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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 28, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 0-23400
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DT INDUSTRIES, INC.
[Exact name of registrant as specified in its charter]
DELAWARE 44-0537828
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Corporate Centre, Suite 2-300
1949 E. Sunshine 65804
Springfield, MO (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (417) 890-0102
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each exchange
Title of each class on which registered
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None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, par value $.01 per share
Series A Preferred Stock, par value $.01 per share
Preferred Stock Purchase Rights
(Title of each class)
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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.
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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K X .
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As of September 14, 1998, the aggregate market value of the voting stock
held by non-affiliates of the registrant was $203,114,078 (based on the closing
sales price, on such date, of $20.125 per share).
As of September 14, 1998, there were 10,243,474 shares of common stock,
$0.01 par value outstanding.
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DOCUMENTS INCORPORATED BY REFERENCE
Proxy Statement Dated September 28, 1998 (portion)(Part III).
Annual Report to Shareholders for the Fiscal Year Ended June 28, 1998
(portion) (Parts I, II and IV).
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DT INDUSTRIES, INC.
INDEX TO FORM 10-K
Page
Part I
Item 1. Business................................................... 1
Item 2. Properties................................................. 11
Item 3. Legal Proceedings.......................................... 12
Item 4. Submission of Matters to a Vote of Security Holders........ 12
Information Regarding Forward Looking Statements........... 12
Part II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters........................................ 13
Item 6. Selected Financial Data.................................... 13
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................. 13
Item 7A. Quantitative and Qualitative Disclosures About
Market Risk ............................................... 13
Item 8. Financial Statements and Supplementary Data................ 13
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure................................... 13
Part III
Item 10. Directors and Executive Officers of the Registrant......... 14
Item 11. Executive Compensation..................................... 14
Item 12. Security Ownership of Certain Beneficial Owners and
Management................................................. 14
Item 13. Certain Relationships and Related Transactions............. 14
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K................................................... 15
PART I
ITEM 1. BUSINESS
GENERAL
DT Industries, Inc. (together with its subsidiaries, the "Company" or
"DTI") is an engineering-driven designer, manufacturer and integrator of
automated production equipment and systems used to manufacture, test or package
a variety of industrial and consumer products. The Company is the largest
manufacturer of integrated assembly and test systems for discrete parts, as well
as integrated tablet packaging and processing systems, in North America.
Substantial growth opportunities are believed to be provided by certain trends
among its customers, including increased emphasis on manufacturing productivity
and flexibility, concurrent engineering of products and assembly systems,
globalization of manufacturing and markets, vendor rationalization and
outsourcing. To capitalize on these trends, DTI has implemented a business
strategy to provide, develop and acquire complementary technologies and
capabilities to supply customers with integrated processing, assembly, testing
and packaging systems for their products. As part of this strategy, the Company
seeks to cross-sell the products produced by acquired companies through its
larger company-wide sales force providing for greater geographic and customer
coverage. The Company operates in two business segments: Special Machines and
Components. Through acquisitions, internal growth and product development, the
Company's Special Machines business has grown from consolidated net sales of
$28.5 million in the fiscal year ended June 30, 1993 to fiscal 1998 consolidated
net sales of $471.8 million. In addition, the Company's Components business,
which produces precision metal components for a broad range of industrial
applications, has grown from consolidated net sales of $22.1 million in fiscal
1993 to consolidated net sales of $47.5 million in fiscal 1998.
Due to the significant acquisitions in recent years by the Special Machines
segment and the sale of the Knitting Elements division in fiscal 1998, as of and
for the fiscal year ended June 28, 1998, the Components segment has become less
significant to the Company as a whole and no longer qualifies for separate
disclosure as specified by Statement of Financial Accounting Standards No. 14,
"Financial Reporting for Segments of a Business Enterprise". The Company has
included certain separate disclosures for the Components segment in the fiscal
1998 consolidated financial statements to enhance comparability with prior
periods.
SPECIAL MACHINES SEGMENT. The Special Machines segment's products are used
in the electronics, automotive, pharmaceutical, nutritional, consumer products,
tire, electrical components, appliance, plastics, medical devices, hardware,
cosmetics and many other industries. Sales of these products also produce a
stream of recurring revenues from replacement parts and service as the Company's
substantial installed base of equipment is maintained and upgraded over time.
The Special Machines segment, which accounted for approximately 91% of the
Company's consolidated fiscal 1998 net sales, consists of two groups: DT
Automation and DT Packaging. Each group offers a class of products and services
that complement one another in terms of markets, engineering requirements,
product needs and systems capabilities.
DT Automation. DT Automation designs and builds a complete line of
integrated automated assembly and testing systems. Integrated systems combine a
variety of manufacturing technologies into a complete automated manufacturing
system. Core capabilities of DT Automation include systems integration,
medium/high speed indexing, synchronous/non-synchronous assembly,
flexible/reconfigurable assembly, high speed precision assembly, build-to-print,
material handling, cell control/data collection, lean manufacturing, precision
tools and dies, micron assembly, automated welding systems and large
thermoforming systems. The Company is the largest manufacturer of integrated
assembly and test systems for discrete parts in North America.
DT Packaging. DT Packaging designs and builds proprietary machines and
integrated systems used to perform processing and packaging tasks. Core
capabilities of DT Packaging include the design and manufacture of
thermoforming, blister packaging and foam extrusion systems, liquid filling
systems and a complete line of tablet processing and packaging systems. The
Company is the largest manufacturer of integrated tablet processing and
packaging systems in North America.
COMPONENTS SEGMENT. The Components segment, which accounted for
approximately 9% of consolidated fiscal 1998 net sales, stamps and fabricates a
range of standard and custom metal components for the broad range of industries
including heavy trucking, agricultural equipment, appliance, recreational
products, and other consumer products.
The following table summarizes the acquisitions made by the Company,
segregated by business segment and core business group:
ACQUISITION DATE BUSINESS
- ----------- ---- --------
Special Machines Segment
DT Automation:
Peer Division of Teledyne, July 1992 Designer and manufacturer of resistance and arc
Inc. ("Peer") welding systems and related parts
Detroit Tool and Engineering August 1992 Designer and manufacturer of integrated
Company ("DTE") manufacturing systems and custom equipment,
including tools and dies
Advanced Assembly August 1994 Designer, manufacturer and integrator of
Automation, Inc. ("AAA") automated production and testing systems
Assembly Machines, Inc. January 1996 Manufacturer of high-speed assembly systems
("AMI")
Mid-West Automation Enterprises, July 1996 Designer and manufacturer of integrated precision
Inc. ("Mid-West") assembly systems
Hansford Manufacturing September 1996 Designer and manufacturer of integrated precision
Corporation ("Hansford") assembly systems
Assembly Technology & Test, Inc. July 1997 Designer, manufacturer and integrator of
("ATT"), previously Lucas automated production and testing systems
Assembly & Test Systems
DT Packaging:
Sencorp Systems, Inc. ("Sencorp") August 1993 Designer and manufacturer of plastics processing
and packaging equipment, systems and related parts
Stokes-Merrill, Inc. December 1993 Designer and manufacturer of rotary presses,
("Stokes-Merrill") tablet counting equipment and related parts
Lakso Division of Package February 1995 Designer and manufacturer of automated packaging
Machinery Company ("Lakso") machinery, systems and related parts
Armac Industries, Co. ("Armac") February 1995 Designer and manufacturer of plastics processing
and packaging equipment
H.G. Kalish Inc. ("Kalish") August 1995 Designer, manufacturer and integrator of liquid
filling and tablet packaging systems
Swiftpack Automation Limited November 1995 Designer and manufacturer of packaging equipment,
("Swiftpack") primarily electronic counters
Scheu & Kniss, Inc. ("S&K") August 1998 Manufacturer of tablet press replacement parts
and rebuild services
Components Segment
Detroit Tool Metal Products Co. August 1992 Manufacturer of custom stamped metal components
("DTMP")
2
On May 1, 1998, the Company completed the sale of substantially all of the
assets of its non-core Knitting Elements division for $9.4 million. The division
was comprised of assets acquired from F. J. Potter Co., Inc. in August 1992, and
from Arrow Precision Elements, Inc. in September 1995.
In August 1998, the Company completed the acquisition of certain of the net
assets of Scheu & Kniss, Inc., a Louisville, Kentucky based manufacturer of
tablet press replacement parts and rebuild services serving primarily the
pharmaceutical, nutritional, battery and confectionery industries. The purchase
price of approximately $10.2 million was primarily financed by borrowings under
the Company's revolving credit facility. Annualized sales of Scheu & Kniss
approximate $7.5 million.
The Company is a Delaware corporation organized in January 1993 and the
successor to Peer Corporation, Detroit Tool Group, Inc. ("DTG") and Detroit Tool
and Engineering Company. Peer Corporation was organized in June 1992 to acquire
the Peer Division of Teledyne, Inc. and the stock of DTG, the sole stockholder
of DTE and DTMP. Through the acquisitions described above, internal growth and
product development, the Company has grown from consolidated net sales of $50.6
million in fiscal 1993 to $519.3 million in fiscal 1998.
The Company's principal executive offices are located at 1949 E. Sunshine,
Suite 2-300, Springfield, Missouri 65804 and its telephone number is
(417) 890-0102.
BUSINESS STRATEGY
The business strategy of DTI is to provide, develop and acquire
complementary technologies and capabilities to supply customers with integrated
assembly, testing and packaging systems for their products. DTI's goal is to
become the premier provider of engineered solutions. The Company expects to
achieve this goal by designing and delivering on-time, innovative solutions
which meet or exceed our customers' expectations while continuously improving
quality, service and cost. Key elements of the Company's strategy include the
following:
Acquisitions. The assembly, testing and packaging equipment markets are
highly fragmented. Special machines, for example, are characterized by a number
of industry niches in which few manufacturers compete. The Special Machines
segment has established its presence in particular niches through acquisitions,
and the Company intends to pursue additional acquisitions, or strategic
alliances, with companies which are established technical and market leaders.
The Company can provide its customers more complete integrated automation
systems by continuing to expand the breadth of its products and engineering
expertise, a capability the Company believes will enable it to benefit from its
customers' increasing demand for complete systems. Additionally, the Company
will continue to pursue acquisitions, or strategic alliances, with companies
which provide significant potential for cross-selling among the various product
lines and cost savings through more efficient utilization of manufacturing and
engineering capacity.
Product Line Expansion. Through acquisitions, product license arrangements
and strategic alliances, the Company has increased, and plans to continue to
increase, its engineering capabilities and product offerings. DT Packaging has
the capability to provide customers with fully integrated tablet processing and
packaging systems. DT Automation has increased its assembly systems capabilities
as more fully described in "Markets and Products" below. The Company's objective
is to provide customers with integrated automation solutions and systems
integration expertise, rather than single use equipment. The Company also uses
its engineering expertise and manufacturing capability to develop new products
and technology for markets the Company currently serves and to provide entree
into new markets.
Cross-Selling. Substantial cross-selling opportunities exist across the
product lines of the Special Machines segment. As the Company implements its
acquisition strategy and integrates acquired operations, it is able to expand
its product offerings and customer base. Since the inception of the Company's
cross-selling program four years ago, over $110 million in projects have been
developed through cross-selling. The Company expects this growth to continue as
a result of new opportunities created through the awareness and expansion of its
customer base.
3
Leverage Engineering and Manufacturing Capabilities. The Company's
engineering strategy is to satisfy the growing demand for small, medium and
large complex, integrated automation solutions by utilizing the versatile
engineering expertise of its Special Machines businesses. The Company expects to
continue to acquire engineering and design expertise through acquisitions and
licensing arrangements. The Company intends to utilize its manufacturing
capacity and engineering capabilities fully by directing work to facilities with
specific capabilities and manufacturing strengths to best meet the customer's
needs.
International Expansion. The Company seeks to increase its international
sales through strategic alliances, international agents, foreign offices and
acquisitions. The Company acquired Canada-based Kalish, and the United
Kingdom-based Swiftpack during fiscal 1996, significantly enhancing its
international packaging presence. Also, continued international sales growth by
DT Packaging has resulted from the strategic alliance with Davis Standard
Corporation for the sales of foam extrusion systems. In fiscal 1997, DT
Automation continued to expand its international presence by forming an alliance
with a subsidiary of Claas KGaA opening a sales and service office in Beelen,
Germany. This alliance also allows the Company to market Claas KGaA's highly
regarded automation systems to the Company's existing customer base. The July
1997 acquisition of ATT provided DT Automation a stronger international presence
with manufacturing facilities in the United Kingdom and Germany, as well as the
United States. International sales accounted for approximately 35% of
consolidated net sales in fiscal 1998.
Continuous Improvement. In 1998 the Company launched a comprehensive
Continuous Improvement program based upon organizational values, core
competencies, vision, mission, and key performance indicators throughout the
organization. At the center of this continuous improvement program are key DTI
values of customer satisfaction, employee growth and respect, individual and
corporate integrity, innovative technology, global teamwork, environmental and
community responsibility and growth of shareholder value. The Company has
identified key performance indicators at all of its operating units which
directly relate to these values. The Company will measure the success of the
Continuous Improvement Program by monitoring these indicators. These performance
indicators include: improved quality, shorter lead times, improved on-time
delivery, continuous cost reduction and better communications.
MARKETS AND PRODUCTS
SPECIAL MACHINES. The Special Machines segment designs and builds a
complete line of automated production systems used to manufacture, test or
package products for a range of industries, including electronics, automotive,
pharmaceutical, nutritional, consumer products, tire, electrical components,
appliance, plastics, medical devices, hardware, cosmetics and many others. The
Company also manufactures custom production equipment for specific customer
applications, proprietary machines for specific industrial applications and
integrated systems which may combine features of custom and proprietary
equipment. The Special Machines segment consists of two core business groups: DT
Automation and DT Packaging.
DT AUTOMATION. DT Automation designs and builds a complete line of
automated assembly and test systems, special machines and large complex dies.
Sales from DT Automation accounted for approximately 68%, 63% and 45% of
consolidated net sales for fiscal 1998, 1997, and 1996, respectively.
Integrated Systems. Integrated systems combine a wide variety of
manufacturing technologies into a complete automated manufacturing system.
Utilizing advanced computers, robotics, vision systems and other technologies,
the Company provides a variety of capabilities including systems integration,
medium/high speed indexing, synchronous/non-synchronous assembly,
flexible/reconfigurable assembly, high speed precision assembly, build-to-print,
material handling, cell control/data collection, lean manufacturing, precision
tools and dies, micron assembly, automated welding systems and large
thermoforming systems for the electronics, automotive, appliance, electrical
components, and hardware industries. The Company offers this variety of
integrated systems for small or large, custom or standard automation
applications. The standardized automation applications utilize various machine
platforms and proprietary modular building blocks in carousel, in-line and
rotary assembly systems, all of which facilitate time-sensitive, concurrent
engineering projects where changes in tooling and processes can occur in an
advanced stage of system design.
4
Custom Machines. The Company's custom machine building capabilities
include: engineering, project management, machining and fabrication of
components, installation of electrical controls, final assembly and testing. A
customer will usually approach the Company with a manufacturing objective, and
DTI will work with the customer to design, engineer, assemble, test and install
a machine to meet the objective. The customer often retains rights to the design
after delivery of the machine since the purchase contract typically includes the
design of the machine; however, the engineering and manufacturing expertise
gained in designing and building the machine is often reapplied by the Company
in projects for other customers.
Material Handling. The Company builds an automated electrified monorail
product offered in various capacity ranges from light weight systems to systems
transporting products weighing up to 8,800 pounds. This product can be applied
to a variety of material handling applications ranging from delivery systems for
the food industry to manufacturing processes involving manual and automation
interfaces for engine assembly and testing. The benefits of this product include
providing a clean, quiet, controlled transport with the flexibility to operate
in a variety of processes and production rates.
Automated Resistance and Arc Welding Systems. The Company manufactures and
sells a line of standard resistance welding equipment as well as special
automated welding systems designed and built for specific applications. Marketed
under the brand name Peer(TM), the Company's products are used in the
automotive, appliance and electrical industries to fabricate and assemble
components and subassemblies. The Company's resistance welding equipment is also
used in the manufacture of file cabinets, school and athletic lockers, store
display shelves, metal furniture and material storage products.
Tooling and Dies. The Company possesses considerable expertise in the
design, engineering and production of precision tools and dies. In addition,
personnel trained as tool and die makers often apply their skills to the
manufacture of the Company's special machines.
DT PACKAGING. The DT Packaging group designs and builds proprietary
machines and integrated systems which are marketed under individual brand names
and manufactured for specific industrial applications using designs owned or
licensed by the Company. Although these machines are generally cataloged as
specific models, they are usually modified for specific customer requirements
and often combined with other machines into integrated systems. Many customers
also request additional accessories and features which typically generate higher
revenues and enhanced profit opportunities. DT Packaging products include
thermoformers, blister packaging systems, extrusion systems, rotary presses and
complete integrated packaging systems. Packaging systems include: bottle
unscrambling, electronic and slat tablet counting/filling, cottoning, sealing
and capping, labeling, collating, cartoning, and liquid and tube filling. The
Company believes this equipment maintains a strong reputation among its
customers for quality, reliability and ease of operation and maintenance. The
Company also sells replacement parts and accessories for its substantial
installed base of machines. Sales from DT Packaging accounted for approximately
23%, 25% and 37% of consolidated net sales for fiscal 1998, 1997 and 1996,
respectively.
Thermoformers. A thermoformer heats plastic material and uses pressure
and/or a vacuum to mold it into a product. Marketed under the brand names
Sencorp(R) and Armac(TM), the Company's thermoformers are used by customers in
North America, Europe and Asia to form a variety of products including:
specialized cups, plates and food containers, trays for food and medical
products and other plastics applications.
The Company's thermoformers are sold primarily to custom formers who use
the machines to create thermoformed items which are sold to a variety of end
users. The Company also sells thermoformers directly to end users, including
large producers of electrical and healthcare products, cosmetics, hardware, and
other consumer products.
The Company produces a line of thermoformers of different sizes, heating
ovens, maximum draw depths and press capacities. Certain thermoformers produced
by the Company feature a fully integrated process control system to regulate the
thermoformer's functions. Depending upon the customer's requirements, the
control system is capable of networking with, or downloading to, the customer's
computers or other equipment and the Company's service center. This on-line
diagnostic capability allows the Company to provide real-time service and
support to its customers.
5
Blister Packaging Systems. Blister packaging is a common method of
displaying consumer products for sale in hardware stores, convenience stores,
warehouse stores, drug stores and similar retail outlets. Batteries, cosmetics,
hardware items, electrical components, razor blades and toys are among the large
variety of products sold in a clear plastic blister or two-sided package. The
Company designs and manufactures machinery marketed under the brand names
Sencorp(R) and Armac(TM), which performs blister packaging by heat-sealing a
clear plastic bubble, or blister, onto coated paperboard, or by sealing
two-sided packages using heat or microwave technology.
The Company's blister packaging systems are primarily sold to manufacturers
of the end products. These customers, with higher volume production
requirements, may use a thermoformer in-line with a blister sealer to form
blisters, insert their product and seal the package in one continuous process,
referred to as a form/fill/seal configuration. Customers having relatively low
volume production often use a stand-alone blister sealing machine to seal
products in a package using blisters purchased from a custom former.
Extruders. An extrusion process is used to convert plastic resin and
additives into a continuous melt and to force such melt through a die to produce
a desired shape that is then cooled. Marketed under the brand name Sencorp(R),
the Company's foam extruders are used to produce products such as building
insulation, display board, meat trays, bottle wrap protection labels and egg
cartons. The Company's foam extruders are primarily sold to large plastics
companies that use the machines to create end products and sheet products. The
Company also manufactures reclaim extruders which process a variety of plastic
materials from ground form to finished pellet form.
Rotary Presses. The Company is the largest U.S. designer and manufacturer
of rotary tablet presses. The Company designs and manufactures rotary presses
used by customers in the airbag, candy, food supplement, ceramic, ordnance,
specialty chemical, and pharmaceutical industries to produce tablets. Marketed
under the brand name Stokes(TM), the Company's line of rotary presses includes
machines capable of producing 17,000 tablets per minute and other machines
capable of applying up to 40 tons of pressure. Products produced on the
Company's rotary presses include Lifesavers(R), and Breathsavers(R) brand mints,
Centrum(R) brand vitamins and inflation pellets for automotive airbags.
The Company has an agreement with Horn & Noack Pharmatechnick GmbH, for the
purpose of licensing German rotary press technology designed primarily for the
pharmaceutical and nutritional markets. The agreement gives the Company the
exclusive right to manufacture and market this press technology under the
Stokes(TM) brand name in North and Central America and non-exclusively in the
rest of the world, excluding Europe. The Company is marketing the pharmaceutical
press through DT Packaging, a leader in pharmaceutical filling and packaging
systems.
Packaging Systems. The Company designs, manufactures and distributes a
complete line of products utilized for packaging, liquid filling or tube filling
applications. The equipment manufactured by the Company, which includes bottle
unscramblers, slat counters, electronic counters, liquid fillers, cottoners,
cappers and labelers, collators and cartoners, can be sold as an integrated
system or individual units. These machines are marketed under the brand names of
Kalish(TM), Lakso(R), Merrill(R) and Swiftpack(TM) and are primarily delivered
to customers in the pharmaceutical, nutritional, food, cosmetic, toy and
chemical industries.
The Company benefits from a substantial installed base of Lakso(R) and
Merrill(R) slat counters in the aftermarket sale of slats. Slat counting
machines use a set of slats to meter the number of tablets or capsules to be
inserted into bottles. Each size or shape of tablet or capsule requires a
different set of slats. In addition, the practice in the pharmaceutical industry
is to use a different set of slats for each product, even if the tablets are the
same size.
Laboratory Machines, Tooling, Parts and Accessories. The Company produces a
line of small scale blister sealers and a line of tablet pressing equipment used
to test new materials and techniques, for quality control, laboratory or other
small run uses. The Company also sells parts and accessories for its proprietary
machines. In addition, the Company designs and builds special tools and dies
used in custom applications of its thermoforming systems, rotary presses and
slat counters.
6
COMPONENTS. The Company's Components segment produces custom and precision
components for the heavy trucking, agricultural equipment, appliance, and
electrical industries. Sales from Components accounted for approximately 9%, 12%
and 18% of consolidated net sales for fiscal 1998, 1997 and 1996, respectively.
The Company completed the sale of substantially all of the assets of its
Knitting Elements division in May 1998 for $9.4 million.
Custom Stamping and Fabrication. The Company produces precision-stamped
steel and aluminum components through its stamping and fabrication operations.
The Company's stamping presses range in size from 32 tons to 1,500 tons, giving
the Company the flexibility to stamp flat rolled metal ranging in thickness from
.015 inches to .750 inches. Certain of the Company's presses can accommodate
dies up to 190 inches in length to perform several stamping functions in a
single press.
Through its Special Machines segment, the Company possesses considerable
expertise in the design, engineering and production of precision tools and dies.
The Company produces tools and dies for use in its own blanking and stamping
operations as well as for sale to other industrial customers. The Company
believes its tool and die design and engineering capabilities give it an
important competitive advantage in its Components segment.
MARKETING AND DISTRIBUTION
SPECIAL MACHINES. The Company's special machines and systems are sold
primarily through the Company's approximately 75 person direct sales force and
to a lesser extent through manufacturers' representatives and agents. Sales of
special machines and integrated systems require the Company's sales personnel to
have a high degree of technical expertise and extensive knowledge of the
industry served. The Company's sales force consists of specialists in each
primary market in which the Company's special machines are sold. Each operating
unit has a sales force experienced in the marketing of the equipment
historically produced by each respective business. The Company believes that
cross-selling among the members of the Special Machines segment and integration
of proprietary technology and custom equipment into total production automation
systems for selected industries provide the Company with expanded sales
opportunities.
The Company's special machines are sold throughout the world by more than
80 manufacturers' representatives and sales agents in nearly 50 countries. The
Company has sales and service offices in China, Canada, England and Germany.
International sales continue to grow as the business grows and more resources
are focused in the international arena. International sales were approximately
35% of consolidated net sales for fiscal 1998 compared to 30% and 22% of
consolidated net sales in fiscal 1997 and fiscal 1996, respectively.
COMPONENTS. The Company's custom stamping products are sold by the
Company's direct sales force.
MANUFACTURING AND RAW MATERIALS
SPECIAL MACHINES SEGMENT. The principal raw materials and components used
in the manufacturing of the Company's special machines include carbon steel,
stainless steel, aluminum, electronic components, pumps and compressors,
programmable logic controls, hydraulic components, conveyor systems, visual and
mechanical sensors, precision bearings and lasers. The Company is not dependent
upon any one supplier for raw materials or components used in the manufacture of
special machines. Certain customers specify sole source suppliers for components
of custom machines or systems. The Company believes there are adequate
alternative sources of raw materials and components of sufficient quantity and
quality.
DT AUTOMATION. Integrated systems to assemble and test various products are
designed and manufactured at the Company's facilities in Illinois, Michigan, New
York, Ohio, Pennsylvania, the United Kingdom and Germany where manufacturing
activity primarily consists of fabrication and assembly and, to a lesser extent,
machining. The facilities in Missouri house the machining, assembly and test
operations primarily used in the manufacture of tools and dies, custom special
machines, thermoforming and certain other integrated systems. Facilities in
Michigan and the United Kingdom manufacture the material handling
7
systems. Another facility in Michigan houses the machining, assembly and test
operations used in the manufacture of resistance welding equipment and systems.
A number of manufacturing technologies are employed at these facilities
including: fabrication of stainless steel, direct numerically controlled
machinery, computer generated surface modeling of contoured components and fully
networked CAD/CAM capabilities.
DT PACKAGING. Special machines, integrated systems and related parts for
the Company's tablet packaging and liquid-filling equipment are designed and
assembled at the Company's facilities in Massachusetts, Illinois, Canada and the
United Kingdom from components made to the Company's specifications by
unaffiliated vendors. Rotary presses and related replacement parts are
manufactured and are assembled at the Company's facilities in Pennsylvania and
Kentucky. Special machines and integrated systems for the plastics packaging
industry are primarily manufactured at the two Company manufacturing facilities
in Massachusetts which include machining, fabrication and assembly.
COMPONENTS SEGMENT. The principal raw materials used in the Company's
components manufacturing processes include carbon steel, aluminum, stainless
steel, copper and other metals in coil or sheet form. The Company is not
dependent upon any one supplier for raw materials used in the manufacture of its
metal products. The Company believes there are adequate alternative sources of
raw materials of sufficient quantity and quality.
The Company's components manufacturing operations are primarily located at
the Company's facilities in Missouri. Operations conducted at that facility
include blanking, heavy and precision stamping using precision single stage,
progressive and transfer dies, cutting, punching, forming, welding, cleaning,
bonderizing and painting. The Company utilizes a Metalsoft(R) FabriVision
optical scanning system for prototyping and quality control.
FINANCIAL INFORMATOIN RELATING TO BUSINESS SEGMENTS, FOREIGN AND DOMESTIC
OPERATIONS AND EXPORT SALES
The Company operates predominantly in the business segments classified as
Special Machines and Components. During fiscal 1998, the Components segment
became less significant to the Company as a whole. The Company's principal
foreign operations consist of manufacturing, sales and service operations in
Canada, the United Kingdom and Germany. For certain financial information
concerning the Company's business segments, foreign and domestic operations and
export sales, see Note 15 of the Notes to Consolidated Financial Statements in
the Company's Annual Report to Shareholders, which is incorporated herein by
reference.
CUSTOMERS
The majority of the Company's sales is attributable to repeat customers,
some of which have been customers of the Company or its acquired businesses for
over twenty years. The Company believes such repeat business is indicative of
the Company's engineering capabilities, the quality of its products and overall
customer satisfaction.
Hewlett-Packard Company, a customer of the Company's Special Machines
segment, accounted for over 10% of the Company's consolidated net sales in
fiscal 1998. Hewlett-Packard Company and Ford Motor Company, customers of the
Company's Special Machines segment, each accounted for over 10% of the Company's
consolidated net sales in fiscal 1997. The Goodyear Tire & Rubber Company, a
customer of the Company's Special Machines segment, accounted for over 10% of
the Company's consolidated net sales in fiscal 1996. The Company's five largest
customers during fiscal 1998 accounted for approximately 35% of the Company's
consolidated net sales.
Certain purchasers of the Company's special machines make advance and
progress payments to the Company in connection with the manufacture of machinery
and systems. Sales of the Company's components are typically made without
advance or progress payments.
8
BACKLOG
The Company's backlog is based upon customer purchase orders the Company
believes are firm. As of June 28, 1998, the Company had $224.8 million of orders
in backlog, which compares to a backlog of approximately $175.5 million as of
June 29, 1997. The acquisition of ATT increased the backlog $69.3 million at
June 28, 1998 in comparison to June 29, 1997. Excluding the effect of these
acquisitions, backlog would have been $155.5 million at June 28, 1998, a
decrease of $20.0 million, or 11.4%, from a year ago.
The backlog for the Special Machines segment at June 28, 1998 was $219.2
million, an increase of $51.2 million from a year ago. Excluding the effect of
acquisitions, the Special Machines backlog decreased $18.7 million. The Special
Machines backlog reflects the drop in orders with certain electronics customers.
Backlog for the Components segment was $5.6 million at June 28, 1998, a decrease
of $1.9 million, or 25.3%, from the $7.5 million backlog a year ago. The lower
Components segment backlog is a result of the Company's efforts to discontinue
production of various low margin parts coupled with the sale of the Knitting
Elements Division.
The level of backlog at any particular time is not necessarily indicative
of the future operating performance of the Company. Additionally, certain
purchase orders are subject to cancellation by the customer upon notification.
Certain orders are also subject to delays in completion and shipment at the
request of the customer. The Company believes most of the orders in the backlog
will be recognized as sales during fiscal 1999.
COMPETITION
The market for the Company's special machines is highly competitive, with a
large number of companies advertising the sale of production machines. However,
the market for special machines is fragmented and characterized by a number of
industry niches in which few manufacturers compete. The market for products by
the Components segment is also highly regionally competitive and fragmented. The
Company's competitors vary in size and resources; most are smaller privately
held companies or subsidiaries of larger companies, some of which are larger
than the Company; and none competes with the Company in all product lines. In
addition, the Company may encounter competition from new market entrants. The
Company believes that the principal competitive factors in the sale of the
Company's special machines are quality, technology, on-time delivery, price and
service. The Company believes that the principal competitive factors in the sale
of the Company's components are price, technical capability, quality and on-time
delivery. The Company believes that it competes favorably with respect to each
of these factors.
ENGINEERING; RESEARCH AND DEVELOPMENT
The Company maintains engineering departments at all of its manufacturing
locations. The Company employs more than 550 people with experience in the
design of production equipment. In addition to design work relating to specific
customer projects, the Company's engineers develop new products and product
improvements designed to address the needs of the Company's target market niches
and to enhance the reliability, efficiency, ease of operation and safety of its
proprietary machines.
TRADEMARKS AND PATENTS
The Company owns and maintains the registered U.S. trademarks
AssemblyFlex(R), Lakso(R), Merrill(R), Mid-West(R) and Sencorp(R). Registrations
for Company trademarks are also owned and maintained in countries where such
products are sold and such registrations are considered necessary to preserve
the Company's proprietary rights therein.
The Company also has the rights to use the unregistered trademarks
Armac(TM), F.A.S.T.(TM), Hartridge(TM), Kalish(TM), Peer(TM), Stokes(TM) and
Swiftpack(TM). All of the trademarks listed above are used in connection with
the machines and systems marketed by the Special Machines Segment.
9
The Company applies for and maintains patents where the Company believes
such patents are necessary to maintain the Company's interest in its inventions.
The Company does not believe that any single patent or group of patents is
material to either its Special Machines business or its Components business, nor
does it believe that the expiration of any one or a group of its patents would
have a material adverse effect upon its business or ability to compete in either
line of business. The Company believes that its existing patent and trademark
protection, however, provides it with a modest competitive advantage in the
marketing and sale of its proprietary products.
ENVIRONMENTAL AND SAFETY REGULATION
The Company is subject to environmental laws and regulations that impose
limitations on the discharge of pollutants into the environment and establish
standards for the treatment, storage and disposal of toxic and hazardous wastes.
The Company is also subject to the federal Occupational Safety and Health Act
and other state statutes. Except for costs incurred in connection with the
environmental cleanup of its property in Lebanon, Missouri, which was completed
in October 1995, costs of compliance with environmental, health and safety
requirements have not been material to the Company.
The Company believes it is in material compliance with all applicable
environmental and safety laws and regulations.
EMPLOYEES
At the end of August 1998, the Company had approximately 3,100 employees,
including those employed by Scheu & Kniss. None of the Company's employees are
covered under collective bargaining agreements. The Company has not experienced
any work stoppages in the last five years and considers its relations with
employees to be good.
10
ITEM 2. PROPERTIES
The Company's administrative headquarters are located in Springfield,
Missouri. Set forth below is certain information with respect to the Company's
manufacturing facilities.
Square
Footage Owned/
Location (approximate) Leased Lease Expiration Products
-------- ------------- ------ ---------------- --------
Special Machines Segment
DT Automation:
Lebanon, Missouri 300,000 Owned Special machines, integrated
systems, tools and dies
Buffalo Grove, Illinois 205,000 Leased July 31, 2003(1) Integrated precision assembly
63,000 Leased July 31, 2003(1) systems
20,000 Leased February 28, 2000(2)
Buckingham, England and 150,000 Owned Integrated assembly and testing
Gawcott, England 40,000 Owned systems
Dayton, Ohio 160,000 Leased July 1, 2016(3) Integrated assembly and testing
systems
Rochester, New York 87,000 Leased Sept. 30, 2006(3) Integrated precision assembly
26,000 Leased July 31, 2002(3) systems
Livonia, Michigan 86,000 Leased July 1, 2000(4) Integrated assembly and testing
20,000 Leased June 30, 2000(4) systems
Saginaw, Michigan 83,000 Owned Integrated assembly and testing
systems
Benton Harbor, Michigan 70,500 Owned Resistance and arc welding
equipment and systems
Erie, Pennsylvania 56,000 Owned High-speed assembly systems
Koblenz, Germany 9,000 Leased Dec. 31, 1998(5) Integrated assembly and testing
systems
DT Packaging:
Hyannis, Massachusetts & 98,000 Owned(6) Plastics processing and packaging
Fall River, Massachusetts 37,000 Leased Jan. 31, 2000(1) equipment
Montreal, Quebec 81,000 Leased Aug. 14, 2017 Tablet packaging, liquid filling
and tube filling equipment and
systems
Leominster, Massachusetts 60,000 Owned Tablet packaging equipment and
systems
Louisville, Kentucky 55,000 Owned(7) Tablet press parts and rebuild
services
Bristol, Pennsylvania 43,000 Leased May 31, 2000(1) Rotary presses
Niles, Illinois 30,000 Leased July 16, 2000(9) Tablet counters
Alcester, England 22,000 Owned Electronic counters
Components Segment
Lebanon, Missouri 200,000(8) Owned Metal products
(1) The Company has an option to renew such lease for one additional five-year
term.
(2) The Company has an option to renew such lease for one additional term of
three years.
(3) The Company has an option to renew such lease for two additional terms of
five years.
(4) The Company has an option to renew such lease for one additional two-year
term.
(5) The Company has negotiated a new lease for a 33,000 square foot facility
currently under construction scheduled to be complete in October of 1998.
(6) This facility was purchased in July 1998.
(7) This facility was acquired in August 1998 through the acquisition of Scheu
& Kniss.
(8) Facility consists of two adjacent buildings of approximately 171,000 square
feet and 29,000 square feet, respectively. (9) The Company has an option to
renew such lease for an additional two-year term and a second additional
five-year term.
11
The Company also leases other office, warehouse and service facilities in
Missouri, New Jersey, Canada, the United Kingdom, Germany and China. The Company
anticipates no significant difficulty in leasing alternate space at reasonable
rates in the event of the expiration, cancellation or termination of a lease
relating to any of the Company's leased properties.
To accommodate growth occurring at two of the Special Machines facilities,
the Company is in the process of expanding its plastics processing and packaging
systems facility in Hyannis, Massachusetts and its assembly and testing systems
facilities in Dayton, Ohio and Germany. Upon adding additional capacity at these
facilities, the Company believes that its principal owned and leased
manufacturing facilities will have sufficient capacity to accommodate future
internal growth without major additional capital improvements.
ITEM 3. LEGAL PROCEEDINGS
Product liability claims are asserted against the Company from time to time
for various injuries alleged to have resulted from defects in the manufacture
and/or design of the Company's products. At June 28, 1998, there were 21 such
claims pending. The Company does not believe that the resolution of such suits,
either individually or in the aggregate, will have a material adverse effect on
the Company's results of operations or financial condition. Product liability
claims are covered by the Company's comprehensive general liability insurance
policies, subject to certain deductible amounts. The Company has established
reserves for such deductible amounts, which it believes to be adequate based on
its previous claims experience. However, there can be no assurance that
resolution of product liability claims in the future will not have a material
adverse effect on the Company.
In addition to product liability claims, from time to time, the Company is
the subject of legal proceedings, including claims involving employee matters,
commercial matters and similar claims. There are no material claims currently
pending. The Company maintains comprehensive general liability insurance which
it believes to be adequate for the continued operation of its business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None
---------------------------
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
Certain information contained in this report, particularly the information
appearing in Items 1, 3 and 7, includes forward-looking statements. These
statements comprising all statements herein which are not historical are based
upon the Company's interpretation of what it believes are significant factors
affecting its businesses, including many assumptions regarding future events,
and are made pursuant to the safe harbor provisions of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. References to "opportunities", "growth potential",
"objectives" and "goals", the words "anticipate", "believe", "estimate",
"expect", and similar expressions used herein indicate such forward-looking
statements. Actual results could differ materially from those anticipated in any
forward-looking statements as a result of various factors, including economic
downturns in industries or markets served, delays or cancellations of customer
orders, delays in shipping dates of products, significant cost overruns on
certain projects, foreign currency exchange rate fluctuations, delays in
achieving anticipated cost savings or in fully implementing project management
systems and possible future acquisitions that may not be complementary or
additive. Additional information regarding certain important factors that could
cause actual results of operations or outcomes of other events to differ
materially from any such forward-looking statement appears elsewhere herein,
including in the text of Items 1, 3 and 7, and in particular under the headings
"Market Risk," "Seasonality and Fluctuations in Quarterly Results," Year 2000
Compliance" and "Cautionary Statements Regarding Forward-Looking Statements"
under Item 7.
12
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information required by this item is set forth under the caption
"Common Stock Information" appearing on page 40 of the Company's Annual Report
to Shareholders for the year ended June 28, 1998 ("the Annual Report"), which
information is incorporated herein by reference thereto.
The Company's Common Stock is quoted on the Nasdaq National Market under
the symbol "DTII". As of September 14, 1998, the number of record holders of
common stock was 66. Such record holders include several holders who are
nominees for an undetermined number of beneficial owners. The Company believes
that the number of beneficial owners of the shares of common stock issued and
outstanding at such date was approximately 2,700.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is set forth under the captions
"Statement of Operations Data" and "Balance Sheet Data" on page 8 of the
Company's Annual Report, which information is incorporated herein by reference
thereto.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information required by this item is set forth on pages 8 through 19 of
the Company's Annual Report, which information is incorporated herein by
reference thereto.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this item is set forth on page 18 of the
Company's Annual Report, which information is incorporated herein by reference
thereto.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data required by this item are
presented under Item 14 and incorporated herein by reference thereto.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
13
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
A definitive proxy statement is being filed with the Securities and
Exchange Commission on or about September 28, 1998. The information required by
this item is set forth under the caption "Election of Directors" on pages 2
through 5, under the caption "Executive Officers" on page 8 and under the
caption "Section 16(a) Beneficial Ownership Reporting Compliance" on page 15 of
the definitive proxy statement, which information is incorporated herein by
reference thereto.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is set forth under the caption
"Executive Compensation" on pages 9 through 14 of the definitive proxy
statement, which information is incorporated herein by reference thereto.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is set forth under the caption
"Security Ownership of Certain Beneficial Owners and Management" on pages 6
through 7 of the definitive proxy statement, which information is incorporated
herein by reference thereto.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is set forth under the caption
"Certain Transactions" on page 15 of the definitive proxy statement, which
information is incorporated herein by reference thereto.
14
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
1. Financial Statements
The following consolidated financial statements of the Company and its
subsidiaries, included on pages 21 to 39 in the Annual Report, and the
report of independent accountants on page 20 of the Annual Report are
incorporated herein by reference thereto:
Consolidated Balance Sheets as of June 28, 1998 and June 29, 1997
Consolidated Statement of Operations for the Fiscal Years Ended
June 28, 1998, June 29, 1997 and June 30, 1996
Consolidated Statement of Changes in Stockholders' Equity for the
Fiscal Years Ended June 28, 1998, June 29, 1997 and June 30, 1996
Consolidated Statement of Cash Flows for the Fiscal Years Ended
June 28, 1998, June 29, 1997 and June 30, 1996
Notes to Consolidated Financial Statements
2. Financial Statement Schedule
Report of Independent Accountants on Financial
Statement Schedule S-1
Schedule VIII Valuation and Qualifying Accounts
and Reserves for the Fiscal Years Ended June 28,
1998, June 29, 1997 and June 30, 1996 S-2
All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes
thereto.
3. Exhibits
The exhibits listed on the accompanying Index to Exhibits are filed as
part of this Report.
4. Reports on Form 8-K
On May 8, 1998, a Current Report on Form 8-K was filed to report,
pursuant to Item 5 thereof, the completion of the sale of the Knitting
Elements division for approximately $9.4 million. The Company also
reported, pursuant to item 5 thereof, the release of its earnings for
the three and nine month periods ended March 29, 1998.
On May 21, 1998, a Current Report on Form 8-K was filed to report,
pursuant to Item 5 thereof, the authorization by the Board of
Directors to repurchase an amount of common stock up to a total of 1
million shares.
On July 20, 1998, a Current Report on Form 8-K was filed to report,
pursuant to Item 5 thereof, the completion of the previously announced
repurchase of 1 million shares of common stock.
On August 6, 1998, a Current Report on Form 8-K was filed to report,
pursuant to Item 5 thereof, the release of the Company's earnings for
the quarter and fiscal year ended June 28, 1998.
On August 25, 1998, a Current Report on Form 8-K was filed to report,
pursuant to Item 5 thereof, the acquisition of substantially all of
the net assets of Scheu & Kniss, Inc.
On September 1, 1998, a Current Report on Form 8-K was filed to
report, pursuant to Item 5 thereof, the authorization by the Board of
Directors to repurchase up to an additional 1 million shares of common
stock.
15
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.
DT INDUSTRIES, INC.
By: /s/ Bruce P. Erdel
------------------------------------
Bruce P. Erdel
Senior Vice President - Finance
and Administration
Dated: September 25, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on September 28, 1998.
Signatures Title
---------- -----
* Chairman of the Board
- -------------------------------
James J. Kerley
* President, Chief Executive Officer and
- ------------------------------- Director
Stephen J. Gore (Principal Executive Officer)
/s/ Bruce P. Erdel Senior Vice President - Finance and
- ------------------------------- Administration
Bruce P. Erdel (Principal Financial and Accounting Officer)
* Director
- -------------------------------
William H.T. Bush
* Director
- -------------------------------
Charles A. Dill
* Director
- -------------------------------
Frank W. Jones
* President - Packaging Group and Director
- -------------------------------
Graham L. Lewis
* Director
- -------------------------------
Lee M. Liberman
* President - Automation Group and Director
- -------------------------------
John F. Logan
* Director
- -------------------------------
Charles Pollnow
*By: /s/ Bruce P. Erdel
--------------------------
Bruce P. Erdel
Attorney-In-Fact
- --------------------------
* Such signature has been affixed pursuant to the following Power of Attorney.
16
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Stephen J. Gore and Bruce P. Erdel as his
true and lawful attorney-in-fact and agent, each with full power of
substitution, for him and in his name, place and stead, in any and all
capacities, to sign the 1998 Annual Report on Form 10-K of DT Industries, Inc.,
and to file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
each said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and ratifying and confirming all that
each said attorney-in-fact and agent or his substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES
To the Board of Directors and Stockholders of
DT Industries, Inc.
Our audits of the consolidated financial statements of DT Industries, Inc.
and its subsidiaries, referred to in our report dated August 5, 1998, appearing
on page 20 of the fiscal 1998 Annual Report to Shareholders of DT Industries,
Inc. (which report and consolidated financial statements are incorporated by
reference in this Annual Report on Form 10-K), also included an audit of the
Financial Statement Schedule of DT Industries, Inc. listed at item 14 of this
Form 10-K. In our opinion, the Financial Statement Schedule presents fairly, in
all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
St. Louis, Missouri
August 5, 1998
S-1
DT INDUSTRIES, INC.
SCHEDULE VIII
Rule 12-09 Valuation and Qualifying Accounts and Reserves
(In thousands)
Column A Column B Column C Column D Column E Column F Column G
Balance at Charged to Charged to Purchase Balance at
Valuation and Beginning Costs and Other of Net End of
Reserve Accounts of Period Expenses Accounts Deductions Assets Period
FOR THE FISCAL YEAR ENDED JUNE 28, 1998
Deferred Tax Assets Valuation
Allowance $ 1,029 ($ 31) $ 998
Accounts Receivable Reserve $ 1,849 $ 624 $ 0 ($ 461) $ 130(1) $ 2,142
(1) Reflects net increase to Accounts Receivable Reserves due to acquisition of
ATT and decrease due to Knitting Elements sale.
FOR THE FISCAL YEAR ENDED JUNE 29, 1997
Deferred Tax Assets Valuation
Allowance $ 1,029 $ 1,029
Accounts Receivable Reserve $ 1,294 $ 356 $ 0 ($ 373) $ 572(1) $ 1,849
(1) Reflects net increase to Accounts Receivable Reserves due to acquisition of
Mid-West and Hansford.
FOR THE FISCAL YEAR ENDED JUNE 30, 1996
Deferred Tax Assets Valuation
Allowance $ 1,029 $ 1,029
Accounts Receivable Reserve $ 751 $ 167 $ 0 ($ 189) $ 565(1) $ 1,294
(1) Reflects net increase to Accounts Receivable Reserves due to acquisition of
Kalish, Arrow and AMI.
S-2
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
3.1 Restated Certificate of Incorporation of the Registrant (filed
with the Commission as Exhibit 3.1 to the Company's 1994
Registration Statement on Form S-1 Registration No. 33-75174,
filed with the Commission on February 11, 1994, as amended on
March 22, 1994 (the "1994 Registration Statement") and
incorporated herein by reference thereto)
3.2 Certificate of Amendment of Restated Certificate of Incorporation
of the Company dated November 11, 1996 (filed as Exhibit 99 to
the Company's Report on Form 8-K dated November 11, 1996 filed
with the Commission on November 21, 1996 and incorporated herein
by reference thereto)
3.3 Amended By-Laws of the Registrant (filed as Exhibit 3.2 to the
1994 Registration Statement and incorporated herein by reference
thereto)
4.1 Rights Agreement dated as of August 18, 1997 between DT
Industries, Inc. and ChaseMellon Shareholder Services, L.L.C., as
Rights Agent (filed as Exhibit 1 to the Company's Form 8-K dated
August 18, 1997, filed with the Commission on August 19, 1997 and
incorporated herein by reference thereto). The Rights Agreement
includes as Exhibit A thereto the Certificate of Designations,
Preferences and Rights of Series A Preferred Stock of DT
Industries, Inc., as Exhibit B thereto the Form of Rights
Certificate and as Exhibit C thereto the Summary of Rights to
Purchase Series A Preferred Stock.
10.1* Purchase and Stockholder Agreement, dated September 30, 1993, by
and between Detroit Tool and Engineering Company and Stephen J.
Gore (filed as Exhibit 10.1 to the 1994 Registration Statement
and incorporated herein by reference thereto)
10.2* Stock Pledge Agreement, dated September 30, 1993, by and between
Stephen J. Gore and Detroit Tool and Engineering Company (filed
as Exhibit 10.2 to the 1994 Registration Statement and
incorporated herein by reference thereto)
10.3* $84,600 Promissory Note, dated September 30, 1993, by Stephen J.
Gore to Detroit Tool and Engineering Company (filed as Exhibit
10.3 to the 1994 Registration Statement and incorporated herein
by reference thereto)
10.4* Letter Agreement, dated September 30, 1993, by Stephen J. Gore to
Detroit Tool and Engineering Company (filed as Exhibit 10.4 to
the 1994 Registration Statement and incorporated herein by
reference thereto)
10.5* Employment Agreement, dated September 19, 1990, by and between
Detroit Tool Group, Inc. and Stephen J. Gore (filed as Exhibit
10.5 to the 1994 Registration Statement and incorporated herein
by reference thereto)
10.6* Amendment to Promissory Note and Stock Pledge Agreement, dated
March 16, 1994, by and among DT Industries, Inc., Peer Investors,
L.P. and Stephen J. Gore (filed as Exhibit 10.6 to the 1994
Registration Statement and incorporated herein by reference
thereto)
10.7* DT Industries, Inc. Employee Stock Option Plan (filed as Exhibit
10.21 to the 1994 Registration Statement and incorporated herein
by reference thereto)
10.8* DT Industries, Inc. 1994 Directors Non-Qualified Stock Option
Plan (filed as Exhibit 10.22 to the 1994 Registration Statement
and incorporated herein by reference thereto)
- --------------------
* Management contract or compensatory plan or arrangement.
10.9 Asset Purchase Agreement, dated as of August 28, 1995, by and
among H.G. Kalish, Inc., Kalish Machinery Ltd., Graham Lewis and
Kalish Canada Inc. (filed as Exhibit 2.1 to the Company's Report
on Form 8-K dated August 28, 1995 filed with the Commission on
September 11, 1995 and incorporated herein by reference thereto)
10.10 Agreement of Lease, dated April 30, 1997, between Teecan
Properties Inc. and Kalish Canada Inc. (filed as Exhibit 10.15 to
the Company's Annual Report on Form 10-K for the fiscal year
ended June 29, 1997 filed with the Commission on September 29,
1997 (the "1997 10-K") and incorporated herein by reference
thereto)
10.11 Lease Agreement, dated February 7, 1995, between Lanard &
Axibund, Inc., as agent, I-95 Business Center at Keystone Park-1,
as lessor, and Stokes-Merrill Corporation as lessee (filed as
Exhibit 10.46 to the Company's Annual Report on Form 10-K for the
fiscal year ended June 25, 1995 filed with the Commission on
September 22, 1995 (the "1995 10-K") and incorporated herein by
reference thereto)
10.12* Purchase and Stockholder Agreement, dated November 30, 1993, by
and between Detroit Tool and Engineering Company and Bruce P.
Erdel (filed as Exhibit 10.55 to the Company's Annual Report on
Form 10-K for the fiscal year ended June 26, 1994 filed with the
Commission on September 23, 1994 (the "1994 10-K") and
incorporated herein by reference thereto)
10.13* Stock Pledge Agreement, dated November 30, 1993, by and between
Bruce P. Erdel and Detroit Tool and Engineering Company (filed as
Exhibit No. 10.56 to the 1994 10-K and incorporated herein by
reference thereto)
10.14* $33,300 Promissory Note, dated November 30, 1993, by Bruce P.
Erdel to Detroit Tool and Engineering Company (filed as Exhibit
No. 10.57 to the 1994 10-K and incorporated herein by reference
thereto)
10.15* Letter Agreement, dated November 30, 1993, by and between Bruce
P. Erdel and Detroit Tool and Engineering Company (filed as
Exhibit No. 10.58 to the 1994 10-K and incorporated herein by
reference thereto)
10.16* Amendment to Promissory Note and Stock Pledge Agreement, dated
March 16, 1994, by and among DT Industries, Inc., Peer Investors,
L.P. and Bruce P. Erdel (filed as Exhibit No. 10.59 to the 1994
10-K and incorporated herein by reference thereto)
10.17 Agreement relating to the sale and purchase of 76,000 Ordinary
Shares of (pound)1 each in the capital of Swiftpack, dated as of
November 23, 1995 by and among Peter Harris and Others and DTUK
and the Company (filed as Exhibit 2.1 to the Company's Report on
Form 8-K dated November 23, 1995 filed with the Commission on
December 7, 1995 and incorporated herein by reference thereto)
10.18 Agreement and Plan of Merger, dated July 19, 1996, by and among
Automation Acquisition Corporation, DT Industries, Inc., Mid-West
Automation Enterprises, Inc. and the Stockholders listed therein
(filed as Exhibit 2.1 to the Company's Report on Form 8-K dated
July 19, 1996 filed with the Commission on August 5, 1996 and
incorporated herein by reference thereto)
10.19 Indemnification and Escrow Agreement, dated as of July 19, 1996,
by and among Mid-West Automation Enterprises, Inc., the
stockholders listed therein, and LaSalle National Trust, N.A., as
Escrow Agent (filed as Exhibit 2.2 to the Company's Report on
Form 8-K dated July 19, 1996 filed with the Commission on August
5, 1996 and incorporated herein by reference thereto)
- --------------------
* Management contract or compensatory plan or arrangement.
10.20 Fourth Amended and Restated Credit Facilities Agreement, dated
July 21, 1997, among NationsBank, N.A. (successor by merger to
The Boatmen's National Bank of St. Louis) and any other persons
who become lenders as provided therein and DT Industries, Inc.
and the other borrowers listed on the signature pages thereof
(filed as Exhibit 10.31 to the 1997 10-K and incorporated herein
by reference thereto)
10.21 First Amendment to Fourth Amended and Restated Credit Facilities
Agreement, dated as of December 31, 1997, among Nations Bank,
N.A., as Administrative Agent, and Nations Bank, N.A. and the
other Lenders listed therein and DT Industries, Inc. and the
other Borrowers listed therein (filed as Exhibit 10 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
March 29, 1998 filed with the Commission on May 12, 1998 and
incorporated herein by reference thereto)
10.22 Second Amendment to Fourth Amended and Restated Credit Facilities
Agreement, dated as of April 30, 1998, among Nations Bank, N.A.,
as Administrative Agent, and Nations Bank, N.A. and the other
Lenders listed therein and DT Industries, Inc. and the other
Borrowers listed therein.
10.23 Third Amendment to Fourth Amended and Restated Credit Facilities
Agreement, dated as of August 26, 1998, among Nations Bank, N.A.,
as Administrative Agent, and Nations Bank, N.A. and the other
Lenders listed therein and DT Industries, Inc. and the other
Borrowers listed therein.
10.24 Lease dated as of February 20, 1996 by and between CityWide
Development Corporation and Advanced Assembly Automation, Inc.
(filed as Exhibit 10 to the Company's Quarterly Report on Form
10-Q for the quarter ended March 24, 1996 filed with the
Commission on May 3, 1996 and incorporated herein by reference
thereto)
10.25 Single-Tenant Industrial Business Lease dated July 19, 1996,
between American National Bank and Trust Company of Chicago, as
Trustee under Trust No. 63442, Landlord, and Mid-West Automation
Enterprises, Inc., an Illinois corporation and Mid-West
Automation Systems, Inc., an Illinois corporation, collectively,
Tenant (filed as Exhibit No. 10.58 to the Company's Annual Report
on Form 10-K for the fiscal year ended June 30, 1996 filed with
the Commission on September 30, 1996 (the "1996 10-K") and
incorporated herein by reference thereto)
10.26* DT Industries, Inc. Amendment to 1994 Employee Stock Option Plan,
adopted May 16, 1996 (filed as Exhibit 10.59 to the 1996 10-K and
incorporated herein by reference thereto)
10.27* DT Industries, Inc. Second Amendment to 1994 Employee Stock
Option, adopted September 18, 1996 (filed as Exhibit 10.60 to the
1996 10-K and incorporated herein by reference thereto)
10.28* DT Industries, Inc. 1996 Long-Term Incentive Plan (filed as
Exhibit No. 10.61 to the 1996 10-K and incorporated herein by
reference thereto)
10.29* Employment and Noncompetition Agreement, dated August 28, 1995,
between Kalish Canada Inc. and Graham Lewis (filed as Exhibit No.
10.37 to the 1997 10-K and incorporated herein by reference
thereto)
10.30* Employment and Noncompetition Agreement, dated February 26, 1997,
between DT Industries, Inc. and Eugene R. Haffely (filed as
Exhibit No. 10.38 to the 1997 10-K and incorporated herein by
reference thereto)
10.31 Agreement and Plan of Merger dated September 23, 1996, by and
among H022 Corporation, a New York Corporation (the Buyer), DT
Industries, Inc., Hansford Manufacturing Corporation, a New York
Corporation and the Stockholder listed therein (filed as Exhibit
10.1 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 29, 1996 filed with the Commission on
November 8, 1996 and incorporated herein by reference thereto)
- --------------------
* Management contract or compensatory plan or arrangement.
10.32 Indemnification and Escrow Agreement by and among Hansford
Manufacturing Corporation, DT Industries, Inc., the Stockholder
and Manufacturers and Traders Trust Company, a New York Bank, as
escrow agent (filed as Exhibit 10.2 to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 29, 1996
filed with the Commission on November 8, 1996 and incorporated
herein by reference thereto)
10.33 Lease Agreement by and between Van Buren N. Hansford, Jr., the
Stockholder and Landlord, and Hansford Manufacturing Corporation,
the Tenant, dated as of September 30, 1996 (filed as Exhibit 10.3
to the Company's Quarterly Report on Form 10-Q for the quarter
ended September 29, 1996 filed with the Commission on November 8,
1996 and incorporated herein by reference thereto)
10.34 Lease Agreement dated February 11, 1997 between Kersten Randolph
Street Property and Mid-West Automation Enterprises, Inc. (filed
as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 30, 1997 filed with the Commission on
May 12, 1997 and incorporated herein by reference thereto)
10.35 Amended and Restated Declaration of Trust of DT Capital Trust
dated as of June 1, 1997 among DT Industries, Inc., as Sponsor,
the Bank of New York, as Property Trustee, The Bank of New York
(Delaware), as Delaware Trustee, and Stephen J. Gore, Bruce P.
Erdel and Gregory D. Wilson, as Trustees (filed as Exhibit 4.2 to
the Company's Registration Statement on Form S-3, Registration
No. 333-30909, filed with the Commission on July 8, 1997 (the
"1997 Registration Statement") and incorporated herein by
reference thereto)
10.36 Indenture for the 7.16% Convertible Junior Subordinated
Deferrable Interest Debentures Due 2012 dated as of June 1, 1997
among DT Industries, Inc. and The Bank of New York, as Trustee
(filed as Exhibit 4.3 to the 1997 Registration Statement and
incorporated herein by reference thereto)
10.37 Preferred Securities Guarantee Agreement dated June 12, 1997
between DT Industries, Inc., as Guarantor, and The Bank of New
York, as Preferred Guarantee Trustee (filed as Exhibit 4.6 to the
1997 Registration Statement and incorporated herein by reference
thereto)
10.38 Umbrella Agreement relating to the Sale and Purchase of Assets of
Lucas Assembly & Test Systems in the United Kingdom, Germany and
the United States of America, dated July 29, 1997 (filed as
Exhibit No. 10.52 to the 1997 10-K and incorporated herein by
reference thereto)
10.39 Agreement relating to the Sale and Purchase of the United States
Assets of Lucas Assembly & Test Systems, dated July 29, 1997, by
and among Lucas Automation & Control Engineering, Inc., Lucas
Industries plc and Assembly Technology & Test, Inc. (filed as
Exhibit No. 10.53 to the 1997 10-K and incorporated herein by
reference thereto)
10.40 Agreement relating to the Sale and Purchase of the English Assets
of Lucas Assembly & Test Systems, dated July 29, 1997, by and
among Lucas Limited, Assembly Technology & Test Limited, Lucas
Industries plc and Lucas Automation & Control Engineering Limited
(filed as Exhibit No. 10.54 to the 1997 10-K and incorporated
herein by reference thereto)
10.41 Agreement relating to the Sale and Purchase of the German Assets
of Lucas Assembly & Test Systems, dated July 29, 1997, by and
among Lucas Automation & Control Engineering GmbH, Lucas
Industries plc and Assembly Technologie & Automation GmbH (filed
as Exhibit No. 10.55 to the 1997 10-K and incorporated herein by
reference thereto)
10.42 Industrial Building Lease, dated July 1991, by and between The
Allen Group Inc. and Lucas Hartridge, Inc. (filed as Exhibit No.
10.56 to the 1997 10-K and incorporated herein by reference
thereto)
11.0 Computation of Earnings Per Share
13.0 Annual Report to Shareholders (portion)
21.0 Subsidiaries of the Registrant
23.0 Consent of PricewaterhouseCoopers LLP
24.0 Powers of Attorney