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 1, 2001
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, 2001
Common stock 26,136,515
PART I - FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements
UNIROYAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
ASSETS
April 1, October 1,
2001 2000
------------ ------------
Current assets:
Cash and cash equivalents $ 7,660 $ 36,627
Short-term investments (Note 2) 14,974 12,425
Trade accounts receivable (less estimated reserve for
doubtful accounts of $108 and $119,
respectively) 6,417 5,669
Inventories (Note 3) 13,116 11,079
Accrued income taxes receivable 5,348 -
Deferred income taxes 1,454 5,460
Prepaid expenses and other current assets 1,700 1,408
------------ ------------
Total current assets 50,669 72,668
Property, plant and equipment - net 65,149 57,386
Property, plant and equipment held for sale - net 2,194 2,301
Investments (Note 2) - 8,902
Goodwill - net (Note 4) 27,592 27,772
Deferred income taxes - net 10,896 7,828
Other assets - net 12,498 13,175
------------ ------------
TOTAL ASSETS $ 168,998 $ $190,032
============ ============
UNIROYAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
(In thousands, except share data)
LIABILITIES AND STOCKHOLDERS' EQUITY
April 1, October 1,
2001 2000
------------ ------------
Current liabilities:
Current portion of long-term debt $ 10,206 $ 6,702
Trade accounts payable 13,102 11,563
Net liabilities of discontinued operations (Note 5) 1,288 4,632
Accrued expenses:
Compensation and benefits 7,151 9,180
Interest 52 156
Taxes, other than income 398 391
Accrued income taxes - 623
Other 2,920 3,139
------------ ------------
Total current liabilities 35,117 36,386
Long-term debt, net of current portion 15,222 15,462
Other liabilities 24,283 23,800
------------ ------------
Total liabilities 74,622 75,648
------------ ------------
Commitments and contingencies (Note 6)
Minority interest 4,459 7,535
------------ ------------
Stockholders' equity (Note 7):
Preferred stock:
Series C - 0 shares issued and outstanding; par value $0.01;
450 shares authorized - -
Common stock:
32,650,990 and 30,707,976 shares issued or to be issued,
respectively; par value $0.01; 100,000,000 shares authorized 327 307
Additional paid-in capital 103,968 94,296
Retained earnings 29,812 40,575
Unrealized loss on securities held for sale - net - (44)
------------ ------------
134,107 135,134
Less treasury stock at cost - 6,759,038 and 4,841,059 shares,
respectively (44,190) (28,285)
------------ ------------
Total stockholders' equity 89,917 106,849
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 168,998 $ 190,032
============ ============
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 1, April 2, April 1, April 2,
2001 2000 2001 2000
------------ ------------ ------------- ------------
Net sales $ 15,056 $ 16,103 $ 29,374 $ 31,298
Costs, expenses and (other income):
Costs of goods sold 12,784 13,028 24,398 24,586
Selling and administrative (Note 8) 9,062 13,092 17,796 20,328
Depreciation and other amortization 4,120 1,114 8,031 2,118
Provision for uncollectible note receivable - 5,387 - 5,387
Loss on assets to be disposed of (Note 9) 793 2,223 793 2,223
Gain on sale of preferred stock investment - - - (2,905)
----------- ------------ ------------ -----------
Loss before interest, income taxes, minority
interest and discontinued operations (11,703) (18,741) (21,644) (20,439)
Interest income 483 603 1,344 608
Interest expense (316) (592) (915) (911)
----------- ------------ ------------ ------------
Loss before income taxes, minority interest
and discontinued operations (11,536) (18,730) (21,215) (20,742)
Income tax benefit (Note 10) 2,874 20,184 5,019 21,677
----------- ------------ ------------ ------------
(Loss) income before minority interest and discon-
tinued operations (8,662) 1,454 (16,196) 935
Minority interest in losses of consolidated
joint venture 2,782 1,653 5,458 3,067
----------- ------------ ------------ ------------
(Loss) income from continuing operations (5,880) 3,107 (10,738) 4,002
Income from discontinued operations (net of
income taxes) (Note 5) - - - 1,525
(Loss) gain on disposition of discontinued
operations (net of income taxes) (Note 5) (21) 57,118 (25) 57,118
----------- ------------ ------------ ------------
Net (loss) income $ (5,901) $ 60,225 $ (10,763) $ 62,645
=========== ============ ============ ============
Net (loss) income per share - basic (Note 11)
- -----------------------------------
(Loss) income from continuing operations $ (0.23) $ 0.13 $ (0.42) $ 0.16
Income from discontinued operations - 2.31 - 2.42
----------- ------------ ------------ ------------
Net (loss) income $ (0.23) $ 2.44 $ (0.42) $ 2.58
=========== ============ ============ ============
Net (loss) income per share - diluted (Note 11)
- -------------------------------------
(Loss) income from continuing operations $ (0.23) $ 0.11 $ (0.42) $ 0.14
Income from discontinued operations - 1.97 - 2.07
----------- ------------ ------------ ------------
Net (loss) income $ (0.23) $ 2.08 $ (0.42) $ 2.21
=========== ============ ============ ============
See notes to condensed consolidated financial statements.
UNIROYAL TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Unaudited)
(In thousands)
Three Months Ended Six Months Ended
----------------------------- ----------------------------
April 1, April 2, April 1, April 2,
2001 2000 2001 2000
------------ ------------ ------------ --------------
Net (loss) income $ (5,901) $ 60,225 $ (10,763) $ 62,645
Net unrealized gain (loss) on securities
available for sale, net of income
taxes:
Unrealized gain on securities available for
sale (net of income tax expense of $4 and
$34, respectively) 6 - 53 -
Reclassification adjustment for gains
realized in net income (9) - (9) (100)
------------ ------------ ------------ ------------
Net unrealized (loss) gain (3) - 44 (100)
------------ ------------ ------------ ------------
Comprehensive (loss) income $ (5,904) $ 60,225 $ (10,719) $ 62,545
============ ============ ============ ============
See notes to condensed consolidated financial statements.
UNIROYAL TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Six Months Ended
-------------------------------------
April 1, April 2,
2001 2000
------------ ------------
OPERATING ACTIVITIES:
Net (loss) income $ (10,763) $ 62,645
Deduct loss (income) from discontinued operations 25 (58,643)
------------ ------------
(Loss) income from continuing operations (10,738) 4,002
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and other amortization 8,031 2,118
Deferred tax benefit 904 3,607
Provision for uncollectible note receivable - 5,387
Loss on assets to be disposed of 793 2,223
Gain on sale of preferred stock investment - (2,905)
Minority interest in net losses of consolidated joint venture (5,458) (3,067)
Other 89 181
Changes in assets and liabilities:
Increase in trade accounts receivable (843) (204)
Increase in inventories (2,037) (1,699)
Increase in prepaid expenses and other assets (370) (1,431)
Increase in trade accounts payable 1,867 974
(Decrease) increase in other accrued expenses (7,456) 20,352
Increase in other liabilities 483 626
------------ ------------
Net cash (used in) provided by continuing operations (14,735) 30,164
Net cash used in discontinued operations (3,369) (42,328)
------------ ------------
Net cash used in operating activities (18,104) (12,164)
------------ ------------
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (Note 12) (9,592) (14,681)
Investment purchases of available-for-sale securities (13,015) (214)
Investment purchases of held-to-maturity securities (6,002) (500)
Proceeds from sales of available-for-sale securities 16,994 -
Proceeds from sales of held-to-maturity securities 8,505 -
Proceeds from sale of preferred stock investment - 8,125
Business acquisition (2,750) -
Proceeds from sale of discontinued operations - 208,976
------------ ------------
Net cash (used in) provided by investing activities (5,860) 201,706
------------ ------------
FINANCING ACTIVITIES (Note 12):
Increase (decrease) in revolving loan balance 3,092 (7,881)
Repayment of term loans (3,423) (89,013)
Proceeds from term loan 95 -
Proceeds from termination of interest rate swaps - 950
Investment by joint venture partner 2,382 2,202
Purchase of treasury stock (7,311) (1,520)
Stock options exercised 162 311
Warrants exercised - 742
------------ ------------
Net cash used in financing activities (5,003) (94,209)
------------ ------------
Net (decrease) increase in cash (28,967) 95,333
Cash and cash equivalents at beginning of period 36,627 4,145
------------ ------------
Cash and cash equivalents at end of period $ 7,660 $ 99,478
============ ============
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 1, 2001 and April 2, 2000
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 Compound Semiconductors, Inc., UnitechNJ, Inc., BayPlas3,
Inc., UnitechOH, 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 Engineered Products, Inc. includes its
operating divisions, Uniroyal Engineered Products and Uniroyal
Adhesives and Sealants. Uniroyal Compound Semiconductors, Inc.
includes its wholly-owned subsidiaries, Sterling Semiconductor, Inc.
and NorLux Corp., and 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 consolidated
financial statements and notes thereto for the fiscal years ended
October 1, 2000, September 26, 1999 and September 27, 1998.
The Company's fiscal year ends on the Sunday following the last Friday
in September. As a result, Fiscal 2000 ended on October 1, 2000 and
encompassed a 53-week period as compared to Fiscal 2001 which will end
on September 30, 2001 and encompass 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 April 1, 2001.
Certain reclassifications were made to the prior year interim Condensed
Consolidated 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 consolidated
financial statements and notes thereto.
2. INVESTMENTS
At April 1, 2001, the Company's investment portfolio consisted of
marketable corporate debt securities classified as held-to-maturity and
scheduled to mature in less than one year. Available-for-sale debt and
equity securities were liquidated during the six-month period ended
April 1, 2001.
Held-to-maturity debt securities are carried at amortized cost. The
fair value of the held-to-maturity debt securities approximates
$14,931,000 at April 1, 2001, based upon broker quotes. The gross
unrecognized holding loss approximates $43,000 at April 1, 2001.
Available-for-sale debt securities were carried at fair market value
with the unrealized gains and losses, net of tax, reported in
stockholders' equity until realized. Gains and losses on securities
sold are based upon the specific identification method. At April 1,
2001, there were no available-for-sale debt securities. There were no
realized gains or losses for the three and six months ended April 1,
2001.
Available-for-sale equity securities were carried at fair market value
with the unrealized gains and losses, net of tax, reported in
stockholders' equity until realized. Gains and losses on equity
securities sold are based upon the specific identification method. At
April 1, 2001, there were no available-for-sale equity securities. The
realized gain on the sale of available-for-sale equity securities for
the three and six months ended April 1, 2001 approximated $15,000.
There were no investments at April 2, 2000.
3. INVENTORIES
Inventories consisted of the following (in thousands):
April 1, October 1,
2001 2000
------------ ------------
Raw materials, work in process and supplies $ 6,949 $ 6,187
Finished goods 6,167 4,892
------------ ------------
Total $ 13,116 $ 11,079
============ ============
4. BUSINESS ACQUISITION
On December 18, 2000, the Company completed the acquisition of the net
assets of the solvent-based industrial adhesives business of Henkel
Corporation for $2,750,000 in cash.
The business combination was accounted for by the purchase method in
accordance with Accounting Principles Board Opinion ("APB") No. 16,
Business Combinations. The results of operations of the above named
business is included in the consolidated financial statements from the
date of acquisition forward.
The fair market value of purchased assets was determined to be zero;
therefore, the entire purchase price has been allocated to goodwill on
the date of acquisition. The acquired preliminary goodwill will be
amortized over its estimated useful life of 15 years.
The pro forma effect of this acquisition on the Company's net sales,
income from continuing operations, net income and earnings per share,
had the acquisition occurred on October 2, 2000, is not considered
material, either quantitatively or qualitatively.
5. 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 ("Spartech"). The
transaction closed on February 28, 2000, and resulted in cash proceeds
of $208,976,000 net of certain transaction costs and preliminary
purchase price adjustments (the "Spartech Sale"). The ultimate purchase
price adjustments have not been agreed to by both parties. The Company
estimates, and has provided for, an ultimate reduction in the purchase
price of approximately $5,100,000, which would result in a loss of the
$5,000,000 holdback as well as an additional payment from the Company
to Spartech of approximately $100,000. In addition to what the Company
has provided for, Spartech is seeking an additional purchase price
reduction up to approximately $4,237,000. Management believes the
ultimate resolution of the purchase price adjustment should not have a
material adverse effect on the results of operations, cash flows or
financial position.
The accompanying Condensed Consolidated Financial Statements reflect
the operations of the High Performance Plastics segment as discontinued
operations in accordance with APB Opinion No. 30, Reporting Results of
Operations.
Net liabilities of the discontinued operations have been segregated on
the April 1, 2001 and October 1, 2000 consolidated balance sheets, the
components of which are as follows (in thousands):
April 1, October 1,
Net Liabilities of Discontinued Operations 2001 2000
------------------------------------------ ------------ ------------
Assets:
Cash $ 106 $ 100
Deferred income taxes 144 186
Prepaid and other assets 248 487
------------ ------------
Total assets 498 773
------------ ------------
Liabilities:
Current portion of long-term debt 158 158
Trade payables 148 432
Other accrued expenses 1,480 4,815
------------ ------------
Total liabilities 1,786 5,405
------------ ------------
Net liabilities of discontinued operations $ 1,288 $ 4,632
============ ============
The results of operations for all periods presented have been restated
for discontinued operations. The operating results of discontinued
operations are as follows (in thousands):
For the Three Months Ended
-------------------------------------
April 1, April 2,
(Loss) Income from Discontinued Operations 2001 2000
------------------------------------------ ------------ ------------
Net sales $ - $ 21,211
Costs of goods sold - 19,346
Selling and administrative 29 1,182
Depreciation and other amortization - 999
Gain on sale of HPPI - (97,239)
------------ ------------
(Loss) income before interest expense and
income taxes (29) 96,923
Interest income (expense) - net 6 (1,447)
------------ ------------
(Loss) income before taxes (23) 95,476
Tax benefit (expense) 2 (38,358)
------------ ------------
(Loss) income from discontinued operations $ (21) $ 57,118
============ ============
For the Six Months Ended
-------------------------------------
April 1, April 2,
(Loss) Income from Discontinued Operations 2001 2000
------------------------------------------ ------------ ------------
Net sales $ - $ 54,954
Costs of goods sold - 44,133
Selling and administrative 35 3,927
Depreciation and other amortization - 2,475
Gain on sale of HPPI - (97,239)
------------ ------------
(Loss) income before interest expense and
income taxes (35) 101,658
Interest income (expense) - net 5 (3,619)
------------ ------------
(Loss) income before taxes (30) 98,039
Tax benefit (expense) 5 (39,396)
------------ ------------
(Loss) income from discontinued operations $ (25) $ 58,643
============ ============
6. COMMITMENTS AND CONTINGENCIES
Litigation
On February 23, 2001, the Company and its wholly owned subsidiary,
Sterling Semiconductor, Inc., were served with a complaint by AFG-NVC,
LLC in the Loudoun County, Virginia Circuit Court. The complaint seeks
$8,105,909 for alleged default under a lease and benefits that the
landlord believes it would have received under such lease. The Company
has filed an answer seeking not less than $7,000,000 for breaches of
contract, fraud and constructive fraud on the part of the plaintiff. At
the present time the Company does not have sufficient information to
determine what liability, if any, the Company might have in connection
with this action.
The Company is engaged in other 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.
Based on information available as of April 1, 2001, 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.
7. STOCKHOLDERS' EQUITY
During the six months ended April 1, 2001, the Company repurchased
975,620 shares of its common stock in the open market for approximately
$7,311,000.
During the six months ended April 1, 2001, the Company received
1,090,947 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 $8,921,000 (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 1,
2001.
During the six months ended April 1, 2001, the Company issued 2,015,014
shares of its common stock (72,000 shares of which came from treasury)
to directors, officers and employees of the Company for the exercise of
the stock options.
8. JOINT VENTURE
During the three months ended April 1, 2001 and April 2, 2000,
approximately $4,212,000 and $2,884,000, respectively, of joint venture
start-up costs are included in selling and administrative costs.
During the six months ended April 1, 2001 and April 2, 2000,
approximately $8,257,000 and $5,510,000, respectively, of joint venture
start-up costs are included in selling and administrative costs.
9. LOSS ON ASSETS TO BE DISPOSED OF
During the three months ended April 1, 2001, the Company made a
decision to terminate its lease for a new facility in Sterling,
Virginia for the operations of Sterling Semiconductor, Inc. The
decision was made as result of construction delays and breaches of
contract. As a result of the lease termination, the Company reserved
approximately $686,000 for the impairment of assets at that facility.
The Company is currently involved in litigation regarding the lease
termination (Note 6).
During the three months ended April 1, 2001, the Company further
reserved $107,000 against its Stirling, New Jersey facility held for
sale. An additional impairment loss was recorded based upon a reduction
in the offering price of the facility.
10. INCOME TAXES
The provisions for income tax benefit for the three months and six
months ended April 1, 2001 and April 2, 2000 were calculated through
the use of the estimated annual income tax rates based on projected
annualized income. During the three months and six months 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 a preferred
stock investment and the sale of the High Performance Plastics Segment
(Note 5).
11. INCOME PER COMMON SHARE
For the three months ended April 1, 2001, the weighted average number
of common shares outstanding for the calculation of basic and diluted
earnings per share was 25,869,954. Inclusion of warrants to purchase
735,770 shares of common stock at $2.1875 per share and additional
stock options to purchase 3,976,913 shares of common stock at various
prices in the calculation of diluted earnings per share would have been
antidilutive.
The reconciliation of the numerators and denominators of the basic and
diluted earnings per share computation for the three 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 $ 3,107,000
Basic EPS
---------
Income available to
common stockholders $ 3,107,000 24,729,221 $ 0.13
=========
Effect of Dilutive Securities
-----------------------------
Stock options 3,506,472
Warrants 705,297
----------
Diluted EPS
-----------
Income available to
common stockholders $ 3,107,000 28,940,990 $ 0.11
=============== ========== =========
For the six months ended April 1, 2001, the weighted average number of
common shares outstanding for the calculation of basic and diluted
earnings per share was 25,854,048. Inclusion of warrants to purchase
735,770 shares of common stock at $2.1875 per share and additional
stock options to purchase 3,976,913 shares of common stock at various
prices in the calculation of diluted earnings per share would have been
antidilutive.
Six Months Ended
April 2, 2000
-----------------------------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
-----------------------------------------------------------------
Income from continuing
operations $ 4,002,000
Basic EPS
---------
Income available to
common stockholders $ 4,002,000 24,277,802 $ 0.16
=========
Effect of Dilutive Securities
-----------------------------
Stock options 3,329,091
Warrants 793,834
----------
Diluted EPS
-----------
Income available to
common stockholders $ 4,002,000 28,400,727 $ 0.14
=============== ========== =========
12. STATEMENTS OF CASH FLOWS
Supplemental disclosures of cash flow information are as follows:
Payments for income taxes and interest expense were (in thousands):
For the Six Months Ended
---------------------------------
April 1, April 2,
2001 2000
------------- -------------
Interest payments (net of capitalized
interest) - continuing operations $ 957 $ 1,064
Interest payments (net of capitalized
interest) - discontinued operations - 4,667
Income tax payments - continuing
operations 151 23
Income tax payments - discontinued
operations 1,981 225
The purchases of property, plant and equipment and net cash used in
financing activities for the six months ended April 1, 2001 and April
2, 2000 do not include $3,500,000 and $2,600,000, respectively, related
to property held under capital leases. The new leases relate to
equipment purchased for the Compound Semiconductor and Optoelectronics
segment.
During the six months ended April 1, 2001 and April 2, 2000, the
Company made matching contributions to its 401(k) Savings Plan of
$124,000 and $219,000, respectively, through the reissuance of 19,905
and 17,206 common shares from treasury, respectively.
During the six months ended April 1, 2001, the Company made a special
discretionary contribution to its 401(k) Savings Plan for the plan year
ended December 31, 1999. This special contribution was valued at
approximately $723,000 and was funded through the reissuance of 56,683
shares of common stock from treasury. Subsequent to April 1, 2001, the
Company made a special discretionary contribution to its 401(k) Savings
Plan for the plan year ended December 31, 2000. This special
contribution was valued at approximately $1,512,000 and was funded
through the reissuance of 241,957 shares of common stock from treasury.
The liability and related compensation expense for these two special
discretionary contributions were accrued at October 1, 2000.
13. SEGMENT INFORMATION
Segment information for the three months and six months ended April 1,
2001 and April 2, 2000 is as follows (in thousands):
For the Three Months Ended For the Six Months Ended
----------------------------------- -------------------------------
April 1, April 2, April 1, April 2,
2001 2000 2001 2000
------------- ------------- ------------- -------------
Net sales:
Coated Fabrics $ 7,818 $ 8,588 $ 14,476 $ 17,293
Specialty Adhesives 6,234 6,613 12,728 12,489
Compound Semiconductor
and Optoelectronics 1,004 902 2,170 1,516
------------- ------------- ------------- -------------
Total $ 15,056 $ 16,103 $ 29,374 $ 31,298
============= ============= ============= =============
(Loss) income before interest,
income taxes, minority interest
and discontinued operations:
Coated Fabrics $ (73) $ (787) $ (65) $ 68
Specialty Adhesives 90 380 397 721
Compound Semiconductor
and Optoelectronics (9,847) (3,158) (18,238) (6,087)
Corporate (1,873) (15,176) (3,738) (15,141)
------------- ------------- ------------- -------------
Total $ (11,703) $ (18,741) $ (21,644) $ (20,439)
============= ============= ============= =============
Segment information as of April 1, 2001 and October 1, 2000 is as
follows (in thousands):
April 1, October 1,
2001 2000
------------- --------------
Identifiable Assets:
Coated Fabrics $ 21,762 $ 20,915
Specialty Adhesives 19,764 16,346
Compound Semiconductor and Optoelectronics 81,699 74,823
Corporate 45,773 77,948
------------- -------------
Total $ 168,998 $ 190,032
============= =============
14. NEW ACCOUNTING PRONOUNCEMENT
In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 133,
Accounting for Derivative Instruments and Hedging Activities. SFAS No.
133 establishes accounting and reporting standards for derivative
instruments and hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair
value. The accounting for changes in the fair value of a derivative
(that is, gains and losses) depends upon the intended use of the
derivative and resulting designation. In July 1999, FASB issued SFAS
No. 137, Accounting for Derivative Instruments and Hedging Activities
- Deferral of the Effective Date of SFAS No. 133, which postponed the
effective date of SFAS No. 133 for one year. In June 2000, FASB issued
SFAS No. 138, Accounting for Certain Derivative Instruments and
Certain Hedging Activities, an amendment to SFAS No. 133. The Company
adopted SFAS No. 133 (as amended by SFAS No. 138) as of October 2,
2000. The adoption of this statement had no impact on the Company's
financial position or results of operations.
ITEM 2. Management's Discussion and Analysis Of Financial Condition and
Results Of Operations
Second Quarter Fiscal 2001 Compared with
the Second Quarter Fiscal 2000
Net Sales. The Company's net sales from continuing operations decreased in the
second quarter of fiscal 2001 by approximately 7% to $15,056,000 from
$16,103,000 in the second quarter of fiscal 2000. The decrease is attributable
to a softening in the transportation, industrial equipment and recreational
vehicle markets at the Coated Fabrics and Specialty Adhesives segments. The
decline was partially offset by an increase in sales at the Compound
Semiconductor and Optoelectronics segment.
Net sales by the Coated Fabrics segment decreased in the second quarter of
fiscal 2001 approximately 9% to $7,818,000 from $8,588,000 in the second quarter
of fiscal 2000. The decrease is due to a lower sales volume as a result of the
softening in the transportation and industrial equipment markets.
Net sales by the Specialty Adhesives segment decreased in the second quarter of
fiscal 2001 by approximately 6% to $6,234,000 from $6,613,000 in the second
quarter of fiscal 2000. This decrease is attributable to the overall slowing of
the economy and its impact on the manufactured housing and recreational vehicle
markets.
Net sales by the Compound Semiconductor and Optoelectronics segment were
$1,004,000 in the second quarter of fiscal 2001 versus $902,000 in the second
quarter of fiscal 2000. The increase in sales is due to the acquisition of
Sterling Semiconductor, Inc. in the third quarter of fiscal 2000. The sales in
the second quarter of fiscal 2000 were from wafer sales produced by the partner
of the Optoelectronics joint venture. It is anticipated that the Optoelectronics
joint venture will reach commercial production levels in the second six months
of fiscal 2001.
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 2001 was $11,703,000
compared to a loss of $18,741,000 for the second quarter of fiscal 2000. Losses
for the second quarter of fiscal 2001 are attributable to the continuing
start-up costs associated with the Compound Semiconductor and Optoelectronics
segment. The decrease in the loss from the second quarter of fiscal 2000 to the
second quarter of fiscal 2001 is attributable to a number of unusual items that
occurred in the second quarter of fiscal 2000.
The Coated Fabrics segment had a loss before interest, income taxes, minority
interest and discontinued operations of $73,000 in the second quarter of fiscal
2001 versus $787,000 in the second quarter of fiscal 2000. The decrease in the
loss was primarily due to cost reductions in an effort to offset the decline in
sales as well as the absence in the second quarter of fiscal 2001 of a $657,000
write-down of certain assets held for sale that occurred in the second quarter
of fiscal 2000.
The Specialty Adhesives segment had income before interest, income taxes,
minority interest and discontinued operations of $90,000 in the second quarter
of fiscal 2001 compared to $380,000 in the second quarter of fiscal 2000. The
decrease is attributable to a greater proportion of sales of lower margin
roofing products versus the higher margin industrial products and an overall
decline in sales.
The Compound Semiconductor and Optoelectronics segment incurred a loss before
interest, income taxes, minority interest and discontinued operations of
$9,847,000 in the second quarter of fiscal 2001 compared to a loss of $3,158,000
in the second quarter of fiscal 2000. The losses relate to start-up costs of the
Optoelectronics joint venture which have increased as the joint venture gets
closer to the commencement of commercial operations and the amortization of
intangible assets associated with the acquisition of Sterling Semiconductor,
Inc. which occurred in the third quarter of fiscal 2000, which is also in the
development stage. Included in the second quarter of 2001 is a write-off of
certain assets to be disposed of at Sterling Semiconductor, Inc. The assets
relate to preliminary design and construction costs at a proposed new Sterling,
Virginia facility. The lease at this facility was terminated after certain
construction delays and breaches of contract. See Item 1. "Legal Proceedings" of
Part II for a discussion of litigation that arose in connection with the lease
termination.
Approximately $1,873,000 of other expenses incurred in the second quarter of
fiscal 2001 compared to $15,176,000 in the second quarter of fiscal 2000 was not
allocated to any segment of the Company's businesses. Unallocated expenses
declined due to a reduction of corporate overhead as a result of the sale of net
assets of the High Performance Plastics segment in the second quarter of fiscal
2000 and due to the absence in the second quarter of fiscal 2001 of a number of
unusual items which were recorded in the second quarter of fiscal 2000. Unusual
items in the second quarter of fiscal 2001 consisted of a write-down of $107,000
related to the Stirling, New Jersey facility held for sale. Unusual items in the
second quarter of fiscal 2000 included the write-off of a note receivable
($5,387,000), a reduction in the fair value of property, plant and equipment
held for sale ($1,566,000) and incentive payments and benefit costs for officers
and directors related to the achievement of certain strategic initiatives
($5,449,000).
Loss from discontinued operations of the High Performance Plastics segment was
$21,000 in the second quarter of fiscal 2001 compared to income from
discontinued operations of $57,118,000 in the second quarter of fiscal 2000.
This difference is due to the sale of net assets, and resulting gain, of the
High Performance Plastics segment in the second quarter of fiscal 2000.
Interest Income (Expense). Interest income for the second quarter of fiscal 2001
was $483,000 compared to interest income in the second quarter of fiscal 2000 of
$603,000. The decrease is attributable to a lower level of interest income
earned on the investment of the proceeds received from the sale of net assets of
the Company's High Performance Plastics segment in the second quarter of fiscal
2001 compared to the second quarter of fiscal 2000 as a result of a reduction in
investment balances during the same time period.
Interest expense was $316,000 in the second quarter of fiscal 2001 compared to
$592,000 in the second quarter of fiscal 2000. The decrease in interest expense
is due to the capitalization of interest in the second quarter of fiscal 2001 of
approximately $358,000 compared to no capitalized interest in the second quarter
of fiscal 2000. Including capitalized interest, overall interest costs were
greater than the prior year period primarily due to the addition of capitalized
leases subsequent to the second quarter of fiscal 2000 at a higher interest rate
which offset the effect of an overall reduction in debt.
Income Tax Benefit. Income tax benefit in the second quarter of fiscal 2001 was
$2,874,000 compared to a $20,184,000 benefit in the second quarter of fiscal
2000. 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 net
assets of the High Performance Plastics Segment.
First Two Quarters Fiscal 2001 Compared with
the First Two Quarters Fiscal 2000
Net Sales. The Company's net sales from continuing operations decreased in the
first two quarters of fiscal 2001 by approximately 6% to $29,374,000 from
$31,298,000 in the first two quarters of fiscal 2000. The decrease is
attributable to a softening in the transportation and industrial equipment
markets at the Coated Fabrics segment as well as the first two quarters of
fiscal 2000 containing 27 weeks compared to 26 weeks for the first two quarters
of fiscal 2001. The decline was partially offset by an increase in sales at the
Specialty Adhesives segment and an increase in sales at the Compound
Semiconductor and Optoelectronics segment.
Net sales by the Coated Fabrics segment decreased in the first two quarters of
fiscal 2001 approximately 16% to $14,476,000 from $17,293,000 in the first two
quarters of fiscal 2000. The decrease is due to a lower sales volume as a result
of the softening in the transportation and industrial equipment markets. The
comparison of net sales to the prior year is also affected by the first two
quarters of fiscal 2000 containing 27 weeks as compared to 26 weeks for the
first two quarters of fiscal 2001.
Net sales by the Specialty Adhesives segment increased in the first two quarters
of fiscal 2001 by approximately 2% to $12,728,000 from $12,489,000 in the first
two quarters of fiscal 2000. This increase is attributable to an increase in
roofing revenues and branded industrial products in the first quarter of fiscal
2001.
Net sales by the Compound Semiconductor and Optoelectronics segment were
$2,170,000 in the first two quarters of fiscal 2001 versus $1,516,000 in the
first two quarters of fiscal 2000. The increase in sales is due to the
acquisition of Sterling Semiconductor, Inc. in the third quarter of fiscal 2000.
It is anticipated that the Optoelectronics joint venture will reach commercial
production levels in the second six months of fiscal 2001.
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 2001 was
$21,644,000 compared to a loss of $20,439,000 for the first two quarters of
fiscal 2000. The increase in the loss is attributable to start-up losses for the
Compound Semiconductor and Optoelectronics segment and a decline in sales
associated with the Coated Fabrics segment. The loss in the first two quarters
of fiscal 2000 was due in part to a large number of unusual items and was
partially offset by the gain on the sale of a preferred stock investment.
The Coated Fabrics segment had a loss before interest, income taxes, minority
interest and discontinued operations in the first two quarters of fiscal 2001 of
$65,000 versus income of $68,000 in the first two quarters of fiscal 2000. The
decrease was primarily a result of the decline in revenues for the first two
quarters of fiscal 2001 versus the first two quarters of fiscal 2000. The first
two quarters in fiscal 2000 were impacted by a $657,000 write-down of certain
assets to be disposed of.
The Specialty Adhesives segment had income before interest, income taxes,
minority interest and discontinued operations in the first two quarters of
fiscal 2001 of $397,000 compared to $721,000 in the first two quarters of fiscal
2000. The decrease is attributable to a greater proportion of sales of lower
margin roofing products versus the higher margin industrial products.
The Compound Semiconductor and Optoelectronics segment incurred a loss before
interest, income taxes, minority interest and discontinued operations of
$18,238,000 in the first two quarters of fiscal 2001 compared to a loss of
$6,087,000 in the first two quarters of fiscal 2000. The losses relate to
start-up costs of the Optoelectronics joint venture which have increased as the
joint venture moves closer to the commencement of commercial operations and the
amortization of intangible assets associated with the acquisition of Sterling
Semiconductor, Inc. which occurred in the third quarter of fiscal 2001, which is
also in the development stage.
Approximately $3,738,000 of other costs and unusual items incurred in the first
two quarters of fiscal 2001 compared to $15,141,000 in the first two quarters of
fiscal 2000 were not allocated to any segment of the Company's business. Unusual
items in the first two quarters of fiscal 2001 included a write-down of the
Stirling, New Jersey facility held-for-sale of approximately $107,000. Unusual
items in the first two quarters of fiscal 2000 included the gain recognized on
the sale of a preferred stock investment ($2,905,000); the write-off of a note
receivable ($5,387,000); a reduction in the fair value of the Company's Port
Clinton, Ohio facility held-for-sale ($1,566,000); and incentive payments and
benefit costs for officers and directors related to the achievement of certain
strategic initiatives ($5,449,000). Overall non-allocated costs have been
reduced due to a reduction of corporate overhead as a result of the sale of net
assets of the High Performance Plastics segment.
Loss from discontinued operations of the High Performance Plastics segment was
$25,000 in the first two quarters of fiscal 2001 compared to net income from
discontinued operations of $58,643,000 in the first two quarters of fiscal 2000.
This difference is due to the sale of net assets, and resulting gain, of the
High Performance Plastics segment in the second quarter of fiscal 2000.
Interest Income (Expense). Interest income for the first two quarters of fiscal
2001 was $1,344,000 compared to interest income in the first two quarters of
fiscal 2000 of $608,000. The increase is attributable to interest income earned
on the investment of the proceeds received from the sale of net assets of the
Company's High Performance Plastics segment in the second quarter of fiscal
2000.
Interest expense was $915,000 in the first two quarters of fiscal 2001 compared
to $911,000 in the first two quarters of fiscal 2000. Overall, interest expense
has increased slightly period-to-period after consideration of capitalized
interest for the Compound Semiconductor and Optoelectronics segment of
approximately $358,000 in the first two quarters of fiscal 2001 versus $287,000
in the first two quarters of fiscal 2000.
Income Tax Benefit. Income tax benefit in the first two quarters of fiscal 2001
was $5,019,000 compared to a $21,677,000 benefit in the first two quarters of
fiscal 2000. The provisions for income tax benefit were calculated through the
use of the estimated income tax rates based on 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 the capital gains resulting from
the sale of net assets of the High Performance Plastics Segment and the sale of
an investment in preferred stock.
Liquidity and Capital Resources
For the first two quarters of fiscal 2001, continuing operations used
$14,735,000 of cash as compared to $30,164,000 provided by continuing operations
during the first two quarters of fiscal 2000. The increase in cash used by
continuing operations for the first two quarters of fiscal 2001 resulted
primarily from an increase in start-up costs for the Compound Semiconductor and
Optoelectronics segment and a decrease in other accrued expenses as a result of
income tax and bonus payments made.
Net cash used in investing activities for the first two quarters of fiscal 2001
was $5,860,000 compared to $201,706,000 provided by investing activities during
the first two quarters of fiscal 2000. The net proceeds from the sale and
redemption of investments were offset by the expenditures for capital equipment
and a business acquisition. During the first quarter of fiscal 2001, the
purchase of machinery and equipment primarily related to the Compound
Semiconductor and Optoelectronics segment. The first two quarters of fiscal 2000
benefited from the sale of net assets of the High Performance Plastics segment.
Net cash used in financing activities during the first two quarters of fiscal
2001 was $5,003,000 compared to $94,209,000 of cash used during the first two
quarters of fiscal 2000. Purchases of Company common stock in the open market
and repayment of term loans were partially offset by borrowings under the
Company's revolving line of credit facility and a capital contribution from the
Optoelectronics joint venture partner during the first two quarters of fiscal
2001. The significant amount of cash used during the first two quarters of
fiscal 2000 were a result of debt repayment in connection with the sale of net
assets of the High Performance Plastics segment.
On April 1, 2001, the Company had approximately $7,660,000 in cash and cash
equivalents as compared to approximately $36,627,000 at October 1, 2000. Working
capital at April 1, 2001 was $15,552,000 compared to $36,282,000 at October 1,
2000. On April 1, 2001, the Company had outstanding borrowings of $4,358,000
under its $10,000,000 revolving credit facility with the CIT Group/Business
Credit, Inc. (subject to a borrowing base limitation of approximately $9,680,000
at April 1, 2001). The principal uses of cash during the first two quarters of
fiscal 2001 were to repurchase Company stock for treasury and to fund capital
expenditures and operating losses for the Compound Semiconductor and
Optoelectronics segment. The Company plans to spend an additional $15 - $20
million on capital expenditures for the Compound Semiconductor and
Optoelectronics segment during fiscal 2001. The Company plans to fund these
expenditures with the remaining proceeds from the sale of net assets of the High
Performance Plastics segment as well as capital lease financing. The Company
believes that cash from the Coated Fabrics and Specialty Adhesives operations,
its ability to borrow under the revolving credit facility mentioned above, its
ability to obtain financing for capital equipment and proceeds from the sale of
net assets 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 facility will
continue to be sufficient to finance its existing level of operations and meet
its debt service obligations or that the Company's Optoelectronics joint venture
partner will continue to fund its 49% share of the cost of the joint venture's
operations. 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, sell assets or obtain additional 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.
Forward Looking Statements
Certain statements contained in or incorporated by reference into this report
are "forward looking statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995. Forward looking statements include
statements which are predictive in nature, which depend upon or refer to future
events or conditions, which include words such as "expects," "anticipates,"
"intends," "plans," "believes," "estimates," or similar expressions. In
addition, any statements concerning future financial performance (including
future revenues, earnings or growth rates), ongoing business strategies or
prospects, and possible future actions, which may be provided by management, are
also forward looking statements as defined by the United States Private
Securities Litigation Reform Act of 1995. Forward looking statements are based
on current expectations and projections about future events and are subject to
risks, uncertainties and assumptions about the Company, economic and market
factors and the industries in which we do business, among other things. These
statements are not guaranties of future performance and we have no specific
intention to update these statements.
These forward looking statements, like any forward looking statements, involve
risks and uncertainties that could cause actual results to differ materially
from those projected or anticipated. Among the important factors which could
cause actual results to differ materially from those in the forward looking
statements are:
o cancellations, rescheduling or delays in product shipments;
o manufacturing capacity constraints;
o lengthy sales and qualification cycles;
o difficulties in the production process;
o the effectiveness of our capital expenditure programs;
o our future financial performance including our ability to raise cash;
o delays in developing and commercializing new products;
o competition;
o changes in the industries in which we compete or plan to compete,
especially the HB-LED and semiconductor industries, including overall
growth of the industries;
o the continued acceptance of our products;
o availability and performance of key personnel;
o relations with employees, customers, suppliers and venture partners;
o our ability to obtain and protect key intellectual property;
o continued funding from our joint venture partner;
o acquisitions and our success in integrating the acquired businesses;
and
o economic conditions generally and in our industries.
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 and
investment portfolio. The Company's risk management policy includes the use of
derivative financial instruments (interest rate swaps) to manage its interest
rate exposure on long-term variable rate debt. The counter parties are major
financial institutions. The Company does not enter into derivatives or other
financial instruments for trading or speculative purposes. No interest rate
swaps are outstanding at April 1, 2001.
At April 1, 2001, the Company had approximately $22.6 million of cash, cash
equivalents and investments subject to variable short-term interest rates and
approximately $4.4 million of floating rate revolving credit advances. Because
of the short-term nature or floating rates, 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 the net balance, a change
of one percent in the interest rate would cause a change in net interest income
of approximately $182,000 on an annual basis.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
(a) On February 23, 2001, the Company and its wholly owned
subsidiary, Sterling Semiconductor, Inc., were served with a
complaint by AFG-NVC, LLC in the Loudoun County, Virginia Circuit
Court. The complaint seeks approximately $8,106,000 for alleged
default under a lease and benefits that the landlord believes it
would have received under such lease. The Company has filed an
answer seeking not less than $7,000,000 for breaches of contract,
fraud and constructive fraud on the part of the plaintiff. At the
present time the Company does not have sufficient information to
determine what liability, if any, the Company might have in
connection with this action.
The Company knows of no other 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 1, 2001, other than routine litigation incidental to the
Company's business.
Item 2. Changes in Securities
On March 16, 2001, the stockholders of the Company approved the
amendment of the Company's Certificate of Incorporation to
increase the number of shares of common stock, par value $.01 per
share, of the Company that are authorized for issuance from
thirty-five million to one hundred million.
Item 3. Default upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
On March 16, 2001, the Company held its annual meeting of
stockholders in Danbury, Connecticut. A total of 25,779,354
shares of capital stock of the Company were entitled to vote at
the meeting. Of this amount, 24,190,228 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.
The first proposal was to elect the seven 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 22,966,809 1,223,419
Thomas E. Constance 22,962,962 1,227,266
Howard R. Curd 23,295,245 894,983
Curtis L. Mack 23,303,307 886,921
Roland H. Meyer 23,291,602 898,626
John A. Porter 23,303,307 886,921
Robert L. Soran 23,300,177 890,051
Proposal Number 2 was to amend the Company's Certificate of
Incorporation to increase the number of authorized shares of
common stock. The following summarizes the results of the vote:
Voted For Voted Against Abstained
--------- ------------- ---------
20,443,962 3,623,088 123,178
Proposal Number 3 was to approve the Company's 2001 Stock Option
Plan. The following summarizes the results of the vote:
Voted For Voted Against Abstained
--------- ------------- ---------
12,713,934 5,644,790 95,352
Proposal Number 4 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 September 30, 2001. The following summarizes
the results of the vote:
Voted For Voted Against Abstained
--------- ------------- ---------
24,091,236 45,469 53,523
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 Amended and Restated Certificate of Incorporation of Uniroyal
Technology Corporation.
3.2 By-Laws of Uniroyal Technology Corporation as Amended and
Restated to March 16, 2001.
10.16 Uniroyal Technology Corporation 1992 Stock Option Plan, as
Amended and Restated to March 20, 2001.
10.40 Uniroyal Technology Corporation 1994 Stock Option Plan, as
Amended and Restated to March 16, 2001.
10.62 Uniroyal Technology Corporation 2001 Stock Option Plan.
(b) Reports on Form 8-K
None.
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 9, 2001 By: /s/ George J. Zulanas, Jr.
--------------------------
George J. Zulanas, Jr.,
Executive Vice President,
Treasurer and Chief Financial
Officer