1999. The increase is attributable to the net
effect of the gain recognized on the February 28, 2000 sale of the High
Performance Plastics Segment of $58,193,000 (net of taxes of $39,046,000) and
partially offset by operating losses of $1,075,000 (net of taxes of $688,000)
for the period January 3, 2000 to February 28, 2000. The decline in operations
is primarily a result of production inefficiencies at the Polycast Stamford,
Connecticut facility due to a major plant modernization and only two months of
operations in the second quarter of Fiscal 2000 versus three months of
operations in the second quarter of Fiscal 1999. The decline in operations was
partially offset by the suspension of a corporate allocation to this Segment in
the second quarter of Fiscal 2000.
Interest Income (Expense). Interest income in the second quarter of Fiscal 2000
was $11,000 as compared to interest (expense) of $141,000 in the second quarter
of Fiscal 1999. Income from the investment of the proceeds received for the sale
of the Company's High Performance Plastics Segment on February 28, 2000, offset
an increase in debt relating to capitalized lease obligations incurred to
finance the construction of the facility and the purchase of machinery and
equipment at the Optoelectronics Segment.
Income Tax Benefit. Income tax benefit in the second quarter of Fiscal 2000 was
$20,184,000 compared to a $279,000 benefit in the second quarter of Fiscal 1999.
The provisions for income tax benefit were calculated through the use of the
estimated income tax rates based on annualized income. The second quarter of
Fiscal 2000 benefited from the reversal of $12,409,000 of deferred tax valuation
allowance related to capital loss carryforwards. The reversal was due to the use
of the capital losses to offset the capital gains resulting from the sale of the
High Performance Plastics Segment.
First Two Fiscal Quarters 2000 Compared with
the First Two Fiscal Quarters 1999
Net Sales. The Company's net sales decreased in the first two quarters of Fiscal
2000 by approximately 11% ($3,793,000) to $31,298,000 from $35,091,000 in the
first two quarters of Fiscal 1999, primarily due to the sale of the automotive
operations of the Coated Fabrics Segment in Fiscal 1998 and the gradual
phase-out of those operations. Excluding automotive sales from both periods,
sales increased 17% in the first two quarters of Fiscal 2000 compared to the
first two quarters of Fiscal 1999. The 17% increase, excluding automotive sales
from both periods, was due to an increase in sales from the Optoelectronics
Segment and the inclusion of twenty-seven weeks in the first two quarters of
Fiscal 2000 versus twenty-six weeks in the first two quarters of Fiscal 1999.
Net sales by the Coated Fabrics Segment decreased in the first two quarters of
Fiscal 2000 by approximately 25% ($5,912,000) to $17,293,000 from $23,205,000 in
the first two quarters of Fiscal 1999 due to the gradual phase-out of its
automotive business. Automotive sales approximated $631,000 in the first two
quarters of Fiscal 2000 compared to $8,783,000 in the first two quarters of
Fiscal 1999. Excluding automotive sales from both periods, sales of Naugahyde(R)
vinyl-coated fabrics increased by approximately 16%, due to strong growth in the
transportation division and the inclusion of twenty-seven weeks in the first two
quarters of Fiscal 2000 versus twenty-six weeks in the first two quarters of
Fiscal 1999.
Net sales by the Specialty Adhesives Segment increased in the first two quarters
of Fiscal 2000 by approximately 6% ($688,000) to $12,489,000 from $11,801,000 in
the first two quarters of Fiscal 1999, primarily due to increased sales of its
industrial adhesives and sealant products and the inclusion of twenty-seven
weeks in the first two quarters of Fiscal 2000 versus twenty-six weeks in the
first two quarters of Fiscal 1999.
Net sales by the Optoelectronics Segment for the first two quarters of Fiscal
2000 were $1,516,000 compared to $85,000 in the first two quarters of Fiscal
1999. The Optoelectronics Segment began commercial sales and production in the
first six months of Fiscal 2000 but is still in a start-up mode.
Loss Before Interest, Income Taxes, Minority Interest and Discontinued
Operations. Loss before interest, income taxes, minority interest and
discontinued operations for the first two quarters of Fiscal 2000 was
$20,439,000, compared to a loss of $1,629,000 for the first two quarters of
Fiscal 1999. The greater loss is due to a number of non-recurring and unusual
items including the gain realized on the sale of the investment in the preferred
stock of Emcore Corporation ($2,905,000); the write-off of a note receivable
(and related accrued interest) related to the sale of the Ensolite closed cell
foam division, due to the deterioration of the financial condition of the buyer
(RBX Group, Inc.) as a result of a prolonged strike at its major facility
($5,387,000); a reduction in the fair value of certain property, plant and
equipment related to the Company's Port Clinton, Ohio facility which is expected
to be disposed of this year ($2,223,000); incentive payments and benefit costs
to and for officers and directors related to the achievement of certain
strategic initiatives ($5,449,000); a loss of revenues associated with the
gradual phase-out of the automotive operations of the Coated Fabrics Segment and
start-up losses for the Optoelectronics Segment. Also during the first two
quarters of Fiscal 2000, there were no corporate allocations to the discontinued
operations of the High Performance Plastics Segment. Prior year corporate
allocations for the first two quarters of Fiscal 1999 were $2,241,000.
The Coated Fabrics Segment's loss before interest, income taxes, minority
interest and discontinued operations in the first two quarters of Fiscal 2000
was $375,000 compared to income of $1,636,000 in the first two quarters of
Fiscal 1999. The decrease is attributable to the write-down to fair value of
certain assets to be disposed of, the loss of revenues from the gradual
phase-out of its automotive operations, as well as certain incremental costs
related to the closure of the Port Clinton, Ohio facility previously used to
produce automotive products.
The Specialty Adhesives Segment's income before interest, income taxes, minority
interest and discontinued operations in the first two quarters of Fiscal 2000
was $721,000 versus $370,000 in the first two quarters of Fiscal 1999. The
increase is due to the increase in sales volume of industrial products and the
inclusion of twenty-seven weeks in the first two quarters of Fiscal 2000 versus
twenty-six weeks in the first two quarters of Fiscal 1999.
The Optoelectronics Segment's loss before interest, income taxes, minority
interest and discontinued operations in the first two quarters of Fiscal 2000
was $6,087,000 compared to a loss of $1,482,000 in the first two quarters of
Fiscal 1999. The losses relate to the start-up and training costs of the
Optoelectronics Segment.
Approximately $14,698,000 of costs, non-recurring and unusual items recorded in
the first two quarters of Fiscal 2000 were not allocated to any business segment
compared to $2,153,000 of unallocated costs for the first two quarters of Fiscal
1999. Included in the non-allocated items in Fiscal 2000 are the gain realized
on the sale of the investment in the preferred stock of Emcore Corporation
($2,905,000); the write-off of the RBX Group, Inc. note (and related accrued
interest) ($5,387,000); a reduction in the fair value of certain property, plant
and equipment related to the Company's Port Clinton, Ohio facility which is
expected to be disposed of this year ($1,566,000); and incentive payments and
benefit costs to and for officers and directors related to the achievement of
certain strategic initiatives ($5,449,000). Also during the first two quarters
of Fiscal 2000, there were no corporate allocations to the discontinued
operations of the High Performance Plastics Segment. Prior year corporate
allocations for the first two quarters of Fiscal 1999 were $2,241,000.
Net income from discontinued operations of the High Performance Plastics Segment
increased to $58,643,000 in the first two quarters of Fiscal 2000 compared to
$1,897,000 in the first two quarters of Fiscal 1999. The increase is
attributable to the net effect of the gain recognized on the February 28, 2000
sale of the High Performance Plastics Segment of $58,193,000 (net of taxes of
$39,046,000) and operating income of $450,000 (net of taxes of $350,000) for the
period September 27, 1999 to February 28, 2000. The decline in operations is
primarily a result of production inefficiencies at the Stamford, Connecticut
facility due to a major plant modernization and only five months of operations
in the first two quarters of Fiscal 2000 versus six months of operations in the
first two quarters of Fiscal 1999. The decline in operations was partially
offset by the suspension of a corporate allocation to this Segment in the first
two quarters of Fiscal 2000.
Interest Expense. Interest expense for the first two quarters of Fiscal 2000
increased to $303,000 from $254,000 in the first two quarters of Fiscal 1999. An
increase in the debt relating to capitalized lease obligations incurred to
finance the construction of the facility and the purchase of machinery and
equipment at the Optoelectronics Segment was partially offset by the interest
income earned on the investment of the proceeds received from the sale of the
Company's High Performance Plastics Segment on February 28, 2000.
Income Tax Benefit. Income tax benefit in the first two quarters of Fiscal 2000
was $21,677,000 as compared to $484,000 in the first two quarters of Fiscal
1999. The provisions for income tax benefit were calculated through the use of
the estimated income tax rates based upon annualized income. The first two
quarters of Fiscal 2000 benefited from the reversal of $13,702,000 of deferred
tax valuation allowance related to capital loss carryforwards. The reversal was
due to the use of the capital losses to offset capital gains resulting from the
sale of the preferred stock of Emcore Corporation and the sale of the High
Performance Plastics Segment.
Liquidity and Capital Resources
For the first two quarters of Fiscal 2000, continuing operations provided
$30,164,000 of cash as compared to $7,673,000 provided by continuing operations
during the first two quarters of Fiscal 1999. The increase in cash provided by
continuing operations for the first two quarters of Fiscal 2000 resulted
primarily from an increase in income taxes payable as a result of the High
Performance Plastics Segment sale and an increase in accrued and other expenses
in connection with special incentive costs awarded to officers and directors
related to the achievement of certain strategic initiatives.
Net cash provided by investing activities for the first two quarters of Fiscal
2000 was $201,706,000 as compared to $15,293,000 used in investing activities
during the first two quarters of Fiscal 1999. During the first two quarters of
Fiscal 2000, the purchase of machinery and equipment primarily related to the
new Optoelectronics production facility in Tampa, Florida and the modernization
of the Polycast production facility in Stamford, Connecticut. Significant cash
provided by investing activities during the first two quarters of Fiscal 2000
included net cash proceeds from the sale of the High Performance Plastics
Segment of $208,976,000 and the sale of the remaining Emcore Corporation
preferred stock for $8,125,000, net of certain transaction costs.
Net cash used in financing activities during the first two quarters of Fiscal
2000 was $94,209,000 as compared to $750,000 of cash used during the first two
quarters of Fiscal 1999. The primary use of cash in financing activities during
the first two quarters of Fiscal 2000 was to repay the outstanding borrowings at
Fleet Bank as a result of the sale of the High Performance Plastics Segment.
On April 2, 2000, the Company had approximately $99,478,000 in cash and cash
equivalents as compared to approximately $4,145,000 at September 26, 1999.
Working capital at April 2, 2000 was $71,906,000 compared to a working capital
deficit of $10,597,000 at September 26, 1999. On April 2, 2000, the Company had
outstanding borrowings of $6,547,000 under its $10,000,000 revolving credit
facility with the CIT Group/Business Credit, Inc. (subject to a borrowing base
limitation of approximately $9,479,000 at April 2, 2000). The principal uses of
cash during the first two quarters of Fiscal 2000 were to repay debt and to fund
capital expenditures and operating losses at the new Optoelectronics facility in
Tampa, Florida. The Company plans to spend an additional $20.0 - $25.0 million
on capital expenditures for the Optoelectronics Segment. The Company plans to
fund these expenditures with the proceeds from the sale of the High Performance
Plastics Segment. The Company believes that cash from its operations, its
ability to borrow under the revolving credit facility mentioned above and
proceeds from the sale of the High Performance Plastics Segment will provide
sufficient liquidity to finance its existing level of operations and meet its
debt service obligations. However, there can be no assurance that the Company's
operations together with amounts available under the revolving credit facilities
will continue to be sufficient to finance its existing level of operations and
meet its debt service obligations. The Company's ability to meet its debt
service and other obligations depends on its future performance, which in turn,
is subject to general economic conditions and to financial, business and other
factors, including factors beyond the Company's control. If the Company is
unable to generate sufficient cash flow from operations, it may be required to
refinance all or a portion of its existing debt or obtain additional financing
including equity financing. There can be no assurance that the Company will be
able to obtain such refinancing or additional financing.
Effects of Inflation
The markets in which the Company sells products are competitive. Thus, in an
inflationary environment the Company may not in all instances be able to pass
through to consumers general price increases; certain of the Company's
operations may be materially impacted if such conditions were to occur. The
Company has not in the past been adversely impacted by general price inflation.
Year 2000
Many software applications and operational programs written in the past were not
designed to recognize calendar dates beginning in the Year 2000. The failure of
such applications or systems to properly recognize the dates beginning in the
Year 2000 could result in miscalculations or system failures which could result
in an adverse impact on the Company's operations.
The Company instituted a Year 2000 task force that reports to the Audit
Committee of the Board of Directors. The Company also initiated a comprehensive
project, overseen by the task force, to prepare its computer systems,
communication systems and manufacturing/testing equipment for the Year 2000. The
project primarily included three phases: 1) identification and assessment of all
software, hardware and equipment that could potentially be affected by the Year
2000 issue, 2) remedial action necessary to bring such systems into compliance
and 3) further testing, if necessary. The Company completed all phases of its
project. The Company primarily used internal resources in its Year 2000 project
and incurred costs of less than $800,000.
The Company also contacted critical suppliers of products and services and
customers to determine the extent to which the Company might be vulnerable to
such parties' failure to resolve their own Year 2000 issues. The Company does
not have a concentration of dependence on these parties. The effect, if any, on
the Company's results of operations from the failure of such parties to be Year
2000 ready is not reasonably estimable.
The Company formulated contingency plans with respect to its reasonably likely
worst case scenario which is the unavailability of critical raw materials. The
contingency plans for critical raw materials include alternate materials or
sources and advance inventory purchases of certain raw materials.
As of the date of this report, the Company did not experience any significant
disruptions in any of its systems on January 1, 2000, nor has any supplier or
customer of the Company made us aware of any significant disruptions. The
Company will continue to monitor this issue through the remainder of the
calendar year.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
Market Risks
The Company is exposed to various market risks, including changes in interest
rates. The Company's earnings and cash flows are subject to fluctuations due to
changes in interest rates on its floating rate revolving credit advances. The
Company's risk management policy includes the use of derivative financial
instruments (interest rate swaps) to manage its interest rate exposure. The
counter parties are major financial institutions. The Company does not enter
into derivatives or other financial instruments for trading or speculative
purposes. During the second quarter of Fiscal 2000, the Company liquidated all
of its interest rate swap instruments for cash proceeds and a gain of $950,000.
At April 2, 2000, approximately $6.5 million of the Company's floating rate
revolving credit advances was not covered under an interest swap agreement. For
floating rate debt, interest changes generally do not affect the fair market
value but do impact future earnings and cash flows assuming other factors are
held constant. Based upon this balance, a change of one percent in the interest
rate would cause a change in interest expense of approximately $65,000 on an
annual basis.
Forward Looking Information
The information provided herein may include forward-looking statements relating
to future events, such as the development of processes, the commencement of
production, or the future financial performance of the Company. Actual operating
results may differ from such projections and are subject to certain risks,
including, without limitation, risks arising from: increased competition, delays
in developing and commercializing new products and labor actions against the
Company or the Company's customers or vendors.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
(a) The Company knows of no pending legal proceedings to which the
Company or any of its subsidiaries is a party or of which any of
their property is the subject other than routine litigation
incidental to the Company's business or legal proceedings in
which an adverse outcome would not be expected to have a material
impact on the Company.
(b) No legal proceedings were terminated during the six months ended
April 2, 2000, other than routine litigation incidental to the
Company's business.
Item 2. Changes in Securities
On March 10, 2000, the Company declared a two-for-one stock split
in the form of a 100% stock dividend to its common stockholders
of record on March 20, 2000.
Item 3. Default upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
On March 10, 2000, the Company held its annual meeting of
stockholders in New York, NY. A total of 22,148,308 shares of
capital stock of the Company were entitled to vote at the
meeting. Of this amount, 20,607,830 shares were represented by
proxy. The number of shares that were present at the meeting
constituted a quorum for the transaction of all business that was
to be considered at the meeting. At that time, certain proposals
were submitted to a vote of the stockholders. All voted shares
reflect the two-for-one stock dividend.
The first proposal was to elect the eight incumbent directors for
a term of one year to be elected by the holders of common stock.
The following directors were elected:
Name Voted For Withheld
---------- --------
Peter C. B. Bynoe 20,589,766 18,064
Thomas E. Constance 20,587,406 20,424
Howard R. Curd 20,587,766 20,064
Richard D. Kimbel 20,394,660 213,170
Curtis L. Mack 20,587,406 20,424
Roland H. Meyer 20,589,406 18,424
John A. Porter 20,589,766 18,064
Robert L. Soran 20,587,766 20,064
Proposal Number 2 was to consider and take action upon the
ratification of the selection of Deloitte & Touche, LLP to serve
as the independent public accountants for the Company for the
fiscal year ending October 1, 2000. The following summarizes the
results of the vote:
Voted For Voted Against Abstained
---------- ------------- ---------
20,468,920 36,596 102,314
Proposal Number 3 was to approve the Company's 2000 Stock Plan.
The following summarizes the results of the vote:
Voted For Voted Against Abstained
---------- ------------- ---------
15,800,218 434,648 135,130
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.51 Memorandum of Understanding and Confidentiality Agreement
dated February 23, 1995, between the Company and Firestone
Building Products Division of Bridgestone/ Firestone, Inc.
and amendments thereto. (1)
(1)Confidential treatment of portions of this document is
being requested pursuant to Rule 24b-2 of the Securities
and Exchange Commission. The full document has been filed
with the Commission on a confidential basis.
10.52 Amended and Restated Uniroyal Technology Corporation
Deferred Compensation Plan Effective August 1, 1995, as
Amended April 3, 2000.
(b) Reports on Form 8-K
Report on Form 8-K dated March 14, 2000, related to the sale of
the High Performance Plastics Segment to Spartech Corporation.
Report on Form 8-K dated April 27, 2000, related to the
restatement of the Uniroyal Technology Corporation Consolidated
Financial Statements as of September 26, 1999, and September 27,
1998, and for the fiscal years ended September 26, 1999,
September 27, 1998 and September 28, 1997, for the effect of
discontinued operations and the retroactive effect of a
two-for-one stock split.
Report on Form 8-K/A dated April 27, 2000, related to restated
unaudited Pro Forma Financial Information in connection with the
sale of the High Performance Plastics Segment to Spartech
Corporation.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATE: May 17, 2000 By: /s/ George J. Zulanas, Jr.
------------ --------------------------
George J. Zulanas, Jr., Executive
Vice President, Treasurer and Chief
Financial Officer