AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 10, 2002
REGISTRATION NO. 333-91500
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
DT INDUSTRIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 44-0537828
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
907 WEST FIFTH STREET
DAYTON, OHIO 45407
(937) 586-5600
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
DENNIS S. DOCKINS
GENERAL COUNSEL
DT INDUSTRIES, INC.
907 WEST FIFTH STREET
DAYTON, OHIO 45407
(937) 586-5600
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
COPY TO:
ADAM R. KLEIN
KATTEN MUCHIN ZAVIS ROSENMAN
525 WEST MONROE STREET, SUITE 1600
CHICAGO, ILLINOIS 60661-3693
(312) 902-5200
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SECTION 8(a), MAY DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THE SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES, AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES, IN ANY STATE OR JURISDICTION WHERE THE OFFER OR
SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED OCTOBER 10, 2002
PROSPECTUS
15,760,658 SHARES
DT INDUSTRIES, INC.
COMMON STOCK
This prospectus relates to the offer and sale from time to time of up to
15,760,658 shares of our common stock, including the associated preferred stock
purchase rights, by the stockholders identified in this prospectus. Of these
shares, 2,500,000 are issuable upon the conversion of preferred securities of
our wholly-owned subsidiary trust by certain of the selling stockholders. We
will not receive any proceeds from the sale of the shares.
Our common stock is listed on the Nasdaq National Market under the symbol
"DTII." On October 9, 2002, the closing price of our common stock as reported on
the Nasdaq National Market was $2.20 per share.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 5.
---------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
The date of this Prospectus is , 2002
You should rely only on the information contained or incorporated by
reference in this prospectus or in any supplement. We have not authorized anyone
to provide you with different or additional information. If anyone provides you
with different or additional information, you should not rely on it. This
prospectus is not an offer to sell these securities in any jurisdiction where
the offer or sale is not permitted. You should assume that the information
appearing or incorporated by reference in this prospectus and any supplement is
accurate as of its date only. Our business, financial condition, results of
operations and prospects may have changed since that date.
Our principal executive offices are located at 907 West Fifth Street,
Dayton, Ohio 45407, and our telephone number is (937) 586-5600. Our web site is
www.dtindustries.com. Information contained in our website is not incorporated
by reference into this prospectus, and you should not consider information
contained in our web site as part of this prospectus. All references in this
prospectus to our common stock include the associated preferred stock purchase
rights.
---------------------
TABLE OF CONTENTS
Where You Can Find More Information......................... 1
Prospectus Summary.......................................... 2
Risk Factors................................................ 5
Cautionary Note Regarding Forward-Looking Statements........ 13
Use of Proceeds............................................. 14
Selling Stockholders........................................ 14
Plan of Distribution........................................ 17
Legal Matters............................................... 18
Experts..................................................... 18
Documents Incorporated by Reference......................... 18
---------------------
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly, and special reports, proxy statements, and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms at Judiciary Plaza Building, 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, as well as at the SEC's regional
offices at 175 West Jackson Street, Suite 900, Chicago, Illinois 60661 and 223
Broadway, New York, New York 10279. Copies of these materials may also be
obtained from the SEC at prescribed rates by writing to the Public Reference
Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549. You may
obtain information about the operation of the SEC public reference room in
Washington, D.C. by calling the SEC at 1-800-SEC-0330. Our filings are also
available to the public from commercial document retrieval services and at the
web site maintained by the SEC at "http:// www.sec.gov."
This prospectus is part of a registration statement on Form S-3 that we
filed with the SEC. The registration statement contains more information about
us and our common stock, including certain exhibits. You can obtain a copy of
the registration statement from the SEC at the addresses or web site listed
above.
1
PROSPECTUS SUMMARY
This summary highlights only some of the information contained or
incorporated by reference in this prospectus. This summary does not contain all
of the information that you should consider in making your investment decision.
You should read carefully this entire prospectus and the information
incorporated by reference, including the "Risk Factors" section and our
consolidated financial statements and notes to those financial statements
incorporated by reference, before making an investment decision.
OUR BUSINESS
We are 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. Our business strategy is to
provide, develop and market complementary technologies and capabilities to
supply customers with integrated processing, assembly, testing and packaging
systems for their products.
Through the end of fiscal 2002, we primarily operated in two business
segments -- Automation and Packaging. We announced in March 2002 that we are
reorganizing our operations into four business segments: Material Processing,
which consists of two divisions, Precision Assembly, Assembly and Test, which
consists of two divisions, and Packaging Systems. This new structure is designed
to allow us to streamline product offerings, capitalize on the combined strength
of operating units, reduce overlap in the marketplace and improve capacity
utilization, internal controls, financial reporting and disclosure controls. We
are still implementing this integration plan and completing the systems required
to provide, analyze, review and report results of operations for current and
historical periods for our newly-defined segments. We intend to begin reporting
financial results for these four new business segments in our Form 10-Q for the
fiscal quarter ended September 29, 2002.
DT MATERIAL PROCESSING manufactures special machines, automated systems,
tooling and fixturing, the Peer(TM) brand of automated welding systems,
high-speed rotary presses and plastic processing machines and equipment for a
wide variety of products, such as appliances, electronics, building
construction, hardware, cosmetics, food and beverage, toys, and automotive
accessories. The DT Material Processing segment is comprised of the Detroit Tool
and Engineering and DT Converting Technologies divisions.
DT PRECISION ASSEMBLY designs, manufactures and integrates custom precision
assembly systems, primarily for customers in the medical, electronics, consumer,
bioscience and automotive markets.
DT ASSEMBLY AND TEST designs and builds custom non-synchronous assembly
systems, rotary dial assembly systems, electrified monorail material handling
systems, fuel injection, engine and transmission test systems, and lean assembly
systems, primarily for customers in automotive-related, electronics and heavy
equipment markets. The Assembly and Test segment is comprised of the DT Assembly
and Test -- North America and DT Assembly and Test -- Europe divisions.
DT PACKAGING SYSTEMS designs and builds proprietary machines and integrated
systems utilized for packaging, liquid filling or tube filling applications that
are marketed under individual brand names and manufactured for specific
industrial applications using designs we own or license, primarily for customers
in the pharmaceutical, nutritional, food, cosmetic, toy and chemical industries.
RECENT DEVELOPMENTS
RECAPITALIZATION TRANSACTION. On June 20, 2002, we consummated a
significant financial recapitalization transaction pursuant to which we:
- amended the credit agreement with our lenders to, among other things,
extend the maturity date under our senior credit facility from July 2,
2002 to July 2, 2004, repay approximately $18.5 million of our
outstanding indebtedness under the senior credit facility using proceeds
from a private placement of our common stock, reduce the total revolving
loan commitment under the facility to $70.4 million and modify various
financial covenants;
2
- sold an aggregate of 7,000,000 shares of our common stock at a purchase
price of $3.20 per share in a private placement; and
- issued an aggregate of 6,260,658 shares of our common stock in exchange
for $35.0 million of the outstanding preferred securities of our
wholly-owned subsidiary trust, plus approximately $15.1 million of
accrued and unpaid distributions on the trust preferred securities, at an
exchange rate of $8.00 per share, and amended the terms of the $35.0
million of trust preferred securities that have remained outstanding
following the closing of the recapitalization to, among other things,
reduce their conversion price from $38.75 to $14.00 per share, shorten
their maturity date from May 31, 2012 to May 31, 2008 and provide for a
"distribution holiday" pursuant to which distributions will not accrue
from April 1, 2002 through July 2, 2004.
The recapitalization transaction was necessary because we would not have
been able to meet our obligations under our senior credit facility if it had
matured on July 2, 2002, as originally scheduled. In order to obtain the
extension of our senior credit facility, we determined that it was necessary to
concurrently (1) raise additional equity in the private placement to help pay
down some of the outstanding indebtedness under the facility and (2) reduce the
subordinated debt held by our wholly-owned subsidiary trust by exchanging half
of the trust's outstanding preferred securities, plus accrued and unpaid cash
distributions, for equity. In connection with the recapitalization transaction,
we agreed to file this registration statement with the SEC to register the
resale of the shares of common stock issued, or issuable, as applicable, in the
private placement and the exchange and restructuring of the trust preferred
securities.
RECENT RESTATEMENT OF HISTORICAL FINANCIAL RESULTS. As publicly announced
on August 6, 2002 (prior to the public announcement of our consolidated
financial results for the fiscal year ended June 30, 2002), we discovered that
we were required to make accounting adjustments to our previously reported
audited consolidated financial results for the fiscal years ended June 24, 2001,
June 25, 2000 and June 27, 1999, as well as our previously reported unaudited
consolidated financial results for the first three fiscal quarters of 2002, due
to an overstatement of the balance sheet account entitled costs and estimated
earnings in excess of amounts billed on uncompleted contracts ("CIE"). The CIE
balance is comprised of estimated gross margins recognized to date plus actual
work-in-process costs incurred to date less billings/deposits to date. The
overstatement of CIE occurred at our Assembly Machines, Inc. ("AMI") subsidiary,
a small facility located in Erie, Pennsylvania that has historically been part
of our Automation segment. This CIE overstatement resulted in a corresponding
understatement of cost of sales because CIE represents project costs that have
been expended, but are still available to be billed; therefore, the
overstatement in CIE included available to bill amounts that should have been
expensed to cost of sales in prior periods. The cumulative amount of the
accounting adjustments increased the aggregate pre-tax loss reported during the
impacted periods by $6.5 million and increased the aggregate net loss after
taxes reported during the impacted periods by $4.2 million. Our restated audited
consolidated financial statements as of, and for the fiscal year ended, June 24,
2001 and our restated audited consolidated statement of operations, changes in
stockholders' equity and cash flows for the year ended June 25, 2000 are
included on pages F-3 through F-6 of our Form 10-K for the fiscal year ended
June 30, 2002, which is incorporated by reference herein, and Note 16 to the
audited consolidated financial statements included therein. Restated selected
consolidated financial data for those two fiscal years, as well as the fiscal
year ended June 27, 1999, is included under "Item 6. Selected Financial Data" in
our 2002 Form 10-K. Restated unaudited consolidated quarterly financial data for
the fiscal years ended June 30, 2002 and June 24, 2001 is included in Note 17 to
the audited consolidated financial statements included in our 2002 Form 10-K.
We discovered the accounting adjustments while beginning the transfer of
the sales and accounting functions at AMI to our DT Precision Assembly segment
headquarters in Buffalo Grove, Illinois in connection with the reorganization of
our operations described below. Our Board of Directors authorized the Audit and
Finance Committee to conduct an independent investigation, with the assistance
of special counsel retained by the Committee, to identify the causes of these
accounting adjustments. The Committee retained Katten Muchin Zavis Rosenman
("KMZR") as special counsel, and KMZR engaged an independent accounting firm to
assist in the investigation. In addition, we investigated whether similar issues
existed at any of our other subsidiaries. As a result of the investigations, we
believe that the accounting issues were confined to AMI and
3
determined that the misstatement of the CIE account at AMI was primarily the
result of the former controller of AMI, without instruction from, or the
knowledge of, our management, (1) failing to properly account for manufacturing
variances, (2) adding inappropriate costs to work-in-process amounts, (3)
understating amounts billed and/or customer deposits and (4) failing to
recognize certain losses, in each case on various projects during the relevant
time period. Using these miscalculations of CIE, the former AMI controller made
incorrect journal entries that were recorded in the books and records of AMI.
---------------------
We were incorporated in Delaware in January 1993 as the successor to Peer
Corporation, Detroit Tool Group, Inc. 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 Detroit Tool Group, the sole stockholder of
Detroit Tool and Engineering Company and Detroit Tool Metal Products Co.
4
RISK FACTORS
An investment in our common stock involves a number of risks. You should
carefully consider the risks and uncertainties described below, along with all
of the other information included or incorporated by reference in this
prospectus, before you decide whether to purchase shares of our common stock.
Any of the following risks could materially adversely affect our business,
financial condition or operating results and could negatively impact the value
of your investment.
RISKS RELATED TO OUR BUSINESS
OUR INDEBTEDNESS AND OUR OBLIGATIONS UNDER THE PREFERRED SECURITIES OF OUR
WHOLLY-OWNED SUBSIDIARY TRUST COULD ADVERSELY AFFECT OUR FINANCIAL HEALTH.
As of August 31, 2002, our total indebtedness, plus our obligations under
the preferred securities of our wholly-owned subsidiary trust (the sole asset of
which is our junior subordinated debentures), was approximately $79.3 million.
We expect to incur additional indebtedness in the future to fund our operations
and capital expenditures. Our indebtedness and obligations under the trust
preferred securities could adversely affect our financial health by:
- limiting our ability to obtain additional financing that we may need to
operate and develop our business;
- requiring us to dedicate or reserve a substantial portion of our cash
flow from operations to service our debt and other obligations, which
reduces the funds available for operations and future business
opportunities;
- increasing our vulnerability to a downturn in general economic conditions
or other adverse events in our business;
- increasing our vulnerability to increases in interest rates because our
borrowings under our senior credit facility are at variable interest
rates; and
- making us more leveraged than certain competitors in our industry, which
could place us at a competitive disadvantage.
Our senior credit facility matures on July 2, 2004 and we have periodic
commitment reductions of $1.5 million per quarter commencing September 30, 2002
while the senior credit facility is outstanding. In addition, the trust
preferred securities and our related junior subordinated debentures are
scheduled to mature on May 31, 2008 and, although they may be deferred until
such maturity date, we are obligated to make cash distributions on these
securities beginning on July 2, 2004 for at least one quarter to qualify to
defer subsequent distributions after the quarter ending September 30, 2004. If
the cash flow from our operating activities is insufficient to meet our
obligations under the senior credit facility and the trust preferred securities,
we may need to delay or reduce capital expenditures, restructure or refinance
our debt, sell assets or seek additional equity capital. For example, if we had
not consummated our financial recapitalization transaction on June 20, 2002,
whereby we extended the maturity of our senior credit facility and used proceeds
from a private placement of common stock to repay outstanding indebtedness of
approximately $18.5 million under our senior credit facility, we would not have
been able to make the approximately $48.8 million lump sum payment that would
otherwise have been due on July 2, 2002. In addition, the sale of assets for
approximately $24.4 million in fiscal 2002, coupled with the cash provided by
operations of approximately $55.4 million in fiscal 2002 that reflected our
working capital management program, enabled us to make scheduled reductions of
approximately $58.5 million and cash interest payments of approximately $9.0
million under our senior credit facility in fiscal 2002. Delaying or reducing
capital expenditures, restructuring or refinancing our debt, selling assets
and/or raising additional equity capital, however, may not be sufficient to
allow us to service our debt and other obligations in the future. Further, we
may be unable to take any of these actions on satisfactory terms, in a timely
manner, or at all. If we do not have sufficient funds to satisfy our obligations
under our senior credit facility and the trust preferred securities, we may not
be able to continue our operations as currently anticipated.
5
THE COVENANTS AND RESTRICTIONS UNDER OUR SENIOR CREDIT FACILITY COULD LIMIT
OUR OPERATING AND FINANCIAL FLEXIBILITY.
Under the terms of our senior credit facility, we must maintain minimum
levels of EBITDA (earnings before interest, taxes, depreciation and
amortization) and quarterly net worth, not exceed annual capital expenditure
limitations and comply with various financial performance ratios. We may not be
able to comply with these covenants. For example, as a result of our financial
performance in fiscal 2002, we failed to satisfy the minimum trailing
twelve-month EBITDA and maximum funded debt to EBITDA financial covenants under
the facility. In connection with our recapitalization transaction completed on
June 20, 2002, we obtained waivers from our lenders for our failure to comply
with those covenants, and or lenders established new covenants commencing with
the first quarter of fiscal 2003. We also exceeded our capital expenditure
limitation under the facility for the fourth quarter of fiscal 2002. We obtained
a waiver from our lenders for our failure to comply with this provision. Any
other failure to comply with the covenants in our credit facility, however,
could trigger an event of default that, if not waived or cured, would entitle
our lenders to, among other things, accelerate the maturity of the debt
outstanding under our senior credit facility so that it is immediately due and
payable. In addition, no further borrowings would be available under the
revolving portion of our senior credit facility. If our indebtedness is
accelerated, we may not have sufficient funds to satisfy our obligations and we
may not be able to continue our operations as currently anticipated.
In addition, our senior credit facility contains restrictive covenants that
could limit our ability to engage in transactions that we believe are in our
long-term best interest, including the following:
- certain types of mergers or consolidations;
- paying dividends or other distributions to our stockholders;
- making investments;
- selling or encumbering assets;
- changing lines of business;
- borrowing additional money; and
- engaging in transactions with affiliates.
These restrictions could limit our ability to react to changes in our operating
environment or take advantage of business opportunities.
OUR BORROWING BASE OF ASSETS MAY NOT BE SUFFICIENT TO PERMIT US TO BORROW
SUFFICIENT FUNDS UNDER OUR SENIOR CREDIT FACILITY TO OPERATE OUR BUSINESS.
All advances and letters of credit in excess of $53.0 million made under
the revolver portion of our senior credit facility and letters of credit are
subject to a monthly asset coverage test based on eligible accounts receivable
and eligible inventory. Under this test, we may not always have the ability to
borrow up to the amount by which the credit facility's commitment exceeds $53.0
million. Furthermore, our borrowing base of assets may not be sufficient in the
future to permit us to borrow sufficient funds to operate our business and meet
our capital resources needs, including as a result of our periodic commitment
reduction obligations under the credit facility being applied against our
borrowing base of assets.
WE REPORTED AN OPERATING LOSS FOR OUR 2001 AND 2002 FISCAL YEARS AND MAY
NOT ACHIEVE OR SUSTAIN PROFITABILITY IN THE NEAR FUTURE.
We reported a restated operating loss of approximately $66.8 million for
the fiscal year ended June 24, 2001 and an operating loss of approximately $1.8
million for the fiscal year ended June 30, 2002. We are implementing a plan to
restructure our business by consolidating manufacturing and fabrication
operations, establishing four business segments and reducing our workforce. We
are focused on improving operational performance through greater use of risk
assessment techniques, higher quality and more detailed project proposals, a
strengthening of the skill set in applications, engineering and project
management, and an
6
increased focus on working capital management. To the extent that our corporate
restructuring and focus on operational improvements do not generate the cost
savings or net sales that we anticipate, we may continue to incur losses and may
not achieve profitability in the near future. Furthermore, if we achieve
profitability in the near future, we may not be able to sustain it.
WE HAVE A NUMBER OF DIFFERENT OPERATING DIVISIONS AND MANUFACTURING
FACILITIES AND MAY HAVE DIFFICULTY ESTABLISHING EFFECTIVE INTERNAL AND
DISCLOSURE CONTROLS AND CONDUCTING OUR OPERATIONS ON AN INTEGRATED BASIS.
Upon completion of our corporate restructuring, we will have six operating
divisions with 12 manufacturing facilities within four business segments. Some
of our operating facilities have different systems, internal and disclosure
controls and procedures in various operational and financial areas that we are
in the process of rationalizing and integrating. We will need to continue to
upgrade and modify our financial, information and management systems and
controls to ensure uniform compliance with corporate procedures and policies and
accurate and timely reporting of financial data and required company disclosure.
This may be difficult because we have facilities in the United Kingdom, Germany
and six different states in the United States. If we are unable to fully
integrate our operations and improve our internal and disclosure controls
smoothly, quickly, successfully, or at all, we will not achieve the efficiency
and results that the rationalization and consolidation of our operations are
designed to accomplish.
A DOWNTURN IN GENERAL ECONOMIC CONDITIONS AND THE ECONOMIC CONDITION OF THE
MARKETS THAT WE SERVE HAS MATERIALLY ADVERSELY AFFECTED, AND MAY FURTHER
MATERIALLY ADVERSELY AFFECT, OUR REVENUES.
Our revenues and results of operations are susceptible to negative trends
in the general economy and the markets that we serve that affect capital
spending. For example, the slowing of the U.S. economy and the effects of the
events of September 11, 2001 have resulted in restrained customer capital
spending, which has adversely affected sales of our equipment to the
pharmaceutical and nutritional, plastics packaging, automotive, heavy trucks and
other industries. A prolonged economic slowdown or continued economic
uncertainty could cause our customers to further reduce or delay orders for our
products or delay payment for our delivered products. If this occurs, our
revenues and cash flows could be further materially adversely affected.
WE MAY NOT RECOGNIZE AS SALES A MATERIAL AMOUNT OF OUR BACKLOG, WHICH COULD
MATERIALLY HARM OUR BUSINESS.
Our backlog was $142.8 million as of June 30, 2002. Our backlog is based
upon customer purchase orders that we believe are firm. The level of our backlog
at any current time, however, is not necessarily indicative of our future
operating performance for any particular reporting period because we may not be
able to recognize as sales the orders in our backlog when expected or at all due
to various contingencies, many of which are beyond our control. For example,
many of our purchase orders are subject to cancellation by the customer upon
notification and certain purchase orders are subject to delays in completion and
shipment at the request of the customer. Although we have historically
recognized as sales almost all of the orders in our backlog, our ability to
recognize as sales in fiscal 2003 the orders in our backlog as of June 30, 2002
could be adversely affected if a continued downturn or continued uncertainty in
the economic condition of the markets we serve causes our customers in those
markets to cancel purchase orders due to poor demand for their products and
their need to restrain capital spending. If we fail to recognize a material
amount of our backlog, our net sales would be materially harmed.
OUR OVERALL PERFORMANCE AND QUARTERLY OPERATING RESULTS MAY FLUCTUATE
SIGNIFICANTLY AND COULD ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK.
Our net sales and results of operations have varied significantly from
quarter to quarter. We expect large fluctuations in our future quarterly
operating results due to a number of factors, including:
- the level of product and price competition;
- the length of our sales cycle and manufacturing processes;
- the size and timing of individual transactions;
- the timing of satisfying milestones in order to recognize revenue for
percentage of completion projects;
7
- the mix of customized projects, which tend to have lower gross margins
due to the difficulty in estimating the cost and pricing of less proven
concepts, and repeat and standard projects, which tend to have higher
margins, due to experience in estimating the cost and price of proven
concepts;
- the size and timing of significant pre-tax charges, including for
goodwill impairment, the write-down of assets, such as for excess and
obsolete inventories and doubtful account receivables, warrantly related
costs and restructuring charges, including costs for severance, idle
facilities and personnel relocation;
- defects and other product quality problems;
- the timing of new product introductions and enhancements by us and our
competitors;
- customers' fiscal constraints and related demand for our equipment and
systems;
- changes in foreign currency exchange rates, including for the Euro and
the British Pound; and
- general economic conditions.
As a result of these and other factors, many of which are beyond our control,
our results of operations for any particular quarter are not necessarily
indicative of results that may be expected for any subsequent quarter or related
fiscal year. These fluctuations in our quarterly results could cause our
quarterly earnings to fall below market expectations, which in turn could
adversely affect the market price of our common stock.
OUR BUSINESS COULD BE ADVERSELY AFFECTED IF WE FAIL TO ACCURATELY ESTIMATE
THE MATERIAL AND LABOR COSTS OR DURATION OF A PROJECT OR FAIL TO COMMUNICATE
CHANGES TO THESE SPECIFICATIONS TO OUR CUSTOMERS.
We derive almost all of our net sales from the sale and installation of
equipment and systems pursuant to fixed-price contracts. Because of the
complexity or customized nature of many of our projects, accurately estimating
the material and labor costs of a particular project can be a difficult task. If
we fail to accurately estimate the costs of projects during the bidding process,
we could be forced to devote additional materials and labor hours to these
projects for which we will not receive additional compensation. To the extent
that an expenditure of additional resources is required on a project, this could
reduce the profitability of, or result in a loss on, the project. In the past,
we have, on occasion, engaged in significant negotiations with customers
regarding changes to the costs or duration of specific projects. To the extent
we do not sufficiently communicate to our customers, or our customers fail to
adequately appreciate, the nature and extent of any of these changes to a
project, our reputation may be harmed and we may suffer losses on the project.
In addition, many contracts are subject to certain completion schedule
requirements with liquidated damages in the event schedules are not met as the
result of circumstances that are within our control. Our business could be
materially adversely affected if we incur significant liquidated damages due to
not satisfying projects' schedules.
THE LOSS OF, OR REDUCED PURCHASE ORDERS FROM, A KEY CUSTOMER COULD
ADVERSELY AFFECT OUR OPERATING RESULTS BECAUSE WE DEPEND ON A RELATIVELY LIMITED
NUMBER OF CUSTOMERS FOR A LARGE PORTION OF OUR NET SALES.
We have generated a substantial portion of our net sales from a relatively
small number of customers. For example, Hewlett-Packard Company accounted for
approximately 31% and 28% of our consolidated net sales during fiscal 2002 and
fiscal 2001, respectively. The loss of, or reduced orders for products from, one
or more of our significant customers, including Hewlett-Packard, could have a
material adverse effect on our future operating results. In addition, a delay in
purchase orders from, or completion of projects for, one or more of our
significant customers, including Hewlett-Packard, could have a material adverse
impact on our operating results in a particular quarterly period. Our reliance
on a limited number of customers also magnifies the risks of not being able to
collect accounts receivable from any one customer.
OUR BUSINESS COULD BE ADVERSELY AFFECTED IF WE EXPERIENCE EXCESS PRODUCT
WARRANTY OR LIABILITY CLAIMS.
We are subject to warranty claims in the ordinary course of our business.
Although we maintain reserves for such claims, the warranty expense levels may
not remain at current levels or our reserves may not be adequate. A large number
of warranty claims exceeding our current warranty expense levels could
materially harm our business. In addition, we are subject to product liability
claims from time to time for various injuries
8
alleged to have resulted from defects in the manufacture and/or design of our
products. Any resolution of these claims in a manner adverse to us could have an
adverse effect on our business, financial condition and results of operations.
These claims may also be costly to defend against and may divert the attention
of our management and resources in general.
INTENSE COMPETITION IN OUR INDUSTRY COULD IMPAIR OUR ABILITY TO GROW AND
ACHIEVE PROFITABILITY.
The market for our automation and packaging machines and systems is highly
competitive. Our competitors vary in size and resources, some of which are
larger than we are and have access to greater resources than we do. As a result,
our competitors may be in a stronger position to respond more quickly to changes
in customer needs and may be able to devote more resources to the development,
marketing and sale of their products than we can. We may also encounter
competition from new market entrants. We may not be able to compete effectively
with current or future competitors, which could impair our ability to grow and
achieve profitability.
OUR FAILURE TO RETAIN KEY PERSONNEL MAY NEGATIVELY AFFECT OUR BUSINESS.
Our success depends on our ability to retain senior executives and other
key employees who are critical to our continued development and support of our
products, the management of our diverse operations and our ongoing sales and
marketing efforts. The loss of key personnel could cause disruptions in our
operations, the loss of existing customers, the loss of key information,
expertise and know-how, and unanticipated additional recruitment and training
costs. Furthermore, our amended senior credit facility provides that an event of
default will exist under the facility if any two of Stephen J. Perkins, our
President and Chief Executive Officer, John M. Casper, our Senior Vice
President -- Finance and Chief Financial Officer, and John F. Schott, our Chief
Operating Officer, are no longer employed by, and fulfilling their current
positions with, us, other than as a result of their death, disability or our
board of directors exercising its fiduciary duty. Thus, under these
circumstances, if we lose any two of these senior executives, our lenders could
accelerate the maturity of the debt outstanding under our senior credit facility
unless we obtain satisfactory replacement executives.
IF WE DECIDE TO SELL ANY OF OUR BUSINESSES OR DISCONTINUE ANY OF OUR OPERATIONS
AND DO NOT SUCCESSFULLY ADDRESS THE ASSOCIATED RISKS, OUR ABILITY TO COMPETE,
OPERATE EFFICIENTLY AND OTHERWISE REALIZE THE EXPECTED BENEFITS OF SUCH A
TRANSACTION MAY BE IMPAIRED.
In connection with our corporate integration plan and to generate cash to
help us meet our debt obligations, in fiscal 2002 we disposed of our Detroit
Tool Metal Products, Scheu & Kniss and Hansford Parts and Products businesses,
closed facilities in Montreal, Quebec, Rochester New York and Bristol,
Pennsylvania and consolidated our Swiftpack and C.E. King operations. Although
we currently do not expect to sell any of our other businesses or discontinue
any of our other operations in the near future, we may decide to do so if we
believe such actions would further improve our operational efficiency, decide to
change the focus of our business strategy or need to generate cash. In the case
of the disposition of a business, we may not be able to identify buyers who are
willing to pay acceptable prices or agree to acceptable terms. For example, we
pursued the sale of our Stokes business in 2001, but were unable to consummate
the disposition due to adverse market conditions and instead closed the facility
in Bristol, Pennsylvania and combined Stokes' manufacturing operations with our
DT Converting Technologies facility in Hyannis, Massachusetts in 2002. The sale
of a business and discontinuing operations involve a number of special risks and
challenges, including:
- diversion of management's attention;
- expenses incurred to effect the transactions;
- difficulties in implementing a new business strategy with which we may
have little experience;
- employees' uncertainty about their role with the continuing operations of
the business and a lack of employee focus due to distractions of a
transaction;
- a reduction of recurring costs that may not exceed the reduction of
recurring revenues; and
- incurring substantial non-recurring charges, such as for severance, asset
write-offs and future facility lease costs, or a net loss on the disposal
of assets.
9
If we decide to sell any of our businesses or discontinue any of our operations
and do not successfully address the associated risks, our ability to compete,
operate efficiently and otherwise realize the expected benefits of such a
transaction may be impaired.
WE ARE SUBJECT TO VARIOUS ENVIRONMENTAL AND EMPLOYEE SAFETY AND HEALTH
REGULATIONS, WHICH COULD SUBJECT US TO SIGNIFICANT LIABILITIES AND COMPLIANCE
EXPENDITURES.
We are subject to various federal, state and local environmental laws and
regulations concerning air emissions, wastewater discharges, storage tanks and
solid and hazardous waste disposal at our facilities. Our operations are also
subject to various employee safety and health laws and regulations, including
those concerning occupational injury and illness, employee exposure to hazardous
materials and employee complaints. Environmental and employee safety and health
regulations are comprehensive, complex and frequently changing. We may be
subject from time to time to administrative and/or judicial proceedings or
investigations brought by private parties or governmental agencies with respect
to environmental matters and employee safety and health issues. These
proceedings and investigations could result in substantial costs to us, divert
our management's attention and, if it is determined we are not in compliance
with applicable laws and regulations, result in significant liabilities, fines
or the suspension or interruption of our manufacturing activities. Future
events, such as changes in existing laws and regulations, new laws and
regulation or the discovery of conditions not currently known to us, could
create substantial compliance or remedial liabilities and costs.
WE INCURRED SIGNIFICANT PRE-TAX CHARGES RELATED TO GOODWILL IMPAIRMENT AND THE
WRITE-DOWN OF ASSETS DURING FISCAL 2001, AND IF WE INCUR SIMILAR SIGNIFICANT
CHARGES IN THE FUTURE OUR OPERATING RESULTS AND BORROWING BASE MAY BE MATERIALLY
ADVERSELY AFFECTED.
During fiscal 2001, we recorded an impairment charge of approximately $38.2
million after determining that the goodwill associated with five of our
divisions had been impaired and wrote down approximately $21.8 million of assets
primarily due to excess and obsolete inventory and accounts receivable
write-offs. As of June 30, 2002, our goodwill balance of approximately $125.5
million represented approximately 41% of our total assets. In July 2001, the
Financial Accounting Standards Board issued Statement No. 142, "Goodwill and
Other Intangible Assets" (SFAS 142), which we early adopted in the first quarter
of fiscal 2002. SFAS 142 requires, among other things, the discontinuance of the
amortization of goodwill and the introduction of, at a minimum, annual
impairment testing in its place. In connection with such impairment testing in
the future, we may determine that the carrying value of our goodwill is
impaired. If we are required to significantly write-down the carrying value of
goodwill in accordance with SFAS 142 in the future, or write-down significant
assets in the future due to unsalable inventory or difficulties in collecting
accounts receivable, our operating results may be materially adversely affected
and the borrowing base under our senior credit facility may be significantly
reduced.
THE RESTATEMENTS OF OUR HISTORICAL FINANCIAL RESULTS DURING FISCAL 2002 AND
FISCAL 2000 HAVE ADVERSELY AFFECTED OUR MANAGEMENT'S ABILITY TO FOCUS ON
OPERATING THE COMPANY AND OUR REPUTATION AND RESULTED IN AN SEC INVESTIGATION;
ANY FURTHER RESTATEMENTS IN THE FUTURE COULD HAVE A MATERIAL ADVERSE EFFECT ON
OUR LIQUIDITY, ABILITY TO OPERATE AND COMMON STOCK PRICE AND RESULT IN MATERIAL
LIABILITIES.
As discussed in "Prospectus Summary -- Recent Restatement of Historical
Financial Results," we have restated our previously reported audited
consolidated financial results for the fiscal years ended June 24, 2001, June
25, 2000 and June 27, 1999, as well as our previously reported unaudited
consolidated financial results for the first three fiscal quarters of 2002. As
discussed in "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Overview" in our 2002 Form 10-K, in fiscal 2000, we
were also required to restate our audited consolidated financial results for the
fiscal years 1997, 1998 and 1999, as well as our unaudited consolidated
financial results for the first three quarters of fiscal 2000. The restatements
were the result of improper accounting entries made by controllers at three of
our divisions. These restatements have diverted management's attention from our
ongoing operations, generated significant accounting and legal expenses and
harmed our reputation with investors and possibly customers. In addition, the
restatement in fiscal 2000 harmed our relationship with our lenders and led to a
class action lawsuit that has since been
10
dismissed. The SEC is currently conducting an investigation into the accounting
practices that led to these restatements. We cannot predict the length or
outcome of the investigation at this time.
Although we continue to improve our internal controls and accounting staff
at our divisions, we may experience accounting and financial reporting problems
at our subsidiaries in the future, which could have a material adverse impact on
our consolidated financial statements. If we are not able to hire competent,
trustworthy accounting staff at our divisions and continue to upgrade and modify
our internal controls so as to avoid these accounting issues and similar
restatements in the future, our access to our senior credit facility and ability
to obtain other financing, as well the price of our common stock and our ability
to maintain the listing of our common stock on the Nasdaq Stock Market, may be
materially adversely affected, we may face securities class action lawsuits and
the SEC may impose significant penalties against us.
RISKS RELATED TO OUR COMMON STOCK
IF A MORE ACTIVE TRADING MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP OR IS
NOT SUSTAINED, YOU MAY HAVE DIFFICULTY SELLING YOUR SHARES.
Our common stock is currently traded on the Nasdaq National Market. The
market for our common stock has historically been characterized by limited
trading volume and a limited number of holders. A more active trading market for
our common stock may not develop or be sustained after this offering. As a
result, it may be difficult for you to sell your shares when you want and at a
price at or above the price at which you acquired them.
THE MARKET PRICE OF OUR COMMON STOCK MAY CONTINUE TO BE VOLATILE, WHICH
COULD PREVENT YOU FROM SELLING YOUR SHARES AT OR ABOVE THE PRICE AT WHICH YOU
ACQUIRED THEM.
From June 1, 2001 through the date of this prospectus, the price per share
of our common stock has ranged from a high of $7.66 to a low of $2.03. The
market price of our common stock has been, and is likely to continue to be,
volatile and subject to fluctuations due to the risk factors described in this
section and the following factors, some of which are beyond our control:
- changes in the general economic and political environment;
- broad market fluctuations;
- the perceived prospects of our company and the packaging and automation
industries in general;
- changes in analysts' recommendations or projections;
- low trading volume; and
- differences between our actual financial and operating results and those
expected by investors and analysts.
As a result, you may be unable to sell your shares of common stock at or above
the price at which you acquired them.
FUTURE SALES OF A LARGE NUMBER OF SHARES OF COMMON STOCK BY THE SELLING
STOCKHOLDERS OR THEIR AFFILIATES, OR THE PERCEPTION THAT THESE SALES MAY OCCUR,
MAY HAVE AN ADVERSE IMPACT ON THE MARKET PRICE OF OUR COMMON STOCK.
As of the date of this prospectus, there are 23,647,932 shares of our
common stock issued and outstanding. Substantially all of these shares are
freely tradable in the public market without restriction under the federal
securities laws, subject to any contractual limitations entered into by certain
of the selling stockholders. Certain of the selling stockholders and their
affiliates each beneficially own a significant percentage of these freely
tradable shares. Future sales by these stockholders of a substantial number of
shares of our common stock in the public market, or the perception that these
sales could occur, could cause the market price of our common stock to decline.
These sales may also make it more difficult for us to sell equity or
equity-related securities in the future at a time and price that we deem
appropriate.
11
PROVISIONS OF OUR CERTIFICATE OF INCORPORATION, OUR BYLAWS AND DELAWARE LAW
COULD DELAY OR DETER TENDER OFFERS OR TAKEOVER ATTEMPTS THAT MAY OFFER YOU A
PREMIUM FOR YOUR COMMON STOCK.
Certain provisions in our certificate of incorporation, our bylaws and
Delaware law could make it more difficult for a third party to acquire control
of us, even if that transaction would be beneficial to you. These impediments
include:
- the classification of our board of directors into three classes serving
staggered three-year terms;
- the ability of our board of directors to issue shares of preferred stock
with rights as it deems appropriate without stockholder approval;
- a requirement that our stockholders comply with advance-notice provisions
to bring director nominations or other matters before meetings of our
stockholders; and
- the adoption of a provision of Delaware law that prohibits us from
entering into some business combinations with interested stockholders
without the approval of our board of directors.
The existence of these provisions may deprive you of an opportunity to sell your
shares at a premium over prevailing prices. The potential inability of our
stockholders to obtain a control premium could adversely affect the market price
of our common stock.
OUR STOCKHOLDER RIGHTS PLAN COULD DELAY OR DETER TENDER OFFERS OR TAKEOVER
ATTEMPTS THAT MAY OFFER YOU A PREMIUM FOR YOUR COMMON STOCK.
Our stockholder rights plan, adopted by our board of directors in 1997, is
designed to protect stockholders against unfair and coercive takeover tactics.
Under the plan, our board of directors is authorized to issue preferred stock
purchase rights to stockholders that would have the effect of substantially
diluting the ownership of any person or group that acquires 15% or more of our
common stock, unless the rights are first cancelled or redeemed by our board of
directors in its discretion. Notwithstanding our board of director's objective
in adopting the rights plan, the existence of the rights plan may delay or deter
potential acquirors from making tenders offers or takeover attempts that would
offer you a premium for your common stock. We have agreed to submit the rights
plan to a vote of stockholders at our 2003 annual meeting of stockholders and
each annual meeting every three years thereafter so long as the rights plan is
in effect.
HOLDERS OF OUR COMMON STOCK ARE SUBORDINATED TO THE HOLDERS OF PREFERRED
SECURITIES OF OUR WHOLLY-OWNED SUBSIDIARY TRUST AND WOULD BE DILUTED UPON
CONVERSION OF THE TRUST PREFERRED SECURITIES INTO COMMON STOCK.
Our wholly-owned subsidiary trust currently has issued and outstanding
$35.0 million of preferred securities. These trust preferred securities
represent undivided beneficial ownership interests in the trust, the sole assets
of which are a related aggregate principal amount of our junior subordinated
debentures. We have guaranteed the payment of distributions and payments on
liquidation of the trust or the redemption of the trust preferred securities.
Through this guarantee, our junior subordinated debentures, the debentures'
indenture and the trust's declaration of trust, taken together, we have fully,
irrevocably and unconditionally guaranteed all of the trust's obligations under
the trust preferred securities. Thus, while the trust preferred securities are
not included in liabilities for financial reporting purposes and instead appear
on our consolidated balance sheet between liabilities and stockholders' equity,
they represent obligations of DTI that rank senior in right of payment to our
common stock. Therefore, upon the bankruptcy, liquidation or winding up of the
operations of DTI, holders of the trust preferred securities would be paid
before holders of our common stock. In addition to having a preference senior to
our common stock, the trust preferred securities are convertible into an
aggregate of 2,500,000 shares of common stock. The issuance of these shares of
common stock would dilute the ownership and voting interest in DTI of existing
stockholders.
12
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains and incorporates by reference certain
"forward-looking statements" that reflect our current beliefs and expectations
about our future results, performance, liquidity, financial condition, prospects
and opportunities. These statements, comprising all statements contained and
incorporated by reference herein that are not historical, including, without
limitation, statements appearing under the captions "Business," "Legal
Proceedings," and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" in the 2002 Form 10-K, are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. You
can identify these statements from our use of the words "opportunities," "growth
potential," "objectives," "goals," "may," "could," "estimate," "believe,"
"expect," "intend," "anticipate," "should," "will," "plan," or the negative of
these terms, and similar expressions. Our actual results, performance,
liquidity, financial condition, prospects and opportunities could differ
materially from those expressed in, or implied by, any forward-looking
statements as a result of various risks, uncertainties and other factors. See
the section of this prospectus captioned "Risk Factors" for a description of
these risks, uncertainties and other factors. You should not place undue
reliance on any forward-looking statements. Except as required by the federal
securities laws, we undertake no obligation and do not intend to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events, changed circumstances or any other reason.
13
USE OF PROCEEDS
The selling stockholders are offering all of the shares of common stock
covered by this prospectus. We will not receive any proceeds from the sales of
these shares.
SELLING STOCKHOLDERS
The 15,760,658 shares of our common stock registered for public resale
pursuant to this prospectus and listed under the column "Number of Shares
Offered Hereby" on the table set forth below consist of the following shares
that were issued or are issuable in connection with the recapitalization: (1)
7,000,000 shares of our common stock issued to purchasers of our common stock in
the private placement, (2) 6,260,658 shares of our common stock issued in
exchange for $35.0 million of trust preferred securities, plus approximately
$15.1 million of accrued and unpaid cash distributions thereon, and (3)
2,500,000 shares of our common stock issuable upon the conversion of the
currently outstanding trust preferred securities at a conversion price of $14.00
per share. These shares of our common stock are included in this prospectus
pursuant to the registration rights we granted to the selling stockholders in
the share purchase agreement or the exchange agreement, as applicable, that we
entered into in connection with the recapitalization. Our registration of these
shares does not necessarily mean that any selling stockholder will sell any or
all of its shares.
The following table sets forth the number of shares beneficially owned by
each of the selling stockholders as of the date of this prospectus, except as
disclosed below, and is based on information provided to us by each selling
stockholder. We are not able to estimate the amount of shares that will be held
by each selling stockholder after the completion of this offering because (1)
the selling stockholders may sell less than all of the shares registered under
this prospectus, (2) the selling stockholders may convert less than all of their
trust preferred securities, and (3) to our knowledge, the selling stockholders
currently have no agreements, arrangements or understandings with respect to the
sale of any of their shares. The following table assumes that all of the
currently outstanding trust preferred securities will be converted into common
stock and all the shares being registered pursuant to this prospectus will be
sold. The selling stockholders are not making any representation that any shares
covered by this prospectus will be offered for sale and reserve the right to
accept or reject, in whole or in part, any proposed sale of shares. Except as
otherwise indicated, based on information provided to us by each selling
stockholder, the selling stockholders have sole voting and investment power with
respect to their shares of common stock.
BENEFICIAL OWNERSHIP
AFTER OFFERING
NUMBER OF SHARES ---------------------
BENEFICIALLY OWNED NUMBER OF SHARES NUMBER OF
NAME PRIOR TO OFFERING OFFERED HEREBY SHARES PERCENT
---- ------------------ ---------------- ---------- --------
The Northwestern Mutual Life Insurance
Company(1).............................. 3,754,568 3,754,568(2) 0 *
The Travelers Insurance Company(1)........ 1,051,279 1,051,279(3) 0 *
The Travelers Indemnity Company(1)........ 1,451,766 1,451,766(4) 0 *
MassMutual Corporate Investors(1)......... 250,305 250,305(5) 0 *
MassMutual Participation Investors(1)..... 125,152 125,152(6) 0 *
Massachusetts Mutual Life Insurance
Company(1).............................. 1,001,218 1,001,218(7) 0 *
MassMutual Corp Value Partners(1)......... 500,609 500,609(8) 0 *
MassMutual High Yield Partners II,
LLC(1).................................. 625,761 625,761(9) 0 *
State of Wisconsin Investment Board....... 4,459,100 2,500,000 1,959,100 7.5%
Putnam Variable Trust -- Putnam VT Small
Cap Value Fund(10)...................... 369,300 261,700 107,600 *
Putnam Investment Funds -- Putnam Small
Cap Value Fund.......................... 885,700 728,900 156,800 *
14
BENEFICIAL OWNERSHIP
AFTER OFFERING
NUMBER OF SHARES ---------------------
BENEFICIALLY OWNED NUMBER OF SHARES NUMBER OF
NAME PRIOR TO OFFERING OFFERED HEREBY SHARES PERCENT
---- ------------------ ---------------- ---------- --------
Putnam World Trust II -- Putnam U.S. Small
Cap Value Equity Fund................... 13,500 9,400 4,100 *
Fidelity Puritan Trust -- Fidelity
Low-Priced Stock Fund(11)............... 1,782,000 1,250,000 532,000 2.0%
NTC -- Ironwood Capital Management Bell
South Master Plan(12)................... 123,600 54,000 69,600 *
NTCC For Employees Benefit Trust(12)...... 196,000 75,000 121,000 *
NTCC For Grantors Trust(12)............... 260,200 115,000 145,200 *
PNC/Hillview Alpha Fund(12)............... 105,700 43,000 62,700 *
IDEX/Isabelle Small-Cap Value Fund(12).... 375,400 186,000 189,400 *
ICM/Isabelle Small-Cap Value Fund(12)..... 1,048,000 394,000 654,000 2.5%
University of Notre Dame(12).............. 308,900 159,000 149,900 *
NTCC Oregon(12)........................... 255,100 104,000 151,100 *
Heavingline & Co., for the account of
Royce Opportunity Fund #6623(13)........ 655,000 400,000 255,000 1.0%
Pictet & Cie, Geneva, for the benefit of
Djursholm Investments, Inc.(13)......... 99,400 50,000 49,400 *
Pictet & Cie, Geneva, for the benefit of
Hov, Inc.(13)........................... 99,100 50,000 49,100 *
Pictet & Cie, Geneva, for the benefit of
Inglestorp Investments, Inc.(13)........ 99,100 50,000 49,100 *
Caxton International Limited.............. 783,100 400,000 383,100 1.5%
LibertyView Funds, L.P.................... 148,750 144,500 4,250 *
LibertyView Fund, LLC..................... 26,250 25,500 750 *
---------------
* Less than 1.0%
(1) These selling stockholders have each agreed to not sell, transfer or
otherwise dispose of our common stock for a period of 180 days following
June 20, 2002. In addition, these stockholders as a group have been granted
the right to appoint one representative to attend and observe meetings of
our board of directors.
(2) The number of shares offered by the selling stockholder includes 1,071,500
shares of common stock that are issuable upon the conversion of currently
outstanding preferred securities of our wholly-owned subsidiary trust.
(3) The number of shares offered by the selling stockholder includes 300,000
shares of common stock that are issuable upon the conversion of currently
outstanding preferred securities of our wholly-owned subsidiary trust.
(4) The number of shares offered by the selling stockholder includes 414,286
shares of common stock that are issuable upon the conversion of currently
outstanding preferred securities of our wholly-owned subsidiary trust.
(5) The number of shares offered by the selling stockholder includes 71,429
shares of common stock that are issuable upon the conversion of currently
outstanding preferred securities of our wholly-owned subsidiary trust.
(6) The number of shares offered by the selling stockholder includes 35,714
shares of common stock that are issuable upon the conversion of currently
outstanding preferred securities of our wholly-owned subsidiary trust.
15
(7) The number of shares offered by the selling stockholder includes 285,714
shares of common stock that are issuable upon the conversion of currently
outstanding preferred securities of our wholly-owned subsidiary trust.
(8) The number of shares offered by the selling stockholder includes 142,857
shares of common stock that are issuable upon the conversion of currently
outstanding preferred securities of our wholly-owned subsidiary trust.
(9) The number of shares offered by the selling stockholder includes 178,571
shares of common stock that are issuable upon the conversion of currently
outstanding preferred securities of our wholly-owned subsidiary trust.
(10) The investment advisor for this selling stockholder, The Putnam Advisory
Company, LLC, has been delegated all investment and voting power with
respect to its shares.
(11) The selling stockholder is a portfolio of an investment company registered
under Section 8 of the Investment Company of 1940, as amended. Fidelity
Management & Research Company ("FMR Co.") is a Massachusetts corporation
and an investment advisor registered under Section 203 of the Investment
Advisers Act of 1940, as amended, and provides investment advisory services
to this Fidelity fund, to other registered investment companies and to
certain other funds that are generally offered to a limited group of
investors. FMR Co. is a wholly-owned subsidiary of FMR Corp., a
Massachusetts corporation. The holdings are as of June 20, 2002.
(12) The shares of common stock shown as beneficially owned by the selling
stockholder are also deemed to be beneficially owned by Ironwood Capital
Management, L.L.C. ("ICM"), which shares voting and dispositive power with
respect to such shares. In their capacity with ICM, Warren J. Isabelle,
Richard L. Droster and Donald Collins each has shared voting and
dispositive power with respect to these shares of common stock and,
therefore, may be deemed to beneficially own such shares.
(13) The shares of common stock shown as beneficially owned by the selling
stockholder are also deemed to be beneficially owned by Royce & Associates,
Inc., which shares voting and dispositive power with respect to such
shares.
Based on information provided to us by the selling stockholders, the
following selling stockholders listed in the table are or may be deemed to be
affiliated with broker-dealers:
- The Travelers Insurance Company and The Travelers Indemnity Company are
affiliated with several registered broker-dealers;
- Massachusetts Mutual Life Insurance Company and its related funds,
MassMutual Corporate Investors, MassMutual Participation Investors,
MassMutual Corporate Value Partners Limited and MassMutual High Yield
Partners II LLC are affiliated with registered broker dealers, which are
part of the MassMutual Financial Group;
- The Northwestern Mutual Life Insurance Company is an affiliate of
Northwestern Mutual Investment Services, LLC, a registered broker-dealer;
- The voting shares of LibertyView Funds, LP are controlled by Banque CPR,
a French company. Banque CPA also owns LibertyView Alternative Asset
Management (LVAAM), a registered broker-dealer. The managing member of
LibertyView Fund LLC is owned by CPR (USA), Inc., which in turn is owned
by Banque CPR. Accordingly, LibertyView Fund LLC may be deemed to be
affiliated with a registered broker-dealer; and
- Putnam Variable Trust -- Putnam VT Small Cap Value Fund, Putnam
Investment Funds -- Putnam Small Cap Value Fund and Putnam World Trust
II -- Putnam U.S. Small Cap Value Equity Fund are affiliated with Putnam
Retail Management Limited Partnership, a registered broker-dealer.
Each of these selling stockholders has represented that (1) it acquired the
shares of common stock registered hereby in the ordinary course of its business
and (2) at the time it acquired the shares of common
16
stock, it had not entered into an agreement or understanding, directly or
indirectly, with any person to distribute the shares.
This prospectus also covers additional shares of common stock that may
become issuable in connection with the shares being registered to prevent
dilution resulting from future stock splits, stock dividends or similar
transactions. In addition, this prospectus covers the preferred stock purchase
rights that currently trade with our common stock and entitle the holders to
purchase additional shares of our common stock under certain circumstances.
PLAN OF DISTRIBUTION
The shares covered by this prospectus may be offered, sold, or distributed
from time to time by the selling stockholders named in this prospectus, or by
their donees, pledgees, transferees, or other successors in interest. The
selling stockholders may sell their shares at market prices prevailing at the
time of sale, at prices related to such prevailing market prices at the time of
sale, at negotiated prices, or at fixed prices, which may be changed. Each
selling stockholder reserves the right to accept or reject, in whole or in part,
any proposed purchase of shares, whether the purchase is to be made directly or
through agents. We are not aware that any selling stockholder has entered into
any arrangements with any underwriters or broker-dealers regarding the sale of
its shares of common stock.
The selling stockholders may offer their shares at various times in one or
more of the following transactions:
- in ordinary brokers' transactions and transactions in which the broker
solicits purchasers;
- in transactions involving cross or block trades or otherwise on any
national securities exchange or quotation system, such as the Nasdaq
National Market, on which our common stock may be listed or quoted;
- in an over-the-counter distribution in accordance with the rules of the
Nasdaq Stock Market;
- in transactions in which brokers, dealers, or underwriters purchase the
shares as principals and resell the shares for their own accounts
pursuant to this prospectus;
- in transactions "at the market" to or through market makers in our common
stock;
- in other ways not involving market makers or established trading markets,
including direct sales of the shares to purchasers or sales of the shares
effected through agents;
- through transactions in options, swaps, or other derivatives that may or
may not be listed on an exchange;
- in privately negotiated transactions;
- in transactions to cover short sales; or
- in a combination of any of the foregoing transactions.
In addition, the selling stockholders also may sell their shares in private
transactions or in accordance with Rule 144 under the Securities Act rather than
under this prospectus.
From time to time, one or more of the selling stockholders may pledge or
grant a security interest in some or all of the shares owned by it. If a selling
stockholder defaults in performance of the secured obligations, the pledgees or
secured parties may offer and sell the shares from time to time. A selling
stockholder also may transfer and donate shares in other circumstances. If a
selling stockholder donates or otherwise transfers its shares, the number of
shares beneficially owned by it will decrease as and when it takes these
actions. The plan of distribution for the shares offered and sold under this
prospectus will otherwise remain unchanged, except that the transferees, donees,
or other successors in interest will be selling stockholders for purposes of
this prospectus.
17
The selling stockholders may use brokers, dealers, underwriters, or agents
to sell their shares. The persons acting as agents may receive compensation in
the form of commissions, discounts, or concessions. This compensation may be
paid by the selling stockholders or the purchasers of the shares for whom such
persons may act as agent, or to whom they may sell as principal, or both. In
addition, the broker-dealers' or their affiliates' commissions, discounts, or
concessions may qualify as underwriters' compensation under the Securities Act.
Neither we, nor any selling stockholder, can presently estimate the amount of
that compensation. We will make copies of this prospectus and any supplements or
amendments hereto available to each selling stockholder or any of its agents or
broker-dealers for the purpose of satisfying the prospectus delivery
requirements of the Securities Act.
The selling stockholders and any other person participating in a
distribution of the shares covered by this prospectus will be subject to
applicable provisions of the Exchange Act and the rules and regulations under
the Exchange Act, including Regulation M, which may limit the timing of
purchases and sales of any of the shares by the selling stockholders and any
other such person. Furthermore, under Regulation M, any person engaged in the
distribution of the shares may not simultaneously engage in market-making
activities with respect to the particular shares being distributed for certain
periods prior to the commencement of or during that distribution. All of the
above may affect the marketability of the shares and the availability of any
person or entity to engage in market-making activities with respect to the
shares.
Under our agreements with the selling stockholders, we are required to bear
the expenses relating to the registration of this offering. We are also
obligated to cover up to an aggregate of $100,000 in legal expenses, including
the legal expenses related to the review of this prospectus, for the selling
stockholders who received shares of common stock in exchange for trust preferred
securities. The selling stockholders will bear any underwriting discounts or
commissions, brokerage fees or stock transfer taxes. We have agreed to indemnify
the selling stockholders against certain liabilities arising in connection with
this offering, including liabilities under the Securities Act. The selling
stockholders may agree to indemnify any agent, dealer, or broker-dealer that
participates in transactions involving the shares of common stock against
certain liabilities, including liabilities arising under the Securities Act.
LEGAL MATTERS
The validity of the shares of our common stock that are covered by this
prospectus has been passed upon for us by Katten Muchin Zavis Rosenman, Chicago,
Illinois.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K for the year ended June 30, 2002
have been so incorporated in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document that we filed separately with the SEC.
Information in this prospectus updates, and in some cases supersedes,
information incorporated by reference from documents we have filed with the SEC
prior to the date of this prospectus, while information that we file later with
the SEC will automatically update and, in some cases, supersede the information
contained or incorporated by reference in this prospectus.
The following documents that we have previously filed with the SEC are
incorporated by reference into this prospectus:
- Our Annual Report on Form 10-K for our fiscal year ended June 30, 2002,
filed with the SEC on October 4, 2002;
18
- Our Current Report on Form 8-K filed with the SEC on August 7, 2002;
- The description of our common stock contained in our registration
statement on Form 8-A, filed with the SEC on February 11, 1994; and
- The description of our preferred stock purchase rights contained in our
registration statement on Form 8-A, filed with the SEC on August 19,
1997.
In addition, all documents filed by us under Section 13(a), 13(c), 14, or 15(d)
of the Exchange Act after the date of this prospectus and prior to the sale of
all of the shares covered by this prospectus are incorporated by reference into,
and deemed a part of, this prospectus from the date of filing of those
documents.
You may request a copy of these documents, which will be provided to you at
no cost, by contacting:
DT Industries, Inc.
Attention: General Counsel and Secretary
907 West Fifth Street
Dayton, Ohio 45407
Telephone: (937) 586-5600
Fax: (937) 586-5605
19
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses, all of which are to
be paid by us, in connection with the registration, issuance, and distribution
of the securities being registered hereby. All amounts are estimates except the
SEC registration fee.
SEC Registration Fee........................................ $ 5,119
Legal Fees and Expenses..................................... 25,000
Accounting Fees and Expenses................................ 20,000
Printing Fees and Expenses.................................. 25,000
Miscellaneous............................................... 2,881
-------
Total............................................. $78,000
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145(a) of the General Corporation Law of the State of Delaware
provides, in general, that a corporation shall have the power to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit or proceeding, whether civil,
criminal, administrative, or investigative (other than an action by or in the
right of the corporation), because the person is or was a director or officer of
the corporation. Such indemnity may be against expenses (including attorneys'
fees), judgments, fines, and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit, or proceeding, if
the person acted in good faith and in a manner the person reasonably believed to
be in or not opposed to the best interests of the corporation and if, with
respect to any criminal action or proceeding, the person did not have reasonable
cause to believe the person's conduct was unlawful.
Section 145(b) of the Delaware Corporation Law provides, in general, that a
corporation shall have the power to indemnify any person who was or is a party,
or is threatened to be made a party, to any threatened, pending, or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor because the person is or was a director or officer of the corporation,
against any expenses (including attorneys' fees) actually and reasonably
incurred by the person in connection with the defense or settlement of such
action or suit, if the person acted in good faith and in a manner the person
reasonably believed to be in, or not opposed to, the best interests of the
corporation, except that no indemnification shall be made in respect of any
claim, issue, or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
be indemnified for such expenses that the Court of Chancery or such other court
shall deem proper.
Section 145(g) of the Delaware Corporation Law provides, in general, that a
corporation shall have the power to purchase and maintain insurance on behalf of
any person who is or was a director or officer of the corporation against any
liability asserted against the person and incurred by the person in any such
capacity, or arising out of the person's status as such, whether or not the
corporation would have the power to indemnify the person against such liability
under the provisions of the law.
Our Amended and Restated Certificate of Incorporation provides for
indemnification to the fullest extent permitted under Delaware law of any person
who is or was one of our directors or officers who is or was involved or
threatened to be made so involved in any proceeding, whether civil, criminal,
administrative, or investigative, because that person is or was serving as one
of our directors or officers, or was serving at our request as a director or
officer of any other enterprise. We have also entered into indemnification
agreements with our directors and executive officers that provide for the
indemnification described above and maintain directors' and officers' liability
insurance. In addition, the selling stockholders have agreed to indemnify our
II-1
officers and directors against certain liabilities arising in connection with
this offering, including liabilities under the Securities Act.
The foregoing statements are subject to the detailed provisions of Section
145 of the Delaware Corporation Law and our Amended and Restated Certificate of
Incorporation.
ITEM 16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4.1 Rights Agreement dated as of August 18, 1997 between DT
Industries, Inc. and Chase Mellon Shareholder Services,
L.L.C., as Rights Agent (incorporated herein by reference to
Exhibit 1 to the Company's Current Report on Form 8-K dated
August 18, 1997, filed with the SEC on August 19, 1997)
4.2 Amendment No. 1 to the Rights Agreement by and between DT
Industries, Inc. and Chase Mellon Shareholder Services,
L.L.C., dated as of November 5, 1998 (incorporated herein by
reference to Exhibit 10 to the Company's Quarterly Report on
Form 10-Q for the quarter ended December 27, 1998, filed
with the SEC on February 10, 1999)
4.3 Amendment No. 2 to the Rights Agreement by and between DT
Industries, Inc. and Chase Mellon Shareholder Services,
L.L.C., dated as of November 17, 2000 (incorporated by
reference to Exhibit 4 to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 25, 2001, filed with
the SEC on May 9, 2001)
4.4 Specimen stock certificate representing DT Industries, Inc.
common stock (incorporated by reference to the Company's
Registration Statement on Form S-1, File No. 33-75174, filed
with the SEC on February 11, 1994)
5* Opinion of Katten Muchin Zavis Rosenman
23.1 Consent of PricewaterhouseCoopers LLP
23.2* Consent of Katten Muchin Zavis Rosenman (included in Exhibit
5)
24* Power of Attorney (included on the signature page of the
initial filing of this Registration Statement)
99.1* Share Purchase Agreement, dated May 9, 2002, by and among DT
Industries, Inc. and the purchasers listed on Schedule A
thereto
99.2* Exchange Agreement, dated May 9, 2002, by and among DT
Industries, Inc., DT Capital Trust, Stephen J. Perkins, John
M. Casper and Gregory D. Wilson, as the regular trustees of
the Trust, The Bank of New York and each of the investors
listed on Schedule A thereto
99.3* Twelfth Amendment to Fourth Amended and Restated Credit
Facilities Agreement, dated as of May 9, 2002
---------------
* Previously filed.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereto) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
II-2
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
of this section do not apply if the registration statement is on Form
S-3, Form S-8, or Form F-3, and the information required to be included
in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in this registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the registrant
in the successful defense of any action, suit, or proceeding) is asserted by
such director, officer, or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Dayton, Ohio on October 10, 2002.
DT INDUSTRIES, INC.
By: /s/ JOHN M. CASPER
------------------------------------
John M. Casper
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on October 10, 2002.
SIGNATURE TITLE
--------- -----
* Chairman of the Board of Directors
------------------------------------------------
James J. Kerley
* President, Chief Executive Officer and Director
------------------------------------------------ (Principal Executive Officer)
Stephen J. Perkins
* Senior Vice President -- Finance and Chief
------------------------------------------------ Financial Officer (Principal Financial and
John M. Casper Accounting Officer)
* Director
------------------------------------------------
William H.T. Bush
* Director
------------------------------------------------
Charles A. Dill
* Director
------------------------------------------------
Lee M. Liberman
* Director
------------------------------------------------
John F. Logan
* Director
------------------------------------------------
Charles F. Pollnow
* Director
------------------------------------------------
Robert C. Lanneret
*/s/ JOHN M. CASPER
-----------------------------------------
Attorney-in-fact
II-4
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
23.1 Consent of PricewaterhouseCoopers LLP