ITEM 1. Business.
A. Products.
Alden Electronics, Inc. (the "Company") designs, assembles, sells and leases communications equipment, computerized graphic display systems, imaging equipment and related supplies. The Company also operates communications networks, making use of both satellite and terrestrial technologies, to facilitate the delivery of meteorological and other data to customers.
The Company's communications equipment is used primarily for meteorological applications. The meteorological communications equipment, graphic display systems and data are used by various users of weather information including professional weather forecasters, commercial airlines, radio and television stations, colleges and universities, private pilots, mariners as well as various domestic (local, state and federal) and foreign governmental agencies.
Data distributed through the Company's communications networks are primarily acquired from governmental agencies such as the National Oceanic & Atmospheric Administration, National Weather Service ("NWS") and the Federal Aviation Administration ("FAA"). This information is either distributed centrally from Company facilities or by providing customers direct access to NWS and FAA weather radar information through proprietary access devices installed by the Company at or near government radar installations.
The Company's imaging products include its CTP continuous tone thermal printer, which provides high resolution images on various media, thermal paper and plastic materials.
Subsequent to March 31, 1996, the Company divested itself of substantially all of its marine electronics products. The Company's marine electronics products consisted of communication products either manufactured by the Company or manufactured by others and sold through the Company's marine distribution network. These marine communication products included the SATFIND-406(TM) SURVIVAL EPIRB (Emergency Position Indicating Radio Beacon) which transmits radio signals to allow search and rescue authorities to locate distressed vessels. On June 11, 1996, the Company completed the divestiture of its marine electronics products with the sale of its manufacturing and distribution rights for its SATFIND-406(TM) SURVIVAL EPIRB to Northern Airborne Technology Inc., an affiliate of Chelton Ltd, a UK company.
During each of the three years in the period ended March 31, 1996, the Company incurred substantial losses. The Company continues to implement cost containment measures with the objective of maintaining revenues and reducing costs. Concurrently, the Company is reviewing strategic alternatives with respect to all of its product lines and assets. The alternatives under consideration include divestiture of some or all of its product lines and liquidation of some or all of its assets. The Company has retained Argus Management Corporation, a management consulting firm, to assist the Company in its review of strategic alternatives and general operational matters.
B. Sales and Leasing.
The Company's sales of equipment, parts, supplies and services accounted for approximately 94.4% of the Company's revenues for the year ended March 31, 1996, and income from leased equipment accounted for approximately 5.6% of the Company's revenues for the year. A majority of the Company's leasing business is with governmental agencies. Most of the Company's leases with governmental agencies are for one year and, generally, give the agency a right to extend the term of the lease for additional terms, subject to appropriation of funds by Congress.
During the year ended March 31, 1996, no single customer accounted for more than 10% of total revenues.
C. Backlog of Orders.
As of March 31, 1996, there was a backlog of orders believed to be firm of approximately $1,422,754. As of March 31, 1995, the amount of backlog was approximately $1,049,000. Because the amount of backlog may at any given time reflect nonrecurring orders with extended delivery schedules, the Company does not consider the amount of its backlog to be indicative of anticipated sales for a fiscal year.
D. Competition.
Most of the business areas in which the Company is involved are competitive and require highly skilled and experienced technical personnel. There are other companies which compete in these business areas, some of which have greater resources than the Company. As such, there can be no assurance that the Company will compete successfully in the future. The Company believes the skills and experience that its personnel have with the products that it markets are the key to its growth and competitive position.
E. Patents, Licenses, Product Development and Employees.
Although the Company holds a number of patents in the field of facsimile and instant graphic recording, the Company's reliance on these patents is diminishing as the products related to these patents constitute a declining share of the Company's product mix. Moreover, the Company believes that its accumulated experience and know-how in these areas are as important as the underlying patents.
The Company expended approximately $574,000 during the year ended March 31, 1996, for the development of new products and improvements of existing products.
The Company employs 57 persons.
ITEM 2.
ITEM 2. Properties
The Company owns approximately 26.1 acres of land in Westborough, Massachusetts near the intersection of Routes 9 and 495. Situated on this land are approximately 85,500 square feet of building space the Company utilizes for office, manufacturing, service, engineering and warehouse purposes. The Company has entered into an agreement, which contains standard closing conditions, to sell a portion of its real estate holdings.
The Company's real estate holdings are subject to a mortgage granted to the Company's prinicpal lender as collateral for its credit facility.
The Company also has one lease for approximately 2,500 square feet of floor space in Epsom, England.
Leased equipment in the field had a depreciated book value of approximately $118,206 as of March 31, 1996.
ITEM 3.
ITEM 3. Legal Proceedings.
There were no pending legal proceedings, other than ordinary routine litigation incidental and not material to the business of the Company, to which the Company is party or to which any of its property is subject.
ITEM 4.
ITEM 4. Submission of Matters to a Vote of Security Holders.
The Company did not submit any matters to a vote of security holders during the fourth quarter of the fiscal year ended March 31, 1996.
PART II
ITEM 5.
ITEM 5. Market For The Registrant's Common Equity and Related Stockholder Matters.
(a) The Company's Class A Common Stock is principally traded over the counter on the NASDAQ System under the symbol ADNEA. Such stock is also traded on the Boston Stock Exchange under the symbol ADN.
The following table shows the market range of the Company's Class A Common Stock based upon the high and low bid as reported by NASD.
1995/1996 1994/1995 --------- ---------- Period High Low High Low - - ------ ----------- ------------ First Quarter 2 3/4 2 2 7/8 2 5/8 Second Quarter 2 5/8 2 1/4 2 3/4 2 1/2 Third Quarter 2 3/8 1 1/4 2 5/8 2 1/4 Fourth Quarter 1 3/8 3/4 2 1/4 2
(b) As of June 19, 1996, there were 1,510 holders of record of the Company's Class A Common Stock and six (6) holders of record of the Company's Class B Common Stock.
(c) The Company did not declare a dividend for the 1995 fiscal year or the 1996 fiscal year. Under the terms of the Company's Loan Agreement with its principal lender entered into on August 5, 1994, the Company is prohibited from paying cash dividends on any class of its capital stock.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
A. Results of Operations - 1996 compared to 1995.
Revenues for the year ended March 31, 1996 were $12,806,700 compared to $18,227,312 for the year ended March 31, 1995, while a net loss of $3,088,722 ($1.41 per share) was posted for 1996 compared to a net loss of $3,347,542 ($1.53 per share) for 1995.
Decreased revenues for 1996 reflect reduced sales from three Marine products discontinued during the year, including the ALDENSART(TM) (search and rescue transponder), the Alden SATPHONE(TM) (satellite telephone) and the TRIV MARINEFAX recorder. The Company also had reduced sales of the 9315CTP continuous tone printer and paper products. Revenues from the three Marine products in 1996 were $900,000 compared to $3,500,000 in 1995. Revenues from the sales of the Company's 9315CTP continuous tone printer were $900,000 less in 1996 when compared to 1995. Revenues from the sale of paper products were $900,000 less in 1996 when compared to 1995. The Company also had a decline of $400,000 in revenues from equipment lease and service contracts.
Gross profit of 15% in 1996 is comparable to that of the prior year; however, both levels are below historical levels. In 1996, gross profit margins were adversely affected by reduced margins on weather display systems relating to continuing development efforts, losses relating to custom systems produced during the year, increased costs of providing weather data and the continued decline of highly profitable lease and service revenues.
Selling, General and Administrative expenses were $1,800,000 less in 1996 when compared to 1995. This decline was primarily related to declines in revenue, cost containment measures implemented by the Company and non-reoccurrence of costs experienced in 1995 associated with new product introductions.
B. Results of Operations - 1995 compared to 1994.
Revenues for the year ended March 31, 1995 were $18,227,312 compared to $16,803,966 for the year ended March 31, 1994, while a net loss of $3,347,542 ($1.53 per share) was posted for 1995 compared to a net loss of $1,838,024 ($0.84 per share) for 1994.
Increased revenues for 1995 reflect sales for two Marine products introduced in the first quarter of 1995, the ALDENSART(TM) (search and rescue transponder) and the Alden SATPHONE(TM) (satellite telephone). Revenues from the sales of these two products were $2,700,000 in 1995. These increases offset decreased revenues from sales of the Company's AE-900 NAVTEX(TM) Receiver of $1,200,000 when compared to 1994. Increases in sales of equipment used in the ingest and display of weather data amounting to $900,000 offset decreases in revenue from leased equipment, equipment service and data services.
Gross profit declined from 21% in 1994 to 15% in 1995. The decline was attributable to less than expected gross profit performance of the ALDENSART(TM) and Alden SATPHONE(TM) which reduced overall gross profits by 3.25%, the decline of highly profitable lease revenues on older equipment, the provision for costs relating to the December 19, 1994 recall of the SATFIND-406(TM) SURVIVAL EPIRB ($464,000) and the provision of $363,000 for the write-down of inventory related to discontinued products in 1995. In late fiscal 1995, the Company discontinued the ALDENSART(TM) and Alden SATPHONE(TM) product lines.
Selling, General and Administrative expenses for 1995 exceeded those of 1994 by $900,000. This increase was primarily related to additional costs associated with the introduction of new products (approximately $600,000) and the payment of commissions and sales incentives in excess of historical rates (approximately $300,000).
C. Liquidity and Sources of Capital.
The ratio of current assets to current liabilities was 1.1 to 1 at March 31, 1996, compared to 1.8 to 1 at March 31, 1995 and 3.4 to 1 at March 31, 1994. The decrease in working capital during 1996 reflects decreases in accounts receivable and inventories of approximately $2,500,000 relating to the Company's reduced revenues for the year, efforts by the Company to improve inventory turnover without a corresponding reduction in accounts payable and the repayment and reclassification of certain obligations.
During 1996, the Company experienced a net increase in cash and cash equivalents of $66,200 compared to net decreases in cash and cash equivalents of $1,297,000 and $821,000 in 1995 and 1994, respectively.
During 1996, operating activities provided $1,158,000 in cash primarily attributable to reduction in investments in inventories of $1,715,000, and net reductions in other working capital amounting to $678,000. These sources along with non-cash charges of $1,874,000 for depreciation and amortization and impairment of assets and restructuring charges offset the net loss of $3,089,000 for the year.
Investing activities during 1996 consisted exclusively of additions to property, plant and equipment of $677,000.
Financing activities during 1996 used $395,000 in cash, primarily for the repayment of debt to the Company's bank.
During 1995, operating activities used $1,421,000 in cash primarily attributable to the net loss of $3,348,000. These activities were offset by non-cash charges included in operating costs (such as depreciation and provisions for inventory write-downs of $1,360,000).
Investing activities during 1995 consisted exclusively of additions to property, plant and equipment of $530,000.
Financing activities in 1995 provided $633,000 in cash, primarily from short-term borrowings of $700,000.
As indicated above, the Company has incurred substantial losses in each of the three years ended March 31, 1996. On June 12, 1995 the Company secured a commitment from its bank to forebear from collection of certain amounts due under its credit facility with the Company until June 30, 1996. This commitment was contingent upon the Company making scheduled payments of interest and principal and to continued compliance with existing covenants, as amended. The Company is currently in default of its payment obligations and certain existing covenants, including covenants relative to minimum cash flows and tangible net worth levels. The Company has informed the bank that it intends to reduce these balances under its credit facility with the proceeds from an impending real estate sale and the collection of receivables related to certain discontinued product lines.
With respect to operating results, the Company continues to implement cost containment measures with the objective of maintaining revenues and reducing costs. Concurrently, the Company is reviewing strategic alternatives with respect to all of its product lines and assets. The alternatives under consideration include divestiture of some or all of its product lines and liquidation of some or all of its assets. The Company has retained Argus Management Corporation, a management consulting firm, to assist the Company in its review of strategic alternatives and general operational matters.
D. Impact of Inflation and Price Changes.
In recent years, the Company has not experienced significant inflation in the cost of its products. In those cases where the Company experiences increased costs, it seeks ways to cope with the impact of those increases so as not to materially impact profit margins. Substantially all of the Company's revenue decrease in 1996 and increases in 1995 and 1994 were the result of fluctuations in sales volume from existing products and new product introductions.
A portion of the Company's products are purchased from foreign suppliers. When it is practical, the Company enters into foreign exchange contracts to minimize the risk of foreign exchange losses on the purchase of products. During fiscal 1996, changes in exchange rates affecting the gross profit margins of the Company's products were not material.
ITEM 8.
ITEM 8. Financial Statements and Supplementary Data.
See the next page for financial statements and supplementary data.
Report of Independent Auditors
Board of Directors Alden Electronics, Inc. and Subsidiaries
We have audited the accompanying consolidated balance sheets of Alden Electronics, Inc. and subsidiaries (the Company) as of March 31, 1996 and 1995, and the related consolidated statements of operations and retained earnings, and cash flows for each of the three years in the period ended March 31, 1996. Our audits also included the financial statement schedule listed in the Index at Item 14(a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule 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 Alden Electronics, Inc. and subsidiaries at March 31, 1996 and 1995, and the consolidated results of their operations and their cash flows for each of the three years in the period ended March 31, 1996, in conformity with generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
The accompanying financial statements have been prepared assuming that Alden Electronics, Inc. will continue as a going concern. As more fully described in Note 1, the Company has incurred recurring operating losses. In addition, the Company has not complied with certain covenants of loan agreements with its bank. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regards to these matters are also described in Note 1. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.
ERNST & YOUNG LLP Boston, Massachusetts June 21, 1996
Alden Electronics, Inc. and Subsidiaries
Consolidated Balance Sheets
See accompanying notes.
Alden Electronics, Inc. and Subsidiaries
Consolidated Statements of Operations and Retained Earnings
See accompanying notes.
Alden Electronics, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Alden Electronics, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (continued)
See accompanying notes.
Alden Electronics, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
March 31, 1996
1. The Company, Operations and Liquidity
The Company designs, assembles, sells and leases computer-based weather display systems, color weather radar terminals, weather satellite ground receiving systems and a variety of printers and supplies. The Company also manufactures and distributes specialized communication and safety equipment used in marine applications and operates communication networks to facilitate the delivery of meteorological and other data to its customers. The Company markets its products worldwide.
During each of the three years in the period ended March 31, 1996, the Company incurred substantial losses. On June 12, 1995, the Company obtained a commitment from its bank to forebear from collection of certain amounts due under its credit facility with the Company until June 30, 1996. This commitment was contingent upon the Company making scheduled payments of interest and principal and to continued compliance with existing covenants, as amended. The Company has informed the bank that it does not anticipate the repayment of remaining principal on June 30, 1996, but intends to reduce these balances with proceeds of an impending real estate sale and the sale of certain assets relating to its marine product lines during the first quarter of fiscal 1997 (see Note 10).
With respect to operating results, the Company continues to implement cost containment measures with the objective of maintaining revenues and reducing costs. Concurrently, the Company is reviewing strategic alternatives with respect to all of its product lines and assets. The alternatives under consideration include divestiture of some or all of its product lines and liquidation of some or all of its assets. The Company has retained Argus Management Corporation, a management consulting firm, to assist the Company in its review of strategic alternatives and general operational matters.
Alden Electronics, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
2. Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries: Alden International, Inc., Alfax Paper & Engineering Company, Inc. and Alfax Paper of United Kingdom Limited. All intercompany accounts and transactions have been eliminated upon consolidation.
Foreign Currency Translation
Balance sheet accounts of the Company's foreign subsidiary are translated into United States dollars at fiscal year-end exchange rates. Operating accounts are translated at weighted average exchange rates for each year. Net translation gains or losses are adjusted directly to a separate component of stockholders' equity.
Inventories
The Company's inventories are carried at the lower of cost (first-in, first-out method) or market.
Research and Development Costs
Costs of research and development ($574,000 in 1996; $1,026,000 in 1995; $731,000 in 1994) have been charged to expense and are included in the consolidated statements of operations and retained earnings under the caption "Cost of products sold and expenses of leasing equipment."
Property, Plant and Equipment
The Company's property, plant and equipment is stated at historical cost. Expenditures for maintenance, repairs and renewals are charged to expense; betterments are capitalized. The Company provides for depreciation based on the estimated useful lives of the assets, which range from three to 30 years. An accelerated method is used to provide for depreciation of substantially all equipment on lease; the straight-line method is used for other plant and equipment. The Company routinely removes fully depreciated assets from its books and records.
Alden Electronics, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
2. Accounting Policies (continued)
Revenues
Revenues for product sales are recognized when equipment is shipped to customers. The Company leases equipment generally for terms of one year or less; rental revenue is recognized over the lease term.
Income Taxes
The Company accounts for income taxes under the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" (Statement No. 109). Under Statement No. 109, deferred tax assets and liabilities are recorded for decreases and increases in taxes payable or refundable in future years as a result of temporary differences between the tax bases of assets or liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply in periods in which the deferred tax asset or liability is expected to be realized or settled.
Net Loss Per Share
Net loss per share has been computed on the basis of the weighted-average number of shares of Class A Common Stock outstanding, plus the effect of common stock equivalents when dilutive, added to the equivalent number of shares that would have been issued if the Class B Common Stock were converted. The number of shares used in calculating net loss per share was 2,185,385 in 1996 and 1995 and 2,177,988 in 1994.
Cash and Cash Equivalents
The Company considers all highly liquid financial instruments which have an original maturity of three months or less to be cash equivalents. The Company invests its excess cash in short-term government securities and certificates of deposit. These investments are recorded at cost, which approximates market value.
Concentration of Credit Risk
Financial instruments which potentially subject the Company to a concentration of credit risk principally consist of cash on deposit with a major bank and trade receivables.
Alden Electronics, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
2. Accounting Policies (continued)
The Company sells its products and services to Government agencies and commercial enterprises. To reduce credit risk, the Company performs ongoing credit evaluations of the financial condition of its customers. Although the Company is directly affected by the overall financial condition of weather data and marine products industries, management does not believe significant credit risk exists at March 31, 1996.
Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Impairment of Long-Lived Assets
In March 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," which establishes criteria for the recognition and measurement of impairment of loss associated with long-lived assets. Assets that are impaired are written down to their fair value based on the future cash flows expected to be generated, discounted at a market rate of interest. Effective April 1, 1995, the Company adopted this standard and recognized a loss on impairment of certain assets used in its operations by $766,886 in fiscal 1996 (see Note 3).
Stock-Based Compensation
The Company has elected to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25), in accounting for its stock-based compensation plans, rather than the alternative fair value accounting method provided for under Financial Accounting Standards Board Statement No. 123, "Accounting for Stock-Based Compensation," as this alternative requires the use of option valuation models that were not developed for use in valuing employee stock options. Since the exercise price of options granted under these plans equals the market price of the underlying stock on the date of grant, no compensation expense is required under APB 25.
Alden Electronics, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
3. Impairment of Assets, Restructuring and Related Charges
During 1996, 1995 and 1994, the Company, as disclosed in Notes 1 and 10, has discontinued certain unprofitable product lines and services and entered into agreements to sell certain assets which, combined with cost reductions initiated in late fiscal 1995, are intended to allow the Company to improve its operating results. In connection with these initiatives, in fiscal 1994, the Company charged operations $1,355,751 of which $455,751 related to the disposal of equipment and $900,000 related to write-downs of inventories related to the discontinued product lines. The disposal of the equipment has been recognized as a restructuring charge, and the inventory write-down has been charged to cost of products sold and expenses of leasing equipment.
During 1995, the Company discontinued additional unprofitable product lines, which resulted in inventory write-downs of $363,000. In addition, the Company provided $464,000 in connection with a recall of a defective product attributable to a component not manufactured by the Company. During 1996, the Company recovered $223,933 in a settlement related to the recall which was credited to costs of products sold and expenses of leasing equipment.
The Company provides weather data services to various government agencies through the use of equipment placed at various locations throughout the United States. During 1996, the Company determined that that service would not generate sufficient cash flows to support the ongoing operating costs and the value of the capitalized equipment. The Company recognized an impairment loss of $766,886 on this equipment which represents the entire carrying value of the equipment (see Note 3).
4. Financing Arrangements
During 1995, the Company entered into an agreement with its bank to provide a revolving line of credit which had a maximum availability of $1,500,000 through August 31, 1995 and a term loan in an amount of $483,354. On June 12, 1995, the Company secured a commitment letter and entered into a forebearance agreement dated June 12, 1995 in which the bank agreed to extend amounts then outstanding under the line of credit ($700,000) and to forebear from calling the term loan through June 30, 1996. These loans are secured by the assets of the Company and contain certain restrictive covenants, including that the Company generate minimum cash flows, maintain tangible net worth above specific levels and restrict the payment of dividends. As previously disclosed in Note 1, at March 31, 1996, the Company was in violation of covenants relative to minimum cash flows and tangible net worth levels. The terms of the commitment letter provide for interest on all borrowings to bear interest at the bank's base rate (8.25% at March 31, 1996) plus 2%.
Alden Electronics, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
4. Financing Arrangements (continued)
Borrowings under the term loan require that the Company continue to make monthly payments of $8,083 plus interest through June 30, 1996, at which time the remaining balance will be due. Borrowing under the forebearance agreement require that the Company repay $200,000 of the amount outstanding under the revolving line of credit by July 31, 1995, make additional repayments of $50,000 per quarter beginning October 31, 1995 and repay any remaining balance by June 30, 1996. The forebearance agreement also requires the Company's compliance with existing covenants, as amended. The weighted-average interest rate on revolving debt for the year ended March 31, 1996 was 9.96%.
During fiscal 1996 all payments required under the forebearance agreement were made on a timely basis. The Company has informed the bank that it does not anticipate the repayment of remaining principal on June 30, 1996, but intends to reduce these balances from proceeds of an impending real estate sale and the sale of certain assets relating to its marine product lines during the first quarter of fiscal 1997 (see Note 10).
Long-term debt consists of the following:
March 31 1996 1995 ----------------------------- Term loan payable to a bank in monthly principal installments of $8,083 plus interest with the remaining balance due on June 30, 1996 $330,155 $426,962
Less current portion 330,155 96,672 -----------------------------
$ 0 $330,290 ==============================
The fair value of the Company's debt obligations approximates the outstanding principal balances based on the short repayment period and variable interest rate.
5. Stockholders' Equity
The Class A and Class B Common Stocks are entitled to dividends based on a share-for-share basis. Each share of Class B Common Stock may be converted into seven shares of Class A Common Stock. Class B Common Stock has sole voting rights unless more than 5,000 shares of Class B Common Stock are converted into Class A Common Stock, at which time the holders of Class A Common Stock will have sole voting rights. At
Alden Electronics, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
5. Stockholders' Equity (continued)
March 31, 1996, 175,000 shares of Class A Common Stock were reserved for issuance in connection with the conversion rights of Class B Common Stock.
6. Stock Options
Under terms of the Incentive Stock Option Plan, options may be granted to key employees to purchase shares of Class A Common Stock at prices not less than the fair market value at date of grant. The options, subject to termination of employment, expire five years after date of grant; however, the term may be extended up to ten years at the discretion of the Stock Option Plan Committee. Options are nontransferable other than upon death.
On April 15, 1994, the Class B Common Stockholders voted to increase the maximum number of shares available to 250,000 shares. Options become exercisable at the discretion of the Stock Option Plan Committee. Stock option information is as follows:
Stock Option Stock Option Shares Price Per Share ------------------------------------
Outstanding at March 31, 1994 155,032 $3.12-$4.19 Granted 22,500 $2.00 Exercised Expired 10,000 $4.19 ------------------------------------ Outstanding at March 31, 1995 167,532 $2.00-$3.19 Granted 15,000 $2.16 Exercised - - Expired 15,000 $3.19 ------------------------------------
Outstanding at March 31, 1996 167,532 $2.00-$3.19 ====================================
Exercisable at March 31, 1996 91,749 $2.00-$3.19 ====================================
During fiscal 1996, the Company issued nonqualified stock options for 30,000 shares of the Company's common stock at an exercise price of $2.25. At March 31, 1996, 13,333 nonqualified stock option shares were exercisable.
Alden Electronics, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
7. Employee Benefit Plans
The Company has a qualified contributory Profit Sharing Retirement Plan (the Profit Sharing Plan) for all employees who have completed six months of service. Contributions to the Profit Sharing Plan are made at the discretion of the Board of Directors, provided that the total amount contributed for any plan year does not exceed the maximum amount allowable under the Internal Revenue Code. There was no employer contribution to the Profit Sharing Plan during the years ended March 31, 1996, 1995 and 1994.
On April 18, 1991, the Company entered into agreements with three executives which provide for retirement, death and severance benefits. The agreements provide for retirement benefits equal to 1 2/3 times annual salary at retirement payable over five years. Pursuant to these agreements, the Company provided $62,700 of retirement expense during 1994. The retirement, death and severance benefits were fully accrued at March 31, 1994. At March 31, 1996 and 1995, the deferred compensation liability amounted to $250,675 and $339,380, respectively, and is included in accrued expenses in the accompanying balance sheet.
8. Transactions with Affiliated Companies
The Company, in the ordinary course of business, purchases from and sells products and services to companies in which certain Company directors own an interest. Purchases of such products and services amounted to approximately $124,000 in 1996, $220,000 in 1995 and $373,000 in 1994; sales to affiliated companies were less than $10,000 in each year.
Alden Electronics, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
9. Income Taxes
Significant components of the Company's deferred tax assets and liabilities are as follows:
Alden Electronics, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
9. Income Taxes (continued)
Income tax provisions (benefit) consist of the following:
A reconciliation of income taxes computed at the statutory federal income tax rate to the income tax provision follows:
The Company recorded refundable income taxes of $79,000 in 1994 from the carryback of net operating losses. No income tax payments were made in 1996, 1995 and 1994.
The Company has federal net operating loss carryforwards of $6,796,000 to offset future taxable income. These carryforwards expire as follows: $822,000 in the year 2009, $3,306,000 in the year 2010 and $2,668,000 in the year 2011.
For financial reporting purposes, valuation allowances have been recognized to offset deferred tax assets related to net operating loss carryforwards and certain other reserves. Valuation allowances amounted to $880,000, $1,572,000 and $667,000 in 1996, 1995 and 1994, respectively.
Alden Electronics, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
10. Subsequent Events
Subsequent to March 31, 1996, the Company entered into agreements to sell a portion of its real estate holdings and equipment and inventory related to its marine product line to separate buyers. These sales of assets are not expected to result in the recognition of any significant gains or losses.
The Company also entered into termination agreements with two senior executives. Compensation and termination benefits amount to approximately $210,000 which will be recognized in fiscal 1997.
11. Major Customer and Segment Information
Sales and leases to the United States Government and its agencies accounted for approximately 42%, 30%, and 38% of the Company's revenue for 1996, 1995 and 1994, respectively. Foreign operations generated earnings before income taxes of $103,000, $44,000, and $67,000 in 1996, 1995 and 1994, respectively. In addition, the Company had export sales from the United States of $1,583,000, $2,942,000, and $2,115,000 in 1996, 1995 and 1994, respectively.
12. Quarterly Results of Operations (Unaudited)
ITEM 9.
ITEM 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
PART III
ITEM 10.
ITEM 10. Directors and Executive Officers.
(a) Identification of Directors.
Year Since Expiration Other Named Person Date of Positions Has Contin- Term of with the uously Been Name Office (1) Company Age a Director - - ---- ---------- ------- --- ----------
Elizabeth J. Alden (2) None 42 1989
William L. Alden (3)(4) None 70 1971
Arnold A. Kraft President 52 1994 & Chief Executive Officer
J. David Luening (3) None 61 1994
George P. Bauer (2) None 65 1995
(1) The Expiration Date of the term of office of each Director is the Deferred Annual Meeting of Stockholders scheduled for July 23, 1996.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
(4) William L. Alden was also a Director during the years 1952-1955.
(b) Identification of Executive Officers.
The following table sets forth certain information concerning each executive officer of the Company. The principal occupation of each executive officer, unless otherwise indicated in the table, has remained unchanged during the past five years.
Executive Other Positions Name Office Held Age with the Company ---- ----------- --- ---------------- Arnold A. Kraft (1) President & 52 Director Chief Executive Officer
Robert J. Chief Operating Wentworth (2) Officer, Treasurer 41 Clerk & Vice President of Finance and Administration
John L. Vice President of Alexanderson (3) Marketing 57 None
(1) Prior to joining the Company in January, 1994, Mr. Kraft served as the President and Chief Executive Officer of Bachman Information Systems, Inc., a software products and services company, for at least the preceding five years. Mr. Kraft intends to leave the Company by September 8, 1996, and it is expected that Mr. Wentworth will assume his duties and responsibilities at that time.
(2) Mr. Wentworth was elected Vice President of Finance and Administration in March, 1994, and Treasurer and Clerk in September, 1993. Mr. Wentworth was elected Chief Operating Officer in June, 1996. Prior to joining the Company as Senior Controller in May, 1993, Mr. Wentworth served as an Audit Executive with Ernst & Young LLP in Boston, Massachusetts, for at least the preceding five years.
(3) Mr. Alexanderson managed his own marketing firm from July, 1993 until joining the Company in May, 1994. Mr. Alexanderson also held various positions with Digital Equipment Corporation, including Vice President of Sales Training from July, 1991 to July, 1993, and Vice President of Direct Marketing for at least the preceding five years. As of July 1, 1996, Mr. Alexanderson is engaged on a part-time basis, and is expected to remain with the Company until September 1, 1996.
(c) Identification of Certain Significant Employees.
Not Applicable.
(d) Family Relationships.
William L. Alden is the uncle of Elizabeth J. Alden.
(e) Business Experience.
Unless described in (a) or (b) above, the principal occupations and employment during the past five years of each person identified in (a) and (b) above are set forth in the following paragraphs.
For at least the preceding five years, William L. Alden has been the President of a film development company, Pilgrim Productions, Ltd.
For at least the preceding five years, Elizabeth J. Alden has been the President, Treasurer and Assistant Clerk of Alden Products Co., a manufacturer of components for OEM electronic equipment and a supplier of the Company. (See Item 13).
For at least the preceding five years, J. David Luening has been a principal in the international management consulting firm, Marakon Associates, and from 1990 to 1993, Mr. Luening served as guest lecturer and advisor in the Graduate School of Business Administration of New York University and a Director of its Management Decision Laboratory.
A former executive with IBM whose positions included Group Director of Business Systems for Europe, Africa and the Middle East, George P. Bauer has managed his own investment banking firm, G.P.B. Group, Ltd. for at least the preceding five years. Mr. Bauer also consults with profit and non-profit institutions in the United States and Europe in the area of corporate and information systems planning. He is a trustee of Yale Divinity School in New Haven, Connecticut, and a Director of Pinellas Community Bank in St. Petersburg, Florida.
(f) Involvement in Certain Legal Proceedings.
None.
(g) Compliance with Section 16(a) of the Securities Exchange Act of 1934.
Section 16(a) of the Securities Exchange Act of 1934 requires officers and directors of the Company and persons who own more than ten percent of a registered class of the Company's equity securities (collectively, "Reporting Persons") to file reports of ownership and changes in ownership of the Company's Class A Common Stock with the Securities and Exchange Commission, and to furnish the Company with copies of all such reports. Based solely on its review of the copies of such reports furnished to the Company by such Reporting Persons or on the written representations of such Reporting Persons that no reports were required, the Company believes that during the fiscal year ended March 31, 1995, all of the Reporting Persons complied with their Section 16(a) filing requirements with respect to their ownership of the Company's Class A Common Stock.
ITEM 11.
ITEM 11. Executive Compensation.
(a) Summary Compensation Table.
The Summary Compensation Table sets forth individual compensation information on the Chief Executive Officer and other executive officers of the Company and its subsidiaries whose total compensation exceeded $100,000 for services rendered in all capacities during the fiscal year ended March 31, 1996.
Annual Name and Principal Compensation Options/ All Other Position Year Salary Bonus SARS (4) Compensation - - ------------------- ---- ------ ----- -------- ------------ Arnold A. Kraft (1) 1996 $180,000 1,179 (5) Chief Executive 1995 180,075 $20,000 7,241 (6) Officer 1994 31,154 110,032
John L. Alexanderson (2) 1996 $125,000 $20,000 15,000 Vice President of Marketing 1995 103,440
Robert J. Wentworth (3) 1996 $105,000 $20,000 Chief Operating Officer 1995 100,229 5,000 1994 78,489 15,000
(1) Mr. Kraft joined the Company as President and Chief Executive Officer on January 24, 1994.
(2) Mr. Alexanderson joined the Company in May, 1994, and was elected a Vice President of Marketing in July, 1995.
(3) Mr. Wentworth joined the Company as Senior Controller in May, 1993.
(4) Awards in fiscal years 1996, 1995 and 1994 represent the granting of stock options under the Company's Amended and Restated 1987 Incentive Stock Option Plan.
(5) The amount reported includes $1,179 of term life insurance premiums paid by the Company on behalf of Mr. Kraft.
(6) The amount reported includes a reimbursement of $6,062 for health insurance coverage maintained by Mr. Kraft's former employer, and $1,179 of term life insurance premiums paid by the Company on behalf of Mr. Kraft.
(b) Individual Option Grants in Last Fiscal Year.
The following table sets forth, with respect to the Executive Officers named in the Summary Compensation Table, information with respect to the aggregate number of options granted during the last fiscal year.
Percentage of Total Options Granted to Employees Options in Fiscal Exercise Expiration Granted (1) Year Price Date ------- ----------- ----- ----
John L. Alexanderson 15,000 100% $2.16 5/17/05
(1) Options for 4,200 shares of the Company's Class A Common Stock vested on May 17, 1995, and options for 300 additional shares vest on the first day of each calendar month thereafter commencing July 1, 1995.
(c) Aggregated Option Exercises and Fiscal Year End Option Values.
The following table sets forth, with respect to the Executive Officers named in the Summary Compensation Table, information with respect to the aggregate amount of options exercised during the last fiscal year, any value realized thereon, the number of unexercised options at the end of the fiscal year (exercisable and unexercisable) and the value with respect thereto.
Shares Number of Unexercised Acquired on Value Options at Fiscal Exercise Realized Year End (1) ----------- -------- --------------------- Exercisable Unexercisable ----------- ----------- Arnold A. Kraft ___ ___ 67,849 42,183
John L. Alexanderson ___ ___ 6,900 8,100
Robert J. Wentworth ___ ___ 9,200 10,800
(1) As of the fiscal year end, the exercise price of such options equalled or exceeded the market price of the underlying security.
(d) Compensation of Directors.
The Company generally compensates outside Directors, who are not employed by the Company, at $1,000 per meeting attended.
On July 25, 1995, Mr. Luening, a Director of the Company, received non-qualified stock options for 30,000 shares of the Company's Class A Common Stock at an exercise price of $2.25 per share. As of March 31, 1996, options for 13,333 shares were exercisable, and 833 1/3 shares become exercisable on the first day of each calendar month thereafter. The term of the options expires July 24, 2005.
(e) Employment Contracts, Termination of Employment and Change in Control Arrangements.
On April 18, 1991, the Company entered into Employment and Severance Benefits Agreements with Joseph H. Girouard and other former executive officers of the Company, Messrs. Lawrence A. Farrington and S. Charles Sviokla. The Agreements generally defined the compensation received by each of the individuals as well as the scope and term of employment. Provisions were made for severance benefits payable upon death, disability, retirement, involuntary termination without cause, and termination following change in control. Amounts paid in fiscal 1996 under these Agreements totalled $113,388. Mr. Farrington retired on May 21, 1993, and Messrs. Sviokla and Girouard retired on December 31, 1993.
Under their respective Agreements, Messrs. Girouard, Farrington and Sviokla are entitled to 1 2/3 times the individual's annual salary on the date of his retirement payable over five (5) years, and, during such period, health insurance
coverage and a death benefit equal to the remaining payments due the individual at the time of his death.
In January, 1994, the Company entered into an Employment Agreement with Arnold A. Kraft, providing for a minimum annual salary of $180,000, and a performance bonus beginning with the 1995 fiscal year. The Employment Agreement provides for, among other things, the grant of options to purchase 110,032 shares of the Company's Class A Common Stock pursuant to the Company's Amended and Restated 1987 Incentive Stock Option Plan, and severance payments in the event of a change in control. Upon a termination of Mr. Kraft's employment following a change in control, the Company is obligated to continue fringe benefits made available to Mr. Kraft during the term of the Employment Agreement and his annual salary for a period not to exceed three years following the date of his employment termination. Severance payments, including fringe benefits and salary for a one year period, are payable to Mr. Kraft should the Company terminate his employment without cause, or Mr. Kraft terminates his employment following the Company's breach of the Employment Agreement, a change in Mr. Kraft's title or a diminution of his duties, the failure of the Board to nominate Mr. Kraft for election to the Board of Directors, or to recommend to the stockholders his election to the Board of Directors, a change in the Company's principal place of business, or a change in control which is not approved by the Board of Directors.
On June 10, 1996, the Company elected to terminate Mr. Kraft's employment without cause by issuing a ninety day termination notice pursuant to the terms of the Employment Agreement. Mr. Kraft will be entitled to the continuation of his salary and fringe benefits for a period of one year following expiration of the interim ninety day period.
On November 15, 1995, the Company granted Robert J. Wentworth certain severance benefits, payable if the Company terminates his employment without cause. The severance benefits include the payment of base pay and certain fringe benefits for a minimum period of six months. If Mr. Wentworth remains unemployed at the end of the six month period, he will continue to receive severance benefits until the earlier of the expiration
of an additional three month period or the date Mr. Wentworth gains new employment.
The Company's severance commitment to Mr. Alexanderson is the continuation of base pay and certain fringe benefits for a minimum of three months. If Mr. Alexanderson remains unemployed at the end of the three month period, he will continue to receive severance benefits until the earlier of the expiration of an additional three month period or the date Mr. Alexanderson gains new employment. Mr. Alexanderson and the Company have agreed that Mr. Alexanderson will receive his initial three month severance over a four month period, commencing July 1, 1996, in exchange for Mr. Alexanderson working on a part-time basis until September 1, 1996.
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ITEM 12.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
(a) Security Ownership of Certain Beneficial Owners.
The following is a table showing those who own, beneficially, more than 5% of the outstanding shares of Class B Common Stock of the Company as of June 19, 1996.
Name and Amount and Percent Address of Nature of of Beneficial Owner Beneficial Ownership Class - - ----------------- -------------------- ------- Elizabeth J. Alden 7,000 Shares. (1) 28% 68 Dover Road Sole voting and Wellesley, MA 02181 investment power.
9,000 Shares. (2) 36% Shared voting and investment power.
Joan K. Alden 7,000 Shares. (1) 28% 380 Grove Street Needham, MA 02192
William L. Alden 9,000 Shares. (2) 36% 40 Washington Street Shared voting and Westboro, MA 01581 investment power.
Henry C. Horner 4,500 Shares. (3) 18% 370 Main Street Sole voting and Worcester, MA 01608 investment power.
John Sands 1,500 Shares. 6% 5 Carpenter Lane Sole voting and Marshfield, MA 02054 investment power.
Priscilla Beck 1,500 Shares. 6% 37 Oldham Road Sole voting and Pembroke, MA 02359 investment power.
Janet Samson 1,500 Shares. 6% 12715 Fredericksburg Drive Sole voting and Saratoga, CA 95070 investment power.
The Bank of Boston 9,000 Shares. (2) 36% 100 Federal Street Shared voting and Boston, MA 02210 investment power.
Frances H. Nolan 7,000 Shares. (l) 28% Miller, Wachman & Co. 40 Broad Street Boston, MA 02109
(1) Held as Trustee of the John M. Alden GST Exempt Qualified Terminable Interest Marital Deduction Trust. Elizabeth J. Alden exercises sole voting and investment control of the shares of Class B Common Stock held by the Trust. Joan K. Alden is the sole beneficiary of the Trust.
(2) Held as Trustee of the Trust under Article Fifth of the Milton Alden Trust-1960.
(3) These shares are held by Henry C. Horner as Trustee of the Judith G. Alden Irrevocable Trust-1986 of which William L. Alden, a Director of the Registrant, is the sole beneficiary.
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(b) Security Ownership of Management.
The following is a table showing the ownership as of June 19, 1996, by each Director of the Registrant and each Executive Officer identified in the Summary Compensation Table under Item 11 above and by all Directors and Executive Officers of the Registrant as a group of each class of equity securities of the Registrant:
Name of Directors, Title Executive Officers Of Amount and Nature of Percent or Identity of Group Class Beneficial Ownership of Class - - -------------------- ------ -------------------- -------- Elizabeth J. Alden Class B (i) 9,000 Shares. 36% Shared voting and investment power.
(ii) 7,000 Shares. 28% Sole voting and investment power.
Class A (i) 194,612 Shares. (4) 9% (2) Shared voting (3) and investment power.
(ii) 158,620 Shares. (1) 7% 2) Sole voting (3) and investment power.
William L. Alden (5) Class B 9,000 Shares. 36% Shared voting and investment power.
Class A 194,612 Shares. (4) 9% (2) Shared Voting (3) and investment power.
J. David Luening Class A 10,000 Shares. Sole Less than voting (3) and 1% (2) investment power.
George P. Bauer Class A 284,000 Shares 13% (2) Sole voting (3) and investment power.
All Directors & Class B (i) 9,000 Shares. 36% Officers as a Group (5) Shared voting (3) and investment power.
(ii) 7,000 Shares. 28% Sole voting (3) and investment power.
Class A (i) 452,620 Shares. (1) 21% (2) Sole voting (3) and investment power.
(ii) 195,212 Shares. 9% (2) (4) Shared voting (3) and investment power.
(1) This amount includes 49,000 shares which may be acquired upon conversion of Class B Common Stock.
(2) This percentage is based upon issued shares and assumes the conversion of all shares of Class B Common Stock (25,000 shares) into the Class A Common Stock (175,000 shares).
(3) See Note 5 to Financial Statements (Item 8 above) for an explanation of the voting rights of the holders of the Class A Common Stock and the Class B Common Stock.
(4) This amount includes 63,000 shares which may be acquired upon conversion of Class B Common Stock.
(5) Amounts shown in this table do not include 83,910 shares of Class A Common Stock and 4,500 shares of Class B Common Stock held by Henry C. Horner as Trustee of the Judith G. Alden Irrevocable Trust-1986 of which William L. Alden, a Director of the Company, is sole beneficiary.
(c) Changes in Control.
The Company's Class B Common Stock has sole voting rights unless more than 5,000 shares of the Class B Common Stock are converted into Class A Common Stock, at which time the holders of Class A Common Stock will have sole voting rights.
ITEM 13.
ITEM 13. Certain Relationships and Related Transactions.
(a) Transactions with Management and Others.
Alden Products Co. may be considered a related or affiliated company to the Registrant.
The voting common stock of Alden Products Co. is wholly owned by Elizabeth J. Alden. Alden Products Co. is a manufacturer, and a supplier to the Company, of some of the mechanical portions of recorders and of certain other component parts.
During fiscal 1996 the Company engaged in various transactions with Alden Products Co., all of which transactions have been on terms which the Company believes are no less favorable to the Company than were otherwise available on the market. Purchases from Alden Products Co. amounted to approximately $123,981 in fiscal 1996.
(b) Certain Business Relationships.
None, except as may be described in (a) above.
(c) Indebtedness of Management.
None required to be reported.
(d) Transactions with Promoters.
Not applicable.
PART IV
ITEM 14.
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) 1. Financial Statements.
The following consolidated financial statements of the Registrant are included in Item 8:
Report of Independent Auditors
Consolidated balance sheets--March 31, 1996 and March 31, 1995.
Consolidated statements of operations and retained earnings--Years ended March 31, 1996; March 31, 1995; and March 31, 1994.
Consolidated statements of cash flows--Years ended March 31, 1996; March 31, 1995; and March 31, 1994.
Notes to consolidated financial statements.
2. Financial Statement Schedules.
The following financial statement schedule of the Registrant is included in Item 14(d):
Schedule II - Valuation and Qualifying Accounts.
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 instructions or are inapplicable and, therefore, have been omitted.
3. Listing of Exhibits.
A Listing of Exhibits filed as part of this Form 10-K is included on Page 45 hereof.
(b) Reports on Form 8-K. There have been no filings on Form 8-K during the three months ended March 31, 1996. On June 26, 1996, the Company filed a Report on Form 8-K regarding the disposition of certain assets which occurred on June 11, 1996.
(c) Exhibits. The Company hereby files as part of this Form 10-K the exhibits listed in Item 14(a)3 above.
(d) Financial Statement Schedule.
See next page for financial statement schedule.
Alden Electronics, Inc. Schedule II - Valuation and Qualifying Accounts March 31, 1996
(A) This amount represents amounts charged off as uncollectible of $69,402
(B) This amount represents amounts charged off as uncollectible of $20,515
(C) This amount represents amounts charged off as uncollectible of $11,000
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.
ALDEN ELECTRONICS, INC.
/s/ Robert J. Wentworth ------------------------------ Robert J. Wentworth, Treasurer & Chief Financial Officer
Date: July 15, 1996
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/ Arnold A. Kraft President & Chief July 15, 1996 - - ------------------------ Executive Officer Arnold A. Kraft (Principal Executive Officer), Director
/s/ William L. Alden - - -------------------- Director July 11, 1996 William L. Alden
/s/ Elizabeth J. Alden Director July 12, 1996 - - ---------------------- Elizabeth J. Alden
- - -------------------- Director -------------- J. David Luening
/s/ George P. Bauer Director July 12, 1996 - - ------------------- George P. Bauer
LIST AND INDEX OF EXHIBITS
Item Incorporated By Number Description Reference To
3.1 Restated Articles Form 10-K for fiscal of Organization year ended March 27,
3.2 Amendment to Form 10-K for fiscal Articles of year ended Organization March 26, 1983 effective June 13, 1983
3.3 Amendment to Form 10-K for fiscal Articles of year ended March 28, Organization 1987 effective March 30, 1987
3.4 By-Laws, as Form 10-K for fiscal amended to date year ended March 31, 1994
4.1 Specimen Stock Form 10, Exhibit 3; Certificate, Class S-1 Registration A Common Stock Statement (No. 2-27991) Exhibit 4(A)
10.1 Amended and Restated Form 10-K for fiscal 1987 Incentive year ended March 31, 1994 Stock Option Plan
10.2 Loan Agreement Form 10-K for with Shawmut fiscal year ended Bank, N.A. dated March 31, 1995 August 5, 1994
10.3 $483,354 Secured Term Form 10-K for Note dated August 5, fiscal year ended 1994 to Shawmut March 31, 1995 Bank, N.A.
10.4 $1,500,000 Secured Form 10-K for Revolving Time Note fiscal year ended to Shawmut Bank, N.A. March 31, 1995 dated August 5, 1994
10.5 Financing Commitment Form 10-K for Letter from Shawmut fiscal year ended Bank dated June 12, March 31, 1995
10.6 Modification Agreement dated November 21, 1995 with Shawmut Bank, N.A.
10.7 Employment and Form 10-K for fiscal Severance Benefits year ended March 30, Agreement with 1991 Joseph H. Girouard, dated April 18, 1991.
10.8 Employment and Form 10-K for fiscal Severance Benefits year ended March 30, Agreement with 1991 Lawrence A. Farrington dated April 18, 1991.
10.9 Employment and Form 10-K for fiscal Severance Benefits year ended March 30, Agreement with 1991 S. Charles Sviokla dated April 18, 1991.
10.10 Employment Agreement Form 10-K for fiscal with Arnold A. Kraft year ended March 31, 1994 dated January 24, 1994
10.11 Severance Agreement with Robert J. Wentworth dated November 15, 1995
10.12 Severance Agreement with John L. Alexanderson dated May 19, 1994
11 Statement re: Note 2 to the Financial Computation of Statements in Item 8 per share earnings of this Form 10-K
21 Subsidiaries of Form 10-K for fiscal the Registrant year ended March 28, 1987
23 Consent of Independent Auditors
27 Financial Data Schedule