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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 27, 1996
or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ___________ to ___________
Commission File Number 0-12102
HADCO CORPORATION
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2393279
- ------------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation organization) Identification No.)
12A Manor Parkway, Salem, New Hampshire 03079
- --------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Telephone: (603) 898-8000
-------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Registrant had 10,367,793 shares of Common Stock, $0.05 Par Value, outstanding
at September 3, 1996.
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HADCO CORPORATION AND SUBSIDIARIES
INDEX
Part I. Page
Financial Information:
Consolidated Condensed Balance Sheets as of July 27, 1996
and October 28, 1995 ........................................ 3
Consolidated Condensed Statements of Income for the Quarters
ended July 27, 1996 and July 29, 1995, and nine months ended
July 27, 1996 and July 29, 1995, respectively ............... 4
Consolidated Condensed Statements of Cash Flows for the nine
months ended July 27, 1996 and July 29, 1995, respectively .. 5
Notes to Consolidated Condensed Financial Statements ......... 6
Management's Discussion and Analysis of Results of Operations
and Financial Condition ..................................... 11
Part II.
Other Information ............................................ 16
Signatures ................................................... 17
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3
HADCO CORPORATION AND SUBSIDIARIES
----------------------------------
CONSOLIDATED CONDENSED BALANCE SHEETS
-------------------------------------
(In thousands, except share data)
ASSETS
------
July 27, October 28,
1996 1995
-------- --------
(unaudited)
Current Assets:
Cash and cash equivalents $ 26,926 $ 21,307
Short-term investments 5,632 15,167
Accounts receivable, net of allowance for
doubtful accounts of $898,000 in 1996 and
$850,000 in 1995, respectively 40,087 35,797
Inventories 17,190 13,304
Prepaid expenses 7,931 7,984
-------- --------
Total Current Assets 97,766 93,559
-------- --------
Property, Plant and Equipment, at cost 223,288 183,760
Less - Accumulated depreciation and amortization 127,155 116,068
-------- --------
96,133 67,692
-------- --------
Other Assets 2,319 1,740
-------- --------
$196,218 $162,991
======== ========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
----------------------------------------
Current Liabilities:
Current maturities of long-term debt
and capital lease obligations $ 1,587 $ 2,143
Accounts payable and accrued expenses 38,628 34,342
Accrued Payroll and related expenses 16,185 16,031
-------- --------
Total Current Liabilities 56,400 52,516
-------- --------
Long-Term Debt and Capital Lease Obligations 1,152 2,387
-------- --------
Long-Term Liabilities (Note 5) 9,019 7,314
-------- --------
Stockholders' Investment:
Common stock, $.05 par value -
Authorized 25,000,000 shares
Issued and outstanding 10,365,898
in 1996 and 9,903,236 in 1995 519 497
Paid-in Capital 30,721 25,077
Deferred Compensation Resulting from the
Granting of Non-qualified Stock Options (280) (407)
Retained Earnings 98,687 75,607
-------- --------
Total Stockholders' Investment 129,647 100,774
-------- --------
$196,218 $162,991
======== ========
The accompanying notes are an integral part
of these consolidated condensed financial statements
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HADCO CORPORATION AND SUBSIDIARIES
----------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
-------------------------------------------
unaudited
(In thousands, except share data)
Quarter Ended Nine Months Ended
------------------------ ------------------------
July 27, July 29, July 27, July 29,
1996 1995 1996 1995
----------- ----------- ----------- -----------
Net Sales $ 88,225 $ 67,752 $ 252,799 $ 192,214
Cost of Sales 66,774 50,212 189,975 147,121
----------- ----------- ----------- -----------
Gross Profit 21,451 17,540 62,824 45,093
Selling, General and
Administrative Expenses 8,541 7,719 25,682 22,160
----------- ----------- ----------- -----------
Income from Operations 12,910 9,821 37,142 22,933
Interest Income 276 481 959 1,186
Interest Expense (82) (134) (270) (403)
----------- ----------- ----------- -----------
Income Before Provision for
Income Taxes 13,104 10,168 37,831 23,716
Provision for Income Taxes 5,110 4,016 14,752 9,368
----------- ----------- ----------- -----------
Net Income $ 7,994 $ 6,152 $ 23,079 $ 14,348
=========== =========== =========== ===========
Net Income Per Common and
Common Equivalent Share $ .72 $ .56 $ 2.08 $ 1.34
=========== =========== =========== ===========
Weighted Average Common and Common
Equivalent Shares Outstanding 11,100,474 11,034,118 11,111,441 10,716,761
=========== =========== =========== ===========
The accompanying notes are an integral part of these
consolidated condensed financial statements.
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HADCO CORPORATION AND SUBSIDIARIES
----------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
-----------------------------------------------
unaudited
---------
(In thousands)
Nine Months Ended
-------------------------
July 27, July 29,
1996 1995
--------- ---------
Total Cash Provided From Operations $ 34,012 $ 26,759
--------- ---------
Cash Flows From Investing Activities:
Net sales (purchases) of short-term investments 9,535 (4,222)
Purchases of property, plant and equipment (42,066) (17,294)
Proceeds from sale of property, plant and
equipment 255 299
--------- ---------
Cash Used In Investing Activities (32,276) (21,217)
--------- ---------
Cash Flows From Financing Activities:
Principal payments under capital lease obligations (1,722) (1,972)
Principal payments of long-term debt (69) (2,069)
Proceeds from issuance of common stock 5,674 2,210
Purchase and retirement of common stock - (1,018)
--------- ---------
Cash used in Financing Activities 3,883 (2,849)
--------- ---------
Increase in Cash and Cash Equivalents 5,619 2,693
Cash and Cash Equivalents Beginning of Period 21,307 19,064
--------- ---------
Cash and Cash Equivalents End of Period $ 26,926 $ 21,757
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the respective periods for:
Interest $ 207 $ 450
========= =========
Income taxes $ 8,312 $ 8,701
========= =========
The accompanying notes are an integral part of these
consolidated condensed financial statements.
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HADCO CORPORATION AND SUBSIDIARIES
----------------------------------
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
----------------------------------------------------
(unaudited)
-----------
1. Basis of Presentation
---------------------
In the opinion of management, these consolidated condensed financial
statements contain all normal recurring adjustments for fair presentation. The
results of operations for the quarter ended July 27, 1996, are not necessarily
an indication of the results expected for the full year.
The accompanying consolidated condensed financial statements include the
accounts of Hadco Corporation (the Company) and its wholly-owned subsidiaries.
All material intercompany balances and transactions have been eliminated in
consolidation.
For information as to the significant accounting policies followed by the
Company and other financial and operating information, see the Company's Form
10-K as filed with the Securities and Exchange Commission on January 9, 1996.
These financial statements should be read in conjunction with the financial
statements included in that Form 10-K.
2. Short-term Investments
----------------------
As of July 27, 1996, the Company held investments in the following
held-to-maturity securities:
Fair
Cost Market Value Maturity
---- ------------ --------
(in thousands)
Debt securities issued
by the US Government $ 1,000 $ 997 within 1 year
Debt securities issued
by states of the US 1,500 1,500 within 1 year
Corporate debt
securities 3,132 3,083 within 1 year
------- -------
$ 5,632 $ 5,580
======= =======
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HADCO CORPORATION AND SUBSIDIARIES
----------------------------------
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
----------------------------------------------------
(unaudited)
-----------
3. Inventories
-----------
Inventories are stated at the lower of cost, first-in, first-out (FIFO) or
market and consist of the following:
July 27, October 28,
1996 1995
------- ----------
(In thousands)
Raw Materials $ 9,333 $ 6,318
Work-in-process 7,857 6,986
------- -------
Total $17,190 $13,304
======= =======
4. Significant Customers
---------------------
One customer accounted for 15%, and another customer accounted for 10% of
net sales for the quarter ended July 27, 1996. For the quarter ended July 29,
1995, there were no customers who accounted for more than 10% of net sales.
5. Environmental Matters
---------------------
During March 1995, the Company received a Record Of Decision (ROD) from the
New York State Department of Environmental Conservation (NYSDEC), regarding soil
and groundwater contamination at its Owego, New York facility. Based on a
Remedial Investigation and Feasibility Study (RIFS) for apparent on-site
contamination at that facility and a Focused Feasibility Study (FFS), each
prepared by environmental consultants of the Company, the NYSDEC had approved a
remediation program of groundwater withdrawal and treatment and iterative soil
flushing. The cost, based upon the FFS, to implement this remediation is
estimated to be $4.6 million, and is expected to be expended as follows:
$300,000 for capital equipment and $4.3 million for operation and maintenance
costs which will be incurred and expended over the estimated life of the program
of 30 years. NYSDEC has requested that the Company consider taking additional
samples from a wetland area near the Company's Owego facility. Analytical
reports of earlier sediment samples indicated the presence of certain
inorganics. There can be no assurance that the Company and/or other third
parties will not be required to conduct additional investigations and
remediation at that location, the costs of which are currently indeterminable
due
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HADCO CORPORATION AND SUBSIDIARIES
----------------------------------
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
----------------------------------------------------
(unaudited)
-----------
5. Environmental Matters (Continued)
---------------------------------
to the numerous variables described in the second sentence of the fourth
paragraph of this "Environmental Matters" section.
From 1974 to 1980, the Company operated a printed circuit manufacturing
facility in Florida as a lessee of property that is now the subject of a pending
lawsuit ("the Florida Lawsuit") and investigation by the Florida Department of
Environmental Regulation (FDER). On June 9, 1992, the Company entered into a
Cooperating Parties Agreement in which it and Gould, Inc., another prior lessee
of the site, have agreed to fund certain assessment and feasibility study
activities at the site, and an environmental consultant has been retained to
perform such activities. The cost of such activities is not expected to be
material to the Company. In addition to the Cooperating Parties Agreement, Hadco
and others are participating in alternative dispute resolution regarding the
site with an independent mediator. In connection with the mediation, in February
1992 the FDER presented computer-generated estimates of remedial costs, for
activities expected to be spread over a number of years, that ranged from
approximately $3.3 million to $9.7 million. Mediation sessions were conducted in
March 1992 but have been suspended during the ongoing assessment and feasibility
activities. Management believes it is likely that it will participate in
implementing a continuing remedial program for the site, the costs of which are
currently unknown. However, based on information currently known by the Company,
management does not expect these costs to have a material adverse effect on the
Company. Also see the penultimate paragraph of this "Environmental Matters"
section relating to the Company's having been named as a third-party defendant
in the Florida Lawsuit.
The Company is planning the installation of a groundwater extraction system
at its Derry, New Hampshire facility to address certain groundwater
contamination. Because of the uncertainty regarding both the quantity of
contaminants beneath the building at the site and the long-term effectiveness of
the groundwater migration control system the Company proposes to install, it is
not possible to make a reliable estimate of the length of time remedial activity
will have to be performed. However, it is anticipated that the groundwater
extraction system will be operated for at least 30 years. There can be no
assurance that the Company will not be required to conduct additional
investigations and remediation relating to the Derry facility. The total costs
of such groundwater extraction system and of conducting any additional
investigations and remediation relating to the Derry facility are
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HADCO CORPORATION AND SUBSIDIARIES
----------------------------------
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
----------------------------------------------------
(unaudited)
-----------
5. Environmental Matters (Continued)
---------------------------------
not fully determinable due to the numerous variables described in the fourth
paragraph of this "Environmental Matters" section.
The Company accrues estimated costs associated with known environmental
matters, when such costs can be reasonably estimated. The cost estimates
relating to future environmental clean-up are subject to numerous variables, the
effects of which can be difficult to measure, including the stage of the
environmental investigations, the nature of potential remedies, possible joint
and several liability, the magnitude of possible contamination, the difficulty
of determining future liability, the time over which remediation might occur,
and the possible effects of changing laws and regulations. The total reserve for
environmental matters currently identified by the Company amounted to $9.9
million and $8.2 million at July 27, 1996 and October 28, 1995, respectively.
The current portion of these costs as of July 27, 1996 and October 28, 1995,
amounted to approximately $900,000, and is included in "Accounts Payable and
Accrued Expenses." The long-term portion of these costs amounted to
approximately $9.0 million and $7.3 million as of July 27, 1996 and October 28,
1995, respectively, and is reported under the caption "Long-term Liabilities."
Based upon its assessment at the current time, management estimates the cost of
ultimate disposition of the above known environmental matters to range from
approximately $7.0 million to $12.0 million, and is expected to be spread over a
number of years. Management believes the ultimate disposition of the above known
environmental matters will not have a material adverse effect upon the
liquidity, capital resources, business or consolidated financial position of the
Company. However, one or more of such environmental matters could have a
significant negative impact on the Company's consolidated financial results for
a particular reporting period.
The Company is one of thirty-three entities which have been named as
potentially responsible parties in a lawsuit pending in the federal district
court of New Hampshire concerning environmental conditions at the Auburn Road,
Londonderry, New Hampshire landfill site. Local, state and federal entities and
certain other parties to the litigation seek contribution for past costs,
totaling approximately $20 million, allegedly incurred to assess and remediate
the Auburn Road site. In April, 1996, the EPA published for comment, and
recommended for approval, a proposal to change the remedy at the Auburn Road
site from active groundwater remediation to future monitoring. Other parties to
the lawsuit also allege that future monitoring will be required. The Company is
contesting liability, but is participating in mediation with twenty-seven other
parties in an effort to resolve the lawsuit.
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HADCO CORPORATION AND SUBSIDIARIES
----------------------------------
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
----------------------------------------------------
(unaudited)
-----------
5. Environmental Matters (Continued)
---------------------------------
Management believes that the ultimate disposition of this lawsuit will not have
a material adverse effect upon the liquidity, capital resources, business or
consolidated financial position of the Company.
In connection with the "Florida Lawsuit" (as described in the second
paragraph of this "Environmental Matters" section), pending in the Circuit Court
of Broward County, Florida, Hadco and Gould, Inc., another prior lessee of the
site of the printed circuit manufacturing facility in Florida, each was served
with a third-party complaint in June 1995, as third-party defendants in such
pending Florida lawsuit by a party who had previously been named as a defendant
when the Florida Lawsuit was commenced in 1993 by the FDER. The Florida Lawsuit
seeks damages relating to environmental pollution and FDER costs and expenses,
civil penalties, and declaratory and injunctive relief to require the parties to
complete assessment and remediation of soil and groundwater contamination. The
other parties include alleged owners of the property and Fleet Credit
Corporation, a secured lender to a prior lessee of the property.
The future costs in connection with the lawsuits described in the two
immediately preceding paragraphs are currently indeterminable due to such
factors as the unknown timing and extent of any future remedial actions which
may be required, the extent of any liability of the Company and of other
potentially responsible parties, and the financial resources of the other
potentially responsible parties.
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HADCO CORPORATION AND SUBSIDIARIES
----------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
------------------------------------------------
Except for the historical information contained herein, the matters
discussed below or elsewhere in this quarterly report including, without
limitation, "Environmental Matters," are forward-looking statements that
involve risks and uncertainties. Any forward-looking statements should be
considered in light of the factors described below under "Factors That May
Affect Future Results." Actual results may vary materially from those projected,
anticipated or indicated in any forward-looking statements. In this quarterly
report, the words "anticipates," "believes," "expects," "intends," "future,"
"could," and similar words or expressions (as well as other words or expressions
referencing future events, conditions or circumstances) identify forward looking
statements.
Results of Operations
- ---------------------
Third Quarter
- -------------
Net sales for the third quarter of 1996 increased 30.2% over the same
period in 1995. The change was due to a 13.8% increase in the volume of
production and shipments, and a shift in product mix to higher layer, higher
density printed circuits, as compared to the third quarter last year. Average
pricing per unit increased 4.7% for the third quarter of 1996 over the third
quarter of 1995. Sales of backplane and other electronic assemblies increased to
19% of the Company's net revenues for the quarter ended July 27, 1996, versus 7%
for the same period last year. The Company believes that excess capacity may
exist in the printed circuit and electronic assembly industries, as well as
fluctuating growth rates in the electronics industry as a whole. Both factors
could have an adverse impact on future orders and pricing.
The gross profit margin decreased from 25.9% in the third quarter of 1995 to
24.3% in the third quarter of 1996. The decrease is a result of higher costs due
to the implementation of new production processes, and the increase in the
volume of shipments for backplane and other electronic assemblies which have
lower gross margins than printed circuit sales.
Selling, general and administrative (SG&A) expenses, as a percent of net
sales, decreased to 9.7% in the third quarter of 1996 as compared to 11.4% in
the third quarter of 1995 due to increased revenue. SG&A expenses increased from
$7.7 million in the third quarter of 1995 to $8.5 million in the third quarter
of 1996, as a result of increased variable costs directly attributable to
increased net sales. Included in SG&A expenses are charges for actual
expenditures and accruals, based on estimates, for environmental matters. During
the third quarter of 1996 and 1995, the Company made, and charged to SG&A
expenses, actual payments of approximately $149,000 and $391,000, respectively,
for
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environmental matters. In the third quarter of 1996 and 1995, the Company also
accrued and charged to SG&A expenses approximately $451,000 and $689,000,
respectively, as cost estimates relating to known environmental matters. To the
extent and in amounts Hadco believes circumstances warrant, it will continue to
accrue and charge to SG&A expenses cost estimates relating to environmental
matters. Management believes the ultimate disposition of known environmental
matters will not have a material adverse effect upon the liquidity, capital
resources, business or consolidated financial position of the Company. However,
one or more of such environmental matters could have a significant negative
impact on the Company's consolidated financial results for a particular
reporting period.
Interest income decreased in the third quarter of 1996 as compared to the
third quarter of 1995 due to lower average cash balances available for
investing.
Interest expense decreased in the third quarter of 1996 as compared to the
third quarter of 1995 due to a decrease in outstanding debt.
Year-to-Date
- ------------
Net sales for the first nine months of 1996 increased 31.5% above the same
period in 1995. The increase is the result of a 14% higher volume of production
and shipments and an increase in the technology level of product mix from the
same period last year. The increase in net sales was affected by a 7.0% increase
in average pricing. Sales of backplanes and other electronic assemblies
increased to 15% of the Company's net revenues for the first nine months of 1996
versus 6% for the same period last year.
The gross profit margin increased from 23.5% to 24.9% from the first nine
months of 1995 to the first nine months of 1996. The increase is a direct result
of higher volume of shipments, an increase in the technology level of product
mix, and an increase in average pricing.
SG&A expenses decreased as a percent of net sales, from 11.5% to 10.2% from
the first nine months of 1995 to the first nine months of 1996. This resulted
from increased revenue. The SG&A expenses increased from $22.2 million for the
first nine months of 1995 to $25.7 million for the first nine months of 1996, as
a result of increased variable costs directly attributable to increased net
sales. Included in SG&A expenses are charges for actual expenditures and
accruals, based on estimates, for environmental matters. During the first nine
months of 1996 and 1995, the Company made, and charged to SG&A expenses, actual
payments of approximately $674,000 and $978,000, respectively, for environmental
matters. In the first nine months of 1996 and 1995, the Company also accrued and
charged to SG&A cost estimates approximately $1,335,000 and $1,706,000,
respectively, as cost estimates relating to know environmental matters.
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Interest income decreased in the first nine months of 1996 as compared to the
same period in 1995 due to lower yields on investments.
Interest expense decreased in the first nine months of 1996 as compared to
the third quarter of 1995 due to a decrease in outstanding debt.
Income Taxes
- ------------
In accordance with generally accepted accounting principles, the Company
has provided for income taxes in the third quarter at its estimated annual
effective rate. The Company presently anticipates that the effective annual rate
of income taxes for 1996 will be 39.0%, which is less than the current combined
federal and state statutory rates. This difference is caused by tax advantaged
investment income, the tax benefit of a Foreign Sales Corporation (FSC), and
various state investment tax credits. The effective tax rate for 1996 is based
on current tax laws.
Liquidity and Capital Resources
- -------------------------------
At July 27, 1996, the Company's working capital was $41.7 million, including
cash, cash equivalents and held-to-maturity securities of $32.6 million, as
compared to working capital of $41.0 million, including cash, cash equivalents
and held-to-maturity securities of $36.5 million, at October 28, 1995.
On July 10, 1996, the Company executed an unsecured Revolving Credit
Agreement with a bank. The agreement provides for up to $15,000,000 in revolving
credit until June 30, 1997. During this period the Company can designate the
rate of interest at either the Eurodollar Rate plus 60 basis points (0.60%) or
the banks's Base Rate. As of July 27, 1996 no amounts were outstanding under
this line of credit.
(in thousands)
--------------
Leasing Line of Credit $ 4,661
Revolving Line of Credit 15,000
-------
Total Credit Available $19,661
=======
The Company believes that the available cash balances, together with cash
flow from operations, will be sufficient to meet the Company's cash requirements
through its fiscal year ending October 26, 1996.
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Factors That May Affect Future Results
- --------------------------------------
The Company operates in a changing environment that involves a number of
risks, some of which are beyond the Company's control. The following discussion
highlights some of these risks.
Variability of Customer Requirements; Nature and Extent of Customer
Commitments on Orders. The level and timing of orders placed by the Company's
customers vary due to customer attempts to manage inventory, changes in the
customers' manufacturing strategies and variation in demand for customer
products due to, among other things, technological change, introduction of new
products, product life cycles, competitive conditions or general economic
conditions. The Company generally does not obtain long-term purchase orders or
commitments. A certain portion of the Company's backlog may be subject to
cancellation or postponement without significant penalty or without any penalty.
Competition. The domestic market for printed circuits is highly competitive
and fragmented. The Company believes its major competitors are larger
independent producers and captive producers world-wide, which also manufactures
multilayer, high density printed circuits and provide backplane and other
electronic assemblies. During periods of recession in the electronic industry,
and other periods when excess capacity exists, electronic equipment
manufacturers become more price sensitive, which could have a material adverse
impact on pricing. In addition, the Company's competitors may seek orders in the
open market to fill excess capacity, thereby increasing price competition.
Process Technology and Risk of Process Failure. The Company's success
depends in part on its proprietary techniques and manufacturing expertise,
particularly in the area of the multilayer, high density circuit boards. At this
time, the Company has no patents for these proprietary techniques and chooses to
rely on trade secret protection. In addition, the introduction of new
manufacturing processes are subject to failure. The loss of revenue and earnings
to the Company from such a failure could have a material adverse effect on its
results of operations.
Dependence on Electronics Industry. The Company's customers include OEMs and
contract manufacturers of data communications and telecommunications equipment,
instrumentation and industrial equipment, and computers and peripheral business
systems. These industry segments, as well as the electronics industry as a
whole, are subject to rapid technological change and product obsolescence.
Discontinuance or modification of products containing printed circuit boards
manufactured by the Company could have a material adverse effect on the Company.
The electronics industry is subject to economic cycles and has experienced and
is likely in the future to experience recessionary periods. Pricing pressures, a
general recession or any other event leading to excess capacity or a
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downturn in the electronics industry likely would result in intensified price
competition, reduced gross margins and a decrease in unit volume, which could
have a material adverse effect on the Company.
Environmental Compliance. The Company is subject to a variety of
environmental regulations relating to the use, storage, discharge and disposal
of hazardous chemicals used during its manufacturing process. A failure by the
Company to comply with present and future regulations could subject it to future
liabilities or the suspension of production. Such regulations could also
restrict the Company's ability to expand its facilities or could require the
Company to acquire costly equipment or to incur other significant expenses to
comply with environmental regulations. The Company may also from time to time be
subject to lawsuits with respect to environmental matters. The extent of the
Company's liability under any such suit is indeterminable and may, in certain
circumstances, have a material adverse effect on the Company.
Possible Volatility of Market Price of Common Stock. The trading price of
the common stock is subject to significant fluctuations in response to
variations in quarterly operating results, general conditions in the electronics
industry and other factors. In addition, the stock market is subject to price
and volume fluctuations which affect the market price for many high technology
companies in particular, and which can be unrelated to operating performance.
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PART II - OTHER INFORMATION
Item 6. Exhibits and reports on Form 8-K
(a) Exhibits
10.1 Revolving Credit Agreement dated July 10, 1996 between Registrant and
The First National Bank of Boston.
27 Financial Data Schedule
(b) Reports on Form 8-k
There were no reports on Form 8-k filed for the quarter ended July 27,
1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
Hadco Corporation
Date: September 03, 1996 By: /s/ Timothy P. Losik
-------------------------------
Timothy P. Losik
Chief Financial Officer,
Vice President
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