-----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, BVGuwsGmnFAJt9ox/W8yNWXM2Fg42t1yvgB9FbiY1tveYO5EtotYpLcEelVR1Dvd ibgV3sI7K4EB8vDbumKQjA== 0000910647-99-000160.txt : 19990615 0000910647-99-000160.hdr.sgml : 19990615 ACCESSION NUMBER: 0000910647-99-000160 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990424 FILED AS OF DATE: 19990608 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESTERBEKE CORP CENTRAL INDEX KEY: 0000796502 STANDARD INDUSTRIAL CLASSIFICATION: MOTORS & GENERATORS [3621] IRS NUMBER: 041925880 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-15046 FILM NUMBER: 99641991 BUSINESS ADDRESS: STREET 1: AVON INDUSTRIAL PARK STREET 2: 41 LEDIN DRIVE CITY: AVON STATE: MA ZIP: 02322 BUSINESS PHONE: 5085887700 MAIL ADDRESS: STREET 1: AVON INDUSTRIAL PARK CITY: AVON STATE: MA ZIP: 02322 10-Q 1 BODY OF 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: April 24, 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 0-15046 Westerbeke Corporation (Exact name of registrant as specified in its charter) Delaware 04-1925880 (State or other jurisdiction of (I.R.S. employer incorporation or organization) Identification No.) Avon Industrial Park, Avon, Massachusetts 02322 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code (508) 588-7700 No Change (Former name, former address and former fiscal year if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was to file such reports.) and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Outstanding at Class June 4, 1999 ----- -------------- Common Stock, $.01 par value 1,917,812
WESTERBEKE CORPORATION AND SUBSIDIARY INDEX Page Part I - Financial Information Item 1 - Consolidated Financial Statements Consolidated Balance Sheets as of April 24, 1999 and October 24, 1998 3 Consolidated Statements of Operations for the three months ended April 24, 1999 and April 25, 1998 4 Consolidated Statements of Operations for the six months ended April 24, 1999 and April 25, 1998 5 Consolidated Statements of Cash Flows for the six months ended April 24, 1999 and April 25, 1998 6 Notes to Consolidated Financial Statements 7-9 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 10-13 Item 3 - Quantitative and Qualitative Disclosures About Market Risk 14 Part II - Other Information 15-16 Signatures 17 WESTERBEKE CORPORATION AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS
April 24, October 24, 1999 1998 --------- ----------- (Unaudited) Audited ASSETS Current assets: Cash and cash equivalents $ 843,500 $ 101,900 Accounts receivable, net of allowance for doubtful accounts of $59,200 at April 24, 1999 and October 24, 1998 2,792,500 2,292,900 Inventories (Note 2) 5,510,200 5,391,600 Prepaid expenses and other assets 349,500 343,000 Deferred income taxes 578,600 578,600 ---------------------------- Total current assets 10,074,300 8,708,000 Property, plant and equipment, net 2,091,200 2,161,500 Other assets, net 2,124,300 2,002,100 Investments in marketable securities 94,300 1,690,700 Note receivable - related party 100,200 108,000 ---------------------------- $14,484,300 $14,670,300 ============================ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 191,200 $ 189,700 Revolving demand note payable - 200,000 Accounts payable 1,769,500 1,905,900 Accrued income taxes 183,400 93,900 Accrued expenses and other liabilities 454,300 668,900 ---------------------------- Total current liabilities 2,598,400 3,058,400 Deferred income taxes 71,700 154,900 Deferred compensation 429,800 320,700 Long-term debt, net of current portion 318,800 417,400 ---------------------------- Total liabilities 3,418,700 3,951,400 ---------------------------- Stockholders' equity: Common stock, $.01 par value; authorized 5,000,000 shares; issued 2,185,950 shares at April 24, 1999 and October 24, 1998 21,900 21,900 Additional paid-in-capital 6,025,300 6,025,300 Accumulated other comprehensive income (Note 3) 27,800 151,200 Retained earnings 5,746,600 5,276,500 ---------------------------- 11,821,600 11,474,900 Less - Treasury shares 268,138 at cost 756,000 756,000 ---------------------------- Total stockholders' equity 11,065,600 10,718,900 ---------------------------- $14,484,300 $14,670,300 ============================
The accompanying notes are an integral part of the consolidated financial statements. WESTERBEKE CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended ------------------------- April 24, April 25, 1999 1998 --------- --------- (Unaudited) Net sales $7,601,700 $7,224,700 Cost of sales 5,705,200 5,652,000 -------------------------- Gross profit 1,896,500 1,572,700 Selling, general and administrative expense 1,061,800 956,400 Research and development expense 329,000 268,600 -------------------------- Income from operations 505,700 347,700 Interest expense, net 3,300 58,300 Other income, net 472,900 - -------------------------- Income before income taxes 975,300 289,400 Provision for income taxes 394,700 116,500 -------------------------- Net income $ 580,600 $ 172,900 ========================== Income per common share, basic $ .30 $ .09 ========================== Income per common share, diluted $ .28 $ .08 ========================== Weighted average common shares, basic 1,917,812 1,917,812 ========================== Weighted average common shares, diluted 2,057,515 2,072,941 ==========================
The accompanying notes are an integral part of the consolidated financial statements. WESTERBEKE CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS
Six Months Ended -------------------------- April 24, April 25, 1999 1998 --------- --------- (Unaudited) Net sales $13,048,500 $12,184,200 Cost of sales 10,196,000 9,726,300 ---------------------------- Gross profit 2,852,500 2,457,900 Selling, general and administrative expense 1,880,100 1,725,300 Research and development expense 656,400 527,100 ---------------------------- Income from operations 316,000 205,500 Interest income (expense), net 32,900 (7,000) Other income, net 442,200 - ---------------------------- Income before income taxes 791,100 198,500 Provision for income taxes 321,000 79,900 ---------------------------- Net income $ 470,100 $ 118,600 ============================ Income per share common share, basic $ .25 $ .06 ============================ Income per share common share, diluted $ .23 $ .06 ============================ Weighted average common shares, basic 1,917,812 1,911,279 ============================ Weighted average common shares, diluted 2,059,146 2,073,302 ============================
The accompanying notes are an integral part of the consolidated financial statements. WESTERBEKE CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended ------------------------- April 24, April 25, 1999 1998 --------- --------- (Unaudited) Cash flows from operating activities: Net income $ 470,100 $ 118,600 Reconciliation of net income to net cash used in operating activities: Depreciation and amortization 231,800 215,200 Deferred income taxes (83,200) 17,100 Changes in operating assets and liabilities: Accounts receivable (499,600) (1,634,000) Inventories (118,600) 477,300 Prepaid expenses and other assets (6,500) (20,300) Other assets (133,100) (214,000) Accounts payable (136,400) (412,700) Accrued expenses and other liabilities (214,600) 254,000 Deferred compensation 109,100 149,900 Income taxes payable 89,500 69,600 -------------------------- Net cash used in operating activities (291,500) (979,300) -------------------------- Cash flows from investing activities: Purchase of property, plant and equipment (150,600) (285,900) Proceeds from payment of note receivable - related party 7,800 7,200 Investment in marketable securities, net 1,473,000 (252,900) -------------------------- Net cash provided (used) in investing activities 1,330,200 (531,600) -------------------------- Cash flows from financing activities: Borrowings (repayments) under revolving demand note (200,000) 1,500,000 Proceeds from exercise of employee stock options - 29,000 Principal payments on long-term debt and capital lease obligations (97,100) (107,700) -------------------------- Net cash provided (used) in financing activities (297,100) 1,421,300 -------------------------- Increase (decrease) in cash and cash equivalents 741,600 (89,600) Cash and cash equivalents, beginning of period 101,900 156,900 -------------------------- Cash and cash equivalents, end of period $ 843,500 $ 67,300 ========================== Supplemental cash flow disclosures: Interest paid $ 17,800 $ 64,400 Income taxes paid $ 120,000 $ 10,000 Supplemental disclosures of non-cash items: Increase (decrease) in unrealized gains on marketable securities, net of income taxes $ (221,100) $ 33,400
The accompanying notes are an integral part of the consolidated financial statements. WESTERBEKE CORPORATION AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Summary of Significant Accounting Policies: ------------------------------------------- A. Financial Statements -------------------- The condensed consolidated financial statements included herein have been prepared by Westerbeke Corporation (the "Company"), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. While certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, the Company believes that the disclosures made herein are adequate to make the information presented not misleading. It is recommended that these condensed statements are read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended October 24, 1998. In the opinion of the Company, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of Westerbeke Corporation and Subsidiary as of April 24, 1999, the results of their operations for the three and six months ended April 24, 1999 and April 25, 1998, and the cash flows for the six months then ended, have been included. B. Basis of Presentation --------------------- The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Westerbeke International, Inc. (a Foreign Sales Corporation). All significant intercompany transactions and accounts have been eliminated. Westerbeke International, Inc. has been inactive since fiscal year 1987. On October 25, 1998, the Company adopted Financial Accounting Standards No. 131, "Disclosure about Segments of an Enterprise and Related Information" (FAS 131). The Company operates in one market segment, marine engine and air-conditioning products. The adoption of this standard had no material effect on the Company's reporting and disclosure requirements. In March 1998, the American Institute of Certified Public Accountants issued Statement of Position 98-1 (SOP 98-1), "Accounting for the Costs of Computer Software Developed and obtained for Internal Use". The statement is effective for fiscal years beginning after December 15, 1998. Earlier application is encouraged in fiscal years for which annual financial statements have not been issued. The statement defines which costs of computer software developed or obtained for internal use are capitalized and which costs are expensed. The Company does not believe the adoption of SOP 98-1 will have a material impact on the financial statements. In April 1998, the American Institute of Certified Public Accountants issued Statement of Position 98-5 (SOP 98-5), "Reporting on the Costs of Start-Up Activities". The statement is effective for fiscal years beginning after December 15, 1998. The statement requires costs of start-up activities and organization costs to be expensed as incurred. The Company does not believe the adoption of SOP 98-5 will have a material impact on the financial statements. In June 1998, the Financial Accounting Standards Board issued SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133). The statement requires companies to recognize all derivatives as either assets or liabilities with the instruments measured at fair value. The accounting for changes in fair value gains and losses depends on the intended use of the derivative and its resulting designation. The statement is effective for all fiscal quarters of fiscal years beginning after June 15, 2000. The Company does not believe the adoption of SFAS 133 will have a material impact on the financial statements. C. Earnings per Share ------------------ Basic income per common share is computed by dividing income available to common stockholders by the weighted average number of shares outstanding for the period. Diluted income per share reflects the maximum dilution that would have resulted from the exercise of stock options. Diluted income per share is computed by dividing net income by the weighted average number of common shares and all dilutive securities, except when the effect would be antidilutive. 2. Inventories ----------- The Company uses the last-in, first-out (LIFO) method to value inventory. Inventories are comprised of the following:
April 24, October 24, 1999 1998 -------- ----------- Raw materials $4,662,100 $4,416,300 Work-in-process 507,400 530,300 Finished goods 340,700 445,000 ------------------------ $5,510,200 $5,391,600 ========================
For purposes of this LIFO calculation, the Company has estimated both the year-end inventory levels and the inflation/deflation which will occur during the fiscal year. The Company anticipates an increase in its LIFO valuation account as of October 23, 1999. Accordingly, the Company has recorded an increase of $45,000, on a pro rata basis, in the LIFO reserve during the first six months of fiscal 1999. During the first six months of 1998, the Company recorded, on a pro rata basis, an increase of $30,000 in the LIFO reserve. Inventories would have been $937,500 higher at April 24, 1999 and $892,500 higher as of October 24, 1998, if the first- in, first-out (FIFO) method had been used. Inventory cost determination on the FIFO method approximates replacement or current cost. 3. Comprehensive Income -------------------- The Company adopted the provisions of Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income during income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. This pronouncement requires that the accumulated total of other comprehensive income be shown as a separate component of stockholders' equity with additional disclosure of accumulated balances for each classification within other comprehensive income in addition to the reporting of total comprehensive income. Accumulated other comprehensive income, a component of stockholders' equity was previously titled "unrealized gain on marketable securities". During the six months ended April 24, 1999, the Company realized gains of $442,200 on the sale of marketable securities. The components of total comprehensive income for the six months ended April 24, 1999 and April 25, 1998 are as follows:
1999 1998 ---- ---- Net income $470,100 $118,600 Other comprehensive income 300 33,400 --------------------- Comprehensive income $470,400 $152,000 =====================
Item 2 - Management's Discussion and Analysis Of Financial Condition and Results Of Operations Results of Operations - - ----------------------- Net sales increased by $377,000, or 5%, during the second quarter of fiscal 1999 and increased $864,300 for the first six months of fiscal 1999 as compared to the same periods in fiscal 1998. The increase in net sales is primarily attributable to higher unit volume of the Company's marine generator products. Gross profit increased $323,800 or 21% during the second quarter and increased $394,600 or 16% for the first six months of fiscal 1999 as compared to the same periods in fiscal 1998. The increase in gross profit is primarily attributable to a decrease in manufacturing costs. As a percentage of net sales, gross profit was 25% during the second quarter of fiscal year 1999, as compared to 22% for the second quarter of fiscal 1998. For the six months ended April 24, 1999 gross profit was 22% compared to 20% for the same period ended April 25, 1998. Operating expenses increased $165,800 or 14% for the second quarter and $284,100 or 13% in the first six months of fiscal 1999, as compared to the same periods in fiscal 1998. Research and development costs have increased due to the addition of personnel and higher costs related to achieving compliance with federal and state exhaust emission requirements. Selling and administrative expenses have increased primarily due to higher advertising, legal and personnel costs. Net interest expense decreased $55,000 during the second quarter and decreased $39,900 for the first six months of fiscal 1999 as compared to the same periods in fiscal 1998. The decrease in interest expense in the second quarter and the six months ended April 24, 1999 is primarily due a lower outstanding balance on the line of credit with State Street Bank & Trust Company. Other income is comprised of the realized gain from the sale of the majority of the marketable securities portfolio during the quarter ended April 24, 1999. For the second quarter ended April 24, 1999, the Company reported net income of $580,600, compared to a net income of $172,900 for the same period in fiscal 1998. For the six months ended April 24, 1999, the Company reported net income of $470,100 as compared to net income of $118,600 for the six- months ended April 25, 1998. The Company is currently renegotiating its exclusive sales agreement with its largest customer. The existing agreement will expire on June 30, 1999. The Company cannot predict the results of these negotiations. The loss of the revenues associated with this agreement would have a material effect on the Company's operating results and financial condition if the Company were unable to replace the business and or reduce operating expenses. WESTERBEKE CORPORATION AND SUBSIDIARY Liquidity and Capital Resources - ------------------------------- During the first six months of fiscal 1999, net cash used in operations was $291,500, compared to net cash used in operations of $979,300 for the first six months in fiscal 1998. The increase in cash flow from operations is primarily attributable to the increase in net income and a decrease in accounts receivable, for the six-month period ended April 24, 1999, as compared to the same period in fiscal 1998. During the six months ended April 24, 1999, the Company purchased property, plant and equipment of $150,600. The Company plans to spend approximately $300,000 more on equipment and capital improvements during the remainder of the year. The Company has a $4,000,000 Credit Agreement with State Street Bank and Trust Company, collateralized by inventory, accounts receivable and general intangibles. At April 24, 1999, the Company had no outstanding borrowings under the Credit Agreement and approximately $470,500 committed to cover the Company's reimbursement obligations under certain letters of credit. The Credit Agreement was renewed on March 31, 1999. On January 23, 1996, the Company entered into a $500,000 revolving line of credit agreement (the "Revolving Line of Credit") and term loan facility with State Street Bank and Trust Company, collateralized by various items of emission testing and product development equipment and subject to working capital and equity covenants. On July 31, 1996, the Revolving Line of Credit terminated and automatically converted into a five year term loan in the principal amount of $491,600 bearing a fixed interest rate of 8.08%. At April 24, 1999, the outstanding principal amount was $225,900. On April 25, 1997, the Company entered into a $300,000 revolving line of credit agreement (the "1997 Revolving Line of Credit") and term loan facility with State Street Bank and Trust Company, collateralized by various items of emission testing and product development equipment and subject to working capital and equity covenants. On June 30, 1997, the 1997 Revolving Line of Credit terminated and automatically converted into a five year term loan bearing a fixed interest rate of 8.11%. At April 24, 1999, the outstanding principal amount was $190,800. Management believes cash flow from operations and borrowings available under the Credit Agreement will provide for working capital needs, principal payments on long-term debt, and capital and operating leases through fiscal 1999. Domestic inflation is not expected to have a material impact on the Company's operations. The cost of engine blocks and other components is subject to foreign currency fluctuations (primarily the Japanese yen). Exchange rate fluctuations have had a minimal impact on the Company during the first two fiscal quarters of 1999. Year 2000 Compliance - -------------------- The Company is aware of the potential for industry wide business disruption which could occur due to problems related to the "Year 2000 Issue." It is the belief of the Company's management that it has a prudent plan to address these issues within the Company and with its suppliers. The components of the Company's plan include an assessment of internal systems for modification and/or replacement, communication with vendors to determine their state of readiness to maintain an uninterrupted supply of goods and services to the Company; an evaluation of the Company's production equipment as to its ability to function properly after the turn of the century; an evaluation of facility related issues; and the development of a contingency plan. State of Readiness The Company has developed a plan to reduce the probability of operational difficulties due to Year 2000 related failures. While there is still a certain amount of work to do, the Company believes that it is on track towards a timely completion. Overall the Company estimates that it has completed approximately 95% of the Year 2000 issue identification process and approximately 75% of the process of remediating Year 2000 issues that have been identified to date. Internal Systems (Information Technology) The Company is in the process of completing its assessment of all information technology systems that could be significantly affected by the Year 2000 issue. The assessment has indicated that certain systems are already Year 2000 compliant while others are still in the process of being remediated. The Company has received from its software vendor the updated software necessary to make its operating system Year 2000 compliant, which the Company has installed and is currently testing. Testing will be ongoing throughout 1999. Suppliers The Company is in the process of communicating with its external vendors to gain an understanding of their readiness to maintain an uninterrupted supply of goods and services to the Company. The Company has identified vendors it views as critical to its business. The Company defined a critical vendor as one whose inability to continue to provide goods and services would have a serious adverse impact on the Company's ability to produce, deliver and collect payment. To date, the Company is not aware of any supplier with a Year 2000 issue that would materially impact the results of operations, liquidity or capital resources. However, the Company has no means of ensuring that suppliers will be Year 2000 ready. The inability of suppliers to complete their Year 2000 resolution process in a timely fashion could materially impact the Company. Production Equipment The Company has completed an inventory of production equipment currently used at the Company. The Company has determined the Year 2000 readiness of its equipment through communication with the equipment manufacturers and testing where appropriate. The Company is not aware of any production equipment that is affected by the Year 2000 issue. Facility Related Issues The Company has evaluated facilities related equipment with the potential for Year 2000 related failures. The Company has determined the Year 2000 readiness of its equipment through communication with the equipment manufacturers and testing where appropriate. This assessment has determined that to the Company's knowledge the Year 2000 issue will not affect facilities related equipment. The Company believes that it has a prudent approach towards evaluating facilities equipment, however, it may be impracticable or impossible to test certain items of equipment for Year 2000 readiness. To the extent such untested equipment is not Year 2000 ready, it may fail to operate on January 1, 2000, resulting in possible interruption of security, heating, telephone and other services. Costs The Company is evaluating the total cost of Year 2000 compliance. At this time, the Company estimates the total cost of Year 2000 related activities to be approximately $75,000, of which approximately $18,000 has been spent to date. This amount is not incremental spending and has been budgeted within the normal magnitude of Information Technology spending. This amount includes the replacement of hardware and applications that are outdated and were due for replacement regardless of Year 2000 issues. Contingency Plan Although the Company believes that it is taking prudent action related to the identification and resolution of issues related to the Year 2000, its remediation is still in progress. The Company is currently not in a position to determine what would be its most reasonably likely worst case Year 2000 scenario or any plan for handling such scenario. To date, the Company has not completed a formal contingency plan for non-compliance, however to the extent that further evaluation of its products, information technology systems, production equipment or information obtained from the third parties with which it has a material relationship suggests that there is a significant risk, contingency plans will be implemented. Such contingency plans may include the development of alternative sources for the product or service provided by any non-compliant vendor. This Quarterly Report on Form 10-Q may contain forward-looking information about the Company. The Company is hereby setting forth statements identifying important factors that may cause the Company's actual results to differ materially from those set forth in any forward-looking statements made by the Company. Some of the most significant factors include: an unanticipated down-turn in the recreational boating industry resulting in lower demand for the Company's products; the inability of the Company to renegotiate its exclusive sales agreement with its largest customer and/or the unanticipated loss of, or decline in sales to, other major customers; the unanticipated loss of a major supplier; the inability of the Company to effect required modifications of its products to meet governmental regulations with respect to emission standards; the unanticipated inability of the Company to be Year 2000 Compliant; market risks in the changes in value of short term investments and financial instruments; and foreign currency fluctuations resulting in cost increases to the Company for its foreign supplied components. Accordingly, there can be no assurances that any anticipated future results will be achieved. Item 3 - Quantitative and Qualitative Disclosures About Market Risk Market risk represents the risk of changes in the value of short-term investments and financial instruments caused by fluctuations in investment prices and interest rates. The Company addresses market risks in accordance with established policies. The Company's risk-management activities involve risk and uncertainties and accordingly, results could differ materially from those projected. Interest Rate Risk - ------------------ Due to the fact that the long-term debt will mature within three years, management has determined that the fair value would not be materially different from the carrying value at April 24, 1999. Part II. Other Information Item 1 Legal Proceedings ------ ----------------- The Company has initiated arbitration with the American Arbitration Association in New York against Daihatsu Motor Company, Ltd. ("Daihatsu") for breach of contract and other claims. The Company is seeking damages based on Daihatsu's breach of a Component Sales Agreement which also granted the Company rights to certain engines including an engine Daihatsu began marketing in 1993 through a joint venture with Briggs & Stratton Corporation. In a separate but related case pending in the Federal District Court for the District of Massachusetts, the Company is seeking damages from Briggs & Stratton Corporation for tortious interference with the Company's Agreement with Daihatsu and other related claims. Item 2 Changes in Securities ------ --------------------- None to report Item 3 Default Upon Senior Securities ------ ------------------------------ None to report Item 4 Submissions of Matters to a Vote of Security Holders ------ ---------------------------------------------------- (a) The Annual Meeting of Stockholders (the "Meeting") of the Company was held March 29, 1999. (b) Not applicable because: (I) proxies for the Meeting were solicited pursuant to Regulation 14 under the Securities Exchange Act of 1934; (ii) there was no solicitation in opposition to management's nominees as listed in the Company's proxy statement dated March 5, 1999; and (iii) all such nominees were elected. (c) The matters voted upon at the Meeting were as follows: (i) The election of two Class A directors of the Company. Gerald Bench FOR 1,662,693 --------- WITHHOLD AUTHORITY 41,057 --------- Nicholas H. Safford FOR 1,674,693 --------- WITHHOLD AUTHORITY 29,057 --------- (ii) A proposal to ratify the Board of Directors' selection of KPMG Peat Marwick LLP to serve as the Company's independent auditors for the Company's fiscal year ending October 23, 1999. FOR 1,700,350 --------- AGAINST 1,900 --------- ABSTENTIONS AND BROKER NON-VOTES 1,500 --------- Item 5 Other Information ------ ----------------- None to report Item 6 Exhibits and Reports on Form 8-K ------ -------------------------------- (a) Exhibits 27 Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed by the Company during the period covered by this report. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WESTERBEKE CORPORATION (Registrant) Dated June 8, 1999 /s/ John H. Westerbeke, Jr. -------------- ------------------------------ John H. Westerbeke, Jr. Chairman of the Board, President and Principal Executive Officer Dated June 8, 1999 /s/ Carleton F. Bryant III -------------- ------------------------------ Carleton F. Bryant III Executive Vice President, Chief Operating Officer and Principal Financial and Accounting Officer EX-27 2 FDS FOR 2ND QUARTER
5 1 6-MOS OCT-23-1999 APR-24-1999 843,500 0 2,792,500 59,200 5,510,200 10,074,300 5,931,100 3,839,900 14,484,300 2,598,400 0 0 0 21,900 11,043,700 14,484,300 13,048,500 13,048,500 10,196,000 10,196,000 2,536,500 0 (32,900) 791,100 321,000 470,100 0 0 0 470,100 .25 .23
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