-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E/p6dFSJLAE/o4uqIrBd9L9eTf26HTfZ8nfI/vON3V2WuMJfuMU2GWkpuWgDHIJ8 dVCPvsckqB8P3Let9x9rsA== 0000892569-99-001764.txt : 19990625 0000892569-99-001764.hdr.sgml : 19990625 ACCESSION NUMBER: 0000892569-99-001764 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 23 CONFORMED PERIOD OF REPORT: 19990326 FILED AS OF DATE: 19990624 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRINTRONIX INC CENTRAL INDEX KEY: 0000311505 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 952903992 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-09321 FILM NUMBER: 99651555 BUSINESS ADDRESS: STREET 1: 17500 CARTWRIGHT RD STREET 2: P O BOX 19559 CITY: IRVINE STATE: CA ZIP: 92713 BUSINESS PHONE: 7148631900 MAIL ADDRESS: STREET 1: ATTN GENERAL ACCOUNTING STREET 2: PO BOX 19559 CITY: IRVINE STATE: CA ZIP: 92713 10-K405 1 FORM 10-K FOR THE YEAR ENDED MARCH 26, 1999 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 26, 1999 --------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File Number 0-9321 --------- PRINTRONIX, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 95-2903992 (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) 17500 CARTWRIGHT ROAD 92623 P.O. BOX 19559, IRVINE, CALIFORNIA (Zip Code) (Address of Principal Executive Offices) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (949) 863-1900 ------------------ SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: COMMON STOCK, PAR VALUE $.01, INCLUDING COMMON SHARE PURCHASE RIGHTS Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] On May 21, 1999, there were 6,590,665 shares of the Registrant's Common Stock outstanding. The aggregate market value of the Common Stock (based upon the closing price of $14.00 per share in the over-the-counter market on May 21, 1999) held by non-affiliates of the Registrant was $66,834,026. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrant's Annual Report to Stockholders for the fiscal year ended March 26, 1999 are incorporated by reference into Parts I, II, and IV of this report. Portions of the Registrant's Proxy Statement for the Annual Meeting of Stockholders to be held on August 17, 1999 are incorporated by reference into Part III of this report. ================================================================================ 2 PART I ITEM 1. BUSINESS Certain geographic information for Item 1 is contained in the Company's 1999 Annual Report to Stockholders on page 22, which information is incorporated herein by reference (and except for that page, the Company's Annual Report to Stockholders for the fiscal year ended March 26, 1999 is not deemed filed as part of this report). GENERAL Printronix, Inc. designs, manufactures, and markets medium and high speed printers used on a wide range of computer systems and associated networks. Printronix printers produce "hard copy" output using line matrix, laser and thermal printing technologies. The Company's products are designed primarily for business and industrial applications where performance and reliability are paramount. All of the Company's printers have extensive graphics capabilities allowing them to support most popular graphics languages while printing most output types such as text, reports, tabular data, computer graphics, bar codes, forms, labels, logos, etc. Printronix, Inc. was incorporated in California in 1974 and was reincorporated in Delaware in December 1986. Unless the context otherwise requires, the terms "Company" and "Printronix" refer to Printronix, Inc. and its consolidated subsidiaries. ACQUISITION In January 1998, the Company, through a 91.5% majority-owned subsidiary, acquired the assets, rights to the bar code verification business, and the RJS name, from Eltron International, Inc. by a cash payment of $2.9 million in a business combination accounted for as a purchase. The subsidiary, RJS Systems International ("RJS"), is primarily engaged in barcode verification products. See Note 2 of Notes to Consolidated Financial Statements for more detail on the acquisition. During fiscal 1999, the ownership interest of RJS was reduced to 84.4%, which resulted from the issuance of additional shares of subsidiary stock. COMPUTER PRINTERS Computer printers are output devices that use electromechanical techniques to convert digitized information sent from a host computer to printed form. The printed output produced can then be read by people and/or machines, depending upon the format of the output. Such devices can print on paper and other substances, such as card stock or mylar, by means of impact or non-impact technologies. Impact printers are generally classified as being either text or graphics printers and as either serial or line printers. Text printers print a predetermined set of fully formed characters. Graphics printers print dots anywhere on the paper and are used for text and graphics applications. Serial printers print one character at a time and line printers print one line at a time. Impact printers can print both single-part and multi-part forms. Graphic printers form characters by printing dots in combinations of patterns. Such printers are called dot matrix or line matrix printers. Serial dot matrix printers create characters one at a time in horizontal sweeps across the page. Printronix manufactures line matrix printers, which print a complete line of dots, thus combining the flexibility of the matrix printing technique with the reliability and durability of a line printer. Non-impact printers print on paper by means of thermal, electrostatic, inkjet, laser, LED and other techniques that deliver high resolution printed output for letter quality and graphics applications, but print only single-part forms. TECHNOLOGY Printronix products include line matrix printers, laser printers and thermal printers. This product line is unified by a common printer controller architecture called Printronix System Architecture ("PSA(TM)2"). This architecture permits all three printing technologies to be application compatible by supporting common graphics languages and computer host communication protocols. -2- 3 LINE MATRIX PRINTERS The Printronix line matrix printers, the Printronix P5000 series, operate at 500, 1000, and 1500 lines per minute as summarized below. Printing is accomplished as the hammer bank shuttles a small distance back and forth, enabling the hammers to place dots anywhere along a row across the paper. Successive dot rows are produced by the paper advancing while the hammer bank reverses for printing the next dot row. Dots overlap horizontally and vertically to produce graphics as well as alphanumeric characters. LINE MATRIX SPEED PRINTER MODEL (LINES PER MINUTE) HAMMERS ------------- ------------------ ------- P5X05 500 28 P5X10 1000 60 P5X15 1500 102 The dot placement of Printronix line matrix printers is very precise, permitting accurate character alignment. The combination of precise dot placement anywhere on the page and the use of overlapping dots rather than fully formed characters enables Printronix printers, under computer control, to produce graphic output. Another key feature of the line matrix technology is that hammer energy is optimized to print only dots, resulting in improved print quality on multi-part forms. These printers are available in either pedestal or floor cabinet models with local languages, a wide range of computer capabilities, and a power paper stacker for floor model units. A new option offered for the Printronix P5000 series of line matrix printers in fiscal 1999 was PrintNet(TM) Plus, which is a combination of hardware and software components that offer an advanced IS management solution for managing networked P5000s. The PrintNet interface card provides the connection to an Ethernet local area network while the Printronix printer manager is a Java-based software application providing advanced configuration management tools. Networked P5000 printers can be remotely managed worldwide from a PC or workstation. LASER PRINTERS The Company's continuous form laser printers create images on paper electrographically like a copier machine. The image is fixed to the paper with toner in the same manner as copiers. The controllers, designed by the Company, are integrated with print engines purchased from outside suppliers. All models are available with optional power stackers. The LaserLine(R) printers combine print quality and speed with the distinctive advantages of continuous forms. A straight-through paper path combined with optional power stacking allows for long, unattended print runs. The L1024 printer uses the heat/pressure method for toner application, supports form widths up to 10 inches, and offers a 50,000 page per month duty cycle. The L5000 series, consisting of the L5020 and L5035, handle higher duty cycle printing (200,000 and 300,000 pages per month, respectively), and employ a flash fusing imaging system which allows printing on a wide range of paper and label stock.
SPEED (PAGES PER DPI (DOTS PER INCH) LASER MODEL PAPER MINUTE) - ----------- ----- ---------------- ------------------- L1024 A-Size Continuous Form 24 PPM 300 L5020 14.6 Print Width Continuous 20 PPM 300 Form L5035 14.6 Print Width Continuous 35 PPM 300 Form and Cut Sheet
-3- 4 THERMAL PRINTERS The ThermaLine(R) printers create images on paper by heating thermal sensitive media. The image is created either by heating an ink-based ribbon which transfers its ink to the paper label material (transfer) or by heating paper label material in which the thermally sensitive ink is already impregnated (direct). This type of printer is especially useful in "on-demand" label applications. These models use print engines purchased from outside suppliers and are integrated with PSA2.
DIRECT OR SPEED DPI THERMAL MODEL PRINT WIDTH TRANSFER (INCHES PER SECOND) (DOTS PER INCH) - ------------- ----------- --------- ------------------- --------------- T1006 6.3 Inch Label Both 6 IPS 203 T2204 4.1 Inch Label Both 6 IPS 203 T3204 4.1 Inch Label Both 10 IPS 203 T3306 6.4 Inch Label Both 8 IPS 300 T3308 8.5 Inch Label Both 5 IPS 300 T4204 4.1 Inch Label Both 6 IPS 203
PRODUCTS Line matrix models include the new Printronix P5000 series line printer family with speeds ranging from 500 to 1500 lines per minute. The new P5000 series models were introduced in fiscal 1996, with enhancements in fiscal 1999, and replace the Company's previous generation models in the MVP, P3000, P4000, P6000, and P9000 series. Applications for line matrix printers include reports, multi-part forms, bar codes, labels, and program listings. The LaserLine L5020 and L5035 continuous form laser printers operate at up to 35 pages per minute and have a unique flash fusing process which produces output of exceptional durability and quality. And, unlike other laser printers, the L5020 and L5035 can print on a wide variety of media including synthetics and plastic cards. The wide carriage, duty cycle, and durability of the output make these printers particularly well suited for high volume utility type billing and labeling applications. The L1024 continuous form laser printer operates at up to 24 pages per minute. Utilizing the more conventional heat/pressure fusing process, the L1024, with its modest duty cycle, is primarily used for medium volume billing and labeling applications. The ThermaLine family of thermal printers is dedicated to bar code/label printing applications. They range in print width from 4.1 to 8.5 inches and in speed from up to 10 inches per second. The ThermaLine T4204 was announced and began shipping in late fiscal 1999. With PrintNet Plus, on-line verification and PSA2, the T4204 sets a new standard to meet the demands of today's printing applications. ThermaLine printers address a wide range of label printing applications in the manufacturing, distribution, retail, and healthcare sectors. The Company's Printronix P5000 series, LaserLine, and ThermaLine printers employ PSA2 design which provides software compatibility among its printer families. All of the Company's printers support Printronix IGP(R)/PGL(R) and IGP/VGL bar code label printing languages. MARKETING AND CUSTOMERS The market for the Company's products is related to the market for computer and bar code systems. Printronix printers are marketed worldwide directly through major computer system companies and a network of full-service system integrators, distributors and value added resellers ("VARs"). The Company's 10 largest customers accounted for an aggregate of approximately 59% of net sales during the fiscal years 1999 and 1998, and 62% of net sales for fiscal year 1997. During fiscal 1999, the Company sold its products through major computer system companies and distributors/VARs, which accounted for approximately 46% and 54% of net sales, respectively. -4- 5 In fiscal 1999, the Company had two customers which individually represented a significant percentage of consolidated net sales. Sales to the largest customer, IBM, represented 30%, 28% and 29% of net sales for fiscal years 1999, 1998 and 1997, respectively. Sales to the second largest customer represented 9% of consolidated net sales for fiscal year 1999, and 10% of net sales for fiscal years 1998 and 1997. A significant decline in sales to either customer could have an adverse effect on the Company's operations. COMPETITION The Company has a wide range of printers that compete in the overall market for medium and high speed computer printers. The overall market includes serial, line matrix, band, laser and thermal transfer printers. This overall market includes a large captive market which consists of computer systems manufacturers that formerly produced their own printers and in the past have not bought from independent printer manufacturers. Due to the increasing competitive nature and the level of investment now required for ongoing line matrix printer development, all of these companies are now buying from independent manufacturers. The Company competes on a direct basis with several companies of varying sizes, including some of the largest businesses in the United States and Japan, in the non-captive market. Competing products include high end serial printers, medium and high speed line printers, laser printers, thermal printers, and other non-impact technologies. Competitive factors in the Company's markets include reliability, durability, price, print quality, versatility of special performance features, and after-sales support. The Company believes that its printers are highly competitive with regard to price/performance and cost of ownership, and that the Company rates highly in after-sales support. The Company has periodically evaluated other printing technologies and intends to continue to do so. Introduction of products with superior performance or substantially lower prices could adversely affect the Company's business. ORDER BACKLOG The Company's order backlog at March 26, 1999 was approximately $16.5 million, compared with $16.1 million at March 27, 1998 and $13.4 million at March 28, 1997. The increase over prior years represents increased orders from the Company's largest customer. The backlog represents orders for which the majority of products have a delivery date and expected ship date of three months or less. RAW MATERIALS The Company purchases basic mechanical and standard electronic components from numerous outside vendors. Most of those components used in the Company's impact printers are immediately available from alternate sources. The Company also purchases certain components from sole sources and has no reason to believe that it will be unable to obtain those components. However, if the Company were to lose any sole source for a component, there could be a delay in shipment of printers using those components until an alternate source begins production. The Company's laser and thermal printer products are designed to use specific print engines and printer assemblies manufactured by outside vendors. The Company has entered into written purchase agreements for these printer components and has no reason to believe that it will be unable to obtain the materials required. ENGINEERING AND DEVELOPMENT The Company operates in an industry which is subject to rapid technological change, and its ability to compete successfully depends upon, among other things, its ability to react to change. Accordingly, the Company is committed to the development of new products. The Company's engineering and development expenditures incurred were approximately $18.1 million in fiscal 1999, compared to $15.6 million (excluding a one time charge of $0.9 million for in-process engineering related to the acquisition of RJS) in fiscal 1998 and $14.3 million in fiscal 1997. Engineering personnel are located in all three key regions: the Americas; Europe, Middle East, and Africa; and Asia Pacific. Substantially all expenditures were Company sponsored in fiscal 1999, and a substantial portion of engineering and development expenditures were made to develop and bring new products to market, including high speed line matrix models, a new thermal printer, Windows(R) and SAP(TM) drivers and network management capabilities. -5- 6 PATENTS AND LICENSES The Company has been issued 41 United States patents, and related foreign patents (primarily in Canada, the United Kingdom, France, and Germany) associated with various aspects of its printers. Two of the United States patents will expire in October and November 1999, respectively. The Company believes that its patented line matrix printing technology has competitive value and intends to continue its practice of enforcing its patent rights against potential infringers where it deems appropriate. Although there can be no assurance that the Company will be successful in defending its rights to any of its patents, the Company believes that its patents are valid. The Company has no material licenses from others pertaining to the manufacture of its products, including those under development, and believes that none are currently required. The Company believes that, based on industry practice, any such licenses as might be required in the future could be obtained on terms which would not have a material effect on it. However, the Company does have licenses for the use of IPDS and PCL5 graphic languages. All brand names are trademarks or registered trademarks of their respective companies. EMPLOYEES The Company had 942 employees as of March 26, 1999 including 542 in the United States, 329 in Singapore and 71 in Europe. None of the Company's employees in North America or Singapore are subject to a collective bargaining agreement. Printronix Nederland BV is a member of the Employers Union F.M.E., and some of its employees have elected to become members of an employee union. This employee union is not government sponsored and is supported by contributions from its members. The Company believes that its relationship with its employees is good. FOREIGN OPERATIONS The Company has manufacturing facilities in Singapore, wherein line matrix printer products and some printed circuit board assemblies are produced. Also provided out of the Singapore facility are product support and customer service for the Asia Pacific Region. In the Netherlands, the Company has a facility that provides product support, customer service, line matrix, and thermal product distribution and assembly of selected models of laser printers. International sales represented approximately 44% of the Company's total sales in fiscal years 1999, 1998 and 1997. The Company has sales offices within Germany, France, the United Kingdom, Austria and Singapore. The Company is not aware of any significant risks with respect to its foreign business other than those inherent in the competitive nature of the business and fluctuations in foreign currency exchange rates. Selected financial information regarding foreign and export sales by geographic area is set forth in Note 8 of Notes to Consolidated Financial Statements. ITEM 2. PROPERTIES The Company's executive, manufacturing, engineering, administrative and marketing offices are located in a total of approximately 169,000 square feet of leased facilities in Irvine, California. During the fourth quarter of fiscal 1998, the Company purchased land in Irvine for $8.1 million to consolidate into one complex the corporate headquarters, research and development, and manufacturing, which are currently housed in five buildings in the area. Construction of the new complex began in the fall of 1998 with an expected move date during the fall of 1999. The Company's foreign operations are located in the Netherlands and Singapore. The Netherlands operations are in leased facilities of approximately 34,000 square feet. The Singapore operations were moved to a new 74,000 square foot state-of-the-art building purchased in fiscal 1997 for approximately $3.8 million with an additional $3.0 million spent in capital improvements in fiscal 1997. The Company also leases several small offices, generally on short-term leases, throughout the United States and Europe for sales or service. See Note 9 of Notes to Consolidated Financial Statements for a summary of the expiration dates and lease or rental commitments. The Company opened a distribution and printer configuration facility in Memphis, Tennessee, during the fourth quarter of fiscal 1999 to provide faster delivery and support to the Eastern two-thirds of the United States. The leased facilities are approximately 20,000 square feet. -6- 7 ITEM 3. LEGAL PROCEEDINGS ENVIRONMENTAL ASSESSMENT In January 1994, the Company was notified by the California Regional Water Quality Control Board - Santa Ana Region ("the Board") that groundwater monitoring reports indicated that the groundwater under one of the Company's former production plants was contaminated with various chlorinated volatile organic compounds ("VOCs"). Evidence adduced from site studies undertaken to date indicates that compounds containing the VOCs were used by the prior tenant during its long-term occupancy of the site. The tests also indicate that the composition of the soil is such that off-site migration of contamination is very slow and contamination is most likely confined to the site. Investigation indicates that the prior occupant is a well established business enterprise which has substantial assets and is affiliated with a publicly traded company. In March 1996, the Company received a request from the Board for information regarding chemicals used by the Company or others on property adjacent to the former production plant site. Although the Company previously occupied a small portion of this adjacent property, primarily for office space and a machine shop, initial review indicates that the Company did not use compounds containing VOCs on this adjacent property. There are presently no Board remediation orders outstanding against the Company. As of March 26, 1999, the Company has reserved $214,000 to cover further legal fees or any additional expenses related to environmental tests which could be requested by the Board at the site. To date, the Company has incurred only minimal expense in its initial response to the Board's request for information and for environmental testing. However, the Company could be subject to charges related to remediation of the site. These charges on a preliminary (and very general) basis, could be estimated as follows: Remediation involves a two-step procedure. The first step would include the installation of a soil vapor extraction system. The cost of installation could range from $50,000 to $100,000. There would also be annual operating costs of up to $50,000 for a period of several years. The second step would be the installation of a pump and water treatment system to cleanse the groundwater. The cost of installation would range from $100,000 to $200,000. The annual operating costs could be as high as $100,000 for a period which cannot now be ascertained. The Company is convinced that it bears no responsibility for any contamination at the site and intends to vigorously defend any action which might be brought against it in respect thereto. Furthermore, the Company believes it has adequately accrued for any future expenditures in connection with further legal fees or additional environmental tests that could be requested by the Board at the site, and that such expenditures will not have a materially adverse effect on its financial condition or results of operations. However, because of the uncertainty of this matter there is no assurance the actual costs will not exceed management's estimate. -7- 8 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Company did not submit any matter during the fourth quarter of the fiscal year covered by this report to a vote of security holders, through the solicitation of proxies or otherwise. EXECUTIVE OFFICERS OF THE REGISTRANT The executive officers of the Company and their ages as of May 21, 1999 are as follows: Robert A. Kleist 70 President, Chief Executive Officer and Director Theodore A. Chapman 50 Senior Vice President, Engineering and Chief Technical Officer C. Victor Fitzsimmons 51 Senior Vice President, Worldwide Manufacturing Ralph Gabai 61 Senior Vice President, Marketing George L. Harwood 54 Senior Vice President, Finance and Information Systems (IS), Chief Financial Officer and Corporate Secretary Richard A. Steele 54 Senior Vice President, Sales
Officers are appointed by and hold office at the pleasure of the Board of Directors. Mr. Kleist is one of the founders of the Company and has served as a director and its President and Chief Executive Officer since its formation in 1974. In addition, Mr. Kleist served as Chief Financial Officer from February 1987 to October 1988, a position he also held from August 1985 until January 1986. Mr. Kleist is a director of Seagate Technology, a manufacturer of computer disk drives. Mr. Chapman joined the Company in November 1995 as Vice President, Product Development. In April 1999, Mr. Chapman was appointed Senior Vice President, Engineering and Chief Technical Officer. From July 1970 to October 1995, Mr. Chapman held various engineering and senior management positions with IBM Corporation. Mr. Fitzsimmons joined the Company in September 1985 as Director of Information Systems. In December 1988, he was appointed Vice President, Information Systems. In May 1990, Mr. Fitzsimmons assumed responsibility for Printronix B.V., the Company's Netherlands subsidiary. Mr. Fitzsimmons was appointed to the additional office of Vice President, Irvine Manufacturing in October 1990. In July 1991, he assumed responsibility for Printronix A.G., the Company's Singapore subsidiary. From May 1992 to October 1994 Mr. Fitzsimmons was Senior Vice President, Manufacturing and Information Systems. In October 1994, he was appointed Senior Vice President, Worldwide Manufacturing. From September 1979 to September 1985, Mr. Fitzsimmons held various senior IS positions at Magnavox. Mr. Gabai joined the Company in August 1998 as Senior Vice President, Marketing. Prior to that time, Mr. Gabai had served as a director of the Company since 1988. From April to August 1998, Mr. Gabai was President of Bi-Coastal Consulting Ltd., a firm specializing in management consulting, a position he also held from March 1984 to December 1996. From December 1996 to April 1998, Mr. Gabai was President and Chief Executive Officer of MicroNet Technology, Inc., a manufacturer and marketer of Storage Systems and RAID Memory Systems. From June 1981 to March 1984, Mr. Gabai was the Chairman and Chief Executive Officer of Microperipherals Inc., which engaged in the business of manufacturing flexible disk drives. From July 1987 until December 1989, Mr. Gabai was Chairman and Chief Executive Officer of Triplex Corporation, a manufacturer of fault tolerant programmable controllers. From January to December 1990, Mr. Gabai was Chairman and Chief Executive Officer of Unistructure, Inc., a firm engaged in high density electronic packaging. Mr. Harwood joined the Company in October 1988 as Senior Vice President, Finance and Chief Financial Officer. Mr. Harwood was appointed to the additional office of Corporate Secretary in January 1989. In October 1994, Mr. Harwood assumed responsibility for the Company's Information Systems. From December 1984 to October -8- 9 1988, Mr. Harwood was Chief Financial Officer and Vice President, Finance at Qume Corporation. From December 1982 to December 1984, Mr. Harwood was Group Controller of ITT Automotive Products, Worldwide. In prior years, Mr. Harwood has held various senior financial positions at ITT in Brussels, London, and Zambia. Mr. Harwood is a Fellow of the Institute of Chartered Accountants in England and has had seven years of public accounting experience, primarily at Price Waterhouse LLP. Mr. Steele joined the Company in July 1991 as Senior Vice President, Sales and Marketing. From May 1990 to June 1991, Mr. Steele was Senior Vice President, Sales and Marketing at DataWare. From May 1989 to May 1990, Mr. Steele was Vice President, Sales and Marketing at Talaris. From April 1972 to January 1987, Mr. Steele held various positions including District Sales Manager, National Sales Manager, and Vice President, Sales and Marketing at Datagraphix. In January 1987, Datagraphix became Anacomp, Inc. and Mr. Steele was appointed Senior Vice President, Sales and Marketing, a position he held until October 1988. In prior years, Mr. Steele held various positions in sales management and systems engineering at IBM. PART II Information for Items 5, 6, 7 and 8 is contained in the Company's 1999 Annual Report to Stockholders on the following pages, which information is incorporated herein by reference (and except for these pages, the Company's Annual Report to Stockholders for the fiscal year ended March 26, 1999 is not deemed filed as part of this report):
ANNUAL REPORT TO STOCKHOLDERS ITEM NO. TITLE PAGE REFERENCE - -------- ----- ---------------- Item 5. Market for Registrant's Common Equity and 24, back cover Related Stockholder Matters Item 6. Selected Financial Data inside cover Item 7. Management's Discussion and Analysis of 7-10 Results of Operations and Financial Condition Item 8. Financial Statements and Supplementary 11-24 Data
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None PART III Information required under Item 10 "Directors and Executive Officers of the Registrant" (except for certain information concerning the Executive Officers provided in Part I of this report), Item 11 "Executive Compensation," Item 12 "Security Ownership of Certain Beneficial Owners and Management," and Item 13 "Certain Relationships and Related Transactions" has been omitted from this report. Such information is hereby incorporated by reference from Printronix's Proxy Statement for its Annual Meeting of Stockholders to be held on August 17, 1999, which the Company intends to file with the Securities and Exchange Commission not later than July 12, 1999. -9- 10 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Index to Financial Statements *Page in Annual Report ------------- 1. Financial Statements included in Part II of this report: Report of Independent Public Accountants 24 Consolidated Balance Sheets as of March 26, 1999 and March 27, 1998 11 Consolidated Statements of Income for each of the three years in the period ended March 26, 1999 12 Consolidated Statements of Stockholders' Equity for each of the three years in the period ended March 26, 1999 13 Consolidated Statements of Cash Flows for each of the three years in the period ended March 26, 1999 14 Notes to Consolidated Financial Statements 15-23
* Incorporated by reference from the indicated pages of the Company's Annual Report to Stockholders for the fiscal year ended March 26, 1999 (and except for these pages, the Company's Annual Report to Stockholders for the fiscal year ended March 26, 1999, is not deemed filed as part of this report).
2. Schedules supporting the Consolidated Financial Statements: Page in this report ------------------- Report of Independent Public Accountants on Schedules 11 Schedule II - Valuation and Qualifying Accounts 13
All schedules except Schedule II have been omitted for the reason that the required information is shown in financial statements or notes thereto, the amounts involved are not significant or the schedules are not applicable. (b) Reports on Form 8-K None (c) Exhibits Reference is made to the Index of Exhibits beginning at page 14 of this report which index is incorporated herein by reference. (d) Other Financial Statements There are no financial statements required to be filed by Regulation S-X which are excluded from the annual report to stockholders by Rule 14a-3(b)(1). -10- 11 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To The Board of Directors and Stockholders of Printronix, Inc.: We have audited in accordance with generally accepted auditing standards, the financial statements included in Printronix, Inc.'s annual report to stockholders incorporated by reference in this Form 10-K, and have issued our report thereon dated April 22, 1999. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedule listed in the index above is the responsibility of the Company's management and is presented for purposes of complying with the Securities and Exchange Commission rules and is not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN LLP Orange County, California April 22, 1999 -11- 12 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: June 24, 1999 PRINTRONIX, INC. BY ROBERT A. KLEIST ----------------------------- Robert A. Kleist, President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE - --------- ----- ---- ROBERT A. KLEIST President, Chief June 24, 1999 - --------------------------- Executive Officer and Robert A. Kleist Director (Principal Executive Officer) GEORGE L. HARWOOD Senior Vice President, June 24, 1999 - --------------------------- Finance & IS, Chief George L. Harwood Financial Officer and Corporate Secretary (Principal Accounting and Financial Officer) BRUCE T. COLEMAN Director June 24, 1999 - --------------------------- Bruce T. Coleman JOHN R. DOUGERY Director June 24, 1999 - --------------------------- John R. Dougery CHRIS WHITNEY HALLIWELL Director June 24, 1999 - --------------------------- Chris Whitney Halliwell ERWIN A. KELEN Director June 24, 1999 - --------------------------- Erwin A. Kelen
-12- 13 PRINTRONIX, INC. AND SUBSIDIARIES ------------------------- SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED MARCH 1999
Additions ------------------------------ Balance at Charged to Charged Balance Beginning Cost and to Other at End Description of Period Expenses Accounts Deductions of Period - -------------------------------------------------------------------------------------------------------------------------- YEAR ENDED MARCH 26, 1999 Allowance for doubtful accounts $1,920,000 $ 729,000 $ - $ 347,000 A $2,302,000 ========== ========== ============= =========== ========== YEAR ENDED MARCH 27, 1998 Allowance for doubtful accounts $1,010,000 $1,089,000 $ - $ 179,000 A $1,920,000 ========== ========== ============= =========== ========== YEAR ENDED MARCH 28, 1997 Allowance for doubtful accounts $ 937,000 $ 961,000 $ - $ 888,000 A $1,010,000 ========== ========== ============= =========== ==========
DESCRIPTIONS OF OTHER ADDITIONS AND DEDUCTIONS: A -- Write-off of bad debt -13- 14 INDEX OF EXHIBITS EXHIBIT NUMBER DESCRIPTION - -------------- ----------- 3.1 Certificate of Incorporation of Printronix, Inc. (incorporated by reference to exhibit 3.1 to the Company's Report on Form 10-K for fiscal year ended March 27, 1998). 3.2 By-laws of Printronix, Inc. currently in effect (incorporated by reference to the Company's report on Form 10-K for fiscal year ended March 31, 1989), as amended in Exhibit 3.2a. 3.2a Amendment to By-laws of Printronix, Inc. 4.1 Copies of certain instruments, which in accordance with paragraph (b)(4)(iii) of Item 601 of Regulation S-K are not required to be filed as exhibits to Form 10-K, have not been filed by Printronix. Printronix agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request. 4.2 Common Shares Rights Agreement dated as of March 17, 1989 between Printronix, Inc. and Chemical Trust Company of California, including the form of Rights Certificate and the Summary of Rights attached thereto as Exhibits A and B, respectively (incorporated by reference to Exhibit 1 to the Company's Registration Statement on Form 8-A filed on or about March 17, 1989). 4.3 Amended and Restated Rights Agreement, dated as of April 4, 1999 between Printronix, Inc. and ChaseMellon Shareholder Services, L.L.C., including the form of Rights Certificate and the Summary of Rights attached thereto as Exhibits A and B, respectively (incorporated by reference to Exhibit 1 to the Company's Registration Statement on Form 8-A/A filed on or about May 7, 1999). 10.1 Printronix, Inc. 1980 Employee Stock Purchase Plan, as amended (incorporated by reference to Exhibits 4.1 and 4.2 to Post-Effective Amendment No. 5 to Registration Statement No. 2-70035 on Form S-8). 10.2 Printronix, Inc. 1984 Stock Incentive Plan, as amended (incorporated by reference to Exhibits 4.3 and 4.4 to Registration Statement No. 33-14288 on Form S-8). 10.3 Form of Indemnification Agreement between Printronix, Inc. and its directors (incorporated by reference to Exhibit 10.4 to the Company's Report on Form 10-K for the fiscal year ended March 27, 1987). 10.4 Printronix, Inc. Executive Health Insurance Plan (incorporated by reference to Exhibit 10.5 to the Company's Report on Form 10-K for the fiscal year ended March 29, 1985). 10.5 Printronix, Inc. 1994 Stock Incentive Plan (incorporated by reference to Exhibit 10.10 to the Company's Report on Form 10-K for the fiscal year ended March 25, 1994). 10.6 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and Robert A. Kleist (incorporated by reference to Exhibit 10.11 to the Company's Report on Form 10-K for the fiscal year ended March 27, 1998). 10.6a Amendment to Restricted Stock Purchase Agreement dated March 26, 1999 between the Company and Robert A. Kleist. 10.7 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and J. Edward Belt (incorporated by reference to Exhibit 10.12 to the Company's Report on Form 10-K for the fiscal year ended March 27, 1998). -14- 15 INDEX OF EXHIBITS (CONTINUED) EXHIBIT NUMBER DESCRIPTION - -------------- ----------- 10.7a Amendment to Restricted Stock Purchase Agreement dated March 26, 1999 between the Company and J. Edward Belt. 10.8 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and George L. Harwood (incorporated by reference to Exhibit 10.13 to the Company's Report on Form 10-K for the fiscal year ended March 27, 1998). 10.8a Amendment to Restricted Stock Purchase Agreement dated March 26, 1999 between the Company and George L. Harwood. 10.9 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and C. Victor Fitzsimmons (incorporated by reference to Exhibit 10.14 to the Company's Report on Form 10-K for the fiscal year ended March 27, 1998). 10.9a Amendment to Restricted Stock Purchase Agreement dated March 26, 1999 between the Company and C. Victor Fitzsimmons. 10.10 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and Richard A. Steele (incorporated by reference to Exhibit 10.15 to the Company's Report on Form 10-K for the fiscal year ended March 27, 1998). 10.10a Amendment to Restricted Stock Purchase Agreement dated March 26, 1999 between the Company and Richard A. Steele. 10.11 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and Gordon B. Barrus (incorporated by reference to Exhibit 10.16 to the Company's Report on Form 10-K for the fiscal year ended March 27, 1998). 10.11a Amendment to Restricted Stock Purchase Agreement dated March 26, 1999 between the Company and Gordon B. Barrus. 10.12 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and Theodore A. Chapman (incorporated by reference to Exhibit 10.17 to the Company's Report on Form 10-K for the fiscal year ended March 27, 1998). 10.12a Amendment to Restricted Stock Purchase Agreement dated March 26, 1999 between the Company and Theodore A. Chapman. 10.13 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and Philip Low Fook (incorporated by reference to Exhibit 10.18 to the Company's Report on Form 10-K for the fiscal year ended March 27, 1998). 10.13a Amendment to Restricted Stock Purchase Agreement dated March 26, 1999 between the Company and Philip Low Fook. 10.14 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and Bruce T. Coleman (incorporated by reference to Exhibit 10.19 to the Company's Report on Form 10-K for the fiscal year ended March 27, 1998). 10.14a Amendment to Restricted Stock Purchase Agreement dated March 26, 1999 between the Company and Bruce T. Coleman. -15- 16 INDEX OF EXHIBITS (CONTINUED) EXHIBIT NUMBER DESCRIPTION - -------------- ----------- 10.15 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and John R. Dougery (incorporated by reference to Exhibit 10.20 to the Company's Report on Form 10-K for the fiscal year ended March 27, 1998). 10.15a Amendment to Restricted Stock Purchase Agreement dated March 26, 1999 between the Company and John R. Dougery. 10.16 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and Ralph Gabai (incorporated by reference to Exhibit 10.21 to the Company's Report on Form 10-K for the fiscal year ended March 27, 1998). 10.16a Amendment to Restricted Stock Purchase Agreement dated March 26, 1999 between the Company and Ralph Gabai. 10.16b Restricted Stock Purchase Agreement, dated August 21, 1998 between the Company and Ralph Gabai. 10.16c Amendment to Restricted Stock Purchase Agreement dated March 26, 1999 between the Company and Ralph Gabai. 10.17 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and Erwin A. Kelen (incorporated by reference to Exhibit 10.22 to the Company's Report on Form 10-K for the fiscal year ended March 27, 1998). 10.17a Amendment to Restricted Stock Purchase Agreement dated March 26, 1999 between the Company and Erwin A. Kelen. 10.18 Restricted Stock Purchase Agreement dated August 21, 1998 between the Company and Chris Whitney Halliwell. 10.18a Amendment to Restricted Stock Purchase Agreement dated March 26, 1999 between the Company and Chris Whitney Halliwell. 11 Computation of net income per share for the three years ended March 26, 1999. 13 The Company's Annual Report to Stockholders for the fiscal year ended March 26, 1999, (with the exception of the information incorporated by reference into Items 5, 6, 7, and 8 of this report, the Annual Report to Stockholders is not deemed to be filed as part of this report). 21 List of Printronix's subsidiaries. 23 Consent of Independent Public Accountants, Arthur Andersen LLP, to the incorporation of their reports herein to Registration Statement Nos. 2-70035, 33-14288, and 33-83156. 27 Financial Data Schedule (This schedule contains summary financial information extracted from the Company's Annual Report for the fiscal year ended March 26, 1999 and is qualified in its entirety by reference to such financial statements.) -16- EX-3.2A 2 AMENDMENT TO BY-LAWS OF PRINTRONIX, INC. 1 EXHIBIT 3.2a CERTIFICATE OF SECRETARY OF PRINTRONIX, INC. A Delaware Corporation I, the undersigned, do hereby certify: (1) That I am the duly elected and acting Secretary of Printronix, Inc., a Delaware corporation. (2) That the following recitals and resolutions, amending the corporation's by-laws, were duly adopted by the Board of Directors of the corporation at a duly-convened meeting held on February 9, 1999; RESOLVED FURTHER, that ARTICLE II, Section 3 of the Corporation's By-laws is hereby amended and restated to read as follows: "Section 3. Special Meetings. Special meetings may be called only by the Board of Directors of the Corporation." RESOLVED FURTHER, that ARTICLE II, Section 8 of the Corporation's By-laws is hereby amended and restated to read a follows: "Section 8. Stockholder Action by Written Consent Without a Meeting. Any action which may be taken at any annual or special meeting of stockholders may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or to take that action at a meeting at which all shares entitled to vote on that action were present and voted. In the case of election of directors, such consent shall be effective only if signed by the holders of all outstanding shares entitled to vote for the election of directors; provided, however, that a director may be elected at any time to fill a vacancy that has not been filled by the directors, by the written consent of the holders of a majority of the outstanding shares entitled to vote for the election of directors. All such consents shall be field with the Secretary of the Corporation and shall be maintained in the corporate records. Any stockholder giving written consent, or the stockholder's proxy holders, or a transferee of the shares or a personal representative of the stockholder or their respective proxy holders, may revoke the consent by a writing received by the Secretary of the Corporation before written consents of the number of shares required to authorize the proposed action have been filed with the Secretary. 2 Prompt notice of the corporate action approved by the stockholders without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing." RESOLVED FURTHER, that a new Section 14 shall be added under ARTICLE II of the Corporation's By-laws reading as follows: "Section 14. Nominations and Proposals. Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the stockholders may be made at any meeting of stockholders only (a) pursuant to the Corporation's notice of meeting, (b) by or at the direction of the Board of Directors or (c) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in these bylaws, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 14. For nominations or other business to be properly brought before a stockholders meeting by a stockholder pursuant to clause (c) of the preceding sentence, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must otherwise be a proper matter for stockholder action. To be timely, a stockholder's notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 60th day nor earlier than the close of business on the 90th day prior to the meeting; provided, however, that in the event that less than 65 days notice of the meeting is given to stockholders, notice by the stockholder to be timely must be so delivered not later than the close of business on the seventh (7th) day following the day on which the notice of meeting was mailed. In no event shall the public announcement of an adjournment of a stockholders meeting commence a new time period for the giving of a stockholder's notice as described above. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (or any successor thereto) and Rule 14a-11 thereunder (or any successor thereto) (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose 3 behalf the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation's books, and of such beneficial owner, and (ii) the class and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner. Notwithstanding any provision herein to the contrary, no business shall be conducted at a stockholders meeting except in accordance with the procedures set forth in this Section 14." RESOLVED FURTHER, that ARTICLE IX, Section 5 of the Corporation's By-laws is hereby amended and restated to read and follows: "Section 5. Record Date. 5.1 Actions other that Written Consent. For the purpose of determining the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or the allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or other lawful purpose (other than the expression of consent to corporate action in writing without a meeting) the directors may fix, in advance, a record date, which, in the case of a meeting of stockholders, shall not be more than 60 days nor less than 10 days before the date of such meeting. If no record date is fixed, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held and the record date for determining stockholders for any other purpose pursuant to this Section 5.1 shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at any meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting; 5.2 Action by Written Consent. In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. The Board 4 of Directors may, at any time within ten (10) days after the date on which such a request is received, adopt a resolution fixing the record date (unless a record date has previously been fixed by the first sentence of this Section 5.2). If no record date has been fixed by the Board of Directors pursuant to the first sentence of this Section 5.2 or otherwise within ten (10) days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business, or to any officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action. In the event of the delivery, in the manner provided by this Section 5.2, to the Corporation of the requisite written consent or consents to take corporate action and/or any related revocation or revocations, the Corporation may engage independent inspectors of elections for the purpose of performing promptly a ministerial review of the validity of the consents and revocations. For the purpose of permitting the inspectors to perform such review, in the event such inspectors are appointed, no action by written consent without a meeting shall be effective until such date as such appointed independent inspectors certify to the Corporation that the consents delivered to the Corporation in accordance herewith represent at least the minimum number of votes that would be necessary to take the corporate action. Nothing contained in this Section 5.2 shall in any way be construed to suggest or imply that the Board of Directors or any stockholder shall not be entitled to contest the validity of any consent or revocation thereof, whether before or after any certification by any independent inspectors, or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation). Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated written consent received in accordance with this Section 5.2, a written consent or consents signed by 5 a sufficient number of holders to take such action are delivered to the Corporation in the manner prescribed herein." RESOLVED FURTHER, that George L. Harwood be, and he hereby is, authorized and directed to prepare and sign a Secretary's Certificate of Amendment of the By-laws reflecting the foregoing resolutions amending the bylaws, and to place such Certificate with the Bylaws of the corporation; IN WITNESS WHEREOF, I have executed this certificate on February 15, 1999. GEORGE L. HARWOOD ------------------------------ George L. Harwood, Secretary EX-10.6A 3 AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT 1 EXHIBIT 10.6a PRINTRONIX, INC. AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made at Irvine, California as of March 26, 1999 between PRINTRONIX, INC., a Delaware corporation (the "Company") and Robert A. Kleist (the "Stockholder"). RECITALS A. The Stockholder has acquired shares of the Company (the "Shares") pursuant to a sale of restricted stock (as that term is used in the Company's 1994 Stock Incentive Plan) under a restricted stock purchase agreement (the "Agreement"). B. Payment for the Shares was made by promissory note (the "Note") accompanied by a pledge of the Shares. C. The Company currently has the right to repurchase a portion of the Shares. D. The parties now desire to amend the Agreement. NOW, THEREFORE, the parties hereto amend the Agreement as follows: AGREEMENT 1. Notwithstanding anything in the Agreement to the contrary, the Company hereby relinquishes any right to repurchase any or all of the Shares and all such shares are now "vested" as that term is used in the Agreement. 2. The parties substitute the promissory note attached hereto as Exhibit A (the "New Note") in the place of the Note. The Stockholder acknowledges that the Shares will not be released from the pledge until the New Note has been paid. Therefore, by virtue of the inability to prepay the New Note, the Stockholder will be unable to sell the Shares for at least two years. 3. The Stockholder shall not voluntarily resign from his position with the Company for a period of two years from the date hereof. The Stockholder recognizes that, if he were to terminate the relationship with the Company at a time when the Company deemed that the continued relationship was in its best interests, that the Company would be damaged. 4. Nothing in this agreement alters the Company's right to terminate any employment or other relationship with the Stockholder at will, with or without cause. 5. Except as so amended, the Agreement remains in full force and effect. -1- 2 IN WITNESS WHEREOF, this agreement is entered into as of the date first-above written. THE COMPANY THE STOCKHOLDER PRINTRONIX, INC. By: GEORGE L. HARWOOD ROBERT A. KLEIST ----------------------------- ----------------------------- George L. Harwood, Robert A. Kleist Senior Vice President & CFO -2- 3 PROMISSORY NOTE $400,000 Irvine, California October 8, 1997 For value received, the undersigned, Robert A. Kleist, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, or order, on March 26, 2001, the sum of Four Hundred Thousand Dollars ($400,000), together with interest on the principal balance from the date hereof at the annual rate of Six percent (6.0%), until said principal and interest have been paid in full. No part of this Note may be prepaid, either in whole or in part. Payment shall first be credited on interest and then on principal. The principal and interest are payable in lawful money of the United States of America. This Note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, as amended as of March 26, 1999, between the undersigned and Printronix, Inc. The undersigned has pledged shares of Printronix, Inc. stock as security for the repayment of this Note and Printronix, Inc.'s sole recourse in the event of breach of the undersigned's obligations under this Note is to such security. In the event action shall be instituted for the collection of any amounts due under this Note, the undersigned promises to pay such amounts as the court may fix as attorneys' fees. ROBERT A. KLEIST ----------------------- Robert A. Kleist Exhibit A -3- EX-10.7A 4 AMEMDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT 1 EXHIBIT 10.7a PRINTRONIX, INC. AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made at Irvine, California as of March 26, 1999 between PRINTRONIX, INC., a Delaware corporation (the "Company") and J. Edward Belt (the "Stockholder"). RECITALS A. The Stockholder has acquired shares of the Company (the "Shares") pursuant to a sale of restricted stock (as that term is used in the Company's 1994 Stock Incentive Plan) under a restricted stock purchase agreement (the "Agreement"). B. Payment for the Shares was made by promissory note (the "Note") accompanied by a pledge of the Shares. C. The Company currently has the right to repurchase a portion of the Shares. D. The parties now desire to amend the Agreement. NOW, THEREFORE, the parties hereto amend the Agreement as follows: AGREEMENT 1. Notwithstanding anything in the Agreement to the contrary, the Company hereby relinquishes any right to repurchase any or all of the Shares and all such shares are now "vested" as that term is used in the Agreement. 2. The parties substitute the promissory note attached hereto as Exhibit A (the "New Note") in the place of the Note. The Stockholder acknowledges that the Shares will not be released from the pledge until the New Note has been paid. Therefore, by virtue of the inability to prepay the New Note, the Stockholder will be unable to sell the Shares for at least two years. 3. The Stockholder shall not voluntarily resign from his position with the Company for a period of two years from the date hereof. The Stockholder recognizes that, if he were to terminate the relationship with the Company at a time when the Company deemed that the continued relationship was in its best interests, that the Company would be damaged. 4. Nothing in this agreement alters the Company's right to terminate any employment or other relationship with the Stockholder at will, with or without cause. 5. Except as so amended, the Agreement remains in full force and effect. -1- 2 IN WITNESS WHEREOF, this agreement is entered into as of the date first-above written. THE COMPANY THE STOCKHOLDER PRINTRONIX, INC. By: ROBERT A. KLEIST J. EDWARD BELT --------------------------- --------------------------- Robert A. Kleist, J. Edward Belt President & CEO -2- 3 PROMISSORY NOTE $300,000 Irvine, California October 8, 1997 For value received, the undersigned, J. Edward Belt, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, or order, on March 26, 2001, the sum of Three Hundred Thousand Dollars ($300,000), together with interest on the principal balance from the date hereof at the annual rate of Six percent (6.0%), until said principal and interest have been paid in full. No part of this Note may be prepaid, either in whole or in part. Payment shall first be credited on interest and then on principal. The principal and interest are payable in lawful money of the United States of America. This Note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, as amended as of March 26, 1999, between the undersigned and Printronix, Inc. The undersigned has pledged shares of Printronix, Inc. stock as security for the repayment of this Note and Printronix, Inc.'s sole recourse in the event of breach of the undersigned's obligations under this Note is to such security. In the event action shall be instituted for the collection of any amounts due under this Note, the undersigned promises to pay such amounts as the court may fix as attorneys' fees. J. EDWARD BELT ----------------------- J. Edward Belt Exhibit A -3- EX-10.8A 5 AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT 1 EXHIBIT 10.8a PRINTRONIX, INC. AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made at Irvine, California as of March 26, 1999 between PRINTRONIX, INC., a Delaware corporation (the "Company") and George L. Harwood (the "Stockholder"). RECITALS A. The Stockholder has acquired shares of the Company (the "Shares") pursuant to a sale of restricted stock (as that term is used in the Company's 1994 Stock Incentive Plan) under a restricted stock purchase agreement (the "Agreement"). B. Payment for the Shares was made by promissory note (the "Note") accompanied by a pledge of the Shares. C. The Company currently has the right to repurchase a portion of the Shares. D. The parties now desire to amend the Agreement. NOW, THEREFORE, the parties hereto amend the Agreement as follows: AGREEMENT 1. Notwithstanding anything in the Agreement to the contrary, the Company hereby relinquishes any right to repurchase any or all of the Shares and all such shares are now "vested" as that term is used in the Agreement. 2. The parties substitute the promissory note attached hereto as Exhibit A (the "New Note") in the place of the Note. The Stockholder acknowledges that the Shares will not be released from the pledge until the New Note has been paid. Therefore, by virtue of the inability to prepay the New Note, the Stockholder will be unable to sell the Shares for at least two years. 3. The Stockholder shall not voluntarily resign from his position with the Company for a period of two years from the date hereof. The Stockholder recognizes that, if he were to terminate the relationship with the Company at a time when the Company deemed that the continued relationship was in its best interests, that the Company would be damaged. 4. Nothing in this agreement alters the Company's right to terminate any employment or other relationship with the Stockholder at will, with or without cause. 5. Except as so amended, the Agreement remains in full force and effect. -1- 2 IN WITNESS WHEREOF, this agreement is entered into as of the date first-above written. THE COMPANY THE STOCKHOLDER PRINTRONIX, INC. By: ROBERT A. KLEIST GEORGE L. HARWOOD --------------------------- ------------------------------- Robert A. Kleist, George L. Harwood President & CEO -2- 3 PROMISSORY NOTE $300,000 Irvine, California October 8, 1997 For value received, the undersigned, George L. Harwood, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, or order, on March 26, 2001, the sum of Three Hundred Thousand Dollars ($300,000), together with interest on the principal balance from the date hereof at the annual rate of Six percent (6.0%), until said principal and interest have been paid in full. No part of this Note may be prepaid, either in whole or in part. Payment shall first be credited on interest and then on principal. The principal and interest are payable in lawful money of the United States of America. This Note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, as amended as of March 26, 1999, between the undersigned and Printronix, Inc. The undersigned has pledged shares of Printronix, Inc. stock as security for the repayment of this Note and Printronix, Inc.'s sole recourse in the event of breach of the undersigned's obligations under this Note is to such security. In the event action shall be instituted for the collection of any amounts due under this Note, the undersigned promises to pay such amounts as the court may fix as attorneys' fees. GEORGE L. HARWOOD ------------------------- George L. Harwood Exhibit A -3- EX-10.9A 6 AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT 1 EXHIBIT 10.9a PRINTRONIX, INC. AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made at Irvine, California as of March 26, 1999 between PRINTRONIX, INC., a Delaware corporation (the "Company") and C. Victor Fitzsimmons (the "Stockholder"). RECITALS A. The Stockholder has acquired shares of the Company (the "Shares") pursuant to a sale of restricted stock (as that term is used in the Company's 1994 Stock Incentive Plan) under a restricted stock purchase agreement (the "Agreement"). B. Payment for the Shares was made by promissory note (the "Note") accompanied by a pledge of the Shares. C. The Company currently has the right to repurchase a portion of the Shares. D. The parties now desire to amend the Agreement. NOW, THEREFORE, the parties hereto amend the Agreement as follows: AGREEMENT 1. Notwithstanding anything in the Agreement to the contrary, the Company hereby relinquishes any right to repurchase any or all of the Shares and all such shares are now "vested" as that term is used in the Agreement. 2. The parties substitute the promissory note attached hereto as Exhibit A (the "New Note") in the place of the Note. The Stockholder acknowledges that the Shares will not be released from the pledge until the New Note has been paid. Therefore, by virtue of the inability to prepay the New Note, the Stockholder will be unable to sell the Shares for at least two years. 3. The Stockholder shall not voluntarily resign from his position with the Company for a period of two years from the date hereof. The Stockholder recognizes that, if he were to terminate the relationship with the Company at a time when the Company deemed that the continued relationship was in its best interests, that the Company would be damaged. 4. Nothing in this agreement alters the Company's right to terminate any employment or other relationship with the Stockholder at will, with or without cause. 5. Except as so amended, the Agreement remains in full force and effect. -1- 2 IN WITNESS WHEREOF, this agreement is entered into as of the date first-above written. THE COMPANY THE STOCKHOLDER PRINTRONIX, INC. By: ROBERT A. KLEIST C. VICTOR FITZSIMMONS ------------------------- ----------------------------- Robert A. Kleist, C. Victor Fitzsimmons President & CEO -2- 3 PROMISSORY NOTE $300,000 Irvine, California October 8, 1997 For value received, the undersigned, C. Victor Fitzsimmons, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, or order, on March 26, 2001, the sum of Three Hundred Thousand Dollars ($300,000), together with interest on the principal balance from the date hereof at the annual rate of Six percent (6.0%), until said principal and interest have been paid in full. No part of this Note may be prepaid, either in whole or in part. Payment shall first be credited on interest and then on principal. The principal and interest are payable in lawful money of the United States of America. This Note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, as amended as of March 26, 1999, between the undersigned and Printronix, Inc. The undersigned has pledged shares of Printronix, Inc. stock as security for the repayment of this Note and Printronix, Inc.'s sole recourse in the event of breach of the undersigned's obligations under this Note is to such security. In the event action shall be instituted for the collection of any amounts due under this Note, the undersigned promises to pay such amounts as the court may fix as attorneys' fees. C. VICTOR FITZSIMMONS -------------------------- C. Victor Fitzsimmons Exhibit A -3- EX-10.10A 7 AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT 1 EXHIBIT 10.10a PRINTRONIX, INC. AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made at Irvine, California as of March 26, 1999 between PRINTRONIX, INC., a Delaware corporation (the "Company") and Richard A. Steele (the "Stockholder"). RECITALS A. The Stockholder has acquired shares of the Company (the "Shares") pursuant to a sale of restricted stock (as that term is used in the Company's 1994 Stock Incentive Plan) under a restricted stock purchase agreement (the "Agreement"). B. Payment for the Shares was made by promissory note (the "Note") accompanied by a pledge of the Shares. C. The Company currently has the right to repurchase a portion of the Shares. D. The parties now desire to amend the Agreement. NOW, THEREFORE, the parties hereto amend the Agreement as follows: AGREEMENT 1. Notwithstanding anything in the Agreement to the contrary, the Company hereby relinquishes any right to repurchase any or all of the Shares and all such shares are now "vested" as that term is used in the Agreement. 2. The parties substitute the promissory note attached hereto as Exhibit A (the "New Note") in the place of the Note. The Stockholder acknowledges that the Shares will not be released from the pledge until the New Note has been paid. Therefore, by virtue of the inability to prepay the New Note, the Stockholder will be unable to sell the Shares for at least two years. 3. The Stockholder shall not voluntarily resign from his position with the Company for a period of two years from the date hereof. The Stockholder recognizes that, if he were to terminate the relationship with the Company at a time when the Company deemed that the continued relationship was in its best interests, that the Company would be damaged. 4. Nothing in this agreement alters the Company's right to terminate any employment or other relationship with the Stockholder at will, with or without cause. 5. Except as so amended, the Agreement remains in full force and effect. -1- 2 IN WITNESS WHEREOF, this agreement is entered into as of the date first-above written. THE COMPANY THE STOCKHOLDER PRINTRONIX, INC. By: ROBERT A. KLEIST RICHARD A. STEELE --------------------------- ------------------------------- Robert A. Kleist, Richard A. Steele President & CEO -2- 3 PROMISSORY NOTE $300,000 Irvine, California October 8, 1997 For value received, the undersigned, Richard A. Steele, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, or order, on March 26, 2001, the sum of Three Hundred Thousand Dollars ($300,000), together with interest on the principal balance from the date hereof at the annual rate of Six percent (6.0%), until said principal and interest have been paid in full. No part of this Note may be prepaid, either in whole or in part. Payment shall first be credited on interest and then on principal. The principal and interest are payable in lawful money of the United States of America. This Note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, as amended as of March 26, 1999, between the undersigned and Printronix, Inc. The undersigned has pledged shares of Printronix, Inc. stock as security for the repayment of this Note and Printronix, Inc.'s sole recourse in the event of breach of the undersigned's obligations under this Note is to such security. In the event action shall be instituted for the collection of any amounts due under this Note, the undersigned promises to pay such amounts as the court may fix as attorneys' fees. RICHARD A. STEELE ------------------------ Richard A. Steele Exhibit A -3- EX-10.11A 8 AMENDMENT TO RESTRACTED STOCK PURCHASE AGREEMENT 1 EXHIBIT 10.11a PRINTRONIX, INC. AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made at Irvine, California as of March 26, 1999 between PRINTRONIX, INC., a Delaware corporation (the "Company") and Gordon B. Barrus (the "Stockholder"). RECITALS A. The Stockholder has acquired shares of the Company (the "Shares") pursuant to a sale of restricted stock (as that term is used in the Company's 1994 Stock Incentive Plan) under a restricted stock purchase agreement (the "Agreement"). B. Payment for the Shares was made by promissory note (the "Note") accompanied by a pledge of the Shares. C. The Company currently has the right to repurchase a portion of the Shares. D. The parties now desire to amend the Agreement. NOW, THEREFORE, the parties hereto amend the Agreement as follows: AGREEMENT 1. Notwithstanding anything in the Agreement to the contrary, the Company hereby relinquishes any right to repurchase any or all of the Shares and all such shares are now "vested" as that term is used in the Agreement. 2. The parties substitute the promissory note attached hereto as Exhibit A (the "New Note") in the place of the Note. The Stockholder acknowledges that the Shares will not be released from the pledge until the New Note has been paid. Therefore, by virtue of the inability to prepay the New Note, the Stockholder will be unable to sell the Shares for at least two years. 3. The Stockholder shall not voluntarily resign from his position with the Company for a period of two years from the date hereof. The Stockholder recognizes that, if he were to terminate the relationship with the Company at a time when the Company deemed that the continued relationship was in its best interests, that the Company would be damaged. 4. Nothing in this agreement alters the Company's right to terminate any employment or other relationship with the Stockholder at will, with or without cause. 5. Except as so amended, the Agreement remains in full force and effect. -1- 2 IN WITNESS WHEREOF, this agreement is entered into as of the date first-above written. THE COMPANY THE STOCKHOLDER PRINTRONIX, INC. By: ROBERT A. KLEIST GORDON B. BARRUS ------------------------- ---------------------------- Robert A. Kleist, Gordon B. Barrus President & CEO -2- 3 PROMISSORY NOTE $200,000 Irvine, California October 8, 1997 For value received, the undersigned, Gordon B. Barrus, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, or order, on March 26, 2001, the sum of Two Hundred Thousand Dollars ($200,000), together with interest on the principal balance from the date hereof at the annual rate of Six percent (6.0%), until said principal and interest have been paid in full. No part of this Note may be prepaid, either in whole or in part. Payment shall first be credited on interest and then on principal. The principal and interest are payable in lawful money of the United States of America. This Note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, as amended as of March 26, 1999, between the undersigned and Printronix, Inc. The undersigned has pledged shares of Printronix, Inc. stock as security for the repayment of this Note and Printronix, Inc.'s sole recourse in the event of breach of the undersigned's obligations under this Note is to such security. In the event action shall be instituted for the collection of any amounts due under this Note, the undersigned promises to pay such amounts as the court may fix as attorneys' fees. GORDON B. BARRUS ----------------------- Gordon B. Barrus Exhibit A -3- EX-10.12A 9 AMENDMENT TO RESTRICTED STOCK AGREEMENT 1 EXHIBIT 10.12a PRINTRONIX, INC. AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made at Irvine, California as of March 26, 1999 between PRINTRONIX, INC., a Delaware corporation (the "Company") and Theodore A. Chapman (the "Stockholder"). RECITALS A. The Stockholder has acquired shares of the Company (the "Shares") pursuant to a sale of restricted stock (as that term is used in the Company's 1994 Stock Incentive Plan) under a restricted stock purchase agreement (the "Agreement"). B. Payment for the Shares was made by promissory note (the "Note") accompanied by a pledge of the Shares. C. The Company currently has the right to repurchase a portion of the Shares. D. The parties now desire to amend the Agreement. NOW, THEREFORE, the parties hereto amend the Agreement as follows: AGREEMENT 1. Notwithstanding anything in the Agreement to the contrary, the Company hereby relinquishes any right to repurchase any or all of the Shares and all such shares are now "vested" as that term is used in the Agreement. 2. The parties substitute the promissory note attached hereto as Exhibit A (the "New Note") in the place of the Note. The Stockholder acknowledges that the Shares will not be released from the pledge until the New Note has been paid. Therefore, by virtue of the inability to prepay the New Note, the Stockholder will be unable to sell the Shares for at least two years. 3. The Stockholder shall not voluntarily resign from his position with the Company for a period of two years from the date hereof. The Stockholder recognizes that, if he were to terminate the relationship with the Company at a time when the Company deemed that the continued relationship was in its best interests, that the Company would be damaged. 4. Nothing in this agreement alters the Company's right to terminate any employment or other relationship with the Stockholder at will, with or without cause. 5. Except as so amended, the Agreement remains in full force and effect. -1- 2 IN WITNESS WHEREOF, this agreement is entered into as of the date first-above written. THE COMPANY THE STOCKHOLDER PRINTRONIX, INC. By: ROBERT A. KLEIST THEODORE A. CHAPMAN --------------------------- ----------------------------- Robert A. Kleist, Theodore A. Chapman President & CEO -2- 3 PROMISSORY NOTE $200,000 Irvine, California October 8, 1997 For value received, the undersigned, Theodore A. Chapman, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, or order, on March 26, 2001, the sum of Two Hundred Thousand Dollars ($200,000), together with interest on the principal balance from the date hereof at the annual rate of Six percent (6.0%), until said principal and interest have been paid in full. No part of this Note may be prepaid, either in whole or in part. Payment shall first be credited on interest and then on principal. The principal and interest are payable in lawful money of the United States of America. This Note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, as amended as of March 26, 1999, between the undersigned and Printronix, Inc. The undersigned has pledged shares of Printronix, Inc. stock as security for the repayment of this Note and Printronix, Inc.'s sole recourse in the event of breach of the undersigned's obligations under this Note is to such security. In the event action shall be instituted for the collection of any amounts due under this Note, the undersigned promises to pay such amounts as the court may fix as attorneys' fees. THEODORE A. CHAPMAN --------------------------- Theodore A. Chapman Exhibit A -3- EX-10.13A 10 AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT 1 EXHIBIT 10.13a PRINTRONIX, INC. AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made at Irvine, California as of March 26, 1999 between PRINTRONIX, INC., a Delaware corporation (the "Company") and Philip Low Fook (the "Stockholder"). RECITALS A. The Stockholder has acquired shares of the Company (the "Shares") pursuant to a sale of restricted stock (as that term is used in the Company's 1994 Stock Incentive Plan) under a restricted stock purchase agreement (the "Agreement"). B. Payment for the Shares was made by promissory note (the "Note") accompanied by a pledge of the Shares. C. The Company currently has the right to repurchase a portion of the Shares. D. The parties now desire to amend the Agreement. NOW, THEREFORE, the parties hereto amend the Agreement as follows: AGREEMENT 1. Notwithstanding anything in the Agreement to the contrary, the Company hereby relinquishes any right to repurchase any or all of the Shares and all such shares are now "vested" as that term is used in the Agreement. 2. The parties substitute the promissory note attached hereto as Exhibit A (the "New Note") in the place of the Note. The Stockholder acknowledges that the Shares will not be released from the pledge until the New Note has been paid. Therefore, by virtue of the inability to prepay the New Note, the Stockholder will be unable to sell the Shares for at least two years. 3. The Stockholder shall not voluntarily resign from his position with the Company for a period of two years from the date hereof. The Stockholder recognizes that, if he were to terminate the relationship with the Company at a time when the Company deemed that the continued relationship was in its best interests, that the Company would be damaged. 4. Nothing in this agreement alters the Company's right to terminate any employment or other relationship with the Stockholder at will, with or without cause. 5. Except as so amended, the Agreement remains in full force and effect. -1- 2 IN WITNESS WHEREOF, this agreement is entered into as of the date first-above written. THE COMPANY THE STOCKHOLDER PRINTRONIX, INC. By: ROBERT A. KLEIST PHILIP LOW FOOK ------------------------------ ----------------------------- Robert A. Kleist, Philip Low Fook President & CEO -2- 3 PROMISSORY NOTE $200,000 Irvine, California October 8, 1997 For value received, the undersigned, Philip Low Fook, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, or order, on March 26, 2001, the sum of Two Hundred Thousand Dollars ($200,000), together with interest on the principal balance from the date hereof at the annual rate of Six percent (6.0%), until said principal and interest have been paid in full. No part of this Note may be prepaid, either in whole or in part. Payment shall first be credited on interest and then on principal. The principal and interest are payable in lawful money of the United States of America. This Note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, as amended as of March 26, 1999, between the undersigned and Printronix, Inc. The undersigned has pledged shares of Printronix, Inc. stock as security for the repayment of this Note and Printronix, Inc.'s sole recourse in the event of breach of the undersigned's obligations under this Note is to such security. In the event action shall be instituted for the collection of any amounts due under this Note, the undersigned promises to pay such amounts as the court may fix as attorneys' fees. PHILIP LOW FOOK ----------------------- Philip Low Fook Exhibit A -3- EX-10.14A 11 AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT 1 EXHIBIT 10.14a PRINTRONIX, INC. AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made at Irvine, California as of March 26, 1999 between PRINTRONIX, INC., a Delaware corporation (the "Company") and Bruce T. Coleman (the "Stockholder"). RECITALS A. The Stockholder has acquired shares of the Company (the "Shares") pursuant to a sale of restricted stock (as that term is used in the Company's 1994 Stock Incentive Plan) under a restricted stock purchase agreement (the "Agreement"). B. Payment for the Shares was made by promissory note (the "Note") accompanied by a pledge of the Shares. C. The Company currently has the right to repurchase a portion of the Shares. D. The parties now desire to amend the Agreement. NOW, THEREFORE, the parties hereto amend the Agreement as follows: AGREEMENT 1. Notwithstanding anything in the Agreement to the contrary, the Company hereby relinquishes any right to repurchase any or all of the Shares and all such shares are now "vested" as that term is used in the Agreement. 2. The parties substitute the promissory note attached hereto as Exhibit A (the "New Note") in the place of the Note. The Stockholder acknowledges that the Shares will not be released from the pledge until the New Note has been paid. Therefore, by virtue of the inability to prepay the New Note, the Stockholder will be unable to sell the Shares for at least two years. 3. The Stockholder shall not voluntarily resign from his position with the Company for a period of two years from the date hereof. The Stockholder recognizes that, if he were to terminate the relationship with the Company at a time when the Company deemed that the continued relationship was in its best interests, that the Company would be damaged. 4. Nothing in this agreement alters the Company's right to terminate any employment or other relationship with the Stockholder at will, with or without cause. 5. Except as so amended, the Agreement remains in full force and effect. -1- 2 IN WITNESS WHEREOF, this agreement is entered into as of the date first-above written. THE COMPANY THE STOCKHOLDER PRINTRONIX, INC. By: ROBERT A. KLEIST BRUCE T. COLEMAN ------------------------------ ----------------------------- Robert A. Kleist, Bruce T. Coleman President & CEO -2- 3 PROMISSORY NOTE $40,000 Irvine, California October 8, 1997 For value received, the undersigned, Bruce T. Coleman, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, or order, on March 26, 2001, the sum of Forty Thousand Dollars ($40,000), together with interest on the principal balance from the date hereof at the annual rate of Six percent (6.0%), until said principal and interest have been paid in full. No part of this Note may be prepaid, either in whole or in part. Payment shall first be credited on interest and then on principal. The principal and interest are payable in lawful money of the United States of America. This Note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, as amended as of March 26, 1999, between the undersigned and Printronix, Inc. The undersigned has pledged shares of Printronix, Inc. stock as security for the repayment of this Note and Printronix, Inc.'s sole recourse in the event of breach of the undersigned's obligations under this Note is to such security. In the event action shall be instituted for the collection of any amounts due under this Note, the undersigned promises to pay such amounts as the court may fix as attorneys' fees. BRUCE T. COLEMAN ----------------------- Bruce T. Coleman Exhibit A -6- EX-10.15A 12 AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT 1 EXHIBIT 10.15a PRINTRONIX, INC. AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made at Irvine, California as of March 26, 1999 between PRINTRONIX, INC., a Delaware corporation (the "Company") and John R. Dougery (the "Stockholder"). RECITALS A. The Stockholder has acquired shares of the Company (the "Shares") pursuant to a sale of restricted stock (as that term is used in the Company's 1994 Stock Incentive Plan) under a restricted stock purchase agreement (the "Agreement"). B. Payment for the Shares was made by promissory note (the "Note") accompanied by a pledge of the Shares. C. The Company currently has the right to repurchase a portion of the Shares. D. The parties now desire to amend the Agreement. NOW, THEREFORE, the parties hereto amend the Agreement as follows: AGREEMENT 1. Notwithstanding anything in the Agreement to the contrary, the Company hereby relinquishes any right to repurchase any or all of the Shares and all such shares are now "vested" as that term is used in the Agreement. 2. The parties substitute the promissory note attached hereto as Exhibit A (the "New Note") in the place of the Note. The Stockholder acknowledges that the Shares will not be released from the pledge until the New Note has been paid. Therefore, by virtue of the inability to prepay the New Note, the Stockholder will be unable to sell the Shares for at least two years. 3. The Stockholder shall not voluntarily resign from his position with the Company for a period of two years from the date hereof. The Stockholder recognizes that, if he were to terminate the relationship with the Company at a time when the Company deemed that the continued relationship was in its best interests, that the Company would be damaged. 4. Nothing in this agreement alters the Company's right to terminate any employment or other relationship with the Stockholder at will, with or without cause. 5. Except as so amended, the Agreement remains in full force and effect. -1- 2 IN WITNESS WHEREOF, this agreement is entered into as of the date first-above written. THE COMPANY THE STOCKHOLDER PRINTRONIX, INC. By: ROBERT A. KLEIST JOHN R. DOUGERY ------------------------------ ----------------------------- Robert A. Kleist, John R. Dougery President & CEO -2- 3 PROMISSORY NOTE $40,000 Irvine, California October 8, 1997 For value received, the undersigned, John R. Dougery, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, or order, on March 26, 2001, the sum of Forty Thousand Dollars ($40,000), together with interest on the principal balance from the date hereof at the annual rate of Six percent (6.0%), until said principal and interest have been paid in full. No part of this Note may be prepaid, either in whole or in part. Payment shall first be credited on interest and then on principal. The principal and interest are payable in lawful money of the United States of America. This Note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, as amended as of March 26, 1999, between the undersigned and Printronix, Inc. The undersigned has pledged shares of Printronix, Inc. stock as security for the repayment of this Note and Printronix, Inc.'s sole recourse in the event of breach of the undersigned's obligations under this Note is to such security. In the event action shall be instituted for the collection of any amounts due under this Note, the undersigned promises to pay such amounts as the court may fix as attorneys' fees. JOHN R. DOUGERY ------------------------ John R. Dougery Exhibit A -3- EX-10.16A 13 AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT 1 EXHIBIT 10.16a PRINTRONIX, INC. AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made at Irvine, California as of March 26, 1999 between PRINTRONIX, INC., a Delaware corporation (the "Company") and Ralph Gabai (the "Stockholder"). RECITALS A. The Stockholder has acquired shares of the Company (the "Shares") pursuant to a sale of restricted stock (as that term is used in the Company's 1994 Stock Incentive Plan) under a restricted stock purchase agreement (the "Agreement"). B. Payment for the Shares was made by promissory note (the "Note") accompanied by a pledge of the Shares. C. The Company currently has the right to repurchase a portion of the Shares. D. The parties now desire to amend the Agreement. NOW, THEREFORE, the parties hereto amend the Agreement as follows: AGREEMENT 1. Notwithstanding anything in the Agreement to the contrary, the Company hereby relinquishes any right to repurchase any or all of the Shares and all such shares are now "vested" as that term is used in the Agreement. 2. The parties substitute the promissory note attached hereto as Exhibit A (the "New Note") in the place of the Note. The Stockholder acknowledges that the Shares will not be released from the pledge until the New Note has been paid. Therefore, by virtue of the inability to prepay the New Note, the Stockholder will be unable to sell the Shares for at least two years. 3. The Stockholder shall not voluntarily resign from his position with the Company for a period of two years from the date hereof. The Stockholder recognizes that, if he were to terminate the relationship with the Company at a time when the Company deemed that the continued relationship was in its best interests, that the Company would be damaged. 4. Nothing in this agreement alters the Company's right to terminate any employment or other relationship with the Stockholder at will, with or without cause. 5. Except as so amended, the Agreement remains in full force and effect. -1- 2 IN WITNESS WHEREOF, this agreement is entered into as of the date first-above written. THE COMPANY THE STOCKHOLDER PRINTRONIX, INC. By: ROBERT A. KLEIST RALPH GABAI -------------------------------- ----------------------------- Robert A. Kleist, Ralph Gabai President & CEO -2- 3 PROMISSORY NOTE $40,000 Irvine, California October 8, 1997 For value received, the undersigned, Ralph Gabai, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, or order, on March 26, 2001, the sum of Forty Thousand Dollars ($40,000), together with interest on the principal balance from the date hereof at the annual rate of Six percent (6.0%), until said principal and interest have been paid in full. No part of this Note may be prepaid, either in whole or in part. Payment shall first be credited on interest and then on principal. The principal and interest are payable in lawful money of the United States of America. This Note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, as amended as of March 26, 1999, between the undersigned and Printronix, Inc. The undersigned has pledged shares of Printronix, Inc. stock as security for the repayment of this Note and Printronix, Inc.'s sole recourse in the event of breach of the undersigned's obligations under this Note is to such security. In the event action shall be instituted for the collection of any amounts due under this Note, the undersigned promises to pay such amounts as the court may fix as attorneys' fees. RALPH GABAI --------------------- Ralph Gabai Exhibit A -3- EX-10.16B 14 RESTRICTED STOCK PURCHASE AGREEMENT 1 EXHIBIT 10.16b PRINTRONIX, INC. 1994 STOCK INCENTIVE PLAN RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made as of August 21, 1998 between PRINTRONIX, INC., a Delaware corporation (hereinafter referred to as the "Company") and Ralph Gabai (hereinafter referred to as "Participant"). 1. Purposes. This Agreement is entered into pursuant to the terms of the Printronix, Inc. 1994 Stock Incentive Plan to provide Participant with an additional interest in and incentive to serve the Company. Nothing contained in this Agreement, however, shall be construed as obligating either Participant or the Company to continue Participant's employment or other affiliation with the Company. 2. Sale of Shares. (a) Subject to the terms and conditions set forth in this Agreement, the Company hereby agrees to sell to Participant and Participant hereby agrees to purchase from the Company 26,000 shares of Common Stock, $.01 par value, of the Company (hereinafter collectively referred to as the "Shares" or singularly as a "Share") for a purchase price of $10.00 per Share, equal to an aggregate purchase price of $260,000. (b) As consideration for the Shares, Participant shall execute and deliver to the Company a promissory note in the principal amount of $260,000, payable as, and to the extent that, the Shares vest (as hereinafter defined), together with interest on the unpaid principal balance at the rate of 8.0% per annum. Participant may from time to time prepay all or any part of the balance due on the note without penalty. However, such prepayment shall not accelerate the vesting of any Shares. Participant shall be personally liable on the note, which shall be in the form set forth in Exhibit A hereto (the "Note"). -1- 2 3. Restrictions. Except as provided in this Paragraph 3 (as to the Company's right to repurchase the Shares) and in Paragraph 4 (as to the pledge of Shares to the Company), Participant agrees not to sell, assign, transfer, pledge, or hypothecate in any way any of the Shares until they have "vested" (as hereinafter defined) and have been paid for and until they are no longer subject to divestment. The Company shall initially have the right to repurchase all of the Shares. The right to repurchase shall lapse as to 50% of the Shares at the end of each fiscal year, commencing with 1999, in which both of the following occur: (I) sales for that fiscal year are at least 7% greater than for the immediately preceding fiscal year, and (ii) pre-tax earnings per share for that fiscal year are at least 15% greater than for the immediately preceding fiscal year. At the end of fiscal year 2001 or upon termination of employment or other affiliation, whichever occurs first, the Company shall repurchase all Shares as to which the right of repurchase has not lapsed. Because in the event of termination of employment or other affiliation, the Company's right to repurchase may again come into existence, as described below, none of the Shares can be sold prior to the end of the fiscal year 1999. Notwithstanding the foregoing, the Company shall repurchase all of the Shares at any time until the end of fiscal year 2001 if Participant voluntarily leaves the employ of or ceases affiliation with the Company, dies, or is terminated for cause. As the foregoing conditions have been satisfied as to any portion of the Shares, those Shares as to which the conditions have been satisfied and as to which the Company has no right to repurchase shall be deemed to be "vested." Repurchase by the Company shall be for a purchase price per Share equal to the price per Share paid by Participant, together with interest on the amount of said purchase price at a rate of 8.0% per annum from the date of purchase by Participant to the date of repurchase by the Company. -2- 3 At such time that Participant's interest in any of the Shares is vested and is not subject to divestment, then to that extent Participant shall repay the Note and upon such repayment shall receive a certificate or certificates representing such vested shares. If repayment has not been made within 90 days of vesting, then the Company may repurchase the Shares. 4. Pledge of Shares. Upon issuance and sale of the Shares to Participant, Participant shall deliver the certificate(s) representing the Shares to the Company, along with appropriate stock powers executed by Participant, to secure performance by Participant of his obligations under this Agreement. Participant agrees that in the event that any stock dividends, stock splits, reclassification, or other change is declared or made in the capital structure of the Company, all new, substituted and additional shares, or other securities, issued by reason of such change in respect to Shares that have not "vested" (as defined in Paragraph 3 hereof), shall be delivered forthwith to the Company and shall be held by the Company under the terms of this Agreement. The Company shall release from this pledge and deliver to Participant the certificate(s) representing any Shares that become "vested" as soon as reasonably practicable after they have become "vested", together with any additional shares or other securities under this pledge which may have been issued in respect to such "vested" Shares by reason of a change in the capital structure of the Company as provided above. 5. Rights Incident to Shares. Subject to the provisions of this Agreement, Participant shall retain the right to vote the Shares and all other rights incidental to the ownership of the Shares; provided, however, that any cash dividends paid in respect to Shares that have not "vested" shall be used by Participant to pay the balance due on the Note. 6. Participant hereby acknowledges that this transaction is subject to his reading and understanding the Summary of Certain Tax Consequences of Purchase of Restricted Stock attached hereto as Exhibit B. -3- 4 7. Participant understands and agrees that the certificate(s) evidencing the Shares shall bear a legend evidencing the restrictions set forth in this Agreement and such other legend or legends as the Company may deem to be necessary or appropriate. 8. This Agreement shall be binding upon the heirs, representatives, executors and successors of the parties hereto. 9. This Agreement shall be construed and governed by the laws of the state of California. Executed at Irvine, California, as of the date first above written. PRINTRONIX, INC. PARTICIPANT By: ROBERT A. KLEIST RALPH GABAI ---------------------- ---------------------- Robert A. Kleist, Ralph Gabai President -4- EX-10.16C 15 AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT 1 EXHIBIT 10.16c PRINTRONIX, INC. AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made at Irvine, California as of March 26, 1999 between PRINTRONIX, INC., a Delaware corporation (the "Company") and Ralph Gabai (the "Stockholder"). RECITALS A. The Stockholder has acquired shares of the Company (the "Shares") pursuant to a sale of restricted stock (as that term is used in the Company's 1994 Stock Incentive Plan) under a restricted stock purchase agreement (the "Agreement"). B. Payment for the Shares was made by promissory note (the "Note") accompanied by a pledge of the Shares. C. The Company currently has the right to repurchase a portion of the Shares. D. The parties now desire to amend the Agreement. NOW, THEREFORE, the parties hereto amend the Agreement as follows: AGREEMENT 1. Notwithstanding anything in the Agreement to the contrary, the Company hereby relinquishes any right to repurchase any or all of the Shares and all such shares are now "vested" as that term is used in the Agreement. 2. The parties substitute the promissory note attached hereto as Exhibit A (the "New Note") in the place of the Note. The Stockholder acknowledges that the Shares will not be released from the pledge until the New Note has been paid. Therefore, by virtue of the inability to prepay the New Note, the Stockholder will be unable to sell the Shares for at least two years. 3. The Stockholder shall not voluntarily resign from his position with the Company for a period of two years from the date hereof. The Stockholder recognizes that, if he were to terminate the relationship with the Company at a time when the Company deemed that the continued relationship was in its best interests, that the Company would be damaged. 4. Nothing in this agreement alters the Company's right to terminate any employment or other relationship with the Stockholder at will, with or without cause. 5. Except as so amended, the Agreement remains in full force and effect. -1- 2 IN WITNESS WHEREOF, this agreement is entered into as of the date first-above written. THE COMPANY THE STOCKHOLDER PRINTRONIX, INC. By: ROBERT A. KLEIST RALPH GABAI ---------------------- ---------------------- Robert A. Kleist, Ralph Gabai President & CEO -2- 3 PROMISSORY NOTE $260,000 Irvine, California August 21, 1998 For value received, the undersigned, Ralph Gabai, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, or order, on March 26, 2001, the sum of Two Hundred Sixty Thousand Dollars ($260,000), together with interest on the principal balance from the date hereof at the annual rate of Six percent (6.0%), until said principal and interest have been paid in full. No part of this Note may be prepaid, either in whole or in part. Payment shall first be credited on interest and then on principal. The principal and interest are payable in lawful money of the United States of America. This Note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of August 21, 1998, as amended as of March 26, 1999, between the undersigned and Printronix, Inc. The undersigned has pledged shares of Printronix, Inc. stock as security for the repayment of this Note and Printronix, Inc.'s sole recourse in the event of breach of the undersigned's obligations under this Note is to such security. In the event action shall be instituted for the collection of any amounts due under this Note, the undersigned promises to pay such amounts as the court may fix as attorneys' fees. RALPH GABAI ---------------------- Ralph Gabai Exhibit A -3- EX-10.17A 16 AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT 1 EXHIBIT 10.17a PRINTRONIX, INC. AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made at Irvine, California as of March 26, 1999 between PRINTRONIX, INC., a Delaware corporation (the "Company") and Erwin A. Kelen (the "Stockholder"). RECITALS A. The Stockholder has acquired shares of the Company (the "Shares") pursuant to a sale of restricted stock (as that term is used in the Company's 1994 Stock Incentive Plan) under a restricted stock purchase agreement (the "Agreement"). B. Payment for the Shares was made by promissory note (the "Note") accompanied by a pledge of the Shares. C. The Company currently has the right to repurchase a portion of the Shares. D. The parties now desire to amend the Agreement. NOW, THEREFORE, the parties hereto amend the Agreement as follows: AGREEMENT 1. Notwithstanding anything in the Agreement to the contrary, the Company hereby relinquishes any right to repurchase any or all of the Shares and all such shares are now "vested" as that term is used in the Agreement. 2. The parties substitute the promissory note attached hereto as Exhibit A (the "New Note") in the place of the Note. The Stockholder acknowledges that the Shares will not be released from the pledge until the New Note has been paid. Therefore, by virtue of the inability to prepay the New Note, the Stockholder will be unable to sell the Shares for at least two years. 3. The Stockholder shall not voluntarily resign from his position with the Company for a period of two years from the date hereof. The Stockholder recognizes that, if he were to terminate the relationship with the Company at a time when the Company deemed that the continued relationship was in its best interests, that the Company would be damaged. 4. Nothing in this agreement alters the Company's right to terminate any employment or other relationship with the Stockholder at will, with or without cause. 5. Except as so amended, the Agreement remains in full force and effect. -1- 2 IN WITNESS WHEREOF, this agreement is entered into as of the date first-above written. THE COMPANY THE STOCKHOLDER PRINTRONIX, INC. By: ROBERT A. KLEIST ERWIN A. KELEN ---------------------- ---------------------- Robert A. Kleist, Erwin A. Kelen President & CEO -2- 3 PROMISSORY NOTE $40,000 Irvine, California October 8, 1997 For value received, the undersigned, Erwin A. Kelen, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, or order, on March 26, 2001, the sum of Forty Thousand Dollars ($40,000), together with interest on the principal balance from the date hereof at the annual rate of Six percent (6.0%), until said principal and interest have been paid in full. No part of this Note may be prepaid, either in whole or in part. Payment shall first be credited on interest and then on principal. The principal and interest are payable in lawful money of the United States of America. This Note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, as amended as of March 26, 1999, between the undersigned and Printronix, Inc. The undersigned has pledged shares of Printronix, Inc. stock as security for the repayment of this Note and Printronix, Inc.'s sole recourse in the event of breach of the undersigned's obligations under this Note is to such security. In the event action shall be instituted for the collection of any amounts due under this Note, the undersigned promises to pay such amounts as the court may fix as attorneys' fees. ERWIN A. KELEN ---------------------- Erwin W. Kelen Exhibit A -3- EX-10.18 17 RESTRICTED STOCK PURCHASE AGREE. W/ C. HALLIWELL 1 EXHIBIT 10.18 PRINTRONIX, INC. 1994 STOCK INCENTIVE PLAN RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made as of August 21, 1998 between PRINTRONIX, INC., a Delaware corporation (hereinafter referred to as the "Company") and Chris Whitney Halliwell (hereinafter referred to as "Participant"). 1. Purposes. This Agreement is entered into pursuant to the terms of the Printronix, Inc. 1994 Stock Incentive Plan to provide Participant with an additional interest in and incentive to serve the Company. Nothing contained in this Agreement, however, shall be construed as obligating either Participant or the Company to continue Participant's employment or other affiliation with the Company. 2. Sale of Shares. (a) Subject to the terms and conditions set forth in this Agreement, the Company hereby agrees to sell to Participant and Participant hereby agrees to purchase from the Company 4,000 shares of Common Stock, $.01 par value, of the Company (hereinafter collectively referred to as the "Shares" or singularly as a "Share") for a purchase price of $10.00 per Share, equal to an aggregate purchase price of $40,000. (b) As consideration for the Shares, Participant shall execute and deliver to the Company a promissory note in the principal amount of $40,000, payable as, and to the extent that, the Shares vest (as hereinafter defined), together with interest on the unpaid principal balance at the rate of 8.0% per annum. Participant may from time to time prepay all or any part of the balance due on the note without penalty. However, such prepayment shall not accelerate the vesting of any Shares. Participant shall be personally liable on the note, which shall be in the form set forth in Exhibit A hereto (the "Note"). -1- 2 3. Restrictions. Except as provided in this Paragraph 3 (as to the Company's right to repurchase the Shares) and in Paragraph 4 (as to the pledge of Shares to the Company), Participant agrees not to sell, assign, transfer, pledge, or hypothecate in any way any of the Shares until they have "vested" (as hereinafter defined) and have been paid for and until they are no longer subject to divestment. The Company shall initially have the right to repurchase all of the Shares. The right to repurchase shall lapse as to 50% of the Shares at the end of each fiscal year, commencing with 1999, in which both of the following occur: (I) sales for that fiscal year are at least 7% greater than for the immediately preceding fiscal year, and (ii) pre-tax earnings per share for that fiscal year are at least 15% greater than for the immediately preceding fiscal year. At the end of fiscal year 2001 or upon termination of employment or other affiliation, whichever occurs first, the Company shall repurchase all Shares as to which the right of repurchase has not lapsed. Because in the event of termination of employment or other affiliation, the Company's right to repurchase may again come into existence, as described below, none of the Shares can be sold prior to the end of the fiscal year 1999. Notwithstanding the foregoing, the Company shall repurchase all of the Shares at any time until the end of fiscal year 2001 if Participant voluntarily leaves the employ of or ceases affiliation with the Company, dies, or is terminated for cause. As the foregoing conditions have been satisfied as to any portion of the Shares, those Shares as to which the conditions have been satisfied and as to which the Company has no right to repurchase shall be deemed to be "vested." Repurchase by the Company shall be for a purchase price per Share equal to the price per Share paid by Participant, together with interest on the amount of said purchase price at a rate of 8.0% per annum from the date of purchase by Participant to the date of repurchase by the Company. -2- 3 At such time that Participant's interest in any of the Shares is vested and is not subject to divestment, then to that extent Participant shall repay the Note and upon such repayment shall receive a certificate or certificates representing such vested shares. If repayment has not been made within 90 days of vesting, then the Company may repurchase the Shares. 4. Pledge of Shares. Upon issuance and sale of the Shares to Participant, Participant shall deliver the certificate(s) representing the Shares to the Company, along with appropriate stock powers executed by Participant, to secure performance by Participant of his obligations under this Agreement. Participant agrees that in the event that any stock dividends, stock splits, reclassification, or other change is declared or made in the capital structure of the Company, all new, substituted and additional shares, or other securities, issued by reason of such change in respect to Shares that have not "vested" (as defined in Paragraph 3 hereof), shall be delivered forthwith to the Company and shall be held by the Company under the terms of this Agreement. The Company shall release from this pledge and deliver to Participant the certificate(s) representing any Shares that become "vested" as soon as reasonably practicable after they have become "vested", together with any additional shares or other securities under this pledge which may have been issued in respect to such "vested" Shares by reason of a change in the capital structure of the Company as provided above. 5. Rights Incident to Shares. Subject to the provisions of this Agreement, Participant shall retain the right to vote the Shares and all other rights incidental to the ownership of the Shares; provided, however, that any cash dividends paid in respect to Shares that have not "vested" shall be used by Participant to pay the balance due on the Note. 6. Participant hereby acknowledges that this transaction is subject to his reading and understanding the Summary of Certain Tax Consequences of Purchase of Restricted Stock attached hereto as Exhibit B. -3- 4 7. Participant understands and agrees that the certificate(s) evidencing the Shares shall bear a legend evidencing the restrictions set forth in this Agreement and such other legend or legends as the Company may deem to be necessary or appropriate. 8. This Agreement shall be binding upon the heirs, representatives, executors and successors of the parties hereto. 9. This Agreement shall be construed and governed by the laws of the state of California. Executed at Irvine, California, as of the date first above written. PRINTRONIX, INC. PARTICIPANT By: ROBERT A. KLEIST CHRIS WHITNEY HALLIWELL ---------------------- ---------------------- Robert A. Kleist, Chris Whitney Halliwell President -4- 5 PROMISSORY NOTE $40,000 Irvine, California August 21, 1998 For value received, the undersigned, Chris Whitney Halliwell, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, on order, the principal sum of Forty Thousand Dollars ($40,000) together with interest on the unpaid principal balance from the date hereof at the rate of Eight percent (8.0%) per annum, until said principal and interest have been paid in full. Each payment shall be credited first on interest then due and the remainder on principal, and interest shall thereupon cease upon the principal so credited. The principal and interest are payable in lawful money of the United States of America. This note may be prepaid in whole or at any time or in part from time to time without penalty. Should default be made in payment of any installment when due, the remaining principal balance and interest accrued shall become immediately due and payable at the option of the holder of this note. In the event action shall be instituted for the collection of any amounts due under this note, the undersigned promises to pay such sum as the court may fix as attorneys' fees. This note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of August 21, 1998, between the undersigned and Printronix, Inc. Repayment of this note shall be made in installments as the Shares vest as provided in that Agreement, the terms of which are incorporated herein by reference. This is a full recourse obligation. The undersigned understands that he is personally liable for the payments due under this Note. CHRIS WHITNEY HALLIWELL ------------------------------ Chris Whitney Halliwell Exhibit A -5- EX-10.18A 18 AMENDMENT STOCK PURCHASE AGREEMENT 1 EXHIBIT 10.18a PRINTRONIX, INC. AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made at Irvine, California as of March 26, 1999 between PRINTRONIX, INC., a Delaware corporation (the "Company") and Chris Whitney Halliwell(the "Stockholder"). RECITALS A. The Stockholder has acquired shares of the Company (the "Shares") pursuant to a sale of restricted stock (as that term is used in the Company's 1994 Stock Incentive Plan) under a restricted stock purchase agreement (the "Agreement"). B. Payment for the Shares was made by promissory note (the "Note") accompanied by a pledge of the Shares. C. The Company currently has the right to repurchase a portion of the Shares. D. The parties now desire to amend the Agreement. NOW, THEREFORE, the parties hereto amend the Agreement as follows: AGREEMENT 1. Notwithstanding anything in the Agreement to the contrary, the Company hereby relinquishes any right to repurchase any or all of the Shares and all such shares are now "vested" as that term is used in the Agreement. 2. The parties substitute the promissory note attached hereto as Exhibit A (the "New Note") in the place of the Note. The Stockholder acknowledges that the Shares will not be released from the pledge until the New Note has been paid. Therefore, by virtue of the inability to prepay the New Note, the Stockholder will be unable to sell the Shares for at least two years. 3. The Stockholder shall not voluntarily resign from his position with the Company for a period of two years from the date hereof. The Stockholder recognizes that, if he were to terminate the relationship with the Company at a time when the Company deemed that the continued relationship was in its best interests, that the Company would be damaged. 4. Nothing in this agreement alters the Company's right to terminate any employment or other relationship with the Stockholder at will, with or without cause. 5. Except as so amended, the Agreement remains in full force and effect. -1- 2 IN WITNESS WHEREOF, this agreement is entered into as of the date first-above written. THE COMPANY THE STOCKHOLDER PRINTRONIX, INC. By: ROBERT A. KLEIST CHRIS WHITNEY HALLIWELL ---------------------- ---------------------- Robert A. Kleist, Chris Whitney Halliwell President & CEO -2- 3 PROMISSORY NOTE $40,000 Irvine, California August 21, 1998 For value received, the undersigned, Chris Whitney Halliwell, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, or order, on March 26, 2001, the sum of Forty Thousand Dollars ($40,000), together with interest on the principal balance from the date hereof at the annual rate of Six percent (6.0%), until said principal and interest have been paid in full. No part of this Note may be prepaid, either in whole or in part. Payment shall first be credited on interest and then on principal. The principal and interest are payable in lawful money of the United States of America. This Note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of August 21, 1998, as amended as of March 26, 1999, between the undersigned and Printronix, Inc. The undersigned has pledged shares of Printronix, Inc. stock as security for the repayment of this Note and Printronix, Inc.'s sole recourse in the event of breach of the undersigned's obligations under this Note is to such security. In the event action shall be instituted for the collection of any amounts due under this Note, the undersigned promises to pay such amounts as the court may fix as attorneys' fees. CHRIS WHITNEY HALLIWELL ----------------------------- Chris Whitney Halliwell Exhibit A -3- EX-11 19 COMPUTATION OF NET INCOME PER SHARE/3 YRS 1 PRINTRONIX, INC. EXHIBIT 11 - COMPUTATION OF NET INCOME PER SHARE OF COMMON STOCK
Years Ended March, ----------------------------------------------- 1999 1998 1997 ----------- ----------- ----------- Net income $12,364,000 $15,064,000 $11,671,000 ----------- ----------- ----------- Weighted average number of common shares outstanding 7,030,683 7,884,024 7,913,010 Basic net income per common share $ 1.76 $ 1.91 $ 1.47 ----------- ----------- ----------- Effect of dilutive securities: Weighted average number of common shares outstanding 7,030,683 7,884,024 7,913,010 Stock options 212,106 345,255 396,738 ----------- ----------- ----------- 7,242,789 8,229,279 8,309,748 Diluted net income per common share $ 1.71 $ 1.83 $ 1.40 ----------- ----------- -----------
EXHIBIT 11 EX-13 20 ANNUAL REPORT TO STOCKHOLDERS 1 PRINTRONIX EXHIBIT 13 1999 ANNUAL REPORT [ARTWORK] The complete network printing solution 2 Highlights for Fiscal 1999 > Revenue increased 5.5% to $179.7 million; fourth quarter set record sales at $46.4 million, with a gross margin of 33.9% > Worldwide line matrix printer market share reached 57%* > New thermal printer introduced with network management capability > P5000 series line matrix and LaserLine(R) industrial strength printers enhanced with new models, additional Windows(R) drivers and languages, and network management > New distribution center opened in Memphis, TN to serve eastern U.S.; construction started for new headquarters/manufacturing/distribution complex in Irvine, CA COMPANY PROFILE Printronix, founded in 1974, is the leading supplier in the design, manufacture and marketing of line matrix, continuous form laser and thermal printers for business and industrial applications. With headquarters in Irvine, California, and major operations in Singapore, Holland and Memphis, Tennessee, the Company markets and distributes its products worldwide through original equipment manufacturers (OEMs), full-service distributors and value-added resellers (VARs). Printronix common stock is traded on Nasdaq under PTNX. GLOBAL REACH Printronix's global presence was strengthened during fiscal 1999 with a new distribution and printer configuration facility in Memphis, TN to help speed delivery of printers and supplies to customers in the eastern two-thirds of the United States. This complements operations in Holland, Singapore and Irvine, CA. With a new sales office in China, there are 13 sales offices worldwide, staffed with sales people and systems engineers. [GLOBAL MAP] Map for Manufacturing/Distribution and Sales Offices Internet: www.printronix.com *Source: Dataquest All brand names are trademarks or registered trademarks of their respective companies. 3 Twenty-five years ago, Printronix introduced the first heavy-duty line matrix printers with the added graphics capability to serve emerging bar code applications. This helped customers to print faster, better and at lower cost for an expanded range of printing solutions. > Over the years, Printronix has added industrial-strength laser printers and steadily upgraded both lines, adding hardware and software enhancements. > This year,Printronix introduced the first model of a full line of new thermal printers with network management, serving a growing market. > Printronix also rolled out a comprehensive network management capability across all product lines. This enables a complex enterprise to install varied Printronix printers throughout its operations, depending upon the functions required, and to manage the printers remotely through a worldwide network. > The result is a printing solution of great power and promise for today's enterprise computing networks, as well as the platform upon which Printronix can build to expand its printing solution offerings. 4 SELECTED FINANCIAL DATA $ IN THOUSANDS, EXCEPT SHARE DATA
NET SALES 95 147 96 159 97 173 98 170 99 180
NET INCOME 95 7.2 96 6.8 97 11.7 98 15.1 99 12.4
FULLY TAXED DILUTED NET INCOME PER SHARE 95 0.65 96 0.59 97 1.02 98 1.35 99 1.49
FISCAL YEARS ENDED MARCH,
1995 1996 1997 1998 1999 -------- -------- -------- -------- -------- RESULTS OF OPERATIONS Net sales $146,589 $159,261 $173,290 $170,391 $179,702 Net income 7,160 6,771 11,671 15,064 12,364 Diluted net income per share 0.90 0.82 1.40 1.83 1.71 Fully taxed diluted net income per share $ 0.65 $ 0.59 $ 1.02 $ 1.35 $ 1.49 SELECTED BALANCE SHEET DATA Cash, net of debt $ 8,088 $ 6,281 $ 12,766 $ 10,264 $ 11,911 Working capital 31,815 35,285 40,247 37,008 31,798 Total assets 61,675 69,130 80,653 88,864 88,866 Stockholders' equity per share $ 5.57 $ 6.40 $ 7.91 $ 9.05 $ 10.09
5 3 TO OUR STOCKHOLDERS [PHOTOGRAPH] > Fiscal 1999 - the Company's 25th year in business - showed a return to sales growth and a record year for sales as the result of an increased commitment to engineering, establishment of a separate marketing organization, and global expansion of our sales organization. The fourth quarter of fiscal 1999 showed record sales for that period with a gross margin of 33.9%. Net income for the fiscal year was lower than fiscal 1998 due to the increased engineering, sales, and marketing expense, as well as a higher effective income tax rate as net operating loss carryforwards were fully utilized during the year. > Overall, Printronix closed fiscal 1999 in a stronger product, market, and financial position than ever before in the Company's history. > A measure of the Company's strength is its financial position at fiscal 1999 year end. Printronix had no debt and $11.9 million in cash and cash equivalents vs. $10.3 million at the end of fiscal 1998. This was achieved even as the Company self-funded product development programs, facilities expansion at two locations, and the repurchase of common stock during the fiscal year. > Last year, we noted that "the challenge is to spur top-line growth from steady implementation of our global product and marketing strategy." That objective is being realized. Printronix continues to strengthen its product line, offering a "plug-and-play" printing solution with quick delivery to virtually anywhere in the world and with the ability to interact with any major computer system using different local languages. > Printronix's line matrix products continue to provide a solid business base as they are adapted for new printing solutions in developing enterprise computing networks. Network management capabilities have been expanded with PrintNet(TM) Plus, increased language capabilities, particularly for high-growth, emerging markets, and embedded printer drivers in popular enterprise application software packages. These printers 6 4 also delivered higher performance at a lower cost of ownership through the upgrading to 500/1000/1500 line-per-minute performance during the fiscal year, and with added network management capabilities. > These continuing enhancements support a stronger line matrix market share for Printronix, which grew to 57% worldwide in fiscal 1999. Opportunity for line matrix sales growth continues through Printronix global presence, particularly in emerging economies with growing demand for sophisticated printing solutions. Sales to the Americas accounted for 59% of total sales last year, 34% in Europe/Middle East/Africa and 7% in Asia/Pacific. [NEW THERMAL PRINTER PHOTO] > The most important product news today is our introduction of the first of a new line of thermal printer solutions, the ThermaLine(R) 4000. These new thermal bar code label printers, which serve a growing market of over $800 million per year, share the advanced systems capabilities of our line matrix printers. They are uniquely differentiated from competitors by the new Printronix network management capability, as well as online data validation (simultaneous printing and bar code verification) technology, enabled by the strategic acquisition of RJS in fiscal 1998. The current Printronix sales base, divided almost equally between distribution channels and OEM sales, should provide clear pathways to the thermal market. Continuous form laser printers round out the Printronix complete printing solution with applications compatible with line matrix and thermal printers. > Supporting all three Printronix printer technologies are two distinctive shared resources. PrintNet(TM) Plus, the network connectivity solution, enables network administrators to remotely access, monitor and manage distributed printers anywhere in the world using a standard web browser. PSA(TM)2, the new level of Printronix System Architecture, allows a user to share applications across all three of Printronix's technologies (line matrix, laser, thermal) to maximize investment in hardware and software. > Printronix's strong product line and continuous product enhancement is a clear reflection of the Company's position as the industry technology leader, with a commitment of 10.1% of sales to R&D during fiscal 1999. > To strengthen the ability to deliver products quickly around the world, Printronix engaged in two major facilities projects in fiscal 1999. We opened a facility in Memphis, Tennessee, with direct access to the Federal Express hub, for printer configuration/shipping and distribution of spares and supplies. It will cut delivery time in half for the eastern United States, advancing our "Order Today, Ship Tomorrow" program to a higher level of customer service and satisfaction. We also began construction of a new headquarters/ 7 5 engineering/U.S. manufacturing/distribution complex in Irvine, California, for occupancy in late calendar 1999. This will integrate operations that now utilize five separate facilities in the area, enhancing productivity as well as the process of developing and introducing new products. > In the fiscal 1997 report, we focused on the global reach of the Company as demonstrated by the new manufacturing and distribution facility in Singapore, serving the Asia/Pacific region. The following year's downturn in that region's economy has not stifled our interest. In the fourth quarter of fiscal 1999, aided by a new sales and support operation in China, sales rebounded in Asia/Pacific markets. We believe that future years will show growth for Printronix in the region as individual economies continue their inexorable march towards more sophisticated, industrialized status. > We took important initiatives in fiscal 1999 to expand the Company's prospects for sales growth and higher quality of earnings, and to enhance stockholder value through the repurchase of 1.3 million shares of common stock, bringing the total repurchased since 1997 to 2.1 million shares. [PRINTRONIX PRINTER MANAGER] > Printronix commands a clear global presence, with the ability to deliver products quickly and to support customers in each market area with efficient operations. The Company has strong cash flow that funds significant printing solutions advances and new business models. Given a continuing positive environment for business, Printronix is well-positioned for fiscal year 2000 opportunities and beyond. > The success of Printronix is due in part to the deliberate efforts of our employees and management team, reinforced by industry partners and affiliates, the confidence of customers, and the vision of our Board of Directors. Our clear focus on finding, keeping and growing users of Printronix printing solutions worldwide lies at the heart of this success. We intend to continue this winning strategy for the benefit of our stockholders. /s/ ROBERT A. KLEIST Robert A. Kleist President and Chief Executive Officer June 15, 1999 8 Operation Spread Printronix< The Enterprise Printing Solution: Multi-technology printers share common software and comprehensive network management capability < Line Matrix Printers The performance leader in impact printing, Printronix's P5000 series is the next-generation successor to the line matrix technology that we invented 25 years ago. These versatile printers are designed to operate in varied conditions ranging from harsh industrial environments to quiet offices and secure computer rooms, integrating seamlessly into computer systems from PC networks and client servers to mainframes. The choice for data reports and multi-part forms, P5000 series printers also deliver exceptional value in batch bar code label applications. < Thermal Printers Providing bar code printing solutions for demanding applications, the ThermaLine family offers top quality production of bar coded thermal labels on a wide variety of materials for both on-demand and batch label applications. Compatible with industry-leading software packages, these printers are well-suited to printing labels used in warehousing and distribution, as well as manufacturing work-in-process, inventory, and finished goods. < Laser Printers Printronix LaserLine printers combine the print quality and speed of the laser with the distinctive advantages of continuous forms. These rugged, high speed printers with the proprietary flash-fusing system - specially built for retail, distribution center and service bureau needs - excel in printing on a wide variety of stock, including plastic cards and synthetic materials for such applications as drum labels, automobile window stickers, sporting events tickets or retail hang tags. The Printronix Printer Manager: Providing command, control and communications throughout an enterprise computing network Modeled on the world wide web browser format, the Printronix Printer Manager provides instant and easy diagnostics, monitoring and control of every Printronix printer (line matrix, laser and thermal) across a wide enterprise network, effectively managing printer functions from local to worldwide. Caption 1 Data processing reports Multi-part forms Purchase orders SAP reports Labor reporting Caption 2 Customer correspondence Commission statements Forecast reports Mailing labels Caption 3 Inventory pick tickets Document tracking Scheduling reports SAP reports Caption 4 Product identification QA reports Work-in-process Caption 5 Invoicing/Checks Customer statements Financial reports Electronic forms Asset labels Caption 6 Bar code shipping labels Shipping & receiving reports Compliance labeling Packing aslips 9 6 PSA(TM)2 - Printronix System Architecture Our next-generation printer architecture provides hardware and software commonality across all three of our product lines to enable our line matrix, laser and thermal printers to work and interact seamlessly in the enterprise computing environment. Increasingly, Printronix customers are employing all three printing technologies for different needs throughout their enterprise computing networks. PSA(TM)2 also provides customers with the ability to upgrade their printers as new features are developed - an important consideration given the extended useful life of Printronix printers. [PRINTRONIX SYSTEM ARCHITECTURE PHOTO] 10 7 Management's Discussion and Analysis of Results of Operations and Financial Condition > GENERAL Founded in 1974, Printronix, Inc. is the leading industry supplier in the design, manufacture and marketing of a full range of line matrix, laser and thermal printers for business and industrial applications. Printronix printers are designed for use in high-volume applications and in environments that demand high levels of durability. The products are marketed worldwide through original equipment manufacturers (OEMs), full service distributors and value added resellers (VARs). Printronix is headquartered in Irvine, California, with operations in Singapore, Holland and Memphis, Tennessee. Printronix can be accessed on the Internet at www.printronix.com. Printronix common stock is traded over-the-counter under the NASDAQ symbol PTNX. Fiscal 1999 revenue grew 5.5% over the prior year as a result of the Company's commitment to continuous product development and market expansion. Enhanced line matrix print speed and quality, coupled with lower cost of ownership, resulted in increased sales and an increase in line matrix market share to 57% worldwide. The Company continued its commitment to build its presence in industrializing countries, including the Asia Pacific region where sales were up 8.3% over the prior year. Even as revenues increased, the Company increased its spending on engineering and sales and marketing as it implemented its global growth strategy. During the year, the Company fully utilized the net operating loss carryforwards it had enjoyed in the prior years. As a result, the effective tax rate increased to 20.0% compared to 5.0% in the prior year. As a result of its growth strategy and expiring net operating loss carryforwards, the increase in revenues was more than offset by higher operating expenses and income taxes. Income before taxes decreased 2.5% compared to the prior fiscal year. The Company's financial position remains strong with no outstanding debt and increased cash. > FORWARD-LOOKING STATEMENTS Certain statements contained in this report may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which provides a new "safe harbor" for these types of statements. Forward-looking statements are made based upon management's current expectations and beliefs concerning future developments and their potential effects upon the Company. These forward-looking statements are subject to certain risks and uncertainties which could cause actual results to differ materially from historical results or those anticipated. Terms such as "objectives," "believes," "expects," "plans," "intends," "estimates," "anticipates," and variations of such words and similar expressions are intended to identify such forward-looking statements. Among these risks and uncertainties is the impact of the Year 2000, and political and economic uncertainties in emerging growth markets throughout the world. > RESULTS OF OPERATIONS NET SALES Fiscal 1999 revenue of $179.7 million increased $9.3 million, or 5.5%, compared to fiscal 1998. The increase was due to higher sales to the Company's largest OEM customer, primarily in Europe, strong distribution sales in the Americas and Asia Pacific, and sales by the Company's subsidiary, RJS, which was acquired in January 1998. Sales to Europe, Middle East and Africa ("EMEA") increased $3.6 million, or 6.2%, to $61.5 million compared to fiscal 1998. Sales to the Americas increased 4.7% to $105.2 million compared to last year. Americas distribution sales increased 13.5% to $55.7 million due to channel expansion. Americas OEM sales decreased 3.8% to $49.5 million. Americas OEM sales were impacted by acquisition-related activity and internal reorganization by some of our OEM customers. Increased sales to the Company's largest OEM customer were more than offset by lower sales to the Company's smaller OEM customers. Sales to Asia Pacific increased 8.3% to $13.0 million compared to $12.0 million a year ago. Despite generally slow conditions in this region as a whole, sales to China and India increased 87.9% and 25.5%, respectively, compared to the prior year. Sales by channel were 46% OEM and 54% distribution compared to 49% OEM and 51% distribution in the prior year. North American sales were $100.2 million, or 55.8% of total sales, compared to $96.2 million, or 56.4%, in fiscal 1998. Revenue growth by product for fiscal 1999 was primarily attributable to increased Printronix P5000 series line matrix sales and sales by RJS. Line matrix sales were $150.1 million, an increase of 4.4%, or $6.3 million, compared to last year. Thermal sales were $4.5 million, an increase of 13.2% over last year, 11 8 and laser sales were $22.2 million, an increase of 1.1% compared to last year. Sales by RJS were $2.9 million compared to $0.7 million last year. A distribution and printer configuration facility was opened in Memphis, Tennessee, during the fourth quarter to provide faster delivery and support to the Eastern two-thirds of the United States. Like other Printronix plants, it can configure a printer to order and ship it within 24 hours, and its location saves an average of 2 1/2 days shipping time for that region compared to previous shipments from Irvine, California. The Memphis plant began shipping spares and consumables from this location during the fourth quarter; however, the shipment of printers did not begin until the first quarter of fiscal 2000. Fiscal 1998 revenue of $170.4 million decreased $2.9 million, or 1.7%, compared to fiscal 1997. The decrease resulted from lower sales to certain OEM customers in the Americas and Europe, lower sales of laser products due to increased competition in Europe, partially offset by increased sales in China and India in the Asia Pacific Region. Sales to the Americas decreased $1.3 million, and sales to EMEA decreased $2.9 million compared to fiscal 1997. The decrease in these regions was partially offset by an increase in sales to Asia Pacific of $1.3 million, or a 12.1% increase, compared to fiscal 1997. GROSS PROFIT Gross profit as a percentage of sales was 32.8% in 1999 compared to 31.7% and 26.5% in fiscal 1998 and 1997, respectively. The increase in gross profit percentage in 1999 and 1998 resulted from higher volumes, manufacturing efficiencies and cost reductions on the P5000 series line matrix and thermal printers. Margins in 1997 were unfavorably impacted by the manufacturing phase down of the previous generations mature line matrix printers for which production ended in mid fiscal 1997. OPERATING EXPENSES Operating expenses consist of engineering and development, sales and marketing, and general and administrative costs. Over the past three years, these expenses have increased due to the Company's commitment to product development of the P5000 series line matrix, ThermaLine and LaserLine industrial strength printers. Operating expenses for fiscal 1999 were $44.4 million compared to $39.8 million and $34.2 million for fiscal 1998 and 1997, respectively. In fiscal 1999, the Company spent $18.1 million on engineering and development, compared to $15.6 million (excluding a one-time acquisition related charge of $0.9 million) for fiscal 1998 and $14.3 million for fiscal 1997. As a percentage of sales, engineering and development expenses increased to 10.1% from 9.2% for fiscal 1998 and 8.3% for fiscal 1997. Significant engineering expenditures were made to develop and bring new products to market, including higher speed line matrix models, a new thermal printer, Windows and SAP(tm) drivers and network management capability. Sales and marketing expenses increased to $16.7 million for fiscal 1999, compared to $15.2 million for fiscal 1998 and $13.0 million for fiscal 1997. As a percentage of sales, sales and marketing expenses increased to 9.3% from 8.9% and 7.5% for fiscal 1998 and 1997, respectively. Sales expenses increased largely due to expansion of distribution channels and increased customer support. During fiscal 1999, the Company established a separate marketing organization to increase its marketing capabilities and develop worldwide marketing programs to enable sales growth of existing products as well as those under development. General and administrative spending increased to $9.6 million for fiscal 1999, compared to $8.0 million and $6.9 million for fiscal 1998 and 1997, respectively. As a percentage of sales, general and administrative expenses increased to 5.3% from 4.7% and 4.0% for fiscal 1998 and 1997, respectively. General and administrative expenses increased primarily due to the acquisition of RJS, including goodwill amortization, and higher administrative labor costs. OTHER INCOME AND EXPENSES Foreign currency remeasurement gains were $0.1 million in fiscal 1999 compared with gains of $0.7 million in fiscal 1998 and losses of less than $0.1 million in fiscal 1997. Foreign currency remeasurement gains in fiscal 1999 were mostly due to strengthening of the US dollar against the Singapore dollar. Interest and other income, net, decreased $0.2 million in fiscal 1999 compared to fiscal 1998 due to lower average cash balances during the year. Interest and other income, net, increased $0.5 million in fiscal 1998 compared to fiscal 1997 due to increased interest income resulting from higher average cash balances and decreased interest expense. 12 9 INCOME TAXES For Federal income tax purposes, the Company has had net operating loss carryforwards and has been paying minimal income taxes. These carryforwards were fully utilized during fiscal 1999. For California income tax purposes, the net operating loss carryforwards were fully utilized in fiscal 1997. The provision for taxes also includes certain state and foreign income taxes. The effective tax rate was 20.0%, 5.0% and 3.9% for fiscal 1999, 1998 and 1997, respectively. The Company expects its effective fully taxed rate to be 33% for fiscal 2000. > LIQUIDITY AND CAPITAL RESOURCES During fiscal 1999, the Company generated $29.7 million in operating funds. The major uses of funds were the repurchase of Printronix common stock totaling $18.4 million, and capital expenditures of $11.0 million. Capital expenditures related to machinery and equipment totaled $6.8 million and $4.2 million for buildings and improvements, including construction of the new facility in Irvine. Cash and equivalents were $11.9 million at the end of fiscal 1999, compared with $10.3 million at the end of fiscal 1998. Fiscal 1999 year-end inventory was lower than fiscal 1998 due to ongoing improvements in the just in time inventory system. The Company's increased manufacturing efficiencies have reduced the time from order to shipment from eighteen days in 1996 to only 24 hours in 1999. This reduction in lead time has enabled the Company to maintain lower inventory levels and increase inventory turns. On February 22, 1999, the Company entered into a new unsecured line of credit for $22.5 million. This line of credit replaces the previous line of credit of $7.5 million. The increase in the line of credit is intended to supplement the cash flow requirements to construct the new building in Irvine (see Note 3). Unsecured lines of credit at March 26, 1999, totaled $25.1 million, of which $23.3 million was available for borrowing (see Note 4). At the end of fiscal 1999, the Company continues to reserve $0.2 million for an environmental issue associated with the closing down of the Company's Irvine hammerbank factory in fiscal 1994 (see Note 9). The Company believes that its internally-generated funds, together with available bank credit agreements, will adequately provide for working capital requirements, capital expenditures and engineering and development needs through fiscal 2000. > YEAR 2000 This Year 2000 Readiness Disclosure Statement is made in accordance with the "Year 2000 Information and Readiness Disclosure Act" of the United States of America. The Company's products are inherently Year 2000 compliant. No Printronix printer or Printronix printer application software performs relative date calculations using internal clocks. Such clocks are not necessary for the printer to operate because the printer is only concerned with converting host data into printed images. Therefore, all Printronix products are Year 2000 compliant. The Company is the majority shareholder of RJS Systems International ("RJS"), a manufacturer of bar code scanning and print quality verification devices. RJS reports that none of its products performs date calculations or contains a clock. However, one product, Autoscan II, is shipped together with a personal computer manufactured by a third party. The computer operates under the DOS operating system. Accordingly, at the turn of the century, the date on the computer will revert to 1980. This has no effect on the operation of the Autoscan II product, other than to indicate the wrong date on printouts of scanning results. The problem is easily corrected by entering the correct date using the DOS "Date" command. The Company has completed an assessment of the impact of the Year 2000 on its information systems and hardware. The assessment phases of the Company's information system and hardware included the identification of the systems or processes to be reviewed, evaluation of current systems or processes, risk assessment and development of contingency plans. The scope of the assessment addressed the information technology systems, such as the accounting and financial reporting systems, mainframe computers, personal computers and the distributed network, and also addressed the non-information technology systems, such as facilities, plant equipment, lab and test equipment, distribution systems, security systems, communication systems, key services provided by third parties, and key suppliers and customers. The Company has partially completed an assessment of the impact on its significant business partners and expects to finish the assessment by mid calendar year 1999. The assessment includes inquiries of key suppliers and customers related 13 10 to their own Year 2000 issues. The Company's objective is to be fully Year 2000 compliant for all business critical systems by late summer 1999 and to develop contingency plans in the event it fails to complete its Year 2000 projects. To date, the Company has not had to accelerate the replacement of systems due to Year 2000 issues. The Company's business critical operating system, accounting and financial reporting systems, including manufacturing and sales, were converted to a certified Year 2000 compliant enterprise wide software package in August 1997, with the exception of the customer service and fixed asset systems. The fixed assets system was converted in April 1999, and the customer service system is expected to be compliant by fall 1999. The Company is planning to move the Irvine operations from the current buildings to a new facility in October 1999. All building systems are being selected to be Year 2000 compliant. These systems include elevator, security, HVAC, utilities, lighting, fire control and parking. The Company has determined the telephone communications system is not fully Year 2000 compliant; however, the cost to upgrade to full compliance is immaterial. A detailed plan to become Year 2000 system compliant by fall 1999 is in effect and the project is on schedule. Based upon its assessment and the suppliers' and customers' representations, the Company believes the systems of its key suppliers and customers are either Year 2000 compliant or will be made so by late summer calendar year 1999. The Company believes the most significant Year 2000 compliance risk is that the key customers, suppliers and third party service providers may fail to complete their remediation efforts in a timely manner, particularly in areas outside the United States where less attention is given to Year 2000 compliance. Any significant disruption of business with key customers, suppliers and third party service providers could have a material adverse impact on the Company's revenues, income, cash flows or financial condition. Contingency plans addressing these issues are expected to be complete by fall 1999. In fiscal 1999 and 1998, the cost of Year 2000 assessment efforts and remediation projects was not material and was funded from current operations. Future expenditures are not expected to be material and will be funded from operations. > MARKET RISK The United States dollar is the functional currency for all of the Company's foreign subsidiaries. For these subsidiaries, the assets and liabilities have been remeasured at the end of the period exchange rates, except inventories and property and equipment which have been remeasured at historical rates. The statements of operations have been remeasured at average rates of exchange for the period, except cost of sales and depreciation which have been remeasured at historical rates. The Company's Singapore operation may be impacted by foreign currency fluctuations. The Company is not aware of any significant risks with respect to its foreign business other than those inherent in the competitive nature of the business and fluctuations in foreign currency exchange rates. The impact of foreign currency fluctuations has not been material to the Company. > SUPPLEMENTAL INFORMATION Fiscal years 1999, 1998 and 1997 utilized a fifty-two week period. For fiscal 1999, the Company was required to adopt Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income." The adoption of this pronouncement did not have a material impact on the Company's presentation of financial position or results of operations. For fiscal 1999, the Company was required to adopt SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." The adoption of this pronouncement did not have a material impact on the Company's disclosures. For fiscal 2001, the Company will be required to adopt SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." The adoption of this pronouncement is not expected to have a material impact on the Company's presentation of financial position or results of operations. The Company believes that the effects of inflation on its operations and financial condition are minimal. 14 11 CONSOLIDATED BALANCE SHEETS
$ in thousands, except share data AS OF MARCH 26, 1999 AND MARCH 27, 1998 1999 1998 - --------------------------------------------------------------------------------------------- ASSETS Current assets Cash and cash equivalents $ 11,911 $ 10,264 Accounts receivable, net of allowance for doubtful accounts of $2,302 in 1999 and $1,920 in 1998 23,954 26,739 Inventories Raw materials, subassemblies and work in process 13,416 15,782 Finished goods 2,037 1,826 -------- -------- 15,453 17,608 Prepaid expenses 1,044 1,015 -------- -------- Total current assets 52,362 55,626 -------- -------- Property and equipment, at cost Machinery and equipment 25,320 32,740 Furniture and fixtures 19,529 18,435 Land 8,100 8,100 Buildings 11,266 7,046 Leasehold improvements 1,819 2,104 -------- -------- 66,034 68,425 Less: Accumulated depreciation and amortization (31,798) (37,159) -------- -------- 34,236 31,266 Intangible assets, net 908 1,166 Other assets 1,360 806 -------- -------- Total Assets $ 88,866 $ 88,864 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 12,209 $ 9,988 Accrued expenses Payroll and employee benefits 4,531 4,590 Warranty 2,001 1,681 Other 1,512 1,385 Income taxes 97 760 Environmental 214 214 -------- -------- Total current liabilities 20,564 18,618 -------- -------- Other long-term liabilities 1,568 794 Minority interest in subsidiary 283 215 Commitments and contingencies (see Note 9) Stockholders' equity Common stock, $0.01 par value (Authorized 30,000,000 shares; issued and outstanding 6,583,366 shares in 1999 and 7,649,901 shares in 1998) 66 77 Additional paid-in capital 28,338 30,054 Retained earnings 38,047 39,106 -------- -------- Total stockholders' equity 66,451 69,237 -------- -------- Total Liabilities and Stockholders' Equity $ 88,866 $ 88,864 ======== ========
The accompanying notes are an integral part of these consolidated financial statements. 15 12 CONSOLIDATED STATEMENTS OF INCOME
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED MARCH 1999 $ in thousands, except share data - ---------------------------------------------------------------------------------------------------------------- MARCH 26, 1999 % MARCH 27, 1998 % MARCH 28, 1997 % -------------- ---- -------------- ---- -------------- ----- Net sales $179,702 $170,391 $173,290 Cost of sales 120,802 116,461 127,347 ----------------------- --------------------- ----------------------- Gross profit 58,900 32.8% 53,930 31.7% 45,943 26.5% ----------------------- --------------------- ----------------------- Operating Expenses Engineering and development 18,092 10.1% 15,621 9.2% 14,324 8.3% In-process engineering charge -- 0.0% 942 0.6% -- 0.0% Sales and marketing 16,736 9.3% 15,191 8.9% 13,022 7.5% General and administrative 9,584 5.3% 8,032 4.7% 6,898 4.0% ----------------------- --------------------- ----------------------- 44,412 24.7% 39,786 23.4% 34,244 19.8% ----------------------- --------------------- ----------------------- Income from operations 14,488 8.1% 14,144 8.3% 11,699 6.8% Foreign currency remeasurement gain/(loss) 146 732 (35) Interest and other income, net 726 926 476 Gain on issuance of subsidiary stock 53 -- -- ----------------------- --------------------- ----------------------- Income before minority interest and taxes 15,413 8.6% 15,802 9.3% 12,140 7.0% Minority interest in loss of subsidiary (29) (48) -- Provision for income taxes 3,078 786 469 ----------------------- --------------------- ----------------------- Net income $ 12,364 6.9% $ 15,064 8.8% $ 11,671 6.7% ======================= ===================== ======================= Net income per share Basic $ 1.76 $ 1.91 $ 1.47 Diluted $ 1.71 $ 1.83 $ 1.40 Number of common shares used in the computation of net income per share Basic 7,030,683 7,884,024 7,913,010 Diluted 7,242,789 8,229,279 8,309,748
The accompanying notes are an integral part of these consolidated financial statements. 16 13 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED MARCH 1999 $ in thousands, except share data - ------------------------------------------------------------------------------------------------------ COMMON STOCK ----------------------------- ADDITIONAL RETAINED NUMBER OF SHARES AMOUNT PAID-IN CAPITAL EARNINGS ---------------- ---------- --------------- ---------- BALANCE, MARCH 29, 1996 7,823,366 $ 78 $ 29,125 $ 20,870 Exercise of stock options 209,019 2 532 -- Compensation expense for restricted stock -- -- 1,147 -- Purchase price of vested portion of restricted stock -- -- 83 -- Redemption and retirement of shares of fractional common shares (82) -- -- -- Net income -- -- -- 11,671 --------- ---------- ---------- ---------- BALANCE, MARCH 28, 1997 8,032,303 80 30,887 32,541 Exercise of stock options 358,998 4 812 -- Compensation expense for restricted stock -- -- 1,257 -- Repurchase and retirement of shares of common stock (741,400) (7) (2,902) (8,499) Net income -- -- -- 15,064 --------- ---------- ---------- ---------- BALANCE, MARCH 27, 1998 7,649,901 77 30,054 39,106 Exercise of stock options 199,465 2 862 -- Compensation expense for restricted stock -- -- 333 -- Repurchase and retirement of shares of common stock (1,266,000) (13) (4,996) (13,423) Utilization of NOLs related to non-qualified stock options -- -- 2,085 -- Net income -- -- -- 12,364 --------- ---------- ---------- ---------- BALANCE, MARCH 26, 1999 6,583,366 $ 66 $ 28,338 $ 38,047 ========= ========== ========== ==========
The accompanying notes are an integral part of these consolidated financial statements. 17 14 Consolidated STATEMENTS OF CASH FLOWS
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED MARCH 1999 $ in thousands - ------------------------------------------------------------------------------------------------------ March 26, 1999 March 27, 1998 March 28, 1997 -------------- -------------- -------------- Cash flows from operating activities: Net income $ 12,364 $ 15,064 $ 11,671 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 7,592 7,533 7,091 Compensation expense for restricted stock 333 1,257 1,147 In-process engineering charge -- 942 -- Loss on sale of property and equipment 282 222 52 Gain on issuance of subsidiary stock (53) -- -- Minority interest in loss of subsidiary (29) (48) -- Changes in assets and liabilities: Accounts receivable 2,785 (3,045) 490 Inventories 2,155 3,079 2,682 Other long-term assets (152) (353) (202) Accounts payable 2,221 1,146 (3,225) Accrued warranty expenses 320 100 400 Accrued income taxes 1,868 119 312 Other long-term liabilities (74) 14 (97) Other current assets and liabilities, net 39 268 864 -------- -------- -------- Net cash provided by operating activities 29,651 26,298 21,185 -------- -------- -------- Cash flows from investing activities: Purchase of machinery, equipment, furniture and fixtures (6,786) (6,904) (9,024) Purchase of land -- (8,100) -- Purchase and construction of buildings and leasehold improvements (4,233) (498) (6,769) Acquisition of RJS -- (2,900) -- Proceeds from disposition of property and equipment 416 194 476 -------- -------- -------- Net cash used in investing activities (10,603) (18,208) (15,317) -------- -------- -------- Cash flows from financing activities: Payments against debt borrowing -- -- (5,205) Proceeds from term loan -- -- 5,000 Proceeds from issuance of subsidiary stock 167 -- -- Proceeds from exercise of stock options 864 816 617 Repurchase and retirement of shares of common stock (18,432) (11,408) -- -------- -------- -------- Net cash (used in) provided by financing activities (17,401) (10,592) 412 -------- -------- -------- Increase (decrease) in cash and cash equivalents 1,647 (2,502) 6,280 Cash and cash equivalents at beginning of year 10,264 12,766 6,486 -------- -------- -------- Cash and cash equivalents at end of year $ 11,911 $ 10,264 $ 12,766 ======== ======== ======== Supplemental disclosures of cash flow information: Interest paid $ 99 $ 80 $ 244 Taxes paid $ 1,637 $ 956 $ 119
The accompanying notes are an integral part of these consolidated financial statements. 18 15 Notes TO CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 26, 1999 AND MARCH 27, 1998 AND FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED MARCH 26,1999 NOTE 1 > SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES GENERAL Printronix, Inc. ("the Company") was incorporated in California in 1974 and was reincorporated in Delaware in December 1986. The Company designs, manufactures and markets medium and high speed printers which support a wide range of computer systems and software platforms. Printronix printers produce "hard copy" through the application of line matrix, laser and thermal technologies. The Company's product line is designed primarily for business and industrial applications, quickly and reliably producing every type of printed computer output, from reports and labels to bar codes. The Company also produces and markets Intelligent Graphics Printing (IGP(TM)), which resides in the printer, enabling it to produce bar codes, forms and logos, PrintNet(TM) Plus, and bar code verifiers through it's RJS subsidiary. BASIS OF CONSOLIDATION The consolidated financial statements include the accounts of the Company and its wholly and majority-owned subsidiaries. All intercompany accounts and transactions have been eliminated. ACCOUNTING PERIOD The Company utilizes a fifty-two, fifty-three week fiscal year ending on the last Friday of March. The Company is reporting a fifty-two week fiscal year for all periods presented. CASH EQUIVALENTS For cash flow reporting purposes, the Company considers all highly liquid temporary cash investments with original maturities of three months or less at the time of purchase to be cash equivalents. The effect of exchange rate changes on cash balances held in foreign currencies was not material for the periods presented. INVENTORIES Inventories, which include material, labor and overhead costs, are valued at the lower of cost (first-in, first-out method) or market. PROPERTY AND EQUIPMENT Depreciation and amortization of property and equipment are provided using the straight-line method over the following estimated useful lives: Machinery and equipment 3 to 5 years Furniture and fixtures 3 to 7 years Buildings 30 years Leasehold improvements Lesser of useful life or term of lease
Maintenance, repairs and minor renewals are charged directly to expense as incurred. Additions and betterments to property and equipment are capitalized at cost. When assets are disposed of, the applicable costs and accumulated depreciation and amortization thereon are removed from the accounts and any resulting gain or loss is included in operations. Depreciation and amortization expense was $7.3 million, $7.5 million and $7.1 million for the fiscal years ended 1999, 1998 and 1997, respectively. INTANGIBLE ASSETS The Company recorded certain intangible assets of $1.2 million resulting from the purchase of RJS in fiscal 1998. The intangible assets are being amortized over a period of five years using the straight-line basis. Amortization expense of $0.2 million and less than $0.1 million was charged to operations in fiscal 1999 and 1998, respectively. LONG-TERM ASSETS The carrying value of long-term assets is periodically reviewed by management, and impairment losses, if any, are recognized when the expected non-discounted future operating cash flows derived from such assets are less than their carrying value. SALES RECOGNITION Sales are recorded as of the date shipments are made to customers. The Company's products are sold 19 16 primarily to computer system companies, system integrators, VARs and distributors in the computer and bar code industry and, accordingly, the majority of the Company's accounts receivable are concentrated among such customers. Sales returns and allowances are reflected as a reduction in sales and reflected in inventory at cost or expected net realizable value, whichever is lower. The Company has not experienced sales returns of a material amount. Products that are defective upon arrival are handled under the Company's warranty policy. INCOME ON MAINTENANCE CONTRACTS The Company generates income on extended maintenance contracts through the sale of the service obligation to a third party provider. The third party provider is responsible for the performance of all on-site maintenance services for the contract period. The income on such contracts is recognized fully in the period the contract is sold to the third party provider as the Company assumes no further material obligation after the date of sale. Income generated from maintenance contracts was not material in any fiscal year presented. WARRANTY COSTS The Company's financial statements reflect accruals for potential warranty claims based on the Company's claim experience. ENGINEERING AND DEVELOPMENT Company-funded engineering and development costs are expensed as incurred. A substantial portion of the engineering and development expense is related to developing new products and making significant improvements to existing products or processes. Expenses were also affected by a rapid increase in salary structure due to an industry shortage of engineers and computer scientists. ADVERTISING The Company expenses advertising costs including promotional literature, brochures and trade shows as incurred. Advertising expense was $1.9 million, $2.1 million and $1.3 million for the years 1999, 1998 and 1997, respectively. FOREIGN CURRENCY REMEASUREMENT AND TRANSLATION The United States dollar is the functional currency for all of the Company's foreign subsidiaries. For these subsidiaries, the assets and liabilities have been remeasured at the end of the period exchange rates, except inventories and property and equipment which have been remeasured at historical rates. The statements of operations have been remeasured at average rates of exchange for the period, except cost of sales and depreciation which have been remeasured at historical rates. INCOME TAXES The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes". SFAS No. 109 requires the use of the asset and liability method for financial accounting and reporting for income taxes, and further prescribes that current and deferred tax balances be determined based on the difference between the financial statement and tax basis of assets and liabilities using tax rates in effect for the year in which the differences are expected to reverse. NET INCOME PER COMMON SHARE During the year ended March 27, 1998, the Company adopted SFAS No. 128, "Earnings per Share". In accordance with SFAS No. 128, basic net income per common share is computed using the weighted average number of shares of common stock outstanding and diluted net income per common share is computed using the weighted average number of shares of common stock outstanding and potential shares outstanding, if dilutive. Net income per share amounts for all periods presented have been restated to conform with SFAS No. 128 requirements.
$ in thousands, except share data - ---------------------------------------------------------------------------------------------------------------- March 26, 1999 March 27, 1998 March 28, 1997 -------------- -------------- -------------- Numerator: Net income $ 12,364 $ 15,064 $ 11,671 Denominator for basic net income per share 7,030,683 7,884,024 7,913,010 Basic net income per share $ 1.76 $ 1.91 $ 1.47 Effect of dilutive securities: Weighted average shares outstanding 7,030,683 7,884,024 7,913,010 Stock options 212,106 345,255 396,738 ---------- ---------- ---------- Denominator for diluted net income per share 7,242,789 8,229,279 8,309,748 Diluted net income per share $ 1.71 $ 1.83 $ 1.40
20 17 CAPITAL STOCK In June 1996, the Company completed a stock split effected in the form of a fifty percent stock dividend. Retroactive effect has been given to the stock split in all share, price and per share data presented. ACCOUNTING FOR STOCK-BASED COMPENSATION The Company accounts for stock-based compensation issued to employees using the intrinsic value based method as prescribed by the Accounting Principles Board Opinion (APB) No. 25, "Accounting for Stock Issued to Employees." Under the intrinsic value based method, compensation is the excess, if any, of the fair market value of the stock at the grant date or other measurement date over the amount an employee must pay to acquire the stock. Compensation expense, if any, is recognized over the applicable service period, which is usually the vesting period. (See Note 6.) NEW PRONOUNCEMENTS For fiscal 1999, the Company was required to adopt SFAS No. 130, "Reporting Comprehensive Income." The adoption of this pronouncement did not have a material impact on the Company's presentation of financial position or results of operations. For fiscal 1999, the Company was required to adopt SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." The adoption of this pronouncement did not have a material impact on the Company's disclosures. For fiscal 2001, the Company will be required to adopt SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." The adoption of this pronouncement is not expected to have a material impact on the Company's presentation of financial position or results of operations. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. RECLASSIFICATIONS Certain amounts for previous fiscal years have been reclassified to conform with the fiscal 1999 presentation. NOTE 2 > ACQUISITION In January 1998, the Company, through a 91.5% majority-owned subsidiary, acquired the assets, rights to the bar code verification business and the RJS name, and assumed certain liabilities from Eltron by a cash payment of $2.9 million in a business combination accounted for as a purchase. RJS is primarily engaged in bar code verification products. The results of operations of RJS are included in the consolidated financial statements since the date of acquisition. The fair value of assets acquired exceeded the purchase price by $0.9 million based upon appraised values and the excess has been allocated to reduce the value of noncurrent assets acquired. The acquisition also resulted in a $1.2 million intangible asset (See Note 1). Fiscal 1998 results included a one-time charge for in-process engineering expenses of $0.9 million before tax benefit, or $0.6 million after tax. During fiscal 1999, the ownership interest in RJS was reduced to 84.4%, which resulted from the issuance of additional shares of subsidiary stock. NOTE 3 > LAND PURCHASE During the fourth quarter of fiscal 1998, the Company purchased land in Irvine, California, for $8.1 million. The Company plans to consolidate into one complex the corporate headquarters, research and development and manufacturing operations now housed in five buildings in the area. Construction of the building began in the fall of 1998 with an expected move date during the fall of 1999. NOTE 4 > BANK BORROWING AND DEBT ARRANGEMENTS At March 27, 1998, the Company maintained an unsecured line of credit of $7.5 million with a United States bank. The line of credit agreement generally provided for interest at the prime rate or LIBOR plus 2.0%, contained certain standard financial and non-financial covenants, provided for an annual commitment fee of 0.5% of the unused portion of the line, and was renewable in August of 1998. This line of credit remained 21 18 in place until February 22, 1999 when the Company entered into a new line of credit agreement for $22.5 million with the same bank. The line of credit agreement generally provides for interest at the prime rate or LIBOR plus 1.375%, contains certain standard financial and non-financial covenants, provides for an annual commitment fee of 0.375% of the unused portion of the line, and is renewable in September of 2002. At the end of fiscal years 1999 and 1998, there were no cash borrowings against this line of credit. At March 26, 1999, one of the Company's foreign subsidiaries maintained unsecured lines of credit with foreign banks of $2.6 million which include a standby Letter of Credit of $1.8 million. These credit facilities are subject to parent guarantees, require payment of certain loan fees, and provide for interest at approximately 0.75% to 1.0% above the bank's cost of raising capital. At the end of fiscal years 1999 and 1998, there were no cash borrowings against these lines of credit. NOTE 5 > 401(K) SAVINGS, PROFIT-SHARING AND BONUS PLANS Effective January 1, 1985, the Company adopted a 401 (k) Savings and Investment Plan (the "401(k) Plan"), for all eligible employees, which is designed to be tax deferred in accordance with the provisions of Section 401(k) of the Internal Revenue Code. All United States employees (including officers, but not outside directors) may contribute from 1% to 17% of compensation per week (subject to certain limitations) on a tax-free basis through a "salary reduction" arrangement. The Company matches employee contributions up to a maximum of 3% of salary or $2,000 per year, whichever is less. Employee contributions are always 100% vested. All Company contributions become fully vested after four full years of employment. Company contributions to the 401(k) Plan were $0.5 million for fiscal years 1999 and 1998, and $0.4 million for fiscal year 1997. The Company also maintains a discretionary worldwide profit-sharing plan for qualified employees. Employees who have been with the Company for 90 days of continuous service are eligible to participate in the profit-sharing plan. The Company allocates a percentage of pre-tax profits to a profit-sharing pool which is then distributed to employees pro rata based on quarterly salary. In addition, certain executives are eligible to participate in a bonus plan which is contingent upon achieving specific operating performance targets established by the Board of Directors. Company contributions to these plans were $3.0 million for fiscal years 1999 and 1998, and $3.1 million for fiscal year 1997. NOTE 6 > STOCK INCENTIVE PLAN AND COMMON SHARE PURCHASE RIGHTS (A) STOCK INCENTIVE PLAN The Company has one stock incentive plan under which options may be granted to purchase shares of its common stock. A total of 1,525,000 shares are authorized for issuance under this plan. An additional plan which expired April 30, 1994, has options outstanding, but no further options may be granted under this plan. Options under the current plan are generally granted at prices not less than the fair market value of the common stock on the date of grant and can become exercisable in installments at dates ranging from one to ten years from the date of grant, as determined by the Stock Option Committee of the Board of Directors. Generally, outstanding options become exercisable at the rate of 25% per year, and expire five years from the date of grant. The following is a summary of the transactions, including restricted stock, as discussed below, relating to the plans for fiscal years ended 1999, 1998 and 1997.
1999 1998 1997 - -------------------------------------------------------------------------------------------------------------------------------- Weighted Weighted Weighted Average Average Average Common Stock Options and Exercise Exercise Exercise Restricted Stock Purchases Shares Price Shares Price Shares Price ------- ----------- ------- ----------- ------- ----------- Beginning, outstanding 883,046 $ 10.35 782,437 $ 9.04 963,332 $ 7.34 Granted 306,625 11.44 485,525 11.41 69,575 13.55 Exercised (199,465) 5.42 (358,998) 8.84 (209,019) 2.55 Canceled (16,801) 12.79 (25,918) 11.48 (41,451) 10.38 ----------------------- ----------------------- --------------------------- Ending, outstanding 973,405 $ 11.66 883,046 $ 10.35 782,437 $ 9.04 ----------------------- ----------------------- --------------------------- Options exercisable 413,549 377,200 294,837 ----------------------- ----------------------- --------------------------- Weighted average fair value of options granted $ 4.62 $ 8.15 $ 6.16
22 19 As of March 26, 1999, options to acquire 82,824 shares remained available to grant. A detail of options outstanding and exercisable as of March 26, 1999, is presented below:
Options Outstanding Options Exercisable ----------------------------------------------------------------------- ----------------------------- Weighted Average Weighted Weighted Remaining Average Average Range of Number Contractual Exercise Number Exercise Exercise Prices Outstanding Life in Years Price Exercisable Price --------------- ----------- ------------- -------- ----------- --------- $ 3.56 - $4.11 66,295 0.22 $ 3.79 66,295 $ 3.79 11.00 - 11.00 373,320 3.45 11.00 111,729 11.00 11.75 - 12.33 269,483 2.60 12.06 116,926 12.10 12.38 - 18.44 264,307 2.53 14.14 118,599 13.92 ----------------------------------------------------------------------- ------------------------------ $3.56 - $18.44 973,405 2.75 $ 11.66 413,549 $ 10.99 ======================================================================= ==============================
Had compensation cost for these plans been determined consistent with SFAS No. 123, "Accounting for Stock-based Compensation," the Company's net income and diluted net income per share would have been reduced to the following pro forma amounts for the three fiscal years ended March 1999:
$ in thousands, except share data March 26, 1999 March 27, 1998 March 28, 1997 ------------------------------------------------------------------------------------------------------------ Net income as reported $ 12,364 $ 15,064 $ 11,671 Pro forma $ 9,660 $ 13,310 $ 10,700 Diluted net income per share as reported $ 1.71 $ 1.83 $ 1.40 Pro forma $ 1.33 $ 1.62 $ 1.29
The fair value of each option granted to employees and directors is estimated using the Black-Scholes option-pricing model on the date of grant using the following assumptions: no dividend yield, average volatility of 51% for fiscal year 1999, 54% for 1998 and 65% for 1997, weighted average risk-free interest rate of approximately 4.8%, 5.8% and 6.2% for fiscal years 1999, 1998 and 1997, respectively, and an average expected life of 3.3 years for fiscal 1999, 3.2 years for fiscal 1998 and 3.3 years for fiscal 1997. Under the now expired 1984 Stock Incentive Plan ("the 1984 Plan") and the 1994 Stock Incentive Plan ("the 1994 Plan"), grants of restricted stock can be made at any price. In fiscal 1991 and fiscal 1993, 258,750 shares and 112,500 shares were issued, respectively, under the 1984 Plan. Additionally, 236,000 shares and 30,000 shares were issued in fiscal 1998 and 1999, respectively, under the 1994 Plan. The shares issued under both plans are subject to certain repurchase agreements if certain annual performance criteria are not met. The options lapse over an extended period not exceeding seven years for the 1984 Plan and two years for the 1994 Plan beginning in fiscal 1999. All repurchase agreements on shares issued in fiscal 1991 and fiscal 1993 expired prior to March 27, 1998. The excess of the fair market value on the date of vesting over the purchase price is charged to operations as compensation expense as the restrictions lapse. As discussed in Note 1 above, the Company accounts for the above plans under APB No. 25. In each of fiscal 1998 and 1997, 92,816 shares, or 25%, of the issued shares vested, with $1.3 million and $1.1 million, respectively, charged to operations under the 1984 Plan. In fiscal 1999, 266,000 shares, or 100%, of the issued shares vested, with $0.3 million charged to operations under the 1994 Plan. Effective March 26, 1999, the Company and various of its employees and directors who had purchased restricted stock entered into agreements amending the prior purchase agreements and related promissory notes. Among other things, pursuant to the amendment the shares previously purchased are no longer subject to a right of repurchase by the Company and, by virtue of a no-prepayment provision in the amended promissory note coupled with a pledge of the shares to secure payment of the note, sale of the shares is precluded for a period of at least two years. (B) COMMON SHARE PURCHASE RIGHTS On March 16, 1989, the Company declared a dividend payable on April 4, 1989, of 10,311,603 Common Share Purchase Rights. Each right, when exercisable, entitles a stockholder to buy one share of the Company's common stock at an exercise price of $15.55, subject to adjustment. The rights become exercisable ten days after certain persons or groups announce acquisition of 20% or more, or announce an offer for 30% or more, of the Company's common stock. The rights are nonvoting, expire in ten years and may be redeemed prior to 23 20 becoming exercisable. In the event that the Company is acquired in a merger or other business combination, each outstanding right would entitle a holder to purchase, at the current exercise price, that number of shares of common stock of the surviving company having a market value equal to two times the exercise price of the right. Prior to expiration of the rights, the plan under which the rights were granted was amended to, among other things, extend the plan for an additional ten years and change the exercise price to $70.00. The foregoing is a general description only and is subject to the detailed terms and conditions set forth in the Amended and Restated Rights Agreement, dated as of April 4, 1999, between the Company and ChaseMellon Shareholder Services, L.L.C. NOTE 7 > INCOME TAXES PROVISION FOR INCOME TAXES The provision for income taxes for the three fiscal years ended March 1999 consists of the following:
$ in thousands ------------------------------------------------------------------------------------------------ March 26, 1999 March 27, 1998 March 28, 1997 -------------- -------------- -------------- Current Federal $ 2,549 $ 262 $ 155 State 641 538 205 Foreign 464 294 289 Deferred (576) (308) (180) ------- ------- ------- Total $ 3,078 $ 786 $ 469
COMPONENTS OF INCOME BEFORE TAXES
$ in thousands ----------------------------------------------------------------------------------------------------- 1999 1998 1997 United States $ 8,211 $ 9,824 $11,820 Foreign 7,231 6,026 320 ------- ------- ------- Total $15,442 $15,850 $12,140
Amounts for tax provision and components of income before taxes shown in the two tables above are classified based on location of the taxing authority and not on geographic region. DEFERRED INCOME TAX PROVISION
$ in thousands ------------------------------------------------------------------------------------------------------- March 26, 1999 March 27, 1998 March 28, 1997 -------------- -------------- -------------- Capitalized research and development $ (84) $ (308) $ -- Tax depreciation under depreciation for financial reporting purposes (306) (137) (191) Inventory costs capitalized for tax and expensed for financial reporting (430) (210) 198 Increase in liability reserves (229) (670) (217) Utilization of net operating losses and credits 2,424 4,618 3,263 AMT credit carryforward (147) (255) (180) Valuation reserve (1,804) (3,346) (3,053) ------- ------- ------- Total $ (576) $ (308) $ (180)
Deferred income taxes are not provided on the undistributed earnings (which totaled approximately $49.9 million as of March 26, 1999) of the Company's foreign subsidiaries as the Company intends to reinvest these earnings indefinitely outside of the United States. Deferred income taxes result from differences in the timing of reporting income and expenses for financial statement and income tax reporting purposes. 24 21 DEFERRED INCOME TAX ASSET
$ in thousands ------------------------------------------------------------------------------------ March 26, 1999 March 27, 1998 -------------- -------------- Capitalized research and development $ 392 $ 308 Tax depreciation under depreciation for financial reporting purposes 424 118 Inventory costs capitalized for tax and expensed for financial reporting 1,096 666 Liability reserves 1,661 1,432 Net operating loss carryforward 1,632 4,056 AMT credit carryforward 619 472 ------- ------- Gross deferred tax asset 5,824 7,052 Valuation reserve (4,723) (6,527) ------- ------- Total $ 1,101 $ 525
At March 26, 1999, the Company had available net operating loss carryforwards for Federal income tax purposes of approximately $4.8 million expiring in 2002 to 2010. Approximately $1.6 million of the valuation reserve for the net operating loss carryforward is related to the deduction of stock options and will be allocated directly to capital when utilized. RECONCILIATION OF STATUTORY FEDERAL TAX RATE TO EFFECTIVE TAX RATE
$ in thousands -------------------------------------------------------------------------------------------------------- 1999 1998 1997 Amount % Amount % Amount % ------- ---- ------- ---- ------- ---- Provision computed at statutory rates $ 5,395 35.0 $ 5,548 35.0 $ 4,248 35.0 State income taxes, net of Federal tax benefit 298 1.9 350 2.2 180 1.5 Rate (reductions) increase due to foreign operations (including carryback) (2,067) (13.4) (1,852) (11.6) 177 1.4 Other (548) (3.5) (3,260) (20.6) (4,136) (34.0) ------- ---- ------- ----- ------- ----- Total $ 3,078 20.0 $ 786 5.0 $ 469 3.9
The Company has a favorable pioneer tax status in Singapore for income generated from the manufacture of new Printronix P5000 series line matrix products. The pioneer status started in April 1996, lasts for a duration of five years, and is extendible to eight years. The pioneer status mandates that the Company meet certain requirements, including meeting specific levels of capital investment and engineering headcount. Earnings generated there are exempt from tax liability through 2001, extendible to 2004. The aggregate dollar effect of the pioneer status was to reduce foreign taxes by $1.4 million, $1.8 million and $0.1 million for fiscal years 1999, 1998 and 1997, respectively. The diluted net income per share effects of this pioneer status would be 19 cents for 1999, and 22 cents and one cent for fiscal years 1998 and 1997, respectively. 25 22 Note 8 > SEGMENT AND CUSTOMER DATA Printronix operates in one industry segment - the design, manufacture and marketing of medium and high speed printers which support a wide range of computer systems and software platforms. Regional segment data is as follows:
$ in thousands ------------------------------------------------------------------------------------------------------- The Americas EMEA Asia Pacific Eliminations Consolidated ------------ ---- ------------ ------------ ------------ 1999 Revenues: Net sales $ 126,439 $ 39,372 $ 13,891 $ -- $ 179,702 Transfers between geographic locations 8,636 1,287 36,584 (46,507) -- --------- --------- --------- --------- --------- 135,075 40,659 50,475 (46,507) 179,702 Income from operations $ 9,363 $ 4,145 $ 980 $ -- $ 14,488 Identifiable assets $ 46,514 $ 6,057 $ 36,295 $ -- $ 88,866 1998 Revenues: Net sales $ 118,267 $ 39,235 $ 12,889 $ -- $ 170,391 Transfers between geographic locations 10,957 1,949 42,128 (55,034) -- --------- --------- --------- --------- --------- 129,224 41,184 55,017 (55,034) 170,391 Income from operations $ 8,264 $ 4,643 $ 1,237 $ -- $ 14,144 Identifiable assets $ 55,260 $ 13,750 $ 19,849 $ -- $ 88,864 1997 Revenues: Net sales $ 120,439 $ 41,731 $ 11,120 $ -- $ 173,290 Transfers between geographic locations 18,307 601 42,658 (61,566) -- --------- --------- --------- --------- --------- 138,746 42,332 53,778 (61,566) 173,290 Income from operations $ 6,217 $ 4,239 $ 1,243 $ -- $ 11,699 Identifiable assets $ 44,993 $ 12,257 $ 23,403 $ -- $ 80,653
Geographic information is based upon the principal location of the Company's operations and not necessarily on the location of the customers. Transfers between geographic locations are billed at manufacturing costs plus a margin representing a reasonable rate of return for activities performed. Certain operating expenses have been redistributed among geographic regions to reflect a reasonable allocation of operating expenses which support worldwide operations. The Americas' sales included export sales of approximately $26.2 million, $22.1 million, and $23.5 million for fiscal years 1999, 1998 and 1997, respectively. Export sales are principally to Europe, Canada, and Asia. Sales based on the location of the customers were as follows for fiscal years 1999, 1998, and 1997, respectively: Americas - $105.2 million, $100.5 million and $101.8 million; EMEA - $61.5 million, $57.9 million and $60.8 million; and Asia Pacific - $13.0 million, $12.0 million and $10.7 million. In fiscal 1999, the Company had two customers each of which represented a significant percentage of consolidated net sales. Sales to the largest customer, IBM, represented 30%, 28% and 29% of net sales for fiscal years 1999, 1998 and 1997, respectively. Sales to the second largest customer represented 9% of net sales for fiscal year 1999, and 10% of net sales for fiscal years 1998 and 1997. A significant decline in sales to either customer could have an adverse effect on the Company's operations. 26 23 NOTE 9 > COMMITMENTS AND CONTINGENCIES Operating Leases The Company conducts its operations using leased facilities under non-cancelable operating leases which expire at various dates from fiscal years 2000 through 2004, except the land lease for the Company's building in Singapore, which expires in fiscal year 2026. The following is a summary of rental expense of non-cancelable building and equipment operating leases incurred for each of the three years in the period ended March 1999:
$ in thousands March 26, 1999 March 27, 1998 March 28, 1997 -------------------------------------------------------------------------------------------------- Gross rental expenses $ 3,048 $ 2,949 $ 3,560 Less: sublease rental income -- -- (25) ------- ------- ------- Net rental expense $ 3,048 $ 2,949 $ 3,535
The minimum rental commitments required under existing non-cancelable operating leases are as follows:
$ in thousands 2000 2001 2002 2003 2004 Thereafter Total ------ ------ ------ ------ ------ ---------- ------ $2,574 $1,121 $ 650 $ 148 $ 114 $3,774 $8,381
The minimum rental commitment for the land located at the Singapore manufacturing facility represents $4.3 million of the above $8.4 million commitment under non-cancelable operating leases. ENVIRONMENTAL ASSESSMENT In January 1994, the Company was notified by the California Regional Water Quality Control Board - Santa Ana Region (the "Board") that groundwater monitoring reports indicated that the groundwater under one of the Company's former production plants was contaminated with various chlorinated volatile organic compounds ("VOCs"). Evidence adduced from site studies undertaken to date indicate that compounds containing the VOCs were not used by the Company during its tenancy, but were used by the prior tenant during its long-term occupancy of the site. The tests also indicate that the composition of the soil is such that off-site migration of contamination is very slow and contamination is most likely confined to the site. In March 1996, the Company received a request from the Board for information regarding chemicals used by the Company or others on property adjacent to the former production plant site. Although the Company previously occupied a small portion of this adjacent property, primarily for office space and a machine shop, initial review indicates that the Company did not use compounds containing VOCs on this adjacent property. Presently, the Board continues to investigate the source of the VOCs and there are currently no further orders outstanding against the Company. As of March 26, 1999 and March 27, 1998, the Company has reserved $214,000 which is a reasonable estimate to cover further legal fees or any additional expenses related to environmental tests which could be requested by the Board at either site. To date, the Company has incurred only minimal expense in its initial response to the Board's request for information and for environmental testing. The Company is convinced it bears no responsibility for any contamination at the sites and intends to vigorously defend any action which might be brought against it with respect thereto. Furthermore, the Company believes that it has adequately accrued for any future expenditures in connection with environmental matters and that such expenditures will not have a materially adverse effect on its financial condition or results of operations. NOTE 10 > SUBSEQUENT EVENT (UNAUDITED) During Fiscal 1999, the Board of Directors authorized the company to repurchase up to an additional 2,000,000 shares of the Company's outstanding common stock, resulting in a total of 3,000,000 shares authorized for repurchase. Subsequent to year end, a total of 130,000 shares of common stock were purchased at fair market value and retired, at a cost of $1.7 million. To date, the Company has repurchased and retired 2,137,400 shares of common stock at a cost of $31.6 million. Future purchases of up to 862,600 shares may be made from time to time at the discretion of management. 27 24 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To The Board of Directors and Stockholders of Printronix, Inc.: We have audited the accompanying consolidated balance sheets of Printronix, Inc. (a Delaware Corporation) and subsidiaries as of March 26, 1999 and March 27, 1998, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended March 26, 1999. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Printronix, Inc. and subsidiaries as of March 26, 1999 and March 27, 1998, and the results of their operations and their cash flows for each of the three years in the period ended March 26, 1999 in conformity with generally accepted accounting principles. /s/ ARTHUR ANDERSEN LLP ----------------------------- ARTHUR ANDERSEN LLP Orange County, California April 22, 1999 QUARTERLY DATA (UNAUDITED)
$ in thousands, except share data --------------------------------------------------------------------------------------------- 1st quarter 2nd quarter 3rd quarter 4th quarter ---------- ---------- ---------- ----------- Fiscal 1999 Net sales $ 45,703 $ 41,728 $ 45,840 $ 46,431 Gross profit $ 14,764 $ 13,530 $ 14,853 $ 15,753 Net income $ 3,304 $ 2,735 $ 3,033 $ 3,292 Net income per share Basic $ 0.44 $ 0.38 $ 0.45 $ 0.49 Diluted $ 0.43 $ 0.37 $ 0.44 $ 0.48 Stock Price High $ 17.00 $ 16.50 $ 14.75 $ 14.88 Low $ 14.25 $ 13.75 $ 11.00 $ 11.00
$ in thousands, except share data --------------------------------------------------------------------------------------------- 1st quarter 2nd quarter 3rd quarter 4th quarter ---------- ---------- ---------- ----------- Fiscal 1998 Net sales $ 43,667 $ 40,788 $ 42,528 $ 43,408 Gross profit $ 12,924 $ 13,192 $ 13,810 $ 14,004 Net income $ 3,639 $ 3,739 $ 4,529 $ 3,157 Net income per share Basic $ 0.46 $ 0.47 $ 0.56 $ 0.41 Diluted $ 0.45 $ 0.45 $ 0.54 $ 0.39 Stock Price High $ 15.13 $ 21.25 $ 21.63 $ 18.00 Low $ 10.63 $ 14.63 $ 16.63 $ 14.38
28 CORPORATE INFORMATION Board of Directors BRUCE T. COLEMAN* Chief Executive Officer, El Salto Advisors (Advice and interim CEO services) JOHN R. DOUGERY* Dougery Ventures (Venture capital investments) CHRIS WHITNEY HALLIWELL Principal, Chris Halliwell Technology Consulting (Marketing consulting) ERWIN A. KELEN* President, Kelen Ventures (Venture Investments) ROBERT A. KLEIST President and Chief Executive Officer, Printronix, Inc. Corporate Officers ROBERT A. KLEIST President and Chief Executive Officer THEODORE A. CHAPMAN Senior Vice President, Engineering, Chief Technical Officer C. VICTOR FITZSIMMONS Senior Vice President, Worldwide Manufacturing RALPH GABAI Senior Vice President, Marketing GEORGE L. HARWOOD Senior Vice President, Finance & IS, Chief Financial Officer and Corporate Secretary RICHARD A. STEELE Senior Vice President, Sales GORDON B. BARRUS Vice President, Advanced Development CLAUS HINGE Vice President, European Sales & Marketing MICHAEL K. JACOBS Vice President, Distribution Sales, Americas PHILIP F. LOW Vice President, Asia Operations JULI A. MATHEWS Vice President, Human Resources and Assistant Corporate Secretary BRUCE E. MENN Vice President, Customer Support *member of the Audit Committee Corporate Directory PRINTRONIX CORPORATE OFFICES 17500 Cartwright Road P.O. Box 19559 Irvine, California 92623 Tel: (949) 863-1900 Fax: (949) 660-8682 http://www.printronix.com LEGAL COUNSEL Kirshman, Harris & Branton A Professional Corporation, General Counsel 315 S. Beverly Drive Suite 315 Beverly Hills, California 90212 Tel: (310) 277-2323 INDEPENDENT AUDITORS Arthur Andersen LLP 18201 Von Karman Avenue Suite 800 Irvine, California 92615 Tel: (949) 757-3100 REGISTRAR AND TRANSFER AGENT ChaseMellon Shareholder Services 400 S. Hope Street Fourth Floor Los Angeles, California 90071 Tel: (800) 647-4273 ANNUAL MEETING Annual meeting will be held at 9:00 a.m., August 17, 1999, at Printronix Corporate Offices, located at 17500 Cartwright Road, Irvine, California. PRINTRONIX COMMON STOCK Traded OTC, NASDAQ, National Market System, Stock Symbol: PTNX STOCKHOLDERS As of March 26, 1999, there were 3,572 record holders of the Company's Common Stock. CORPORATE AND INVESTOR INFORMATION A copy of Printronix's annual report on Form 10-K filed with the Securities and Exchange Commission (SEC) will be furnished without charge to any stockholder. This publication includes certain forward-looking statements reflecting the Company's expectations and objectives in the near future. However, many factors which may affect the actual results, including market and economic conditions, industry competition, and changing regulations, are difficult to predict. Accordingly, there is no assurance that the Company's expectations and objectives will be realized. 29 PRINTRONIX 17500 CARTWRIGHT ROAD P. O. Box 19559 Irvine, California 92623-9559 http://www.printronix.com EX-21 21 LIST OF PRINTRONIX'S SUBSIDIARIES 1 EXHIBIT 21 LIST OF SUBSIDIARIES
STATE OR OTHER JURISDICTION OF NAME INCORPORATION - ---- --------------- Printronix Nederland B.V. The Netherlands Printronix Latinoamericana, S.A. de C.V. Mexico Printronix Foreign Sales Corporation B.V. The Netherlands Printronix GmbH West Germany Printronix A.G. Switzerland Printronix Limited Cayman Islands Printronix Luxembourg S.a.r.l. Luxembourg Printronix France S.a.r.l. France Printronix Singapore P.T.E. Ltd. Singapore Printronix Asia P.T.E. Ltd. Singapore Printronix Shenzhen P.T.E. Ltd. China RJS Systems International California
EX-23 22 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS 1 EXHIBIT 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report incorporated by reference in this Form 10-K, into the Company's previously filed Registration Statement File Nos. 2-70035, 33-14288 and 33-83156. /s/ ARTHUR ANDERSEN LLP ----------------------------- ARTHUR ANDERSEN LLP Orange County, California June 24, 1999 EX-27 23 FINANCIAL DATA SCHEDULE
5 1,000 12-MOS MAR-26-1999 MAR-28-1998 MAR-26-1999 11,911 0 26,256 2,302 15,453 52,362 66,034 31,798 88,866 20,564 0 0 0 66 66,385 88,866 179,702 179,702 120,802 165,214 925 0 0 15,442 3,078 12,364 0 0 0 12,364 1.76 1.71
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