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CONFORMED COPY
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 December 31, 1993
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 I-4795
MLX CORP.
(Exact name of registrant as specified in its charter)
Georgia 38-0811650
(State or other jurisdiction of incorporation or
organization)(I.R.S. Employer Identification No.)
1000 Center Place, Norcross, Georgia 30093
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404)798-0677
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:Common
Stock, $.01 par value
Indicate by check mark whether the Registrant (1) has filed all
reports to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or such
shorter period that the Registrant was required to file such
reports), and (2) has been subject to such filing requirement 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 (Section Number 229.405 of this
chapter) 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 amendments to this Form 10-K. [ ]
The aggregate market value of voting stock held by non-affiliates
of the Registrant was $7,244,000 as of March 1, 1994, based on
the bid (asked) price as reported on the NASDAQ Small Cap Market.
The number of shares outstanding of the Registrant's Common
Stock, par value $.01, as of the close of business on March 1,
1994 was 2,535,950.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Part I, II & IV hereof incorporate information by
reference from Registrant's 1993 Annual Report to Shareholders, a
copy of which is filed with the Commission as Exhibit 13 hereto.
Portions of Part III hereof incorporate information by reference
from Registrant's definitive Proxy Statement to be filed with the
Commission no later than 120 days after the close of the
Registrant's fiscal year ended December 31, 1993 in connection
with Registrant's 1994 Annual Meeting of Shareholders.
PART I
Item 1. Business.
(A) General Development of Business The
Registrant is engaged in the design and
manufacture of high-energy friction materials
which are used primarily in aircraft brakes
and heavy equipment brakes, transmission and
clutches.
Reference is made to the information set forth in the
Registrant's 1993 Annual Report to Shareholders under
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" for a discussion
of the development of the business since January 1,
1993, which information is incorporated herein by
reference.
In June 1993, the Company merged with and into a
wholly-owned subsidiary in order to reincorporate in
the State of Georgia. This transaction was approved by
the Company's shareholders at the annual meeting of
shareholders on June 2, 1993.
(B) Financial Information About Industry Segments Reference
is made to information set forth in Note J of the Notes
to Consolidated Financial Statements in the
Registrant's 1993 Annual Report to Shareholders, which
information is incorporated herein by reference.
(C) Narrative Description of Business Reference is made to
the information set forth in "Management's Discussion
and Analysis of Financial Condition and Results of
Operations" under "Other Data" contained in the
Registrant's 1993 Annual Report to Shareholders, which
information is incorporated herein by reference.
Additional information concerning the business of the
Registrant follows.
General: Today, MLX owns and manages the S. K. Wellman
("Wellman") subsidiary. Wellman is one of the world's
leading manufacturers of high-energy friction
materials. The friction materials manufactured and sold
by Wellman are used in a variety of applications which
require material which will withstand and function
under extreme conditions of high energy and heat. These
types of conditions exist in aircraft brakes and heavy
equipment brakes, transmissions and clutches. Wellman
has manufacturing facilities located in Brook Park,
Ohio; LaVergne, Tennessee; Concord, Ontario, Canada;
and Orzinuovi, Italy. Wellman also has administrative
offices and research facilities located in Solon, Ohio
and sales and/or distribution offices in Madison,
Wisconsin; Peoria, Illinois; Detroit, Michigan;
Cleveland, Ohio; Akron, Ohio; Edmonton, Alberta,
Canada; Vancouver, British Columbia, Canada; Concord,
Ontario, Canada; and Orzinuovi, Italy. At December
31, 1993 Wellman had 511 employees. Approximately
213 of these employees were covered under collective
bargaining agreements which expire on April 22, 1994.
MLX provides managerial and administrative support to
Wellman. This support is provided in the areas of
strategic management, income tax compliance, legal
strategy and capital and lending resources.
Products: The friction materials manufactured by
Wellman are made of a variety of materials, including
metallic (either copper or iron based), graphitic,
ceramic, and composite fiber (paper). These friction
materials are used in commercial, military and general
aviation aircraft brakes; friction disks for use in
automatic and power shift transmissions; and clutch
buttons, which are used as the main contact point
between the engine and transmission. Wellman also
manufactures other types of clutch facings and opposing
disks to complement its clutch button business. Raw
materials used by Wellman are available from multiple
sources.
Customers: Wellman's customers for the aircraft brake
friction materials are primarily aircraft wheel and
brake manufacturers. Wellman's principal customers for
its friction disks are heavy equipment manufacturers
such as Caterpillar Inc., John Deere & Company, and the
Allison Division of General Motors Corporation. The
principal customers for its clutch buttons are heavy
equipment component suppliers such as Dana
Corporation. More than 80% of friction disk and clutch
button production is sold to original equipment
manufacturers with the balance sold to end users (under
the "Velvetouch" tradename) through distributors and
equipment rebuilders.
Competition: The Registrant believes that the domestic
market for the products that it manufactures is
approximately $200 million and that the total
worldwide approximates $300 million. The Registrant
believes that it is either the largest or the second
largest manufacturer of each of the products it
sells, with market share ranging between 20% and 60% of
such markets. In each of its markets, the Registrant
competes with a number of companies; however, there are
only one or two competitors in each of its markets
which are comparable in size to the Registrant.
Competition is primarily based upon the ability to
engineer a product which meets the customers'
specifications, consistent quality, price and delivery.
Research and Development: Research, product
development and engineering are an important aspect of
Wellman's business. Each of Wellman's products are
specifically engineered to meet a customer's
applications. The Registrant believes that it has the
most extensive research, development and engineering
capabilities and testing equipment in the industry.
Product research, development and engineering
expenditures for Wellman were approximately $3,365,000
in 1993, $3,164,000 in 1992 and $3,344,000 in 1991.
(D) Financial Information About Foreign and Domestic
Operations and Export Sales Reference is made to
the information set forth in Note J of the Notes
to Consolidated Financial Statements in the
Registrant's 1993 Annual Report to Shareholders,
which information is incorporated herein by
reference.
Item 2. Properties.
The Registrant and its consolidated subsidiaries utilize the
following properties.
Square
Location How Held Footage Utilization
Brook Park,Ohio Owned1 111,000 Manufacturing
Cleveland, Ohio Leased 14,300 Materials Storage
Akron, Ohio Leased 20,400 Distribution
Solon, Ohio Owned1 50,000 Administration &
rearch
LaVergne, Tennessee Owned1 76,100 Manufacturing
Concord, Ontario, Leased1 15,200 Manufacturing &
Canada distribution
Orzinuovi, Italy Owned 65,000 Manufacturing &
sales
Norcross, Georgia Leased 3,000 Executive &
administration
Management believes that none of the leased facilities is
critical to its operations. The leases are generally for an
initial term of five years and generally contain one or more
renewal option periods. Management considers the properties to be
suitable for their present use.
Item 3. Legal Proceedings.
An interpleader action was filed in the U.S. District Court for
the Northern District of Georgia on October 9, 1992, by Mr.
Alfred R. Glancy III, a director of the Company, as the custodian
of the shares of Common Stock held pursuant to a Voting Trust.
Mr. Glancy requested that the court determine whether or not the
Voting Trust was effectively terminated as a result of the
actions of one of the trustees of the Voting Trust. Upon Mr.
Glancy's motion, the interpleader action was dismissed with
prejudice on March 11, 1994. Mr Glancy has indicated that he will
distribute the trust shares to their beneficial owners, and the
Company has agreed to permit the Voting Trust to terminate. The
Company agreed to the termination of the Voting Trust prior to
its scheduled expiration (June 30, 1994) because the adoption of
share transfer restrictions at last year's annual meeting of
shareholders obviated the need for the trust.
[FN]
1 These facilities and equipment at these locations are a
portion of the collateral securing the Senior Lending Facility
due in 1997 (S. K. Wellman) described in Note D of the Notes to
the Consolidated Financial Statements contained in the
Registrant's 1993 Annual Report to Shareholders.
Other than the interpleader action described above, the
Registrant is unaware of any litigation which is expected to have
a material effect on the results of operations or financial
condition of the Registrant.
Item 4. Submission of Matters to a Vote of Security
Holders
No response under this item is required.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters.
Reference is made to the information set forth in "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" under "Market, Share Ownership and Dividend
Information" in the Registrant's 1993 Annual Report to
Shareholders, which information is incorporated herein by
reference.
Item 6. Selected Financial Data.
Reference is made to the information set forth in "Financial
Review" under "Selected Financial Information" in the
Registrant's 1993 Annual Report to Shareholders, which
information is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Reference is made to the information set forth under
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Registrant's 1993 Annual Report to
Shareholders, which information is incorporated herein by
reference.
Item 8. Financial Statements and Supplementary Data.
Reference is made to the information set forth under
"Consolidated Financial Statements" in the Registrant's 1993
Annual Report to Shareholders, which information is incorporated
herein by reference.
Reference is made to the information set forth under "Quarterly
Data" in the Registrant's 1993 Annual Report to Shareholders,
which information is incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
No response under this item is required.
PART III
Item 10. Directors and Executive Officers of the
Registrant.
For information with respect to Directors and Executive Officers
of the Registrant, the Registrant incorporates by reference
herein the information appearing under the caption, "Business
Experience of Directors and Executive Officers" and, with respect
to compliance with Item 405 of Regulation S-K, "Security
Ownership of Certain Beneficial Owners" under the table
containing the "Amount and Nature of Beneficial Ownership" of
executive officers and directors contained in the Registrant's
definitive Proxy Statement to be filed with the Commission no
later than 120 days after the close of the Registrant's fiscal
year ended December 31, 1993 in connection with the Registrant's
1994 Annual Meeting of Shareholders.
Item 11. Executive Compensation.
Registrant incorporates by reference herein information appearing
under the caption "Remuneration of Directors and Executive
Officers" contained in the Registrant's definitive Proxy
Statement to be filed with the Commission no later than 120 days
after the close of the Registrant's fiscal year ended December
31, 1993 in connection with the Registrant's 1994 Annual Meeting
of Shareholders.
Item 12. Security Ownership of Certain Beneficial Owners
and Management.
Registrant incorporates by reference herein information appearing
under the caption "Security Ownership of Certain Beneficial
Owners" contained in the Registrant's definitive Proxy Statement
to be filed with the Commission no later than 120 days after the
close of the Registrant's fiscal year ended December 31, 1993 in
connection with the Registrant's 1994 Annual Meeting of
Shareholders.
Item 13. Certain Relationships and Related Transactions.
Registrant incorporates by reference herein information appearing
under the caption "Employment Agreements With Executive Officers"
and "Compensation Committee Interlocks and Related Transactions'
contained in the Registrant's definitive Proxy Statement to be
filed with the Commission no later than 120 days after the close
of the Registrant's fiscal year ended December 31, 1993 in
connection with the Registrant's 1994 Annual Meeting of
Shareholders.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K.
(a) Documents Filed as part of the Report.
(1) The following consolidated financial
statements of the Registrant and its
subsidiaries, included in its 1993 Annual
Report to Shareholders, are incorporated in
Item 8 herein by reference:
Consolidated Balance Sheets at December 31,
1993 and 1992.
Consolidated Statements of Operations for the
years ended December 31, 1993, 1992 and 1991.
Consolidated Statements of Cash Flows for the
years ended December 31, 1993, 1992 and 1991.
Consolidated Statements of Shareholders'
Equity for the years ended December 31, 1993,
1992 and 1991.
Notes to Consolidated Financial Statements -
December 31, 1993.
(2) The following consolidated financial
statement schedules of the Registrant and its
subsidiaries are included in Item 14(d):
Schedule III - Condensed Financial
Information of
Registrant
Schedule V - Property, Plant and
Equipment
Schedule VI - Accumulated Depreciation,
Depletion, and
Amortization of
Prroperty, Plant and
Equipment
Schedule VIII - Valuation and Qualifying
Accounts
Schedule IX - Short Term Borrowings
Schedule X - Supplementary Income
Statement Information
All other schedules for which provision is made in
the applicable accounting regulation of the
Securities and Exchange Commission are not
required under the related instruction or are
inapplicable, and therefore have been omitted.
(3) Exhibits required by Item 601 of Regulation
S-K:
Exhibit 3.1 & 4.1 - Articles of
Incorporation of the
Registrant, as
amended
(incorporated herein
by reference to
Exhibit 3.1 to the
Registrant's Report
on Form 10-Q for the
quarter ended June
30, 1993).
Exhibit 3.2 & 4.2 - By-Laws of the
Registrant
(incorporated herein
by reference to
Exhibit 3.2 to the
Registrant's Report
on Form 10-Q for the
quarter ended June
30, 1993).
Exhibit 4.3 & 9.1 - Voting Trust
Agreement dated
Deecember 11, 1984
(incorporated herein
by reference to
Exhibit 4.3 to the
Registrant's Report
on Form 10-K for the
fiscal year ended
December 31, 1991).
Exhibit 4.4 & 9.2 - Amendment No. 1
dated October 26,
1987 to the Voting
Trust Agreement
dated December 11,
1984 (incorporated
herein by reference
to Exhibit 4.3 to
the Registrant's
Report on Form 10-K
for the fiscal year
ended December 31,
1991).
Exhibit 4.5 & 9.3 - Amendment No. 2,
dated April 2, 1991,
to the Voting Trust
Agreement dated
December 11, 1984
(incorporated herein
by reference to
Exhibit 4.3 to the
Registrant's Report
on Form 10-K for the
fiscal year ended
December 31, 1991).
Exhibit 4.6 - Restricted Transfer
Trust Agreement
dated October 10,
1986 (incorporated
herein by reference
to Exhibit 4.3 to
the Registrant's
Report on Form 10-K
for the fiscal year
ended December 31,
1991).
Exhibit 4.7 - Amendment No. 1
dated October 26,
1987 to the
Restricted Transfer
Trust Agreement
dated October 10,
1986 (incorporated
herein by reference
to Exhibit 4.3 to
the Registrant's
Report on Form 10-K
for the fiscal year
ended December 31,
1991).
Exhibit 4.8 - Amendment No. 2
dated June 4, 1990
to the Restricted
Transfer Trust
Agreement dated
October 10, 1986
(incorporated herein
by reference to
Exhibit 4.3 to the
Registrant's Report
on Form 10-K for the
fiscal year ended
December 31, 1991).
Exhibit 4.9* - MLX Exchange
Agreement dated as
of April 13, 1990,
as amended and
restated as of March
19, 1992, as amended
and restated as of
April 21, 1993,
among the
Registrant, the
Lenders listed
therein, and Morgan
Guaranty Trust
Company of New York,
as Bond Agent.
Exhibit 4.10 - MLX Limited
Guarantee, dated as
of March 19, 1992
(incorporated herein
by reference to
Exhibit 2.17 to the
Registrant's Current
Report on Form 8-K,
dated April 10,
1992).
Exhibit 4.11 - Management Services
Agreement, dated as
of March 19, 1992,
between the
Registrant and
Pameco Holdings,
Inc. (incorporated
herein by reference
to Exhibit 2.16 of
Registrant's Current
Report on Form 8-K
dated April 10,
1992).
Exhibit 4.12 - Amendment to
Management Services
Agreement, dated as
of November 30,
1992, between the
Registrant and
Pameco Holdings,
Inc. (incorporated
herein by reference
to Exhibit 4.12 of
Registrant's Report
on Form 10-K for the
year ended December
31, 1992).
Exhibit 4.13 - Nomination
Agreement, dated as
of December 15,
1992, among the
Registrant and the
Investors listed
therein
(incorporated herein
by reference to
Exhibit 4.13 of
Registrant's Report
on Form 10-K for the
year ended December
31, 1992).
Exhibit 4.14 - Exchange Agreement,
dated as of January
15, 1993, among MLX
Corp. and the
Investors listed
therein
(incorporated herein
by reference to
Exhibit 4.14 of
Registrant's Report
on Form 10-K for the
year ended December
31, 1992).
Exhibit 4.15 - Loan and Security
Agreement, dated as
of January 15, 1993,
between S.K. Wellman
Limited, Inc. and
Barclays Business
Credit, Inc.
(incorporated herein
by reference to
Exhibit 4.15 of
Registrant's Report
on Form 10-K for the
year ended December
31, 1992).
Exhibit 4.16 - First Amendment to
Loan and Security
Agreement, dated as
of February 19,
1993, between S.K.
Wellman Limited,
Inc. and Barclays
Business Credit,
Inc. (incorporated
herein by reference
to Exhibit 4.16 of
Registrant's Report
on Form 10-K for the
year ended December
31, 1992).
Exhibit 4.17 - Second Amendment to
Loan and Security
Agreement, dated as
of March 15, 1993,
between S.K. Wellman
Limited, Inc. and
Barclays Business
Credit, Inc.
(incorporated herein
by reference to
Exhibit 4.17 of
Registrant's Report
on Form 10-K for the
year ended December
31, 1992).
Exhibit 4.18 - Stock Pledge
Agreement (S.K.
Wellman S.p.A.),
dated as of January
15, 1993 between The
S.K. Wellman Corp.
and Barclays
Business Credit,
Inc. (incorporated
herein by reference
to Exhibit 4.18 of
Registrant's Report
on Form 10-K for the
year ended December
31, 1992).
Exhibit 4.19 - Stock Pledge
Agreement (S.K.
Wellman S.p.A.),
dated as of January
15, 1993, between
S.K. Wellman
Limited, Inc. and
Barclays Business
Credit, Inc.
(incorporated herein
by reference to
Exhibit 4.19 of
Registrant's Report
on Form 10-K for the
year ended December
31, 1992).
Exhibit 4.20 - Stock Pledge Agreeme
(The S.K. Wellman
Company of Canada
Limited), dated as
of January 15, 1993,
between The S.K.
Wellman Corp. and
Barclays Business
Credit, Inc.
(incorporated herein
by reference to
Exhibit 4.20 of
Registrant's Report
on Form 10-K for the
year ended December
31, 1992).
Exhibit 4.21 - Patent Collateral
Assignment and
Security Agreement,
dated as of January
15, 1993, between
The S.K. Wellman
Corp. and Barclays
Business Credit,
Inc. (incorporated
herein by reference
to Exhibit 4.21 of
Registrant's Report
on Form 10-K for the
year ended December
31, 1992).
Exhibit 4.22 - Trademark Security
Agreement, dated as
of January 15, 1993,
between The S.K.
Wellman Corp. and
Barclays Business
Credit, Inc.
(incorporated herein
by reference to
Exhibit 4.22 of
Registrant's Report
on Form 10-K for the
year ended December
31, 1992).
Exhibit 4.23* - Exchange Agreement
dated as of April 2,
1993 among MLX Corp.
and the Bondholders
Listed Herein.
Exhibit 10.1# - Employment Agreement
dated February 10,
1991, between the
Registrant and Brian
R. Esher
(incorporated herein
by reference to
Exhibit 10.1 to the
Registrant's Report
on Form 10-K for the
fiscal year ended
December 31, 1990).
Exhibit 10.2# - First Amendment to
Employment
Agreement, dated as
of March 19, 1992,
between the
Registrant and Brian
Esher.
Exhibit 10.3 - Severance/Consulting
Agreement dated
January 14, 1991,
between the
Registrant and
William P. Panny
(incorporated herein
by reference to
Exhibit 10.3 to the
Registrant's Report
on Form 10-K for the
fiscal year ended
December 31, 1990).
Exhibit 10.4 - Purchase Agreement,
dated as of March
19, 1992, among the
Registrant, Pameco
Holdings, Inc., and
Pameco Corporation
(incorporated herein
by reference to
Exhibit 2.1 of
Registrant's Current
Report on Form 8-K
dated April 10,
1992).
Exhibit 10.5# - MLX Corp. Stock
Option Plan, dated
as of December 29,
1989 (incorporated
herein by reference
to Exhibit 10.5 of
Registrant's Report
on Form 10-K for the
year ended December
31, 1992).
Exhibit 10.6# - Senior Management
Discretionary Bonus
Plan, dated as of
January 21, 1992
(incorporated herein
by reeference to
Exhibit 10.6 of
Registrant's Report
on Form 10-K for the
year ended December
31, 1992).
Exhibit 13* - 1993 Annual Report
to Shareholders of
the Registrant. With
the exception of
information
expressly
incorporated herein
by reference, the
1993 Annual Report
is not deemed to be
filed with the
Commission.
Exhibit 21 - Subsidiaries of the
Registrant
(incorporated herein
by reference to
Exhibit 22 of
Registrant's Report
on Form 10-K for the
year ended December
31, 1992).
Exhibit 24* - Consent of
Independent
Accountants.
_____________
[FN]
*Filed with this Report on Form 10-K
#Management compensatory plan or arrangement
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the
Registrant during the quarter ended December 31,
1993.
SIGNATURES
Pursuant to the requirement's 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,
hereunto duly authorized.
MLX Corp.
Dated: March 11, 1994 By: /s/ Thomas C. Waggoner
Thomas C. Waggoner
Vice President &
Chief Financial Officer
Pursuant to the requirement 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, on
March 11, 1994.
Signature Title
/s/ BRIAN R. ESHER Chairman of the Board,
President & Chief
Executive Officer
(Principal Executive
Officer) and Director
/s/ THOMAS C. WAGGONER Vice President & Chief
Financial Officer
(Principal Financial &
Accounting Officer)
/s/ WILLEM F.P. de VOGEL Director
/s/ ALFRED R. GLANCY III Director
/s/ S. STERLING McMILLAN III Director
/s/ J. WILLIAM UHRIG Director
/s/ W. JOHN ROBERTS Director
/s/ H. WHITNEY WAGNER Director
Report of Independent Auditors
Board of Directors
MLX Corp.
We have audited the consolidated balance sheets of MLX Corp. and
subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of operations, shareholders' equity, and
cash flows for each of the three years in the period ended
December 31, 1993. Our audits also included the financial
statement schedules listed in the Index at Item 14(a). These
financial statements and schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion
on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of MLX Corp. and subsidiaries at December 31,
1993 and 1992, and the consolidated results of their operations
and their cash flows for each of the three years in the period
ended December 31, 1993 in conformity with generally accepted
accounting principles. Also, in our opinion, the related
financial statement schedules, when considered in relation to the
basic financial statements taken as a whole, present fairly in
all material respects the information set forth therein.
As discussed in Note A to the consolidated financial statements,
in 1993 the Company changed its method of accounting for income
taxes and postretirement benefits.
ERNST & YOUNG
March 11, 1994
Atlanta, Georgia
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT MLX Corp.
December 31, 1993 and 1992
(in thousands)
CONDENSED BALANCE SHEETS 1993 1992
ASSETS
Current Assets:
Cash and cash equivalents $ 695 $ 413
Dividend receivable from subsidiary - 2,523
Prepaid expenses and other - 115
Total Current Assets 695 3,051
Investment in Subsidiaries* 12,612 13,571
Other Assets:
Leasehold improvements and equipment - net 7 47
Intangible assets - net 415 345
Other 1 1
Total Other Assets 423 393
$13,730 $17,015
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 6 $ 10
Payables to subsidiaries* - 1
Other accrued liabilities 1,083 1,022
Current portion of long-term debt - 718
Federal income taxes payable 150 -
Dividends payable on Series A Preferred Stock 638 -
Total Current Liabilities 1,877 1,751
Long-Term Liabilities:
Minority interest notes payabl - 2,384
Zero coupon bonds 1,005 9,472
Note payable to bank - 3,302
Variable Rate Subordinated Note 1,397 -
Note payable to subsidiary* 2,127 1,950
4,529 17,108
Shareholders' Equity:
Preferred stock 6,981 5,100
Common stock 25 254
Capital in excess of par value 60,551 57,319
Retained earnings deficit since December 11, 1984 (58,836) (63,629)
8,721 (956)
Other equity deductions (1,397) (888)
Total Shareholders' Equity 7,324 (1,844)
$13,730 $17,015
*Eliminated in consolidation.
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - (cont.) MLX Corp.
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(in thousands)
CONDENSED STATEMENTS OF OPERATIO 1993 1992 1991
Revenues:
Interest and other income $ 125 $ 348 $ 384
Dividends from subsidiaries* 5,900 - 5,002
Management fees from subsidiarie 950 600 1,650
Management fee from related party 82 470 -
Total Revenues 7,057 1,418 7,036
Expenses:
General and administrative expenses 1,355 1,408 2,006
Interest expense:
Subsidiary indebtedness* 151 295 377
Other indebtedness 366 1,334 1,595
Earnings (loss) before taxes, equity in
earnings (losses) of subsidiaries,
discontinued operations and
extraordinary item 5,185 (1,619) 3,058
Charge in lieu of federal
income taxes (1,243) (1,110) -
Provision for federal AMT taxes (150) - -
Credit for subsidiary tax sharing 1,360 2,129 876
Earnings (loss) before equity in earnings
(losses) of subsidiaries, discontinued
operations and extraordinary item 5,152 (600) 3,934
Equity in earnings (losses) of
subsidiaries, after payment
of dividends* (3,113) 1,985 (18,233)
Loss on disposal of discontinued
operations - - (8,935)
Extraordinary gain on early retirement
of debt (net of charge in lieu of federal
income taxes of $1,869 in 1993 and $1,661
in 1992) 3,627 4,124 -
Net earnings (loss) $ 5,666 $ 5,509 $(23,234)
CONDENSED STATEMENTS OF CASH FLOWS
Net Cash Provided by Operating Activities $ 254 $ 1,211 $ 215
Investing Activities:
Purchase of property - - (24)
Financing Activities:
Proceeds from sale of common stock - - 78
Dividends and advances from subsidiary 6,538 - -
Reduction of debt (6,510) (1,835) (661)
28 (1,835) (583)
Increase (Decrease) in cash $ 282 $ (624) $ (392)
* Eliminated in consolidation.
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
MLX CORP. AND SUBSIDIARIES
COL. A COL. B COL. C COL. D COL. E COL. F
Balance at Other Charges Balance at
Classification Beginning of Additions at Cost Retirements Add (deduct) End of
Period (1) Period
Year ended December 31, 1993:
Land and improvements $ 1,192,000 $ 0 $ 0 $ (13,000) $ 1,179,000
Buildings and improvements 6,934,000 83,000 0 (84,000) 6,933,000
Machinery and equipment 14,883,000 1,835,000 (68,000) (643,000) 16,007,000
Construction in process 631,000 (98,000) 0 0 533,000
$23,640,000 $1,820,000 $(68,000) $ (740,000) $24,652,000
Year ended December 31, 1992:
Land and improvements $ 1,219,000 $ 0 $ 0 $ (27,000) $ 1,192,000
Buildings and improvements 7,114,000 0 (5,000) (175,000) 6,934,000
Machinery and equipment 15,342,000 907,000 (110,000) (1,256,000) 14,883,000
Construction in process 409,000 222,000 0 0 631,000
$24,084,000 $1,129,000 $(115,000) $(1,458,000) $23,640,000
Year ended December 31, 1991:
Land and improvements $ 1,216,000 $ 5,000 $ 0 $ (2,000) $ 1,219,000
Buildings and improvements 7,205,000 43,000 (120,000) (14,000) 7,114,000
Machinery and equipment 14,337,000 1,238,000 (144,000) (89,000) 15,342,000
Construction in process 301,000 108,000 0 0 409,000
$23,059,000 $1,394,000 $(264,000) $ (105,000) $24,084,000
(1) Foreign translation adjustments.
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION
AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
MLX CORP. AND SUBSIDIARIES
COL. A COL. B COL. C COL. D COL. E COL. F
Balance at Additions Charged Other Charges Balance at
Classification Beginning of to Costs and Retirements Add (deduct) End of
Period Expemses (1) Period
Year ended December 31, 1993:
Land and improvements $ 59,000 $ 22,000 $ 0 $ 0 $ 81,000
Buildings and improvements 1,751,000 359,000 0 (15,000) 2,095,000
Machinery and equipment 9,553,000 1,372,000 (60,000) (453,000) 10,412,000
$11,363,000 $1,753,000 $ (60,000) $ (468,000) $12,588,000
Year ended December 31, 1992:
Land and improvements $ 42,000 $ 17,000 $ 0 $ 0 $ 59,000
Buildings and improvements 1,439,000 341,000 (5,000) (24,000) 1,751,000
Machinery and equipment 8,576,000 1,811,000 (91,000) (743,000) 9,553,000
$10,057,000 $2,169,000 $ (96,000) $ (767,000) $11,363,000
Year ended December 31, 1991:
Land and improvements $ 25,000 $ 17,000 $ 0 $ 0 $ 42,000
Buildings and improvements 1,188,000 353,000 (98,000) (4,000) 1,439,000
Machinery and equipment 6,834,000 1,896,000 (114,000) (40,000) 8,576,000
$ 8,047,000 $2,266,000 $(212,000) $ (44,000) $10,057,000
(1) Foreign translation adjustments
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
MLX CORP. AND SUBSIDIARIES
COL. A COL. B COL. C COL. D COL. E
Additions
Balance at Beginning Charged to Costs Charged to Other Deductions-Describe Balance at End
Description of Period and Expenses Accounts-Describe (1) of Period
Year Ended December 31, 1993:
Reserve and allowances
deducted from
asset accounts
Valuation allowance
for deferred
tax assets - $124,000,000 - $3,000,000 $121,000,000
(1) Reduction in net operating loss carryover due to offset against taxable income.
SCHEDULE IX - SHORT-TERM BORROWINGS
MLX CORP. AND SUBSIDIARIES
COL. A COL. B COL. C COL. D COL. E COL. F
Maximum Amount Average Amount Weighted
Balance at Weighted Outstanding Outstanding Average Interest
Catagory of Aggregate End of Average During the During the Rate During
Short-Term Borrowings Period Interest Rate Period Period (1) the Period (2)
Year ended December 31, 1993:
Revolving Credit Facility $2,345,036 9.82% $4,424,605 $2,968,932 9.05%
Year ended December 31, 1992:
Revolving Credit Facility $1,332,180(3) 8.49% $4,368,019 $2,334,262 8.50%
Revolving Credit Facility 0(3) 15.60% 3,224,550 1,896,970 15.60%
Year ended December 31, 1991:
Revolving Credit Facility $4,368,019(3) 8.95% $10,027,000 $7,023,309 9.75%
Revolving Credit Facility 3,224,550(3) 14.50% 3,592,339 3,230,969 14.50%
(1)Average amount outstanding computed by dividing calendar month end loan balances plus
previous year-end balance by 13.
(2)The weighted average interest rate during the period was computed by dividing the actual
interest expense by average short-term debt outstanding.
(3)The revolving credit facilities expired in 1993. The facilities were replaced by a new lender
in early 1993. The new facility expires in 1997.
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
MLX CORP. AND SUBSIDIARIES
COL. A COL. B
ITEM Charged to Costs and Expenses
Year ended December 31
1993 1992 1991
Maintenance and repairs $1,111,000 $1,086,000 $ 768,000
Depreciation and amortization of
intangible assets, preoperating costs
and similar deferrals $ 919,000 $1,252,000 $1,356,000
Taxes other than payroll and
income taxes (A) (A) (A)
Royalties (A) (A) (A)
Advertising costs (A) (A) (A)
(A) Expense amount represents less than 1% of total sales.