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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT
Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarter Ended June 30, 1996
Commission file number: 1-5529
BORG-WARNER SECURITY CORPORATION
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-3408028
- ----------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
200 South Michigan Avenue, Chicago, Illinois 60604
- -------------------------------------------- -------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312)322-8500
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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
----- -----
On July 31, 1996 the registrant had 22,110,542 shares of Common Stock and
1,149,600 shares of Series I Non-Voting Common Stock outstanding.
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-1-
BORG-WARNER SECURITY CORPORATION AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
THREE MONTHS ENDED JUNE 30, 1996
INDEX
Page No.
--------
PART I. Financial Information
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Item 1. Financial Statements
Condensed Consolidated Balance Sheet
at June 30, 1996 and December 31, 1995 . . . . . . . . . 2
Consolidated Statement of Earnings for
the three months ended June 30, 1996 and 1995 . . . . . 3
Consolidated Statement of Earnings for
the six months ended June 30, 1996 and 1995 . . . . . . 4
Condensed Consolidated Statement of Cash Flows for
the six months ended June 30, 1996 and 1995 . . . . . . 5
Notes to the Consolidated
Financial Statements . . . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . 11
PART II. Other Information
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Item 1. Legal Proceedings . . . . . . . . . . . . . . . . 15
Item 2. Changes in Securities . . . . . . . . . . . . . . 15
Item 3. Defaults Upon Senior Securities . . . . . . . . . 15
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . 15
Item 5. Other Information . . . . . . . . . . . . . . . . 16
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 16
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . 17
-2-
Part I. Financial Information
Item 1. Financial Statements
--------------------
BORG-WARNER SECURITY CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(MILLIONS OF DOLLARS)
June 30, December 31,
1996 1995
---------- ------------
ASSETS
Cash and cash equivalents $ 15.7 $ 21.1
Receivables, net 97.8 102.7
Inventories 13.6 12.5
Other current assets 64.5 59.5
------- -------
Total current assets 191.6 195.8
------- -------
Property, plant and equipment, at cost 478.9 500.7
Less accumulated depreciation 248.1 249.8
------- -------
Net property, plant and equipment 230.8 250.9
------- -------
Net excess purchase price
over net assets acquired 265.9 273.0
Deferred tax asset 52.9 52.8
Other assets 87.1 78.9
------- -------
$ 828.3 $ 851.4
Total assets ======= =======
LIABILITIES & STOCKHOLDERS' EQUITY
Notes payable $ 5.0 $ 7.0
Accounts payable and accrued expenses 180.9 193.9
------- -------
Total current liabilities 185.9 200.9
------- -------
Long-term debt 478.7 482.1
Other long-term liabilities 111.6 118.7
Capital stock:
Common stock 0.2 0.2
Series I non-voting common stock - -
Other stockholders' equity 51.9 49.5
------- -------
Total stockholders' equity 52.1 49.7
------- -------
Total liabilities & stockholders'
equity $ 828.3 $ 851.4
======= =======
(The accompanying notes are an integral part of these financial
statements)
-3-
BORG-WARNER SECURITY CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
(MILLIONS OF DOLLARS, EXCEPT PER SHARE DATA)
Three Months Ended June 30,
-------------------------------
1996 1995
-------- --------
Net service revenues $ 454.6 $ 467.3
Cost of services 366.2 377.0
Selling, general and
administrative expenses 54.2 57.0
Depreciation 12.9 14.3
Amortization of excess purchase
price over net assets acquired 3.6 3.6
Interest expense and finance charges 14.6 14.4
-------- --------
Earnings before income taxes 3.1 1.0
Provision for income taxes 1.2 0.4
-------- --------
Net earnings $ 1.9 $ 0.6
======== ========
Net earnings per share $ 0.08 $ 0.03
======== ========
(The accompanying notes are an integral part of these financial
statements)
-4-
BORG-WARNER SECURITY CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
(MILLIONS OF DOLLARS, EXCEPT PER SHARE DATA)
Six Months Ended June 30,
-----------------------------
1996 1995
-------- --------
Net service revenues $ 904.6 $ 929.7
Cost of services 729.4 748.2
Selling, general and
administrative expenses 109.0 115.9
Depreciation 26.1 29.2
Amortization of excess purchase
price over net assets acquired 7.2 7.4
Interest expense and finance charges 29.6 28.2
-------- --------
Earnings before income taxes 3.3 0.8
Provision for income taxes 0.9 0.1
-------- --------
Net earnings $ 2.4 $ 0.7
======== ========
Net earnings per share $ 0.10 $ 0.03
======== ========
(The accompanying notes are an integral part of these financial
statements)
-5-
BORG-WARNER SECURITY CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(MILLIONS OF DOLLARS)
Six Months Ended
June 30,
1996 1995
------- ------
OPERATING:
Net earnings $ 2.4 $ 0.7
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Non-cash charges to earnings:
Depreciation and amortization 33.3 36.6
Provision for losses on receivables 2.2 2.1
Amortization of debt discounts 0.6 1.0
Changes in assets and liabilities:
Decrease in receivables 2.6 7.4
Increase in other current assets (5.8) (4.4)
Decrease in accounts payable and
accrued expenses (13.0) (6.4)
Net change in other long-term assets and liabilities 2.5 (5.7)
Other (5.0) (2.0)
------- ------
Net cash provided by operating activities 19.8 29.3
------- ------
INVESTING:
Capital expenditures and investments in sales-type
leases (21.9) (27.6)
Other, net 1.0 0.4
------- ------
Net cash used in investing activities (20.9) (27.2)
------- ------
FINANCING:
Net decrease in notes payable (2.0) (5.7)
Increase (decrease) in debt outstanding under revolving
credit facility (2.1) 18.6
Increases in long-term debt 100.0 -
Reductions in long-term debt (100.0) -
Net decrease in receivables sold (0.3) (18.0)
Sales of treasury common stock 0.1 0.5
------- ------
Net cash used in financing activities (4.3) (4.6)
------- ------
NET DECREASE IN CASH AND CASH EQUIVALENTS (5.4) (2.5)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 21.1 15.8
------- ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 15.7 $ 13.3
======= ======
(The accompanying notes are an integral part of these financial statements)
-6-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) The financial statements of Borg-Warner Security Corporation and
Consolidated Subsidiaries ("Company") have been prepared in accordance with
the instructions to Form 10-Q. The statements are unaudited, but include all
adjustments, consisting of normal recurring items, which the Company considers
necessary for a fair presentation of the information set forth herein. The
results of operations for the three and six month periods ended June 30, 1996
are not necessarily indicative of the results to be expected for the entire
year. Certain 1995 amounts have been reclassified to conform with the 1996
presentation.
(2) The allowance for doubtful accounts was $7.0 million at June 30, 1996 and
$7.3 million at December 31, 1995. The accumulated amortization on excess
purchase price over net assets acquired was $90.4 million at June 30, 1996 and
$93.0 million at December 31, 1995.
In November 1995, the Company entered into a three-year agreement to sell a
$120 million undivided interest in a revolving pool of customer receivables.
This sold interest was reflected as a reduction of "Receivables" in the
accompanying Condensed Consolidated Balance Sheet at June 30, 1996 and
December 31, 1995. The Company retains, on a subordinated basis, an undivided
interest in the pool of receivables. The Company's retained interest of $11.2
million and $17.0 million at June 30, 1996 and December 31, 1995,
respectively, is included with "Receivables, net" on the balance sheet. "Other
current assets" at June 30, 1996 and December 31, 1995 included interest-
bearing cash deposits of $31.4 million and $31.1 million, respectively, held
in trust under the terms of the accounts receivable facility. These deposits
represent collections held back by the trustee based on the amount of eligible
receivables in the revolving receivables pool. The Company's retained interest
in the receivables and cash deposits is generally restricted. The full amount
of the allowance for losses has been retained because the Company has retained
substantially the same risk of credit loss as if the receivables had not been
sold. The discount related to the sale of receivables is included with
"Interest expense and finance charges" in the Consolidated Statement of
Operations.
Net cash payments for interest and income taxes were as follows (in millions
of dollars):
Six Months Ended
June 30,
-------------------
1996 1995
------ ------
Interest paid $29.7 $28.4
Income taxes paid (refunded) 1.5 (0.6)
(3) The Company's provisions for income taxes for the three and six month
periods ended June 30, 1996 and 1995 reflect estimated annual tax rates for
the year applied to federal, state and foreign income.
-7-
(4) The following tables summarize the capitalization of the Company at June
30, 1996 and December 31, 1995 (in millions of dollars):
June 30, 1996 December 31, 1995
----------------- -----------------
DEBT Current Long-Term Current Long-Term
------- --------- ------- ---------
Bank term loan due 1998 (at
an average rate of 8.8%
in 1996 and 9.5% in 1995;
and 8.7% at June 30, 1996) $ - $200.0 $ - $100.0
Bank revolving commitment
loan due through 1999 (at
an average rate of 8.5% in
1996 and 7.3% in 1995; and
8.4% at June 30, 1996) - 122.5 - 124.6
8% notes (face amount of
$100 million due 1996) - - - 99.5
Unsecured notes (at an average
rate of 7.2% in 1996 and 7.0%
in 1995; and 7.3% at June 30,
1996) 0.2 0.4 0.4 0.6
Capital lease liability (at an
average rate of 8.3% in 1996
and 8.4% in 1995; and 8.4% at
June 30, 1996) 4.8 6.6 6.6 8.3
9-1/8% senior subordinated
notes (face amount of
$150 million due 2003) - 149.2 - 149.1
----- ------ ------ ------
Total notes payable and
long-term debt $ 5.0 $478.7 $ 7.0 $482.1
===== ====== ====== ======
-8-
STOCKHOLDERS' EQUITY June 30, December 31,
1996 1995
------------- ------------
Common stock:
Common stock $ 0.2 $ 0.2
Series I non-voting common stock - -
Preferred stock - -
Capital in excess of par value 28.3 28.1
Notes receivable - management
stock purchase (0.3) (0.3)
Retained earnings 33.5 31.2
Cumulative translation adjustment (0.6) (0.4)
---------- ----------
61.1 58.8
Less treasury common stock,
1,905,958 shares in 1996 and
1,928,861 shares in 1995, at cost (9.0) (9.1)
---------- ----------
Total stockholders' equity $ 52.1 $ 49.7
========== ==========
CAPITAL STOCK - NUMBER OF SHARES June 30, December 31,
(Thousands of shares) 1996 1995
--------- ------------
Common Stock, $.01 par value:
Authorized 50,000.0 50,000.0
Issued 22,446.1 22,446.1
Outstanding 22,110.5 22,087.6
Series I non-voting common stock,
$.01 par value:
Authorized 25,000.0 25,000.0
Issued 2,720.0 2,720.0
Outstanding 1,149.6 1,149.6
Preferred stock, $.01 par value:
Authorized 5,000.0 5,000.0
Issued and outstanding - -
-9-
(5) Earnings per common share are based on average outstanding common shares
and common share equivalents. Common share equivalents recognize the dilutive
effects of common shares which may be issued in the future upon exercise of
certain stock options. The number of shares used in the computation of
earnings per share were as follows (in thousands of shares):
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1996 1995 1996 1995
------ ------ ------ ------
Average common shares
outstanding 23,258 23,101 23,251 23,027
Common share equivalents 294 195 284 203
------ ------ ------ ------
Total used for computation
of per share earnings 23,552 23,296 23,535 23,230
====== ====== ====== ======
(6) The Company's discontinued property and casualty insurance subsidiary
("Centaur") ceased writing insurance in 1984 and has been operating under
rehabilitation since September 1987. Rehabilitation is a process supervised
by the Illinois Director of Insurance to attempt to compromise claim
liabilities at an aggregate level that is not in excess of Centaur's assets.
In rehabilitation, Centaur's assets are currently being used to satisfy claim
liabilities under direct insurance policies written by Centaur. Any remaining
assets will be applied to Centaur's obligations to other insurance companies
under reinsurance contracts. If all of Centaur's obligations are not
satisfied through rehabilitation, it is possible that satisfaction could be
sought from the Company for Centaur's liabilities.
The foregoing has resulted in one pending lawsuit against the Company, certain
of its current and former subsidiaries, and directors and officers of certain
current and former subsidiaries for recovery of alleged damages incurred
because of Centaur's failure to satisfy its reinsurance obligations. The
lawsuit seeks in excess of $100 million for current losses, future losses and
other damages and also seeks punitive damages. The Company believes that any
damages for failure to satisfy reinsurance obligations are solely the
responsibility of Centaur and that the resolution of the lawsuit relating to
Centaur, including the Company's indemnification obligations to certain former
officers and directors, will not have a material adverse effect on its
financial position or future operating results; however, no assurance can be
given as to the ultimate outcome with respect to such lawsuit.
The Company and certain of its current and former subsidiaries have been
identified by the U.S. Environmental Protection Agency and certain state
environmental agencies as potentially responsible parties ("PRPs") at several
hazardous waste disposal sites under the Comprehensive Environmental Response,
Compensation and Liability Act ("Superfund") and equivalent state laws and, as
such, may be liable for the cost of cleanup and other remedial activities at
these sites. Responsibility for cleanup and other remedial activities at a
Superfund site is typically shared among PRPs based on an allocation formula.
The Company believes that none of these matters individually
-10-
or in the aggregate will have a material adverse effect on its financial
position or future operating results, generally either because the maximum
potential liability at a site is not large or because liability will be shared
with other PRPs, although no assurance can be given with respect to the
ultimate outcome of any such liability. Based on its estimate of allocations
of liability among PRPs, the probability that other PRPs, many of whom are
large, solvent public companies, will fully pay the costs allocated to them,
currently available information concerning the scope of contamination at such
sites, estimated remediation costs at such sites, estimated legal fees and
other factors, the Company has made provisions for indicated environmental
liabilities in the aggregate amount of approximately $9 million (relating to
environmental matters with respect to discontinued operations of the Company).
If any environmental liability claim relating to the Company's former chemical
and plastics business is made, the Company is indemnified by the purchaser of
such business, General Electric Company. Since the disposition, the Company
has notified General Electric Company of various claims made with respect to
the Company's former chemical and plastic business, and General Electric
Company has assumed all of such claims and has not contested its
indemnification obligations. There is no dollar limitation on the General
Electric Company's indemnification obligations and there are no other material
limitations or exclusions with respect thereto. If any environmental
liability claim relating to the operations of the Company's discontinued
automotive subsidiary is made, the Company will be indemnified by such former
subsidiary.
The Company believes that the various asserted claims and litigation in which
it is involved will not materially affect its financial position or future
operating results, although no assurance can be given with respect to the
ultimate outcome of any such claim or litigation.
-11-
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
RESULTS OF OPERATIONS
---------------------
Consolidated net service revenue for the three and six month periods ended
June 30, 1996 declined 2.7% from the comparable 1995 periods. Despite reduced
revenue, operating profit, which is pretax earnings before interest expense
and unallocated corporate expenses, increased 13.4% and 11.2% for the second
quarter and first six months of 1996, respectively. The Guard and Alarm units
improved margins through a combination of profitability improvement programs
and cost reduction efforts. Lower margins at the Armored and Courier units
offset some of the improvement.
The revenue contributed by each of the Company's units was as follows (in
millions of dollars):
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1996 1995 1996 1995
------ ------ ------ ------
Guard $297.7 $307.7 $593.9 $609.7
Alarm 59.9 63.1 118.8 128.3
Armored 60.7 56.8 119.7 113.4
Courier 36.3 39.7 72.2 78.3
------ ------ ------ ------
Total $454.6 $467.3 $904.6 $929.7
====== ====== ====== ======
Guard revenue declined 3% in the second quarter and the first six months of
1996 compared to 1995. Volume, as measured by average guard hours-in-force,
declined 5.3% year-to-date, as reductions, cancellations, and terminations
exceeded new sales. The unit's program to reduce underperforming contracts
contributed to improved margins as operating profit increased 19.7% in the
second quarter and 22.8% in the first half of this year. Field cost
reduction and streamlining programs along with reduced amounts of unbilled
overtime also contributed to the improvement.
Alarm revenue decreased 5.2% in the second quarter and 7.4% in the first six
months of 1996 compared to 1995. In 1995, Alarm began recognizing
installation contracts as sales-type leases rather than operating leases.
Such recognition resulted in increased reported revenue in 1995 which is and
will be offset by reduced rental revenue from equipment under operating
leases. There is no significant impact on operating income since the
-12-
rental revenue is substantially offset by finance income earned on sales-type
leases and lower depreciation expense on remaining operating leases. Alarm's
1996 operating profit increased significantly primarily due to improved
investment control performance and lower operating costs.
Armored revenue increased 7.1% in the second quarter and 5.6% in the first six
months of 1996 compared to 1995. The increases resulted primarily from higher
volume in the ATM operations. Revenue for the armored transport and cash
services operations were comparable to 1995. Operating profit declined 25.8%
and 21.3% for the second quarter and the first half of 1996, respectively, due
to higher labor and vehicle costs, higher cargo losses, and the absence of a
pricing surcharge implemented in the first quarter of 1995.
Courier revenue decreased 8.6% in the second quarter and 7.8% in the first six
months of 1996 compared to 1995. The lower revenue reflects the reduced
volume of traditional financial document shipments, customer cost reduction
efforts and the unit's efforts to improve margins by reducing underperforming
business. Operating profit declined due to reduced revenues and a fixed cost
base in established route structures. The unit is reviewing its route
structure and branch organization in light of the reduced volume of business.
The United States Congress has recently passed legislation that is expected to
be enacted that will increase the minimum wage payable to employees. The
Company believes that it will be able to adjust its billing rates in response
to any such increase and that there would not be a material effect on
operating income from any increase in the minimum wage.
Interest expense and finance charges increased 1.4% in the second quarter and
5.0% for the first six months of 1996 compared to 1995. This is primarily due
to higher interest rates associated with refinancing activities in late 1995,
offset by slightly lower average debt balances.
FINANCIAL CONDITION AND LIQUIDITY
- ---------------------------------
In November 1995 the Company entered into a three-year agreement to sell a
$120 million undivided interest in a revolving pool of customer receivables.
Other current assets at June 30, 1996 and December 31, 1995 included interest-
bearing cash deposits of $31.4 million and $31.1 million, respectively, held
in trust under the terms of the accounts receivable facility. These deposits
represent collections held back based on the amount of eligible receivables in
the revolving receivables pool. The levels of receivables and current
liabilities are influenced by the timing of billings, collections and
payrolls. The Company's policy is to keep working capital as low as is
operationally feasible to minimize related carrying costs.
-13-
Net cash provided by operating activities was $19.8 million and $29.3
million in the first six months of 1996 and 1995, respectively. The decline
in cash provided by operating activities was primarily due to changes in
working capital requirements. Cash used for investing activities declined by
$6.3 million due primarily to controlled Alarm investment and lower capital
expenditures. Total funding, including debt and off-balance sheet facilities,
declined to $570.4 million at March 31, 1996 from $576.3 million at December
31, 1995. The Company expects that continuing operations, together with
existing credit facilities and replacements thereof, will generate sufficient
cash to fund current operating requirements and capital expenditures.
On October 17, 1995, the Company entered into a credit agreement with a
syndicate of banks, providing for a $200 million term loan due December 31,
1998. On such date the Company also amended its existing revolving credit and
letter of credit facilities, principally to permit the term loan, change
pricing, amend covenants relating to interest coverage, leverage, net
worth and earnings, extend the maturity of the letter of credit facility to
December 31, 1998 and reduce the level of commitments under the letter of
credit facility to $155 million.
The Company used the initial $100 million of proceeds from the term loan
to prepay an existing $50 million term loan and for general corporate
purposes. The remaining $100 million of term loan proceeds was used to repay
the $100 million principal amount of its 8% notes, which matured on April 1,
1996.
The Company is required to prepay the term loan with the proceeds from certain
asset sales, certain reversions of surplus pension plan assets, issuance of
debt or equity securities and excess cash flow. In the event that, as of the
end of each quarter beginning with the quarter ended March 31, 1997, the
Company has not achieved required covenants for the four consecutive quarters
ending on such date, the Company is required to prepay $150 million of the
term loan not later than 120 days after the end of such quarter. If the
Company is required to make such payment, it expects to fund such amount
through some combination of transactions that may include the issuance of debt
or equity securities, the sale of assets or other financing alternatives.
In March 1996, the Company entered into an agreement that provides for the
purchase of the installation and equipment lease payments due under certain
alarm unit customer leased installations.
The Company has entered into a letter of intent to combine the business
conducted by its armored unit with Loomis Armored, Inc. The Company and
existing shareholders of Loomis will each own 50% of the to-be-named company.
Loomis is controlled by Wingate Partners, a private equity investment
partnership. The new company will provide a full range of armored
transportation, cash services and automated teller machine services
nationwide. The Company expects to receive approximately $95 million from the
transaction, which will be applied to reduce existing debt. The transaction is
subject to a number of conditions, but the Company expects that it will be
completed in 1996.
-14-
As discussed more fully in Note 6 of the Notes to Consolidated Financial
Statements, various complaints seeking substantial dollar amounts have been
filed against the Company. The Company believes that it has established
adequate provisions for litigation liabilities in its financial statements in
accordance with generally accepted accounting principles. The Company
believes that none of these matters individually or in the aggregate will have
a material adverse effect on its financial position or future operating
results, although no assurance can be given with respect to the ultimate
outcome of any such proceeding.
-15-
Part II. Other Information
Item 1. Legal Proceedings
-----------------
As previously reported in the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, Centaur Insurance Company ("Centaur"), the
Company's discontinued property and casualty insurance subsidiary, has been
operating under rehabilitation since September 1987. Rehabilitation is a
process supervised by the Illinois Director of Insurance to attempt to
compromise Centaur's liabilities at an aggregate level that is not in excess
of its assets. The foregoing has resulted in one pending lawsuit against the
Company for recovery of alleged damages incurred as a result of Centaur's
failure to satisfy its reinsurance obligations. The liability phase of such
lawsuit has begun and the Company intends to defend this lawsuit vigorously.
Item 2. Changes in Securities
---------------------
Inapplicable
Item 3. Defaults Upon Senior Securities
-------------------------------
Inapplicable
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
On April 16, 1996, the Company held its annual meeting of
stockholders. At such meeting, Arthur F. Golden and Andrew
McNally IV were elected as directors to serve for a term expiring
in 1997 and Robert A. McCabe, Alexis P. Michas and Donald C.
Trauscht were elected as directors to serve for a term expiring
in 1999. Each of J. Joe Adorjan, James J. Burke, Jr., Albert J.
Fitzgibbons, III, Dale W. Lang, Jr. and H. Norman Schwarzkopf
continued to serve as directors following the meeting. At such
meeting, the following votes were cast in the election of
directors:
For Withheld
--- --------
A.F. Golden 17,628,578 1,080,729
A. McNally 17,631,658 1,077,649
R.A. McCabe 17,631,658 1,077,649
A.P. Michas 17,617,957 1,091,350
D.C. Trauscht 17,579,264 1,130,043
At such meeting, the proposal to amend the Company's 1993
Stock Incentive Plan was approved by the following votes:
For Against Abstain Broker Non-Votes
--- ------- ------- ----------------
14,581,374 1,381,901 57,501 2,688,531
At such meeting, the proposal to adopt the Company's
Performance Share Plan was approved by the following votes:
For Against Abstain Broker Non-Votes
--- ------- ------- ----------------
15,528,296 308,353 184,127 2,688,531
-16-
At such meeting, the selection of Deloitte & Touche LLP as auditors
was approved by the following votes:
For Against Abstain
--- ------- -------
18,652,646 25,007 31,653
Item 5. Other Information
-----------------
None
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
4.1 First Amendment to Credit Agreement and Consent, dated as
of March 14, 1996, among the Company, various lenders and
Bankers Trust Company, as Agent.
4.2 Fourth Amendment to Credit Agreement and Consent, dated
as of March 14, 1996, among the Company, various lenders,
the lead managers and co-agents named therein and Bankers
Trust Company, as Administrative Agent.
4.3 Amendment No. 8 to Credit Agreement and Consent, dated as
of March 14, 1996, among the Company, the banks party
thereto and The Long-Term Credit Bank of Japan, LTD., as
Agent.
27 - Financial Data Schedule
(b) Reports on Form 8-K:
None
-17-
SIGNATURES
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.
Borg-Warner Security Corporation
--------------------------------
(Registrant)
By /s/ Timothy M. Wood
------------------------
(Signature)
Timothy M. Wood
Vice President, Finance
(Principal Financial and Accounting Officer)
Date: August 14, 1996