SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 18, 2000
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TRIDEX CORPORATION
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(Exact name of registrant as specified in its charter)
Connecticut
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(State or other jurisdiction of incorporation)
1-5513 06-0682273
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(Commission File Number) (IRS Employer Identification Number)
61 Wilton Road, Westport, CT 06880
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(Address of principal executive offices)
(203) 226-1144
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(Registrant's telephone number, including area code)
N/A
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(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets.
On February 18, 2000, Tridex Corporation ("Tridex" or "Company") completed
the sale of the stock of its wholly-owned subsidiary Ultimate Technology
Corporation ("Ultimate") to CFG Capital Management II, L.P. ("CFG") for
approximately $13,000,000 in cash. This purchase price was agreed upon by the
parties after arms-length negotiations. Ultimate, located in Victor, New York,
is a leading designer, developer, manufacturer, marketer and integrator of high
quality, specialized hardware systems and components for the point-of-sale
("POS") industry. CFG or an affiliate intends to continue to operate the
business of Ultimate. Ultimate is considered a significant segment of Tridex and
accordingly the disposition will be accounted for as a discontinued operation in
accordance with Accounting Principles Board Opinion No. 30. Tridex intends to
use the proceeds of the sale primarily to pay down debt (see Item 5 "Other
Events").
Tridex now consists of its operating subsidiary Progressive Software,
Inc., which was acquired in a purchase transaction on April 17, 1998. Pro forma
financial statements reflecting the acquisition of Progressive as if it occurred
January 1, 1998 and Ultimate as a discontinued operation for all periods are set
forth under Item 7 of this report.
The statements contained in this report which are not historical facts may
be deemed to contain forward-looking statements with respect to events, the
occurrence of which involve risks and uncertainties.
Item 5. Other Events.
On February 18, 2000, the Company entered into an amendment to its Credit
Agreement with Fleet National Bank ("Fleet") in which Tridex and Fleet agreed to
defer the maturity of the $12 million term loan and the $8 million working
capital line of credit from December 31, 1999 and March 31, 2000, respectively,
to December 31, 2000. The Company also agreed to make a principal payment of
$8,000,000 on the term loan payable to Fleet on or before February 29, 2000.
Such payment was made on February 18, 2000. The Company also agreed to make an
additional principal payment of $1,000,000 on or before June 30, 2000. As a
result of this amendment, the Company will pay fees to Fleet of $3,000 monthly
and $50,000 on September 30, 2000, in addition to other fees required in
connection with earlier amendments to the Credit Agreement. If all indebtedness
to Fleet is paid in full prior to September 30, 2000, the $50,000 fee will be
waived.
On February 18, 2000, the Company entered into an amendment to the
Securities Purchase Agreements with Massachusetts Mutual Life Insurance Company
and certain of its affiliates (collectively, the "MassMutual Investors") in
which Tridex and the MassMutual Investors agreed to defer the payment of each of
the April 17, 1999, July 17, 1999, October 17, 1999, January 17, 2000, April 17,
2000, July 17, 2000 and October 17, 2000 interest payments on the $11 million
senior subordinated notes until December 31, 2000. The maturity date of the
notes issued under the Securities Purchase Agreements has been advanced to
December 31, 2000 from the original maturity date of April 2005. Copies of the
Fleet and MassMutual amendments are filed as exhibits to this report.
2
Item 7. Financial Statements and Exhibits. Page No.
(b) Pro forma financial information
Tridex Corporation and Subsidiaries unaudited pro forma
consolidated condensed financial statements:
Unaudited Pro Forma Consolidated
Condensed Financial Information 4
Unaudited Pro Forma Consolidated Condensed Balance Sheet
at September 30, 1999 5
Unaudited Pro Forma Consolidated Condensed Statement of
Operations for the nine months ended September 30, 1999
and 1998, and for the years ended December 31, 1998, 1997
and 1996 6
Notes to Unaudited Pro Forma Consolidated Condensed
Financial Statements 11
(c) Exhibits.
4.1 Fifth amendment to Securities Purchase Agreements
dated February 18, 2000 among Tridex Corporation,
Progressive Software, Inc., Ultimate Technology
Corporation, Massachusetts Mutual Life Insurance Company,
MassMutual Corporate Investors, MassMutual Participation
Investors and MassMutual Corporate Value Partners Limited. 14
4.2 Letter Agreement dated February 18, 2000 regarding Fifth
amendment to Securities Purchase Agreements dated February
18, 2000 among Tridex Corporation, Progressive Software.
Inc., Ultimate Technology Corporation, Massachusetts Mutual
Life Insurance Company, MassMutual Corporate Investors,
MassMutual Participation Investors and MassMutual Corporate
Value Partners Limited. 20
10.1 Stock Purchase Agreement, dated as of February 8,
2000, between Tridex Corporation, Ultimate Technology
Corporation and CFG Capital Management II, L.P. 23
10.2. Amendment No. 5 to Credit Agreement dated as of
February 18, 2000 among Tridex Corporation, Progressive
Software, Inc., Ultimate Technology Corporation and Fleet
National Bank 61
99.1 Press Release, dated February 22, 2000 69
3
TRIDEX CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED
FINANCIAL INFORMATION
The following unaudited pro forma consolidated condensed financial information
of Tridex Corporation ("Tridex" or the "Company") gives effect to the
discontinuation of the Ultimate Technology Corporation ("Ultimate") business,
the sale of Ultimate by the Company, the application of the net proceeds
therefrom, and the acquisition of Progressive Software, Inc. The unaudited pro
forma consolidated condensed financial information should be read in conjunction
with the separate historical consolidated financial statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1998 and
Quarterly Report on Form 10-Q for the quarter ended September 30, 1999.
The Unaudited Pro Forma Consolidated Condensed Statements of Operations for the
nine month periods ended September 30, 1999 and 1998, and for the years ended
December 31, 1998, 1997 and 1996 give pro forma effect to the discontinuation
and sale of Ultimate as if it had occurred on January 1, 1996. The Unaudited Pro
Forma Consolidated Condensed Balance Sheet gives pro forma effect to the sale of
Ultimate as if it occurred on September 30, 1999.
The Unaudited Pro Forma Consolidated Condensed Statements of Operations for the
nine month period ended September 30, 1998 and for the year ended December 31,
1998 also give pro forma effect to the acquisition of Progressive as if it had
occurred at January 1, 1998, using the purchase method of accounting.
The Unaudited Pro Forma Financial Statements do not purport to be indicative of
the results of operations or financial position of the Company that would have
actually been obtained had such transactions been completed as of the assumed
dates and for the periods presented or which may be obtained in the future. The
Unaudited Pro Forma Financial Statements do not reflect any anticipated cost
savings or other benefits that are anticipated to result from the sale of
Ultimate or the acquisition of Progressive and there can be no assurance that
any such cost savings or other benefits will occur. The pro forma adjustments
are described in the accompanying notes and are based on available information
and certain assumptions that the Company believes are reasonable.
4
TRIDEX CORPORATION AND SUBSIDIARIES
Unaudited Pro Forma Consolidated Condensed Balance Sheet
(Dollars in Thousands)
As of September 30, 1999
-----------------------------------------------------------
Less
Historical Historical Proceeds Use of
Tridex Ultimate From Sale Proceeds Pro Forma
(a) (b)
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ASSETS
Current assets:
Cash and cash equivalents $ 426 $ 11,750 $ (11,750) $ 426
Receivables 9,296 $ (3,505) 5,791
Inventories 7,774 (3,496) 4,278
Deferred tax assets 954 (363) 591
Other current assets 380 (216) 250 414
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Total current assets 18,830 (7580) 12,000 (11,750) 11,500
-----------------------------------------------------------
Plant and equipment, net 2,622 (890) 1,732
Goodwill and intangible assets, net 12,785 (1,638) 11,147
Purchased and internally developed software
costs, net 10,418 10,418
Deferred tax assets 8,138 (52) 8,086
Other assets 259 250 509
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$ 53,052 $ (10,160) $ 12,250 $ (11,750) $ 43,392
===========================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank loan payable $ 5,400 $ (2,750) $ 2,650
Current portion of long term debt 11,100 (9,000) 2,100
Accounts payable 6,333 $ (3,154) 3,179
Accrued liabilities 3,549 (571) $ 1,256 4,234
Deferred revenue 583 (51) 532
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Total current liabilities 26,965 (3,776) 1,256 (11,750) 12,695
-----------------------------------------------------------
Long term obligations, less current portion 9,508 9,508
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Shareholders' equity 16,579 4,610 21,189
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$ 53,052 $ (3,776) $ 5,866 $ (11,750) $ 43,392
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5
TRIDEX CORPORATION AND SUBSIDIARIES
Unaudited Pro Forma Consolidated Condensed Statement of Operations
For the Nine Months Ended September 30, 1999
(Dollars in Thousands, Except Per Share Amounts)
Less
Historical Historical Pro Forma
Tridex Ultimate Subtotal Adjustments Pro Forma
--------------------------------------------------------------
Net Sales $ 48,040 $ (23,934) $ 24,106 $ 24,106
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Operating costs and expenses:
Cost of sales 34,912 (18,122) 16,790 16,790
Engineering, design and product development
costs 3,476 (661) 2,815 2,815
Selling, administrative and general expenses 7,428 (1,941) 5,487 5,487
Depreciation and amortization 3,270 (663) 2,607 2,607
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49,086 (21,387) 27,699 27,699
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Operating loss (1,046) (2,547) (3,593) (3,593)
Operating charges (income):
Interest expense (income), net 2,454 0 2,454 $ (765)(c) 1,689
Other, net (51) 0 (51) (51)
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2,403 0 2,403 (765) 1,638
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Loss from continuing operations
before income taxes (3,449) (2,547) (5,996) 765 (5,231)
Benefit for income taxes (1,000) (1,223) (2,223) 284(h) (1,939)
--------------------------------------------------------------
Loss from continuing operations $ (2,449) (1,324) $ (3,773) $ 481 $ (3,292)
==============================================================
Loss per share - basic and diluted:
From continuing operations $ ($0.38) $ (0.59) $ (0.52)
========== ========= =========
Weighted average shares outstanding
Basic and diluted 6,368,000 6,368,000 6,368,000
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TRIDEX CORPORATION AND SUBSIDIARIES
Unaudited Pro Forma Consolidated Condensed Statement of Operations
For the Nine Months Ended September 30, 1998
(Dollars in Thousands, Except Per Share Amounts)
Less
Historical Historical Progressive Pro Forma
Tridex Ultimate Subtotal Acquisition Adjustments Pro Forma
(1/1 - 4/17/98)
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Net Sales $ 30,840 $(19,199) $ 11,641 $ 6,466 $ 18,107
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Operating costs and expenses:
Cost of sales 22,790 (14,601) 8,189 3,432 11,621
Engineering, design and product development
costs 2,212 (662) 1,550 734 2,284
Selling, administrative and general expenses 5,708 (1,803) 3,905 2,531 6,436
Depreciation and amortization 2,175 (634) 1,541 1,050 $ 872(e) 3,463
Purchased in-process software technology 17,600 17,600 (17,600)(g) 0
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50,485 (17,700) 32,785 7,747 (16,728) 23,804
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Operating loss (19,645) (1,499) $ (21,144) (1,281) 16,728 (5,697)
Operating charges (income):
Interest expense (income), net 1,024 1,024 1,024 768(d)
(712)(c) 2,104
Other, net 15 15 0 15
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1,039 0 1,039 1,024 56 2,119
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Loss from continuing operations
before income taxes (20,684) (1,499) (22,183) (2,305) 16,672 (7,816)
Benefit for income taxes (7,294) (660) (7,954) (352) 5,471(h) (2,835)
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Loss from continuing operations $ (13,390) $ (839) $ (14,229) $ (1,953) $ 11,201 $ (4,981)
=============================================================================
Loss per share - basic and diluted:
Loss from continuing operations $ (2.24) $ (2.38) $ (0.78)
========= ========= =========
Weighted average shares outstanding
Basic and diluted 5,975,000 5,975,000 392,000(f) 6,367,000
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TRIDEX CORPORATION AND SUBSIDIARIES
Unaudited Pro Forma Consolidated Condensed Statement of Operations
For the Year Ended December 31, 1998
(Dollars in Thousands, Except Per Share Amounts)
Less
Historical Historical Progressive Pro Forma
Tridex Ultimate Subtotal Acquisition Adjustments Pro Forma
(1/1 - 4/17/98)
------------------------------------------------------------------------------
Net Sales $ 43,504 $(25,608) $ 17,896 $ 6,466 $ 24,362
------------------------------------------------------------------------------
Operating costs and expenses:
Cost of sales 31,670 (19,601) 12,069 3,432 15,501
Engineering, design and product development
costs 2,821 (934) 1,887 734 2,621
Selling, administrative and general expenses 8,713 (2,540) 6,173 2,531 8,704
Depreciation and amortization 3,264 (862) 2,402 1,273 $ 872(e) 4,547
Purchased in-process software technology 17,600 17,600 (17,600)(g) 0
------------------------------------------------------------------------------
64,068 (23,937) 40,131 7,970 (16,728) 31,373
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Operating loss (20,564) (1,671) (22,235) (1,504) 16,728 (7,011)
Operating charges (income):
Interest expense (income), net 1,735 1,735 1,024 768(d)
(942)(c) 2,585
Other, net 22 22 22
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1,757 0 1,757 1,024 (174) 2,607
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Loss from continuing operations before income
taxes (22,321) (1,671) (23,992) (2,528) 16,902 (9,618)
Benefit for income taxes (8,175) (792) (8,967) (795) 5,556(h) (4,206)
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Loss from continuing operations $ (14,146) $ (879) $ (15,025) $ (1,733) $ 11,346 $ (5,412)
==============================================================================
Loss per share - basic and diluted:
Loss from continuing operations $ (2.33) $ (2.47) $ (0.85)
========== ========== ==========
Weighted average shares outstanding:
Basic and diluted 6,077,000 6,077,000 294,000(f) 6,371,000
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TRIDEX CORPORATION AND SUBSIDIARIES
Unaudited Pro Forma Consolidated Condensed Statement of Operations
For the Year Ended December 31, 1997
(Dollars in Thousands, Except Per Share Amounts)
Less
Historical Historical
Tridex Ultimate Pro Forma
--------------------------------------
Net Sales $ 25,833 $ (24,897) $ 936
--------------------------------------
Operating costs and expenses:
Cost of sales 19,629 (19,112) 517
Engineering, design and product development costs 693 (693) 0
Selling, administrative and general expenses 5,661 (2,282) 3,379
Depreciation and amortization 864 (741) 123
--------------------------------------
26,847 (22,828) 4,019
--------------------------------------
Operating Loss (1,014) (2,069) (3,083)
Operating charges (income):
Interest expense (income), net (603) 1 (602)
Other, net 201 0 201
--------------------------------------
(402) 1 (401)
--------------------------------------
Loss from continuing operations before income
taxes (612) (2,070) (2,682)
Benefit for income taxes (44) (881) (925)
--------------------------------------
Loss from continuing operations $ (568) $ (1,189) $ (1,757)
======================================
Loss per share:
Basic and diluted:
Loss from continuing operations $ (0.11) $ (0.23) $ (0.34)
======================================
Weighted average shares outstanding:
Basic and diluted: 5,157,000 5,157,000 5,157,000
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TRIDEX CORPORATION AND SUBSIDIARIES
Unaudited Pro Forma Consolidated Condensed Statement of Operations
For the Year Ended December 31, 1996
(Dollars in Thousands, Except Per Share Amounts)
Less
Historical Historical
Tridex Ultimate Pro Forma
--------------------------------------
Net Sales $ 22,325 $ (21,466) $ 859
--------------------------------------
Operating costs and expenses:
Cost of sales 16,371 (15,721) 650
Engineering, design and product development costs 447 (447) 0
Selling, administrative and general expenses 4,145 (2,418) 1,727
Depreciation and amortization 1,056 (662) 394
--------------------------------------
22,019 (19,248) 2,771
--------------------------------------
Operating (loss) income 306 (2,218) (1,912)
Operating charges (income):
Gain on sale of subsidiary stock (6,200) (6,200)
Interest expense (income), net 827 0 827
Other, net 145 0 145
--------------------------------------
(5,228) 0 (5,228)
--------------------------------------
Income from continuing operations before income
taxes 5,534 (2,218) 3,316
Benefit for income taxes (112) (1,026) (1,138)
--------------------------------------
Income from continuing operations $ 5,646 $ (1,192) $ 4,454
======================================
Earnings (loss) per share:
Basic:
Income from continuing operations $ 1.44 $ (0.30) $ 1.14
======================================
Diluted:
Income from continuing operations $ 1.23 $ (0.26) $ 0.97
======================================
Weighted average shares outstanding
Basic 3,913,000 3,913,000 3,913,000
Diluted 4,599,000 4,599,000 4,599,000
10
TRIDEX CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(a) Reflects the proceeds and gain on sale resulting from the sale of
Ultimate:
Proceeds:
Gross proceeds $ 13,100
Transaction expenses (850)
--------
Net proceeds 12,250
Escrow (short-term) 250
Escrow (long-term) 250
--------
Net cash proceeds $ 11,750
========
Estimated gain:
Proceeds, net of transaction
expenses $ 12,250
Less:
Net assets 6,384
Tax expense 1,256
--------
Estimated gain $ 4,610
========
(b) Reflects use of proceeds resulting from the sale of Ultimate to repay term
loan and working capital as required by the underlying debt agreements
as follows:
Term Loan $ 9,000
Working Capital Loan 2,750
--------
Total cash proceeds $ 11,750
========
(c) Reflects reduction in interest expense based on application of sale
proceeds to pay down the term loan and working capital debt as follows:
Nine months ending September 30, 1999:
Imputed Interest
Rate Amount Expense
Term Loan 8.69% $ 9,000 $ 586
Working Capital Loan 8.69% 2,750 179
---------------------
$ 11,750 $ 765
=====================
Nine months ending September 30, 1998:
Imputed Interest
Rate Amount Expense
Term Loan 8.09% $ 9,000 $ 545
Working Capital Loan 8.09% 2,750 167
---------------------
$ 11,750 $ 712
=====================
Year ended December 31, 1998:
11
Imputed Interest
Rate Amount Expense
Term Loan 8.02% $ 9,000 $ 722
Working Capital Loan 8.02% 2,750 220
---------------------
$ 11,750 $ 942
=====================
(d) Reflects additional interest expense for the period January 1, 1998
through April 17, 1998, assuming the Progressive acquisition occurred on
January 1, 1998 as follows:
Imputed Interest
Rate Amount Expense
Term Loan 8.15% $ 11,550 $ 277
Subordinated Debt 13.86% 11,000 449
Working Capital Loan 8.15% 1,751 42
---------------------
$ 24,301 $ 768
=====================
(e) Reflects adjustments for additional amortization expense of purchased
software technology ($10,800 over 6 years) and the excess of cost over
fair value of net assets acquired ($12,719 over ten years) for the period
January 1, 1998 through April 16, 1998, assuming the Progressive
acquisition occurred on January 1, 1998.
(f) Represents increase in weighted average shares outstanding to reflect the
Progressive acquisition as occurring on January 1, 1998.
(g) Represents the write-off of purchased in-process software technology at
Progressive and it has been eliminated in the unaudited pro forma
statement of operations due to its non-recurring nature.
(h) Reflects adjustment of provision (benefit) for income taxes as a result of
pro forma adjustments.
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRIDEX CORPORATION
By: /s/ Seth M. Lukash
---------------------------
Seth M. Lukash
Chairman of the Board
and Chief Executive Officer
Date: March 6, 2000
13