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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 1997
Commission File Number 0-2816
METHODE ELECTRONICS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 36-2090085
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7444 West Wilson Avenue 60656
Chicago, Illinois (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number (including area code): (708) 867-9600
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each Class on which registered
------------------- ---------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock ($.50 par value)
Class B Common Stock ($.50 par value)
(Title of Class)
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, 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 Class A and Class B Common Stock, $.50
par value, held by non-affiliates of the Registrant on July 15, 1997, based upon
the average of the closing bid and asked prices on that date as reported by
Nasdaq was $687,898,000.
Registrant had 34,272,032 shares of Class A, $.50 par value, and 1,200,854
shares of Class B, $.50 par value, outstanding as of July 15, 1997.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the proxy statement for the annual shareholders meeting to be
held September 9, 1997, are incorporated by reference into Part III.
PART I
------
Item 1. Business
Methode Electronics, Inc. was incorporated in 1946 as an Illinois
corporation and reincorporated in Delaware in 1966. As used herein, Methode
Electronics, Inc. shall be referred to as the "Registrant" or the "Company."
The Registrant operates in one industry segment, which consists of the
manufacture of electronic components and devices that connect, control and
convey electrical energy, pulse and signal, including connectors, automotive
components, interconnect devices, printed circuits, and current carrying
distribution systems. Components and devices manufactured by the Registrant
are used in the production of electronic equipment and other products with
applications in the automotive, computer, voice and data communications
equipment, industrial, military and aerospace, and consumer electronics
industries.
The following tabulation reflects the percentages of net sales of the major
classes of products of the Registrant for the last three fiscal years.
April 30
1995 1996 1997
----- ----- -----
Connectors and Controls 86.0% 88.6% 89.9%
Printed Circuit Boards and Services 5.5 4.4 5.5
Current Carrying Distribution Systems 8.5 7.0 4.6
The sales activities of the Registrant are directed by sales managers who
are supported by engineering personnel who provide technical services. The
Registrant's products are sold through its sales staff and through independent
manufacturers' representatives with offices throughout the world. Sales are
made primarily to original equipment manufacturers and also to independent
distributors.
Sources and Availability of Raw Materials. Principal raw materials
purchased by Registrant include copper-clad laminate, ferrous and copper alloy
strips, plastic molding materials, fiber optic cable, etching and plating
chemicals, die castings and precious metals. All of these items are available
from several suppliers and the Registrant generally relies on more than one for
each item.
Patents; Licensing Agreements. The Registrant has various patents and
licensing agreements, but does not consider its business to be materially
dependent upon such patents and licensing agreements.
Seasonality. The business of the Registrant is not seasonal.
Working Capital Items. The Registrant is required to maintain adequate
levels of inventory to meet scheduled delivery requirements of customers. It
is not normal for the Registrant to carry significant amounts of finished
goods, as the preponderance of orders received are for scheduled future
deliveries.
Material Customers. During the year ended April 30, 1997, shipments to
Chrysler Corporation and Ford Motor Corporation each were 10% or greater of
consolidated net sales and, in the aggregate, amounted to approximately 42% of
consolidated net sales. Such shipments included a wide variety of the
Registrant's automotive component products.
Backlog. The Registrant's backlog of orders for its continuing operations
was approximately $55,200,000 at May 31, 1996, and $62,300,000 at May 31, 1997.
It is expected that most of the total backlog at May 31, 1997, will be shipped
within the current fiscal year.
2
Contracts Subject to Termination at the Election of the Government.
Shipments as a subcontractor for various military programs constitute a
significant portion of the Registrant's multilayer printed circuitry output,
although not material to the Registrant's business as a whole. Although
existing government orders are subject to termination at the election of the
Government, the Registrant historically has never experienced a significant
termination and has no information to lead it to believe that there is a
likelihood of such an event during fiscal year 1998.
Competitive Conditions. The markets in which the Registrant operates are
highly competitive and characterized by rapid changes due to technological
improvements and developments. Registrant competes with a large number of
other manufacturers in each of its product areas; many of these competitors
have greater resources and total sales. Price, service and product performance
are significant elements of competition in the sale of Registrant's products.
Research and Development. Registrant maintains a Research and Development
program involving a number of professional employees who devote a majority of
their time to the development of new products and processes and the advancement
of existing ones. Senior management of the Registrant also participates
directly in the program. Expenditures for the aforementioned activities
amounted to $14,120,000, $17,425,000 and $18,575,000 for the fiscal years ended
April 30, 1995, 1996, and 1997, respectively.
Environmental Quality. Compliance with federal, state and local provisions
regulating the discharge of materials into the environment has not materially
affected capital expenditures, earnings or the competitive position of the
Registrant. Currently there are no environmental related lawsuits or material
administrative proceedings pending against the Registrant. Further information
as to environmental matters affecting the Registrant is presented in Note 7 to
the consolidated financial statements included in Item 14(a)(1).
Employees. At April 30, 1996, and 1997, Registrant had approximately 3,250
and 3,650 employees, respectively.
Foreign Sales. Information about the Registrant's operations in different
geographic regions is summarized in Note 9 to the consolidated financial
statements included in Item 14 (a) (1).
Item 2. Properties
The Registrant has 21 manufacturing and three service facilities containing
approximately 962,000 square feet of space, of which approximately 295,000
square feet are leased. Ten of the facilities are located in Illinois, four in
California, one in Connecticut, one in New Jersey, one in Maryland, one in
Ireland, two in Malta, two in Singapore and two in the United Kingdom. The
acquisition of Merit-Malta Ltd. in fiscal 1997 added approximately 175,000
square feet of manufacturing space. Approximately 38,000 square feet of
manufacturing space and a 20,000 square foot Research Center were added in 1996
and approximately 90,000 square feet of space for the manufacture of connectors
and controls were added in fiscal 1995. Registrant's manufacturing facilities
have been modernized as necessary in the opinion of management to keep pace with
developments in the industry.
Item 3. Legal Proceedings
As of July 15, 1997, the Registrant was not involved in any material
litigation or any litigation or material administrative proceedings with
governmental authorities pertaining to the discharge of materials into the
environment.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to security holders during the fourth
quarter of fiscal 1997.
3
Executive Officers of the Registrant
Director Offices and Positions Held and
Name Age Since Length of Service as Officer
---- --- -------- ------------------------------
William J. McGinley 74 1946 President since 1997 and Chairman
since 1994. Prior thereto, he was
President of the Registrant from
1946 to 1994. Mr. William J.
McGinley is the father of James W.
McGinley.
Michael G. Andre 57 1984 Senior Executive Vice President of
the Registrant since December 1994.
Prior thereto, he was Executive
Vice President of Interconnect
Products since January 1984 and
Vice President of Interconnect
Products since 1978.
John R. Cannon 49 1997 Senior Executive Vice President of
the Registrant since 1997. Prior
thereto Senior Executive Vice
President of dataMate Products
since 1996; prior thereto,
Executive Vice President of
dataMate Products.
Kevin J. Hayes 56 1984 Executive Vice President of the
Registrant since 1997, Chief
Financial Officer since 1996 and
Assistant Secretary since 1995.
Prior thereto, Vice President and
Treasurer of the Registrant since
1974.
James W. McGinley 42 1993 President since December 1994 and
prior thereto Executive Vice
President since June 1993 of Optical
Interconnect Products. Prior
thereto, he was General Manager of
Connector Products from November
1984 to January 1989, and Vice
President, Corporate Sales and
Marketing from January 1989 to June
1993. Mr. James W. McGinley is the
son of Mr. William J. McGinley.
James W. Ashley, Jr. 47 1995 Secretary of the Registrant since
1995. James W. Ashley, Jr., P.C.
is a partner of Keck, Mahin & Cate
(a law firm retained as counsel to
the Registrant).
All executive officers serve a term of one year which, for the current
year, expires on September 9, 1997, or until their successors are duly elected
and qualified.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
The Registrant's Class A and Class B Common Stock are traded on the Nasdaq
National Market System under the symbols METHA and METHB. The following is a
tabulation of high and low closing sales prices for the periods indicated as
reported by Nasdaq. Historical data have been restated for the three for two
stock split effective October 31, 1995.
Class A Class B
Stock Price Stock Price
------------ ------------
High Low High Low
----- ----- ----- -----
Fiscal Year ended April 30, 1997
First Quarter 18.75 16.50 18.25 16.75
Second Quarter 19.63 16.75 19.25 16.75
Third Quarter 22.38 18.25 22.50 18.25
Fourth Quarter 21.88 13.25 22.00 13.25
Fiscal Year ended April 30, 1996
First Quarter 14.83 11.00 15.00 11.67
Second Quarter 16.17 14.17 16.33 14.33
Third Quarter 16.25 12.63 16.25 13.25
Fourth Quarter 16.75 13.50 16.75 13.75
The Registrant pays dividends quarterly and for fiscal years 1996 and 1997,
quarterly dividends were paid at an annual rate of $.16 and $.20, respectively,
on both the Class A and Class B Common Stock. On June 27, 1997, the Board
declared a dividend of $.05 per Class A share and Class B share, payable on July
31, 1997, to holders of record on July 15, 1997.
4
The Registrant expects to continue its policy of paying regular cash
dividends, although there is no assurance as to future dividends because they
are dependent on future earnings, capital requirements and financial conditions.
As of July 15, 1997, the approximate number of record holders of the
Company's Class A and Class B Common Stock was 1,320 and 525.
Item 6. Selected Financial Data
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
(In Thousands, Except Per Share Amounts)
Income Statement Data:
Net sales $343,092 $307,538 $270,748 $213,298 $172,038
Income from continuing
operations before income taxes 58,444 50,972 40,846 33,476 22,548
Income taxes 21,225 18,600 14,725 12,500 7,800
Income from continuing operations 37,219 32,373 26,121 20,976 14,748
Discontinued operations - - - - 690
Net income 37,219 32,373 26,121 20,976 15,438
Per Common Share:
Income from continuing operations $ 1.06 $ 0.93 $ 0.75 $ 0.61 $ 0.43
Net income 1.06 0.93 0.75 0.61 0.45
Dividends, Class A 0.20 0.16 0.08 0.03 0.03
Dividends, Class B 0.20 0.16 0.07 0.03 0.03
Book value 5.59 4.69 3.87 3.11 2.47
Long-term debt 1,005 - - 107 204
Funded debt to total capital 1:95 1:57 1:28 1:21 1:35
Retained Earnings $161,226 $131,073 $104,323 $ 80,963 $ 61,165
Fixed assets (net) 80,096 66,786 56,167 48,454 44,419
Total assets 253,491 223,279 191,496 160,630 129,029
From continuing operations:
Return on equity 21% 22% 22% 22% 19%
Pre-tax income as a percentage of 17.0% 16.6% 15.1% 15.7% 13.1%
sales
Net income as a percentage of sales 10.8% 10.5% 9.6% 9.8% 8.6%
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Net sales increased 12% in fiscal 1997 following increases of 14% and 27%
in 1996 and 1995 led by gains in electronic and automotive interconnects of 13%
in 1997, 17% in 1996, and 22% in 1995. Sales of electrical, electronic and
optical interconnects represented 90% of sales in fiscal 1997, 89% in 1996, and
86% in 1995. About half of consolidated sales were to the automotive industry
during the three-year period ended April 30, 1997. Interconnect sales during
that time frame benefited from the acquisition of a manufacturer of automotive
components and other devices in the fourth quarter of fiscal 1997; the
acquisition of a PCMCIA connector and package producer in the second quarter of
fiscal 1996; and acquisitions of two molded cable operations in the second
quarter of fiscal 1995. Sales of other connectivity devices (chiefly bus devices
and printed circuit boards) and services declined 1% and 8% in fiscal 1997 and
1996 versus a gain of 72% in fiscal 1995. This area experienced difficult
market conditions due to a decline in sales of mainframe computers (for which
Methode supplies power and signal distribution buswork) and reduced defense
procurement (for which Methode provides sophisticated multilayer circuit
boards). Management has taken action to broaden the markets for these products.
5
Other income consisted primarily of earnings from our automotive joint
venture, interest income from short-term investments, and royalties.
Cost of goods sold as a percentage of sales for 1997, 1996 and 1995 were
71.8%, 72.1% and 72.8%.
Selling and administrative expenses as a percentage of sales were 12.9%,
12.9% and 13.3% in 1997, 1996 and 1995.
Effective income tax rates were 36.3%, 36.5% and 36.1% for fiscal 1997,
1996 and 1995. The effective income tax rates exceed the statutory federal rate
of 35% due to the effect of state income taxes offset, in part, by lower tax
rates on foreign operations.
Financial Condition, Liquidity, and Capital Resources
Net cash provided by operations was $44,854,000, $43,429,000 and
$37,320,000 in 1997, 1996 and 1995. The increase in cash provided by operations
was primarily the result of higher net income offset, in part, in 1997 by
increased working capital requirements. To accelerate market penetration,
extend product lines and stimulate technological development, the Company used
$40,818,000 of its available cash in February 1997 to acquire 100% of Merit
Elektrik GmbH, a manufacturer of automotive electrical components, and a 75%
interest in Magnetoelastic Devices, Inc., a research company focused on solid
state magnetic effects. Shortly after fiscal 1997 year-end, using operating
cash flows the Company purchased the Common Stock of Adam Technologies, Inc., a
designer and marketer of electronic connectors.
Depreciation and amortization expense was $14,668,000, $12,117,000 and
$10,608,000 in fiscal 1997, 1996 and 1995. Capital expenditures were
$20,376,000, $22,124,000 and $17,422,000 in fiscal 1997, 1996 and 1995.
Principal capital investments involved completion of a new Automotive Research
and Test Center in 1997; expansions at our Automotive Electronic Controls,
Optoelectronic Products and Fiber Optic Products facilities in 1996; and a new
test lab in 1995. Capital expenditures in 1997, 1996 and 1995 were funded from
operating cash flows. It is anticipated that fixed capital acquisitions for
1998 will also be funded from operating cash flows.
Item 8. Financial Statements and Supplementary Data
See Item 14 for an Index to Financial Statements and Financial Statement
Schedules. Such Financial Statements and Schedules are incorporated herein by
reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information regarding the directors of the Registrant is included under the
caption "Election of Directors" in the Registrant's proxy statement to be dated
on or about August 8, 1997, and is incorporated herein by reference.
Information regarding the executive officers of the Registrant is included under
a separate caption in Part I hereof, and is incorporated herein by reference, in
accordance with General Instruction G(3) to Form 10-K and Instruction 3 to Item
401(b) of Regulation S-K. Information regarding Section 16(a) of the Exchange
Act is included under the caption "16(a) Beneficial Ownership Reporting
Compliance."
6
Item 11. Executive Compensation
Information regarding the above is included under the caption "Executive
Compensation" in the Registrant's proxy statement to be dated on or about August
8, 1997, and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information regarding the above is included under the caption "Security
Ownership" in the Registrant's proxy statement to be dated on or about August 8,
1997, and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
Information regarding the above is included under the caption "Election of
Directors" in the Registrant's proxy statement to be dated on or about August 8,
1997, and is incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) (1) (2) List of Financial Statements and Financial Statement Schedules
The response to this portion of Item 14 is included in this report
under the caption "List of Financial Statements and Financial Statement
Schedules" which is incorporated herein by reference.
(a) (3) List of Exhibits Required by Item 601 of Regulation S-K
See "Exhibit Index" immediately following the financial statement
schedules.
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on February 20, 1997, reporting
its acquisition of 75% of the Common Stock of Sentorque, Inc. On February
27, 1997, the Company filed a report on Form 8-K reporting its acquisition
of 100% of Merit-Elektrik GmbH and Merit-Malta Ltd.
(c) Exhibits Required by Item 601 of Regulation S-K
See "Exhibit Index" immediately following the financial statement
schedules.
(d) Financial Statement Schedules
The response to this portion of Item 14 is included in this report under
the caption "List of Financial Statements and Financial Statement Schedules"
which is incorporated herein by reference.
Schedules and exhibits other than those listed are omitted for the reasons
that they are not required, are not applicable or that equivalent information
has been included in the financial statements, and notes thereto, or elsewhere
herein.
7
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.
METHODE ELECTRONICS, INC.
(Registrant)
By /s/Kevin J. Hayes
-----------------
Kevin J. Hayes
Executive Vice President,
Chief Financial Officer & Director
Dated: July 28, 1997
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/ William J. McGinley Chairman of the Board, President & July 28, 1997
- --------------------------- Director
William J. McGinley (Principal Executive Officer)
/s/ Michael G Andre Senior Executive Vice President & July 28, 1997
- --------------------------- Director
Michael G. Andre
/s/ John R. Cannon Senior Executive Vice President & July 28, 1997
- --------------------------- Director
John R. Cannon
/s/ Kevin J. Hayes Executive Vice President, July 28, 1997
- --------------------------- Chief Financial Officer & Director
Kevin J. Hayes
/s/ James W. McGinley President, Optical Interconnect July 28, 1997
- --------------------------- Products, & Director
James W. McGinley
/s/ James W. Ashley, Jr. Secretary & Director July 28, 1997
- ---------------------------
James W. Ashley, Jr.
/s/ William C. Croft Director July 28, 1997
- ---------------------------
William C. Croft
/s/ Raymond J. Roberts Director July 28, 1997
- ---------------------------
Raymond J. Roberts
Director July 28, 1997
- ---------------------------
George C. Wright
8
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
FORM 10-K
Item 14(a)(1) and (2)
List of Financial Statements and Financial Statement Schedules
The following consolidated financial statements of Methode Electronics,
Inc. and subsidiaries are included in Item 8:
Consolidated Balance Sheets--April 30, 1997, and 1996
Consolidated Statements of Income--Years Ended April 30, 1997, 1996 and
1995
Consolidated Statements of Shareholders' Equity--Years Ended April 30,
1997, 1996 and 1995
Consolidated Statements of Cash Flows--Years Ended April 30, 1997, 1996 and
1995
Notes to Consolidated Financial Statements
The schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inappropriate and, therefore, have been omitted.
9
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Shareholders
Methode Electronics, Inc.
We have audited the accompanying consolidated balance sheets of Methode
Electronics, Inc. and subsidiaries as of April 30, 1997, and 1996, and the
related consolidated statements of income, shareholders' equity, and cash flows
for each of the three years in the period ended April 30, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements 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 financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Methode
Electronics, Inc. and subsidiaries at April 30, 1997, and 1996, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended April 30, 1997, in conformity with generally
accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
June 24, 1997
10
CONSOLIDATED BALANCE SHEETS
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
April 30
1997 1996
---- ----
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 23,115,320 $ 50,185,934
Accounts receivable, less allowance
(1997--$1,250,000; 1996--$1,285,000) 54,054,695 48,326,214
Inventories:
Finished products 7,347,088 5,199,125
Work in process 21,323,077 15,330,639
Materials 11,185,199 11,557,591
---------------------------
39,855,364 32,087,355
Current deferred income taxes 2,831,000 3,029,000
Prepaid expenses 2,944,056 3,382,073
---------------------------
TOTAL CURRENT ASSETS 122,800,435 137,010,576
OTHER ASSETS
Goodwill, less accumulated amortization
(1997--$544,693; 1996--$190,005) 35,190,298 3,825,687
Intangible benefit plan asset (Note 5) 2,934,061 3,601,793
Cash surrender value of life insurance 6,680,225 5,939,690
Other 5,789,753 6,115,808
---------------------------
50,594,337 19,482,978
PROPERTY, PLANT AND EQUIPMENT
Land 1,700,401 1,684,985
Buildings and building improvements 38,541,323 32,757,588
Machinery and equipment 138,808,669 118,065,196
---------------------------
179,050,393 152,507,769
Less allowances for depreciation 98,954,082 85,721,950
---------------------------
80,096,311 66,785,819
---------------------------
$253,491,083 $223,279,373
===========================
11
April 30
1997 1996
---- ----
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 24,471,106 $ 23,448,875
Salaries, wages and payroll taxes 7,755,491 7,355,329
Other accrued expenses 8,655,617 9,367,295
Income taxes 2,568,477 2,845,202
Notes payable 1,088,133 2,939,380
-----------------------------
TOTAL CURRENT LIABILITIES 44,538,824 45,956,081
ACCUMULATED BENEFIT PLAN OBLIGATION (Note 5) 2,326,248 2,999,422
OTHER LIABILITIES 2,464,519 1,918,391
DEFERRED COMPENSATION 6,964,135 7,301,175
SHAREHOLDERS' EQUITY (Note 3)
Common Stock, Class A 17,137,447 17,036,666
Common Stock, Class B 607,225 624,450
Stock Awards (1,032,465) (969,745)
Additional paid-in capital 18,040,963 15,249,444
Retained earnings 161,225,847 131,073,343
Foreign currency translation adjustment 1,830,046 2,134,352
------------------------------
197,809,063 165,148,510
Less cost of shares in treasury 611,706 44,206
------------------------------
197,197,357 165,104,304
------------------------------
$253,491,083 $223,279,373
==============================
See notes to consolidated financial statements.
12
CONSOLIDATED STATEMENTS OF INCOME
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
Year Ended April 30
1997 1996 1995
---- ---- ----
INCOME
Net sales (Note 9) $343,092,265 $307,538,466 $270,747,848
Other 6,164,196 4,945,265 3,732,237
------------------------------------------------
349,256,461 312,483,731 274,480,085
Costs and expenses:
Cost of products sold 246,323,504 221,605,285 197,215,648
Selling and administrative expenses 44,311,172 39,571,740 36,056,404
Interest expense 177,902 334,092 361,644
------------------------------------------------
290,812,578 261,511,117 233,633,696
------------------------------------------------
INCOME BEFORE INCOME TAXES 58,443,883 50,972,614 40,846,389
Income taxes (Note 6) 21,225,000 18,600,000 14,725,000
------------------------------------------------
NET INCOME $ 37,218,883 $ 32,372,614 $ 26,121,389
================================================
Amounts per Common Share (Note 3):
Net income $1.06 $0.93 $0.75
Cash dividends:
Class A $0.20 $0.16 $0.08
Class B $0.20 $0.16 $0.07
Weighted average number of
Common Shares outstanding 35,236,000 34,967,000 34,671,000
See notes to consolidated financial statements.
13
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
Years Ended April 30, 1997, 1996, and 1995
Common Common Additional Currency
Stock Stock Stock Paid-in Retained Translation Treasury
Class A Class B Awards Capital Earnings Adjustment Stock
------- ------- ------ ------- -------- ---------- --------
Balance at April 30, 1994 $10,967,861 $642,846 $ (720,064) $14,795,130 $ 80,963,058 $1,272,080 $ (44,206)
Stock Award grant of
164,348 shares of Common
Stock, Class A 54,782 (1,767,035) 1,712,253
Earned portion of Stock Awards 1,499,084
Tax benefit from appreciation
of Stock Awards 599,000
Conversion of 4,725 shares of
Common Stock, Class B to 4,725
shares of Common Stock, Class A 2,363 (2,363)
Foreign currency translation
adjustment 1,587,817
Net income for the year 26,121,389
Cash dividends on Common Stock (2,761,738)
-----------------------------------------------------------------------------------------------
Balance at April 30, 1995 11,025,006 640,483 (988,015) 17,106,383 104,322,709 2,859,897 (44,206)
Stock Award grant of 169,062
shares of Common Stock, Class A 56,354 (1,910,688) 1,854,334
Earned portion of Stock Awards 1,928,958
Tax benefit from appreciation
of Stock Awards 68,000
Issuance of 165,708 shares of
Common Stock, Class A (Note 2) 55,236 2,104,764
Three-for-two stock split paid
in Common Stock, Class A 5,884,037 (5,884,037)
Conversion of 32,066 shares of
Common Stock, Class B to 32,066
shares of Common Stock, Class A 16,033 (16,033)
Foreign currency translation
adjustment (725,545)
Net income for the year 32,372,614
Cash dividends on Common Stock (5,621,980)
-----------------------------------------------------------------------------------------------
Balance at April 30, 1996 17,036,666 624,450 15,249,444 2,134,352 (44,206)
(969,745) 131,073,343
Stock Award grant of
119,493 shares of Common
Stock, Class A 59,747 (2,050,075) 1,990,328
Earned portion of Stock Awards 1,987,355
Tax benefit from
appreciation of Stock Awards 125,000
Issuance of 47,619 shares
of Common Stock, Class A
(Note 2) 23,809 676,191
Purchase of treasury stock
-- 40,000 shares of Common
Stock, Class A (567,500)
Conversion of 34,449 shares of
Common Stock, Class B to 34,449
shares of Common Stock, Class A 17,225 (17,225)
Foreign currency translation
adjustment (304,306)
Net income for the year 37,218,883
Cash dividends on Common Stock (7,066,379)
-------------------------------------------------------------------------------------------------
Balance at April 30, 1997 $17,137,447 $607,225 $(1,032,465) $18,040,963 $161,225,847 $1,830,046 $(611,706)
=================================================================================================
See notes to consolidated financial statements.
14
CONSOLIDATED STATEMENTS OF CASH FLOWS
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
Year Ended April 30
1997 1996 1995
---- ---- ----
OPERATING ACTIVITIES
Net income $ 37,218,883 $ 32,372,614 $ 26,121,389
Adjustments to reconcile net
income to net cash provided
by operating activities:
Provision for depreciation
and amortization 14,668,382 12,117,010 10,608,121
Provision for losses on accounts
receivable 11,000 35,000 157,000
Provision for deferred
compensation and supplemental
executive benefit plan (342,482) 684,120 735,974
Provision for deferred
income taxes 541,000 792,000 150,000
Amortization of Stock Awards 1,987,355 1,928,958 1,499,084
Changes in operating assets and
liabilities:
Accounts receivable (786,579) (8,312,521) (2,640,227)
Inventories (3,048,392) 1,061,181 (3,659,668)
Current deferred income
taxes and prepaid expenses 651,990 (548,935) (355,103)
Accounts payable and
accrued expenses (6,046,726) 3,299,795 4,703,232
--------------------------------------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 44,854,431 43,429,222 37,319,802
INVESTING ACTIVITIES
Purchases of property, plant and
equipment (20,375,599) (22,123,827) (17,421,612)
Acquisitions (Note 2) (40,818,330) - (2,593,063)
Purchase of treasury stock (567,500) - -
Purchases of life insurance policies (740,535) (920,171) (493,631)
Other (917,560) (2,692,727) 287,899
--------------------------------------------
NET CASH USED IN
INVESTING ACTIVITIES (63,419,524) (25,736,725) (20,220,407)
FINANCING ACTIVITIES
Repayment on lines of credit
and long-term borrowings (1,439,142) (2,648,239) (359,963)
Dividends (7,066,379) (5,621,980) (2,761,738)
--------------------------------------------
NET CASH USED IN
FINANCING ACTIVITIES (8,505,521) (8,270,219) (3,121,701)
--------------------------------------------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (27,070,614) 9,422,278 13,977,694
Cash and cash equivalents at
beginning of year 50,185,934 40,763,656 26,785,962
--------------------------------------------
CASH AND CASH
EQUIVALENTS AT END OF YEAR $ 23,115,320 $ 50,185,934 $ 40,763,656
============================================
See notes to consolidated financial statements.
15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
April 30, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation: The consolidated financial statements include the
accounts and operations of the Company and its subsidiaries.
Cash Equivalents: All highly liquid investments with a maturity of three months
or less when purchased are carried at their approximate fair value and
classified in the balance sheet as cash equivalents.
Inventories: Inventories are stated at the lower of cost (first-in, first-out
method) or market.
Property, Plant and Equipment: Properties are stated on the basis of cost. The
Company amortizes such costs by annual charges to income, computed on the
straight-line method for financial reporting purposes and on accelerated methods
for income tax purposes.
Long-Lived Assets: In March 1995, the FASB issued Statement No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of, which requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. Statement 121 also addresses the accounting for long-lived
assets that are expected to be disposed of. The Company adopted Statement 121
in the first quarter of 1997 and the effect of adoption was not material.
Income Taxes: Income taxes are accounted for using the liability method as
required by Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes." Under this method, deferred tax assets and liabilities are
determined based on differences between financial reporting and tax bases of
assets and liabilities and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse.
Research and Development Costs: Costs associated with the development of new
products are charged to expense when incurred. Research and development costs
for the years ended April 30, 1997, 1996 and 1995 amounted to $18,575,000,
$17,425,000 and $14,120,000, respectively.
Earnings Per Share: Net income per Common Share is based on the weighted
average number of Common Shares outstanding. The dilutive effect on net income
per Common Share assuming the vesting of unearned Stock Awards is not
significant.
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128 ("Statement No. 128"), Earnings per
Share, which is required to be adopted in the Company's third quarter of fiscal
year 1998. At that time, the Company will be required to change the method
currently used to compute earnings per share and to restate all prior periods.
Statement No. 128 is not expected to have any impact on the Company's
computation of earnings per share.
Fair Value of Financial Instruments: The carrying amounts of the Company's
borrowings under its short-term revolving credit agreements approximate their
fair value. The weighted average interest rates on such borrowings for the
years ended April 30, 1997, 1996 and 1995 were 6.57%, 5.18% and 5.28%,
respectively.
16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates:
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Reclassifications:
- -----------------
Certain amounts have been reclassified in the financial statements for fiscal
1996 and 1995 to conform to their presentation in 1997.
2. ACQUISITIONS
On February 26, 1997, the Company acquired all of the outstanding shares of
German-based Merit-Elektrik GmbH and Malta-based Merit Malta Ltd. (collectively
Merit Elektrik). The aggregate purchase price of approximately $30,400,000,
including costs of acquisition, was financed with available cash balances. Merit
Elektrik is a manufacturer of automotive switches, transmission controls and
other devices.
The acquisition was accounted for using the purchase method of accounting.
Accordingly, a portion of the purchase price was allocated to the net assets
acquired based upon their estimated fair values. The estimated fair values of
tangible assets acquired and liabilities assumed were $17,916,000 and
$7,199,000, respectively. This allocation resulted in an excess of purchase
price over assets acquired of $19,680,000 which is being amortized on a
straight-line basis over 40 years.
On February 16, 1997, the Company acquired for cash 75% of the outstanding
shares of Sentorque, Inc. located in Florida. Sentorque, Inc. owns a portfolio
of intellectual property covering innovative advances in circularly magnetized
non-contact torque sensors.
On July 31, 1995, the Company issued 165,708 shares of Common Stock, Class A to
acquire a San Jose, California manufacturer of sonic welded packages for the
personal computer card industry. On June 27, 1996, 47,619 additional shares of
Common Stock, Class A, were issued as additional consideration for this
acquisition. A final installment of 38,052 shares will be made in the first
quarter of fiscal 1998 related to this acquisition.
On September 9, 1994, the Company purchased for cash, a molded cable assembly
business with operations located in North Haven, Connecticut and Limerick,
Ireland.
The above described acquisitions were accounted for using the purchase method of
accounting and the results of operations of the acquired companies have been
included in the Company's consolidated financial statements from their
respective dates of acquisition. The excess of purchase price over net assets
acquired in these acquisitions, if any, is being amortized on a straight-line
basis over periods ranging from 25 to 40 years. Had these acquisitions been made
as of the beginning of fiscal 1996, sales and operating results would not be
materially different than reported.
17
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
3. SHAREHOLDERS' EQUITY
Preferred Stock: The Company has 50,000 authorized shares of Series A, 4%
cumulative convertible Preferred Stock, par value $100 per share, of which none
were outstanding at April 30, 1997.
Common Stock: Common Stock, Class A, is entitled to dividends at least
equivalent to those paid on the shares of Common Stock, Class B. The Common
Stock, Class A, has more limited voting rights than the Common Stock, Class B.
Generally the holders of Common Stock, Class A, are entitled to elect 25% of the
Company's Board of Directors and are entitled to one-tenth of one vote per share
respecting other matters. Holders of Common Stock, Class B, are entitled to one
vote per share. Each share of Common Stock, Class B, is convertible into one
share of Common Stock, Class A, at the option of the holder. At April 30, 1997,
1,982,206 shares of Common Stock, Class A, are reserved for future issuance in
connection with the conversion of shares of Common Stock, Class B, and the
Company's Incentive Stock Award Plans.
In October, 1995, the Company's Board of Directors declared a three for two
stock split, paid on October 31, 1995, whereby one additional share of Class A
Common Stock was issued for each two shares of Class A and Class B Common Stock
outstanding. All share and per share data have been restated to reflect this
stock split.
Common Stock, par value $.50 per share, authorized, issued and in treasury, was
as follows:
April 30, 1997 April 30, 1996
----------------------- --------------------------
Common Stock Common Stock
Class A Class B Class A Class B
------- ------- ------- -------
Authorized 50,000,000 5,000,000 50,000,000 5,000,000
Issued 34,274,892 1,214,451 34,073,331 1,248,900
In treasury 174,200 12,200 134,200 12,200
Stock Awards: The Company has an Incentive Stock Award Plan (Incentive Plan)
that permits the issuance of up to 3,000,000 shares of Common Stock, Class A, to
certain officers and key employees of the Company, of which 2,331,121 shares
have been awarded through April 30, 1997. Pursuant to the terms of the Incentive
Plan, the granted stock does not vest until two years after the award date. If
for any reason other than retirement, disability or death an employee terminates
his service before the two-year period, the stock will not vest and will be made
available for future grants.
The Company also has an Incentive Stock Award Plan for Non-employee Directors
that permits the issuance of up to 120,000 shares of Common Stock, Class A, to
non-employee directors, of which 75,000 shares have been awarded at April 30,
1997. Shares awarded pursuant to this plan have no vesting restrictions.
18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
4. EMPLOYEE STOCK OWNERSHIP PLAN
The Company has an Employee Stock Ownership Plan for the benefit of full-time
employees who have completed one year of service. The purpose of the Plan is to
assist employees to accumulate capital ownership in the Company and through that
ownership to promote in them a strong interest in the successful operation of
the Company. The Company made annual contributions of $1,200,000 to the Plan
during fiscal 1997, 1996 and 1995.
5. SUPPLEMENTAL EXECUTIVE BENEFIT PLAN
In fiscal 1992, the Company adopted an unfunded defined benefit plan covering
certain key executives. Benefits under the plan are in recognition of
significant contributions to the success of the Company made by the executives
during their many years of service with the Company. Annual payments of $900,000
pursuant to the plan are being made through fiscal year 2001.
The net periodic cost recognized as expense for this plan was as follows:
Prior
Service Costs Interest Total
------------- -------- -----
1997 $667,732 $226,826 $894,558
1996 667,732 270,093 937,825
1995 667,732 310,566 978,298
The weighted-average assumed discount rate used to measure the projected benefit
obligation in all years was 6-2/3%.
6. INCOME TAXES
Significant components of the Company's deferred tax assets and liabilities at
April 30 were as follows:
1997 1996
---- ----
Deferred tax liabilities:
Accelerated tax depreciation $ 4,279,000 $ 4,362,000
Other liabilities 49,000 134,000
----------- -----------
$ 4,328,000 $ 4,496,000
Deferred tax assets:
Deferred compensation and Stock Awards 3,873,000 3,878,000
Inventory valuation differences 978,000 1,012,000
Environmental reserves 690,000 1,020,000
Other accruals 1,616,000 1,596,000
Net operating loss carry forwards 40,000 165,000
----------- -----------
7,197,000 7,671,000
Less valuation allowance 40,000 165,000
----------- -----------
Total deferred tax assets 7,157,000 7,506,000
Net deferred tax assets 2,829,000 3,010,000
=========== ===========
Net current deferred tax assets 2,831,000 3,029,000
Net non-current deferred tax liabilities (2,000) (19,000)
----------- -----------
$ 2,829,000 $ 3,010,000
=========== ===========
19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
6. INCOME TAXES (Continued)
Federal and state taxes on income consisted of the following:
1997 1996 1995
----------- ----------- -----------
Current
Federal $16,477,000 $14,115,000 $11,726,000
Foreign 745,000 696,000 324,000
State 3,462,000 2,997,000 2,525,000
----------- ------------ ----------
20,684,000 17,808,000 14,575,000
Deferred 541,000 792,000 150,000
----------- ----------- -----------
$21,225,000 $18,600,000 $14,725,000
=========== =========== ===========
A reconciliation of the consolidated provisions for income taxes to amounts
determined by applying the prevailing statutory federal income tax rate of 35%
to pre-tax earnings is as follows:
1997 1996 1995
------------ ------------ ------------
Income tax at
statutory rate $20,455,000 $17,841,000 $14,296,000
Effect of:
State income taxes 2,301,000 2,026,000 1,641,000
Foreign operations
with lower statutory
rates (993,000) (736,000) (865,000)
Other-net (538,000) (531,000) (347,000)
----------- ----------- -----------
Income tax provision $21,225,000 $18,600,000 $14,725,000
=========== =========== ===========
The Company paid income taxes of approximately $21,035,000 in 1997, $16,840,000
in 1996 and $13,980,000 in 1995. No provision has been made for income taxes of
approximately $7,036,000 at April 30, 1997 which would be payable should
undistributed net income of $17,612,000 of foreign operations be distributed as
dividends, as the Company plans to continue these foreign operations and does
not contemplate such distributions in the foreseeable future.
7. ENVIRONMENTAL MATTERS
The Company is involved in environmental investigation and/or remediation at
certain of its present plant sites. The Company is not yet able to determine
when such remediation activity will be complete.
At April 30, 1997 and 1996, the Company had accruals, primarily based upon
independent engineering studies, for environmental matters of approximately
$1,825,000 and $3,050,000, respectively. The Company believes the provisions it
has made for environmental matters are adequate to satisfy its liabilities
relating to such matters.
20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
7. ENVIRONMENTAL MATTERS (Continued)
In 1997, the Company spent $1,350,000 on remediation cleanups and related
studies compared with $931,000 in 1996 and $1,615,000 in 1995. In 1997, the
costs associated with environmental matters as they relate to day-to-day
activities were not material.
In fiscal 1997, the Company elected to early adopt Statement of Position 96-1,
Environmental Remediation Liabilities, the impact of which was not material to
the Company.
8. PENDING LITIGATION
Certain litigation arising in the normal course of business is pending against
the Company. The Company is of the opinion that the resolution of such
litigation will not have a significant effect on the consolidated financial
statements of the Company.
9. DESCRIPTION OF BUSINESS
The Company operates in one industry segment, which consists of the manufacture
of electronic components that connect, convey and control electrical energy,
pulse and signal, including connectors, interconnect devices, controls, printed
circuits, and current-carrying distribution systems. The Company manufactures
products with applications in the automotive, computer, voice and data
communications, industrial, military and aerospace, and consumer electronics
industries.
Sales to two automotive customers approximated 42%, 40%, and 42% of net sales in
the years ended April 30, 1997, 1996 and 1995, respectively.
At April 30, 1997 and 1996, accounts receivable from customers in the automotive
industry were approximately $28,713,000 and $27,831,000, respectively.
Receivables are generally due within 30 days. Credit losses relating to all
customers consistently have been within management's expectation.
21
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
9. DESCRIPTION OF BUSINESS (Continued)
Information about the Company's operations in different geographic regions is as
follows:
1997 1996 1995
------------ ------------ ------------
Net Sales:
Domestic $279,715,031 $252,624,190 $226,024,411
Far East 25,508,921 24,630,167 18,931,172
Europe 37,868,313 30,284,109 25,792,265
------------ ------------ -----------
$343,092,265 $307,538,466 $270,747,848
============ ============ ============
Operating Profit:
Domestic $ 51,372,014 $ 45,551,070 $ 37,237,411
Far East 337,265 1,898,117 55,404
Europe 3,925,537 1,504,735 2,421,373
Income & expenses not
allocated to areas 2,809,067 2,018,692 1,132,201
------------ ------------ ------------
$ 58,443,883 $ 50,972,614 $ 40,846,389
============ ============ ============
Assets:
Domestic $189,280,114 $179,178,383 $155,850,737
Far East 29,646,147 29,415,698 23,434,566
Europe 34,564,822 14,685,292 12,210,592
------------ ------------ ------------
$253,491,083 $223,279,373 $191,495,895
============ ============ ============
22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
10. SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following is a summary of unaudited quarterly results of operations for the
two years ended April 30, 1997.
Fiscal Year 1997
Quarter Ended
-------------
July 31 October 31 January 31 April 30
------------ ------------ ------------ ------------
Net sales $78,965,710 $85,188,636 $85,943,283 $92,994,636
Gross profit 21,325,196 23,869,144 23,817,211 27,757,210
Net income 8,009,588 9,099,026 9,134,141 10,976,128
Net income per
Common Share 0.23 0.26 0.26 0.31
Fiscal Year 1996
Quarter Ended
----------------
July 31 October 31 January 31 April 30
------------ ------------ ------------ ------------
Net sales $68,215,814 $78,638,261 $75,731,809 $84,952,582
Gross profit 18,625,040 21,352,888 20,687,894 25,267,359
Net income 6,703,446 7,585,187 7,554,626 10,529,355
Net income per
Common Share 0.19 0.22 0.22 0.30
23
INDEX TO EXHIBITS
Sequential
Exhibit Page
Number Description Number
- ------- ----------- ----------
3.1 Certificate of Incorporation of Registrant, as amended and currently
in effect(1)
3.2 Bylaws of Registrant, as amended and currently in effect(1)
4.1 Article Fourth of Certificate of Incorporation of Registrant, as
amended and currently in effect (included in Exhibit 3.1)
10.1 Methode Electronics, Inc. Employee Stock Ownership Plan dated February
24, 1977(2)*
10.2 Methode Electronics, Inc. Employee Stock Ownership Plan and Trust
Amendment No.1(2)*
10.3 Methode Electronics, Inc. Employee Stock Ownership Trust(2)*
10.4 Methode Electronics, Inc. Employee Stock Ownership Trust--Amendment
No. 1(2)*
10.5 Methode Electronics, Inc. Incentive Stock Award Plan(3)*
10.6 Methode Electronics, Inc. Supplemental Executive Benefit Plan(4)*
10.7 Methode Electronics, Inc. Managerial Bonus and Matching Bonus Plan
(also referred to as the Longevity Contingent Bonus Program)(4)*
10.8 Methode Electronics, Inc. Capital Accumulation Plan(4)*
10.9 Incentive Stock Award Plan for Non-Employee Directors(5)*
10.10 Methode Electronics, Inc. 401(k) Savings Plan(5)*
10.11 Methode Electronics, Inc. 401(k) Savings Trust(5)*
10.12 Methode Electronics, Inc. Electronic Controls Division Cash and Class
A Common Stock Bonus Plan(6)
11 Computation of Earnings per Common Share 25
21 Subsidiaries of the Registrant 26
23.1 Consent of Ernst & Young LLP 27
27 Financial Data Schedules 28
- ----------
(1) Previously filed with Registrant's Form S-3 Registration Statement No.
33-61940 filed April 30, 1993, and incorporated herein by reference.
(2) Previously filed with Registrant's S-8 Registration Statement No. 2-
60613 and incorporated herein by reference.
(3) Previously filed with Registrant's Registration Statement No. 2-92902
filed August 23, 1984, and incorporated herein by reference.
(4) Previously filed with Registrant's Form 10-Q for three months ended
January 31, 1994, and incorporated herein by reference.
(5) Previously filed with Registrant's Form 10-K for the year ended April
30, 1994, and incorporated herein by reference.
(6) Previously filed with Registrant's S-8 Registration Statement No. 33-
88036 and incorporated herein by reference.
*Management contract or compensatory plan or arrangement required
to be filed as an exhibit to this Annual Report on Form
10-K pursuant to Item 14(c) of Form 10-K.
24