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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
___________ ___________
Commission File Number 1-8101
___________
Exact Name of Registrant as
Specified in Its Charter: DDL ELECTRONICS, INC.
______________________________
DELAWARE 33-0213512
_____________________________ _____________
State or Other Jurisdiction of I.R.S. Employer
Incorporation or Organization No. Identification
Address of Principal Executive Offices: 2151 Anchor Court
Newbury Park, CA 91320
_________________________
Registrant's Telephone Number: (805) 376-9415
_________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
_________________________ ________________________________________
Common Stock, $.01 Par Value New York Stock Exchange
Pacific Exchange
7% Convertible Subordinated
Debentures due May 15, 2001 New York Stock Exchange
8-1/2% Convertible Subordinated
Debentures due August 1, 2008 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant based on the closing price as reported by the New York Stock
Exchange on August 21, 1998 was $13,472,000. The registrant had 34,088,128
shares of Common Stock outstanding as of August 21, 1998.
DOCUMENTS INCORPORATED BY REFERENCE
Specified parts of the registrant's Annual Report to Stockholders for its
fiscal year ended June 30, 1998 are incorporated by reference into Parts I
and II hereof. Specified parts of the registrant's Proxy Statement for its
1998 Annual Meeting of Stockholders are incorporated by reference into Part
III hereof.
EXHIBIT INDEX
See page 11
THIS ANNUAL REPORT ON FORM 10-K, INCLUDING EXHIBITS THERETO,
CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF
THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THESE FORWARD-LOOKING
STATEMENT ARE TYPICALLY IDENTIFIED BY THE WORDS "ANTICIPATES",
"BELIEVES", "EXPECTS", "INTENDS", "FORECASTS", "PLANS", "FUTURE",
"STRATEGY", OR WORDS OF SIMILAR MEANING. VARIOUS IMPORTANT FACTORS THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN
THE FORWARD-LOOKING STATEMENTS ARE DESCRIBED AS "RISK FACTORS" IN THE
COMPANY'S DEFINITIVE PROXY STATEMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION ON JUNE 12, 1998 AND IN OTHER DOCUMENTS THE COMPANY
HAS FILED AND FILES, FROM TIME TO TIME, WITH THE SECURITIES AND EXCHANGE
COMMISSION.
PART I
Item 1. BUSINESS
GENERAL
The Company is an independent provider of electronic manufacturing
services ("EMS") to original equipment manufacturers ("OEMs") in the
computer, telecommunications, instrumentation, medical, industrial and
aerospace industries. The Company also fabricates printed circuit boards
("PCBs") for use primarily in the computer, communications and
instrumentation industries. Its EMS facilities are located in Southern
California, Florida and Northern Ireland. Its PCB facilities are located
in Northern Ireland and primarily serve customers in Western Europe.
The Company acquired its European PCB operation in 1984. In 1985, the
Company entered the EMS business by acquiring its first domestic EMS
operation, and in 1990 it started up its European EMS operation. In fiscal
1995, the Company liquidated or sold all assets associated with its PCB and
EMS operations in the United States. In fiscal 1996, the Company acquired
SMTEK, Inc. ("SMTEK") as the first step toward rebuilding a domestic
presence in the EMS industry.
On June 29, 1998, the Company acquired Jolt Technology, Inc. ("Jolt"),
an EMS provider located in Fort Lauderdale, Florida. The acquisition of
Jolt brings the Company an East Coast presence, has broadened the Company's
customer base, and has expanded its involvement in the quick-turn segment
of the EMS market. The acquisition of Jolt was recorded under the pooling-
of-interests method of accounting.
The Company was incorporated in California in 1959 and was
reincorporated in Delaware in 1986. The Company's principal executive
offices are located at 2151 Anchor Court, Newbury Park, California 91320,
telephone (805) 376-9415.
FINANCIAL INFORMATION BY BUSINESS SEGMENT AND GEOGRAPHICAL AREA
As indicated above, the Company operates in two business segments:
electronic manufacturing services and printed circuit board fabrication.
Information with respect to these segments' sales, operating income,
identifiable assets, depreciation and amortization, and capital
expenditures for each of the last three fiscal years is set forth in Note
11 to the consolidated financial statements of the accompanying 1998 Annual
Report to Stockholders. Such information is incorporated herein by
reference and is made a part hereof.
INDUSTRY OVERVIEW
Electronic Manufacturing Services Industry
The EMS industry's revenues in the United States were estimated by the
Institute for Interconnecting and Packaging Electronic Circuits (known as
the "IPC") to be $18 billion in 1997. As a result of the continued trend
toward outsourcing manufacturing services on the part of electronic
equipment OEMs, the EMS industry in the United States grew in excess of 20%
annually from 1990 to 1997, according to IPC estimates. The Company
expects the trend toward outsourcing to continue and to result in continued
growth in the EMS industry.
The EMS industry can be classified into three segments: high-volume,
medium-volume and low-volume. The Company focuses on the medium-volume
segment. Manufacturers in this segment are highly fragmented and
competitive. Customer bases tend to be highly concentrated, with two or
three customers typically accounting for a significant portion of an EMS
provider's total revenue.
Two principal assembly techniques are employed in providing higher-
margin, higher-complexity contract manufacturing in the medium-volume EMS
market segment: surface mount technology ("SMT"), which accounts for the
majority of manufacturing; and through-hole technology. Management
believes that the medium-volume EMS market is continuing to move toward SMT
as the preferred manufacturing technique, mainly because semiconductors
have continued to decline in size, thereby lowering manufacturing
tolerances.
Description of Products and Services - EMS
Production of electronic assemblies for a customer is only performed
when a firm order is received. Customer cancellations of orders are
infrequent and are subject to cancellation charges. More often, a customer
will delay shipment of orders based on its actual or anticipated needs.
Electronic assemblies are produced based on one of two general methods,
either "turnkey" (where the Company provides all materials, labor and
equipment associated with producing the customers' product) or "consigned"
(the Company provides labor and equipment only for manufacturing product).
The Company's EMS operations provide both turnkey and consignment
electronic manufacturing services using surface mount and through-hole
interconnection technologies. The Company conducts the EMS portion of its
business through its SMTEK and Jolt subsidiaries in the U.S. and through
its DDL Electronics Limited ("DDL-E") subsidiary in Europe. SMTEK, Jolt and
DDL-E do not fabricate any of the components or PCBs used in these
processes. EMS sales represented approximately 84%, 80% and 69% of the
Company's consolidated sales for the fiscal years ended June 30, 1998, 1997
and 1996, respectively.
Since turnkey electronic contract manufacturing may be a substitute for
all or some portion of a customer's captive EMS capability, continuous
communication between the Company and the customer is critical. To
facilitate such communication, the Company's EMS businesses maintain customer
service departments whose personnel work closely with the customer throughout
the assembly process. The Company's engineering and service personnel
coordinate with the customer on the implementation of new and re-engineered
products, thereby providing the customer with feedback on such issues as ease
of assembly and anticipated production lead times. Component procurement is
commenced after component specifications are verified and approved sources
are confirmed with the customer. Concurrently, assembly routing and
procedures for conformance with the workmanship standards of IPC are defined
and planned. Additionally, in-circuit test fixtures are designed and
developed. In-circuit tests are normally performed on all assembled circuit
boards for turnkey projects. Such tests verify that components have been
properly inserted and meet certain functional standards and that electrical
circuits are properly completed. In addition, under protocols specified by
the customer, the Company performs customized functional tests designed to
ensure that the board or assembly will perform its intended function. The
Company's personnel monitor all stages of the assembly process in an effort
to provide flexible and rapid responses to the customer's requirements,
including changes in design, order size and delivery schedule.
The materials procurement element of the Company's turnkey services
consists of the planning, purchasing, expediting and financing of the
components and materials required to assemble a board-level or system-level
assembly. Customers have increasingly required the Company and other
independent providers of electronic manufacturing services to purchase some
or all components directly from component manufacturers or distributors and
to finance the components and materials. In establishing a turnkey
relationship with an independent provider of electronic manufacturing
services, a customer typically incurs costs in qualifying that EMS provider
and, in some cases, its sources of component supply, refining product design
and developing mutually compatible information and reporting systems. With
this relationship established, the Company believes that customers experience
significant difficulty in expeditiously and effectively reassigning a turnkey
project to a new assembler or in taking on the project themselves. At the
same time, the Company faces the obstacle of attracting new customers away
from existing EMS providers or from performing services in-house.
Printed Circuit Board Industry
The PCB fabrication industry historically served as additional
capacity to electronic equipment OEMs' captive manufacturing facilities.
However, as electronic products have become more sophisticated, the board
manufacturing processes have become much more advanced, requiring greater
capital investment and manufacturing expertise. As a result, OEMs have
outsourced substantially all of their PCB manufacturing requirements.
Description of Products and Services--PCB Fabrication
Printed circuit boards are the basic platforms used to interconnect
microprocessors, integrated circuits and other components essential to the
functioning of electronic products. PCBs range from simple single- and
double-sided boards to multilayer boards with more than 20 layers. Single-
sided PCBs are used in electronic games and automobile ignition systems,
whereas multilayer PCBs are used in more advanced applications such as
computers, office equipment, communications, instrumentation and defense
systems.
PCBs consist of fine lines of a conductive material, such as copper,
which are bonded to a non-conductive panel, typically rigid laminated epoxy
glass. The conductive pathways in the PCBs form electrical circuits and
replace wire as a means of connecting electronic components. On
technologically advanced multilayer boards, conductive pathways between
layers are connected with traditional plated through-holes and may
incorporate surface mount technology. "Through-holes" are holes drilled
entirely through the board that are plated with a conductive material and
constitute the primary connection between the circuitry on the different
layers of the board and the electronic components attached to the boards
later. "Surface mount" boards are boards on which electrical components
are soldered onto the surface instead of being inserted into through-holes.
Although substantially more complex and difficult to produce, surface mount
boards can substantially reduce wasted space associated with through-hole
technology and permit greatly increased surface and inner layer densities.
The Company fabricates and sells advanced, multilayer PCBs based on
designs and specifications provided by the Company's customers. These
specifications are developed either solely through the design efforts of
the customer or through the design efforts of the customer working together
with the Company's design and engineering staff. Customers submit requests
for quotations on each job and the Company prepares bids based on its own
cost estimates.
The development of increasingly sophisticated electronic equipment,
which combines higher performance and reliability with reduced size and
cost, has created a demand for increased complexity, miniaturization and
density in electronic circuitry. In response to this demand, multilayer
technology is advancing rapidly on many fronts, including the widespread
use of surface mount technology. More sophisticated boards are being
created by decreasing the width of the tracks on the board and increasing
the amount of circuitry that can be placed on each layer. Fabricating
advanced multilayer PCBs requires high levels of capital investment and
complex, rapidly changing production processes.
The Company conducts its PCB fabrication business through its Irlandus
Circuits Limited ("Irlandus") subsidiary located in Northern Ireland. PCB
sales represented approximately 16%, 20% and 31% of the Company's
consolidated sales for the fiscal years ended June 30, 1998, 1997 and 1996,
respectively, with multilayer boards constituting a substantial portion of
the sales.
MARKETS AND CUSTOMERS
The Company's sales in the EMS and PCB fabrication businesses and the
percentage of its consolidated sales to the principal end-user markets it
serves for the last three fiscal years were as follows (dollars in
thousands):
Year ended June 30
----------------------------------------------------
Markets 1998 1997 1996
------------ ------------ ------------ ------------
Computer $ 4,935 9.3% $ 4,622 9.0% $ 4,457 12.5%
Telecommunications 10,062 18.9 7,233 14.0 4,268 12.0
Commercial avionics 11,333 21.3 9,838 19.1 2,329 6.6
Space and satellites 2,729 5.1 2,065 4.0 949 2.7
Banking automation 7,344 13.8 8,089 15.6 3,155 8.9
Industrial controls
& instrumentation 3,934 7.4 7,189 13.9 4,767 13.4
Medical 3,428 6.4 2,609 5.1 4,880 13.8
Defense 4,802 9.0 4,666 9.0 3,897 11.0
Other 4,698 8.8 5,329 10.3 6,788 19.1
------ ----- ------ ----- ------ -----
Total $53,265 100.0% $51,640 100.0% $35,490 100.0%
====== ===== ====== ===== ====== =====
The Company markets its EMS and PCB fabrication services through both a
direct sales force and independent manufacturers' representatives. The
Company's marketing strategy is to develop close relationships with, and to
increase sales to, certain existing and new major EMS and PCB fabrication
customers. This includes becoming involved at an early stage in the design
of PCBs for these customers' new products. The Company believes that this
strategy is necessary to keep abreast of rapidly changing technological
needs and to develop new EMS and PCB fabrication processes, thereby
enhancing the Company's EMS and PCB capabilities and its position in the
industry. As a result of this strategy, however, fluctuations experienced
by one or more of these customers in demand for their products may have and
have had adverse effects on the Company's sales and profitability.
During fiscal 1998, the Company's EMS and PCB businesses served
approximately 96 and 133 customers, respectively. The Company's five
largest customers accounted for 55%, 46% and 35% of consolidated sales
during fiscal years 1998, 1997 and 1996, respectively. In fiscal 1998, the
Company's three largest customers accounted for 19.9%, 13.8% and 13.8% of
consolidated sales, respectively. No other customer accounted for more
than 10% of consolidated sales.
RAW MATERIALS AND SUPPLIERS
In its EMS business, the Company uses numerous suppliers of electronic
components and other materials. The Company's customers may specify the
particular manufacturers and components, such as the Intel Pentium
microprocessor, to be used in the EMS process. To the extent these
components are not available on a timely basis or are in short supply
because of allocations imposed by the component manufacturer, and the
customer is unwilling to accept a substitute component, delays may occur.
Such delays are experienced in the EMS business from time to time and have
caused sales and inventory fluctuations in the Company's EMS business.
The principal materials used by the Company in its PCB fabrication
processes are copper laminate, epoxy glass, copper alloys, gold and various
chemicals, all of which are readily available to the Company from various
sources. The Company believes that its sources of materials for its
fabrication business are adequate for its needs and that it is not
substantially dependent upon any one supplier.
INDUSTRY CONDITIONS AND COMPETITION
The markets in which the EMS and PCB fabrication businesses operate
are intensely competitive and have experienced excess production capacity
during the past few years. Seasonality is not a significant factor in the
EMS and PCB fabrication businesses. Competition is principally based on
price, product quality, technical capability and the ability to deliver
products on schedule. Both the price of and the demand for EMS and PCBs
are sensitive to economic conditions, changing technologies and other
factors. The technology used in EMS and fabrication of PCBs is widely
available, and there are a large number of domestic and foreign
competitors. Many of these firms are larger than the Company and have
significantly greater financial, marketing and other resources. Many of
the Company's competitors have also made substantial capital expenditures
in recent years and operate technologically advanced EMS and PCB
fabrication facilities. Furthermore, some of the Company's customers have
substantial in-house EMS capabilities. There is a risk that when these
customers are operating at less than full capacity they will use their own
facilities rather than contract with the Company. Despite this risk,
management believes that the Company has not experienced a significant loss
of business to OEMs' captive assembly operations.
BACKLOG
At June 30, 1998, 1997 and 1996, the Company's backlog was
$36,209,000, $28,587,000 and $17,669,000, respectively. Backlog is
comprised of orders believed to be firm for products that have scheduled
shipment dates during the next 12 months. Some orders in the backlog may
be canceled under certain conditions. Historically, a substantial portion
of the Company's orders have been for shipment within 90 days of the
placement of the order and, therefore, backlog information as of the end of
a particular period is not necessarily indicative of trends in the
Company's business. In addition, the timing of orders from major customers
may result in significant fluctuations in the Company's backlog and
operating results from period to period.
ENVIRONMENTAL REGULATION
The Company is currently involved in certain remediation and
investigative studies regarding soil and groundwater contamination at
the site of a former printed circuit board manufacturing plant in
Anaheim, California which was leased by one of the Company's
subsidiaries, Aeroscientific Corp., which is now an inactive,
insolvent subsidiary. Management, based in part on consultations
with outside environmental engineers and scientists, believes that
the total remaining costs to clean up this site will not exceed
$600,000. The remaining costs to be incurred to remediate this site
will be borne partially by the property owner under a cost sharing
agreement entered into several years ago. At June 30, 1998, the
Company had a reserve of $528,000, which management believes is
adequate to cover its share of future remediation costs at this site.
It is possible, however, that these future remediation costs could
differ significantly from the estimates, and that the Company's
portion could exceed the amount of its reserve. The Company's
liability for remediation in excess of its reserve could have a
material adverse impact on its business, financial condition and
results of operations.
EMPLOYEES
At June 30, 1998, the Company had approximately 530 employees.
Item 2. PROPERTIES
SMTEK conducts its operations from a 45,000 square foot facility which
is leased through May 31, 2000. The monthly rent was approximately $29,000
during fiscal 1998 and is subject to a 4% increase each year. SMTEK has
the option to extend the lease term for three renewal periods of three
years each. The lease rate during the renewal periods is subject to
adjustment based on changes in the Consumer Price Index for the local area.
Jolt occupies an 8,400 square foot facility which is leased through
October 31, 1998 for $7,100 per month. Jolt management is currently in
negotiations with the landlord concerning an extension of the lease, and
management expects that the lease will be renewed for an additional one
year term. In the event the lease is not renewed, management believes that
there is sufficient vacant industrial space in the local vicinity to enable
Jolt to relocate without unduly disrupting its operations.
DDL-E conducts its operations from a 67,000 square foot facility in
Northern Ireland that was purchased in 1989. Prior to DDL-E commencing
operations in the spring of 1990, approximately 1.6 million pounds sterling
(approximately $2,700,000) was expended on auto-insertion equipment,
surface mount device placement equipment, wave solder equipment, visual
inspection equipment and automated test equipment. The Company believes
that this facility possesses the technology required to compete effectively
and that the facility is capable of supporting projected growth for up to
the next two years.
Irlandus owns and occupies a 63,000 square foot production facility
and an adjacent 9,000 square foot office and storage facility. Irlandus'
existing capacity is expected to be adequate to meet anticipated order
levels for the next three years.
The following table lists principal plants and properties of the
Company and its subsidiaries:
Owned
Square or
Location Footage Leased
------------ ------ ------
Newbury Park, California 45,000 Leased
Fort Lauderdale, Florida 8,400 Leased
Craigavon, Northern Ireland 63,000 Owned
Craigavon, Northern Ireland 67,000 Owned
Craigavon, Northern Ireland 9,000 Owned
The Northern Ireland properties are pledged as security for
installment loans payable to the Industrial Development Board for Northern
Ireland, from which the properties were purchased. These loans had an
aggregate outstanding balance of approximately $1,214,000 at June 30, 1998.
Item 3. LEGAL PROCEEDINGS
No material legal proceedings are presently pending as to which the
Company or any of its properties is subject.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the 1997 Annual Meeting of Stockholders held on June 29, 1998,
Charlene A. Gondek was elected a Class I director and Gregory L. Horton was
elected a Class II director. Directors whose terms of office continued
after the meeting were Karen Beth Brenner, Richard K. Vitelle and Thomas M.
Wheeler. In addition to the election of directors, the stockholders
approved the acquisition of Jolt Technology, Inc. for 9 million shares of
the Company's common stock and an amendment to the Certificate of
Incorporation to increase the number of authorized shares of common stock
from 50 million to 75 million shares. There were 24,613,666 shares of
common stock outstanding and entitled to vote at this meeting. Following is
a summary of the voting:
Votes
Against or Votes
Votes For Withheld Abstained Unvoted
-------- ------- ------- -------
Election of Charlene A. Gondek
as Class I director 19,641,063 170,580
Election of Gregory L. Horton
as Class II director 20,890,231 170,580
Approval of acquisition of
Jolt Technology, Inc. 12,325,393 179,561 93,968 12,014,744
Approval of increase in
authorized shares of
common stock 18,958,705 1,640,573 86,949 3,927,439
The acquisition of Jolt Technology, Inc. required the affirmative vote
of a majority of the shares actually voted, while the increase in authorized
shares required the affirmative vote of all outstanding shares of common
stock.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The information set forth under the caption "Market and Dividend
Information" in the Company's 1998 Annual Report to Stockholders is
incorporated herein by reference and made a part hereof.
Item 6. SELECTED FINANCIAL DATA
The information set forth under the caption "Five-Year Financial
Summary" in the Company's 1998 Annual Report to Stockholders is
incorporated herein by reference and made a part hereof.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information set forth under the caption "Management's Discussion
and Analysis of Financial Condition and Results of Operations" ("MD&A") in
the Company's 1998 Annual Report to Stockholders is incorporated herein by
reference and made a part hereof.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Reference is made to the financial statements later in this Report
under Item 14(a)(1).
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
This information is incorporated by reference to the Company's proxy
statement for its 1998 Annual Meeting of Stockholders.
Item 11. EXECUTIVE COMPENSATION
This information is incorporated by reference to the Company's proxy
statement for its 1998 Annual Meeting of Stockholders.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
This information is incorporated by reference to the Company's proxy
statement for its 1998 Annual Meeting of Stockholders.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
This information is incorporated by reference to the Company's proxy
statement for its 1998 Annual Meeting of Stockholders.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS OF FORM 8-K
1998 Annual
Report to
Stockholders
------
(a)(1) List of Financial Statements
List of data incorporated by reference:
Report of KPMG Peat Marwick LLP on consolidated
financial statements 10
Consolidated balance sheets as of June 30, 1998
and 1997 11
Consolidated statements of operations for the
years ended June 30, 1998, 1997 and 1996 13
Consolidated statements of cash flows for the
years ended June 30, 1998, 1997 and 1996 14
Consolidated statements of stockholders'
equity (deficit) for the years ended June 30,
1998, 1997 and 1996 15
Notes to consolidated financial statements 16
(a)(2) Financial Statement Schedules
The financial statement schedules are omitted
because they are either not applicable or the
information is included in the notes to
consolidated financial statements.
Form 10-K
-------
(a)(3) List of Exhibits:
Exhibit Index 11
(b) Reports on Form 8-K:
On July 15, 1998, the Company filed a Current Report on Form 8-K
regarding the acquisition of Jolt Technology, Inc.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, on
August 27, 1998.
DDL ELECTRONICS, INC.
/s/ Gregory L. Horton
-----------------------
Gregory L. Horton
Chief Executive Officer,
President and Chairman
of the Board of Directors
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the
dates indicated.
Signature Title Date
/s/ Gregory L. Horton Chief Executive Officer, August 27, 1998
- ----------------------- President and Chairman ------------------
Gregory L. Horton of the Board
/s/ Richard K. Vitelle Vice President-Finance and August 27, 1998
- ----------------------- Administration, Chief ------------------
Richard K. Vitelle Financial Officer, Treasurer,
Secretary and Director
/s/ Karen B. Brenner Director August 27, 1998
- ----------------------- ------------------
Karen B. Brenner
/s/ Charlene A. Gondek Director August 27, 1998
- ----------------------- ------------------
Charlene A. Gondek
/s/ Thomas M. Wheeler Director August 27, 1998
- ----------------------- ------------------
Thomas M. Wheeler
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
2.1 Agreement and Plan of Merger dated May 28, 1998 among the
Company, Jolt Technology, Inc. and the shareholders of Jolt
Technology, Inc. (incorporated by reference to Appendix A of the
Company's Definitive Proxy Statement dated June 12, 1998).
3.1 Amended and Restated Certificate of Incorporation of the
Company (incorporated by reference to Exhibit 4.1 of the
Company's Registration Statement on Form S-8, Commission File
No. 33-7440).
3.2 Bylaws of the Company, amended and restated effective March
1995 (incorporated by reference to Exhibit 3-b of the
Company's 1995 Annual Report on Form 10-K).
4.1 Certificate of Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock of the Company
(incorporated by reference to Exhibit 4.2 of the Company's
Registration Statement on Form S-8, Commission File No. 33-7440).
4.2 Certificate of Designation, Preferences and Rights of Series B
Convertible Preferred Stock of the Company (incorporated by
reference to Exhibit 4.3 of the Company's Registration
Statement on Form S-8, Commission File No. 33-7440).
4.3 Indenture dated July 15, 1988, applicable to the Company's
8-1/2% Convertible Subordinated Debentures due August 1, 2008
(incorporated by reference to Exhibit 4-c of the Company's 1988
Annual Report on Form 10-K).
4.3.1 Supplemental Indenture relating to the Company's 8-1/2%
Convertible Subordinated Debentures due August 1, 2008
(incorporated by reference to Exhibit 4-b of the Company's
1991 Annual Report on Form 10-K).
4.4 Indenture relating to the Company's 7% Convertible
Subordinated Debentures due 2001 (incorporated by reference to
Exhibit 4-c of the Company's 1991 Annual Report on Form 10-K).
4.5 Rights Agreement dated as of June 10, 1989, between the
Company and Bank of America, as Rights Agent (incorporated by
reference to Exhibit 1 to the Company's Report on Form 8-K
dated June 15, 1989).
4.5.1 Amendment to Rights Agreement dated as of February 21, 1991,
amending the Rights Agreement dated as of June 10, 1989,
between the Company and Bank of America, as Rights Agent
(incorporated by reference to Exhibit 4.7 of Registration
Statement No. 33-39115).
4.6 Series C Warrant Agreement dated as of July 1, 1995 between
the Company and Fechtor, Detwiler & Co., Inc. covering 250,000
shares and expiring on June 30, 2000 (incorporated by reference
to Exhibit 4-f of the Company's Registration Statement on Form
S-3, Commission File No. 333-02969).
4.7 Series C Warrant Agreement dated as of July 1, 1995 between
the Company and Fortuna Capital Management covering 100,000
shares and expiring on June 30, 2000 (incorporated by reference
to Exhibit 4-g of the Company's Registration Statement on Form
S-3, Commission File No. 333-02969).
4.8 Series C Warrant Agreement dated as of July 1, 1995 between
the Company and Karen Brenner covering 50,000 shares and expiring
on June 30, 2000 (incorporated by reference to Exhibit 4-h of
the Company's Registration Statement on Form S-3, Commission
File No. 333-02969).
4.9 Series C Warrant Agreement dated as of July 1, 1995 between
the Company and Barry Kaplan covering 15,000 shares and expiring
on June 30, 2000 (incorporated by reference to Exhibit 4-k of
the Company's Registration Statement on Form S-3, Commission
File No. 333-02969).
4.10 Series D Warrant Agreement dated as of July 1, 1995 between
the Company and Charles Linn Haslam covering 250,000 shares
and expiring on June 30, 2000 (incorporated by reference to
Exhibit 4-i of the Company's Registration Statement on Form
S-3, Commission File No. 333-02969).
4.11 Form of Series E Warrant dated February 29, 1996 covering an
aggregate 1,500,000 shares and expiring on February 28, 2001
(incorporated by reference to Exhibit 4-n of the Company's
Registration Statement on Form S-3, Commission File No.
333-02969).
4.12 Form of Warrant and Contingent Payment Agreement for Series G
Warrants dated as of March 31, 1996 between the Company and
each of several former officers, key employees and directors
of the Company under various consulting agreements and
deferred fee arrangements covering an aggregate 595,872 shares
expiring on June 1, 1998 (incorporated by reference to Exhibit
4-l of the Company's Registration Statement on Form S-3,
Commission File No. 333-02969).
4.13 Form of Warrant Agreement for Series H Warrants dated July 1,
1995 among the Company and each of several current or former
non-employee directors covering an aggregate of 300,000 shares
expiring on June 30, 2000 (incorporated by reference to
Exhibit C of the Company's Definitive Proxy Statement dated June
14, 1996).
4.14 Debt Term Sheet dated June 30, 1997 between the Company and Thomas
M. Wheeler (incorporated by reference to Exhibit 4.16 of the
Company's 1997 Annual Report on Form 10-K).
4.14.1 Secured promissory note dated June 30, 1997 in the principal amount
of $2 million between the Company and Thomas M. Wheeler
(incorporated by reference to Exhibit 4.16.1 of the Company's
1997 Annual Report on Form 10-K).
4.14.2 Collateral Security Stock Pledge Agreement dated June 30, 1997
between the Company and Thomas M. Wheeler (incorporated by
reference to Exhibit 4.16.2 of the Company's 1997 Annual Report
on Form 10-K).
10.1 1985 Stock Incentive Plan (incorporated by reference to
Exhibit 4a of Registration Statement No. 33-3172).
10.2 1987 Stock Incentive Plan (incorporated by reference to
Exhibit 4a of Registration Statement No. 33-18356)
10.3 1991 General Nonstatutory Stock Option Plan (incorporated by
reference to Exhibit 10-cf of the Company's 1993 Annual Report
on Form 10-K).
10.4 1993 Stock Incentive Plan (incorporated by reference to
Exhibit 4.7 of the Company's Registration Statement on Form
S-8, Commission file No. 33-74400).
10.5 1996 Stock Incentive Plan (incorporated by reference to
Exhibit A of the Company's Proxy Statement for the fiscal 1995
Annual Stockholders Meeting).
10.6 1996 Non-Employee Directors Stock Option Plan (incorporated by
reference to Exhibit B of the Company's Proxy Statement for the
fiscal 1995 Annual Stockholders Meeting).
10.7 Form of Indemnity Agreement with officers and directors
(incorporated by reference to Exhibit 10-o of the Company's
1987 Annual Report on Form 10-K).
10.8 Standard Industrial Lease-Net dated August 1, 1984, among the
Company, Aeroscientific Corp., and Bradmore Realty Investment
Company, Ltd. (incorporated by reference to Exhibit 10-w of
the Company's 1990 Annual Report on Form 10-K).
10.8.1 Second Amendment to Lease among Bradmore Realty Investment
Company, Ltd., the Company and the Company's Aeroscientific
Corp. subsidiary, dated July 2, 1993 (incorporated by
reference to Exhibit 10-cd of Registration Statement No.
33-63618).
10.9 Standard Industrial Lease - Net dated October 15, 1992,
between L.N.M. Corporation-Desert Land Managing Corp. and the
Company's A.J. Electronics, Inc. subsidiary (incorporated by
reference to Exhibit 10.2 of the Company's Quarterly Report on
Form 10-Q for the quarter ended October 2, 1993).
10.10 Grant Agreement dated August 29, 1989, between DDL Electronics
Limited and the Industrial Development Board for Northern Ireland
("IDB") (incorporated by reference to Exhibit 10.29 of the
Company's Registration Statement No. 33-39115).
10.10.1 Agreement dated May 2, 1996, between DDL Electronics Limited
and the IDB amending the Grant Agreement dated August 29,
1989, between DDL Electronics and the IDB (incorporated by
reference to Exhibit 10.11.1 filed with the Company's 1996 Annual
Report on Form 10-K).
10.11 Form of Land Registry for the Company's Northern Ireland
subsidiaries dated November 4, 1993 (incorporated by reference
to Exhibit 10.1 of the Company's Quarterly Report of Form 10-Q
for the quarter ended September 30, 1993).
10.12 Business Financing Agreement dated August 21, 1996 between SMTEK,
Inc. and Deutsche Financial Services Corporation (incorporated by
reference to Exhibit 10 of the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1996).
10.13 Employment Agreement and Letter of Understanding and Agreement
dated October 15, 1995 between the Company and Gregory L.
Horton (incorporated by reference to Exhibit 99.2 filed with
the Company's Current Report on Form 8-K dated January 12,
1996).
10.14 Employment Agreement dated September 12, 1996 between the
Company and Richard K. Vitelle (incorporated by reference to
Exhibit 10.15 filed with the Company's 1996 Annual Report on
Form 10-K).
11 Statement re Computation of Per Share Earnings (incorporated by
reference to Note 9 to the consolidated financial statements of
the 1998 Annual Report to Stockholders).
13 Annual Report to security holders.
21 Subsidiaries of the Registrant.
23 Consent of KPMG Peat Marwick LLP.
27 Financial Data Schedule.
99 Undertaking for Form S-8 Registration Statement.