-----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, M8VLqItGqzFqQ8WgZbxXd/dXnLtm4VRMQw6LDCHNjpWlrYZR8KAITII83KBBv7pq W0KLua91l+sWsZ8P+sTTiA== 0000950131-01-001520.txt : 20010314 0000950131-01-001520.hdr.sgml : 20010314 ACCESSION NUMBER: 0000950131-01-001520 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010131 FILED AS OF DATE: 20010313 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KEWAUNEE SCIENTIFIC CORP /DE/ CENTRAL INDEX KEY: 0000055529 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY APPARATUS & FURNITURE [3821] IRS NUMBER: 380715562 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-05286 FILM NUMBER: 1567407 BUSINESS ADDRESS: STREET 1: 2700 W FRONT ST CITY: STATESVILLE STATE: NC ZIP: 28677 BUSINESS PHONE: 7048737202 MAIL ADDRESS: STREET 1: P O BOX 1842 STREET 2: P O BOX 1842 CITY: STATESVILLE STATE: NC ZIP: 28687-1842 FORMER COMPANY: FORMER CONFORMED NAME: KEWAUNEE SCIENTIFIC EQUIPMENT CORP /DE/ DATE OF NAME CHANGE: 19861216 FORMER COMPANY: FORMER CONFORMED NAME: KEWAUNEE MANUFACTURING CO DATE OF NAME CHANGE: 19680108 10-Q 1 0001.txt FORM 10-Q FOR QUARTER ENDED 1/31/2001 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ----- | X | Quarterly Report Pursuant to Section 13 or 15(d) ----- of the Securities Exchange Act of 1934 For the quarterly period ended January 31, 2001 ----- |_____| 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 0-5286 KEWAUNEE SCIENTIFIC CORPORATION (Exact name of registrant as specified in its charter) Delaware 38-0715562 - ---------------------------------------------------------------------- (State or other jurisdiction of (I.R.S.Employer incorporation or organization) Identification No.) 2700 West Front Street Statesville, North Carolina 28677 - ------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (704) 873-7202 -------------------- (Registrant's telephone number, including area code) 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 _______ ---- As of March 9, 2001, the Registrant had outstanding 2,465,871 shares of Common Stock. Pages: This report, excluding exhibits, contains 15 pages numbered sequentially from this cover page. KEWAUNEE SCIENTIFIC CORPORATION INDEX TO FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2001
Page Number ----------- PART I. FINANCIAL INFORMATION - ------------------------------ Item 1. Financial Statements Condensed Statements of Operations - Three months and nine months ended January 31, 2001 and 2000 3 Condensed Balance Sheets - January 31, 2001 and April 30, 2000 4 Condensed Statements of Cash Flows - Nine months ended January 31, 2001 and 2000 5 Notes to Condensed Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Review by Independent Accountants 12 Report by Independent Accountants 13 PART II. OTHER INFORMATION - --------------------------- Item 6. Exhibits and Reports on Form 8-K 14 SIGNATURE 15 - ---------
2 Part 1. Financial Information Item 1. Financial Statements Kewaunee Scientific Corporation Condensed Statements of Operations (Unaudited)
Three months ended Nine months ended January 31 January 31 -------------------- -------------------- 2001 2000 2001 2000 -------- -------- -------- -------- ($ in thousands, except per share data) Net sales $ 17,632 $ 16,945 $ 58,418 $ 56,561 Cost of products sold 14,627 12,768 47,419 43,408 -------- -------- -------- -------- Gross profit 3,005 4,177 10,999 13,153 Operating expenses 2,923 3,070 9,222 9,522 -------- -------- -------- -------- Operating earnings 82 1,107 1,777 3,631 Interest expense (64) (32) (196) (123) Other income (expense), net (327) 24 (334) 266 -------- -------- -------- -------- Earnings (loss) before income taxes (309) 1,099 1,247 3,774 Income tax expense (benefit) (111) 220 449 1,250 -------- -------- -------- -------- Net earnings (loss) ($ 198) $ 879 $ 798 $ 2,524 ======== ======== ======== ======== Net earnings (loss) per share- Basic ($ 0.08) $ 0.36 $ 0.32 $ 1.03 Diluted ($ 0.08) $ 0.35 $ 0.32 $ 1.02 Average number of common shares outstanding (in thousands)- Basic 2,466 2,464 2,466 2,453 Diluted 2,466 2,482 2,492 2,475
See accompanying notes to condensed financial statements. 3 Kewaunee Scientific Corporation Condensed Balance Sheets ($ in thousands)
January 31 April 30 2001 2000 ------------- ------------- Assets (Unaudited) - ------ Current assets: Cash and cash equivalents $ 8 $ 9 Receivables, less allowances 15,776 17,993 Inventories 4,136 3,499 Deferred income taxes 1,151 1,151 Prepaid expenses and other current assets 425 380 ------------- ------------- Total current assets 21,496 23,032 ------------- ------------- Property, plant and equipment, at cost 34,695 33,242 Accumulated depreciation (21,342) (19,736) ------------- ------------- Net property, plant and equipment 13,353 13,506 ------------- ------------- Other assets 2,828 2,778 ------------- ------------- Total Assets $37,677 $39,316 ============= ============= Liabilities and Stockholders' Equity Current liabilities: Short-term borrowings $2,142 $2,555 Accounts payable 4,567 5,412 Employee compensation and amounts withheld 1,449 1,352 Other current liabilities 1,486 2,241 ------------- ------------- Total current liabilities 9,644 11,560 ------------- ------------- Deferred income taxes 944 944 Accrued employee benefit plan costs 1,673 1,677 ------------- ------------- Total Liabilities 12,261 14,181 ------------- ------------- Stockholders' equity: Common stock 6,550 6,550 Additional paid-in-capital 154 154 Retained earnings 19,632 19,351 Common stock in treasury, at cost (920) (920) ------------- ------------- Total stockholders' equity 25,416 25,135 ------------- ------------- Total Liabilities and Stockholders' Equity $37,677 $39,316 ============= =============
See accompanying notes to condensed financial statements. 4 Kewaunee Scientific Corporation Condensed Statements of Cash Flows (Unaudited) ($ in thousands )
Nine months ended January 31 ------------------------------ 2001 2000 ------------- ------------- Cash flows from operating activities: Net earnings $ 798 $ 2,524 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation 1,619 1,496 Provision for bad debts 70 72 Decrease in receivables 2,147 2,428 Increase in inventories (637) (558) Decrease in accounts payable and other current liabilities (1,503) (2,316) Other, net (95) (143) ------------- ------------- Net cash provided by operating activities 2,399 3,503 ------------- ------------- Cash flows from investing activities: Capital expenditures (1,469) (2,670) ------------- ------------- Net cash used in investing activities (1,469) (2,670) ------------- ------------- Cash flows from financing activities: Net decrease in short-term borrowings (413) (481) Dividends paid (518) (466) Proceeds from exercise of stock options - 114 ------------- ------------- Net cash used in financing activities (931) (833) ------------- ------------- Decrease in cash and cash equivalents (1) - Cash and cash equivalents, beginning of period 9 8 ------------- ------------- Cash and cash equivalents, end of period $ 8 $ 8 ============= =============
See accompanying notes to condensed financial statements. 5 Kewaunee Scientific Corporation Notes to Condensed Financial Statements (unaudited) A. Financial Information - ------------------------- The unaudited interim condensed financial statements of Kewaunee Scientific Corporation (the "Company" or "Kewaunee") have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "Commission"). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These interim condensed financial statements should be read in conjunction with the financial statements and notes included in the Company's 2000 Annual Report to Stockholders. The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. In the opinion of management, the interim condensed financial statements reflect all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. B. New Accounting Pronouncements - --------------------------------- On June 15, 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities". The statement as amended by SFAS No. 137 and SFAS No. 138 is effective for all fiscal quarters of all fiscal years beginning after June 15, 2000. The Company expects that the adoption of SFAS No. 133 will not have a material effect on its financial condition or results of operations. C. Inventories - --------------- Inventories consisted of the following (in thousands):
Jan. 31, 2001 April 30,2000 ------------- ------------- Finished products $ 851 $ 673 Work in process 1,119 932 Raw materials 2,166 1,894 ----- ----- $4,136 $3,499 ====== ======
6 D. Balance Sheet - ----------------- The Company's April 30, 2000 condensed balance sheet as presented herein is derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. E. Segment Information - ----------------------- The following table shows net sales and earnings (loss) before income taxes by business segment for three months and nine months ended January 31, 2001 and 2000 (in thousands):
Laboratory Technical Products Products Corporate Total ----------- --------- --------- ----- Three months ended January 31, 2001 - ---------------- Revenues from external customers $ 14,365 $ 3,267 $ -- $ 17,632 Intersegment revenues -- 52 (52) -- Earnings (loss) before income taxes (53) 222 (478) (309) Three months ended January 31, 2000 - ---------------- Revenues from external customers $ 14,926 $ 2,019 $ -- $ 16,945 Intersegment revenues -- 85 (85) -- Earnings (loss) before income taxes 1,204 194 (299) 1,099 Nine months ended January 31, 2001 - ---------------- Revenues from external customers $ 46,156 $ 12,262 $ -- $ 58,418 Intersegment revenues -- 236 (236) -- Earnings (loss) before income taxes 806 1,251 (810) 1,247 Nine months ended January 31, 2000 - ---------------- Revenues from external customers $ 47,349 $ 9,212 $ -- $ 56,561 Intersegment revenues -- 262 (262) -- Earnings (loss) before income taxes 3,286 810 (322) 3,774
7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The Company's 2000 Annual Report to Stockholders contains management's discussion and analysis of financial condition and results of operations at and for the year ended April 30, 2000. The following discussion and analysis describes material changes in the Company's financial condition since April 30, 2000. The analysis of results of operations compares the three months and nine months ended January 31, 2001 with the comparable periods of the prior fiscal year. Results of Operations - --------------------- The Company recorded sales of $17.6 million for the three months ended January 31, 2001, up 4.1% from sales of $16.9 million for the comparable period of the prior year. Sales for the nine months ended January 31, 2001 were $58.4 million, up 3.3% from sales of $56.6 million in the comparable period of the prior year. The increase in sales for the current quarter and nine months ended January 31, 2001 resulted principally from continued strong demand for the Company's technical products, partially offset by lower sales of laboratory products. The gross profit margin for the quarter ended January 31, 2001 was 17.0% of sales, as compared to 24.7% of sales in the comparable quarter of the prior year. The gross profit margin for the nine months ended January 31, 2001 was 18.8%, as compared to 23.3% in the comparable period of the prior year. The lower gross profit margins experienced during the current year resulted primarily from lower selling prices of laboratory products, an unfavorable mix between higher margin industrial research projects and lower margin educational projects, and a significant increase in healthcare costs. Prices in the educational laboratory market were pressured further during the year as companies pursued this business due to the continuing weakness in the industrial research market. Operating expenses for the quarter ended January 31, 2001 were $2.9 million, or 16.6% of sales, as compared to $3.1 million, or 18.1% of sales, in the comparable quarter of the prior year. Operating expenses for the nine months ended January 31, 2001 were $9.2 million, or 15.8% of sales, as compared to $9.5 million, or 16.8% of sales, in the comparable period of the prior year. The decrease in operating expenses for the quarter and nine months reflect the impact of a series of actions to reduce selling and administrative costs during the year. 8 Operating earnings of $82,000 and $1.8 million were recorded for the three months and nine months ended January 31, 2001, respectively. This compares to operating earnings of $1.1 million and $3.6 million for the comparable periods of the prior year. Interest expense was $64,000 and $196,000 for the three months and nine months ended January 31, 2001, respectively, compared to $32,000 and $123,000 for the similar periods of the prior year. The increase in interest expense in the current year resulted primarily from higher levels of debt under the Company's revolving credit facility. Combined other income and expense resulted in an expense of $327,000 and $334,000 for the three months and nine months ended January 31, 2001, respectively, compared to income of $24,000 and $266,000 for the comparable periods of the prior year. Other expense for the three and nine month periods of the current year include a charge of $391,000 associated with a dispute between the Company and a general contractor on a construction project completed in 1990. The charge was based on an arbitrator's decision during the current quarter regarding the dispute. An income tax benefit of $111,000 and an expense of $449,000 were recorded for the three months and nine months ended January 31, 2001, respectively, as compared to income tax expense of $220,000 and $1,250,000 recorded for the comparable periods of the prior year. The effective tax rate was approximately 36% for the three and nine months ended January 31, 2001. The effective tax rate was 20% for the three months ended January 31, 2000 and 33.1% for the nine months ended January 31, 2000. The lower effective tax rates for the periods of the prior year were the result of tax credits available due to the high levels of research and development expenditures and purchases of new manufacturing machinery during the year. A net loss of $198,000, or $.08 per diluted share, was recorded for the three months ended January 31, 2001. Excluding the charge associated with the construction project dispute, net earnings for the current quarter were $52,000, or $.02 per diluted share. Net earnings for the third quarter of the prior year were $879,000, or $.35 per diluted share. Net earnings of $798,000, or $.32 per diluted share, were recorded for the nine months ended January 31, 2001. Excluding the charge associated with the construction project dispute, net earnings for the nine months were $1,048,000, or $.42 per diluted share. Net earnings for the comparable period of the prior year were $2,524,000, or $1.02 per diluted share. 9 Liquidity and Capital Resources - ------------------------------- Historically, the Company's principal sources of liquidity have been funds generated from operations, supplemented as needed by short-term borrowings. The Company believes that these sources will be sufficient to support ongoing business levels, including capital expenditures. The Company had working capital of $11.9 million at January 31, 2001, as compared to $11.5 million at April 30, 2000. The ratio of current assets to current liabilities was 2.23-to-1 at January 31, 2001, as compared to 1.99-to-1 at April 30, 2000. At January 31, 2001, advances of $642,000 were outstanding under the Company's revolving credit facility, and advances of $1,500,000 were outstanding under the Company's equipment loan component of the credit facility. During the quarter, the Company's unsecured revolving credit arrangement with its bank was extended for two years, and the maximum amount of advances available under the arrangement was increased to $6 million from $3 million. The Company's operations provided cash of $2.4 million during the nine months ended January 31, 2001, primarily from earnings and a reduction in accounts receivable, partially offset by a decrease in accounts payable and other current liabilities. The Company's operations provided cash of $3.5 million during the nine months ended January 31, 2000, primarily from earnings and a reduction in accounts receivable, partially offset by a decrease in accounts payable and other current liabilities. During the nine months ended January 31, 2001, the Company used cash of $1.5 million for capital expenditures, primarily production equipment, compared to the use of $2.7 million for capital expenditures in the comparable period of the prior year. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 - -------------------------------------------------------------------------------- Certain statements in this report constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could significantly impact results or achievements expressed or implied by such forward-looking statements. These factors include, but are not limited to, economic, competitive, governmental, and technological factors affecting the Company's operations, markets, products, services, and prices. The cautionary statements made pursuant to the Reform Act herein and elsewhere by the Company should not be 10 construed as exhaustive. The Company cannot always predict what factors would cause actual results to differ materially from those indicated by the forward-looking statements. In addition, readers are urged to consider statements that include the terms "believes", "belief", "expects", "plans", "objectives", "anticipates", "intends" or the like to be uncertain and forward-looking. 11 REVIEW BY INDEPENDENT ACCOUNTANTS A review of the interim financial information included in this Quarterly Report on Form 10-Q for the three months and nine months ended January 31, 2001 has been performed by PricewaterhouseCoopers LLP, the Company's independent accountants. Their report on the interim financial information follows. 12 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of Kewaunee Scientific Corporation Statesville, North Carolina We have reviewed the accompanying condensed balance sheet of Kewaunee Scientific Corporation as of January 31, 2001, and the related condensed statements of operations and of cash flows for the three and nine month periods then ended. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying interim condensed financial information for it to be in conformity with accounting principles generally accepted in the United States of America. We previously audited in accordance with auditing standards generally accepted in the United States of America, the balance sheet as of April 30, 2000 and the related statements of operations, of stockholders' equity, and of cash flows for the year then ended (not presented herein), and in our report dated May 31, 2000 we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying condensed balance sheet as of April 30, 2000, is fairly stated in all material respects in relation to the balance sheet from which it has been derived. PricewaterhouseCoopers LLP Charlotte, North Carolina February 16, 2001 13 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 10.1 First Amendment to Loan Documents and Amended and Restated Revolving Credit Note dated as of November 30, 2000 between the Registrant and First Union National Bank. 10.2 Second Amendment to Loan Documents dated as of November 30, 2000 between the Registrant and First Union National Bank. (b) Reports on Form 8-K No reports on Form 8-K were filed with the Commission during the three months ended January 31, 2001. 14 SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. KEWAUNEE SCIENTIFIC CORPORATION ------------------------------- (Registrant) Date: March 12, 2001 By /s/ D. Michael Parker ------------------------------ D. Michael Parker Senior Vice President Finance Chief Financial Officer 15 EX-10.1 2 0002.txt FIRST AMENDMENT TO LOAN DOCUMENTS Exhibit 10.1 FIRST AMENDMENT TO LOAN DOCUMENTS THIS FIRST AMENDMENT TO LOAN DOCUMENTS (this "Amendment") is entered into as of November 30, 2000, between KEWAUNEE SCIENTIFIC CORPORATION, a Delaware corporation (the "Borrower"), and FIRST UNION NATIONAL BANK, a national banking association (the "Bank"). RECITALS: -------- A. Pursuant to that certain Loan and Security Agreement dated as of January 6, 1999, between the Bank and the Borrower (the "Original Loan Agreement"), the Bank extended certain financial accommodations to the Borrower. B. The Borrower has requested, and the Bank has agreed, to increase the existing revolving credit loan facility from $3,000,000 to $6,000,000 and to extend the term thereof, subject to the terms and conditions set forth herein. C. The Original Loan Agreement, as amended hereby, is herein referred to as the "Amended Loan Agreement," and the Loan Documents, as amended hereby, are herein referred to as the "Amended Loan Documents." Except as otherwise defined herein, all capitalized terms shall have such meaning as set forth in the Amended Loan Agreement. AGREEMENT: ---------- NOW, THEREFORE, in consideration of the mutual promises herein contained and for other valuable consideration, the parties hereto agree as follows: SECTION 1. Amendments to Loan Agreement. The Original Loan Agreement is hereby - --------- ---------------------------- amended as follows: 1.1. The Loans. Section 1 of the Original Loan Agreement is hereby --------- amended as follows: 1.1.1 Revolving Credit Loan. Section 1.01(a) of the Original Loan --------------------- Agreement is hereby deleted in its entirety, and the following is inserted in lieu thereof: "Availability and Repayment. Subject to the terms and conditions of -------------------------- this Agreement, the Bank will make available for the Borrower's use during the period commencing on the date of this Agreement and ending on December 31, 2002 (the "Revolving Loan Maturity Date") a revolving credit facility of up to $6,000,000.00 (the "Revolving Credit Loan") to provide for the general working capital needs of the Borrower. So long as no Default or Event of Default has occurred which has not been cured or which the Bank, in its sole and absolute discretion, has not waived, the Borrower may borrow and reborrow amounts that have been repaid from the Revolving Credit Loan, from time to time. The Revolving Credit Loan will be evidenced by the Revolving Credit Note, and will bear interest at the rates set forth in Section 1.03, and will be payable in full on ------------ the Revolving Loan Maturity Date, unless sooner due and payable pursuant to the terms hereof; with interest payable monthly in arrears commencing January 31, 1999, and on the last Business Day of each calendar month thereafter during the existence of the Revolving Credit Loan. Notwithstanding the foregoing, the Bank may, in its sole and absolute discretion, make or permit to remain outstanding advances under the Revolving Credit Loan in excess of the original principal amount of the Revolving Credit Note, and all such amounts shall (i) be part of the Obligations evidenced by the Revolving Credit Note, (ii) bear interest as provided herein, (iii) be entitled to all rights and security as provided under the Loan Documents." SECTION 2. Conditions Precedent to Closing. The obligation of the Bank to close - --------- ------------------------------- the transactions contemplated by this Amendment (the "Closing") is subject to satisfaction of the following conditions: 2.1. Loan Documents. The Bank's receipt of (i) two (2) originals of -------------- this Amendment and (ii) one (1) original Amended and Restated Revolving Credit Note, fully executed by the Borrower and each other party thereto (other than Bank). 2.2. Officers Certificates. The Bank's receipt of an officers' --------------------- certificate of two (2) authorized officers of the Borrower certifying, among other things, that attached are true and correct copies of: (i) certificates of the existence and good standing of the Borrower (or other similar certifications), issued by the Secretaries of State of the jurisdiction of the Borrower's organization and each jurisdiction where the Borrower is required to qualify to do business as a foreign corporation, (ii) resolutions adopted by the Board of Directors of the Borrower authorizing the execution, delivery and performance of this Amendment and all other documents to be executed by the Borrower in connection herewith and in connection with the Term Loan, (iii) the governing instruments of the Borrower and (iv) the names and incumbency of those persons authorized on behalf of the Borrower to sign each of the documents or certificates to be executed and delivered by the Borrower in connection herewith. 2.3. Payment of Fees, Costs and Expenses. Payment of all fees, costs ----------------------------------- and expenses due the Bank and evidence of payment to other parties of all fees, costs and expenses which the Borrower is required to pay in connection with the Closing, including, without limitation, the Bank's counsel fees incurred in connection with the negotiation, documentation and closing of this Amendment and related documents and agreements. 2.4. No Default. No Default or Event of Default shall exist under the ---------- Amended Loan Documents. 2.5. Representations and Warranties. The representations and warranties ------------------------------ contained herein and in the Amended Loan Documents shall be true and correct in all material respects as of the date of Closing, except (i) those referring to the financial statements for purposes of this Section shall be deemed to refer to the most recent financial statements timely furnished to the Bank in compliance with the Amended Loan Agreement, and (ii) those representations which specifically relate to an earlier date or which are no longer true due to an action or event specifically permitted by the provisions of the Amended Loan Documents. 2 2.6. Additional Documentation. Such other documentation or information ------------------------- as may reasonably be required by the Bank and its counsel. SECTION 3. Representations, Warranties and Covenants. The Borrower hereby - --------- ----------------------------------------- reaffirms and remakes as of the date hereof and taking into consideration the effects of the transactions contemplated in this Amendment, each of the representations and warranties contained in the Amended Loan Documents as being true and correct in all respects. The Borrower has the necessary power and authority and approvals and is duly authorized to execute, deliver and perform this Amendment and to perform the obligations contemplated hereby and thereby. The Borrower agrees that until satisfaction of the Obligations, the Borrower shall fully comply with all covenants as set forth in the Amended Loan Documents. SECTION 4. Miscellaneous. - --------- ------------- 4.1. No Waiver. Except to the extent that the Loan Documents are --------- specifically modified by this Amendment, nothing in this Amendment, or in the Bank's failure to act prior to this Amendment, shall constitute a waiver by the Bank of its rights and remedies under the Amended Loan Documents. No act or omission by the Bank under this Amendment or in its relations with the Borrower shall constitute a waiver of any of its rights and remedies under the Amended Loan Documents unless such waiver is in writing, signed by the Bank, and then only to the extent specifically set forth therein. 4.2. Reaffirmation; Incorporation; Interpretation. The Borrower hereby -------------------------------------------- acknowledges that all terms and conditions of the Amended Loan Agreement are and shall remain in full force and effect. The Borrower hereby reaffirms its Obligations under the Amended Loan Documents. This Amendment is incorporated into the Loan Documents by reference and shall constitute a part thereof as if fully set forth therein. In the event that any of the terms or the provisions of the Loan Documents are inconsistent or contradictory of the terms hereof, the terms of this Amendment shall control. 4.3. Release. The Borrower acknowledges and agrees that, as of the date ------- hereof, it does not have any claim, defense or set-off right against the Bank, or any of its officers, directors, employees, agents, successors, assigns or affiliates, nor any claim, defense or set-off right to the enforcement by the Bank of the full amount of the Obligations. The Borrower hereby forever expressly waives, releases, relinquishes, satisfies, acquits and discharges the Bank and its officers, directors, employees, agents, successors, assigns and affiliates, from any and all defenses to payment or other defenses, set-offs, claims, counterclaims, liability and causes of action, accrued or unaccrued, known or unknown, which occurred or arose on or prior to the date hereof. 4.4. Counterparts. This Amendment may be executed simultaneously in ------------ several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 4.5. Severability. The invalidity or unenforceability of any one or ------------ more phrases, sentences, clauses or Sections contained in this Amendment shall not affect the validity or enforceability of the remaining portions of this Amendment, or any part thereof. 3 4.6. Governing Law. This Amendment shall be governed by and construed -------------- in accordance with the laws of the State of North Carolina, without regard to conflict of laws principles. IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the day and year first above written. BORROWER: -------- KEWAUNEE SCIENTIFIC CORPORATION By /s/ D. Michael Parker --------------------------------- D. Michael Parker, Vice President ATTEST: /s/ Jeffrey L. Bunton - -------------------------------------------- Name: Jeffrey L. Bunton, Assistant Secretary [CORPORATE SEAL] BANK: ---- FIRST UNION NATIONAL BANK By /s/ Gayle W. Harris -------------------------------- Name: Gayle W. Harris Title: Vice President 4 AMENDED AND RESTATED REVOLVING CREDIT NOTE $6,000,000 Charlotte, North Carolina January 6, 1999 (Amended and restated as of November 30, 2000) FOR VALUE RECEIVED, KEWAUNEE SCIENTIFIC CORPORATION, a Delaware corporation (the "Borrower"), hereby unconditionally promises to pay to the order of FIRST UNION NATIONAL BANK (the "Bank"), at its principal office in Charlotte, North Carolina, or at such other place as the Bank may designate, the principal sum of up to SIX MILLION DOLLARS ($6,000,000) or so much thereof as is outstanding, in lawful money of the United States of America and in immediately available funds, under the terms and conditions of that certain Loan and Security Agreement dated January 6, 1999, between the Borrower and the Bank, as the same may be amended from time to time (the "Loan Agreement"). All capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement. All of the terms, conditions and covenants of the Loan Agreement are expressly made a part of this revolving credit note (the "Note") by reference in the same manner and with the same effect as if set forth herein at length, and any holder of this Note is entitled to the benefits of and remedies provided in the Loan Agreement and any other agreements by and between the Borrower and the Bank. The Loan Agreement contains provisions, among other things, for borrowing, repaying and reborrowing the indebtedness evidenced by this Note and for the acceleration of the maturity date hereof upon the occurrence of any Event of Default as set forth therein. The outstanding balance hereof shall be due and payable in full on the Revolving Loan Maturity Date and at such other time at which all of the outstanding principal of any Loan shall become due and payable (whether by acceleration or otherwise). This Note shall bear interest on the outstanding balance from time to time at the lower of either (i) the LIBOR Market Index Rate, plus 175 basis ---- points (1.75%) per annum or (ii) the Prime Rate, minus 75 basis points (0.75%) ----- per annum, as determined by the Bank for each day Obligations are outstanding. Interest will be calculated daily on the basis of actual days elapsed over a year of 360 days. The Borrower agrees to pay, on demand, all costs and expenses (including reasonable attorneys' fees) incurred by the Bank in connection with the collection of this Note and the enforcement of the Bank's rights and remedies under the Loan Agreement and this Note. The Borrower and all endorsers, sureties and guarantors of this Note hereby severally waive demand, presentation, notice of dishonor, protest, notice of protest, diligence in collection, and any notice of any extensions, renewals, partial payments or changes in any manner of this Note, or any delay, indulgence or other act of any holder hereof, whether before or after maturity. This Note amends and restates the terms of that certain Revolving Credit Note of the Borrower dated January 9, 1999, in the stated principal amount of $3,000,000 (the "Original Note"). This amendment and restatement is not intended by the parties to be, nor shall it be construed as, a novation of the original indebtedness evidenced by the Original Note. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH CAROLINA, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES. IN WITNESS WHEREOF, the Borrower has caused its corporate name to be signed hereto under seal by its officers duly authorized on the date written above. KEWAUNEE SCIENTIFIC CORPORATION By /s/ D. Michael Parker ---------------------------------- D. Michael Parker, Vice President ATTEST: /s/ Jeffrey L. Bunton - -------------------------------------- Jeffrey L. Bunton, Assistant Secretary [CORPORATE SEAL] 2 EX-10.2 3 0003.txt SECOND AMENDMENT TO LOAN DOCUMENTS Exhibit 10.2 SECOND AMENDMENT TO LOAN DOCUMENTS THIS SECOND AMENDMENT TO LOAN DOCUMENTS (this "Amendment") is entered into as of November 30, 2000, between KEWAUNEE SCIENTIFIC CORPORATION, a Delaware corporation (the "Borrower"), and FIRST UNION NATIONAL BANK, a national banking association (the "Bank"). RECITALS: -------- A. Pursuant to that certain Loan and Security Agreement dated as of January 6, 1999, between the Bank and the Borrower, as amended from time to time (the "Original Loan Agreement"), the Bank extended certain financial accommodations to the Borrower. B. The Borrower has requested, and the Bank has agreed, to extend the draw period and the maturity date of the Equipment Loan, subject to the terms and conditions set forth herein. C. The Original Loan Agreement, as amended hereby, is herein referred to as the "Amended Loan Agreement," and the Loan Documents, as amended hereby, are herein referred to as the "Amended Loan Documents." Except as otherwise defined herein, all capitalized terms shall have such meaning as set forth in the Amended Loan Agreement. AGREEMENT: --------- NOW, THEREFORE, in consideration of the mutual promises herein contained and for other valuable consideration, the parties hereto agree as follows: SECTION 1. Amendment to Loan Agreement. The Original Loan Agreement is - --------- --------------------------- hereby amended as follows: 1.1. Equipment Loan. Section 1.02(a) of the Original Loan Agreement is -------------- hereby deleted in its entirety, and the following is inserted in lieu thereof "(a) Subject to the terms and conditions of this Agreement, the Bank will make available an equipment term loan facility (the "Equipment Loan") to the Borrower in an amount up to $5,000,000.00 to finance the Borrower's capital expenditure needs. So long as no Default or Event of Default has occurred which has not been cured or which the Bank, in its sole and absolute discretion, has not waived, the Borrower may borrow and reborrow amounts which have been repaid from the Equipment Loan, from time to time on the terms and conditions provided herein until February 28, 2001 (the "Conversion Date"). After the Conversion Date, no payment on the Equipment Loan may be reborrowed. The Equipment Loan shall be evidenced by the Equipment Note, shall bear interest at the rates set forth in Section 1.03, and shall be payable as follows: (i) twenty-six (26) installments of interest only commencing on January 31, 1999, and on the last Business Day of each month thereafter through February 28, 2001; and (ii) sixty (60) installments of principal in equal amounts based upon the principal outstanding on the Conversion Date, plus accrued interest thereon, commencing on March 31, 2001, and on the last Business Day of each mouth thereafter, with a final installment of all principal and accrued interest being due and payable on February 28, 2006, unless sooner due and payable pursuant to the terms hereof." SECTION 2. Amendment to Equipment Note. The Equipment Note is hereby - --------- --------------------------- amended as follows: 2.1 Equipment Note. The reference to the date of "December 31, -------------- 2000" in the fourth (4th) paragraph of the Equipment Note is hereby deleted, and the date of "February 28, 2006" is inserted in lieu thereof. SECTION 3. Conditions Precedent to Closing. The obligation of the Bank - --------- ------------------------------- to close the transactions contemplated by this Amendment (the "Closing") is subject to satisfaction of the following conditions: 3.1. Loan Documents. The Bank's receipt of two (2) originals of -------------- this Amendment, fully executed by the Borrower and each other party thereto (other than Bank). 3.2. Officers Certificates. The Bank's receipt of an officers' --------------------- certificate of two (2) authorized officers of the Borrower certifying, among other things, that attached are true and correct copies of (i) resolutions adopted by the Board of Directors of the Borrower authorizing the execution, delivery and performance of this Amendment and all other documents to be executed by the Borrower in connection herewith and (ii) the names and incumbency of those persons authorized on behalf of the Borrower to sign each of the documents or certificates to be executed and delivered by the Borrower in connection herewith. 3.3. Payment of Fees, Costs and Expenses. Payment of all fees, ----------------------------------- costs and expenses due the Bank and evidence of payment to other parties of all fees, costs and expenses which the Borrower is required to pay in connection with the Closing, including, without limitation, the Bank's counsel fees incurred in connection with the negotiation, documentation and closing of this Amendment and related documents and agreements. 3.4. No Default. No Default or Event of Default shall exist under ---------- the Amended Loan Documents. 3.5. Representations and Warranties. The representations and ------------------------------ warranties contained herein and in the Amended Loan Documents shall be true and correct in all material respects as of the date of Closing, except (i) those referring to the financial statements for purposes of this Section shall be deemed to refer to the most recent financial statements timely furnished to the Bank in compliance with the Amended Loan Agreement, and (ii) those representations which specifically relate to an earlier date or which are no longer true due to an action or event specifically permitted by the provisions of the Amended Loan Documents. 2 3.6. Additional Documentation. Such other documentation or ------------------------ information as may reasonably be required by the Bank and its counsel. SECTION 4. Representations, Warranties and Covenants. The Borrower hereby - --------- ----------------------------------------- reaffirms and remakes as of the date hereof and taking into consideration the effects of the transactions contemplated in this Amendment, each of the representations and warranties contained in the Amended Loan Documents as being true and correct in all respects. The Borrower has the necessary power and authority and approvals and is duly authorized to execute, deliver and perform this Amendment and to perform the obligations contemplated hereby and thereby. The Borrower agrees that until satisfaction of the Obligations, the Borrower shall fully comply with all covenants as set forth in the Amended Loan Documents. SECTION 5. Miscellaneous. - --------- ------------- 5.1. No Waiver. Except to the extent that the Loan Documents are --------- specifically modified by this Amendment, nothing in this Amendment, or in the Bank's failure to act prior to this Amendment, shall constitute a waiver by the Bank of its rights and remedies under the Amended Loan Documents. No act or omission by the Bank under this Amendment or in its relations with the Borrower shall constitute a waiver of any of its rights and remedies under the Amended Loan Documents unless such waiver is in writing, signed by the Bank, and then only to the extent specifically set forth therein. 5.2. Reaffirmation; Incorporation; Interpretation. The Borrower -------------------------------------------- hereby acknowledges that all terms and conditions of the Amended Loan Agreement are and shall remain in full force and effect. The Borrower hereby reaffirms its Obligations under the Amended Loan Documents. This Amendment is incorporated into the Loan Documents by reference and shall constitute a part thereof as if fully set forth therein. In the event that any of the terms or the provisions of the Loan Documents are inconsistent or contradictory of the terms hereof, the terms of this Amendment shall control. 5.3. Release. The Borrower acknowledges and agrees that, as of the ------- date hereof, it does not have any claim, defense or set-off right against the Bank, or any of its officers, directors, employees, agents, successors, assigns or affiliates, nor any claim, defense or set-off right to the enforcement by the Bank of the full amount of the Obligations. The Borrower hereby forever expressly waives, releases, relinquishes, satisfies, acquits and discharges the Bank and its officers, directors, employees, agents, successors, assigns and affiliates, from any and all defenses to payment or other defenses, set-offs, claims, counterclaims, liability and causes of action, accrued or unaccrued, known or unknown, which occurred or arose on or prior to the date hereof. 5.4. Counterparts. This Amendment may be executed simultaneously ------------ in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 5.5. Severability. The invalidity or unenforceability of any one ------------ or more phrases, sentences, clauses or Sections contained in this Amendment shall not affect the validity or enforceability of the remaining portions of this Amendment, or any part thereof. 3 5.6. Governing Law. This Amendment shall be governed by and ------------- construed in accordance with the laws of the State of North Carolina, without regard to conflict of laws principles. IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the day and year first above written. BORROWER: -------- KEWAUNEE SCIENTIFIC CORPORATION By /s/ D. Michael Parker ------------------------------------ D. Michael Parker, Vice President ATTEST: /s/ Jeffrey L. Bunton - ---------------------------------- Name: Jeffrey L. Bunton, Assistant Secretary [CORPORATE SEAL] BANK: ---- FIRST UNION NATIONAL BANK By /s/ Gayle W. Harris ------------------------------------ Name: Gayle W. Harris Title: Vice President 4 -----END PRIVACY-ENHANCED MESSAGE-----