FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 23, 2001
-------------------------------------
Commission File Number: 0-23400
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.)
907 West Fifth Street, Dayton, Ohio 45407
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(937) 586-5600
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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
--- ---
The number of shares of Common Stock, $0.01 par value, of the registrant
outstanding as of November 2, 2001 was 10,387,274.
DT INDUSTRIES, INC.
INDEX
PAGE 1
--------------------------------------------------------------------------------
Page
Number
Part I Financial Information
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets at September 23, 2001
and June 24, 2001 2
Consolidated Statement of Operations for the three
months ended September 23, 2001 and September
24, 2000 3
Consolidated Statement of Changes in Stockholders'
Equity for the three months ended September 23,
2001 4
Consolidated Statement of Cash Flows for the three
months ended September 23, 2001 and September
24, 2000 5
Notes to Consolidated Financial Statements 6-13
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14-20
Item 3. Quantitative and Qualitative Disclosures About Market
Risk 20
Part II Other Information
Item 1. Legal Proceedings 21
Item 6. Exhibits and Reports on Form 8-K 21
Signature
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
PAGE 2
--------------------------------------------------------------------------------
SEPTEMBER 23, JUNE 24,
2001 2001
------------- ---------
ASSETS
Current assets:
Cash $ 5,309 $ 5,505
Accounts receivable, net 27,610 44,915
Costs and estimated earnings in excess of amounts billed
on uncompleted contracts 105,044 117,859
Inventories, net 39,322 40,865
Prepaid expenses and other 13,319 12,497
--------- ---------
Total current assets 190,604 221,641
Property, plant and equipment, net 48,380 62,463
Goodwill, net 124,296 123,767
Other assets, net 10,665 6,830
--------- ---------
$ 373,945 $ 414,701
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Senior secured term and revolving credit facility (Note 4) $ 95,962 $ 35,500
Current portion of other long-term debt 425 651
Accounts payable 28,170 40,917
Customer advances
26,529 25,651
Accrued liabilities 34,498 37,143
--------- ---------
Total current liabilities 185,584 139,862
--------- ---------
Senior secured term and revolving credit facility (Note 4) -- 89,643
Other long-term debt 6,709 6,928
Other long-term liabilities 4,741 3,778
--------- ---------
11,450 100,349
--------- ---------
Commitments and contingencies (Note 10)
Company-obligated, mandatorily redeemable convertible preferred
securities of subsidiary DT Capital Trust holding solely
convertible junior subordinated debentures of the Company 82,092 80,652
--------- ---------
Stockholders' equity:
Preferred stock, $0.01 par value; 1,500,000 shares authorized;
no shares issued and outstanding -- --
Common stock, $0.01 par value; 100,000,000 shares authorized;
10,387,274 and 10,337,274 shares issued and outstanding at
September 23, 2001 and June 24, 2001, respectively) 113 113
Additional paid-in capital 126,824 127,853
Accumulated deficit (6,106) (6,965)
Cumulative translation adjustment (2,066) (2,058)
Unearned portion of restricted stock (878) (661)
Less -
Treasury stock (988,488 and 1,038,488 shares at
September 23, 2001 and June 24, 2001, respectively),
at cost (23,068) (24,444)
--------- ---------
Total stockholders' equity 94,819 93,838
--------- ---------
$ 373,945 $ 414,701
========= =========
See accompanying Notes to Consolidated Financial Statements.
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
PAGE 3
--------------------------------------------------------------------------------
Three Months Ended
September 23, September 24,
2001 2000
------------- -------------
Net sales $ 100,484 $ 116,451
Cost of sales 79,501 96,446
------------ ------------
Gross profit 20,983 20,005
Selling, general and administrative expenses 15,016 19,721
------------ ------------
Operating income 5,967 284
Interest expense, net 3,167 3,462
Dividends on Company-obligated, mandatorily redeemable convertible preferred
securities of subsidiary DT Capital Trust holding solely convertible junior
subordinated debentures of the Company, at 7.16% per annum 1,440 1,342
------------ ------------
Income (loss) before provision for income taxes 1,360 (4,520)
Provision (benefit) for income taxes 501 (1,396)
------------ ------------
Net income (loss) $ 859 $ (3,124)
============ ============
Net income (loss) per common share:
Basic $ 0.08 $ (0.31)
Diluted $ 0.08 $ (0.31)
============ ============
Weighted average common shares outstanding:
Basic 10,340,571 10,107,274
Diluted 10,362,881 10,107,274
============ ============
See accompanying Notes to Consolidated Financial Statements.
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED SEPTEMBER 23, 2001
(DOLLARS IN THOUSANDS)
(UNAUDITED)
PAGE 4
--------------------------------------------------------------------------------
Unearned
Accumulated portion
other Additional of
Accumulated comprehensive Common paid-in Treasury restricted
deficit loss stock capital stock stock Total
-------------------------------------------------------------------------------------
Balance, June 24, 2001 $ (6,965) $ (2,058) $ 113 $127,853 $(24,444) $ (661) $ 93,838
Comprehensive income:
Net income 859
Foreign currency translation (8)
Total comprehensive income 851
Issuance of 50,000 shares of
restricted stock (1,064) 1,376 (312) --
Amortization of earned portion
of restricted stock 95 95
Payment on stock subscriptions
receivable 35 35
-------------------------------------------------------------------------------------
Balance, September 23, 2001 $ (6,106) $ (2,066) $ 113 $126,824 $(23,068) $ (878) $ 94,819
=====================================================================================
See accompanying Notes to Consolidated Financial Statements.
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
PAGE 5
--------------------------------------------------------------------------------
Three Months Ended
September 23, September 24,
2001 2000
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 859 $ (3,124)
Adjustments to reconcile net income (loss) to net cash provided (used) by
operating activities:
Depreciation 1,652 2,422
Amortization 818 1,596
Other 98 --
(Increase) decrease in current assets, excluding the effect of dispositions:
Accounts receivable 12,331 3,814
Costs and earnings in excess of amounts billed 12,815 (9,860)
Inventories (3,505) (3,322)
Prepaid expenses and other (1,230) (1,910)
Increase (decrease) in current liabilities, excluding the effect of
dispositions:
Accounts payable (9,153) (2,993)
Customer advances 956 286
Accrued liabilities (2,504) (3,508)
-------- --------
Net cash provided (used) by operating activities 13,137 (16,599)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of assets 18,189 --
Capital expenditures (254) (894)
Other -- 14
-------- --------
Net cash provided (used) by investing activities 17,935 (880)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (paydowns) on revolving loans (29,335) 18,196
Payments on borrowings (1,745) (662)
Financing costs (2,340) --
Deferral of dividends on convertible preferred securities 1,440 1,342
Net proceeds from equity transactions 35 --
-------- --------
Net cash provided (used) by financing activities (31,945) 18,876
-------- --------
Effect of exchange rate changes 677 (468)
-------- --------
Net increase (decrease) in cash (196) 929
Cash and cash equivalents at beginning of period 5,505 8,705
-------- --------
Cash and cash equivalents at end of period $ 5,309 $ 9,634
======== ========
See accompanying Notes to Consolidated Financial Statements.
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
PAGE 6
--------------------------------------------------------------------------------
1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements of DT
Industries, Inc. (DTI or the Company) have been prepared in accordance
with the instructions for Form 10-Q and do not include all of the
information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements.
However, in the opinion of management, the information includes all
adjustments, consisting only of normal recurring adjustments, necessary
for a fair presentation of the results of operations for the periods
presented. Operating results for any quarter are not necessarily
indicative of the results for any other quarter or for the full year.
These statements should be read in conjunction with the consolidated
financial statements and notes to the consolidated financial statements
included in the Company's Annual Report on Form 10-K for the fiscal
year ended June 24, 2001.
Certain reclassifications have been made to prior year financial
statements for comparative purposes. These reclassifications had no
effect on net income (loss).
2. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant intercompany
transactions and balances have been eliminated.
The accounts of the Company's foreign subsidiaries are maintained in
their respective local currencies. The accompanying consolidated
financial statements have been translated and adjusted to reflect U.S.
dollars in accordance with accounting principles generally accepted in
the United States.
3. ASSET SALES
In the first quarter of fiscal 2002, the Company sold substantially all
of the assets of two divisions. The following table summarizes certain
information regarding these sales:
NET
CASH LOSS
DATE OF SALE BUSINESS PROCEEDS ON DISPOSAL
------------------- --------------------------------------- ------------------ ------------------
June 2001 Detroit Tool Metal Products Co. (DTMP) $ 14,250 $ (1,618)
July 2001 Scheu & Kniss 3,939 (6,200)
----------------- -----------------
$ 18,189 $ (7,818)
================= =================
The losses associated with the sale of these divisions were recognized
in the fourth quarter of fiscal 2001. The combined net sales and
operating profit of DTMP (Other business segment) and Scheu and Kniss
(Packaging business segment) for the three months ended September 24,
2000 were $9,910 and $412, respectively.
In October 2001, the Company completed the sale of the remaining
Components division resulting in net proceeds of approximately $700.
The sale had no effect on net income.
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
PAGE 7
--------------------------------------------------------------------------------
4. FINANCING
As of September 23, 2001 and June 24, 2001, current and long-term debt
consisted of the following:
September 23, June 24,
2001 2001
------------- --------
Term and revolving loans under senior secured credit facility:
Term loan $ 8,703 $ 9,888
Revolving loans 87,259 115,255
Foreign currency denominated debt 1,576 1,459
Other long-term debt 5,558 6,120
-------- --------
103,096 132,722
Less - senior secured credit facility maturing July 2, 2002 95,962 35,500
Less - current portion of other long-term debt 425 651
-------- --------
Long-term debt $ 6,709 $ 96,571
======== ========
The Company's senior credit facility includes an $113,146 revolving
credit facility and an $8,703 term credit facility and matures on July
2, 2002. Borrowings under the amended credit facility bear interest at
floating rates based on the prime rate plus 3% for domestic borrowings
and the Eurodollar rate plus 6% on foreign currency borrowings through
December 31, 2001. After December 31, 2001, the prime rate increment
increases to 3.5% and the Eurodollar rate increment increases to 6.5%.
Borrowings under the credit facility are secured by substantially all
of the assets of DTI and its domestic subsidiaries. Total borrowing
availability under the credit facility as of September 23, 2001 was
$22,895. The Company was in compliance with each of the financial
covenants under the amended credit facility as of September 23, 2001.
In August 2001, the Company extended the senior credit facility, which
was scheduled to mature on July 2, 2001, through an amendment to the
term and revolving loan agreement. The amended agreement requires the
following principal pre-payments on the term and revolving loan
agreements:
- $35,500 in scheduled principal pre-payments from August 2001
through June 2002;
- the use of 80-100% of the proceeds from the sale of assets by
the Company's or its subsidiaries to reduce the principal
balance of the term and revolving loan agreements; and
- the use of 30% of the cash receipts of a specified contract to
reduce the principal balance of the term and revolving loan
agreements, estimated to be approximately $8,500 assuming the
contract cash receipts are received in fiscal 2002.
At September 23, 2001, the Company had made all required payments under
the amended agreement.
Since the Company's senior credit facility matures on July 2, 2002,
borrowings of $95,962 under this facility have been presented within
current liabilities in the Company's September 24, 2001 consolidated
balance sheet. The Company has initiated discussions with several
lenders for purposes of refinancing borrowings under its credit
facilities, and expects to complete such refinancing prior to July 2,
2002, although there can be no assurance that such refinancing will be
completed by this date. The Company has implemented various cash
management initiatives, including a reduction in discretionary capital
expenditures, increased focus on collections of accounts receivable,
and accelerated payment terms from customers, among other things.
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
PAGE 8
--------------------------------------------------------------------------------
5. COMPANY-OBLIGATED, MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED
SECURITIES OF SUBSIDIARY DT CAPITAL TRUST HOLDING SOLELY CONVERTIBLE
JUNIOR SUBORDINATED DEBENTURES OF THE COMPANY (CONVERTIBLE PREFERRED
SECURITIES)
On June 12, 1997, the Company completed a private placement to
institutional investors of 1,400,000 7.16% Convertible Preferred
Securities (liquidation preference of $50 per Convertible Preferred
Security). The placement was made through the Company's wholly owned
subsidiary, DT Capital Trust (Trust), a Delaware business trust. The
securities represent undivided beneficial ownership interests in the
Trust. The sole asset of the Trust is the $72,165 aggregate principal
amount of the 7.16% Convertible Junior Subordinated Deferrable Interest
Debentures Due 2012 which were acquired with the proceeds from the
offering as well as the sale of common securities to the Company. The
Company's obligations under the Convertible Junior Subordinated
Debentures, the Indenture pursuant to which they were issued, the
Amended and Restated Declaration of Trust of the Trust and the
Guarantee of DTI, taken together, constitute a full and unconditional
guarantee by DTI of amounts due on the Convertible Preferred
Securities. The Convertible Preferred Securities are convertible at the
option of the holders at any time into the common stock of DTI at an
effective conversion price of $38.75 per share and are redeemable at
DTI's option after June 1, 2000 and mandatorily redeemable in 2012. The
net proceeds of the offering of approximately $67,750 were used by DTI
to retire indebtedness. In conjunction with the amendment of the
Company's senior credit facility in September 1999, the Company elected
to defer interest payments on the Convertible Junior Subordinated
Debentures for up to 5 years. As a result, quarterly distributions on
the Convertible Preferred Securities have been deferred and DTI will
not declare or pay dividends on its common stock. Dividends on the
Convertible Preferred Securities in the amount of $12,092 have been
deferred and accrued as of September 23, 2001 and are included in the
principal amount of the securities.
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
PAGE 9
--------------------------------------------------------------------------------
6. BUSINESS SEGMENTS
Financial information for the Company's reportable segments consisted
of the following:
Three Months Ended
September 23, 2001 September 24, 2000
------------------ ------------------
Net sales
Automation $ 81,507 $ 84,358
Packaging 18,416 22,811
Other 561 9,282
-------- --------
Consolidated total $100,484 $116,451
======== ========
September 23, 2001 June 24, 2001
------------------ -------------
Total assets
Automation $278,967 $298,020
Packaging 80,382 80,998
Other 3,459 23,401
Corporate 11,137 12,282
-------- --------
Consolidated total $373,945 $414,701
======== ========
In the first quarter of fiscal 2002, the Company sold substantially all
of the assets of a division in the Packaging segment and a division in
the Other business segment. See Note 3.
The reconciliation of segment operating income to consolidated income
(loss) before income taxes consisted of the following:
Three Months Ended
September 24, 2001 September 23, 2000
------------------ ------------------
Automation $ 7,149 $ 3,015
Packaging 538 (1,106)
------- -------
Operating income for reportable segments 7,687 1,909
Operating income (loss) for other businesses (68) 402
Corporate (1,652) (2,027)
Interest expense, net (3,167) (3,462)
Dividends on Company-obligated, mandatorily redeemable
convertible preferred securities of subsidiary DT Capital
Trust holding solely convertible junior subordinated
debentures of the Company (1,440) (1,342)
------- -------
Consolidated income (loss) before income taxes $ 1,360 $(4,520)
======= =======
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
PAGE 10
--------------------------------------------------------------------------------
7. SUPPLEMENTAL BALANCE SHEET INFORMATION
September 23, 2001 June 24, 2001
------------------ -------------
Inventories, net:
Raw materials $ 22,649 $ 26,778
Work in process 21,138 18,549
Finished goods 4,675 6,090
Less provision for excess and obsolete inventories (9,140) (10,552)
-------- --------
$ 39,322 $ 40,865
======== ========
Accrued liabilities:
Accrued employee compensation and benefits $ 12,551 $ 13,570
Accrued warranty 3,433 3,244
Restructuring accrual 1,817 2,879
Other 16,697 17,450
-------- --------
$ 34,498 $ 37,143
======== ========
8. STOCK PLANS
During the first quarter of fiscal 2002, the Company issued 50,000
shares of restricted common stock of the Company with four-year vesting
periods. Upon issuance of the restricted shares, unearned compensation
expense equivalent to the market value at the date of grant was charged
to Stockholders' Equity and will be amortized to expense over the
vesting period. The lapsing of restrictions on these shares will be
accelerated in certain circumstances, one of which is a change in
control of the Company.
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
PAGE 11
--------------------------------------------------------------------------------
9. ACCOUNTING PRONOUNCEMENTS
In June 2001, the FASB approved Statement of Financial Accounting
Standards No. 141, "Business Combinations" (SFAS 141) and Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible
Assets" (SFAS 142).
SFAS 141 addresses financial accounting and reporting for business
combinations. The most significant impact of SFAS 141 is that the
purchase method of accounting must be used for all business
combinations initiated after June 30, 2001 and that specific criteria
are provided for recognizing intangible assets apart from goodwill.
SFAS 141 is effective for all fiscal years beginning after June 30,
2001. Adoption of SFAS 141 will not have a material impact on financial
position or results of operation.
SFAS 142 addresses the financial accounting and reporting for goodwill
and other intangible assets subsequent to their initial recognition.
Among the new requirements of SFAS 142 are:
- Goodwill and indefinite-lived intangible assets will no longer
be amortized;
- Goodwill and indefinite-lived intangible assets will be tested
for impairment at the reporting unit level annually;
- The amortization period of intangible assets that have finite
lives will no longer be limited to 40 years; and
- Additional financial statement disclosures about goodwill and
intangible assets will be required.
SFAS 142 is effective for fiscal years beginning after December 15,
2001, however, early adoption is permitted in certain instances.
In the first quarter of 2002 the Company elected to early adopt the
provisions of SFAS 142.
The following tables summarizes the Company's intangible assets at
September 23, 2001:
Gross
Carrying Accumulated
Amount Amortization
--------------------------------
AMORTIZED INTANGIBLE ASSET
Unpatented technology $ 589 $ 226
The amortization expense related to the intangible asset was $29 for
the first quarters of fiscal 2002 and 2001. Amortization expense is
expected to be $116 for each of the fiscal years 2002, 2003, 2004 and
$44 for fiscal year 2005. The intangible asset is held by a foreign
subsidiary and the gross carrying amount, accumulated amortization and
amortization expense will vary depending on the prevailing foreign
currency exchange rate.
The changes in the carrying amount of goodwill for the quarter ended
September 23, 2001 are as follows:
Automation Packaging
GOODWILL Segment Segment Total
----------------- ----------------- -----------------
Balance as of June 24, 2001 $ 95,458 $ 28,309 $ 123,767
Foreign currency translation 175 354 529
----------------- ----------------- -----------------
Balance as of September 23, 2001 $ 95,633 $ 28,663 $ 124,296
================= ================= =================
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
PAGE 12
--------------------------------------------------------------------------------
The carrying value of goodwill is assessed for recoverability by
management based on an analysis of future expected cash flows from the
underlying operations of the Company. During the fourth quarter of the
fiscal year ended June 24, 2001, management determined that the
goodwill recorded for certain subsidiaries had been impaired and
recorded an impairment charge of $38,219. The write-down of goodwill
was primarily a result of a continued decline in the financial results
of certain subsidiaries and management assumptions regarding future
performance and strategic planning. The Company calculated the present
value of expected cash flows to determine the fair value of the
subsidiaries using a discount rate of 12%, which represents the
weighted cost of capital. Included in the goodwill write-down was a
full impairment charge of $5,943 related to the Stokes division. This
charge was based on a sales price outlined in a letter of intent to
sell such division, which established fair value of the division based
on a current transaction. The net loss on the disposal of Scheu & Kniss
included a full impairment of the related goodwill of $5,018.
Management will continue to assess the recoverability of the carrying
value of goodwill on an annual basis.
The following table summarizes the effect of adoption of SFAS 142 on
net income (loss) and earnings (loss) per share:
For the three months ended
September 23, 2001 September 24, 2000
-------------------- ----------------------
Reported net income (loss) $ 859 $ (3,124)
Add back: Goodwill amortization (net of tax) - 1,195
-------------------- ----------------------
Adjusted net income (loss) $ 859 $ (1,929)
==================== ======================
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE:
Reported net income (loss) $ 0.08 $ (0.31)
Add back: Goodwill amortization (net of tax) - 0.12
-------------------- ----------------------
Adjusted net income (loss) $ 0.08 $ (0.19)
==================== ======================
10. COMMITMENTS AND CONTINGENCIES
The Company is involved in legal proceedings, including a Securities
Action, as previously described in Part 1, "Item 3. Legal Proceedings"
of the Company's Annual Report on Form 10-K for the fiscal year ended
June 24, 2001.
Since the end of the fiscal year ended June 24, 2001, there have been
no material developments in previously reported legal proceedings other
than as follows:
On October 4, 2001, the Federal District Court for the Western District
of Missouri granted the Company's motion to dismiss the Securities
Action, without prejudice. Pursuant to the Court's dismissal order, all
defendants were dismissed, but the plaintiffs were granted the right to
amend their complaint. On October 24, 2001, plaintiffs filed a motion
with the Court indicating their intent to file an amended complaint. To
date, however, no such amended complaint has been filed.
DT INDUSTRIES, INC.
ITEM 1. FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
PAGE 13
--------------------------------------------------------------------------------
If and when the Securities Action is revived by an amended complaint,
the Company intends to defend it vigorously. While it is not feasible
to predict or determine the final outcome of the Securities Actions or
similar proceedings, or to estimate the amounts or potential range of
loss with respect to these matters, management believes the Company and
its officers and directors have adequate liability insurance to cover
the liabilities, costs and expenses arising out of the Securities
Actions, although there can be no assurance that the insurance proceeds
will be adequate to cover any such losses. Further, there can be no
assurance that an adverse outcome with respect to the Securities
Actions will not have a material adverse impact on the Company's
financial condition, results of operations or cash flow.
In addition to the above-described items, the Company is from time to
time subject to claims and suits arising in the ordinary course of
business. Although the ultimate disposition of such proceedings is not
presently determinable, management does not believe that the ultimate
resolution of these matters will have a material adverse effect on the
Company's financial condition, results of operations or cash flows. The
Company maintains comprehensive general liability insurance that it
believes to be adequate for the continued operation of its business.
11. RESTRUCTURING RESERVE
In the fourth quarter of fiscal 2001, a restructuring charge of $3,694
was established for severance costs associated with management changes
and workforce reductions, idle facility costs and personnel relocation
costs resulting from the Corporate office move and the closure of four
Packaging segment sales offices and non-cash asset write-downs. During
the fourth quarter of fiscal 2001, $815 of this reserve was used
resulting in a restructuring reserve accrual of $2,879 at June 24,
2001. The breakdown of the remaining restructuring reserve as of June
24, 2001 and September 23, 2001 was as follows:
AS OF JUNE 24, CHARGES TO AS OF SEPTEMBER 23,
2001 ACCRUAL 2001
----------------------------------------------------------
Severance costs $ 1,277 $ (480) $ 797
Idle facility costs 685 (95) 590
Relocation costs 544 (329) 215
Other 373 (158) 215
----------------------------------------------------------
$ 2,879 $ (1,062) $ 1,817
==========================================================
The Company has utilized approximately $1,877 of the restructuring
accrual as of September 23, 2001 resulting in a remaining accrual of
$1,817 expected to be substantially used during fiscal 2002. The
Company continues to review current operations with a goal of further
cost cuts and other measures to streamline operations and enhance
profitability.
DT INDUSTRIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PAGE 14
--------------------------------------------------------------------------------
GENERAL OVERVIEW
The following discussion summarizes the significant factors affecting the
consolidated operating results and financial condition of DT Industries, Inc.
(DTI or the Company) for the three months ended September 23, 2001 compared to
the three months ended September 24, 2000. This discussion should be read in
conjunction with the consolidated financial statements and notes to the
consolidated financial statements included in the Company's Annual Report on
Form 10-K for the fiscal year ended June 24, 2001 and the consolidated financial
statements and notes thereto included in this Quarterly Report on Form 10-Q.
The Company primarily operates in two business segments, Automation and
Packaging. The Automation segment designs and builds integrated systems for the
assembly, test and handling of discrete products. The Packaging segment
manufactures tablet processing, counting and liquid filling systems and plastics
processing equipment including thermoforming, blister packaging and heat-sealing
systems.
The percentage of completion method of accounting is used by the Company to
recognize revenues and related costs. Under the percentage of completion method,
revenues for customer contracts are measured based on the ratio of engineering
and manufacturing labor hours incurred to date compared to total estimated
engineering and manufacturing labor hours or, for certain customer contracts,
the ratio of total costs incurred to date to total estimated costs. Any
revisions in the estimated total costs or values of the contracts during the
course of the work are reflected when the facts that require the revisions
become known. For contracts not accounted for under the percentage of completion
method, revenue is recognized upon shipment to unaffiliated customers.
Costs and related expenses to manufacture the products are recorded as cost of
sales when the related revenue is recognized. Provisions for estimated losses on
uncompleted contracts are made in the period in which such losses are
determined.
Gross margins may vary in a given period as a result of the variations in
profitability of contracts for large orders of automated production systems or
special machines. In addition, changes in the product mix in a given period
affect gross margins.
Certain information contained in this report, particularly the information
appearing under the headings "Results of Operations", "Liquidity and Capital
Resources", "Backlog", and "Seasonality and Fluctuations in Quarterly Results",
includes forward-looking statements. These statements, comprising all statements
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, excess product warranty
expenses, collectability of past due customer receivables, significant
restructuring or other special, non-recurring charges, foreign currency exchange
rate fluctuations, delays in achieving anticipated cost savings or in fully
implementing project and information management systems, availability of
financing at acceptable terms, the Company's ability to sell existing business
units on favorable terms, changes in interest rates, increased inflation, the
outcome of pending litigation related to the previously announced accounting
irregularities, and the Company's ability to implement operational and financial
systems to manage the Company's decentralized operations. Additional information
regarding important factors that could cause actual results of operations or
outcomes of other events to differ materially from any such forward-looking
statement also appears elsewhere herein, including under the headings "Results
of Operations", "Liquidity and Capital Resources", "Backlog", and "Seasonality
and Fluctuations in Quarterly Results".
DT INDUSTRIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PAGE 15
--------------------------------------------------------------------------------
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the percentage of
consolidated net sales represented by certain items reflected in the Company's
consolidated statement of operations:
Three Months Ended
September 23, September 24,
2001 2000
------------------ ----------------------
Net sales 100.0% 100.0%
Cost of sales 79.1 82.8
------------------ ----------------------
Gross profit 20.9 17.2
Selling, general and administrative expenses 15.0 16.9
------------------ ----------------------
Operating income 5.9 0.3
Interest expense 3.1 3.0
Dividends on Company-obligated, mandatorily redeemable
convertible preferred securities of subsidiary DT Capital Trust 1.4 1.2
------------------ ----------------------
Income (loss) before provision for income taxes 1.4 (3.9)
Provision (benefit) for income taxes 0.5 (1.2)
------------------ ----------------------
Net income (loss) 0.9% (2.7)%
================== ======================
DT INDUSTRIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PAGE 16
--------------------------------------------------------------------------------
THREE MONTHS ENDED SEPTEMBER 23, 2001
COMPARED TO THREE MONTHS ENDED SEPTEMBER 24, 2000
The comparability of the operating results for the first quarters of fiscal 2002
and 2001 was affected by the sale of substantially all of the assets of three
divisions. The following table summarizes first quarter results for fiscal 2002,
fiscal 2001 as reported, and fiscal 2001 proforma excluding the operating
results of the divisions sold in millions:
Three Months Ended
------------------------------------------------------------------------
September 24, Proforma
September 23, 2000 Proforma September 24,
2001 as reported adjustments 2000
---------------------------------------------------------------------------------------------------------------------
Net sales $ 100.5 $ 116.5 $ (10.8) $ 105.7
Gross profit $ 21.0 $ 20.0 $ (0.8) $ 19.2
Gross margin 20.9% 17.2% 7.4% 18.2%
Selling, general and administrative expenses $ 15.0 $ 19.7 $ (1.2) $ 18.5
Operating income $ 6.0 $ 0.3 $ 0.4 $ 0.7
Operating margin 5.9% 0.3% 3.7% 0.7%
Consolidated net sales for the three months ended September 23, 2001 were $100.5
million, a decrease of $16.0 million, or 13.7%, from $116.5 million for the
three months ended September 24, 2000.
Net sales by segment were as follows (in millions):
Three Months Three Months
Ended September Ended September
23, 2001 24, 2000 Decrease
-------------------- -------------------- -------------------
Automation $ 81.5 $ 84.4 $ (2.9)
Packaging 18.4 22.8 (4.4)
Other 0.6 9.3 (8.7)
-------------------- -------------------- -------------------
$ 100.5 $ 116.5 $ (16.0)
==================== ==================== ===================
Automation segment sales decreased $2.9 million, or 3.4%, to $81.5 million
during the three months ended September 23, 2001. The decrease in sales
reflects a substantial decrease in automotive related orders over the last 12
months. Sales to the automotive related industry decreased by approximately $13
million or 31% from the first quarter of fiscal 2001. This decrease was
partially offset by a large order that generated an $11 million increase
in sales for the heavy truck industry. Sales to the electronic market showed a
slight increase from the prior year. Additionally, $0.9 million of the decrease
in sales in the first quarter of fiscal 2002 is attributable to the sale of
Vanguard Technical Solutions (Vanguard) in March 2001.
Packaging segment sales decreased $4.4 million, or 19.3%, to $18.4 million
during the three months ended September 23, 2001. The sale of Scheu & Kniss in
the first quarter of 2002 contributed to $1.4 million of the decrease in sales
from the first quarter of fiscal 2001. The remaining decrease in Packaging
segment sales was primarily attributable to the Company's decision to exit the
extrusion business and lower sales of thermoforming equipment related to the
softness in the plastics market. Extrusion sales in the first quarter of fiscal
2001 were $2.0 million.
DT INDUSTRIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PAGE 17
--------------------------------------------------------------------------------
Sales from the Company's other businesses decreased $8.7 million as a result of
the sale of substantially all of the assets of Detroit Tool Metal Products Co.
(DTMP) in the first quarter of fiscal 2002. DTMP's sales were $8.5 million in
first quarter fiscal 2001.
Gross profit increased by $1.0 million to $21.0 million for the three months
ended September 23, 2001 versus $20.0 million for the three months ended
September 24, 2000. The gross margin increased to 20.9% from 17.2%. The increase
reflects higher gross margins in both the Automation and Packaging segments in
the first quarter of fiscal 2001.
The gross margins in the Automation segment increased to 20.2% in the first
quarter of 2002 from 17.2% in the first quarter of fiscal 2001. The increase in
gross margins were primarily as a result of higher margins in the electronics
market gained from manufacturing efficiencies in the production of duplicate
systems.
The Packaging segment's margins increased to 24.2% in the first quarter of 2002
from 19.9% in the first quarter of 2001. Several packaging businesses showed
significant improvements in gross margins in the first quarter of 2002 partially
resulting from fiscal 2001 restructurings which reduced headcount and overhead
costs.
Selling, general and administrative (SG&A) expenses were $15.0 million for the
three months ended September 23, 2001 compared to $19.7 million for the three
months ended September 24, 2000. The $4.7 million decrease in SG&A expenses is
primarily a result of the restructurings which reduced administrative headcount,
discontinuance of goodwill amortization in fiscal 2002, and divestitures. See
the discussion below regarding the adoption of new accounting pronouncement
related to goodwill and other intangible assets. $1.2 million of the decrease in
SG&A expenses is attributable to the sale of Vanguard, DTMP, and Scheu and
Kniss. SG&A expenses as a percentage of consolidated net sales decreased to
15.0% from 16.9%.
Operating income was $6.0 million for the three months ended September 23, 2001
versus $0.3 million for the three months ended September 24, 2000, as a result
of the factors noted above.
Interest expense decreased $0.3 million to $3.2 million for the three months
ended September 23, 2001 versus $3.5 million for the three months ended
September 24, 2000. The decrease resulted from the lower outstanding borrowings
from the divestiture proceeds. Dividends on the convertible preferred securities
were $1.4 and $1.3 million for the three months ended September 23, 2001 and
September 24, 2000, respectively. The dividends are currently being deferred and
accrued in conjunction with the September 1999 amendment to the credit facility.
The provision for income taxes for the three months ended September 23, 2001
reflected an effective tax rate of approximately 37%. The provision for income
taxes for the three months ended September 24, 2000, reflects book income plus
permanent differences, primarily non-deductible goodwill amortization related to
certain acquisitions, multiplied by statutory federal and applicable state tax
rates.
Net income was $0.9 million for the three months ended September 23, 2001
compared to a net loss of $3.1 million for the three months ended September 24,
2000. Basic and diluted earnings per share were $0.08 for the three months ended
September 23, 2001 compared to basic and diluted loss per share of $0.31 for the
three months ended September 24, 2000. Basic and diluted weighted average shares
outstanding were 10.3 and 10.4 million shares for the three months ended
September 23, 2001, respectively. Basic and diluted weighted average common
shares outstanding were both 10.1 million for the three months ended September
24, 2000.
The Company adopted Statement of Financial Accounting Standard No. 142 (SFAS
142), "Goodwill and Other Intangible Assets" in the first quarter of fiscal
2002. Under SFAS 142, goodwill and indefinite lived intangible assets are not
amortized but are tested annually for impairment.
DT INDUSTRIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PAGE 18
--------------------------------------------------------------------------------
The following table summarizes the effect of adoption of SFAS 142 on net income
(loss) and earnings (loss) per share (EPS):
For the three months ended
September 23, 2001 September 24, 2000
-------------------- ----------------------
Reported net income (loss) $ 859 $ (3,124)
Add back: Goodwill amortization (net of tax) - 1,195
-------------------- ----------------------
Adjusted net income (loss) $ 859 $ (1,929)
==================== ======================
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE:
Reported net income (loss) $ 0.08 $ ( 0.31)
Add back: Goodwill amortization (net of tax) - 0.12
-------------------- ----------------------
Adjusted net income (loss) $ 0.08 $ (0.19)
==================== ======================
LIQUIDITY AND CAPITAL RESOURCES
Net income plus non-cash operating charges provided $3.4 million of operating
cash flow for the quarter ended September 23, 2001 compared to $0.9 million for
the quarter ended September 24,2000. Net decreases in working capital balances
provided operating cash of $9.7 million, resulting in net cash provided by
operating activities of $13.1 million for the quarter ended September 23, 2001.
The lower working capital balances primarily reflect decreased accounts
receivable and costs and earnings in excess of amounts billed and are partially
offset by lower accounts payable. The decrease in accounts receivable and costs
and earnings in excess of amounts billed was largely in the Automation segment
and resulted primarily from the shipment, collection and progress billings on
several large projects for the electronics market in the first quarter of 2002.
Accounts payable decreased from the balance at June 24, 2001 largely due to the
decrease in work in process in the first quarter of 2002.
Working capital balances can fluctuate significantly between periods as a result
of the significant costs incurred on individual contracts, and the relatively
large amounts invoiced and collected by the Company for a number of large
contracts, and the amounts and timing of customer advances or progress payments
associated with certain contracts.
During the three months ended September 23, 2001, the Company made $31.1 million
in payments under its senior credit facility and other debt agreements. The
proceeds from the first quarter asset sales of $18.2 million as well as a $9.7
million decrease in working capital contributed to the paydown of debt in the
first quarter of fiscal 2002. The Company also paid $2.3 million in financing
costs in the first quarter of fiscal 2002 as a result of the extension of the
credit facility in August 2001 and made capital expenditures of $0.3 million.
During the three months ended September 24, 2000, the Company borrowed $18.2
million on its revolving credit facility. The funds were used primarily for
working capital requirements and capital expenditures of $0.9 million.
The Company's credit facility includes a $113.1 million revolving credit
facility and an $8.7 million term credit facility and matures on July 2, 2002.
Borrowings under the amended credit facility bear interest at floating rates
based on the prime rate plus 3% for domestic borrowings and the Eurodollar rate
plus 6% on foreign currency borrowings through December 31, 2001. After December
31, 2001, the prime rate increment increases to 3.5% and the Eurodollar rate
increment increases to 6.5%. Borrowings under the credit facility are secured by
substantially all of the assets of DTI and its domestic subsidiaries. Total
borrowing availability under the credit facility as of September 23, 2001 was
$22.9 million. The Company was in compliance with each of the financial
covenants under the amended credit facility as of September 23, 2001.
DT INDUSTRIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PAGE 19
--------------------------------------------------------------------------------
In August 2001, the Company extended the senior credit facility, which was
scheduled to mature on July 2, 2001, through an amendment to the term and
revolving loan agreement. The amended agreement requires the following principal
pre-payments on the term and revolving loan agreements:
- $35.5 million in scheduled principal pre-payments from August 2001
through June 2002;
- the use of 80-100% of the proceeds from the sale of assets by the
Company's or its subsidiaries to reduce the principal balance of the
term and revolving loan agreements; and
- the use of 30% of the cash receipts of a specified contract to reduce
the principal balance of the term and revolving loan agreements,
estimated to be approximately $8.5 million assuming the contract cash
receipts are received in fiscal 2002.
At September 23, 2001, the Company had made all required payments under the
amended agreement.
Since the Company's credit facility matures on July 2, 2002, borrowings of $96
million under this facility have been presented within current liabilities in
the Company's September 24, 2001 consolidated balance sheet. The Company has
initiated discussions with several lenders for purposes of refinancing
borrowings under its credit facilities, and expects to complete such refinancing
prior to July 2, 2002, although there can be no assurance that such refinancing
will be completed by this date. The Company has implemented various cash
management initiatives, including a reduction in discretionary capital
expenditures, increased focus on collections of accounts receivable, accelerated
payment terms from customers, among other things. As discussed earlier, the
Company sold substantially all of the net assets of DTMP and S&K for aggregate
net cash proceeds of $18.2 million.
The Company has also been pursuing the sale of the Stokes division, another
small business and a product line of the Packaging segment, and the possible
sale/leaseback of various owned properties. Due primarily to the current
economic situation, the Company was not able to complete the planned sale of
Stokes or the Packaging product line in the first quarter of 2002. The Company
continues to pursue the sale of these businesses. In October 2001, the Company
completed the sale of the remaining Components division resulting in net
proceeds of approximately $0.7 million. In the first quarter of fiscal 2002 the
Company announced the consolidation of two divisions within each of the
Automation and Packaging business segments. One of the packaging facilities is
scheduled to be shut down by December 2001. The consolidations are expected to
provide more effective use of the common sales force and provide combined annual
savings of approximately $1.5 million.
In conjunction with an amendment to the credit facility in September 1999, the
Company elected to defer interest payments on its convertible junior
subordinated debentures. The credit facility requires that the deferral continue
until the maturity of the credit facility. As a result, quarterly distributions
on the Convertible Preferred Securities are also being deferred and DTI is not
declaring or paying any dividends on its common stock. Dividends on the
Convertible Preferred Securities in the amount of $12.1 million have been
deferred and accrued as of September 23, 2001 and are included in the principal
amount of the securities.
Management anticipates capital expenditures for fiscal 2002 to be in the range
of $4.0 to $6.0 million. This includes primarily only recurring replacement or
refurbishment of machinery and equipment. Funding for capital expenditures is
expected to be provided by cash from operating activities and through the
Company's credit facilities.
Based on its ability to generate funds from operations and the availability of
funds under its current credit facilities, the Company believes that it will
have sufficient funds available to meet its currently anticipated operating and
capital expenditure requirements through the remainder of fiscal 2002.
DT INDUSTRIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PAGE 20
--------------------------------------------------------------------------------
BACKLOG
The Company's backlog is based upon customer purchase orders that the Company
believes are firm. As of September 23, 2001, the Company had $151.3 million of
orders in backlog, which compares to a backlog of approximately $311.1 million
as of September 24, 2000.
The backlog for the Automation segment at September 23, 2001 was $129.9 million,
a decrease of $137.2 million, or 51.4%, from a year ago. The decrease in backlog
reflects the unusually high backlog of orders of automation systems at September
24, 2000 from key electronic and tire markets. The Company has not been able to
replace this work with the current economic conditions affecting most of its
other markets. The sale of Vanguard in March 2001 also resulted in a $5.1
million decrease in backlog. Backlog for the Packaging segment was $21.4 million
at September 23, 2001, a decrease of $14.3 million, or 40.1%, from the backlog
at September 24, 2000. The decrease in backlog is primarily due to the soft
order activity for Kalish and Sencorp in the first quarter.
SEASONALITY AND FLUCTUATIONS IN QUARTERLY RESULTS
In general, the Company's business is not subject to seasonal variations in
demand for its products. However, because orders for certain of the Company's
products can be several million dollars, a relatively limited number of orders
can constitute a meaningful percentage of the Company's revenue in any one
quarterly period. As a result, a relatively small reduction or delay in the
number of orders can have a material impact on the timing of recognition of the
Company's revenues. Certain of the Company's revenues are derived from fixed
price contracts. To the extent that original cost estimates prove to be
inaccurate, profitability from a particular contract may be adversely affected.
Gross margins may vary between comparable periods as a result of the variations
in profitability of contracts for large orders of special machines as well as
product mix between the various types of custom and proprietary equipment
manufactured by the Company. Accordingly, results of operations of the Company
for any particular quarter are not necessarily indicative of results that may be
expected for any subsequent quarter or related fiscal year.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See Management's Discussion and Analysis of Financial Condition and Results of
Operations - Market Risk of the Company's Annual Report on Form 10-K for the
year ended June 24, 2001. There has been no material change to that information
that is required to be disclosed in this Quarterly Report on Form 10-Q.
DT INDUSTRIES, INC.
PART II. OTHER INFORMATION
PAGE 21
--------------------------------------------------------------------------------
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in legal proceedings, including a Securities
Action, as previously described in Part 1, "Item 3. Legal Proceedings"
of the Company's Annual Report on Form 10-K for the fiscal year ended
June 24, 2001.
Since the end of the fiscal year ended June 24, 2001, there have been
no material developments in previously reported legal proceedings other
than as follows:
On October 4, 2001, the Federal District Court for the Western District
of Missouri granted the Company's motion to dismiss the Securities
Action, without prejudice. Pursuant to the Court's dismissal order, all
defendants were dismissed, but the plaintiffs were granted the right to
amend their complaint. On October 24, 2001, plaintiffs filed a motion
with the Court indicating their intent to file an amended complaint. To
date, however, no such amended complaint has been filed.
If and when the Securities Action is revived by an amended complaint,
the Company intends to defend it vigorously. While it is not feasible
to predict or determine the final outcome of the Securities Actions or
similar proceedings, or to estimate the amounts or potential range of
loss with respect to these matters, management believes the Company and
its officers and directors have adequate liability insurance to cover
the liabilities, costs and expenses arising out of the Securities
Actions, although there can be no assurance that the insurance proceeds
will be adequate to cover any such losses. Further, there can be no
assurance that an adverse outcome with respect to the Securities
Actions will not have a material adverse impact on the Company's
financial condition, results of operations or cash flow.
In addition to the above-described items, the Company is from time to
time subject to claims and suits arising in the ordinary course of
business. Although the ultimate disposition of such proceedings is not
presently determinable, management does not believe that the ultimate
resolution of these matters will have a material adverse effect on the
Company's financial condition, results of operations or cash flows. The
Company maintains comprehensive general liability insurance that it
believes to be adequate for the continued operation of its business.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
None
(b) On August 15, 2001, a Current Report on Form 8-K was filed to
report, pursuant to Items 5 and 7 thereof, the release of the
Company's earnings for the fourth quarter of fiscal 2001,
among other things.
DT INDUSTRIES, INC.
SIGNATURES
Pursuant to the requirements 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.
Date: November 7, 2001 /s/ John M. Casper
-----------------------------------------
(Signature)
John M. Casper
Senior Vice President - Finance
and Chief Financial Officer