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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO _________
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COMMISSION FILE NUMBER 0-2382
MTS SYSTEMS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MINNESOTA 952-937-4000 41-0908057
(STATE OR OTHER JURISDICTION OF (TELEPHONE NUMBER (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) OF REGISTRANT IDENTIFICATION NO.)
INCLUDING AREA CODE)
14000 TECHNOLOGY DRIVE, EDEN PRAIRIE, MINNESOTA 55344-9763
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
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SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK (PAR VALUE OF 25(CENTS) PER SHARE)
INDICATE BY CHECK MARK WHETHER 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.
__X__YES _____ 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. ( )
AS OF NOVEMBER 30, 2001, 21,029,946 SHARES OF THE REGISTRANT'S COMMON
STOCK WERE OUTSTANDING AND THE AGGREGATE MARKET VALUE OF SUCH COMMON STOCK
(BASED UPON THE AVERAGE OF THE HIGH AND LOW PRICES) HELD BY NON-AFFILIATES WAS
$225,478,800.
-------------------
DOCUMENTS INCORPORATED BY REFERENCE
ANNUAL REPORT TO SHAREHOLDERS FOR FISCAL YEAR ENDED SEPTEMBER 30, 2001 - PARTS
I, II AND IV.
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS, STATEMENT DATED PRIOR TO
JANUARY 29, 2002 - PART III.
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1
MTS SYSTEMS CORPORATION
ANNUAL REPORT PURSUANT TO
SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
PART I
ITEM 1. BUSINESS
MTS Systems Corporation (hereafter called "MTS", or "the Company" or "the
Registrant") is a technology-based, market-driven company providing hardware,
software and engineering services to researchers, designers and manufacturers.
MTS's business approach is based on a set of building-block technologies and
business processes. Technologies include sensors for measuring machine and
process parameters, control technologies for test and process automation,
hydraulic and electric servodrives for precise actuation, and application
software to tailor a test or automation system to a specific customer's needs
and to analyze results. Business processes include project and product styles of
operations on a worldwide basis. In combination, these technologies and business
processes provide solutions to customers in a variety of markets.
CUSTOMERS AND PRODUCTS BY BUSINESS SEGMENT
The Company's operations are organized into two business sectors: the Mechanical
Testing and Simulation ("MT&S") Sector and the Factory Automation ("FA") Sector.
The operational alignment of these sectors allows the Company to maintain a
strategic focus on markets having different applications for the Company's
technologies.
MT&S Sector: Customers of business units comprising this sector use the
Company's systems, software and services for research, product development and
quality control to determine the mechanical properties and performance of
materials, products and structures. Many of the Company's products and services
support its customers' mechanical design automation processes. Customers of this
business sector are part of the following industries:
AIRCRAFT AND AEROSPACE VEHICLE MANUFACTURERS AND THEIR SUPPLIERS: These
customers use the Company's systems and software for full-scale structural tests
on complete vehicles and principal subsystems such as landing gear.
In the aircraft industry, the Company's customers include manufacturers of
commercial, military and general aviation airplanes and their suppliers,
including engine manufacturers.
The space vehicle industry utilizes the Company's systems and software for such
applications as solid fuel development and heat shield studies.
Both aircraft and space vehicle manufacturers and their suppliers use the
Company's systems and software to perform research on new materials and to
control quality in the manufacturing of materials.
CIVIL ENGINEERING: Customers in this market segment include construction and
mineral/petroleum production companies, and test laboratories owned and/or
operated by universities or governmental units. Systems sold to this market
segment include seismic (earthquake) simulators, civil construction component
(e.g., beam) testing systems,
2
pavement material testing systems, and specialized systems for rock and soil
studies in construction and mineral/petroleum production.
CONSUMER AND BIOMECHANICAL PRODUCTS/MATERIAL PRODUCERS: Customers in this market
segment use the Company's electromechanical and servohydraulic material testing
systems in research and product development where a high degree of quality
control is required during production or other operations. In addition,
customers use the Company's nanoindentation systems to test and measure
mechanical properties of products where microscopic precision is required.
Typical consumer products are made of textiles, paper products and plastic films
of many types. Biomechanical products include implants, prostheses and other
medical and dental devices and materials. Material producers include metal,
ceramic, composite, paper and plastic manufacturers.
GROUND VEHICLE INDUSTRY: This market consists of automobile, truck, motorcycle
and off-road vehicle manufacturers and their suppliers. This represents the
largest market segment within the MT&S Sector.
Applications of the Company's systems and software include the design and
production testing of engines and drivetrains, suspension and steering
components, body and chassis, tires and wheels, and fuel storage and exhaust
components. Vehicle manufacturers strive to improve performance, durability and
safety while eliminating noise and vibration from their products. Customers also
integrate the Company's modeling software and physical testing systems as a
means of accelerating prototype design and decreasing product development and/or
manufacturing costs of their products and components.
ADVANCED SYSTEMS: The Company offers highly customized systems for simulation
and testing through its Advanced Engineering Solutions business unit. These
customized systems frequently contain highly technical, or "first of its kind"
advances that are new to a specific application. Customers of Advanced
Engineering Solutions business unit operate in all industries served by the
other business units comprising the MT&S Sector - aerospace and advanced
materials, civil engineering, and ground vehicles - as well as customers from
other industries interested in developing new manufacturing technologies and
systems such as friction stir welding and material processing.
The MT&S Sector typically represents approximately 80% of the Company's total
revenue and is the principal market for the Company's technology.
FA Sector: Customers of business units comprising the FA Sector use the
Company's measurement and control instrumentation to measure process variables
and to automate appropriate production processes. These customers generally use
MTS-produced products in discrete part manufacturing and chemical processing
industries. Products of this Sector include:
DISPLACEMENT POSITION AND LIQUID-LEVEL SENSORS BASED ON MAGNETOSTRICTIVE
TECHNOLOGY: Displacement sensors accurately measure position up to 25 feet and
are often used where accurate positioning and continuous control are critical,
such as in discrete (piece part) manufacturing machinery, mobile equipment,
process control elements and continuous measurement devices. Major applications
include injection molding machines, servo-hydraulic cylinders, equipment presses
of many types, sawmills, logging and other mobile machinery and valve or flow
control.
Displacement sensors are also used in high volume applications requiring low
cost position feedback. MTS has the capabilities of manufacturing low cost
products in various lengths and configurations, while maintaining an extremely
high degree of accuracy. These lower cost solutions are marketed to such
industries as automotive, appliance, medical, agricultural, marine, aeronautic
and other non-manufacturing markets.
3
Liquid level sensors accurately measure the level of liquids up to 60 feet in
tanks and other vessels. These sensors are marketed to control continuous
processes in chemical, pharmaceutical, bio-technology and other related markets.
The need for highly reliable accurate measurement of one or more fluid levels is
common in most of these applications. These types of products are marketed to
the ultimate end users, such as chemical producing companies, and to original
equipment manufacturers and private label companies who, in turn, design level
measurement or leak detection into their control systems or accessories for
remote indication and where control devices are required.
SERVO MOTORS, AMPLIFIERS AND CONTROLLERS: Customers use high-performance
brushless servo motors and amplifiers for challenging factory automation
applications in a wide range of industries, including machine tools, fabrication
and packaging. Specialized plug-in amplifiers are used in light duty
applications such as the semiconductor and textile industries. The Company's
controllers are used for precise control of a wide variety of applications
ranging from simple applications requiring only one axis of control to
high-speed, complex operations requiring up to 28 axes of control. These
combined product lines address many of the needs for high performance systems
and are used primarily by original equipment manufacturers and large end users.
TITANIUM AND OTHER PRODUCTS: The Company, through its wholly-owned subsidiary,
AeroMet Corporation, has developed an innovative laser direct metal deposition
process for manufacturing parts made out of titanium and other metals. This
newly developed, computer-driven process uses a laser to fuse titanium powder,
or powder of other metals, layer by layer, into solid structures. The process
significantly reduces the time required to produce complex parts used in various
industries, including the aircraft and aerospace industries.
The FA sector typically represents approximately 20% of the Company's total
revenue.
COMMON TECHNOLOGIES
The Company's systems and products are produced using the application
engineering know-how of its employees, combined with common technology building
block components that consist generally of measuring and actuation devices,
electronic controls and application software. Many of these components are
proprietary in nature and have been developed within the Company.
The employees of the Company engineer or configure the components into products
and systems to meet the specific application specifications of a customer's
order. Frequently, special-purpose software is developed to meet a customer's
unique requirements. Such software often represents a significant part of the
value added by the Company. Services offered to system customers include on-site
installation, training of customer personnel, technical manuals and continuing
maintenance. While such services are often included in the contract amount
originally charged for completed systems, these types of services may be
purchased separately either during and after the stated warranty period.
Certain proprietary products, such as sensors, process controls, motors,
actuators and process software and firmware are sold as products to end users
and to other companies for incorporation into their systems, machines or
processes. Although the Company sells its products and most systems on
fixed-price contracts, certain complex systems and applied research are
undertaken on "cost-plus-fixed-fee" contract basis.
4
PRODUCT DEVELOPMENT HIGHLIGHTS FOR 2001
As discussed more fully in the Research and Development Section, the Company
performs significant product, system and application development and from time
to time, undertakes "first of its kind" high-technology contracts, certain of
which may include significant technological pioneering. Selected highlights of
product developments undertaken or completed during 2001 include the following:
* The Company introduced an upgraded version of the SWIFT (R) Spinning
Wheel Integrate Force Transducer. The new version, which is a larger
configuration of the SWIFT wheel force transducer originally
introduced in 1998, is designed for medium and heavy weight vehicle
and truck applications. The SWIFT concept has replaced time consuming
and expensive instrumentation for data acquisition and testing in many
vehicle development programs and, with this upgraded version, is now
available to medium and heavy truck development teams.
* The Company introduced a nanoindentation system called Nano Indenter
(R) XPW. This system is capable of performing nanoindentation tests on
full size semiconductor wafers, up to 12 inches in diameter.
Nanoindentation test systems characterize the surfaces of full size
wafers for properties such as hardness and modulus of elasticity, at
the nanometer level, or for as little as tens of atoms.
* The Company introduced a friction stir welding system for advance
manufacturing applications. The multi-axis system will be capable of
conducting non-linear welds on complex structures while providing
sufficient redundancy and documentation for weld validation and
certification needed for aerospace structures. Since friction stir
welding in a welding technique that occurs at a temperature below the
melting point of the work piece metal, the process causes minimal
component distortion and produces a highly desirable microstructure
with high weld strength.
* The Company introduced a new laser additive manufacturing system that
incorporates fuzzy logic control of the process. This new system is an
enhancement to the Company's previously existing multi-axis laser
additive manufacturing systems. These systems use a computer-driven,
high-power laser to fuse metallic powder into three-dimensional
structures whose mechanical performance meets or exceeds that of
comparable structures made by conventional methods, but with less
waste. Benefits of the fuzzy logic controller include improved
production efficiency with better "near net shape" forming.
* The Company introduced the RPC (R) Pro Software, which is the latest
evolution of MTS Remote Parameter Control ("RPC") products that
support road simulation system control and general data analysis. New
additions in this software release include process driven applications
focused on streamlining data acquisition, data analysis and durability
test operation, and new customer product evaluation capabilities.
* The Company introduced the eTIM (TM) electronic test information
management system. This product allows test laboratories to achieve
major advances in productivity through superior information sharing,
archiving and data management among CAE and CAT functions.
* The Company introduced a new version of its EDM (TM) software for
nonlinear, dynamic modeling. This new version expands the software's
modeling abilities to automotive components that have traditionally
been difficult to characterize, but are critical to developing
exceptional vehicle designs, such as engine mounts and suspension
bushings.
5
CHARACTERISTICS OF SALES
The Company's systems and products are sold and delivered throughout the world
to customers in a large number of different industries, government agencies,
academic and other institutions. As such, the Company is generally not dependent
on any single customer or industry for a significant portion of its business.
MT&S systems range in price from less than $20,000 to over $20 million. Although
important to the Company's image and technological advancements, large
individual, fixed-price orders, generally considered as orders over $10 million,
may produce volatility in both backlog and quarterly operating results. The
majority of the customer orders received during any twelve month period is based
on fixed-price quotations and, in some situations, require extensive technical
communications with potential customers prior to receipt of the order. The
production period for a typical system ranges from one to twelve months,
depending on the complexity of the system and the availability of components in
the Company's or its suppliers' inventories. The production periods for larger,
more complex systems have been, in the past, up to three years and on certain
large cost-plus-fixed-fee contracts, the production periods have been longer.
FA products are sold in quantity at unit prices ranging from $500 to $10,000.
Production periods generally vary from several days to several months. During
the past two fiscal years, revenue derived from customers located outside of the
United States has exceeded 50% of the Company's net revenue, a portion of which
was sold in currencies other than the U.S. dollar. During this period, shipment
of the Company's products have been shipped to Europe, Japan, Asia-Pacific,
Latin America and Canada. As such, the Company's foreign operations and revenue
derived from customers in foreign countries may be affected by local political
conditions, export licensing issues and restrictions and/or foreign currency
exchange rates and restrictions.
Sales Channels: MTS markets its products using a number of sales channels. The
Company sells its MT&S equipment through an employee sales network, independent
sales representatives and, to a lesser extent, direct mail or catalog operation.
Sales personnel are generally degreed engineers or highly skilled technicians
and are specially trained to sell MT&S products and services. Employee
salespersons are compensated through salary and sales incentives while
independent sales representatives are paid a commission.
A list of major domestic and international sales offices for the Company's MT&S
Sector include the following:
Domestic Sales Offices:
Akron Dayton Pittsburgh
Austin Denver Raleigh
Baltimore Detroit Rockford
Boston Los Angeles San Francisco
Charlotte Minneapolis Seattle
Chicago Milwaukee Washington, D.C
Cincinnati Newark
Dallas Philadelphia
International Sales Offices:
Beijing and other cities, Hong Kong,
People's Republic of China Peoples Republic of China
Berlin and other cities, Germany Paris, France
Gloucester, United Kingdom Seoul, South Korea
Gothenburg, Sweden Tokyo and other Cities, Japan
Turin, Italy
6
MT&S also has sales and service representative organizations in nearly all
industrialized countries of the world and in many of the developing countries of
Latin America, Asia, Africa and the Middle East.
The Company offers a mail-order catalog of material testing components,
accessories and products. The catalog includes products of complementary vendors
and has an overall objective of reaching a broader group of customers involved
in some type of mechanical testing and simulation.
The FA segment sells its products through sales channels separate from the MT&S
Sector. To market products associated with this Sector, it employs a network of
employees, direct sales, external domestic distributors, sales representatives
and system houses. While revenue derived from customers located in foreign
countries accounts for approximately 45% of this Sector's annual volume,
continuing efforts are being made to continue expansion of its sales channels
into other international markets.
International Operations and Export Sales: For additional information regarding
the Company's operations by geographic area, see the Geographic Analysis of New
Orders, included as part of Management's Discussion and Analysis of Financial
Condition and Results of Operations and Note 3 to Consolidated Financial
Statements, "Business Segment Information," on pages 18 and 19 of the Company's
2001 Annual Report to Shareholders, which sections are incorporated herein by
reference.
Export Licensing: During each of the three years ended September 30, 2001, the
Company made various shipments to Asia, Europe and other regional areas
throughout the world that required the Company to obtain export permission from
the United States government. Although the Company does not undertake
manufacturing on custom systems or projects until it is assured that the
appropriate governmental units will grant export permission, initial design and
development work may be performed on certain systems during the licensing
period. Changes in political relations between the United States and foreign
countries for which export licenses may be required, as well as various other
factors, can adversely affect the Company's ability to complete a shipment
should a previously issued license be unexpectantly withdrawn. Political
activities in various regions of the world may result in dramatic changes in the
export control regulations and restrictions within a relatively short period of
time. In addition, the United States government maintains multilateral controls
in its agreements with allies and unilateral controls based on U.S. initiatives
and foreign policy that may, in certain situations, cause delays in certain of
the Company's planned shipments or cause the Company to reject certain customer
orders.
BACKLOG
The Company's revenue backlog, defined as firm orders from customers remaining
unfilled, totaled $156.3 million, $163.0 million and $146.8 million as of
September 30, 2001, 2000 and 1999, respectively. Based on anticipated production
schedules and other factors, the Company believes that approximately $147.7
million of the backlog as of September 30, 2001 will become revenue during
fiscal 2002. Production and other delays may occur as a result of, among other
matters, technical difficulties, export licensing or other approvals, or the
availability of the customers' installation site. Such delays may affect the
period in which backlog is recognized as revenue.
COMPETITION
MT&S Sector -
In most situations, products manufactured by this sector are available from
several other companies throughout the world, some of whom may have greater
financial, technical and marketing resources than the Company. Although the
Company's products are available worldwide, the intensity of competition varies
by product line and by geographic area. In the United States, the Company's
major competitors include, among others, Instron Corp. and
7
Interlachen, while in foreign markets, competition is greatest throughout Europe
and in Japan where major local manufacturers are located. When competing for
specific projects or orders, the customer will consider such factors, among
others, as engineering excellence and capabilities, the quality and technical
features of the equipment, overall responsiveness to customer needs, quality of
service, and price.
Alternatively, in lieu of purchasing testing and other equipment from the
Company or its competitors, companies may elect to contract with readily
available testing laboratories, including those operated by certain universities
and/or governmental units or they may choose to construct their own testing
equipment from commercially available components.
FA Sector -
The Company competes directly with small to medium-sized specialty suppliers and
also with divisions of the large companies specializing in control systems.
MANUFACTURING AND ENGINEERING
The Company conducts a significant portion of its manufacturing and engineering
activities for the MT&S Sector out of its corporate headquarters and various
other locations in and around the Minneapolis, MN metropolitan area. In
addition, engineering, project management, final system assembly and quality
testing may be performed in Berlin, Germany; Tokyo, Japan; Raleigh, North
Carolina; and Ann Arbor, Michigan. Manufacturing and engineering activities for
business units operating within the FA Sector occur in Raleigh, North Carolina;
New Ulm, Minnesota; Horsham, Pennsylvania; and in Ludenscheid, Freiburg and
Stralsund, Germany.
PATENTS AND TRADEMARKS
Although the Company's overall system business is not dependent on any single
patent, license, trademark or copyright, it holds a number of patents, patent
applications, licenses, trademarks and copyrights that the Company considers, in
the aggregate, to constitute a valuable asset. In addition to these intellectual
properties, the Company relies on its engineering and technological capabilities
to maintain its overall position in the marketplace.
RESEARCH AND DEVELOPMENT
The Company does not do basic research, but does perform significant product,
system and application developments. Costs associated with these development
programs are expensed as incurred, and aggregated $22.5 million, $24.6 million
and $27.0 million for the years ended September 30, 2001, 2000 and 1999,
respectively. From time to time, the Company also undertakes "first of its kind"
high-technology contracts, some of which is fully or partially customer-funded
and that may include significant technological pioneering. In the aggregate,
internally sponsored product development, and system or application innovations
performed as part of certain customer contracts will generally approximate 10%
of annual revenue.
EMPLOYEES
MTS had 2,224 employees as of September 30, 2001, including approximately 500
employees located outside the United States.
None of the Company's employees in the United States is currently covered by
collective bargaining agreements. In the past, the Company has not experienced
any work stoppages at any of its U. S. locations.
8
SOURCES AND AVAILABILITY OF RAW MATERIALS AND COMPONENTS
A major portion of products and systems delivered to customers may consist of
equipment and component parts purchased from third-party vendors. The Company
attempts to promote a partnership-type relationship with its vendors with an
emphasis on continuous improvement in a number of critical areas including, but
not limited to, quality, performance and technological advances. The Company is
dependent, in certain situations, on computing hardware and software devices and
raw materials that may be available in sufficient quantities from a limited
number of vendors. However, during the recent past, the Company has not
experienced significant problems or issues in procuring any essential materials,
parts or components needed in its production process.
Since the Company generally sells its products based on contracts that contain a
fixed-price agreed upon at the time the order is accepted, fluctuations, either
positively or negatively, in the cost of materials or components between the
date of order through the delivery date, if not accurately forecast at an early
date, may significantly impact the expected profitability of any project. Except
for the effect of changes in foreign currency rates, the Company believes that
such fluctuations in the cost of raw materials and components have not had a
material effect on reported operating results.
ENVIRONMENTAL MATTERS
Management believes the Company's operations are in compliance with federal,
state and local provisions relating to the protection of the environment.
ITEM 2. PROPERTIES
Properties Located in the United States:
The Company's corporate headquarters and major manufacturing, assembly and
research facility for several of the MT&S business units, occupying 420,000
square feet, is located on 56 acres of land in the City of Eden Prairie,
Minnesota, a suburb of Minneapolis, Minnesota. Since the original plant was
placed into service in 1967, six additions of various sizes, with the most
recent addition being completed in 1997, have occurred. At the current time,
approximately one-half of this facility is used for manufacturing and assembly,
while the balance is being used as general office space.
During fiscal 2001, the Company's Automation business unit entered into an
operating lease, expiring in 2011, for a newly constructed 75,000 square foot
office, light manufacturing and warehousing facility in New Ulm, Minnesota, a
city located approximately 65 miles southwest of Minneapolis, Minnesota. In
addition, the Automation business unit entered into a 5-year lease agreement
during 2001 for a 90,000 square foot office, light manufacturing and warehousing
facility in Montgomeryville, Pennsylvania, a suburb of Philadelphia. The Company
plans to sublease a portion of this facility to third party lessees.
MTS's Sensors business unit is located in a Company-owned 65,000 square foot
combination office and light manufacturing facility near the Research Triangle
Park in Cary, North Carolina, a suburb of Raleigh, North Carolina. This facility
was originally constructed in 1988 and expanded in 1992.
The Company's electromechanical material testing division is located in a
Company-owned facility adjacent to the MTS Sensors site in Cary, North Carolina.
This 25,000 square foot office and light manufacturing facility was constructed
in 1991.
MTS Noise and Vibration Division currently has an aggregate of 29,000 square
feet under lease in two facilities located in Madison Heights, Michigan and
Milford, Ohio. The lease agreements for these facilities terminate in 2003 and
2004 respectively.
9
MTS Powertrain Division occupies a 57,200 square foot Company-owned facility in
Ann Arbor, Michigan, and has an additional 13,000 square feet in Ann Arbor under
lease through 2004.
The Company also leases space in various other cities in the United States that
serve primarily as sales and service offices. Neither the amount of leased space
nor the rental obligations are significant individually or in the aggregate. The
agreements pertaining to each of its leased facilities in the United States
contain conventional operating lease terms.
International Facilities:
The Company has manufacturing, assembly, warehousing and/or office facilities in
several European countries to support its international operations:
Berlin, Germany - an 80,000 square foot Company-owned facility, of which
a portion is leased to non-MTS entities. This facility is situated on
land leased from the city government. The lease expires in 2052.
Paris, France - a 22,000 square foot leased facility used for
warehousing, servicing and office functions. The lease expires in 2009.
Ludenschied, Germany - a 35,000 square foot leased facility located on
six acres of land and used for light manufacturing and office functions.
The lease expires in 2009.
Freiburg, Germany - a 7,000 square foot office building under lease
through 2006.
Stralsund, Germany - a 7,000 square foot office and assembly facility
under lease through 2006.
The Company also leases office and general purpose space for its sales
and service subsidiaries in Gloucester, United Kingdom; Gothenburg,
Sweden; Turin, Italy; Seoul, South Korea; Tokyo and other cities in
Japan; and Beijing and other cities in the Peoples Republic of China. No
manufacturing is conducted at these locations.
The Company considers its current facilities adequate to support its operations
during fiscal 2002.
ITEM 3. LEGAL PROCEEDINGS
From time to time, the Company is party to various claims, legal actions and
complaints arising in the ordinary course of business. Management believes that
the final resolution of these matters will not have a material adverse effect on
the consolidated financial position or results of operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted for a vote of stockholders during the quarter ended
September 30, 2001.
10
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Shares of the Company's common stock are traded on The Nasdaq Stock Market's
National Market ("Nasdaq") under the symbol "MTSC". The following table sets
forth the high and low prices for the periods indicated:
Quarter Ended Low * High *
------------- ----- ------
December 31, 1999 $ 7.50 $10.63
March 31, 2000 $ 5.38 $ 9.59
June 30, 2000 $ 6.19 $ 7.88
September 30, 2000 $ 6.00 $ 7.50
December 31, 2000 $ 5.50 $ 7.88
March 31, 2001 $ 6.75 $ 9.19
June 30, 2001 $ 7.88 $14.60
September 30, 2001 $10.00 $15.60
* Source: The Nasdaq Stock Market, Inc. Summary of Activity Report
As of November 30, 2001, there were 2,086 holders of record of the Company's
$.25 par value common stock. This number may be lower than the total number of
stockholders of the Company since nominees or broker dealers hold many shares of
the Company's common stock for the benefit of others.
The Company has historically paid quarterly cash dividends and expects to
continue such dividends in the future. During each of the past three years, the
Company has paid cash dividends of $.24 per share to holders of its common
stock.
Under the terms of the Company's revolving credit agreement, certain covenants
require tangible net worth, as defined, to exceed a defined minimum amount and
limit repurchases of its common stock to a defined maximum amount. As of
September 30, 2001, tangible net worth, as defined, exceeded the minimum
requirement by $32.1 million, and $26.0 million was available to the Company for
repurchases of its common stock. Under its current credit agreements, the
Company has the flexibility to declare and pay cash dividends, in similar
amounts, during future periods.
ITEM 6. SELECTED FINANCIAL DATA
A summary of selected financial information is presented in the "Six Year
Financial Summary" on page 5 of the Company's 2001 Annual Report to Shareholders
and is incorporated herein by reference.
11
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of
Operations on pages 6 through 10 of the Company's 2001 Annual Report to
Shareholders is incorporated herein by reference.
ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risks from changes in foreign exchange and
interest rates. Additional information relative to these risks are included in
Management's Discussion and Analysis of Financial Condition and Results of
Operations on page 8 and in Note 1 to Consolidated Financial Statements included
in the Company's 2001 Annual Report to Shareholders, which is incorporated
herein by reference.
FOREIGN CURRENCY EXCHANGE RATES
Market risks from changes in foreign currency exchange rates may cause
fluctuations on the translation of orders, revenue and operating results.
Currency gains and losses from the settlement of foreign currency denominated
transactions are reported as part of "Other expense (income), net" in the
Consolidated Statements of Income located in the 2001 Annual Report to
Shareholders and incorporated herein by reference. The following table
illustrates the impact of such market risks on the above financial items for the
respective years:
(expressed in thousands)
- ------------------------------------------- ----------- ----------- -----------
2001 2000 1999
- ------------------------------------------- ----------- ----------- -----------
Decrease from currency translation on -
- ------------------------------------------- ----------- ----------- -----------
New orders $(11,640) $(2,324) $(10,838)
- ------------------------------------------- ----------- ----------- -----------
Net revenue (13,247) (3,924) (6,704)
- ------------------------------------------- ----------- ----------- -----------
Net income (930) (111) (236)
- ------------------------------------------- ----------- ----------- -----------
- ------------------------------------------- ----------- ----------- -----------
Transaction gain (loss) included in
- ------------------------------------------- ----------- ----------- -----------
"Other expense (income), net" $ 1,073 $ (538) $ (375)
- ------------------------------------------- ----------- ----------- -----------
The Company regularly assesses these risks and employs certain practices to
protect against possible adverse effects of these and other potential exposures.
To manage the risk arising from exposure to changes in foreign currency exchange
rates, the Company, when deemed appropriate, enters into forward contracts. The
Company is principally exposed to movements in the rates of foreign currencies
related to non-U.S. dollar denominated assets and uncertainty related to future
revenue that is denominated in foreign currencies. The Company's foreign
currency exposures include contracts currently in revenue backlog and unbilled
receivables where the Company will ultimately be paid in, among other
currencies, the Euro, Japanese Yen or British Pound. A hypothetical 10%
appreciation in foreign currency exchange rates against the U.S. dollar,
assuming all other variables are held constant, would result in a decrease in
future revenues and asset balances of approximately $3.9 million. A hypothetical
10% depreciation in foreign currency exchange rates against the U.S. dollar,
assuming all other variables are held constant, would result in an increase to
future revenues and asset balances of approximately $3.4 million.
INTEREST RATES
The Company experiences interest rate risk on its fixed and variable rate
indebtedness and manage such risk, part, by balancing the amount of variable and
fixed rate debt outstanding. For fixed rate debt, interest rate changes affect
the fair market value of such debt, but do not impact operating earnings. In
contrast, interest rate risk on variable rate debt generally does
12
not affect the fair market value of such debt, but may impact future operating
results and cash flows.
At September 30, 2001, the Company had fixed rate debt of $53.9 million and
variable rate debt of $5.0 million. Assuming all other factors (including, but
not limited to, foreign exchange rates) remain constant, a hypothetical increase
in interest rates of 100 basis points would result in the unrealized fair market
value of the Company's fixed rate debt to decline by approximately $0.7 million
while the impact on the Company's variable rate debt would reduce operating
results before income taxes and increase cash requirements over the next twelve
months by approximately $50,000.
FORWARD LOOKING STATEMENTS
Statements included or incorporated by reference in this Form 10-K (including
the 2001 Annual Report to Shareholders) and in the Company's press releases and
in oral statements made with the approval of an authorized executive officer,
which are not historical or current facts are "forward-looking statements" made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 and are subject to certain risks and uncertainties that could
cause actual results to differ materially from historical results and those
presently anticipated or projected. The following important factors, among
others, could affect the Company's actual results in the future and could cause
the Company's actual financial performance to differ materially from that
expressed in any forward-looking statement:
(i) With regard to the Company's new product developments, there may
be uncertainties currently unknown to the Company concerning the
expected results. In addition, the Company may not be aware of the
introduction of new products or product enhancements by its
competitors.
(ii) Possible significant volatility in both backlog and quarterly
operating results may result from large, individual, fixed price
orders in connection with sales of MT&S systems.
(iii) Order volumes and other operating considerations may be directly
or indirectly impacted by economic conditions generally and/or in
various geographic areas in which the Company operates.
(iv) Export controls based on U.S. initiatives and foreign policy, as
well as import controls imposed by foreign governments, may cause
delays for certain shipments or the rejection of orders by the
Company. Such delays could create material fluctuations in
quarterly operating results and could have a material adverse
effect on results of operations. Local political conditions and/or
currency restrictions may also affect foreign revenue.
(v) Delays in realization of backlog orders may occur due to technical
difficulties, export licensing approval or the customer's
preparation of the installation site, any of which can affect the
quarterly or annual period when backlog is recognized as revenue
and could materially affect the results of any such period.
(vi) The Company experiences competition on a worldwide basis.
Customers may choose to purchase equipment from the Company or
from its competitors. For certain of the Company's products,
customers may also contract with testing laboratories or construct
their own testing equipment, purchasing commercially available
components. Factors that may influence a customer's decision
include price, service or required level of technology.
(vii) The Company is exposed to market risk from changes in foreign
currency exchange rates, which can affect its results from
operations and financial condition.
13
(viii) The Company's short-term borrowings carry interest rate risk that
is generally related to either LIBOR or the prime rate. The
Company has minimal earnings and cash flow exposure due to market
risks on its long-term debt obligations as a result of the
primarily fixed-rate nature of the debt.
The foregoing list is not exhaustive, and the Company disclaims any obligation
subsequently to revise any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements, Report of Independent Public Accountants,
Quarterly Financial Information (unaudited), and Six Year Financial Summary
(unaudited) included in the Company's 2001 Annual Report to Shareholders on
pages 11-26 are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
None.
14
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
The Executive Officers of the Registrant on the date of this report are:
Name and Age Position Officer Since
- ------------ -------- -------------
S. W. Emery, Jr. (55) Chairman, President and 1998
Chief Executive Officer
S. E. Knight (46) Vice President and 2001
Chief Financial Officer
S. M. Cohoon (47) Vice President 1996
K. D. Donaldson, Jr. (49) Vice President 2000
J. M. Egerdal (50) Vice President 1996
L. B. Hamilton (40) Vice President 2000
D. G. Krantz (46) Vice President 2000
K. M. Staby (55) Vice President 2000
M. G. Togneri (64) Vice President 1991
Executive Officers serve at the discretion of and are elected annually by the
Company's Board of Directors. Business experience of the Executive Officers
(consisting of positions with the Company, unless otherwise indicated) for the
last five years, at a minimum, is as follows:
Officer Business Experience
------- -------------------
S. W. Emery, Jr. Chairman since January 1999. President and
Chief Executive Officer since March 17,
1998. Various management and executive
positions with Honeywell International from
1985 to 1997 (Area Vice President, Western
and Southern Europe from 1994 to 1997; Group
Vice President, Military Avionics Systems
from 1989 to 1994; Vice President and
General Manager, Space Systems Division from
1988 to 1989; Vice President Operations,
Process Controls Division from 1985 to 1988)
S. E. Knight Vice President and Chief Financial Officer
since October 2001. Prior thereto, various
management and executive positions with
Honeywell International from 1977 to 2001
(Chief Financial Officer of the Home and
Building Control global business unit from
2000 to 2001; Chief Financial Officer of the
North American Home and Building Control
business unit from 1995 to 2000 and prior to
1995, held various other management
positions including corporate director of
Financial Planning and Analysis.)
S. M. Cohoon Vice President of Integrated Vehicles
Dynamics Division since 1996. Prior thereto,
various engineering and management positions
at General Motors Corporation.
15
Officer Business Experience
------- -------------------
K. H. Donaldson, Jr. Vice President, Noise and Vibration Business
Unit since November 2001. Vice President of
Strategic Planning and Product Development
since 2000. Sales engineer in the Aerospace
Division from 1995 to 2000.
J. M. Egerdal Vice President, MTS Services and Support
Division since 1997. Vice President, North
American Sales from 1996 to 1997. Regional
Sales and Service Management from 1988 to
1996.
L. B. Hamilton Vice President, Material Testing and
Aerospace Divisions since 2000. Director of
Re-engineering from 1999 to 2000. Prior
thereto, Vice President of Anatomic
Pathology Business for Quest Diagnostics, (a
division of Corning, Inc.) from 1997 to
1999. Executive Director Revenue Services,
Quest Diagnostics from 1995 to 1997.
D. G. Krantz Vice President of Advanced Engineering
Solutions Division since 2000. Program
manager, Advanced Systems from 1995 to 2000.
K. M. Staby Vice President of Human Resources since
2000. Prior thereto, various management
positions at Medtronic, Inc. from 1974 to
1999 (Vice President, Human Resources for
Cardiac Rhythm Management from 1991 to 1999
and for Worldwide Distribution from 1989 to
1991).
M.G. Togneri Vice President of Automation Division since
November 2001. Vice President of Sensors
Division since 1998. Vice President of
Factory Automation Sector from 1991 to 1997.
Prior thereto, Vice President at Square D
Corporation and General Manager of Crisp
Automation.
(c) Information with respect to the directors of the Registrant, including
business experience, can be found in the Registrant's Proxy Statement,
a definitive copy of which will be filed with the Securities and
Exchange Commission not later than 120 days after the end of the fiscal
year covered by this report and certain information included therein is
incorporated herein by reference.
(c) There are no family relationships between and among directors or
officers.
(c) Information regarding compliance with Section 16(a) of the Securities
Exchange Act of 1934 is incorporated herein by reference from the
Registrant's Proxy Statement for the 2001 Annual Meeting of
Shareholders scheduled to be held on January 29, 2002.
16
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is incorporated herein by reference to the
Registrant's Proxy Statement for the 2001 Annual Meeting of Shareholders
scheduled to be held on January 29, 2002.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is incorporated herein by reference to the
Registrant's Proxy Statement for the 2001 Annual Meeting of Shareholders
scheduled to be held on January 29, 2002.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
17
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
The following documents are filed as part of this report:
(a) Financial Statements:
See accompanying Index to Financial Statements on Page F-1.
(b) Reports on Form 8-K: None.
(c) Exhibits:
3.a Restated and Amended Articles of Incorporation, adopted
January 30, 1996, incorporated by reference from Exhibit
3.a. of Form 10-K for the year ended September 30, 1996.
3.b Restated Bylaws, reflecting amendments through May 26,
1998, incorporated by reference from Exhibit 3.b. of
Form 10-K for the year ended September 30, 1998.
10.a Management Variable Compensation Plan, dated October
2001.
10.c 1987 Stock Option Plan, as amended, incorporated herein
by reference to Exhibit 10.c. of the Registrant's Form
10-K filed for the year ended September 30, 1996.
10.d 1990 Stock Option Plan, as amended, incorporated herein
by reference to Exhibit 10.d. of the Registrant's Form
10-K filed for the year ended September 30, 1996.
10.e 1994 Stock Option Plan, as amended, incorporated herein
by reference to Exhibit 10.e. of the Registrant's Form
10-K filed for the year ended September 30, 1996.
10.f 1997 Stock Option Plan, as amended, incorporated herein
by reference to Exhibit 10.p. of the Registrant's Form
10-K filed for the year ended September 30, 1999.
10.h Severance Agreement, dated May 1, 1990, between the
Registrant and Werner Ongyert, incorporated herein by
reference to Exhibit 10.m. of the Registrant's Form 10-K
filed for the year ended September 30, 1990.
10.i Severance Agreement, dated March 27, 1998, between the
Registrant and Keith D. Zell, as amended, incorporated
herein by reference to Exhibit 10.m. of the Registrant's
Form 10-K filed for the year ended September 30, 1998.
10.j Severance Agreement, dated March 24, 1998, between the
Registrant and Mauro G. Togneri, as amended,
incorporated herein by reference to Exhibit 10.n. of the
Registrant's Form 10-K for the year ended September 30,
1998.
18
(c) Exhibits (continued):
10.k 1992 Employee Stock Purchase Plan, incorporated herein
by reference to Exhibit 4(a) of the Registrant's Form
S-8, File No. 33-45386.
10.l Severance Agreement, dated March 18, 1998, between the
Registrant and Steven M. Cohoon, as amended,
incorporated herein by reference to Exhibit 10.q. of the
Registrant's Form 10-K filed for the year ended
September 30, 1998.
10.m Severance Agreement, dated March 16, 1998, between the
Registrant and Sidney W. Emery, Jr., incorporated herein
by reference to Exhibit 10.r. of the Registrant's Form
10-K filed for the year ended September 30, 1998.
10.n Change in Control Agreement, dated March 16, 1998,
between the Registrant and Sidney W. Emery, Jr.,
incorporated herein by reference to Exhibit 10.s. of the
Registrant's Form 10-K filed for the year ended
September 30, 1998.
10.o Change in Control Agreement, dated March 27, 1998,
between the Registrant and Keith D. Zell incorporated
herein by reference to Exhibit 10.t. of the Registrant's
Form 10-K filed for the year ended September 30, 1998.
10.p Change in Control Agreement, dated March 24, 1998,
between the Registrant and Mauro G. Togneri incorporated
herein by reference to Exhibit 10.v. of the Registrant's
Form 10-K filed for the year ended September 30, 1998.
10.q Change in Control Agreement, dated March 18, 1999,
between the Registrant and Steven M. Cohoon incorporated
herein by reference to Exhibit 10.z. of the Registrant's
Form 10-K for the fiscal year ended September 30, 1999.
10.r Severance Agreement, dated March 13, 1998, between the
Registrant and William G. Anderson incorporated herein
by reference to Exhibit 10.aa. of the Registrant's Form
10-K filed for the year ended September 30, 1998.
10.s Severance Agreement, dated March 14, 1998, between the
Registrant and James M. Egerdal incorporated herein by
reference to Exhibit 10.ab. of the Registrant's Form
10-K filed for the year ended September 30, 1998.
10.t Change in Control Agreement, dated March 14, 1998,
between the Registrant and James M. Egerdal incorporated
herein by reference to Exhibit 10.ad. of the
Registrant's Form 10-K filed for the year ended
September 30, 1998.
10.u Severance Agreement dated January 3, 2000, between the
Registrant and Kathleen M. Staby incorporated herein by
reference to Exhibit 10.x. of the Registrant's Form 10-K
filed for the year ended September 30, 2000.
19
(c) Exhibits (continued):
10.v Change in Control Agreement, dated January 3, 2000,
between the Registrant and Kathleen M. Staby
incorporated herein by reference to Exhibit 10.y. of the
Registrant's Form 10-K filed for the year ended
September 30, 2000.
10.w Change in Control Agreement, dated June 1, 2001, between
the Registrant and Donald G. Krantz.
10.x Change in Control Agreement, dated June 18, 2001,
between the Registrant and Laura B. Hamilton.
10.y Change in Control Agreement, dated June 25, 2001,
between the Registrant and Kelly H. Donaldson.
10.z Change in Control Agreement, dated October 22, 2001,
between the Registrant and Susan E. Knight.
13. Annual Report to Stockholders for the year ended
September 30, 2001.
21. Subsidiaries of the Registrant.
23. Consent of Independent Public Accountants.
(d) Financial Statement Schedules:
See accompanying Index to Financial Statements on page F-1.
20
SIGNATURES
Pursuant to the requirement 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.
MTS SYSTEMS CORPORATION
By: /s/ Sidney W. Emery, Jr.
---------------------------------------
Sidney W. Emery Jr.
Chairman, President and Chief Executive
Officer
Date: December 20, 2001
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 indicated:
Signatures Title Date
---------- ----- ----
/s/ Sidney W. Emery, Jr. Chairman, December 20, 2001
- ----------------------------- President and
Sidney W. Emery Jr. Chief Executive Officer
/s/ Susan E. Knight Vice President and December 20, 2001
- ----------------------------- Chief Financial Officer
Susan E. Knight
/s/ Charles A. Brickman Director December 20, 2001
- -----------------------------
Charles A. Brickman
/s/ Jean Lou Chameau Director December 20, 2001
- -----------------------------
Jean Lou Chameau
/s/ Bobby I. Griffin Director December 20, 2001
- -----------------------------
Bobby I. Griffin
/s/ Brendan Hegarty Director December 20, 2001
- -----------------------------
Brendan Hegarty
/s/ Bruce Hertzke Director December 20, 2001
- -----------------------------
Bruce Hertzke
/s/ Barb J. Samardzich Director December 20, 2001
- -----------------------------
Barb J. Samardzich
/s/ Linda Hall Whitman Director December 20, 2001
- -----------------------------
Linda Hall Whitman
21
MTS Systems Corporation and Subsidiaries
INDEX TO FINANCIAL STATEMENTS
A. CONSOLIDATED FINANCIAL STATEMENTS
Reference is made to the consolidated financial statements in the
Company's 2001 Annual Report to Shareholders, which are incorporated by
reference in accordance with Rule 12b-23 under the Securities Exchange
Act of 1934 and attached hereto.
Annual
Report 10-K
Page Page
---- ----
Quarterly Financial Information (Unaudited) 11 ---
Consolidated Balance Sheets - September 30, 2001
and 2000 12 ---
Consolidated Statements of Income and Shareholders'
Investment for the Years Ended September 30, 2001,
2000 and1999 13 ---
Consolidated Statements of Cash Flows for the
Years Ended September 30, 2001, 2000 and 1999 14 ---
Notes to Consolidated Financial Statements 15 ---
Report of Independent Public Accountants 26 ---
F-1
B. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS --- F-3
C. FINANCIAL STATEMENT SCHEDULES
Schedule Description
-------- -----------
II Summary of Consolidated Allowances
For Doubtful Accounts, Inventory and
Restructuring Reserves --- F-4
All schedules except the one listed above
have been omitted as not required, not
applicable, or the information required
therein is contained in the financial
statements or the footnotes thereto.
F-2
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To MTS Systems Corporation:
We have audited in accordance with auditing standards generally accepted in the
United States, the consolidated financial statements included in MTS Systems
Corporation's annual report to stockholders incorporated by reference in this
Form 10-K, and have issued our report thereon dated November 15, 2001. Our audit
was made for the purpose of forming an opinion on those statements taken as a
whole. The schedule (page F-4) listed as a part of Item 14 in this Form 10-K is
the responsibility of the Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic consolidated financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic consolidated financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
Arthur Andersen LLP
Minneapolis, Minnesota,
November 15, 2001
F-3
MTS SYSTEMS CORPORATION AND SUBSIDIARIES
SCHEDULE II - SUMMARY OF CONSOLIDATED ALLOWANCES
FOR DOUBTFUL ACCOUNTS, INVENTORY AND RESTRUCTURING RESERVES
FOR THE YEARS ENDED SEPTEMBER 30, 2001, 2000 AND 1999
(In Thousands)
Balance Amounts Balance
Beginning Written-Off/ End of
of Year Provisions Payments Year
----------- ---------- --------- -------
Allowance for Doubtful Accounts:
- --------------------------------
2001 $2,255 $992 $(538) $2,709
2000 2,232 645 (622) 2,255
1999 2,285 544 (597) 2,232
Inventory Reserves:
- -------------------
2001 $3,726 $4,132 $(2,591) $5,267
2000 3,067 1,500 (841) 3,726
1999 2,020 1,370 (323) 3,067
Restructuring Reserves:
- -----------------------
2001 $1,120 $ - $(1,120) $ --
2000 3,231 1,210 (3,321) 1,120
1999 -- 5,711 (2,480) 3,231
F-4