e10vqza
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
Amendment No. 1
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þ |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended December 31, 2010
OR
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o |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________ to ___________
Commission file number 1-9334
BALDWIN TECHNOLOGY COMPANY, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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13-3258160 |
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.) |
2 Trap Falls Road, Suite 402, Shelton, Connecticut 06484
(Address of principal executive offices) (Zip Code)
203-402-1000
(Registrants telephone number, including area code)
N/A
(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 þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or
for such shorter period that the registrant was required to submit and post such files).
Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.
Large accelerated filer o |
Accelerated filer o |
Non-accelerated filer þ
(do not check if a smaller reporting company) |
Smaller reporting company o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No þ
Indicate the number of shares outstanding of each of the issuers classes of common stock, as
of the latest practicable date.
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Class |
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Outstanding at January 31, 2011 |
Class A Common Stock ($0.01 par value) |
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14,542,331 |
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Class B Common Stock ($0.01 par value) |
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1,092,555 |
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EXPLANATORY NOTE
Baldwin Technology Company, Inc. (the Company) originally filed its Quarterly Report on
Form 10-Q for the quarter ended December 31, 2010 on February 14, 2011. The Company is filing this
amendment on Form 10-Q/A to restate its consolidated financial statements and other financial
information to properly account for certain revenue and costs related to the Companys Japanese
operations that had been improperly recognized and booked. Specifically, the improper revenue
cut-off primarily affected the three months ended June 30, 2010 (Q4 in the fiscal year ended June
30, 2010), when revenue and related costs were recorded prematurely and the three months ended
September 30, 2010 and the three and six month periods ended December 31, 2010 (Q1 and Q2 of fiscal
year ended June 30, 2011) when such sales transactions were fulfilled and revenue earned. As
illustrated in the table below, the correction of the above mentioned errors resulted for (i)
reduction of net sales and operating income for the three months and year ended June 30, 2010 by
$4,037 and $1,984, respectively, (ii) increase in net sales and decrease in operating loss in the
three months ended September 30, 2010 by $3,382 and $1,674, respectively, (iii) increase of net
sales and decrease of operating loss for the three months ended December 31, 2010 by $655 and
$310, respectively, and (iv) increase in net sales and decrease of operating loss for the six
months ended December 31, 2010 by $4,037 and $1,984, respectively.
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Fiscal Year 2010 |
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Fiscal Year 2011 |
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(in thousands) |
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(in thousands) |
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For the Year |
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Three Months |
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Three Months |
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Six Months |
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Ended |
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Ended |
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Ended |
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Ended |
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June 30, 2010 |
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September 30, 2010 |
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December 31, 2010 |
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December 31, 2010 |
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Net Sales |
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As previously
reported |
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151,818 |
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38,451 |
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42,203 |
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80,654 |
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Correction for
improper cutoff |
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(4,037 |
) |
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3,382 |
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655 |
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4,037 |
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Restated |
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147,781 |
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41,833 |
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42,858 |
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84,691 |
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Cost of Sales |
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As previously
reported |
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106,682 |
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27,638 |
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29,764 |
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57,402 |
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Correction for
improper cutoff |
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(2,053 |
) |
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1,708 |
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345 |
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2,053 |
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Restated |
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104,629 |
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29,346 |
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30,109 |
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59,455 |
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Operating income
(loss) |
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As previously
reported |
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7,514 |
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(2,585 |
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(518 |
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(3,103 |
) |
Correction for
improper cutoff |
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(1,984 |
) |
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1,674 |
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310 |
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1,984 |
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Restated |
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5,530 |
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(911 |
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(208 |
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(1,119 |
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Net Income (loss) |
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As previously
reported |
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5,028 |
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(1,112 |
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(618 |
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(1,730 |
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Correction for
improper cutoff |
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(1,151 |
) |
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38 |
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858 |
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896 |
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Restated |
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3,877 |
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(1,074 |
) |
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240 |
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(834 |
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Fiscal Year 2010 |
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Fiscal Year 2011 |
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(in thousands) |
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(in thousands) |
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For the Year |
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Three Months |
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Three Months |
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Six Months |
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Ended |
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Ended |
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Ended |
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Ended |
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June 30, 2010 |
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September 30, 2010 |
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December 31, 2010 |
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December 31, 2010 |
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Earnings per share |
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As previously
reported |
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$ |
0.32 |
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(0.07 |
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(0.04 |
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(0.11 |
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Correction for
improper
cutoff |
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(0.07 |
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0 |
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0.06 |
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0.06 |
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Restated |
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$ |
0.25 |
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(0.07 |
) |
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0.02 |
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(0.05 |
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There was no impact to previously reported total cash flows from operations, investing or
financing activities.
Management determined certain financial amounts reflected in our originally filed Form 10-Q
needed to be restated to reflect these adjustments. The amended items have been amended and
restated in their entirety. Other than as described above, no other changes have been made to the
original Form 10-Q.
As a result of this restatement, we have revised Item 4 and have included new certifications
pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002 as reflected in Exhibits 31.01,
31.02, 32.01 and 32.02.
Except as set forth above, this Form 10-Q /A does not modify or update other disclosures in
the original Form 10-Q, including the nature and character of such disclosure to reflect events
occurring after the filing date of the original Form 10-Q. While we are amending only certain
portions of our Form 10-Q, for convenience and ease of reference, we are filing the entire Form
10-Q, except for certain exhibits. The disclosures in this amendment do not reflect events
occurring after the filing of the original Form 10-Q. Accordingly, this amendment should be read in
conjunction with our other filings made with the Securities and Exchange Commission subsequent to
the filing of the originally filed Form 10-Q, including any amendments to those filings, as
information in such filings may update or supersede certain information contained in those filings
as well as in this amendment.
BALDWIN TECHNOLOGY COMPANY, INC.
INDEX
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
ASSETS
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(Restated) |
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(Restated) |
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December 31, |
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June 30, |
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2010 |
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2010 |
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CURRENT ASSETS: |
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(unaudited) |
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Cash and cash equivalents |
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$ |
15,554 |
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$ |
15,710 |
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Accounts receivable trade, net of allowance for doubtful accounts
of $1,299 ($1,154 at June 30, 2010) |
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28,299 |
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22,303 |
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Notes receivable, trade |
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3,337 |
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2,328 |
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Inventories, net |
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21,379 |
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20,839 |
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Deferred taxes, net |
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1,936 |
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1,808 |
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Prepaid expenses and other |
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3,967 |
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4,453 |
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Total current assets |
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74,472 |
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67,441 |
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MARKETABLE SECURITIES: |
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(Cost $879 at December 31, 2010 and $787 at June 30, 2010) |
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622 |
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500 |
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PROPERTY, PLANT AND EQUIPMENT: |
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Land and buildings |
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1,103 |
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1,139 |
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Machinery and equipment |
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8,218 |
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7,932 |
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Furniture and fixtures |
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5,625 |
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4,804 |
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Capital leases |
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100 |
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95 |
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15,046 |
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13,970 |
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Less: Accumulated depreciation |
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(9,397 |
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(7,875 |
) |
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Net property, plant and equipment |
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5,649 |
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6,095 |
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INTANGIBLES, less accumulated amortization of $11,522
($10,572 at June 30, 2010) |
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11,206 |
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11,099 |
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GOODWILL, less accumulated amortization of $1,545 ($1,425
at June 30, 2010) |
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20,748 |
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20,102 |
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DEFERRED TAXES, NET |
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9,391 |
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7,712 |
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OTHER ASSETS |
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5,732 |
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6,343 |
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TOTAL ASSETS |
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$ |
127,820 |
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$ |
119,292 |
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The accompanying notes to consolidated financial statements are an integral part of these financial
statements.
1
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
LIABILITIES AND SHAREHOLDERS EQUITY
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(Restated) |
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(Restated) |
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December 31, |
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June 30, |
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2010 |
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2010 |
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CURRENT LIABILITIES: |
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(unaudited) |
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Loans payable |
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$ |
6,156 |
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$ |
4,525 |
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Current portion of long-term debt |
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16,095 |
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389 |
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Accounts payable, trade |
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14,100 |
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14,086 |
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Notes payable, trade |
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6,180 |
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4,850 |
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Accrued salaries, commissions, bonus and profit-sharing |
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3,716 |
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3,702 |
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Customer deposits |
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1,155 |
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1,755 |
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Accrued and withheld taxes |
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989 |
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1,155 |
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Income taxes payable |
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1,794 |
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1,019 |
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Other accounts payable and accrued liabilities |
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8,726 |
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8,720 |
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Total current liabilities |
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58,911 |
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40,201 |
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LONG-TERM LIABILITIES: |
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Long-term debt, net of current portion |
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2,132 |
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16,066 |
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Other long-term liabilities |
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12,070 |
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12,427 |
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Total long-term liabilities |
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14,202 |
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28,493 |
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Total liabilities |
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73,113 |
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|
68,694 |
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Commitments and contingencies |
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SHAREHOLDERS EQUITY: |
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Class A Common Stock, $0.01 par, 45,000,000 shares authorized,
14,542,331 shares issued at December 31, 2010 and
14,471,363 shares issued at June 30, 2010 |
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145 |
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|
145 |
|
Class B Common Stock, $0.01 par, 4,500,000 shares authorized,
1,092,555 shares issued at December 31, 2010 and 1,092,555
shares issued at June 30, 2010 |
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11 |
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|
11 |
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Capital contributed in excess of par value |
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|
48,562 |
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|
48,098 |
|
Accumulated earnings |
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|
1,185 |
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|
2,019 |
|
Accumulated other comprehensive income |
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|
4,804 |
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|
325 |
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Total shareholders equity |
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54,707 |
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|
50,598 |
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TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |
|
$ |
127,820 |
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|
$ |
119,292 |
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The accompanying notes to consolidated financial statements are an integral part of these financial
statements.
2
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATION
(in thousands, except per share data)
(Unaudited)
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For the three months ended |
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For the six months ended |
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|
December 31, |
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December 31, |
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(Restated) |
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(Restated) |
|
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|
2010 |
|
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2009 |
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|
2010 |
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|
2009 |
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Net Sales |
|
$ |
42,858 |
|
|
$ |
38,751 |
|
|
$ |
84,691 |
|
|
$ |
74,925 |
|
Cost of goods sold |
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|
30,109 |
|
|
|
27,093 |
|
|
|
59,455 |
|
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|
52,847 |
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|
Gross Profit |
|
|
12,749 |
|
|
|
11,658 |
|
|
|
25,236 |
|
|
|
22,078 |
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Operating Expenses: |
|
|
|
|
|
|
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|
|
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General and administrative |
|
|
4,903 |
|
|
|
4,605 |
|
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|
11,055 |
|
|
|
10,240 |
|
Selling |
|
|
3,916 |
|
|
|
3,443 |
|
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|
7,555 |
|
|
|
6,767 |
|
Engineering and development |
|
|
3,683 |
|
|
|
3,503 |
|
|
|
7,098 |
|
|
|
6,574 |
|
Restructuring |
|
|
455 |
|
|
|
|
|
|
|
647 |
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
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|
Total operating expenses |
|
|
12,957 |
|
|
|
11,551 |
|
|
|
26,355 |
|
|
|
23,581 |
|
|
|
|
|
|
|
|
|
|
|
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|
Legal settlement gain |
|
|
|
|
|
|
|
|
|
|
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|
|
|
9,266 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income |
|
|
(208 |
) |
|
|
107 |
|
|
|
(1,119 |
) |
|
|
7,763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Other (income) expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
495 |
|
|
|
485 |
|
|
|
1,035 |
|
|
|
2,200 |
|
Other (income) expense, net |
|
|
(24 |
) |
|
|
26 |
|
|
|
148 |
|
|
|
202 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
471 |
|
|
|
511 |
|
|
|
1,183 |
|
|
|
2,402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes |
|
|
(679 |
) |
|
|
(404 |
) |
|
|
(2,302 |
) |
|
|
5,361 |
|
(Benefit) provision for income taxes |
|
|
(919 |
) |
|
|
12 |
|
|
|
(1,468 |
) |
|
|
1,879 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
240 |
|
|
$ |
(416 |
) |
|
$ |
(834 |
) |
|
$ |
3,482 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share basic
and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income per share basic |
|
$ |
0.02 |
|
|
$ |
(0.03 |
) |
|
$ |
(0.05 |
) |
|
$ |
0.23 |
|
(Loss) income per share diluted |
|
$ |
0.02 |
|
|
$ |
(0.03 |
) |
|
$ |
(0.05 |
) |
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
15,604 |
|
|
|
15,461 |
|
|
|
15,586 |
|
|
|
15,421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
15,981 |
|
|
|
15,461 |
|
|
|
15,586 |
|
|
|
15,472 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes to consolidated financial statements are an integral part of these
financial statements.
3
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
(in thousands, except shares) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital |
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
Comprehensive Income for |
|
|
|
Class A |
|
|
Class B |
|
|
Contributed |
|
|
|
|
|
|
Other |
|
|
|
|
|
|
|
|
|
|
the Six Months ended |
|
|
|
Common Stock |
|
|
Common Stock |
|
|
in Excess of |
|
|
Accumulated |
|
|
Comprehensive |
|
|
Treasury Stock |
|
|
December 31, |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Par Value |
|
|
Earnings |
|
|
Income |
|
|
Shares |
|
|
Amount |
|
|
2010 |
|
|
2009 |
|
Balance at June 30,
2010 |
|
|
14,471,363 |
|
|
$ |
145 |
|
|
|
1,092,555 |
|
|
$ |
11 |
|
|
$ |
48,098 |
|
|
$ |
2,019 |
|
|
$ |
325 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for
the six months ended
December 31, 2010
(restated) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(834 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(834 |
) |
|
$ |
3,482 |
|
Translation
adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,284 |
|
|
|
|
|
|
|
|
|
|
|
4,284 |
|
|
|
761 |
|
Unrealized loss on
available-for-sale
securities, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
17 |
|
|
|
(52 |
) |
Recognition of
pension funded
status, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
178 |
|
|
|
|
|
|
|
|
|
|
|
178 |
|
|
|
233 |
|
Comprehensive
Income (restated) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
stock based
compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
501 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,645 |
|
|
$ |
4,424 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares surrendered
as payment of tax
withholding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(29,270 |
) |
|
|
(37 |
) |
|
|
|
|
|
|
|
|
Retirement of
treasury stock |
|
|
(29,270 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(37 |
) |
|
|
|
|
|
|
|
|
|
|
29,270 |
|
|
|
37 |
|
|
|
|
|
|
|
|
|
Shares issued under
stock option plan |
|
|
100,238 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December
31, 2010 (restated) |
|
|
14,542,331 |
|
|
$ |
145 |
|
|
|
1,092,555 |
|
|
$ |
11 |
|
|
$ |
48,562 |
|
|
$ |
1,185 |
|
|
$ |
4,804 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes to consolidated financial statements are an integral part of these
financial statements.
4
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
For the six months ended |
|
|
|
December 31, |
|
|
|
(Restated) |
|
|
|
|
|
|
2010 |
|
|
2009 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(834 |
) |
|
$ |
3,482 |
|
Adjustments to reconcile net (loss) income to net cash used
in operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,450 |
|
|
|
1,331 |
|
Legal settlement gain |
|
|
|
|
|
|
(9,266 |
) |
Deferred financing charge |
|
|
118 |
|
|
|
1,183 |
|
Proceeds from legal settlement |
|
|
|
|
|
|
9,560 |
|
Provision for losses on accounts receivable |
|
|
346 |
|
|
|
404 |
|
Restructuring charges |
|
|
647 |
|
|
|
|
|
Stock compensation costs |
|
|
501 |
|
|
|
448 |
|
Non-cash deferred compensation charges |
|
|
871 |
|
|
|
|
|
Deferred income taxes |
|
|
(1,663 |
) |
|
|
(68 |
) |
Loss on disposal of fixed assets |
|
|
80 |
|
|
|
|
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts and notes receivable, trade |
|
|
(5,077 |
) |
|
|
2,918 |
|
Inventories |
|
|
1,342 |
|
|
|
1,666 |
|
Prepaid expenses and other |
|
|
801 |
|
|
|
664 |
|
Other assets |
|
|
1,605 |
|
|
|
248 |
|
Customer deposits |
|
|
(665 |
) |
|
|
1,764 |
|
Accrued compensation |
|
|
(858 |
) |
|
|
(1,008 |
) |
Payments of restructuring charges |
|
|
(534 |
) |
|
|
(1,621 |
) |
Accounts and notes payable, trade |
|
|
(263 |
) |
|
|
(3,585 |
) |
Income taxes payable |
|
|
182 |
|
|
|
1,890 |
|
Accrued and withheld taxes |
|
|
(74 |
) |
|
|
(250 |
) |
Other accounts payable and accrued liabilities |
|
|
(1,169 |
) |
|
|
(226 |
) |
|
|
|
|
|
|
|
Net cash (used in) provided by operating activities |
|
|
(3,194 |
) |
|
|
9,534 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Additions of property, plant and equipment |
|
|
(186 |
) |
|
|
(227 |
) |
Additions of patents and trademarks |
|
|
(240 |
) |
|
|
(93 |
) |
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(426 |
) |
|
|
(320 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Long-term and short-term debt borrowings |
|
|
2,788 |
|
|
|
726 |
|
Long-term and short-term debt repayments |
|
|
|
|
|
|
(9,209 |
) |
Repurchase of common stock |
|
|
(37 |
) |
|
|
(45 |
) |
Principal payments under capital lease obligations |
|
|
(59 |
) |
|
|
(81 |
) |
Payment of debt financing costs |
|
|
(220 |
) |
|
|
(685 |
) |
Proceeds from stock option exercises |
|
|
|
|
|
|
12 |
|
Other long-term liabilities |
|
|
(46 |
) |
|
|
104 |
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities |
|
|
2,426 |
|
|
|
(9,178 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effects of exchange rate changes |
|
|
1,038 |
|
|
|
479 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents |
|
|
(156 |
) |
|
|
515 |
|
Cash and cash equivalents at beginning of period |
|
|
15,710 |
|
|
|
13,806 |
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
15,554 |
|
|
$ |
14,321 |
|
|
|
|
|
|
|
|
The accompanying notes to consolidated financial statements are an integral part of these statements.
5
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
For the six months |
|
|
ended December 31, |
|
|
2010 |
|
2009 |
Cash paid during the period for: |
|
|
|
|
|
|
|
|
Interest |
|
$ |
600 |
|
|
$ |
750 |
|
Income taxes |
|
$ |
716 |
|
|
$ |
76 |
|
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
Warrants issued in connection with debt financing |
|
$ |
469 |
|
|
|
|
|
The accompanying notes to consolidated financial statements are an integral part of these statements.
6
BALDWIN TECHNOLOGY COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except share and per share data)
Note 1 Organization and Basis of Presentation:
Baldwin Technology Company, Inc. and its subsidiaries (Baldwin or the Company) are engaged
primarily in the development, manufacture and sale of press automation equipment and related parts
and consumables for the printing and publishing industry.
The accompanying unaudited consolidated financial statements include the accounts of Baldwin
and have been prepared in accordance with accounting principles generally accepted in the United
States of America for interim financial information and in compliance with the rules and
regulations of the Securities and Exchange Commission (SEC). These financial statements reflect
all adjustments of a normal recurring nature, which are in the opinion of management, necessary to
present fairly the financial position and the results for the interim periods. These financial
statements should be read in conjunction with the consolidated financial statements and related
notes included in the Companys latest Annual Report on Form 10-K as amended for the fiscal year
ended June 30, 2010.
The results of operations for the interim period presented are not necessarily indicative of
trends or of results to be expected for any future period including the entire fiscal year ending
June 30, 2011.
On June 30, 2010 the Company successfully completed the acquisition of Nordson UV (UV), a
manufacturer of ultraviolet curing systems, lamps and parts. Operating results of the acquired
entities are included in the results of operations from the date of acquisition.
Note 2 Recent Accounting Standards:
In October 2009, the FASB issued ASC Update No. 2009-13, Revenue Recognition (Topic 605):
Multiple-Deliverable Revenue Arrangements. The consensus in Update No. 2009-13 supersedes certain
guidance in Topic 605 (formerly EITF Issue No. 00-21, Multiple-Element Arrangements) and requires
an entity to allocate arrangement consideration at the inception of an arrangement to all of its
deliverables based on their relative selling prices. The consensus eliminates the use of the
residual method of allocation and requires the use of the relative-selling-price method in all
circumstances in which an entity recognizes revenue for an arrangement with multiple deliverables
subject to ASC 605-25. The Company adopted Update No. 2009-13 as of July 1, 2010.
The new guidance changes the criteria required to (1) separate deliverables into separate
units of accounting when deliverables are sold in a bundled arrangement and (2) to allocate the
arrangements consideration to each unit in the arrangement (such as, equipment, installation or
commissioning services). Entities are now required to determine an estimated selling price for
each separate deliverable following a hierarchy of evidence Vendor-specific objective evidence
(VSOE), Third Party Evidence (TPE) and, if VSOE and TPE do not exist, best estimate of selling
price (BESP).
The Companys material revenue streams are the result of a wide range of activities, from the
delivery of stand-alone equipment, parts, services, consumables and, in some instances, design,
installation and commissioning of equipment. The Company enters into revenue arrangements that may
consist of multiple deliverables of its product and service offerings due to the needs of its
customers. The
7
Company recognizes revenue when persuasive evidence of an arrangement exists,
delivery has occurred, the sales price is fixed or determinable, and collectability of the sale
price is reasonably assured. In addition to these general revenue recognition criteria, the
following specific revenue recognition policies are followed:
Products and Equipment For product and equipment sales (one deliverable only), revenue
recognition generally occurs when products or equipment have been shipped, risk of loss has
transferred to the customer, objective evidence exists that customer acceptance provisions have
been met, no significant obligations remain and an allowance for discounts, returns and customer
incentives can be reliably estimated. Recorded revenues are reduced by these allowances. The
Company bases its estimates of these allowances on historical experience taking into consideration
the type of products sold, the type of customer, and the specific type of transaction in each
arrangement.
Services Revenue for services is generally recognized at completion of the contractually
required services.
Multiple-Element Arrangements Arrangements with customers may include multiple
deliverables, including any combination of products, equipment and services. For the Companys
multiple-element arrangements, deliverables are separated into more than one unit of accounting
when (i) the delivered element(s) have value to the customer on a stand-alone basis, and (ii)
delivery of the undelivered element(s) is probable and substantially in the control of the Company.
Based on the new accounting guidance adopted July 1, 2010, revenue is then allocated to each unit
of accounting based on the estimated selling price determined using a hierarchy of evidence based
first on VSOE if it exists, based next on TPE if VSOE does not exist, and finally, if both VSOE and
TPE do not exist, based on BESP.
|
|
|
VSOE The price of a deliverable when the Company regularly sells it on a
stand-alone basis. |
Typically, the Company is unable to determine VSOE for the installation and
commissioning services portion, as well as, the equipment portion of a multiple-element
arrangement. Since the Company does not sell its installation and commissioning services on
a stand-alone basis, the Company is not able to determine VSOE for these portions of a
multiple-element arrangement. In addition, in certain instances, similar equipment included
in a multiple-element arrangement is sold separately in stand-alone arrangements as
customers may perform installations themselves. The Company has determined that the
applicability of this stand-alone pricing is not appropriate to serve as the VSOE for
equipment in multiple-element arrangements since this pricing considers the geographies in
which the products or services are sold, major product and service groups, customer
classification (OEM versus End User) and other marketing variables.
|
|
|
TPE Third party (competitor, subcontractors, etc) sales prices for the same or
largely interchangeable products or services to similar customers in stand-alone sales.
TPE can only be used if VSOE is not available. |
Generally, the Companys strategy for many of its products differs from that of its
peers and its offerings contain a level of customization and differentiation such that the
comparable pricing of products with similar functionality sold by other companies cannot be
obtained. Furthermore, the Company is unable to reliably determine what similar competitor
products selling prices are on a stand-alone basis. Therefore, the Company is typically not
able to determine TPE for the equipment portion of a multiple-element arrangement. However,
there are others (subcontractors) in the industry with sufficient knowledge about the
installation and commissioning process that
8
the Company uses on occasion to perform these
services. Overall, installation and commissioning services may vary, due in part, to the
size and complexity of the installation and commissioning, however, these subcontractor
rates may provide a basis for TPE
after considering the type of services to be performed (i.e. mechanical, electrical) and
negotiated subcontractor rates.
|
|
|
BESP When the Company is unable to establish VSOE or TPE, the Company uses BESP.
The objective of BESP is to determine the price at which the Company would transact a
sale if the product or service were sold on a stand-alone basis. |
The Company determines BESP for a deliverable in a multiple element arrangement by
first collecting all reasonably available data points including sales, cost and margin
analysis of the product, and other inputs based on the Companys normal pricing practices.
Second, the Company makes any reasonably required adjustments to the data based on market
conditions and Company-specific factors (customer, cost structure, etc.). Third, the Company
stratifies the data points, when appropriate, based on customer, magnitude of the
transaction and sales volume. In addition, the Company has negotiated supply agreements,
primarily with large OEM customers, for pricing some of its products and installation and
commissioning services. The Company has experience selling the products and installation and
commissioning services at the published price list and considers this to be BESP when
contracting with customers under the supply agreements.
The determination of BESP is a
formal process within the Company that includes review and approval by the Companys
management.
Contractually stated prices in multiple-element arrangements are not presumed to represent
VSOE, TPE or BESP for an individual deliverable. An entity must develop its estimate of selling
prices using the hierarchy of evidence in the new guidance.
After determination of the estimated selling price of each deliverable in a multiple-element
arrangement, the arrangement consideration is then allocated using the relative selling price
method. Under the relative selling price method, the estimated selling price for each deliverable
is compared to the sum of the estimated selling prices for all deliverables. The percentage that
is calculated for each deliverable is then multiplied by the total contractual value of the
multiple-element arrangement to determine the revenue allocated to each deliverable.
The revenue allocated to each deliverable will then be recorded in accordance with existing
revenue recognition guidance for stand alone product/equipment sales and unbundled services.
Based on the Companys current sales strategies, the newly adopted accounting guidance for
revenue recognition has not and is not expected to have a significant effect on the timing and
pattern of revenue recognition for sales in periods after the initial adoption when applied to
multiple-element arrangements.
Note 3 Restatement of Consolidated Financial Statements
Background of the Restatements
In late February 2011, allegations surfaced that profits had been manipulated at the Companys
Japanese subsidiary. The Audit Committee of the Board of Directors commissioned an investigation
consisting of extensive employee interviews and audit procedures to review the allegations. The
investigation confirmed the premature recognition of revenue and related costs primarily during the
quarter ended June 30, 2010 through intentional circumvention of internal controls apparently
intended to achieve sales and earnings forecasts previously submitted by the Japanese subsidiary to
corporate senior
9
management. The investigation also revealed that no individual appeared to
personally benefit from these irregularities.
On May 10, 2011 the Company announced that, as a result of the investigation, previously
issued consolidated financial statements for the fiscal year 2010 included in the Companys Form
10-K and for the fiscal quarters ended September 30, 2010 and December 31, 2010, should no longer
be relied upon.
Impact of Restatement
The effects of the restatement on the consolidated statement of operations for the quarter
ended December 31, 2010 are summarized in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended December 31, 2010 |
|
For the six months ended December 31, 2010 |
|
|
Previously |
|
|
|
|
|
|
|
|
|
Previously |
|
|
|
|
|
|
Reported |
|
Adjustment |
|
Restated |
|
Reported |
|
Adjustment |
|
Restated |
|
|
(in thousands) |
|
(in thousands) |
Net Sales |
|
$ |
42,203 |
|
|
$ |
655 |
|
|
$ |
42,858 |
|
|
$ |
80,654 |
|
|
$ |
4,037 |
|
|
$ |
84,691 |
|
Cost of goods sold |
|
|
29,764 |
|
|
|
345 |
|
|
|
30,109 |
|
|
|
57,402 |
|
|
|
2,053 |
|
|
|
59,455 |
|
Gross profit |
|
|
12,439 |
|
|
|
310 |
|
|
|
12,749 |
|
|
|
23,252 |
|
|
|
1,984 |
|
|
|
25,236 |
|
Operating (loss) income |
|
|
(518 |
) |
|
|
310 |
|
|
|
(208 |
) |
|
|
(3,103 |
) |
|
|
1,984 |
|
|
|
(1,119 |
) |
Income (loss) from operations before tax |
|
|
(989 |
) |
|
|
310 |
|
|
|
(679 |
) |
|
|
(4,286 |
) |
|
|
1,984 |
|
|
|
(2,302 |
) |
(Benefit) provision for income taxes |
|
|
(371 |
) |
|
|
(548 |
) |
|
|
(919 |
) |
|
|
(2,556 |
) |
|
|
1,088 |
|
|
|
(1,468 |
) |
Net (loss) income |
|
|
(618 |
) |
|
|
858 |
|
|
|
240 |
|
|
|
(1,730 |
) |
|
|
896 |
|
|
|
(834 |
) |
Basic and diluted net (loss) income per share |
|
$ |
(0.04 |
) |
|
$ |
0.06 |
|
|
$ |
0.02 |
|
|
$ |
(0.11 |
) |
|
$ |
0.06 |
|
|
$ |
(0.05 |
) |
The effects of the restatement on the consolidated balance sheet at December 31, 2010 are
summarized in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previously |
|
|
|
|
|
|
|
|
|
Reported |
|
|
Adjustment |
|
|
Restated |
|
|
|
(in thousands) |
|
Deferred taxes, net |
|
$ |
9,646 |
|
|
$ |
(255 |
) |
|
$ |
9,391 |
|
Total assets |
|
|
128,075 |
|
|
|
(255 |
) |
|
|
127,820 |
|
Accumulated earnings |
|
|
1,440 |
|
|
|
(255 |
) |
|
|
1,185 |
|
Total shareholders equity |
|
|
54,962 |
|
|
|
(255 |
) |
|
|
54,707 |
|
Total liabilities and shareholders equity |
|
|
128,075 |
|
|
|
(255 |
) |
|
|
127,820 |
|
There was no impact to previously reported cash flows from operations, investing or financial
activities. As a result of the restatement, the Company failed to meet the Currency Adjusted Net
Sales covenant during the quarter ended December 31, 2010. The Company and its lenders entered
into Waiver and Amendment No. 10 as of May 16, 2011 (see footnote 4).
10
Note 4 Long Term Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2010 |
|
|
June 30, 2010 |
|
|
|
Current |
|
|
Long-Term |
|
|
Current |
|
|
Long-Term |
|
|
|
(in thousands) |
|
|
(in thousands) |
|
Revolving Credit Facility due November 21,
2011, interest rate one-month LIBOR rate 0.27%
plus
4.50% (a) |
|
$ |
13,700 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
12,100 |
|
Revolving Credit Facility due November 21, 2011,
interest rate one-month LIBOR rate 0.73%
plus 4.50% (a) |
|
|
2,006 |
|
|
|
|
|
|
|
|
|
|
|
1,834 |
|
Subordinated promissory note due June 30, 2015,
interest rate one year LIBOR rate 1.2% plus
4.50% (b) |
|
|
389 |
|
|
|
2,132 |
|
|
|
389 |
|
|
|
2,132 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
16,095 |
|
|
$ |
2,132 |
|
|
$ |
389 |
|
|
$ |
16,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
The Companys primary source of external financing is its Credit Agreement, as
amended, with certain Lenders (the Lenders) and Bank of America (BofA), as Agent for the
Lenders (the Credit Agreement), which has a term that ends on November 21, 2011. The
borrowings under the Credit Agreement are secured in the U.S. by a pledge of substantially all
of the Companys domestic assets and in Europe by a pledge of the Companys European assets and
the stock of the Companys European subsidiaries and certain of the Companys Asian subsidiaries
(approximately $18,000 at June 30, 2010). |
On September 28 and 29, 2010, the Company entered into Amendment #8 and #9 to the Credit
Agreement (Amendment #8 and Amendment #9, respectively) with BofA. Under the terms of Amendment
#8, the total commitment under the Credit Agreement was reduced from $25 million to $20 million,
certain adjustments were made to the interest payment provisions and the Company issued to the
Lenders warrants with a term of 10 years to purchase 352,671 shares of common stock in the Company
for $0.01 per share (the Warrants). The Warrants also contain a put provision that enables the
holders after September 28, 2012 to request a cash settlement of the then fair market value of the
Warrants in an amount not to exceed $1.50 per share. Amendment #8 sets new covenants for currency
adjusted net sales, establishes minimum EBITDA levels and sets a limit on capital expenditures for
the fiscal year ended June 30, 2011. Under the terms of Amendment #9, the definition of EBITDA was
revised.
The Company incurred costs of approximately $689 ($220 in cash, $469 associated with the
Warrants) associated with the September 28, 2010 Amendment. Certain of these costs, together with
certain legacy deferred financing costs, are required to be charged to expense, and the Company
recorded a charge of approximately $118 during the first quarter of fiscal year 2011. The balance
of
these costs, together with the remaining legacy deferred financing costs, aggregating
approximately $1,162, will be amortized over the remaining term of the facility under the Credit
Agreement, as amended.
The Warrants were valued based on the Companys stock price at September 28, 2010 and are
presented as a liability under other long-term liabilities. The value of the Warrants will mark to
market at the end of each reporting period and the change in value will be recorded as interest
expense. During the three months ended December 31, 2010, the value of the Warrants was increased
by $28.
As a result of the required restatements of the Companys financial results for the periods
ended June 30, 2010, September 30, 2010 and December 31, 2010 the Company was not in compliance
with the financial covenants contained in its Credit Agreement. Specifically, as a result of the
restatement, at June 30, 2010, the Company failed to meet the established June 30, 2010 targets for
minimum EBITDA and Currency Adjusted Net Sales. Additionally, as a result of the restatement,
during the quarter ended September 30, 2010, the Company failed to meet the established target for
Currency Adjusted Net Sales for the consecutive three-month periods ended July 31, 2010 and August
30, 2010.
11
In addition, the Company has reported that it did not meet the minimum EBITDA covenant for the
period ended March 31, 2011 and did not meet the Currency Adjusted Net Sales target for the three
consecutive months ended April 30, 2011.
On May 16, 2011, the Company entered into Waiver and Amendment No. 10 to the Credit Agreement
(Amendment No. 10) with Bank of America. Amendment No. 10 provided for a waiver by the lenders
of the Companys failure to meet the applicable minimum EBITDA and Currency Adjusted Net Sales for
all period noted above. Under the terms of Amendment No. 10, the Company provided the Lenders
Warrants with a term of ten years to purchase 372,374 shares of the Companys Class A common stock
in the Company for $0.01 per share. The Warrants also contain a put provision that enables the
Holder after May 16, 2013 to request a cash settlement equal to the then fair market value of the
Warrants in an amount not to exceed $1.50 per share. Amendment No. 10 sets new covenants for
currency adjusted net sales, establishes minimum EBITDA levels, adjusts interest rate provisions,
approves the disposition of the assets of the Companys food blends discontinued operations and
establishes certain milestones regarding refinancing the loan.
The Company incurred costs of approximately $777 ($222 in cash, $555 associated with
aforementioned issuance of warrants) for the May 16, 2011 Amendment. These costs, together with
legacy deferred financing costs, aggregating approximately $1,344 will be amortized over the
remaining term of the amended Agreement.
The warrants were valued based on the Companys stock price at May 12, 2011 will be presented
as a liability under other long-term liabilities. The value of the warrants will mark to market at
the end of each reporting period and the change in value will recorded as interest expense.
The Company currently believes that its cash flows from operations, along with its available
bank lines of credit, are sufficient to finance its working capital and other capital requirements
through the term of the Credit Agreement. The facility under the Credit Agreement (the Credit
Facility) matures November 21, 2011, and the Company may be unable to renew or replace this
financing. The Company has begun preliminary discussions regarding renewal of its Credit Facility
and anticipates finalizing a renewal or replacement of the Credit Agreement, although there are no
assurances that such agreement will be completed by the loan maturity date.
|
|
|
|
(b) |
|
$2,521 five year subordinated promissory note with principal and interest payments due and
payable in five annual installments.
|
The Company maintains relationships with both foreign and domestic banks, which combined have
extended short and long-term credit facilities to the Company totaling $29,849. As of September 30,
2010, the Company had $22,858 outstanding under these credit facilities (including Letters of
Credit). The amount available under these credit facilities at December 31, 2010 was $3,791.
Note 5 Net income (loss) per share:
Basic net income (loss) per share includes no dilution and is calculated by dividing net
income (loss) available to common stockholders by the weighted average number of common shares
outstanding for the period. Diluted net income (loss) per share reflects the potential dilution of
securities that could share in the earnings of an entity. For the three and six months ended
December 31, 2010, the weighted average shares outstanding used to compute diluted net income
(loss) per share includes potentially dilutive securities of zero and 47,000 shares, respectively.
Outstanding options and warrants to purchase 845,000 and 2,025,000 shares, respectively, of the
Companys common stock for the three and six months ended December 31,
12
2010, respectively, are not included in the calculation of diluted net income (loss) per
share, because the effect would be anti-dilutive.
For the three and six months ended December 31, 2009, the weighted average shares outstanding used
to compute diluted net income (loss) per share includes potentially dilutive securities of zero and
51,000 shares, respectively. Outstanding options to purchase 57,000 and 1,065,000 shares,
respectively, of the Companys common stock for the three and six months ended December 31, 2009,
respectively, are not included in the calculation of diluted net income (loss) per share, because
the effect would be anti-dilutive.
Note 6 Accumulated Other Comprehensive Income (Loss):
Accumulated Other Comprehensive Income (Loss) (AOCI) is comprised of various items, which
affect equity that result from recognized transactions and other economic events other than
transactions with owners in their capacity as owners. AOCI is included in stockholders equity in
the consolidated balance sheets. AOCI consists of the following:
|
|
|
|
|
|
|
|
|
|
|
December 31, 2010 |
|
|
June 30, 2010 |
|
|
|
(in thousands) |
|
Cumulative translation adjustments |
|
$ |
5,768 |
|
|
$ |
1,484 |
|
Unrealized gain on investments,
net of tax benefit of $108
(benefit of $121 at June 30, 2010) |
|
|
(149 |
) |
|
|
(166 |
) |
Pension and other, net of tax benefit
of $640 (benefit of $768 at June 30,
2010) |
|
|
(815 |
) |
|
|
(993 |
) |
|
|
|
|
|
|
|
|
|
$ |
4,804 |
|
|
$ |
325 |
|
|
|
|
|
|
|
|
Note 7 Inventories:
Inventories consist of the following:
|
|
|
|
|
|
|
|
|
|
|
December 31, 2010 |
|
|
June 30, 2010 |
|
|
|
(in thousands) |
|
Raw materials |
|
$ |
12,601 |
|
|
$ |
11,574 |
|
In process |
|
|
4,124 |
|
|
|
4,528 |
|
Finished goods |
|
|
4,654 |
|
|
|
4,737 |
|
|
|
|
|
|
|
|
|
|
$ |
21,379 |
|
|
$ |
20,839 |
|
|
|
|
|
|
|
|
Foreign currency translation effects increased inventories by $1,636 from June 30, 2010 to
December 31, 2010.
13
Note 8 Goodwill and Other Intangible Assets:
The changes in the carrying amount of goodwill for the six months ended December 31, 2010 were
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Carrying |
|
|
Accumulated |
|
|
Net |
|
|
|
Amount |
|
|
Amortization |
|
|
Book Value |
|
|
|
(in thousands) |
|
Balance as of June 30, 2010 |
|
$ |
21,527 |
|
|
$ |
1,425 |
|
|
$ |
20,102 |
|
Effects of currency translation |
|
|
766 |
|
|
|
120 |
|
|
|
643 |
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2010 |
|
$ |
22,293 |
|
|
$ |
1,545 |
|
|
$ |
20,748 |
|
|
|
|
|
|
|
|
|
|
|
Intangible assets subject to amortization were comprised of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2010 |
|
|
As of June 30, 2010 |
|
|
|
|
|
|
|
Gross |
|
|
|
|
|
|
Gross |
|
|
|
|
|
|
Amortization |
|
|
Carrying |
|
|
Accumulated |
|
|
Carrying |
|
|
Accumulated |
|
Intangible Assets: |
|
Period |
|
|
Amount |
|
|
Amortization |
|
|
Amount |
|
|
Amortization |
|
|
|
|
|
|
|
(in thousands) |
|
|
(in thousands) |
|
Patents and trademarks |
|
|
12-20 |
|
|
$ |
11,715 |
|
|
$ |
7,527 |
|
|
$ |
11,372 |
|
|
$ |
7,155 |
|
Customer relationships |
|
|
2-13 |
|
|
|
1,098 |
|
|
|
267 |
|
|
|
1,066 |
|
|
|
204 |
|
Trademarks |
|
|
30 |
|
|
|
1,458 |
|
|
|
198 |
|
|
|
1,368 |
|
|
|
163 |
|
Existing product technology |
|
|
15 |
|
|
|
6,042 |
|
|
|
1,393 |
|
|
|
5,605 |
|
|
|
1,135 |
|
Non-compete/solicitation
Agreements |
|
|
5 |
|
|
|
135 |
|
|
|
108 |
|
|
|
95 |
|
|
|
67 |
|
Other |
|
|
5-30 |
|
|
|
2,280 |
|
|
|
2,029 |
|
|
|
2,165 |
|
|
|
1,848 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
$ |
22,728 |
|
|
$ |
11,522 |
|
|
$ |
21,671 |
|
|
$ |
10,572 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization expense associated with these intangible assets was $375 and $723, respectively,
for the three and six months ended December 30, 2010 and $319 and $640, respectively, for the three
and six months ended December 30, 2009.
Note 9 Supplemental Compensation:
The following table sets forth the components of net periodic benefit costs for the Companys
defined benefit plans for the three and six months ended December 31, 2010 and 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months |
|
|
For the six months |
|
|
|
ended December 31, |
|
|
ended December 31, |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
|
(in thousands) |
|
Service cost |
|
$ |
100 |
|
|
$ |
100 |
|
|
$ |
200 |
|
|
$ |
200 |
|
Interest cost |
|
|
79 |
|
|
|
84 |
|
|
|
158 |
|
|
|
168 |
|
Expected return on plan assets |
|
|
(7 |
) |
|
|
(4 |
) |
|
|
(14 |
) |
|
|
(8 |
) |
Amortization of net actuarial
gain |
|
|
18 |
|
|
|
(3 |
) |
|
|
36 |
|
|
|
(6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost |
|
$ |
190 |
|
|
$ |
177 |
|
|
$ |
380 |
|
|
$ |
354 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the three and six months ended December 31, 2010, respectively, the Company made
contributions to the plans of $78 and $166, respectively. During the three and six months ended
December 31, 2009, respectively, the Company made contributions to the plans of $170 and $170,
respectively.
14
Note 10 Customers:
During each of the three and six months ended December 31, 2010, and 2009, one customer
accounted for more than 10% of the Companys net sales. Koenig and Bauer Aktiengesellschaft (KBA)
accounted for approximately 14% of the Companys net sales for the three and six months ended
December 31, 2010, and 18% and 16% of the Companys net sales for the three and six months ended
December 31, 2009, respectively.
Note 11 Warranty Costs:
The Companys standard contractual warranty provisions are to repair or replace, at the
Companys option, product that is proven to be defective. The Company estimates its warranty costs
as a percentage of revenues on a product by product basis, based on actual historical experience.
Hence, the Company accrues estimated warranty costs reported in other accounts payable and accrued
liabilities, at the time of sale. In addition, should the Company become aware of a specific
potential warranty claim, a specific charge is recorded and accounted for separate from the percent
of revenue discussed above.
|
|
|
|
|
|
|
|
|
|
|
For the six months ended |
|
|
|
December 31, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(in thousands) |
|
Warranty reserve at June 30 |
|
$ |
1,999 |
|
|
$ |
2,626 |
|
Additional warranty expense accruals |
|
|
1,058 |
|
|
|
1,487 |
|
Payments against reserve |
|
|
(1,116 |
) |
|
|
(1,754 |
) |
Effects of currency rate fluctuations |
|
|
223 |
|
|
|
123 |
|
|
|
|
|
|
|
|
Warranty reserve at December 31 |
|
$ |
2,164 |
|
|
$ |
2,482 |
|
|
|
|
|
|
|
|
Note 12 Share Based Payments:
Total share-based compensation for the three and six months ended December 31, 2010 and 2009
are summarized in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months |
|
|
For the six months |
|
|
|
ended December 31, |
|
|
ended December 31, |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
Share based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options |
|
$ |
195 |
|
|
$ |
48 |
|
|
$ |
429 |
|
|
$ |
102 |
|
Restricted stock |
|
|
78 |
|
|
|
151 |
|
|
|
72 |
|
|
|
346 |
|
Performance shares (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total share-based compensation |
|
$ |
273 |
|
|
$ |
199 |
|
|
$ |
501 |
|
|
$ |
448 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
No compensation expense was recorded in any period presented related to performance
shares, based on assessment of probability of achievement. |
During the quarter ended September 30, 2010, the Company entered into an advisory agreement
(the Advisory Agreement) with OBX Partners LLC (OBX), under which OBX acted as a financial
advisor and strategic consultant. As part of the consideration for the services rendered, the
Company granted to OBX an option (the OBX Option) to purchase 300,000 shares of the Companys
Class A Common Stock (the Shares) at an exercise price per share of $1.26, exercisable on or
after October 1, 2011. The Option would have terminated on November 16, 2010 if OBX had not
substantially completed the engagement, which OBX completed during the second quarter. If not
previously exercised, the OBX Option shall terminate on September 30, 2020. The fair value of the
OBX Option on the date of grant was
15
$167. The Company recomputed the fair value of the OBX Option as of December 31, 2010 and recorded
an adjustment to the fair value of $31, resulting in a fair value of $198 at December 31, 2010.
In order to induce Mark Becker, President and Chief Executive Officer of the Company, to enter
into an employment agreement with the Company, the Company granted, effective October 1, 2010, to
Mr. Becker the following options:
(i) An option to purchase 200,000 shares of Class A Common Stock of the Company, at an
exercise price of $1.20 per share, pursuant to the Companys 2005 Equity Compensation Plan (the
Plan Option). The Plan Option vested and became exercisable on October 1, 2010. The Plan Option
shall expire, if not sooner exercised, as of the close of business on September 30, 2020.
(ii) An option to purchase 200,000 shares of Class A Common Stock of the Company, at an
exercise price of $1.20 per share (the Non-Plan Option). The Non-Plan Option shall vest and
become exercisable on October 1, 2011.
The aggregate fair value of the Plan Option and the Non-Plan Option on the date of grant was
$220.
Effective November 18, 2010, the Company granted to each non-employee director of the Company
(i) either a Restricted Stock Award or a Restricted Stock Unit with respect to 9,524 shares (a
total of 57,144 shares for all non-employee directors) of the Companys Class A Common Stock, the
restrictions on which will lapse on November 18, 2011, having an aggregate grant date fair value of
$72 and (ii) a non-qualified option (a Non-Employee Director Option) to purchase 9,524 shares (a
total of 57,144 shares for all non-employee directors) of the Companys Class A Common Stock, which
shall vest in three equal annual installments commencing on the second anniversary of the date of
grant, having an aggregated grant date fair value of $34.
Note 13 Restructuring:
Quarter 3 FY 2009 Plan:
In January and March 2009, the Company committed to the principal features of plans to
restructure some of its existing operations. These plans included the consolidation of production
facilities in Germany, as well as employment reductions in Germany, Sweden, Italy and the U.S. The
actions were taken in response to sustained weak market conditions. Actions under the plan
commenced during the Companys third quarter of Fiscal 2009; and the Company substantially
completed the actions by June 30, 2009. Nearly all the costs associated with the plans are cash
costs, payment of which will continue through Fiscal 2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments |
|
|
Balance at |
|
|
Payments |
|
|
Balance at |
|
|
|
Initial |
|
|
against |
|
|
June 30, |
|
|
against |
|
|
December |
|
|
|
Reserve |
|
|
Reserve |
|
|
2010 |
|
|
Reserve |
|
|
31, 2010 |
|
|
|
(in thousands) |
|
Restructuring costs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee termination costs |
|
$ |
3,836 |
|
|
$ |
(3,570 |
) |
|
$ |
266 |
|
|
$ |
(160 |
) |
|
$ |
106 |
|
Other |
|
|
230 |
|
|
|
(101 |
) |
|
|
129 |
|
|
|
|
|
|
|
129 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total restructuring costs |
|
$ |
4,066 |
|
|
$ |
(3,671 |
) |
|
$ |
395 |
|
|
$ |
(160 |
) |
|
$ |
235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter 4 FY 2010 Plan:
In June 2010 the Company committed to the principal features of a plan to additionally
restructure its operation in Germany. Actions under the plan commenced and were completed by June
30, 2010. All costs associated with the plan are cash payments related to employee reductions.
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments |
|
|
Balance at |
|
|
Payments |
|
|
Balance at |
|
|
|
Initial |
|
|
against |
|
|
June 30, |
|
|
against |
|
|
December |
|
|
|
Reserve |
|
|
Reserve |
|
|
2010 |
|
|
Reserve |
|
|
31, 2010 |
|
|
|
(in thousands) |
|
Restructuring costs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee termination costs |
|
$ |
540 |
|
|
$ |
(38 |
) |
|
$ |
502 |
|
|
$ |
(230 |
) |
|
$ |
272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total restructuring costs |
|
$ |
540 |
|
|
$ |
(38 |
) |
|
$ |
502 |
|
|
$ |
(230 |
) |
|
$ |
272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter 1 FY 2011 Plan:
In September 2010 the Company committed to the principle features of a plan to restructure its
operations in the UK and Japan. Actions under the plan to consolidate facilities in the UK and to
reduce employment levels in Japan commenced in September and were concluded in the UK. Additional
actions will continue in Japan through the second quarter of Fiscal 2011. Costs associated with the
current plan are primarily cash payments related to employee reductions. Payments will continue
through the fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments |
|
|
Balance at |
|
|
|
Initial |
|
|
against |
|
|
December |
|
|
|
Reserve |
|
|
Reserve |
|
|
31, 2010 |
|
|
|
(in thousands) |
|
Restructuring costs: |
|
|
|
|
|
|
|
|
|
|
|
|
Employee termination costs |
|
$ |
145 |
|
|
$ |
(137 |
) |
|
$ |
8 |
|
Other |
|
|
47 |
|
|
|
|
|
|
|
47 |
|
|
|
|
|
|
|
|
|
|
|
Total restructuring costs |
|
$ |
192 |
|
|
$ |
(137 |
) |
|
$ |
55 |
|
|
|
|
|
|
|
|
|
|
|
Quarter 2 FY 2011 Plan:
In December 2010 the Company committed to the principle features of a plan to restructure its
operations in Japan, Germany and the U.S. Actions under the plan to reduce employment levels
commenced in December. Costs associated with the current plan are primarily cash payments related
to employee reductions. Payments will continue through the fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments |
|
|
Balance at |
|
|
|
Initial |
|
|
against |
|
|
December |
|
|
|
Reserve |
|
|
Reserve |
|
|
31, 2010 |
|
|
|
(in thousands) |
|
Restructuring costs: |
|
|
|
|
|
|
|
|
|
|
|
|
Employee termination costs |
|
$ |
455 |
|
|
$ |
|
|
|
$ |
455 |
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total restructuring costs |
|
$ |
455 |
|
|
$ |
|
|
|
$ |
455 |
|
|
|
|
|
|
|
|
|
|
|
Note 14 Legal Proceedings:
Baldwin is involved in various legal proceedings from time to time, including actions with
respect to commercial, intellectual property and employment matters. The Company believes that it
has
17
meritorious defenses against the claims currently asserted against it and intends to defend
them vigorously. However, the outcome of litigation is inherently uncertain, and the Company cannot
be sure that it will prevail in any of the cases currently in litigation. The Company believes that
the ultimate outcome of any such cases will not have a material adverse effect on its results of
operations, financial position or cash flows; however, there can be no assurances that an adverse
determination would not have a material adverse effect on the Company.
On September 24, 2009, the Company and technotrans AG (technotrans) agreed to an
out-of-court settlement to terminate all proceedings that had continued for a number of years in
connection with the infringement of a Baldwin patent. Under the agreement, technotrans paid to the
Company Euro 6.5 million (approximately $9.6 million) and the Company agreed to dismiss its claim
for damages.
Note 15 Income Taxes:
The Companys effective tax rate is impacted by several factors including but not limited to
(i) having significant operations outside the United States, which are taxed at rates different
than the U.S. statutory rate, (ii) no tax benefit being recognized for losses incurred in certain
countries as the realization of such benefits is not more likely than not, (iii) certain foreign
and domestic permanent items, and (iv) adjustments to the Companys valuation allowances and FIN 48
reserve.
Note 16 Fair Value Measurements:
ASC Topic 820, Fair Value Measurements and Disclosures, requires the use of valuation
techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.
Observable inputs consist of market data obtained from independent sources while unobservable
inputs reflect the Companys own market assumptions. These inputs create the following fair value
hierarchy:
|
|
|
Level 1 Quoted prices in active markets for identical assets or liabilities |
|
|
|
|
Level 2 Valuations based on quoted prices in markets that are not active, quoted
prices for similar assets or liabilities or all other inputs that are observable |
|
|
|
|
Level 3 Unobservable inputs for which there is little or no market data which
require the Company to develop its own assumptions |
If the inputs used to measure the fair value of a financial instrument fall within different
levels of the hierarchy, the financial instrument is categorized based upon the lowest level input
that is significant to the fair value measurement.
Whenever possible, the Company uses quoted market prices to determine fair value. In the
absence of quoted market prices, the Company uses independent sources and data to determine fair
value.
At December 31, 2010, the Companys financial assets and financial liabilities that are
measured at fair value on a recurring basis, consistent with the fair value hierarchy provision and
valued as Level 1 are comprised of marketable securities and warrants. At December 31, 2010, the
Company did not have any assets or liabilities at fair value on a recurring basis using significant
unobservable inputs (Level 3) in the Consolidated Financial Statements.
There has been no change in the Companys valuation technique during the quarter ended
December 31, 2010.
18
|
|
|
ITEM 2: |
|
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (IN THOUSANDS) |
The following is managements discussion and analysis of certain factors, which have affected
the consolidated financial statements of Baldwin.
Forward-looking Statements
Except for the historical information contained herein, the following statements and certain
other statements contained herein are based on current expectations. Similarly, the press releases
issued by the Company and other public statements made by the Company from time to time may contain
language that is forward-looking. These forward-looking statements may be identified by the use of
forward-looking words or phrases such as forecast, believe, expect, intend, anticipate,
should, plan, estimate, and potential, among others. Such statements are forward-looking
statements that involve a number of risks and uncertainties. The Company cautions investors that
any such forward-looking statements made by the Company are not guarantees of future performance
and that actual results may differ materially from those in the forward-looking statements. Some of
the factors that could cause actual results to differ materially include, but are not limited to
the following: (i) the ability to comply with requirements of credit agreements; the availability
of funding under such agreements; the ability to maintain adequate liquidity in declining and
challenging economic conditions impacting the Company as well as customers, (ii) general economic
conditions in the U.S. and other foreign locations, (iii) the ability to obtain, maintain and
defend challenges against valid patent protection of certain technology, primarily as it relates to
the Companys cleaning systems, (iv) material changes in foreign currency exchange rates versus the
U.S. Dollar, (v) changes in the mix of products and services comprising revenues, (vi) a
19
decline in
the rate of growth of the installed base of printing press units and the timing of new press
orders, (vii) the ultimate realization of certain trade receivables and the status of ongoing
business levels with the Companys large OEM customers, (viii) competitive market influences, and (ix) the
possibility of future cost reduction efforts, including potential restructurings. Additional
factors are set forth in Item 1A Risk Factors in the Companys Annual Report on Form 10-K as
amended for the fiscal year ended June 30, 2010, which should be read in conjunction herewith.
Critical Accounting Policies and Estimates
For further information regarding the Companys critical accounting policies, please refer to
the Managements Discussion and Analysis section of the Companys Annual Report on Form 10-K as
amended for the fiscal year ended June 30, 2010. Other than the adoption of ASC Update No. 2009-13,
Revenue Recognition Topic 605: Multiple-Deliverable Revenue Arrangements, which is discussed in
Note 2 of the financial statements, there have been no material changes during the six months ended
December 31, 2010.
Overview
Baldwin Technology Company, Inc. is a leading global supplier of process automation equipment
and related parts and consumables for the printing and publishing industries. Baldwin offers its
customers a broad range of market-leading technologies, products and systems that enhance the
quality of printed products and improve the economic and environmental efficiency of printing
presses. Headquartered in Shelton, CT, the Company has sales and service centers and product
development and production facilities in the Americas, Asia and Europe. Baldwins technology and
products include cleaning systems and related consumables, fluid management and ink control
systems, web press protection systems, drying and curing systems, blending and packaging services
and related services and parts.
The Company manages its business as one reportable business segment built around its core
competency in accessories and controls.
The market for printing equipment continues to face significant challenges. These challenges
have translated into a lower level of business activity for the Company.
20
Highlights for Six and Three Months Ended December 31, 2010
|
|
|
Revenues, as reported, increased 13% and 11% for the six and three months ended
December 31, 2010, respectively, versus the year ago comparable periods. |
|
|
|
|
For the six and three month periods ended December 31, 2010, order intake was up 23%
and 28%, respectively, versus the comparable year ago periods. |
|
|
|
|
On June 30, 2010 the Company successfully completed the acquisition of Nordson UV,
(UV), a manufacturer of ultraviolet curing systems, lamps and parts. Operating results
of the acquired entities are included in the results of operations from the date of
acquisition. |
|
|
|
|
In September 2010, the Company concluded an amendment to its Credit Agreement with its
lenders covering the period through November 21, 2011, the end of the term of the
Agreement. |
See discussion below related to consolidated results of operations, liquidity and capital
resources.
Six Months Ended December 31, 2010 vs. Six Months Ended December 31, 2009
Consolidated Results
Net Sales
Net sales for the six months ended December 31, 2010 increased by $9,766 or 13%, to $84,691
from $74,925 for the six months ended December 31, 2009. Currency rate fluctuations attributable to
the Companys overseas operations increased net sales by $85 in the current period.
The net sales increase reflects higher sales in Europe of $1,160, including $2,074 of
unfavorable effects from exchange rate fluctuations. The increase in net sales primarily reflects
the additional revenue associated with the UV business acquisition partially offset by lower order
and sales activity by OEM press manufacturers, primarily in Germany, for new printing equipment and
lower level demand from end user customers.
In Asia, net sales increased approximately $6,383, including $1,989 of favorable effects from
exchange rate fluctuations. The increase primarily reflects the delivery of several large newspaper
equipment orders in Japan coupled with the impact of UV shipments and other increases of products
sold in China and India.
Net sales in the Americas increased $2,224, primarily reflecting additional sales from the UV
business acquisition partially offset by a lower volume in the blending and packaging services
market.
Gross Profit
Gross profit for the six months ended December 31, 2010 was $25,236 (29.8% of net sales)
compared to $22,078 (29.50% of net sales) for the six months ended December 31, 2009, an increase
of $3,158. Currency rate fluctuations had virtually no impact on gross profit in the current
period. The increase in gross profit primarily relates to the additional sales volume and higher
gross margins associated with the UV business. Partially offsetting these increases were continued
pricing pressure from OEM and end users and unfavorable overhead absorption related to reduced
volumes.
Selling, General and Administrative Expenses
Selling, general and administrative expenses (SG&A) amounted to $18,610 (23% of net sales) for
the six months ended December 31, 2010 compared to $17,007 (22.6% of net sales) for the same period
in the prior fiscal year, an increase of $1,603 or 9%. Currency rate fluctuations increased SG&A
$113
21
during the six month period. G&A expenses increased $815. The increase primarily reflects
additional G&A expenses associated with the UV business of $744 and costs associated with the
termination agreement with the Companys former CEO of $878. Partially offsetting these increases
were lower professional fees of $911 incurred in fiscal year 2010 related to an investigation into
internal control matters. Selling expenses increased $790. The increase primarily reflects
additional selling expenses associated with the UV business of $754.
Engineering and Development Expenses
Engineering and development expenses amounted to $7,098 for the six months ended December 31,
2010, compared to $6,574 for the same period in the prior fiscal year, an increase of $524 or 8%.
Currency rate fluctuations decreased expenses $183 for the current period. The increase primarily
reflects additional expenses associated with the UV business of $346. As a percentage of net sales,
engineering and development expenses were approximately 8.8% of sales for each of the six months
ended December 31, 2010 and 2009.
Restructuring
The Company recorded $647 of restructuring costs during the six months ended December 31, 2010
versus $0 in the comparable prior year period. The restructuring plans commenced in FY 2011 are
designed to achieve operational efficiencies in Japan, the UK and the U.S. and consist primarily of
employee terminations.
Legal Settlement
During the six months ended December 31, 2009, the Company recorded a gain on the settlement
of a patent infringement lawsuit of $9,266.
Interest and Other
Interest expense, net, for the six months ended December 31, 2010 was $1,035 compared to
$2,200 for the six months ended December 31, 2009. Currency rate fluctuations had no impact on
interest expense in the current period. During the quarter ended September 30, 2010, the Company
concluded an amendment to its credit agreement with its Lenders. Legacy deferred financing costs
totaling approximately $118 were charged to interest expense during the quarter ended September 30,
2010. During the quarter ended September 30, 2009, the Company concluded an amendment to its credit
agreement with its Lenders. Certain costs associated with the amendment, together with legacy
deferred financing costs totaling approximately $1,183, were charged to expense during the quarter
ended September 30, 2009. After giving effect to these expenses, interest expense decreased $100.
Other (income) expense, net, was an expense of $148 for the six months ended December 31, 2010
compared to income of $202 for the six months ended December 31, 2009. These amounts are primarily
comprised of net foreign exchange losses.
Income Taxes
The Company recorded an income tax benefit of $1,468, for the six months ended December 31,
2010, compared to a provision of $1,879, for the six months ended December 31, 2009. The effective
tax rate for fiscal 2010 of 63.8% differs from the U.S. statutory rate and reflects a) foreign
income taxed at rates different than the U.S. statutory rate, (b) no benefits being recognized for
losses incurred in certain countries, as the realization of such benefits is not more likely than
not, (c) the impact of foreign and domestic permanent items, and (d) reversal of previously
recorded reserves associated with unrecognized tax benefits (FIN 48 Liabilities) upon
finalization of a German tax audit for years 2000-2004, of $777 and a reversal of a valuation
allowance in the U.K.
22
The effective tax rate for fiscal 2010, differs from the statutory rate and reflect (a)
foreign income taxed at rates different than the U.S. statutory rate, (b) no benefits recognized
for losses incurred in certain countries, as the realization of such benefits is not more likely than not, and (c) the impact of
foreign and domestic permanent items. The Company continues to assess the need for its deferred
tax asset valuation allowances in the jurisdictions in which it operates. Any adjustments to the
deferred tax asset valuation allowances would be recorded in the income statement for the periods
that the adjustments were determined to be required.
Net Income
The Companys net loss was $834 for the six months ended December 31, 2010, compared to net
income of $3,482 for the six months ended December 31, 2009. Net loss per basic and diluted share
was $0.05 for the six months ended December 31, 2010, compared to net income of $0.23 per basic
and diluted share for the six months ended December 31, 2009.
Three Months Ended December 31, 2010 vs. Three Months Ended December 31, 2009
Consolidated Results
Net Sales
Net sales for the three months ended December 31, 2010 increased $4,107 or 11%, to $42,858
from $38,751 for the three months ended December 31, 2009. Currency rate fluctuations attributable
to the Companys overseas operations increased net sales $91. The UV business acquisition
contributed net sales of approximately $4,064 during the quarter ended December 31, 2010.
Net sales reflects decreased sales in Europe of $307, including $931 of unfavorable effects
from exchange rate fluctuations. The decrease was attributable to the continued weakening of global
demand for the Companys equipment reflecting reduced order and sales activity for new printing
equipment partially offset by the additional revenue from the UV business.
In Asia, net sales increased $2,700, including $1,022 of favorable effects from exchange rate
fluctuations. The increase reflects the impact from shipments of UV products and other increases in
sales of products sold in China and India.
Net Sales in the Americas increased $1,714, primarily reflecting additional sales of products
acquired in the UV business acquisition partially offset by lower volume in the blending and
packaging services market.
Gross Profit
Gross profit for the three months ended December 31, 2010 was $12,749 (29.7% of net sales),
compared to $11,658 (30.0% of net sales) for the three months ended December 31, 2009, an increase
of $1,091 or 9%.The increase in gross profit primarily relates to the additional sales volume and
higher gross margin associated with the UV business. Partially offsetting these increases were
continued pricing pressure from OEM and end users and unfavorable overhead absorption related to
reduced volumes.
Selling, General and Administrative Expenses
Selling, general and administrative expenses (SG&A) were $8,819 (20.9% of net sales) for the
three months ended December 31, 2010, compared to $8,048 (20.8% of net sales) for the same period
in the prior fiscal year, an increase of $771 or 9%. Foreign currency translations increased SG&A
$86. G&A expenses increased $298. The increase primarily reflects additional G&A expenses
associated with the
23
UV business of $382. Selling expenses increased $474. The increase primarily
reflects additional selling expenses associated with the UV business of $345.
Engineering and Development Expenses
Engineering and development expenses were $3,683 (8.7% of net sales) for the three months
ended December 31, 2010, compared to $3,503 (9.0% of net sales) for the same period of the prior
fiscal year, an increase of $180. Currency rate fluctuations of $73 decreased engineering and
development expenses. The increase primarily reflects additional expenses associated with the UV
business of $168.
Restructuring
The Company recorded $455 of restructuring costs during the three months ended December 31,
2010 versus $0 in the comparable prior year period. The restructuring plan was designed to achieve
operational efficiencies in Germany, Japan and the U.S. and consists entirely of employee
terminations.
Interest and Other
Interest expense, net for the three months ended December 31, 2010 was $495 compared to $485
for the three months ended December 31, 2009. Currency rate fluctuations had virtually no impact on
interest expense in the current period.
Other (income) expense, net, amounted to expense of $26 for the three months ended December
31, 2009 compared to income of $24 for the three months ended December 31, 2010. Other income
(expense), net, primarily includes net foreign currency transaction gains for the three months
ended December 31, 2010 and 2009.
Income Taxes
The Company recorded an income tax benefit of $(919) on a loss before tax of $679 for the
three months ended December 31, 2010, compared to a tax expense of $12 for the three months ended
December 31, 2009 on a loss before tax of $404. The effective tax rate for the three months ended
December 31, 2010 differs from the statutory rate and reflects a) foreign income taxed at rates
different than the U.S. statutory rate, (b) no benefits being recognized for losses incurred in
certain countries, as the realization of such benefits is not more likely than not, (c) the impact
of foreign and domestic permanent items, and (d) the reversal of previously recorded reserves
associated with unrecognized tax benefits (FIN 48 Liabilities) upon finalization of a German tax
audit for years 2000-2004, of $777.
The effective tax rate for the three months ended December 31, 2009 differs from the statutory
rate and reflects a) foreign income taxed at rates different than the U.S. statutory rate, (b) no
benefits being recognized for losses incurred in certain countries, as the realization of such
benefits is not more likely than not, and (c) the impact of foreign and domestic permanent items.
The Company continues to assess the need for its deferred tax asset valuation allowances in the
jurisdictions in which it operates. Any adjustments to the deferred tax asset valuation allowances
would be recorded in the income statement of the periods that the adjustments were determined to be
required.
Net Income
The Companys net income was $240 for the three months ended December 31, 2010, compared to a
net loss of $416 for the three months ended December 31, 2009. Net income per basic and diluted
share amounted to $0.02 for the three months ended December 31, 2010, compared to $(0.03) per basic
and diluted share for the three months ended December 31, 2009.
Non-GAAP Financial Measures
Consolidated EBITDA and adjusted EBITDA are non-GAAP financial measures within the meaning of
Regulation G promulgated by the Securities and Exchange Commission. These non-GAAP
24
measures are
provided because management of the Company uses these financial measures as an indicator of
business performance in maintaining and evaluating the Companys on-going financial results and
trends. The Company believes that both management and investors benefit from referring to these
non-GAAP measures in assessing the performance of the Companys ongoing operations and liquidity
and when planning and forecasting future periods. These non-GAAP measures also facilitate
managements internal comparisons to the Companys historical operating results and liquidity. The
following is a reconciliation of the net income (loss) as reported to EBITDA.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months |
|
|
For the six months ended |
|
|
|
ended December 31, |
|
|
December 31, |
|
|
|
(Restated) |
|
|
(Restated) |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
|
(in thousands) |
|
|
(in thousands) |
|
Net income (loss) as reported |
|
$ |
240 |
|
|
$ |
(416 |
) |
|
$ |
(834 |
) |
|
$ |
3,482 |
|
(Benefit) provision for income taxes |
|
|
(919 |
) |
|
|
12 |
|
|
|
(1,468 |
) |
|
|
1,879 |
|
Interest expense, net |
|
|
495 |
|
|
|
485 |
|
|
|
1,035 |
|
|
|
2,200 |
|
Depreciation and amortization |
|
|
786 |
|
|
|
672 |
|
|
|
1,450 |
|
|
|
1,331 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
$ |
602 |
|
|
$ |
753 |
|
|
$ |
(183 |
) |
|
$ |
8,892 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses related to inventory step up |
|
|
|
|
|
|
|
|
|
|
243 |
|
|
|
|
|
Expenses related to Pres/CEO
termination |
|
|
|
|
|
|
|
|
|
|
878 |
|
|
|
|
|
Restructuring |
|
|
455 |
|
|
|
|
|
|
|
647 |
|
|
|
|
|
Legal settlement gain |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9,266 |
) |
Internal control investigation costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
911 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
1,057 |
|
|
$ |
753 |
|
|
$ |
1,951 |
|
|
$ |
537 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity and Capital Resources at December 31, 2010
Cash flows from operating, investing and financing activities, as reflected in the
Consolidated Statements of Cash Flows, are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
Six Months ended December, 31 |
|
Cash provided by (used in): |
|
2010 |
|
|
2009 |
|
Operating activities |
|
$ |
(3,194 |
) |
|
$ |
9,534 |
|
Investing activities |
|
|
(426 |
) |
|
|
(320 |
) |
Financing activities |
|
|
2,426 |
|
|
|
(9,178 |
) |
Effect of exchange rate changes on cash |
|
|
1,038 |
|
|
|
479 |
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents |
|
$ |
(156 |
) |
|
$ |
515 |
|
|
|
|
|
|
|
|
Cash from operating activities decreased $12,728 during the six months ended December 31, 2010
versus the comparable prior year period. This decrease in cash from operating activities primarily
reflects receipt of the proceeds from the legal settlement with a German competitor in fiscal year
2010 of $9,560. In addition cash from operating activities was negatively impacted by lower
receipts from accounts and notes receivable, customer deposits and tax payments associated with the
legal settlement. Partially offsetting these decreases were lower restructuring payments and lower
payments on accounts and notes payable.
Cash utilized for investing during the six months ending December 31, 2010 and 2009 includes
additions to property, plant and equipment and patents and trademarks of $426 and $320,
respectively.
25
Cash flow from financing activities primarily reflects borrowings in fiscal year 2010 in
excess of payments. On September 28 and 29, 2010, the Company entered into Amendment #8 and #9 to
the Credit Agreement (Amendment #8 and Amendment #9, respectively) with its Lenders and BofA as
agent for its Lenders (the Credit Agreement). Under the terms of Amendment #8, the total
commitment under the Credit Agreement was reduced from $25 million to $20 million, certain adjustments were made to the
interest payment provisions and the Company issued to the Lenders warrants with a term of 10 years
to purchase 352,671 shares of common stock in the Company for $0.01 per share (the Warrants). The
Warrants also contain a put provision that enables the holders after September 28, 2012 to request
a cash settlement of the then fair market value of the Warrants in an amount not to exceed $1.50
per share. Amendment #8 sets new covenants for currency adjusted net sales, establishes minimum
EBITDA levels and sets a limit on capital expenditures for the fiscal year ending June 30, 2011.
Under the terms of Amendment #9, the definition of EBITDA was revised.
As a result of the required restatements of the Companys financial results for the periods
ended June 30, 2010, September 30, 2010 and December 31, 2010 the Company was not in compliance
with the financial covenants contained in its Credit Agreement. Specifically, as a result of the
restatement, at June 30, 2010, the Company failed to meet the established June 30, 2010 targets for
minimum EBITDA and Currency Adjusted Net Sales. Additionally, as a result of the restatement,
during the quarter ended September 30, 2010, the Company failed to meet the established target for
Currency Adjusted Net Sales for the consecutive three-month periods ended July 31, 2010 and August
30, 2010.
In addition, the Company has reported that it did not meet the minimum EBITDA covenant for the
period ended March 31, 2011 and did not meet the Currency Adjusted Net Sales target for the
three-month consecutive months ended April 30, 2011.
On May 16, 2011, the Company entered into Waiver and Amendment No. 10 to the Credit Agreement
(Amendment No. 10) with Bank of America. The Amendment provided for a waiver by the lenders of
the Companys failure to meet the applicable minimum EBITDA and Currency Adjusted Net Sales for all
period noted above. Under the terms of Amendment No. 10, the Company provided the Lenders Warrants
with a term of ten years to purchase 372,374 shares of the Companys Class A common stock in the
Company for $0.01 per share. The Warrants also contain a put provision that enables the Holder
after May 16, 2013 to request a cash settlement of the then fair market value of the Warrants in an
amount not to exceed $1.50 per share. Amendment No. 10 sets new covenants for currency adjusted
net sales, establishes minimum EBITDA levels, adjusts interest rate provisions, approves the
disposition of the assets of the Companys food blends discontinued operations and establishes
certain milestones regarding refinancing the loan.
The Company incurred costs of approximately $777 ($222 in cash, $555 associated with
aforementioned issuance of warrants) for the May 16, 2011 Amendment. These costs, together with
legacy deferred financing costs, aggregating approximately $1,344 will be amortized over the
remaining term of the amended Agreement.
Cash (used) by financing activities of $9,178 for the period ended December 31, 2009 reflects
the use of the net cash proceeds from the gain on the legal settlement of approximately $7,700 to
repay the term loan in accordance with the provisions of the July 31, 2009 Credit Agreement
amendment. In addition, cash used for financing activities reflected scheduled term loan payments
of approximately $1,500 and payment of debt financing costs of $685. These payments were partially
offset by borrowings under the Credit Agreement of $726.
26
The Company maintains relationships with both foreign and domestic banks, which combined have
extended credit facilities to the Company totaling $29,849. As of December 31, 2010, the Company
had $22,858 (including letters of credit) outstanding under these Credit Facilities.
The Company currently believes that its cash flows from operations, along with its available
bank lines of credit, are sufficient to finance its working capital and other capital requirements
through the term of the Credit Agreement.
The facility under the Credit Agreement (the Credit Facility) matures November 21, 2011, and
the Company may be unable to renew or replace this financing. The Company has begun preliminary
discussions regarding renewal of its Credit Facility and anticipates finalizing a renewal or
replacement of the Credit Agreement, although there are no assurances that such agreement will be
completed by the loan maturity date.
At December 31, 2010 and June 30, 2009, the Company did not have any relationships with
unconsolidated entities or financial partnerships, such as entities often referred to as structured
finance entities, special purpose entities or variable interest entities, which would have been
established for the purpose of facilitating off-balance sheet arrangements or other contractually
narrow or limited purposes. As such, the Company is not exposed to any financing, liquidity, market
or credit risk that could arise if the Company had engaged in such relationships.
The following summarizes the Companys contractual obligations at December 31, 2010 and the
effect such obligations are expected to have on its liquidity and cash flow in future periods (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Years Ending June 30, |
|
|
|
Total at |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 and |
|
|
|
31, 2010 |
|
|
2011* |
|
|
2012 |
|
|
2013 |
|
|
2014 |
|
|
2015 |
|
|
thereafter |
|
Contractual obligations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans payable |
|
$ |
6,156 |
|
|
$ |
2,462 |
|
|
$ |
3,694 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Capital lease obligations |
|
|
49 |
|
|
|
31 |
|
|
|
18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt |
|
|
18,227 |
|
|
|
389 |
|
|
|
16,148 |
|
|
|
499 |
|
|
|
561 |
|
|
|
630 |
|
|
|
|
|
Non-cancelable operating lease
obligations |
|
|
20,897 |
|
|
|
3,362 |
|
|
|
5,011 |
|
|
|
3,071 |
|
|
|
2,471 |
|
|
|
2,122 |
|
|
|
4,860 |
|
Purchase commitments (materials) |
|
|
12,024 |
|
|
|
9,592 |
|
|
|
2,351 |
|
|
|
81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental compensation |
|
|
8,855 |
|
|
|
1,222 |
|
|
|
804 |
|
|
|
1,030 |
|
|
|
813 |
|
|
|
613 |
|
|
|
4,373 |
|
Restructuring payments |
|
|
1,010 |
|
|
|
492 |
|
|
|
518 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense (1) |
|
|
1,022 |
|
|
|
548 |
|
|
|
274 |
|
|
|
96 |
|
|
|
68 |
|
|
|
36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total contractual cash obligations |
|
$ |
68,240 |
|
|
$ |
18,098 |
|
|
$ |
28,818 |
|
|
$ |
4,777 |
|
|
$ |
3,913 |
|
|
$ |
3,401 |
|
|
$ |
9,233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Includes only the remaining six months of the fiscal year ending June 30, 2011. |
|
(1) |
|
the anticipated future interest payments are based on the Companys current
indebtedness and interest rates at December 31, 2010, with consideration given to debt reduction as
the result of expected payments. |
|
|
|
ITEM 3: |
|
Quantitative and Qualitative Disclosures About Market Risk: |
A discussion of market risk exposures is included in Part II Item 7A, Quantitative and
Qualitative Disclosures About Market Risk of the Companys Annual Report on Form 10-K as amended
for the fiscal year ended June 30, 2010. There has been no material change during the three months
ended December 31, 2010.
27
|
|
|
ITEM 4: |
|
Controls and Procedures: |
Evaluation of Disclosure Controls and Procedures:
The Company maintains disclosure controls and procedures that are designed to ensure that
information required to be disclosed in reports it files or submits under the Securities Exchange
Act of 1934, as amended (the Exchange Act) is recorded, processed, summarized and reported within
the time periods specified in the SECs rules and forms, and that such information is accumulated
and communicated to its management, including the Chief Executive officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of the Companys management, including the
Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of its
disclosure controls and procedures, as such term is defined under Rules 13a-15(e) and
Rule 15d-15(e) promulgated under the Exchange Act, as of the end of the period covered by this Report.
Previously, based upon this evaluation, our Chief Executive Officer and former Chief Financial Officer
concluded that our disclosure controls and procedures were effective as of December 31, 2010.
However, as a result of the restatement of the financial statements, disclosed in the Current
Report on Form 8-K dated May 10, 2011, and in the Annual Report on Form 10-K/A and the material
weaknesses which are described below, our Chief Executive Officer and current Chief Financial
Officer have concluded that our disclosure controls and procedures were not effective as of
December 31, 2010.
Material Weakness Identified in the Companys operations in Japan. In late February 2011,
allegations surfaced that profits had been manipulated at the Companys Japanese subsidiary. The
Audit Committee of the Board of Directors oversaw an internal investigation consisting of extensive
employee interviews and audit procedures to review the allegations. The investigation identified
the premature recognition of revenue and related costs primarily during the quarter ended June 30,
2010 as well as the inappropriate deferral and subsequent recognition of expenses during the quarters of 2009 and 2010, which had no impact on full year fiscal 2009 and were not material in 2010. These irregularities occurred as a result of management
override and intentional circumvention of established revenue recognition, purchase and expense policies and
related internal controls at the Companys Japanese subsidiary. Specifically, existing policies and
controls were violated, as revenue was recorded prior to shipments of goods or completion of
installation services and related costs were recorded prior to receipt of materials and components.
This intentional circumvention of internal controls was apparently intended to achieve sales and
earnings forecasts previously submitted by the Japanese subsidiary to corporate senior management,
although such forecasts were not met. The investigation also revealed that no individual appeared
to personally benefit from these irregularities.
This circumvention of controls was the result of a material weakness in the control environment at the Japan operations.
Since August 2010,
which is before the identification of the irregularities in Japan,
the Company has made significant senior level and other management changes
and other organizational changes. In August 2010, the former president of the Companys Japanese
operations left the Company. In October 2010, the Company hired a new Chief Executive Officer. In
December 2010, under the leadership of the new CEO, the Company made significant organizational
changes including transforming the Company from a country-based group of silo organizations, with
local management and local focus, to a globally integrated organization with multiple leaders
having global responsibility managing the Companys business units with improved reporting and
personal accountabilities. Additionally, in March 2011, the Company hired a new President for its
Japanese subsidiary and in April 2011, the Company hired a new Chief Financial Officer. We believe
that these senior management and organizational changes will contribute significantly to
remediating the issues with management override and circumvention of internal controls at the
Japanese facility.
Additionally, as a result of the violations of Company policy and circumvention of internal
controls at its Japanese subsidiary, the Company will:
28
|
|
|
Take appropriate disciplinary actions against employees in Japan who were involved in
the irregularities. |
|
|
|
|
Conduct updated training with respect to Baldwins Code of Conduct and Business
Ethics policy and require annual written confirmation from each employee of their
understanding and adherence to this policy. |
|
|
|
|
Improve the communication surrounding, and encourage the use of, the Companys
whistleblower program to insure that any issues, such as those that led to the material
weaknesses, are reported in a more timely manner. |
|
|
|
|
Implement a quarterly process for management of the individual subsidiaries to review
and validate the appropriateness of revenue recognition with corporate management. |
|
|
|
|
Conduct additional training on the revenue recognition and purchase processes at all
subsidiaries to ensure that expectations are fully communicated and understood
throughout the Company. |
Changes in Internal Control Over Financial Reporting:
Except as noted above, during the quarter ended December 31, 2010, the Company has not made
any changes in the internal control over financial reporting that have materially affected, or are
reasonably likely to materially affect, the Companys internal control over financial reporting.
The Company continues to review, document and test its internal control over financial
reporting, and may from time to time make changes aimed at enhancing their effectiveness and to
ensure that its systems evolve with the Companys business. These efforts may lead to various
changes in its internal control over reporting.
Part II: Other Information
The following is an update to Item 1A Risk Factors contained in the Companys Annual Report
on Form 10-K, as amended for its Fiscal Year ended June 30, 2010. For additional risk factors that
could cause actual results to differ materially from those anticipated, please refer to the
Companys Form 10-K as amended.
Risks associated with indebtedness.
The Company has indebtedness. As of December 31, 2010, the Companys total indebtedness was
$24,383, including $15,706 under its secured credit facility (the Credit Facility). Borrowings
under the Credit Facility are secured by the assets of the Company. Under the terms of the Credit
Facility, the Company is required to satisfy certain financial covenants.
A decline in the Companys financial performance could have a material adverse effect on the
Company, including the Companys ability to comply with the Credit Agreement covenants to retain
its existing financing or obtain additional financing; or any such financing may not be available
on terms favorable to the Company. The Companys ability to make expected repayments of borrowings
under its Credit Facility and to meet its other debt or contractual obligations (including
compliance with applicable financial covenants) will depend upon the Companys future performance
and its cash flows from operations, both of which are subject to prevailing economic conditions and
financial, business, and other known and unknown risks and uncertainties, certain of which are
beyond the Companys control.
The Companys Credit Facility matures November 21, 2011, and the Company may be unable to
renew or replace this financing. The Company has begun preliminary discussions regarding renewal of
its
29
Credit Facility and anticipates finalizing a renewal or replacement Credit Agreement although
there are no assurances that such agreement will be completed by the loan maturity date.
Current economic conditions and market disruptions adversely affect the Companys business and
results of operations.
A substantial portion of the Companys business depends on customers demand for its products
and services, the overall economic health of current and prospective customers, and general
economic conditions. The general economic downturn has and will continue to adversely impact the
Companys business and financial condition in a number of ways, including impacts beyond those
typically associated with previous economic contractions in the U.S. and other locations. The
economic slowdown is leading to reduced capital spending by OEM and end users, which has already
adversely affected and will continue to adversely affect the Companys product sales. The slowdown
could necessitate further testing for impairment of goodwill, other intangible assets, and
long-lived assets and may negatively impact the valuation allowance with respect to deferred tax
assets. In addition, further cost reduction actions may be necessary which would lead to additional
restructuring charges. The Companys ability to collect its accounts receivable on a timely basis
could result in additional reserves for uncollectible accounts receivable being required, and in
the event of continued contraction in the Companys sales, could lead to dated inventory and
require additional reserves for obsolescence.
The Company is unable to predict the duration and severity of the economic downturn and
disruption in financial markets or their effects on the Companys business and results of
operations; but the consequences may be materially adverse and more severe than other recent
economic slowdowns.
|
|
|
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds |
There has been no activity under the Companys stock repurchase program for the quarter ended
December 31, 2010.
On February 10, 2011, the Company reported its results of operations for the three and six
month period ended December 31, 2010. Details of this announcement are contained in the press
release of the Company dated February 10, 2011, and furnished with this quarterly report on Form
10-Q as Exhibit 99.1.
10.1 |
|
Termination Agreement between Baldwin Technology Company, Inc. and Karl S. Puehringer dated
September 30, 2010, filed as Exhibit 10.1 to the Companys Report on Form 8-K dated
October 5, 2010, and incorporated herein by reference. |
|
10.2 |
|
Employment Agreement between Baldwin Technology Company, Inc. and Mark T. Becker dated
January 5, 2011, filed as Exhibit 10.1 to the Companys Report on Form 8-K dated
January 10, 2011, and incorporated herein by reference. |
|
10.3 |
|
Plan Option Grant Certificate to Mark Becker, filed as Exhibit 10.2 to the Companys
Report on Form 8-K dated January 10, 2011, and incorporated herein by reference. |
30
10.4 |
|
Non-Plan Option Grant Certificate to Mark Becker, filed as Exhibit 10.3 to the
Companys Report on Form 8-K dated January 10, 2011, and incorporated herein by reference. |
|
10.5 |
|
Amendment to Employment Agreement between Baldwin Technology Company, Inc. and John P. Jordan
dated January 3, 2011, filed as Exhibit 10.4 to the Companys Report on Form 8-K dated
January 10, 2011, and incorporated herein by reference. |
|
10.6 |
|
Amendment to Employment Agreement between Baldwin Jimek AB and Peter Hultberg dated January
3, 2011, filed as Exhibit 10.5 to the Companys Report on Form 8-K dated January 10,
2011, and incorporated herein by reference. |
|
10.7 |
|
Amendment to Employment Agreement between Baldwin Germany GmbH and Steffen Weisser dated
January 3, 2011, filed as Exhibit 10.6 to the Companys Report on Form 8-K dated
January 10, 2011, and incorporated herein by reference. |
|
10.8 |
|
Employment Agreement between Baldwin Jimek AB and Birger Hansson dated January 12, 2006,
filed as Exhibit 10.7 to the Companys Report on Form 8-K dated January 10, 2011, and
incorporated herein by reference. |
|
10.9 |
|
Amendment to Employment Agreement between Baldwin Jimek AB and Birger Hansson dated January
3, 2011, filed as Exhibit 10.8 to the Companys Report on Form 8-K dated January 10,
2011, and incorporated herein by reference. |
|
31.01 |
|
Certification of the Principal Executive Officer pursuant to Exchange Act Rule
13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(filed herewith). |
|
31.02 |
|
Certification of the Principal Financial Officer pursuant to Exchange Act Rule
13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(filed herewith). |
|
32.01 |
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
1350 (furnished herewith). |
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32.02 |
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Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
1350 (furnished herewith). |
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99.1 |
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Company Press Release entitled Baldwin Announces
Results for Second Quarter FY 2011 dated
February 10, 2011 (filed as Exhibit 99.1 of the Companys quarterly report dated February 14,
2010 and incorporated herein by reference). |
31
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.
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BALDWIN TECHNOLOGY COMPANY, INC.
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BY |
/s/ Ivan Habibe
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Ivan Habibe |
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Vice President, Chief Financial Officer
and Treasurer |
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Dated:
May 23, 2011
32