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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2002
Commission File No. 0-22724
CABLE DESIGN TECHNOLOGIES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-3601505
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Foster Plaza 7
661 Andersen Drive
Pittsburgh, PA 15220
(Address of principal executive offices)
(412) 937-2300
Registrant's telephone number, including area code
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.
Class Outstanding at 6/10/02
----- ----------------------
Common Stock, $.01 Par Value 44,439,628
1
CABLE DESIGN TECHNOLOGIES CORPORATION
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TABLE OF CONTENTS
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Page
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PART I FINANCIAL INFORMATION
Item 1 Financial Statements
Review Report of Independent Accountants for the Three Months
and Nine Months Ended April 30, 2002 ......................................................3
Information Regarding Predecessor Independent Public Accountants' Review Reports ..........4
Condensed Consolidated Statements of
Income - Unaudited for the Three Months and Nine Months Ended
April 30, 2002 and 2001 ...................................................................6
Condensed Consolidated Balance Sheets-Unaudited as
of April 30, 2002 and July 31, 2001 .......................................................7
Condensed Consolidated Statements of
Cash Flows - Unaudited for the Nine Months
Ended April 30, 2002 and 2001 .............................................................8
Notes to Condensed Consolidated
Financial Statements -Unaudited ...........................................................9
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations ......................................................14
Item 3 Quantitative and Qualitative Disclosures About Market Risk ...............................18
PART II OTHER INFORMATION
Item 1 Legal Proceedings ........................................................................18
Item 2 Changes in Securities ....................................................................18
Item 3 Defaults upon Senior Securities ..........................................................18
Item 4 Submission of Matters to a Vote of Security Holders ......................................18
Item 5 Other Information ........................................................................18
Item 6 Exhibits and Reports on Form 8-K .........................................................18
Signatures ..........................................................................................21
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Stockholders of
Cable Design Technologies Corporation:
We have reviewed the accompanying condensed consolidated balance sheet of Cable
Design Technologies Corporation and subsidiaries as of April 30, 2002, and the
related condensed consolidated statements of income for the three month and nine
month periods ended April 30, 2002 and the condensed consolidated statement of
cash flows for the nine month period ended April 30, 2002. These financial
statements are the responsibility of the Corporation's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States of America, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such condensed consolidated financial statements for them to be in
conformity with accounting principles generally accepted in the United States of
America.
/s/ Deloitte & Touche LLP
Pittsburgh, Pennsylvania
May 29, 2002
3
INFORMATION REGARDING PREDECESSOR INDEPENDENT PUBLIC ACCOUNTANTS' REVIEW REPORTS
- --------------------------------------------------------------------------------
This is a copy of a review report previously issued by Arthur Andersen LLP
("Andersen"). The report has not been reissued by Andersen nor has Andersen
provided an awareness letter for the inclusion of its report in this Current
Report on Form 10-Q.
[COPY]
Report of Independent Public Accountants
To the Board of Directors and Stockholders of Cable Design Technologies
Corporation:
We have reviewed the accompanying condensed consolidated balance sheet of Cable
Design Technologies Corporation (a Delaware corporation) and Subsidiaries as of
April 30, 2001, and the related condensed consolidated statements of income for
the three month and nine month periods ended April 30, 2001 and 2000, and the
condensed consolidated statements of cash flows for the nine month periods ended
April 30, 2001 and 2000. These financial statements are the responsibility of
the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States, the objective
of which is the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with accounting principles generally accepted in the United States.
We have previously audited, in accordance with auditing standards generally
accepted in the United States, the consolidated balance sheet of Cable Design
Technologies Corporation and Subsidiaries as of July 31, 2000, and, in our
report dated September 15, 2000, we expressed an unqualified opinion on that
statement. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of July 31, 2000, is fairly stated, in
all material respects, in relation to the balance sheet from which it has been
derived.
/s/ Arthur Andersen LLP
Pittsburgh, Pennsylvania,
May 22, 2001
4
INFORMATION REGARDING PREDECESSOR INDEPENDENT PUBLIC ACCOUNTANTS' REVIEW REPORTS
- --------------------------------------------------------------------------------
This is a copy of a review report previously issued by Andersen. The report has
not been reissued by Andersen nor has Andersen provided an awareness letter for
the inclusion of its report in this Current Report on Form 10-Q.
[COPY]
Report of Independent Public Accountants
To the Board of Directors and Stockholders of Cable Design Technologies
Corporation:
We have reviewed the accompanying condensed consolidated balance sheet of Cable
Design Technologies Corporation (a Delaware corporation) and Subsidiaries as of
October 31, 2001, and the related condensed consolidated statements of income
and cash flows for the three month periods ended October 31, 2001 and 2000.
These financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States, the objective
of which is the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with accounting principles generally accepted in the United States.
We have previously audited, in accordance with auditing standards generally
accepted in the United States, the consolidated balance sheet of Cable Design
Technologies Corporation and Subsidiaries as of July 31, 2001, and, in our
report dated September 26, 2001, we expressed an unqualified opinion on that
statement. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of July 31, 2001, is fairly stated, in
all material respects, in relation to the balance sheet from which it has been
derived.
/s/ Arthur Andersen LLP
Pittsburgh, Pennsylvania,
November 29, 2001
5
CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES
------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
-------------------------------------------------------
(In thousands, except share and per share data)
-----------------------------------------------
Three Months Ended Nine Months Ended
April 30, April 30,
------------------------------- ------------------------------
2002 2001 2002 2001
-------------- -------------- -------------- --------------
Net sales $ 141,787 $ 181,384 $ 410,808 $ 598,755
Cost of sales 103,265 133,064 307,410 427,309
-------------- -------------- -------------- --------------
Gross profit 38,522 48,320 103,398 171,446
Selling, general and administrative expenses 26,895 32,302 83,685 101,206
Amortization of goodwill 510 603 1,535 1,811
Research and development expenses 1,249 1,285 3,709 3,851
Business restructuring expenses 369 2,065 5,609 2,065
-------------- -------------- -------------- --------------
Income from operations 9,499 12,065 8,860 62,513
Interest expense, net 1,856 2,233 4,979 7,067
Other expense, net 980 480 823 665
-------------- -------------- -------------- --------------
Income before income taxes 6,663 9,352 3,058 54,781
Income tax provision 2,806 4,863 1,665 22,559
-------------- -------------- -------------- --------------
Net income $ 3,857 $ 4,489 $ 1,393 $ 32,222
Basic earnings per common share $ 0.09 $ 0.10 $ 0.03 $ 0.74
============== ============== ============== ==============
Diluted earnings per common share $ 0.09 $ 0.10 $ 0.03 $ 0.72
============== ============== ============== ==============
Weighted average common shares outstanding 44,361,841 43,760,098 44,178,362 43,704,434
============== ============== ============== ==============
Weighted average common shares outstanding and
common stock equivalents 44,681,611 44,742,491 44,669,326 45,005,959
============== ============== ============== ==============
The accompanying notes are an integral part of these statements.
6
CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES
------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS-UNAUDITED
-----------------------------------------------
(In thousands, except share and per share data)
-----------------------------------------------
April 30, July 31,
2002 2001
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 22,400 $ 14,625
Trade accounts receivable, net of allowance for uncollectible accounts of
$5,913 and $6,361, respectively 95,880 99,238
Inventories 148,882 158,415
Other current assets 22,884 25,801
--------------- --------------
Total current assets 290,046 298,079
Property, plant and equipment, net 237,082 218,993
Goodwill, net 61,779 59,001
Intangible assets, net 7,675 4,836
Other assets 3,415 3,487
--------------- --------------
Total assets $ 599,997 $ 584,396
=============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to banks $ 3,198 $ 5,354
Current maturities of long-term debt 2,191 118,902
Other current liabilities 69,685 75,303
--------------- --------------
Total current liabilities 75,074 199,559
Long-term debt, excluding current maturities 132,752 5,413
Other non-current liabilities 38,790 35,446
--------------- --------------
Total liabilities 246,616 240,418
--------------- --------------
Minority interest in subsidiaries 5,021 3,053
--------------- --------------
Stockholders' equity:
Preferred stock, par value $.01 per share -
authorized 1,000,000 shares, no shares issued --- ---
Common stock, par value $.01 per share -authorized 100,000,000 shares,
48,026,884 and 47,672,133 shares issued, respectively 480 477
Paid-in capital 200,159 198,056
Common stock issuable, 20,232 and 28,000 shares, respectively 209 358
Deferred compensation (23) (600)
Retained earnings 207,857 206,464
Treasury stock, at cost, 3,609,738 and 3,652,138 shares, respectively (45,188) (45,719)
Accumulated other comprehensive loss (15,134) (18,111)
--------------- --------------
Total stockholders' equity 348,360 340,925
--------------- --------------
Total liabilities and stockholders' equity $ 599,997 $ 584,396
=============== ==============
The accompanying notes are an integral part of these statements.
7
CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES
------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
-----------------------------------------------------------
(In thousands)
--------------
Nine Months Ended
April 30,
------------------------------
2002 2001
------------ ------------
Net cash provided by operating activities $ 39,378 $ 32,683
Cash flows from investing activities:
Purchases of property, plant and equipment (11,366) (31,403)
Acquisition of businesses, including transaction costs,
net of cash acquired (29,018) ----
Proceeds on sale of assets 47 1,073
------------ ------------
Net cash used by investing activities (40,337) (30,330)
------------ ------------
Cash flows from financing activities:
Net change in demand note borrowings (3,110) 509
Net borrowings/(payments) under long-term credit facilities 11,972 (9,682)
Funds provided by other long-term debt 912 4,862
Funds used to reduce other long-term debt (2,704) (3,755)
Common stock issued or issuable 753 1,206
Net proceeds from exercise of stock options 1,333 2,200
Payments of deferred financing fees (1,490) ----
------------ ------------
Net cash provided (used) by financing activities 7,666 (4,660)
------------ ------------
Effect of exchange rate changes on cash and cash equivalents 1,068 (444)
------------ ------------
Net increase (decrease) in cash and cash equivalents 7,775 (2,751)
Cash and cash equivalents, beginning of period 14,625 16,454
------------ ------------
Cash and cash equivalents, end of period $ 22,400 $ 13,703
============ ============
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 4,929 $ 7,580
============ ============
Income taxes $ 2,987 $ 24,085
============ ============
The accompanying notes are an integral part of these statements.
8
CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES
------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
----------------------------------------------------------------
1. BASIS OF PRESENTATION
---------------------
The condensed consolidated financial statements presented herein are
unaudited. Certain information and footnote disclosures normally prepared
in accordance with accounting principles generally accepted in the United
States of America have been either condensed or omitted pursuant to the
rules and regulations of the Securities and Exchange Commission. Although
the registrant believes that all adjustments necessary for a fair
presentation have been made, interim period results are not necessarily
indicative of the results of operations for a full year. As such, these
financial statements should be read in conjunction with the financial
statements and notes thereto included in the registrant's most recent Form
10-K which was filed for the fiscal year ended July 31, 2001.
2. SIGNIFICANT ACCOUNTING POLICIES
-------------------------------
Amounts billed to customers for shipping and handling costs are included in
net sales in the accompanying consolidated statements of income. Shipping
and handling costs incurred by the Company for the delivery of goods to
customers are classified as a component of either cost of sales or selling,
general and administrative expenses ("SG&A"), depending on the specific
operating unit. Shipping and handling costs included in SG&A were $2.5
million for both the three months ended April 30, 2002 and 2001,
respectively, and $6.4 million and $7.6 million for the nine months ended
April 30, 2002 and 2001, respectively.
3. INVENTORIES
-----------
Inventories, net of reserves, of the Company consist of the following:
April 30, July 31,
2002 2001
--------------- --------------
(In thousands)
Raw materials $ 41,005 $ 40,959
Work-in-process 31,330 29,095
Finished goods 76,547 88,361
--------------- --------------
$ 148,882 $ 158,415
=============== ==============
During the second fiscal quarter ended January 31, 2002, the Company
incurred a charge of $3.3 million to increase the provision for slow moving
inventory associated with products for the telecommunication central office
marketplace based on management's expectation that no significant
improvement will occur in this marketplace through at least the end of the
Company's current fiscal year. Such charge is included in cost of sales in
the accompanying consolidated statement of income for the nine months ended
April 30, 2002.
4. FINANCING ARRANGEMENTS
----------------------
The Company entered into a new unsecured revolving credit facility on
December 17, 2001 which provides for borrowings of up to $200.0 million
(the "U.S. Facility"), including a $50.0 million European sub-facility and
a $15.0 million U.K. sub-facility. The Company also entered into a separate
$65.0 million revolving facility for its Canadian operations (the "Canadian
Facility"), which facility is supported by a letter of credit under the
U.S. Facility and reduces the availability under the U.S. Facility. The
U.S. and Canadian Facilities expire on January 2, 2005 and December 2,
2004, respectively. Borrowings under the U.S. Facility bear interest at
either LIBOR plus 1.05% to 2.00%, or a base rate, as defined, plus 0.20% to
0.50%. The applicable interest rate margin is based on the Company's
leverage ratio as calculated under the facility. A facility fee margin of
0.20% to 0.50%, which is also based on the Company's leverage ratio, is
payable on the maximum facility amount. Fees for letters of credit under
the U.S. Facility are charged at the applicable interest rate margin.
Borrowings under the Canadian Facility bear interest at the Canadian
9
Banker's Acceptance rate, plus an applicable margin of 0.30%. A facility
fee of 0.15% is payable under the Canadian Facility. As of April 30, 2002,
the Company had availability of approximately $60.2 million and $8.3
million under the U.S. Facility and Canadian Facility, respectively.
The U.S. and Canadian Facilities have customary financial and non-financial
covenants. The financial covenants consist of "fixed charge" and "leverage"
ratios and a minimum net worth test. Compliance with these covenants is
dependant on a number of factors, including, in the case of the fixed
charge ratio, trailing four fiscal quarter capital expenditures and tax,
interest and scheduled principal payments and, in the case of the leverage
ratio, the Company's consolidated debt. Important to both of these ratios
is the Company's net income before interest, taxes, depreciation and
amortization (EBITDA), as calculated under the U.S. Facility, for the
trailing four fiscal quarters. In the case of the leverage ratio, pro forma
adjustments are made to EBITDA for acquisitions and, in the case of both
ratios, add-backs to EBITDA are permitted at the discretion of the lenders
in the case of certain types of charges. The Company is currently in
compliance with the financial and non-financial covenants. Continued
compliance with the financial covenants is dependent on the levels of the
various components that are included in the calculations.
5. EARNINGS PER SHARE
------------------
Basic earnings per common share are computed based on the weighted average
common shares outstanding. Diluted earnings per common share are computed
based on the weighted average common shares outstanding plus additional
potential shares assumed to be outstanding to reflect the dilutive effect
of common stock equivalents. The following table sets forth the computation
of basic and diluted earnings per share:
Three Months Ended Nine Months Ended
April 30, April 30,
------------------------------ -----------------------------
2002 2001 2002 2001
--------------- -------------- --------------- -------------
(In thousands, except share and per share data)
Net income $ 3,857 $ 4,489 $ 1,393 $ 32,222
--------------- -------------- --------------- -------------
Basic earnings per common share:
Weighted average common shares outstanding 44,361,841 43,760,098 44,178,362 43,704,434
Basic earnings per common share $ 0.09 $ 0.10 $ 0.03 $ 0.74
=============== ============== =============== =============
Diluted earnings per common share:
Weighted average common shares outstanding 44,361,841 43,760,098 44,178,362 43,704,434
Common stock equivalents 319,770 982,393 490,964 1,301,525
--------------- -------------- --------------- -------------
Weighted average common shares outstanding
and common stock equivalent shares 44,681,611 44,742,491 44,669,326 45,005,959
Diluted earnings per common share $ 0.09 $ 0.10 $ 0.03 $ 0.72
=============== ============== =============== =============
Options outstanding which were excluded from the computation of common
stock equivalents as the options' exercise prices were greater than the
average market price of the common stock for the periods totaled 2,257,051
and 672,282 for the three months and 2,244,051 and 463,250 for the nine
months ended April 30, 2002 and 2001, respectively.
6. INDUSTRY SEGMENT INFORMATION
----------------------------
The Company's operations are organized into two business segments: the
Network Communication segment and the Specialty Electronic segment. Network
Communication encompasses connectivity products used within computer
networks and communication infrastructures for the electronic transmission
of data, voice, and multimedia. Products included in this segment are high
performance network cable, fiber optic cable and passive components,
including connectors, wiring racks and panels, and
10
interconnecting hardware for end-to-end network structured wiring systems,
and communication cable products for local loop, central office, wireless
and other applications. The Specialty Electronic segment encompasses
electronic cable products for automation and process control applications
as well as specialized wire and cable products for niche markets, including
commercial aviation and automotive electronics.
The Company evaluates segment performance based on operating profit
excluding business restructuring expenses, after allocation of Corporate
expenses. Business restructuring expenses of $0.4 million and $5.6 million,
respectively, were incurred in the three and nine month periods ended April
30, 2002, and approximately $0.2 million and $4.9 million of the total
business restructuring expenses for the respective periods were associated
with operations in the Network Communication segment. Business
restructuring expense of $2.1 million was incurred for the three and nine
month periods ended April 30, 2001, and was associated with an operation in
the Network Communication segment. See Note 8 for further discussion.
The Company has no inter-segment revenues. Summarized financial information
for the Company's business segments is as follows:
Network Specialty
Communication Electronic
Segment Segment Total
----------------- ---------------- ----------
Three Months Ended April 30, (In thousands)
Net Sales:
2002 $ 89,885 $ 51,902 $141,787
2001 $120,045 $ 61,339 $181,384
Segment Operating Profit:
2002 $ 4,197 $ 5,671 $ 9,868
2001 $ 6,834 $ 7,296 $ 14,130
Network Specialty
Communication Electronic
Segment Segment Total
----------------- ---------------- ----------
Nine Months Ended April 30, (In thousands)
Net Sales:
2002 $257,550 $153,258 $410,808
2001 $405,174 $193,581 $598,755
Segment Operating Profit:
2002 $ 945 $ 13,524 $ 14,469
2001 $ 37,565 $ 27,013 $ 64,578
11
Segment operating profit differs from consolidated income before income taxes
reported in the consolidated statements of income as follows:
Three months ended Nine months ended
April 30, April 30,
--------------------------- --------------------------
2002 2001 2002 2001
---------- ----------- -------- ---------
Segment operating profit $9,868 $ 14,130 $14,469 $64,578
Less:
Business restructuring expenses 369 2,065 5,609 2,065
Interest expense, net 1,856 2,233 4,979 7,067
Other expense, net 980 480 823 665
---------- ----------- -------- ---------
Income before income taxes $6,663 $ 9,352 $ 3,058 $54,781
========== =========== ======== =========
7. OTHER COMPREHENSIVE INCOME
--------------------------
Comprehensive income is defined as all changes in stockholders' equity during
a period except those resulting from investment by or distribution to
stockholders. The Company's comprehensive income differs from net income due
to foreign currency translation adjustments. Comprehensive income was $10.1
million and $0.2 million for the three months and $4.4 million and $26.7
million for the nine months ended April 30, 2002 and 2001, respectively.
Accumulated other comprehensive income/(loss) is included in the
Stockholders' Equity section of the balance sheet and includes foreign
currency translation adjustments.
8. BUSINESS RESTRUCTURING EXPENSES
-------------------------------
During the nine months ended April 30, 2002, the Company incurred business
restructuring expenses of $5.6 million related to plans to reduce costs,
including workforce reductions of 321 employees and the consolidation of
certain facilities. The restructuring charge includes severance and other
employee termination costs, asset impairment charges related to property and
equipment to be held for sale, and costs incurred related to the closing of
the Company's wireless assembly facility, primarily representing the
write-off of inventory applicable to terminated customer contracts. During
fiscal year 2001, the Company incurred restructuring charges of $6.1 million
including severance and other termination related costs as a result of
workforce reduction plans affecting 641 employees. As of April 30, 2002, all
of the employee terminations under the various restructuring plans have been
completed. The remaining severance reserve represents benefit payments to be
made to terminated employees.
The following table displays the activity related to the restructuring plans
for the nine months ended April 30, 2002:
Asset
Severance Write-downs Total
------------- ----------------- ---------
(In thousands)
Restructuring reserve, July 31, 2001 $5,591 $ --- $5,591
Charges 3,443 2,166 5,609
Payments/asset valuation adjustments (6,133) (2,166) (8,299)
------------- ----------------- ---------
Restructuring reserve, April 30, 2002 $2,901 $ --- $2,901
============= ================= =========
12
9. ACQUISITIONS
------------
On December 4, 2001 the Company purchased 83.6%, and subsequently has
purchased an additional 9.5%, of the outstanding stock of Kabelovna
Decin-Podmokly, a.s., ("KDP/CDT") based in the Czech Republic. KDP/CDT is a
manufacturer of communication, fiber optic, medical, signal and control cable
and cable harnesses with annual revenues for the 2001 calendar year of
approximately $45.0 million.
On August 15, 2001 the Company purchased 100% of the outstanding stock of
A.W. Industries ("AWI/CDT"), based in Ft. Lauderdale, Florida. AWI/CDT is a
designer and manufacturer of connectors for the telecommunication and other
industries.
The results of operations of KDP/CDT and AWI/CDT have been included in the
consolidated financial statements since the respective acquisition dates.
The aggregate purchase price of KDP/CDT and AWI/CDT was $42.5 million,
including $15.2 million of cash acquired. The acquisitions were accounted for
under the purchase method, under which the purchase price is allocated based
on the estimated fair market value of the assets and liabilities acquired.
Acquired intangible assets were $2.4 million, and included $0.7 million
assigned to trade names that are not subject to amortization. The remaining
$1.7 million of intangible assets represent customer lists and contracts,
patents, and non-compete agreements. These intangible assets have estimated
useful lives ranging from one to five years. Allocation of the purchase price
resulted in goodwill of $2.7 million, all of which was assigned to the
Network Communication segment. None of the goodwill is deductible for tax
purposes. In accordance with Statement of Financial Accounting Standards No.
142, Goodwill and Other Intangible Assets, goodwill related to the KDP/CDT
and AWI/CDT acquisitions is not being amortized.
10. COMMITMENTS AND CONTINGENCIES
-----------------------------
Selling, general and administrative expenses for the nine months ended April
30, 2002 include a $1.3 million contingency provision for a lawsuit currently
in discovery, and whose worst-case exposure is estimated at $3.0 million.
Although the outcome of this matter is not certain at this time, the
provision represents management and outside counsel's most likely estimate of
exposure.
11. RECLASSIFICATIONS
-----------------
Certain reclassifications have been made to the prior year statements to
conform with the current year presentation.
13
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Cable Design Technologies is a leading manufacturer of technologically
advanced connectivity products for the Network Communication and Specialty
Electronic marketplaces. Network Communication encompasses connectivity
products used within computer networks and communication infrastructures for
the electronic transmission of data, voice and multimedia. Products included
in this segment are high bandwidth network and interconnect cables, fiber
optic cable and passive components, including connectors, wiring racks and
panels, and interconnecting hardware for end-to-end network structured wiring
systems, and communication cable products for local loop, central office,
wireless and other applications. The Specialty Electronic segment encompasses
electronic cable products for automation and process control applications as
well as specialized wire and cable products for niche markets, including
commercial aviation and automotive electronics.
This discussion and analysis of the Company's financial condition and results
of operations should be read in conjunction with the Company's unaudited
condensed consolidated financial statements and the notes thereto.
Results of Operations
Three Months Ended April 30, 2002 Compared to
Three Months Ended April 30, 2001
Sales for the three months ended April 30, 2002 ("third quarter 2002") were
$141.8 million compared to $181.4 million for the three months ended April
30, 2001 ("third quarter 2001"), a decrease of 22%. Third quarter 2002 sales
included $13.7 million attributable to acquired businesses, primarily in the
Network Communication segment. Network Communication segment sales decreased
$30.1 million, or 25%, to $89.9 million for the third quarter 2002 compared
to $120.0 million for the third quarter 2001, and Specialty Electronic
segment sales declined $9.4 million, or 15%, to $51.9 million for the third
quarter 2002 compared to $61.3 million for the third quarter 2001. The
decrease in sales for the Network Communication segment was primarily due to
the slowdown in both the U.S. economy and in the telecommunication
marketplace. Sales of products for the telecommunication market, which
continue to be affected by very low demand, decreased 61% compared to the
third quarter 2001, excluding sales attributable to acquired businesses.
Network product sales decreased 16%, including a 63% decline in sales of the
lower performance Category 5 network cable, which was partially offset by a
10% increase in sales of the higher performance gigabit network cable. The
decrease in sales for the Specialty Electronic segment was primarily due to
lower sales of industrial cables, which the Company believes reflects lower
demand from electronic equipment manufacturers in response to the economic
slowdown. Sales outside of North America were $46.4 million for the third
quarter 2002 compared to sales of $47.1 million for the third quarter 2001.
The decline in sales outside of North America was primarily due to lower
sales of network and telecommunication related products in Europe, which
was partially offset by sales attributable to the acquired businesses.
Gross profit for the third quarter 2002 decreased 20% to $38.5 million
compared to $48.3 million for the third quarter 2001, however the gross
margin improved to 27.2% compared to 26.6% last year. The improvement in the
gross margin was primarily a result of the Company's cost reduction actions
and lower material costs for certain products, which helped to mitigate
volume inefficiencies.
Selling, general and administrative expenses ("SG&A") for the third quarter
2002 decreased 17%, to $26.9 million compared to $32.3 million for the same
period last year. The decrease in SG&A of $7.5 million, excluding the
additional SG&A of acquired businesses, was primarily due to lower sales
volume related expenses and reduced employee costs resulting in part from the
Company's efforts to reduce expenses in response to the current economic
conditions. SG&A as a percentage of sales increased to 19.0% for the third
quarter 2002 compared to 17.8% for the third quarter 2001, reflecting the
lower sales volume.
Business restructuring expenses of $0.4 million ($0.2 million net of tax)
representing severance costs were incurred in the third quarter 2002. The
severance costs were associated with additional workforce reductions pursuant
to the Company's restructuring plans. Third quarter 2001 business
restructuring expenses of $2.1 million, which were not deductible for income
tax purposes, represent a loss on the sale of certain assets of a network
distribution business.
14
Net interest expense decreased $0.3 million to $1.9 million for the third
quarter 2002 compared to $2.2 million for the third quarter 2001, due to a
slightly lower average interest rate and a lower average balance of
outstanding debt. The third quarter 2002 effective tax rate was 42.1%,
compared to an adjusted rate of 42.0% for the third quarter 2001, excluding
the non-deductible business restructuring expenses of $2.1 million.
Reported net income for the third quarter 2002 was $3.9 million ($0.09 per
diluted share) compared to net income of $4.5 million ($0.10 per diluted
share) for the third quarter 2001. Excluding the business restructuring
expenses, net of tax for both periods, net income for the third quarter 2002
was $4.1 million ($0.09 per diluted share), a decrease of $2.5 million
compared to net income of $6.6 million ($0.15 per diluted share) for the
third quarter 2001. The lower net income was primarily due to the effect of
the lower sales volume, which more than offset the improved gross margin
percentage and lower SG&A expenses.
Nine Months Ended April 30, 2002 Compared to
Nine Months Ended April 30, 2001
Sales for the nine months ended April 30, 2002 ("nine months 2002") decreased
31% to $410.8 million compared to sales of $598.8 million for the nine months
ended April 30, 2001 ("nine months 2001"). Network Communication segment
sales decreased 36% to $257.5 million for the nine months 2002 compared to
sales of $405.2 million for the same period last year. The decrease in sales
for the Network Communication segment was primarily due to the slowdown in
both the U.S. economy and in the telecommunication marketplace that began in
the second half of the Company's 2001 fiscal year. Sales of products for the
telecommunication market continue to be affected by very low demand,
decreasing 65% compared to the nine months 2001 excluding sales attributable
to acquired businesses. Network product sales decreased 22%, primarily due to
a 58% decline in sales of the lower performance Category 5 cable and a 24%
decline in sales of connectivity products. Sales of the higher performance
gigabit network cable remained relatively stable on a year over year basis,
increasing 2%. Specialty Electronic segment sales decreased 21% to $153.3
million for the nine months 2002 compared to $193.6 million for the nine
months 2001. The decrease in sales for the Specialty Electronic segment was
primarily due to lower sales of industrial cables, which the Company believes
reflects lower demand from electronic equipment manufacturers in response to
the economic slowdown. Sales outside of North America were $118.9 million for
the nine months 2002, a decrease of 16% compared to sales of $141.2 million
for the nine months 2001. The decrease in sales outside of North America was
primarily due to lower sales of network and telecommunication related
products in Europe, which was partially offset by sales attributable to the
acquired businesses.
Gross profit for the nine months 2002 decreased 40% to $103.4 million
compared to $171.4 million for the nine months 2001. Gross profit for the
nine months 2002 was reduced by a $3.3 million provision for slow moving
inventory associated with products for the central office telecommunication
marketplace. Excluding this charge, the gross margin was 26.0% for the nine
months 2002 compared to 28.6% for the nine months 2001. The decrease in the
gross margin was due to a lower margin for both the Network Communication and
Specialty Electronic segments, caused primarily by volume inefficiencies
resulting from the absorption of manufacturing expenses over lower production
levels, particularly for telecommunication equipment related products.
Additionally, the slowdown in both the U.S. economy and in the
telecommunication marketplace generally resulted in greater pricing pressure
for the Company's products. These unfavorable effects on the gross margin
were partially mitigated by the Company's cost reduction actions during the
nine months 2002.
SG&A for the nine months 2002 was $83.7 million compared to $101.2 million
for the nine months 2001. The decrease in SG&A of $21.9 million, excluding
the additional SG&A of acquired businesses, was primarily due to lower sales
volume related expenses and reduced employee costs resulting in part from the
Company's efforts to reduce expenses in response to the current economic
conditions. SG&A for the nine months 2002 includes a $1.3 million provision
for a lawsuit currently in discovery, and SG&A for the nine months 2001
includes a $3.1 million bad debt charge related to the bankruptcy of a
customer. Excluding these charges for the respective periods, SG&A as a
percentage of sales increased to 20.1% for the nine months 2002 compared to
16.4% for the nine months 2001, reflecting the lower sales volume.
Business restructuring expenses of $5.6 million ($3.3 million net of tax)
were incurred in the nine months 2002, including $3.4 million of severance
costs associated with workforce reductions, a $1.7 million asset impairment
charge associated with property and equipment to be held for sale, and $0.5
million of asset provisions incurred in connection with the closing of the
Company's wireless assembly facility. Business restructuring expenses for the
nine months 2001 of $2.1 million, which were not deductible for income tax
purposes, represent a loss on the sale of certain assets of a network
distribution business.
Net interest expense decreased $2.1 million to $5.0 million for the nine
months 2002 compared to $7.1 million for the nine months 2001, primarily due
both to a lower average interest rate and a lower average balance of
outstanding debt.
15
Reported net income for the nine months 2002 was $1.4 million ($0.03 per
diluted share) compared to net income of $32.2 million ($0.72 per diluted
share) for the nine months 2001. Excluding, net of tax, the business
restructuring expenses, other one-time SG&A charges and the slow moving
telecommunication inventory provision previously discussed, net income for
the nine months 2002 was $7.5 million ($0.17 per diluted share) compared to
$36.3 million ($0.81 per diluted share) for the nine months 2001. The lower
net income was primarily due to the effect of the lower sales volume and the
lower gross margin percentage, which were partially offset by lower SG&A
expenses.
Financial Condition
Liquidity and Capital Resources
-------------------------------
The Company generated $39.4 million of net cash from operating activities
during the nine months 2002. Operating working capital decreased $16.9
million, excluding the changes resulting from the initial recording of the
working capital of acquired businesses. The change in operating working
capital was primarily the result of decreases in inventory and accounts
receivable of $16.6 million and $9.4 million, respectively, which were
partially offset by decreases in accrued liabilities and taxes of $11.8
million. The change in operating working capital excludes changes in cash and
cash equivalents and current maturities of long-term debt.
Cash used by investing activities of $40.3 million included capital
expenditures of $11.4 million and funds expended for the acquisition of
businesses of $29.0 million excluding cash acquired of $15.2 million. Net
cash provided by financing activities of $7.7 million included $5.6 million
from debt sources, net of payments for deferred financing fees in connection
with the Company's credit facilities discussed below, and $2.1 million
received from the exercise of stock options and issuance of common stock
pursuant to the Company's employee stock purchase plan.
The Company entered into a new unsecured revolving credit facility on
December 17, 2001 which provides for borrowings of up to $200.0 million (the
"U.S. Facility"), including a $50.0 million European sub-facility and a $15.0
million U.K. sub-facility. The Company also entered into a separate $65.0
million revolving facility for it's Canadian operations (the "Canadian
Facility"), which facility is supported by a letter of credit under the U.S.
Facility and reduces the availability under the U.S. Facility. The U.S. and
Canadian Facilities expire on January 2, 2005 and December 2, 2004,
respectively. Borrowings under the U.S. Facility bear interest at either
LIBOR plus 1.05% to 2.00%, or a base rate, as defined, plus 0.20% to 0.50%.
The applicable interest rate margin is based on the Company's leverage ratio
as calculated under the facility. A facility fee margin of 0.20% to 0.50%,
which is also based on the Company's leverage ratio, is payable on the
maximum facility amount. Fees for letters of credit under the U.S. Facility
are charged at the applicable interest rate margin. Borrowings under the
Canadian Facility bear interest at the Canadian Banker's Acceptance rate,
plus an applicable margin of 0.30%. A facility fee of 0.15% basis points is
payable under the Canadian Facility. As of April 30, 2002, the Company had
availability of approximately $60.2 million and $8.3 million under the U.S.
Facility and Canadian Facility, respectively.
The U.S. and Canadian Facilities have customary financial and non-financial
covenants. The financial covenants consist of "fixed charge" and "leverage"
ratios and a minimum net worth test. Compliance with these covenants is
dependant on a number of factors, including, in the case of the fixed charge
ratio, trailing four fiscal quarter capital expenditures and tax, interest
and scheduled principal payments and, in the case of the leverage ratio, the
Company's consolidated debt. Important to both of these ratios is the
Company's net income before interest, taxes, depreciation and amortization
(EBITDA), as calculated under the U.S. Facility, for the trailing four fiscal
quarters. In the case of the leverage ratio, pro forma adjustments are made
to EBITDA for acquisitions and, in the case of both ratios, add-backs to
EBITDA are permitted at the discretion of the lenders in the case of certain
types of charges. The Company is currently in compliance with the financial
and non-financial covenants. Continued compliance with the financial
covenants is dependent on the levels of the various components that are
included in the calculations.
Based on current expectations for improvement in its business, management
believes that the Company's cash flow from operations and the available
portion of its credit facilities will provide it with sufficient liquidity to
meet its current liquidity needs.
Fluctuation in Copper Price
The cost of copper in inventories, including finished goods, reflects
purchases over various periods of time ranging from one to several months for
each of the Company's operations. For certain communication cable products,
profitability is generally not significantly affected by volatility of copper
prices as selling prices are generally adjusted for changes in the market
price of copper, however,
16
differences in the timing of selling price adjustments do occur and may impact
near term results. For other products, although selling prices are not generally
adjusted to directly reflect changes in copper prices, the relief of copper
costs from inventory for those operations having longer inventory cycles may
affect profitability from one period to the next following periods of
significant movement in the cost of copper. The Company does not engage in
activities to hedge the underlying value of its copper inventory.
New Accounting Standards
The Financial Accounting Standards Board ("FASB") issued Statements of Financial
Accounting Standards No. 141, Business Combinations ("SFAS 141") and No. 142,
Goodwill and Other Intangible Assets ("SFAS 142") in June 2001. SFAS 141
requires that the purchase method of accounting be used for all business
combinations initiated after June 30, 2001. The Company adopted SFAS 141 August
1, 2001, and the adoption had no impact on the consolidated financial
statements. Under SFAS 142, goodwill and intangible assets with indefinite lives
are no longer amortized but are reviewed annually (or more frequently if
impairment indicators arise) for impairment. Separable intangible assets that
are not deemed to have indefinite lives will continue to be amortized over their
useful lives (but with no maximum life). The amortization provisions of SFAS 142
apply to goodwill and intangible assets acquired after June 30, 2001. With
respect to goodwill and intangible assets acquired prior to July 1, 2001, the
Company is required to adopt SFAS 142 effective August 1, 2002, and has not yet
determined the impact of adoption. Also in June 2001, the FASB issued Statement
of Financial Accounting Standards No. 143, Accounting for Asset Retirement
Obligations ("SFAS 143"). SFAS 143 addresses financial accounting and reporting
for obligations associated with the retirement of tangible long-lived assets.
The Company is required to adopt SFAS 143 August 1, 2002 and has not yet
determined the impact, if any, of adoption. In August 2001, the FASB issued
Statement of Financial Accounting Standards No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets ("SFAS 144"). SFAS 144 supercedes
SFAS 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of, and provides further guidance regarding the accounting
and disclosure of long-lived assets. The Company is required to adopt SFAS 144
effective August 1, 2002, and has not yet determined the impact, if any, of
adoption.
Forward-Looking Statements -- Under the Private Securities Litigation Act of
1995
Certain statements in this quarterly report are forward-looking statements,
including, without limitation, statements regarding future financial results and
performance and available liquidity, and the Company's or management's beliefs,
expectations or opinions. These statements are subject to various risks and
uncertainties, many of which are outside the control of the Company, including
the level of market demand for the Company's products, competitive pressures,
the ability to achieve reductions in operating costs and to continue to
integrate acquisitions, the ability to remain in compliance with financial and
other covenants contained in the Company's credit facilities (which, in part,
depends on the Company's indebtedness, fixed charges and adjusted EBITDA, each
as calculated under the credit facilities), litigation exposure, price
fluctuations of raw materials and the potential unavailability thereof, foreign
currency fluctuations, technological obsolescence, environmental matters and
other specific factors discussed in the Company's Annual Report on Form 10-K for
the year ended July 31, 2001, and other Securities and Exchange Commission
filings. The information contained herein represents management's best judgment
as of the date hereof based on information currently available; however, the
Company does not intend to update this information to reflect developments or
information obtained after the date hereof and disclaims any legal obligation to
the contrary.
17
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There was no material change in the Company's exposure to market risk from July
31, 2001.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
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 CDT as
filed with the Secretary of State of Delaware on November
10, 1993, incorporated by reference to Exhibit 3.1 to CDT's
Registration Statement on Form S-1 (File No. 33-69992),
Certificate of Amendment of the Restated Certificate of
Incorporation of CDT and Certificate of Designation,
Preferences and Rights of Junior Participating Preferred
Stock, Series A of CDT, as filed with the Secretary of
State of Delaware on December 11, 1996 and incorporated by
reference to CDT's Registration Statement on Form 8-A/A, as
filed on December 23, 1996.
3.2 By-Laws of CDT, as amended to date, incorporated by
reference to Exhibit 3.2 to the Post-Effective Amendment
No. 1 to CDT's Registration Statement on Form S-3 (File No.
333-00554), as filed on February 28, 1996.
4.1 Form of certificate representing shares of the Common Stock
of CDT. Incorporated by reference to Exhibit 4.1 to CDT's
Registration Statement on Form S-1 (File No. 33-69992).
4.2 Rights Agreement dated as of December 11, 1996, between
Cable Design Technologies Corporation and The First
National Bank of Boston, as Rights Agent, including the
form of Certificate of Designation, Preferences and Rights
of Junior Participating Preferred Stock, Series A attached
thereto as Exhibit A, the form of Rights Certificate
attached thereto as Exhibit B and the Summary of Rights
attached thereto as Exhibit C. Incorporated herein by
reference to CDT's Registration Statement on Form 8-A, as
filed on December 11, 1996.
10.1 CDT Long-Term Performance Incentive Plan (adopted on
September 23, 1993). Incorporated by reference to Exhibit
10.18 to CDT's Registration Statement on Form S-1 (File No.
33-69992).
10.2 CDT Stock Option Plan. Incorporated by reference to Exhibit
4.3 to CDT's Registration Statement on Form S-8 as filed on
December 22, 1993.
18
10.3 Cable Design Technologies Corporation Management Stock Award
Plan (adopted on September 23, 1993). Incorporated by
reference to Exhibit 4.3 to CDT's Registration Statement on
Form S-8, as filed on May 2, 1994.
10.4 Description of CDT Bonus Plan. Incorporated by reference to
Exhibit 10.20 to CDT's Registration Statement on Form S-1
(File No. 33-69992).
10.5 Lease Agreement between Phalo and First Hartford Realty Corp.,
dated as of November 9, 1992. Incorporated by reference to
Exhibit 10.23 to CDT's Registration Statement on Form S-1
(File No. 33-69992).
10.6 Employment Agreement dated February 2, 1996, among CDT,
NORDX/CDT and Normand Bourque. Incorporated by reference to
Exhibit 10.17 to CDT's Report on Form 8-K as filed on February
20, 1996.
10.7 Collective Labour Agreement dated June 10, 1996, between
NORDX/CDT and Canadian Union of Communications Workers Unit 4.
Incorporated by reference to Exhibit 10.19 to CDT's Annual
Report on Form 10-K, as filed on October 29, 1996.
10.8 Form of Change in Control Agreement between CDT and each of
George C. Graeber, Kenneth O. Hale, Charles B. Fromm, Peter
Sheehan, Michael A. Dudley and Ian Mack. Incorporated by
reference to Exhibit 10.14 to CDT's Annual Report on Form
10-K, as filed on October 27, 1999.
10.9 Change in Control Agreement dated June 11, 1999, between CDT
and Paul M. Olson. Incorporated by reference to Exhibit 10.15
to CDT's Annual Report on Form 10-K, as filed on October 27,
1999.
10.10 Cable Design Technologies Corporation 1999 Long-Term
Performance Incentive Plan adopted April 19, 1999 and amended
June 11, 1999. Incorporated by reference to Exhibit 10.16 to
CDT's Annual Report on Form 10-K, as filed on October 27,
1999.
10.11 Cable Design Technologies Corporation Employee Stock Purchase
Plan. Incorporated by reference to Exhibit 4.3 to CDT's
Registration Statement on Form S-8 (File No. 333-76351).
10.12 Form of June 11, 1999 Stock Option Grant under the 1999
Long-Term Performance Incentive Plan. Incorporated by
reference to Exhibit 10.18 to CDT's Annual Report on Form
10-K, as filed on October 27, 1999.
10.13 Form of April 23, 1999 Stock Option Grant. Incorporated by
reference to Exhibit 10.19 to CDT's Annual Report on Form
10-K, as filed on October 27, 1999.
10.14 Amendment No. 1, dated March 7, 2000, to Cable Design
Technologies Corporation Non-Employee Director Stock Plan.
Incorporated by reference to Exhibit 10.14 to CDT's Annual
Report on Form 10-K, as filed on October 27, 2000.
10.15 Amendment No. 2, dated July 13, 2000, to Cable Design
Technologies Corporation 1999 Long-Term Performance Incentive
Plan. Incorporated by reference to Exhibit 10.15 to CDT's
Annual Report on Form 10-K, as filed on October 27, 2000.
10.16 Employment agreement dated August 1, 2000, among CDT, Noslo
Ltd. and Ian Mack. Incorporated by reference to Exhibit 10.16
to CDT's Annual Report on Form 10-K, as filed on October 27,
2000.
10.17 Cable Design Technologies Corporation 2001 Long-Term
Performance Incentive Plan adopted December 6, 2000.
Incorporated by reference to Exhibit 99.1 to CDT's Report on
Form 10-Q as filed March 15, 2001.
10.18 Form of Stock Option Grant under CDT Non-Employee Director
Stock Plan. Incorporated by reference to Exhibit 99.2 to CDT's
Report on Form 10-Q as filed March 15, 2001.
10.19 Form of Employment Agreement dated December 10, 2001, between
Cable Design Technologies Corporation and Paul M. Olson.
Incorporated by reference to Exhibit 10.1 to CDT's Report on
Form 10-Q as filed March 13, 2002.
10.20 Form of Employment Agreement dated December 10, 2001, between
Cable Design Technologies
19
Corporation and Ferdinand C. Kuznik. Incorporated by
reference to Exhibit 10.2 to CDT's Report on Form 10-Q as
filed March 13, 2002.
10.21 Form of Change in Control Agreement dated December 10, 2001,
between Cable Design Technologies Corporation and Ferdinand C.
Kuznik. Incorporated by reference to Exhibit 10.1 to CDT's
Report on Form 10-Q as filed March 13, 2002.
10.22 Form of Ferdinand C. Kuznik nonqualified stock option grant,
dated January 21, 2002. Incorporated by reference to Exhibit
10.4 to CDT's Report on Form 10-Q as filed March 13, 2002.
10.23 Amendment, dated December 10, 2001, to Cable Design
Technologies Corporation 2001 Long-Term Performance Incentive
Plan. Incorporated by reference to Exhibit 10.5 to CDT's
Report on Form 10-Q as filed March 13, 2002.
15.1 Statement regarding predecessor Independent Public
Accountants' awareness letters.
15.2 Letter of Deloitte & Touche regarding unaudited interim
financial statement information.
99.1 Form of Credit Agreement dated December 17, 2001, among Cable
Design Technologies Corporation, Fleet National Bank, Fleet
National Bank, London Branch, Fleet Bank Europe Limited, and
other lenders party thereto. Incorporated by reference to
Exhibit 99.1 to CDT's Report on Form 10-Q as filed March 13,
2002.
99.2 Form of Credit Agreement dated December 17, 2001, among
NORDX/CDT, Inc., Cable Design Technologies Corporation, Cable
Design Technologies, Inc. and BNP Paribas (Canada).
Incorporated by reference to Exhibit 99.2 to CDT's Report on
Form 10-Q as filed March 13, 2002.
(b) Reports on Form 8-K:
The Company filed a Form 8-K dated April 11, 2002 related
to a change in certifying accountants.
20
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.
CABLE DESIGN TECHNOLOGIES CORPORATION
/s/ Ferdinand C. Kuznik
---------------------------------------------------
June 14, 2002 Ferdinand C. Kuznik
Chief Executive Officer
/s/ Kenneth O. Hale
---------------------------------------------------
June 14, 2002 Kenneth O. Hale
Vice President and Chief Financial Officer
21