Document/Exhibit Description Pages Size
1: 10-K Polyvision 54 265K
2: EX-10.20 Material Contract 9 36K
3: EX-10.21 Material Contract 7 30K
4: EX-10.22 Material Contract 11 47K
5: EX-10.23 Material Contract 11 48K
6: EX-10.24 Material Contract 10 44K
7: EX-10.25 Material Contract 56 124K
8: EX-10.26 Material Contract 63 220K
9: EX-10.27 Material Contract 16 59K
10: EX-10.28 Material Contract 8 30K
11: EX-10.29 Material Contract 8 34K
12: EX-10.30 Material Contract 10 37K
13: EX-10.31 Material Contract 8 34K
14: EX-22.1 Published Report Regarding Matters Submitted to a 1 6K
Vote of Security Holders
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended Commission file number
April 30, 1996 1-10555
POLYVISION CORPORATION
(FORMERLY INFORMATION DISPLAY TECHNOLOGY, INC.)
(Exact name of registrant as specified in its charter)
New York 13-3482597
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
866 North Main Street Extension
Wallingford, Connecticut 06492
---------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 294-6906
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
Common Stock, par value American Stock Exchange
$.001 per share
Securities registered pursuant to Section 12(g) of the Act:
None
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 the
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 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. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of July 18, 1996:
$6,637,677
The number of shares outstanding of the registrant's class of common stock as of
July 18, 1996:
8,530,073 shares
DOCUMENTS INCORPORATED BY REFERENCE
The Registrant intends to file a definitive Proxy Statement (the
"PolyVision Proxy Statement") pursuant to Regulation 14A within 120 days of the
end of the fiscal year ended April 30, 1996. Certain information required in
response to Items 10, 11, 12 and 13 of Part III of this Form 10-K is hereby
incorporated by reference to the PolyVision Proxy Statement.
Page 1 of ___ Pages
Exhibit Index Appears on Page ___
POLYVISION CORPORATION
(FORMERLY INFORMATION DISPLAY TECHNOLOGY, INC.)
ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED APRIL 30, 1996
TABLE OF CONTENTS
Page
----
PART I
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . 12
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
12
Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . 13
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operation . . . . . . . . . . . . . . . . . . . . . . . 14
Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . 18
Item 9. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . 18
PART III
Item 10. Directors and Executive Officers of the Registrant . . . . . . . . 18
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . 18
Item 12. Security Ownership of Certain Beneficial Owners and Management . . 18
Item 13. Certain Relationships and Related Transactions . . . . . . . . . . 18
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K . 19
2
ITEM 1. BUSINESS
------- --------
General
PolyVision Corporation, through its three wholly-owned subsidiaries (the
"Company" or "PolyVision"), is engaged in the development, manufacture and sale
of information display products.
Greensteel, Inc. ("Greensteel"), which constituted the Company's entire
business prior to the Merger (as more fully described below) under its former
name Information Display Technology, Inc. ("IDT"), is engaged in the manufacture
and sale of custom-designed and engineered writing, projection and other visual
display surfaces (such as porcelain chalkboards and markerboards), custom
cabinets, and work station and conference center casework primarily for schools
and offices. Posterloid Corporation ("Posterloid"), which became a wholly-owned
subsidiary of the Company on May 24, 1995 as a result of the Merger, is engaged
in the manufacture and sale of indoor and outdoor menuboard display systems to
the fast food and convenience store industries, and changeable magnetic signs
used principally by banks to display interest rates, currency exchange rates and
other information. APV, Inc. ("APV"), which also became a wholly-owned
subsidiary of the Company as a result of the Merger, is engaged in the research,
development, licensing and testing of a proprietary technology known as
PolyVision(TM), a materials technology with electrochemical and physical
characteristics that allow it to address applications in a number of display
product markets.
Recent Developments
Union Agreement
On February 28, 1996, Greensteel entered into a new three-year labor
agreement with the local bargaining unit of the Carpenters Union at its
Dixonville, Pennsylvania facility (the "Union"), whose members voted on that
date to accept the new labor agreement. The labor agreement provides for a
"working partnership" between Greensteel management and the Union whereby
bargaining unit members received an aggregate of 229,000 shares of the Company's
common stock and will share in 50% of the excess of "targeted gross profit"
generated at the Dixonville facility. In exchange for such equity participation
and the understanding of the importance of reducing Greensteel's cost structure
to the future growth of the business, Union members agreed to an approximate 14%
reduction in direct wages and a 6% reduction in benefits. The labor agreement
further provides for the termination of the bargaining employees' defined
benefit pension plan with any excess funding to be distributed to its
participants. Although the Company believes this agreement will substantially
enhance its competitive position and allow it to aggressively pursue increased
market share, the issuance of common stock and the termination of the pension
plan resulted in a fourth quarter charge of approximately $700,000.
Bank Financing
On April 25, 1996, the Company and Greensteel entered into a Master Credit
Agreement with the Bank of Boston Connecticut to provide various credit
facilities totaling, in the aggregate, $5,000,000 for Greensteel. The credit
agreement provides for the refinancing of Greensteel's working capital facility
with The Alpine Group, Inc. ("Alpine") which was repaid in the amount of
$2,453,000, including accrued interest, on April 30, 1996. The credit agreement
further provides for a maturity of August 31, 1997, an interest rate equal to
the prime rate plus one percent, a first lien on all tangible and intangible
personal property of Greensteel and a guaranty by the Company of such bank
indebtedness, and is subject to customary loan covenants and other financial
coverage ratios including restrictions on dividends from Greensteel to the
Company.
Greensteel Incorporation
On January 12, 1996 the Board of Directors of the Company approved the
incorporation of its then Greensteel Division. Pursuant to an Agreement of
Transfer, all of the inventory, supplies, fixtures, equipment and
3
other personal property held by the Company relating to its Greensteel Division
was transferred to Greensteel in exchange for 100% of the capital stock of such
subsidiary. Greensteel was incorporated in January 1996 to facilitate the
separate financing of Greensteel's working capital requirements.
Background
On December 21, 1994, Alpine purchased from certain stockholders of
Adience, Inc. ("Adience") a total of 82.3% of the outstanding shares of Adience
common stock (the "Adience Acquisition"), which, together with 4.9% of such
shares previously owned by Alpine, increased its ownership to 87.2% of the
outstanding shares of Adience common stock. At the time of the Adience
Acquisition, Adience owned 80.3% of the outstanding shares of IDT common stock,
and the remainder was publicly owned. As a result of such transaction, control
of IDT passed from Adience to Alpine.
On May 24, 1995, APV (a then 98% owned subsidiary of Alpine) and Posterloid
(a then wholly-owned subsidiary of Alpine) were merged with and into two
separate wholly-owned subsidiaries of IDT pursuant to an Agreement and Plan of
Merger, dated as of December 21, 1994, as amended, among Alpine, IDT, APV and
Posterloid (the "Merger Agreement"), with each subsidiary being the surviving
corporation and remaining a wholly-owned subsidiary of the Company. APV and
Posterloid had comprised Alpine's information display group ("IDG"), a business
segment of Alpine. The Merger was completed on May 24, 1995, following the
approval and adoption of the Merger Agreement by IDT shareholders at the 1995
Annual Meeting of Shareholders of IDT. Because Alpine controlled both IDG and
IDT, the Merger was accounted for as a reorganization of entities under common
control and the merged entity adopted IDG's April 30 fiscal year end. IDT has
been included in the merged entity's financial statements from the date Alpine
acquired control of IDT, which was December 21, 1994.
On June 14, 1995, Alpine distributed to its stockholders approximately 73%
of the outstanding shares of PolyVision Common Stock, which were acquired by it
in the Merger (the "Distribution"). At the time of the Distribution, the
Company comprised all of Alpine's information display operations and assets.
The Distribution, when combined with shares of the Company common stock used as
partial consideration in connection with the Adience Acquisition and the
purchase of Adience's senior notes, resulted in the ownership by Alpine of
approximately 17% of the outstanding shares of Common Stock, and Alpine remains
the Company 's largest single shareholder. Alpine also owns 98% of the
preferred stock of the Company.
Business Operations
Greensteel
Greensteel manufactures and sells custom-designed and engineered writing,
projection and other visual display surfaces (such as porcelain chalkboards and
markerboards), custom cabinets, and work station and conference center casework.
Greensteel has its own nationwide marketing network that enables it to market
its products to schools, health care facilities, offices and other institutions
throughout the country. Greensteel's products are marketed under the trade name
"Greensteel."
Greensteel has achieved its current position in the specialized markets it
serves due largely to its integrated approach to customer needs. In many cases,
Greensteel performs a full range of services, including the custom design,
production, installation and maintenance of its products. Greensteel believes
that this integrated approach, which many of its competitors do not provide,
enhances its responsiveness to customer needs. This approach, which allows the
customer to obtain a full line of products and services from a single source,
better enables Greensteel to establish an ongoing relationship with its
customers to provide for their future requirements. Competition in Greensteel's
markets is based largely on price, product quality, responsiveness and
reliability.
4
Most of Greensteel's products are sold in connection with new facility
construction or renovation. Such products are generally sold as part of a bid
process conducted through architects and general contractors working with
Greensteel's sales staff, and are custom-made to specifications. Successful
marketing of these products is dependent upon the maintenance of strong
relationships with architects and general contractors, particularly in the
education and health care construction fields. Greensteel has been advised by
its customers that its products have achieved general recognition as quality
products.
Products
Greensteel manufactures custom-made systems incorporating chalkboards,
markerboards, tackboards and bulletin boards. Greensteel manufactures porcelain
enameled chalkboards and markerboards which are sold in new construction or as
replacements for traditional slate or glass blackboards. Porcelain products are
manufactured at Greensteel's Alliance, Ohio plant, where porcelain is fused to
sheet steel in electric furnaces. The porcelain-enameled product is then
shipped to one of four other Greensteel production facilities for fabrication
into chalkboards.
Porcelain chalkboards, which are available in a range of colors, are
virtually unbreakable and maintenance free, and are warranted by Greensteel to
retain their original writing and erasing qualities under normal usage and wear.
As a result of these product qualities and the reduced availability of slate for
chalkboard production, Greensteel believes that porcelain chalkboards currently
account for approximately 75% of all chalkboard sales in the United States.
Greensteel's chalkboards, markerboards and cabinetry are typically sold
together as a package to finish wall surfaces in school rooms and offices.
These products are generally manufactured at one or more of Greensteel's five
production and fabrication facilities and are generally sold together as part of
a package to end-users through a sales force operating out of Greensteel's
regional sales offices and through independent distributors. Greensteel's
writing surface products are generally priced from $100 to $900 per unit,
depending on the surface's core material, dimension, gauge and trim, and whether
the products are being sold through its own sales staff or through independent
distributors.
In addition to chalkboards, Greensteel manufactures dry-marker boards,
which are high-gloss porcelain-enameled boards on which the user writes with a
dry erase felt-tip marker. Greensteel also manufactures a variety of other
information display surfaces for educational and health care facilities, such as
tackboards.
Unlike most of its competitors, Greensteel installs as well as manufactures
its information display surfaces. Greensteel designs, engineers and installs
manual and motorized information display systems for educational and office use,
using combinations of chalkboards, markerboards and other surfaces.
Greensteel manufactures and installs wood and plastic laminate cabinetry
for schools, hospitals, laboratories and industry. In addition, Greensteel
manufactures and installs indoor and outdoor display and bulletin board cases.
Sales and Markets
Most of Greensteel's products are sold by a bid process conducted through
architects and general contractors working with Greensteel's sales staff.
Warranties made by Greensteel with respect to its products and services are
consistent with industry standards, except for a 50 year warranty on the writing
surface of its porcelain chalkboards, which is in excess of industry standards.
Greensteel markets its products through a sales staff of 17 persons, most of
whom work on a commission basis, and maintains 12 sales offices in a number of
states. Approximately 30% and 28% of Greensteel's sales during the year ended
April 30, 1996 and the four months ended April 30, 1995, respectively, were made
through independent distributors. As stated above, Greensteel's products are
generally sold as part of a package to finish wall surfaces in school rooms and
offices. While most of the products incorporated into such packages are
manufactured by Greensteel, some components are purchased from
5
other suppliers and distributed by Greensteel as part of the package. In this
way, Greensteel acts as a distributor for certain related products which it does
not manufacture to the extent necessary to complement the sale and installation
of its own products. Pass-through sales of non-manufactured products accounted
for approximately 9% and 8% of the revenues of Greensteel for the year ended
April 30, 1996 and the four months ended April 30, 1995, respectively.
For the year ended April 30, 1996, sales to educational institutions and
health care facilities accounted for a majority of Greensteel's revenues. Most
of Greensteel's business is concentrated in the eastern half of the United
States and Greensteel believes that it is the dominant supplier of visual
display products in the Northeast.
Raw Materials
The glass frit material used by Greensteel to produce its porcelain writing
surfaces is currently produced to its specifications by a single supplier, Ferro
Corp., so as to maintain consistent color and quality standards. Management of
Greensteel believes that alternative sources of supply of the glass frit
material used by Greensteel to produce its porcelain writing surfaces are
readily available. Greensteel has never experienced any difficulty with the
quantity or quality of product from its glass frit supplier. All other raw
materials are readily available from a variety of sources.
Competition
Greensteel competes with a variety of companies which manufacture or
distribute chalkboards and institutional cabinetry. Greensteel is one of only
three manufacturers in the United States of porcelain-enameled steel facings,
along with Claridge Products and Equipment Inc. and Alliance America (which are
privately-owned companies), and is the only one with its own sales force.
Claridge Products and Equipment Inc. sells its products through a network of
independent distributors and Alliance America sells the porcelain facings only
to laminators for further fabrication. As a result, Greensteel competes only
indirectly with such manufacturers, and more directly with independent
distributors which are typically small, local and regional companies.
Greensteel has attained its competitive position primarily as a result of design
quality and reliability, both with respect to its products and installation.
Seasonality
Greensteel's business is seasonal and much of its revenues and most of its
operating profits occur in the third quarter of the calendar year. This occurs
primarily as a result of increased business activity in the summer months when
schools are closed and construction activity increases. Greensteel typically
incurs a loss in the winter months.
Backlog
At April 30, 1996, Greensteel's contract backlog was approximately
$11,310,000, as compared with approximately $15,989,000 at April 30, 1995.
Management expects that all of the backlog will be filled in its next fiscal
year. Revenues from sales of specific products are recorded when title
transfers, which is typically upon shipment. Revenues from construction of
custom installations under contracts are recorded on the percentage-of-
completion method of accounting, measured on the basis of costs incurred to
estimated total costs, which approximates contract performance to date. See
Note 2, "Revenue Recognition." to the Notes to Consolidated Financial Statements
included herein.
Employees
Greensteel currently employs approximately 294 people. Approximately 103
employees at Greensteel's Dixonville, Pennsylvania plant are members of the
Carpenters Union, with the current labor contract expiring in
6
February 1999. Of Greensteel's remaining employees, approximately 50 persons
are union members not covered by collective bargaining agreements.
Greensteel considers relations with its employees to be good.
Patents and Trademarks
Greensteel holds a number of patents and trademarks covering various
products and processes relating to its business. Greensteel believes that its
"Greensteel" trademark is important as the name "Greensteel" is highly
recognized by customers, general contractors and architects in the education and
health care markets as providers of quality products used in construction
projects. Greensteel periodically monitors for infringing uses of this mark and
has never encountered any such infringement. Management of Greensteel believes
that such infringement is unlikely. None of Greensteel's patents or other
trademarks are considered to be material to Greensteel's ongoing business.
Insurance
Greensteel maintains insurance with respect to its properties and
operations in such form, in such amounts and with such insurers as is customary
in the businesses in which Greensteel is engaged. Greensteel believes that the
amount and form of its insurance coverage are adequate at the present time.
Environmental Matters
Greensteel's manufacturing operations are subject to numerous federal,
state and local laws and regulations relating to the storage, handling,
emission, transportation and discharge of hazardous materials and waste
products. Compliance with these laws, as a result of the Adience
indemnification described below, has not been a material cost to Greensteel and
has not had a material effect upon its capital expenditures, earnings or
competitive position.
In February 1992, the Company was cited by the Ohio Environmental
Protection Agency (the "Ohio EPA") for violations of Ohio's hazardous waste
regulations, including speculative accumulation of waste (holding waste on-site
beyond the legal time limit) and illegal disposal of hazardous waste on the site
of Greensteel's Alliance, Ohio manufacturing facility.
In December 1993, the Company and Adience signed a consent order with the
Ohio EPA and Ohio Attorney General that required the Company and Adience to pay
to the State of Ohio a civil penalty of $200,000 of which the Company paid
$175,000 and Adience paid $25,000. In addition, the consent order required the
payment of stipulated penalties of up to $1,000 per day for failure to satisfy
certain requirements of the consent order, including milestones in the closure
plan. Removal and remediation activities as contemplated under the consent
order have been completed.
The Company has submitted risk assessment reports which demonstrate, in
management's opinion, that no further cleanup actions will be required on the
remaining property area not addressed under the closure plan. Based on
administrative precedent, the Company believes that it is likely that the Ohio
EPA will agree with the risk assessment reports. The Company is currently
waiting for a determination from the Ohio EPA as to whether the submitted
reports are approved. If such an agreement is not reached, additional costs may
have to be incurred to complete additional remediation efforts. Although there
are no assurances that additional costs will not have to be incurred, the
Company believes that such costs will not need to be incurred. At April 30,
1996, environmental accruals amounted to $20,000, which represents management's
reasonable estimate of the amounts to be incurred in the resolution of this
matter. Since 1991, the Company and Adience have together paid $1,423,000
(excluding the $200,000 civil penalty) for the environmental cleanup related to
the Alliance facility.
7
Under the acquisition agreement pursuant to which the Company acquired the
Alliance facility from Adience, Adience represented and warranted that, except
as otherwise disclosed to the Company, no hazardous material has been stored or
disposed of on the property and agreed to indemnify the Company for any losses
in excess of $250,000. The Company has notified Adience that it is claiming the
right to indemnification for all costs in excess of $250,000 incurred by the
Company in this matter, and has received assurance that Adience will honor such
claim. Adience has reimbursed the Company $1,428,000 through June 30, 1996.
Posterloid and APV
Posterloid manufactures and sells indoor and outdoor menuboard display
systems to the fast food and convenience store industries, and changeable
magnetic signs used primarily by banks to display interest rates, currency
exchange rates and other information. APV is engaged in the research,
development, licensing and testing of a proprietary materials technology, known
as PolyVision, with potential commercial applications in a range of consumer,
industrial, office and other host product applications that utilize or
incorporate flat-panel display components and systems.
Posterloid
Posterloid is engaged in the manufacture and sale of indoor and outdoor
menuboard display systems to the fast food and convenience store industries, and
changeable magnetic display signage used primarily by banks to display interest
rates, currency exchange rates and other information. Posterloid's displays are
custom manufactured in arrays of screen printed plastic strips for ceiling
hanging or for window or counter displays. During fiscal 1996, Posterloid had
approximately 2,000 customers. Posterloid's marketing activities are conducted
through both a direct sales force and sales representatives. Generally,
Posterloid's products are priced at less than $1,000 per unit. Raw materials
used in Posterloid's operations are widely available but are purchased from a
limited number of sources in order to obtain favorable prices and terms.
Posterloid competes with three other significant national menuboard
manufacturers and a large number of local manufacturers. Menuboard products
compete on the basis of design capability, price, quality and ability to meet
delivery requirements.
APV and PolyVision Technology
APV's proprietary technology, known as PolyVision(TM), is a materials
technology with electrochemical and physical characteristics that allow it to
address applications in a number of product markets, including flat-panel
displays and variable light transmission. The nature of the technology revolves
around the specific materials utilized and the dynamics of the electrochemical
reactions created within the materials. The proprietary aspects of the
technology include the combination of materials utilized, cell structures for
specific applications, cell internal processes and certain manufacturing
techniques. When creating a flat-panel display, PolyVision(TM) materials are
layered and sandwiched between a transparent electrode supported by a glass or
plastic substrate and a second counter electrode. When a low voltage is applied
between the electrodes, rapid chemical reactions occur and a high contrast image
is displayed. Reversal of the voltage clears or erases the displayed image.
The PolyVisionTM technology is characterized by wide viewing angles and
extremely high contrast, as compared with many other currently available flat-
panel display technologies which, at their present stage of development, exhibit
various technical and operating limitations (e.g., viewing angle, sunlight
readability and contrast) resulting in sub-optimal performance in many product
applications (e.g., electronic outdoor displays).
After acquiring the PolyVision(TM) technology, Alpine conducted a
significant internal research and development program to determine feasibility
across various product markets and to define the manufacturing and process
technology to be employed in the commercial production of PolyVision(TM)
displays. As a result of this work, APV is now producing at its facility in
Wallingford, Connecticut, low-information content displays principally for
test and evaluation purposes. Electrical, optical and environmental
characterization of these displays has been conducted since 1994 and initial
samples have been distributed to potential customers for third party
evaluation.
8
Such evaluations have indicated the need for further development primarily with
respect to consistency and duration of cell life. In this regard the technical
staff is focusing its efforts on the homogeneity of the electrolyte and other
constituent materials as well as fabrication processing, and the control and
maintenance of electrochemical balance. In addition APV is currently exploring
display applications in the point of purchasing market where the temporary
nature of many promotions do not require extended cell life.
APV's internal programs have also been augmented by third-party license and
development programs with, among others, COGIDEV (for certain specific military
applications including European military applications), Ralston Purina Co. (for
certain consumer product merchandising applications), and Monsanto Corporation
(for specific display applications).
APV currently obtains all of its outside funding from Alpine and expects
that this will continue through the remainder of fiscal 1997. APV's third party
agreements involve licensing its proprietary technology to commercial customers,
such as manufacturers of electronic and information display products, that may
incorporate the technology into their own specific products or applications in
exchange for license fees plus royalty payments based on unit product sales.
Certain of these manufacturers have established in-house prototype manufacturing
capabilities. The third-party agreements generally have a term co-extensive
with the underlying patent rights being licensed by APV. From APV's
incorporation in May 1986 through April 30, 1994, APV received approximately
$2,500,000 from license and development fees.
Flat-Panel Display Industry
Flat-panel displays are compact, thin, electronically driven information
displays (or viewing screens) which generate characters, numbers and images for
utilization in a wide range of applications from watches and calculators to
laptop computers and televisions. The flat-panel display market can be
segmented in a variety of ways, the most common of which is by the number of
distinct segments or picture elements ("pixels") that can be addressed and
consequently the amount of "information" that can be displayed. Displays
containing less than 100,000 pixels can be referred to as low-information
content displays and displays with more than 100,000 pixels can be referred to
as high-information content displays. Low-information content displays would
include the common seven-segment digital numeric displays used, for instance, in
clocks and radios and matrix addressed multiline displays used, for instance, in
data collection terminals, electronic book readers and organizers. High-
information content displays would include computer and television screens.
Another manner in which the market is segmented is by writing speed, or the rate
at which an individual segment or pixel can be switched from the on to the off
state and vice versa. Many applications, such as television, require "video"
speed capabilities (up to 60 frames per second) while other applications require
significantly less speed.
The first uses of flat-panel displays were for relatively low-information
content applications beginning with LED watches introduced in the early 1970's.
Since that time, digital flat-panel, low-information content displays have been
introduced and utilized for thousands of product applications ranging from
watches and clocks to appliances, stereos, calculators and games. The market
for analog gauges and dials continues to be replaced by this technology. Low -
information content flat-panel displays have also become increasingly
sophisticated and now include a large number of dot matrix applications with
greater flexibility such as indicator and status displays on fax machines,
copiers and automobile dashboards.
Research and Development
APV's PolyVision research and development activities are focused at the
present time on the optimization of performance and design for manufacturing and
the characterization of the initial displays being produced. APV is also
engaged in accelerated life testing of various displays in order to determine
with a high degree of predictability the actual lifespans of the displays. APV
employs a group of six engineers and technicians engaged in the development of
low-information content segmented displays and large pixel displays for signage
and point
9
of purchase applications. In addition, APV collaborates with third parties,
with whom license and/or development agreements have been executed.
Currently, APV is operating as a development stage company and is
evaluating materials technology to construct its anticipated products. To date,
APV has not experienced any supply shortages for the components it utilizes.
Management believes that the components which APV may ultimately use in its
products will be available from a variety of outside vendors, although there can
be no assurance thereof. APV cannot currently predict with certainty when or if
a commercially viable product will be introduced.
Intellectual Property and Proprietary Technology
PolyVision is protected by a number of patents granted and/or filed in the
United States, Canada, Europe and Japan. APV holds nine patents in the United
States with corresponding patents issued or pending in France, Germany, Great
Britain and Japan that expire at various dates from 2002 to 2010. APV has three
patent applications pending in the United States, Canada, Japan, France and
other European countries. In addition to patent protection, APV's proprietary
rights are protected through the execution of confidentiality and non-disclosure
agreements by APV employees, licensees and other third parties with whom APV
shares information.
Competition
Flat-panel display research and development is substantial and continuing
on a worldwide basis, dominated by large vertically integrated manufacturers in
the Far East, primarily in Japan, which possess far greater financial and
technical resources than APV. The cost and performance of the display component
in a host product is, in many cases, a critical factor in market penetration,
acceptance and pricing of the host product. As a result, the further
development and enhancement of display technology is a major priority for all
leading worldwide manufacturers of electronic and information display products.
APV does not currently intend to enter the high-volume commodity display
market. APV's initial products are anticipated to focus on dynamic sign
applications where PolyVision's wide viewing angle and contrast ratio,
especially in high ambient light environments, are expected to provide a
competitive edge. Competing technologies in the dynamic sign market include
numerous manufacturers of mechanical flip-dot, light bulb, LCD, LED and, in the
cases where existing technologies exhibit significant shortcomings, stationary
or static displays.
ITEM 2. PROPERTIES
------- ----------
Greensteel owns three of its facilities. Real estate owned by Greensteel
is subject to mortgages. Greensteel believes that all of its facilities are
well-maintained, in good condition and adequate for its present business.
Greensteel's production facilities are currently utilized to the extent of one
production shift per day. At such level of utilization, Greensteel's production
facilities have sufficient capacity to meet demand for Greensteel's products.
Certain information concerning the principal facilities of Greensteel is
set forth below:
Approximate
Owned or Floor Area Lease
Location Leased (Square Feet) Expiration
-------- ------ ------------- ----------
Dixonville, Pennsylvania . . Owned 199,226 --
Landis, North Carolina . . . Owned 46,800 --
10
Approximate
Owned or Floor Area Lease
Location Leased (Square Feet) Expiration
-------- ------ ------------- ----------
Alliance, Ohio . . . . . . . Owned 28,032 --
Corona, California . . . . . Leased 26,000 1997
The principal facilities used by APV and Posterloid, both of which are leased,
are as follows:
Approximate
Floor Area Lease
Location (Square Feet) Annual Rent Expiration
-------- ------------- ----------- ----------
Wallingford, Connecticut . 32,000 $205,000 1996
Long Island City, New York 25,000 162,000 1997
The principal executive offices of the Company and the development and
prototype facility of APV is located in Wallingford, Connecticut, at which it
has 24 employees. The manufacturing facility and administrative office of
Posterloid is located in Long Island City, New York, at which it has 52
employees. APV and Posterloid consider their employee relations to be good.
The Company is currently negotiating to lease new space which would provide for
the facility requirements of both APV and Posterloid.
ITEM 3. LEGAL PROCEEDINGS
------- -----------------
In 1994, Reliance Insurance Company of New York (the "Plaintiff") commenced
an action in the Supreme Court of the State of New York, County of Suffolk,
against several defendants including PolyVision seeking money damages based on
the purported sale and delivery by defendants of some 860 insulated metal
curtain wall panels manufactured by the Company. Plaintiff has alleged that
such panels were defective in their design and manufacture. In its original
complaint, Plaintiff seeks damages of $385,454 allegedly already incurred and
unspecified future damages. The alleged sales fall into two categories, an
original sale in 1987 and two or more sales in 1991 and 1992 of so-called
replacement panels. Among the theories of liability advanced by Plaintiff are
breach of contract, breach of express warranty and implied warranty. Pursuant
to orders of the Court, the causes of action based on the 1987 transaction were
dismissed on statute of limitation grounds. However, Plaintiff has been granted
leave to serve an amended complaint to allege, among other things, a claim under
the New Jersey Consumer Fraud Act (which might permit treble damages), while
preserving the right of the defendants, including PolyVision to challenge the
applicability of such Act. Since an amended complaint has not yet been served,
Plaintiff's theories of liability and damages are as yet not completely certain.
Moreover, since an answer to the amended complaint, if served, remains to be
served, and, as well, discovery has yet to commence, it is premature to render
an estimate of the outcome of this litigation.
For a description of certain environmental matters, see "Business --
Greensteel; Environmental Matters."
Neither APV nor Posterloid is involved in any pending or threatened
litigation.
11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------- ---------------------------------------------------
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended April 30, 1996.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
-------------------------------------------------------------
MATTERS
-------
The Company's common stock is traded on the American Stock Exchange
("AMEX") under the symbol PLI. As of April 30, 1996, there were approximately
2,409 holders of record of the Company's Common Stock.
The following table sets forth, for the fiscal periods shown (PolyVision
Corporation changed its fiscal year to April 30 from December 31 in connection
with the Merger), the high and low sales prices for PolyVision Common Stock as
reported on the AMEX. The amounts set forth below through the May 24, 1995 date
of the Merger have not been adjusted to reflect the 1-for-15 Reverse Stock
-------------
Split.
Low High
--- ----
Calendar 1994
First Quarter . . . . . . . . . . . . . . . $ 7/8 $ 5/8
Second Quarter . . . . . . . . . . . . . . 3/4 1/2
Third Quarter . . . . . . . . . . . . . . . 7/8 3/8
Fourth Quarter . . . . . . . . . . . . . . 13/16 1/2
Calendar 1995
First Quarter . . . . . . . . . . . . . . . $ 11/16 $ 1/2
Second Quarter . . . . . . . . . . . . . . 3/4 1/2
Third Quarter . . . . . . . . . . . . . . . 7/8 3/8
Fourth Quarter . . . . . . . . . . . . . . 13/16 1/2
Calendar 1996
First Quarter . . . . . . . . . . . . . . . $ 11/16 $ 1/2
Second Quarter (through May 24, 1995) . . . 11/16 1/2
Fiscal 1996
First Quarter (since May 25, 1995) . . . . $ 7-1/2 $3-1/16
Second Quarter . . . . . . . . . . . . . . 3-15/16 2-1/4
Third Quarter . . . . . . . . . . . . . . . 2-9/16 1-3/4
Fourth Quarter . . . . . . . . . . . . . . 2-5/8 1-7/8
Fiscal 1997
First Quarter (through July 19, 1996) . . . $ 2-1/4 $ 7/8
The Company has never declared or paid dividends on its common stock and
does not anticipate paying dividends at any time in the foreseeable future. The
terms of the Company's Series A Preferred Stock prohibits the Company from
paying dividends on all classes of stock junior to such stock (including its
common stock) while shares of the Company's Series A Preferred Stock remain
outstanding.
12
ITEM 6. SELECTED FINANCIAL DATA
------- -----------------------
The following selected consolidated financial data should be read in
conjunction with the consolidated financial statements of the Company and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included herein.
[Enlarge/Download Table]
Fiscal Year Ended April 30,
------------------------------------------------------------
1996 1995(1) 1994 1993 1992
---- ------- ---- ---- ----
(in thousands, except per share data) (unaudited)
Net sales from operations . . $35,627 $13,572 $5,108 $4,211 $3,507
======= ======= ====== ====== ======
(Loss) from operations . . . ($5,245) ($5,644) ($25,692) ($8,564) ($3,644)
======== ======== ========= ======== ========
Net (loss) . . . . . . . . . ($5,769) ($5,728) ($25,732) ($9,638) ($4,009)
======== ======== ========= ======== ========
Preferred stock dividends . . $2,040 $448 $448 $358 $27
====== ==== ==== ==== ===
(Loss) applicable to
common stock . . . . . . . ($7,809) ($6,176) ($26,180) ($9,996) ($4,036)
======== ======== ========= ======== ========
Loss per share (2) . . . . . ($0.94) ($0.67) ($2.56) ($1.14) ($0.56)
======= ======= ======= ======= =======
Total assets . . . . . . . . ($18,983) $22,153 $8,187 $9,496 $8,666
========= ======= ====== ====== ======
Long-term obligations . . . . $5,285 $1,865 $4,927 $9,430 $8,805
====== ====== ====== ====== ======
Preferred stock . . . . . . . $25,731 $25,502 $6,933 $5,485 $4,027
======= ======= ====== ====== ======
Total stockholders' equity
(deficit) . . . . . . . . $4,084 $11,090 $1,472 ($1,350) ($3,553)
====== ======= ====== ======== ========
------------------------
(1) Includes the results of the Greensteel Division of the Company for
the four months ended April 30, 1995. See Note 3 to Notes to
Consolidated Financial Statements for pro forma financial information.
(2) Restated for all periods to reflect the 1-for-15 reverse stock split.
13
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------- ---------------------------------------------------------------
RESULTS OF OPERATION
--------------------
Results of Operations
The following table summarizes, for the periods presented, the respective
amounts of Greensteel, APV and Posterloid:
Fiscal Year Ended April 30,
--------------------------------------------
1996 1995 1994
---- ---- ----
(in thousands, except percentages)
Net sales
Posterloid . . . . . . . . . . $ 5,557 $4,918 $5,108
Greensteel . . . . . . . . . . 30,070 8,654 --
------- ------- ---------
35,627 13,572 5,108
Gross Profit
Posterloid . . . . . . . . . . 1,635 1,484 1,930
Greensteel . . . . . . . . . . 6,129 1,453 --
------- ------- ---------
7,764 2,937 1,930
Gross Margin . . . . . . . . . . 21.8% 21.6% 37.8%
Selling, general and
administrative expenses 1,766 1,514 1,780
Posterloid . . . . . . . . . .
Greensteel . . . . . . . . . . 6,356 2,364 --
APV and Corporate . . . . . . 1,856 1,334 751
------- ------- --------
9,978 5,212 2,531
Research and development
APV . . . . . . . . . . . . . 2,886 3,224 3,259
Purchased R&D and related charges
APV . . . . . . . . . . . . . -- -- 21,687
Amortization of goodwill
Posterloid . . . . . . . . . . 145 145 145
Operating income (loss)
Posterloid . . . . . . . . . . (276) (175) 5
Greensteel . . . . . . . . . . (227) (911) --
APV and Corporate . . . . . . (4,742) (4,558) 25,697
-------- ------- --------
(5,245) (5,664) (25,692)
Net interest expense . . . . . . 516 64 383
Other (income) expense . . . . . 8 20 (343)
Fiscal Year Ended April 30, 1996 Compared with Fiscal Year Ended April
30, 1995
The fiscal 1996 comparative increase in net sales of approximately
$22,055,000, or 162%, was primarily attributable to a full year of Greensteel's
operations as compared to the four month period subsequent to its effective
purchase by Alpine on December 21, 1994 for the fiscal year ended April 30,
1995. Greensteel's comparable revenues for the year ended April 30, 1995 were
$32,611,000. The decrease in Greensteel's comparable revenues is primarily due
to comparably lower sales of third party provided casework in accordance with
Greensteel's decision in 1993 to discontinue reliance on third parties which
had led in the past to substantial cost overruns and
14
late deliveries. In addition, Posterloid's fiscal 1996 revenues increased
approximately $639,000 or 13% with increases in both the menuboard and Viscon
banking product lines. Greensteel's business is seasonal and a disproportionate
amount of its sales and operating profits occur in the third calendar quarter of
the year. This occurs as a result of increased business activity in the summer
months when schools are closed and construction activity increases.
Gross profit in fiscal 1996 increased on a comparative basis by $4,827,000,
while the gross margin percentage increased slightly to approximately 21.8% in
fiscal 1996 from 21.6% in fiscal 1995. The increase in the gross profit as well
as the increase in the gross margin percentage were primarily attributable to
Greensteel's operations. Greensteel's gross margin increased to 20.4% for
fiscal 1996 from 16.8% for the four months ended April 30, 1995, primarily due
to comparing full year results with a four month period of historically lower
production volumes and related margins. Greensteel's fiscal 1996 gross margin
was negatively affected by a non-cash charge of approximately $700,000 relating
to a new three year union agreement at its Dixonville, Pennsylvania location.
In connection with the new union agreement the Company anticipates cost savings
of approximately $1,000,000 in each of the next three years. Posterloid's
comparative 1996 gross profit increased by approximately $151,000 while gross
margin declined to 29.4% from 30.2%. Posterloid's comparative decline in gross
margin was primarily attributable to costs associated with the move of the
Viscon product line to Connecticut.
Research and development expenses, excluding depreciation and amortization
charges, decreased $780,000 on a comparative basis from fiscal 1995. The
Company has determined that the most cost effective method in the event of full
scale production of PolyVisionTM displays is through third party subcontractors.
In this regard the Company will not exercise its option to renew the lease at
its Wallingford Connecticut facility which expires in December 1996 and the
Company is currently exploring alternate sites. In connection with this
decision, depreciation and amortization expenses have been accelerated while
other PolyVisionTM technology manufacturing-related costs have been reduced,
such that research and development expenses for fiscal 1997 are anticipated to
be approximately $1,200,000.
The comparative fiscal 1996 increase in selling, general and administrative
expense of $4,766,000 was primarily attributable to the inclusion of Greensteel
for the entire fiscal year ended April 30, 1996 and a comparative increase of
$522,000 of corporate expenses relating to the new management and public company
structure implemented in connection with the May 1995 Merger.
Since the Merger in May 1995, management of the Company has focused on
deployment of its asset base and its cost structure with a near-term goal of
achieving a break-even level on operating profit for fiscal 1997. At
Greensteel, the Company consolidated its Portland, Oregon manufacturing facility
with its Corona, California facility in September 1995. An expansion of
Greensteel's Alliance, Ohio facility was completed in February 1996 to provide
more efficient laminating and distribution of its porcelain enameled chalkboards
and marker boards. In June 1996, the consolidation of Greensteel's Landis,
North Carolina manufacturing facility with its Dixonville, Pennsylvania facility
was completed. In addition to the efficiencies expected from the foregoing,
cost savings under the new labor agreement and adoption of a new health care
plan will further enhance Greensteel's competitive position. In this regard,
management of the Company intends to focus its resources on aggressively
increasing it market share in fiscal 1997 for both its Greensteel and Posterloid
subsidiaries.
Fiscal Year Ended April 30, 1995 Compared with Fiscal Year Ended April 30,
1994
The fiscal 1995 comparative increase in net sales of approximately
$8,464,000, or 166%, was attributable to the inclusion of $8,654,000 in revenues
from Greensteel's operations for the four month period subsequent to its
effective purchase by Alpine on December 21, 1994. Greensteel's comparable
revenues for the four months ended April 30, 1994 were $8,408,000. Partially
offsetting the revenue increase attributable to Greensteel was a decline in
Posterloid's fiscal 1995 revenue's of approximately $190,000 or 4%.
Greensteel's business is seasonal and a disproportionate amount of its sales and
operating profits occur in the third calendar quarter of the year. This
15
occurs as a result of increased business activity in the summer months when
schools are closed and construction activity increases.
Gross profit in fiscal 1995 increased on a comparative basis by $1,007,000,
while the gross margin percentage declined from approximately 37.8% in fiscal
1994 to 21.6% in fiscal 1995. The increase in the gross profit as well as the
decline in the gross margin percentage were primarily attributable to the
inclusion of Greensteel's operations in fiscal 1995. Greensteel, which
historically has operated at gross margins below 19%, contributed a gross profit
during the period of its inclusion of approximately $1,453,000, representing a
gross margin percentage of approximately 16.8%. Posterloid's comparative 1995
gross profit decreased by approximately $446,000 while gross margin declined to
30.2% from 37.8%. Posterloid's comparative declines in gross profit and gross
margin represent a reduction in business from the higher margin banking sector.
The comparative fiscal 1995 increase in selling, general and administrative
expense of $2,681,000 was primarily attributable to the inclusion of Greensteel
for the four months ended April 30, 1995 and approximately $632,000 of Merger-
related professional fees and other administrative overhead expenses charged by
Alpine.
Fiscal Year Ended April 30, 1994 Compared with Fiscal Year Ended April 30,
1993
Net sales for the fiscal year ended April 30, 1994 increased by
approximately $897,000, or 21.3%, from the fiscal year ended April 30, 1993.
This increase resulted primarily from an increase of approximately $820,000 in
sales to the banking sector which benefitted from a change in federal "truth in
savings" regulations which mandate the disclosures banks are required to make to
customers. The change in regulations resulted in banks being required to update
certain of the information displayed on rate boards. This requirement resulted
in a number of banks upgrading and/or replacing existing rateboards.
Gross profit in fiscal 1994 increased by approximately $895,000, while the
gross margin increased to 37.8% as compared to 24.6% for the year ended April
30, 1993. The increase in gross profit and gross margin reflected improved cost
controls, costs related to the consolidation of the operations of Posterloid,
American Menu Display, Inc. ("AMD") (substantially all of the assets of which
were acquired in January 1993) and VISCON in fiscal 1993, and the inclusion of
higher margin banking sector sales.
S,G&A declined by approximately $852,000 during fiscal 1994 due primarily
to a decrease at APV of $1,000,000. The decrease in APV-related expenses
resulted from the consolidation of administrative functions and costs associated
with the termination of employees in connection with the transfer of the product
development activities from PolyVision France's Massy, Paris facility to APV's
product development facility in Wallingford, Connecticut and a reduction in non-
cash compensation expenses related to stock option grants.
During fiscal 1994, APV incurred a non-cash charge of approximately
$21,687,000 related to the acquisition by Alpine of substantially all of APV's
minority equity ownership interest. Approximately $19,500,000 of the total
charge related to the market value of Alpine common stock issued in the stock-
for-stock exchange which, in accordance with generally accepted accounting
principles, was recorded as an expense for purchased research and development,
offset by a credit to stockholders' equity. The remainder of the charge related
to expenses associated with the transaction, and closedown costs related
principally to PolyVision France's development operations which were
significantly reduced.
During fiscal 1993, APV recorded a similar charge of approximately
$2,800,000 for the purchase of assets and know-how of a research and development
partnership between APV and Kirkbi Projekt A/S, a Danish company.
Operating loss for the year ended April 30, 1994 increased to $25,700,000
from $8,600,000 for the year ended April 30, 1993. The increase resulted
primarily from the substantial non-recurring non-cash charges resulting from the
acquisition by Alpine of the minority interest in APV, referred to above. On a
comparative basis, the fiscal 1993 operating loss of $8,600,000 included an
approximate $2,800,000 charge for purchased R&D.
16
The changes in interest expense in fiscal 1994 and 1993 resulted from
changes in corporate allocations. Other income in fiscal 1994 consisted
primarily of R&D credits associated with PolyVision France.
Liquidity and Capital Resources
During fiscal 1996, the principal uses of cash included approximately
$3,641,000 used for operating activities and approximately $774,000 for
investing activities. Approximately $1,675,000 of such uses were attributable
to ongoing PolyVisionTM technology development efforts at APV, $1,772,000 of
corporate expenses and approximately $1,242,000 was used to repay indebtedness.
Sources of cash included approximately $3,335,000 of long term borrowings from
Alpine, $1,200,000 of new long term borrowings by Greensteel and $1,532,000 of
net repayments by Adience on amounts owed to Greensteel.
During the year ended April 30, 1996, Greensteel provided approximately
$171,000 from its operating activities while Posterloid used approximately
$355,000 for its operating activities.
On April 25, 1996, Greensteel as borrower and the Company as Guarantor,
entered into a $5,000,000 Master Credit Agreement (the "Agreement") with the
Bank of Boston Connecticut to provide financing for Greensteel's general working
capital requirements. In connection with such financing, Greensteel repaid
$2,453,000 to Alpine on April 30, 1996 pursuant to a $2,500,000 temporary credit
facility provided by Alpine (see Note 16 to Notes to Consolidated Financial
Statements included herein). The Agreement provides for a revolving credit
facility of up to $3,800,000 based upon eligible accounts receivable and
inventory as defined (unused and available borrowings after repayment to Alpine
were $1,611,000 at April 30, 1996) at the Bank's prime rate plus 1% (9.25% at
April 30, 1996) and a $1,200,000 term loan payable in equal monthly installments
of $20,000 with interest at the Bank's prime rate plus 1-1/2% (9.75% at April
30, 1996) beginning June 1, 1996 through August 1, 1997, with the remaining
unpaid principal amount of $900,000 due on August 31, 1997. The Agreement
terminates August 31, 1997 and provides for renewal at the Bank's sole and
absolute discretion.
Substantially all of Greensteel's assets are pledged as collateral for the
credit facility. The Agreement requires Greensteel's compliance with certain
financial covenants including maintenance of a minimum tangible net worth and
minimum debt service coverage, as defined, and a restriction on dividends
to the Company, which requires maintenance of a modified debt service coverage
after taking into account any such dividends, and on other transfers of funds
to the Company or its other subsidiaries. The Company is a guarantor of the
Agreement and has pledged Greensteel's common stock in connection therewith.
Greensteel was in compliance with all such financial covenants at April 30,
1996.
On May 24, 1995, the Company entered into an agreement with Alpine,
pursuant to which the Company may borrow from time to time, until May 24, 1997,
up to $5,000,000 from Alpine to be used by the Company to fund its working
capital needs, including research, development and commercialization activities
in connection with APV's PolyVision display technology. Borrowings under the
agreement are unsecured and bear interest at a market rate reflecting Alpine's
cost of borrowing such funds (13% at April 30, 1996), with interest payable
semiannually in cash (but added to the outstanding principal amount for the
first 18 months). For the year ended April 30, 1996 Alpine agreed with the
Company to a modification of terms whereby the Company issued 9,177 shares of
the Company's Series A Preferred Stock to Alpine in lieu of the addition
approximately $229,000 of interest to the outstanding principal amount of
$3,335,000 at April 30, 1996. The principal balance outstanding will be due on
May 24, 2005, subject to mandatory prepayment of principal and interest, in
whole or in part, from the net cash proceeds of any public or private, equity
or debt financing made by the Company at any time before maturity. Alpine's
obligation to lend such funds to the Company is subject to a number of
conditions, including review by Alpine of the proposed use of such funds by the
Company. Alpine's revolving credit facility provides the funds for it to extend
the Alpine Financing to the Company. While no assurance can be given,
management believes that such financing availability which includes $1,665,000
of remaining funding commitment at April 30, 1996, together with anticipated
support from Posterloid's operations, will be sufficient to meet the needs of
APV and its PolyVision(TM) development efforts for the next 12 months, which are
anticipated to require approximately $1,000,000.
17
In the long term, the successful introduction of commercially viable
products will be required for APV to continue to support a sustained research
and development effort at its current level. APV will continue to explore
development and licensing opportunities that further broaden the applications of
its PolyVisionTM technology and provide additional funding. In addition,
management will also consider the private and/or public equity markets as
potential capital sources in connection with the goal of commercializing its
PolyVisionTM technology and reducing its dependence upon Alpine. There can be
no assurance, however, that commercially viable products will be introduced or
that such additional sources of funding will be available on reasonable terms.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
------- -------------------------------------------
The financial statements and supplementary data of the Company appear on
pages F-2 through F-20 of this Form 10-K, are indexed herein under Item
14(a)(1), and are incorporated herein by reference. See also the financial
statement schedule appearing herein under Item 14(a)(2).
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
------- ------------------------------------------------
ACCOUNTING AND FINANCIAL DISCLOSURE
-----------------------------------
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
-------- --------------------------------------------------
The information required by this Item is incorporated herein by reference
to the Company's definitive Proxy Statement to be filed with the Securities and
Exchange Commission pursuant to Regulation 14A within 120 days after the end of
the fiscal year covered by this report (the "PolyVision Proxy Statement").
ITEM 11. EXECUTIVE COMPENSATION
-------- ----------------------
The information required by this Item is incorporated herein by reference
to the PolyVision Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
-------- --------------------------------------------------------------
The information required by this Item is incorporated herein by reference
to the PolyVision Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------- ----------------------------------------------
The information required by this Item is incorporated herein by reference
to the PolyVision Proxy Statement.
18
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
-------- ----------------------------------------------------------------
(a)(1) Financial Statements.
The following financial statements of PolyVision Corporation are submitted
in a separate section beginning on page F-1 pursuant to the requirements of Form
10-K, part II, Item 8 and Part IV, Items 14(a) and 14(d):
Page
----
Report of Independent Accountants . . . . . . . . . . . . . . . . . . . . . F-1
Consolidated Balance Sheets as of April 30, 1996 and 1995 . . . . . . . . . F-2
Consolidated Statements of Operations for the Years ended
April 30, 1996, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . F-3
Consolidated Statements of Stockholders' Equity (Deficit) for
the Years ended April 30, 1996, 1995 and 1994 . . . . . . . . . . . . . . . F-4
Consolidated Statements of Cash Flows for the Years ended
April 30, 1996, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . F-5
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . F-7
(a)(2) Financial Statement Schedules.
The following schedules of PolyVision Corporation are submitted for the
years ended April 30, 1996, 1995 and 1994:
Page
----
Schedule I - Condensed Financial Information of Registrant . . . . . . . . S-1
Schedule II - Valuation and Qualifying Accounts . . . . . . . . . . . . . . S-6
All other schedules are omitted because they are not applicable or are not
required, or because required information is included in the financial
statements or the notes thereto.
(a)(3) Exhibits.
Exhibit No. Document
----------- --------
2.1 Agreement and Plan of Merger, dated as of December 21, 1994, as
amended, among IDT, The Alpine Group, Inc., Alpine PolyVision,
Inc. and Posterloid Corporation.(1)
3.1 Restated Certificate of Incorporation of the Company.(1)
3.2 By-laws of the Company. (2)
19
Exhibit No. Document
----------- --------
4.4 Specimen form of Common Stock Certificate of the Company.(3)
10.1 Asset Acquisition Agreement, dated as of April 24, 1990, relating
to the purchase of the Information Display Division of Adience,
Inc. by IDT.(4)
10.2 Management and Administrative Services Agreement, dated as of
April 24, 1990, between IDT and Adience, Inc.(5)
10.3 Employment Agreement, dated as of October 8, 1990, between IDT
and N. Roy Anderson.(2)
10.4 Tax Sharing Agreement, dated as of April 24, 1990, between IDT
and Adience, Inc.(5)
10.7 1990 Stock Incentive Plan of IDT.(2)
10.8 Nonstatutory Stock Option Agreement, dated November 12, 1990,
between IDT and N. Roy Anderson.(2)
10.15 1994 Stock Option Plan of the Company.(1)
10.16 Credit Commitment Letter Agreements, dated May 24, 1995, between
the Company and The Alpine Group, Inc.(3)
10.17 Registration Rights Agreement, dated May 24, 1995, between the
Company and The Alpine Group, Inc.(3)
10.18 Form of Indemnification Agreement for Directors of the Company.
(3)
10.19 1996 Union Stock Grant Plan of the Company.(6)
10.20 1995 Directors Stock Grant Plan of the Company.
10.21 1995 Directors Stock Option Plan of the Company.
10.22 Amended and Restated Employment Agreement, dated as of May 1,
1995, between the Company and Ivan Berkowitz.
10.23 Amended and Restated Employment Agreement, dated as of May 1,
1995, between the Company and Joseph A. Menniti.
10.24 Employment Agreement, dated as of May 1, 1995, between the
Company and Mel Schrieberg.
10.25 Articles of Agreement, dated February 28, 1996, between
Greensteel and The Carpenters' District Council of Western
Pennsylvania.
10.26 Master Credit Agreement, dated as of April 25, 1996, among Bank
of Boston Connecticut (the "Bank"), Greensteel and the Company.
10.27 Security Agreement, dated as of April 25, 1996, between the Bank
and Greensteel.
10.28 Pledge Agreement, dated as of April 25, 1996, between the Bank
and Greensteel.
20
Exhibit No. Document
----------- --------
10.29 Unlimited Continuing Guaranty Agreement, dated as of April 25,
1996, between the Bank and the Company.
10.30 Stock Pledge Agreement, dated as of April 25, 1996, between the
Bank and the Company.
10.31 Agreement of Transfer, dated as of January 31, 1996, between the
Company and Greensteel.
22.1 Subsidiaries of the Company.
---------------------------------
(1) Incorporated herein by reference from Proxy Statement for the Annual
Meeting of Shareholders, dated May 1, 1995.
(2) Incorporated herein by reference from Current Report on Form 8-K, dated
April 24, 1990.
(3) Incorporated herein by reference to Registration Statement on Form S-2
(No. 33-93010), effective June 9, 1995.
(4) Incorporated herein by reference from Annual Report on Form 10-K for the
fiscal year ended December 31, 1990.
(5) Incorporated herein by reference from Post-Effective Amendment No. 1 to
Registration Statement No. 33-22701 NY.
(6) Incorporated herein by reference to Registration Statement on Form S-8
(No. 333-3897), effective May 16, 1996.
(b) Reports on Form 8-K.
None.
21
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.
POLYVISION CORPORATION
Date: July 26, 1996 By: /s/ Alan J. Nickerson
----------------------
Alan J. Nickerson
Chief Financial
Officer and
Secretary
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:
/s/ Steven S. Elbaum Chairman of the Board July 26, 1996
--------------------
Steven S. Elbaum and Director
/s/ Ivan Berkowitz Chief Executive Officer July 26, 1996
--------------------
Ivan Berkowitz and Director (Principal
Executive Officer)
/s/ Alan J. Nickerson Chief Financial Officer July 26, 1996
-------------------------
Alan J. Nickerson and Secretary (Principal
Financial and Accounting
Officer)
/s/ Lyman C. Hamilton, Jr. Director July 26, 1996
--------------------------
Lyman C. Hamilton, Jr.
/s/ Stephen C. Knup Director July 26, 1996
--------------------
Stephen C. Knup
/s/ Robert J. Levenson Director July 24, 1996
-------------------------
Robert J. Levenson
Director July ___, 1996
-------------------------
Thomas M. Ramseur
/s/ Bragi F. Schut Director July 26, 1996
--------------------
Bragi F. Schut
22
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To PolyVision Corporation:
We have audited the accompanying consolidated balance sheets of PolyVision
Corporation (a New York corporation, formerly known as Information Display
Technology, Inc.) and subsidiaries as of April 30, 1996 and 1995, and the
related consolidated statements of operations, stockholders' equity (deficit)
and cash flows for each of the three years in the period ended April 30, 1996.
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 PolyVision Corporation and
subsidiaries as of April 30, 1996 and 1995, and the results of their operations
and their cash flows for each of the three years in the period ended April 30,
1996, in conformity with generally accepted accounting principles.
As discussed in Note 1, previously issued consolidated financial statements of
Alpine PolyVision, Inc. and subsidiary as of April 30, 1994 and for the year
then ended have been retroactively restated to reflect "push down" accounting
for the acquisition of a minority interest.
Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The schedules listed in the
index to the consolidated financial statements are presented for purposes of
complying with the Securities and Exchange Commission's rules and are not a
required part of the basic consolidated financial statements. These schedules
have been subjected to the auditing procedures applied in our audits of the
basic consolidated financial statements and, in our opinion, fairly state in all
material respects the financial data required to be set forth therein in
relation to the basic consolidated financial statements taken as a whole.
ARTHUR ANDERSEN LLP
New Haven, Connecticut
June 28, 1996
F-1
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
CONSOLIDATED BALANCE SHEETS
April 30, 1996 and 1995
(amounts in thousands, except share amounts)
1996 1995
---- ----
ASSETS
------
Current Assets:
Cash $ 670 $ 260
Accounts receivable, net of allowance for
doubtful accounts of $575 and $521 8,027 8,358
Receivable from affiliates -- 1,532
Inventories 3,735 5,029
Costs and estimated earnings in excess of billings
on uncompleted contracts 823 823
Prepaid expenses and other current assets 345 329
-------- ----------
Total current assets 13,600 16,331
Property and equipment, net 1,402 1,649
Goodwill, net 3,981 4,126
Other assets -- 47
---------- -----------
TOTAL ASSETS $18,983 $ 22,153
======= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Short-term borrowings $ 1,252 $ 1,379
Current maturities of long-term debt 220 1,115
Accounts payable 2,877 2,957
Accrued expenses 2,667 3,305
Accrued dividends 2,040 --
Billings in excess of costs and estimated earnings
on uncompleted contracts 503 522
-------- ---------
Total current liabilities 9,559 9,278
Long-term debt, less current maturities 980 --
Indebtedness to The Alpine Group, Inc. 3,335 --
Royalties payable 750 750
Excess of net assets over purchase price of acquisition 275 1,035
Commitments and contingencies
Stockholders' Equity:
Series A Preferred Stock, $.01 par value, at $25 per
share liquidation value;
authorized 1,500,000 shares, issued 1,029,253
and 1,020,076 shares 25,731 25,502
Common stock, $.001 par value; authorized 25,000,000
shares, issued 8,530,073 and 8,301,073 shares 9 8
Capital in excess of par value 38,524 37,951
Accumulated deficit (60,180) (52,371)
-------- --------
Total stockholders' equity 4,084 11,090
--------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 18,983 $ 22,153
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
F-2
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended April 30, 1996, 1995, and 1994
(amounts in thousands, except per share amounts)
1996 1995 1994
---- ---- ----
Net sales $35,627 $13,572 $ 5,108
Cost of goods sold 27,863 10,635 3,178
-------- -------- ---------
Gross profit 7,764 2,937 1,930
Selling, general and administrative
9,978 5,212 2,531
Research and development 2,886 3,224 3,259
Purchased R&D and related charges -- -- 21,687
Amortization of goodwill 145 145 145
--------- --------- ----------
Operating loss (5,245) (5,644) (25,692)
Interest income 71 120 1
Interest expense (587) (184) (384)
Other income (expense), net (8) (20) 343
---------- --------- ----------
Loss before income taxes (5,769) (5,728) (25,732)
Income tax expense -- -- --
----------- ----------- -----------
Net loss (5,769) (5,728) (25,732)
Preferred stock dividends 2,040 448 448
--------- ---------- ----------
Loss applicable to common stock ($7,809) ($ 6,176) ($26,180)
======== ========= =========
Loss per share of common stock ($ 0.94) ($ 0.67) ($ 2.56)
========= ========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
[Enlarge/Download Table]
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
For the years ended April 30, 1996, 1995, and 1994
(Amounts in thousands, except share amounts)
8% Cumulative Series A
Common Stock Preferred Stock Preferred Stock
------------ --------------- ---------------
Shares Amount Shares Amount Shares Amount
------ ------ ------ ------ ------ ------
Balance at May 1, 1993 10,234,784 $ 10 5,100 $5,485
Dividends on Preferred Stock 448
Shares Issued 7,138
Contribution of Capital by
The Alpine Group, Inc.
Issuance of Preferred Stock 1,000 1,000
Purchased research and development expense
contributed by The Alpine Group, Inc.
Net (Loss) for the year ended April 30, 1994
------------- -------- --------- ---------
Balance at April 30, 1994 10,241,922 10 6,100 6,933
Dividends on Preferred Stock 448
Recapitalization (3,005,124) (3) 1,020,076 $25,502
Contribution of capital by
The Alpine Group, Inc.
Acquisition of Greensteel 1,064,275 1 (6,100) (7,381)
Net (Loss) for the year ended April 30, 1995
---------- -------- --------- --------- ---------- ---------
Balance at April 30, 1995 8,301,073 8 0 0 1,020,076 25,502
Dividends on Preferred Stock
Shares Issued in Connection with Union 229,000 1
Agreement
Issuance of Preferred Stock in Lieu of
Deferred Interest 9,177 229
Compensation Expense Related to Stock Grants
Net (Loss) for the year ended April 30, 1996
------------- --------- --------- --------- ------------ ---------
Balance at April 30, 1996 8,530,073 $ 9 0 $ 0 1,029,253 $25,731
=========== ======== ========= ======== ========== =======
Capital In
Excess of Par Accumulated
Value Deficit Total
-------------- -------------- ------------
Balance at May 1, 1993 $13,170 ($20,015) ($1,350)
Dividends on Preferred Stock (448)
Shares Issued 28 28
Contribution of Capital by
The Alpine Group, Inc. 6,881 6,881
Issuance of Preferred Stock
Purchased research and development expense 1,000
contributed by The Alpine Group, Inc. 20,645 20,645
Net (Loss) for the year ended April 30, 1994
(25,732) (25,732)
----------- ----------- -----------
Balance at April 30, 1994
Dividends on Preferred Stock 40,724 (46,195) 1,472
Recapitalization (448)
Contribution of capital by (25,499)
The Alpine Group, Inc. 5,346 5,346
Acquisition of Greensteel
Net (Loss) for the year ended April 30, 1995 17,380 10,000
(5,728) (5,728)
----------- ---------- ----------
Balance at April 30, 1995
Dividends on Preferred Stock 37,951 (52,371) 11,090
Shares Issued in Connection with Union (2,040) (2,040)
Agreement 486 487
Issuance of Preferred Stock in Lieu of
Deferred Interest
Compensation Expense Related to Stock Grants 229
Net (Loss) for the year ended April 30, 1996 (5,769) (5,769)
----------- ---------- ---------
Balance at April 30, 1996 $ 38,524 ($60,180) $4,084
======== ========= =========
The accompanying notes are an integral part of these consolidated
financial statements.
F-4
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended April 30, 1996, 1995, and 1994
(amounts in thousands)
[Download Table]
1996 1995 1994
---- ---- ----
Cash flows from operating activities:
(Loss) from operations ($5,769) ($5,728) ($25,732)
Adjustments to reconcile (loss) from operations
to net cash (used for) operations:
Depreciation and amortization 1,156 647 1,619
Compensation expense for stock grants 574 -- --
Deferred interest 229 -- --
Purchased R&D and related charges -- -- 20,645
Change in assets and liabilities:
Accounts receivable 331 1,506 (115)
Inventories 1,294 (897) 20
Other current assets 31 (260) (405)
Other assets -- -- 132
Accounts payable and accrued expenses (1,468) (98) 375
Other (19) (149) 127
--------- -------- --------
Cash (used for) operating activities (3,641) (4,979) (3,334)
--------- -------- --------
Cash flows from investing activities:
Capital expenditures (774) (432) (397)
Net cash received in acquisition -- 315 --
--------- -------- --------
Cash (used for) investing activities (774) (117) (397)
--------- -------- --------
Cash flows from financing activities:
Net short-term borrowings (repayments) (127) 579 --
Long-term borrowings 1,200 -- 690
Repayments of long-term borrowings (1,115) (70) (62)
Advances from The Alpine Group, Inc. -- 4,590 2,820
Promissory note borrowings 3,335 -- --
Net repayments of receivable from affiliates 1,532 234 --
Net proceeds from the sale of stock -- -- 28
--------- -------- --------
Cash provided by financing activities 4,825 5,333 3,476
--------- -------- --------
Net increase (decrease) in cash 410 237 (255)
Cash at beginning of period 260 23 278
--------- -------- --------
Cash at end of period $ 670 $ 260 $ 23
========= ======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
F-5
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended April 30, 1996, 1995 and 1994
(Continued)
1996 1995 1994
---- ---- ----
(in thousands)
Supplemental disclosures:
Interest paid $358 $ 196 $ 139
==== ======== =========
Non-cash investing and financing activities:
Conversion of The Alpine Group, Inc.
indebtedness:
Preferred stock $229 $ 5,346 $ 1,000
==== ======== ========
Paid in Capital $ 6,881
========
Purchased research and development
expense contributed by The Alpine Group, Inc. $20,645
=======
Common stock issued in connection with
Union Agreement $487
====
Acquisition (net of cash acquired):
Assets acquired $17,686
Liabilities assumed 8,001
--------
Common stock issued $ 9,685
========
The accompanying notes are an integral part of these consolidated financial
statements.
F-6
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1996, 1995, and 1994
1. Basis of Presentation and Nature of Business
--------------------------------------------
PolyVision Corporation (formerly Information Display Technology, Inc. or
"IDT") (the "Company"), through its wholly-owned subsidiaries, Greensteel,
Inc. ("Greensteel"), APV, Inc. ("APV") and Posterloid Corporation
("Posterloid"), is engaged in the development, manufacture and sale of
information display products. Greensteel is engaged in the manufacture and
sale of custom-designed and engineered writing, projection and other visual
display surfaces (such as porcelain chalkboards and marker boards), custom
cabinets, and work station and conference center casework. APV, which
became a wholly-owned subsidiary of the Company as a result of the Merger
(see below), is engaged in the research, development, licensing and initial
manufacturing and testing of a proprietary technology known as
PolyVision(TM), a materials technology with electrochemical and physical
characteristics that allow it to address applications in a number of
product markets, including flat-panel displays and variable light
transmission. Posterloid, which also became a wholly-owned subsidiary as
a result of the Merger, is engaged in the manufacture and sale of indoor
and outdoor menuboard display systems to the fast food and convenience
store industries, and changeable magnetic signs used principally by banks
to display interest rates, currency exchange rates and other information.
On December 21, 1994, The Alpine Group, Inc. ("Alpine"), acquired an
additional 82% of the outstanding common stock of Adience, Inc. ("Adience")
to increase its ownership in Adience to approximately 87 percent, resulting
in an indirect ownership in IDT of approximately 70%. Also on December 21,
1994, the Company entered into a Merger Agreement with Alpine and two of
its subsidiaries, APV and Posterloid (together, "IDG"), whereby the Company
would merge with IDG and the Company would be named PolyVision Corporation.
Because Alpine controlled both IDG and IDT, the Merger, which was completed
on May 24, 1995, resulted in a new reporting entity which is being
accounted for as a reorganization of entities under common control. The
merged entity has adopted IDG's April 30 fiscal year end and, in order to
provide timely meaningful information, the accompanying financial
statements are presented as if the merger occurred on April 30, 1995. The
accompanying financial statements give effect to push-down accounting to
adjust IDT's accounting basis to fair value related to the December 21,
1994 acquisition of Adience by Alpine. Accordingly, the accompanying
financial statements for the year ended April 30, 1994 represent the
historical financial statements of IDG and for the year ended April 30,
1995 consist of the historical financial statements of IDG adjusted to
include the results of operations of IDT from the December 21, 1994
acquisition date. All significant intercompany transactions and accounts
have been eliminated in the accompanying consolidated financial statements.
In connection with the Merger, APV transferred its previously wholly-owned
subsidiary, PolyVision France S.A., to Alpine at its book value resulting
in an increase of amounts due to Alpine by APV of $702,000. Also in
connection with the Merger, Alpine distributed to its shareholders 76% of
its ownership in the Company resulting in Alpine retaining an approximate
17% ownership of the Company's common stock.
In connection with the Merger, APV's previously issued financial statements
have been retroactively restated to adopt accounting principles required to
be used in filings with the Securities and Exchange Commission.
Accordingly, in the accompanying consolidated financial statements,
Alpine's fiscal 1994 purchase of a minority interest in APV has been
reflected on a "push down" basis (see Note 14) pursuant to the provisions
of Staff Accounting Bulletins Nos. 54 and 73. In APV's previously issued
financial statements, parent company transactions were not pushed down to
APV. The effect of this change in
F-7
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1996, 1995, and 1994
(CONTINUED)
accounting principle was to increase APV's capital surplus by $20,645,000
and to record a purchased research and development charge of $20,645,000,
thereby increasing APV's previously reported fiscal 1994 net loss by the
same amount.
2. Summary of Significant Accounting Policies
------------------------------------------
Cash flow reporting
The Company considers all highly liquid investments with an original
maturity of 3 months or less to be cash equivalents.
Inventories
Inventories are stated at the lower of cost or market, with cost determined
on the first-in, first-out basis.
Revenue recognition
Greensteel's revenues are from sales of specific products and construction
of custom installations under contracts. Revenues from sales of specific
products are recorded when title transfers, which is typically when
shipment occurs. Revenues from contracts are recorded on the percentage-
of-completion method of accounting, measured on the basis of costs incurred
to estimated total costs, which approximates contract performance to date.
Approximately 70% of Greensteel's revenues for the year ended April 30,
1996 were from contracts, and approximately 75% of the related costs of
revenues were from contracts. Provisions for losses on uncompleted
contracts are made if it is determined that a contract will ultimately
result in a loss.
Posterloid recognizes revenues from sales of products when title transfers,
which is typically when shipment occurs.
Warranty claims
Warranty claims are accounted for on an accrual basis based on historical
experience. There have been no significant warranty claims to date.
Loss per common share
Loss per common share is computed by dividing net loss applicable to common
shares by the weighted average number of common shares outstanding. Common
equivalent shares are excluded from the computation as their effect is
anti-dilutive. For the years ended April 30, 1996, 1995 and 1994 the
weighted average number of shares used in computing loss per share was
8,339,200, 9,240,214 and 10,238,353, respectively.
Property and equipment
Plant and equipment are stated at cost less accumulated depreciation.
Depreciation and amortization are provided over the estimated useful lives
of the assets using the straight-line method. The estimated lives are as
follows:
F-8
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1996, 1995, and 1994
(CONTINUED)
Furniture and fixture 5-10 years
Machinery and equipment 2-10 years
Leasehold improvements The lesser of the lease term or estimated useful
life
Maintenance and repairs are charged to expense as incurred. Long-term
improvements are capitalized as additions to plant and equipment. Upon
retirement, or other disposal, the asset cost and related accumulated
depreciation are removed from the accounts and the net amount, less any
proceeds, is charged or credited to income.
Goodwill
Goodwill in the accompanying consolidated balance sheets represents the
excess of cost over the fair value of net assets acquired related to the
previous acquisition of Posterloid and is being amortized on a straight-
line basis over forty years. The Company reviews goodwill to assess
recoverability whenever events or changes in circumstances indicate that
its carrying value may not be recoverable. In performing such reviews the
Company estimates the future cash flows expected to result from
Posterloid's product line. If the sum of the expected future cash flows
(undiscounted and without interest charges) were to be less than the
carrying amount, an impairment loss would be recognized. As a result of
such reviews no impairment loss has been recognized. Accumulated
amortization of goodwill was $1,251,000 and $1,106,000 at April 30, 1996
and 1995, respectively.
Excess of net assets over purchase price of acquisition
Negative goodwill in the accompanying 1996 consolidated balance sheet
represents the excess of the fair value of net assets acquired over the
cost of IDT and is being amortized on a straight-line basis over forty
years (see Note 3).
Research and development
Research and development costs are expensed as incurred.
Workers' compensation
Greensteel was partially self-insured for workers' compensation claims.
The Company has accrued for its workers' compensation claims based on an
assessment of claims outstanding, as well as an estimate, based on
experience, of incurred workers' compensation claims which have not yet
been reported.
Stockholders' equity
Effective April 30, 1995, the Company effected a 1-for-15 reverse stock
split. The accompanying consolidated financial statements and notes
thereto have been retroactively restated to reflect this reverse stock
split.
Fair value of financial instruments
The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to
estimate that value:
Cash, accounts receivable and payable, accrued obligations and
--------------------------------------------------------------
royalties payable - Management believes that the carrying amount
-----------------
approximates fair value because of the short maturity of those
instruments.
F-9
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1996, 1995, and 1994
(CONTINUED)
Line of credit and long-term debt - Management believes that the
---------------------------------
carrying amounts are a reasonable estimate of fair value as the debt
is frequently repriced based on the prime rate, and there has been no
significant change in credit risk since the financing was obtained.
Indebtedness to Alpine - The indebtedness is held by a related party
----------------------
and is not traded. Management believes that the carrying amount is a
reasonable estimate of fair value as there has been no significant
change in credit risk since the financing was obtained.
Recent accounting pronouncements
In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for Impairment of Long-
Lived Assets" (SFAS 121). SFAS 121 requires a company to review long-lived
assets impairment whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. The Company is
required to adopt the new standard during its fiscal year ending April 30,
1997. Management does not believe the adoption of the new standard will
have a significant impact on the Company's future results of operations or
financial position.
In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS 123). SFAS 123 defines a fair value based method of
accounting for an employee stock option or similar equity instrument.
However, it also allows an entity to continue to measure compensation cost
for those plans using the intrinsic value based method of accounting
prescribed by APB Opinion No. 25, "Accounting for Stock Issued to
Employees". Entities electing to remain with the accounting in Opinion 25
must make pro forma disclosures of net income, as if the fair value based
method of accounting defined in the statement had been applied. The
Company is required to adopt the new standard during its fiscal year ending
April 30, 1997. Based upon the Company's initial evaluation, adoption is
not expected to have a material impact on the Company's financial position
or results of operations because the Company intends to make pro forma
disclosures to comply with this statement.
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 reclassifications have been made to the 1995 consolidated financial
statements in order to present them in a manner consistent with 1996.
3. Acquisitions
------------
On December 21, 1994, Alpine acquired an additional 82 percent of the
outstanding common stock of Adience, resulting in an indirect ownership of
IDT of approximately 70 percent. The completion of the Merger Agreement
resulted in Alpine's direct and indirect ownership of 92.4% of the Company.
F-10
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1996, 1995, and 1994
(CONTINUED)
The acquisition of IDT was accounted for as a purchase and, accordingly,
the results of operations of IDT have been included in the consolidated
statements of operations from the December 21, 1994 acquisition date. The
preliminary allocation of IDT's fair market value of $10,000,000 to IDT's
assets resulted in the recording of $1,035,000 of negative goodwill after
the elimination of IDT's non-current assets. In accordance with APB No.
16, the Company has adjusted the carrying values of certain liabilities on
IDT's opening balance sheet resulting in a $750,000 reduction of the
preliminary allocation of negative goodwill. The unaudited pro forma
results of operations which give effect to the IDT acquisition and Merger
as if they occurred on May 1, 1994 and 1993 are presented below. The pro
forma amounts reflect purchase accounting adjustments under APB Opinion No.
16 and the elimination of $587,000 of professional fees directly related to
the Merger which were included in IDT's historical operating results prior
to the acquisition. The pro forma financial information does not purport
to be indicative of either the results of operations that would have
occurred had the acquisition taken place at the beginning of the periods
presented or of future results of the operations.
Pro forma (unaudited)
---------------------
1995 1994
---- ----
(in thousands)
Net sales $37,529 $48,557
Net loss (7,779) (25,099)
Preferred dividends 2,040 2,040
Net loss for common stock (9,819) (27,139)
Loss per common share ($1.06) ($2.65)
4. Inventories
-----------
The components of inventories are as follows at April 30, 1996 and 1995 (in
thousands):
1996 1995
---- ----
Raw materials $3,206 $4,415
Work in process 365 433
Finished goods 164 181
------- -------
$3,735 $5,029
====== ======
F-11
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1996, 1995, and 1994
(CONTINUED)
5. Contracts-in-Progress
---------------------
The status of contract costs on uncompleted construction contracts was as
follows at April 30, 1996 (in thousands):
[Download Table]
Costs and estimated Billings in excess
earnings in excess of costs and
of billings estimated earnings Total
----------- ------------------ -----
Costs and estimated $5,132 $6,551 $11,683
earnings of $1,425
Billings 4,309 7,054 11,363
------- ------- --------
$ 823 $ (503) $ 320
======= ======== ========
The status of contract costs on uncompleted construction contracts was as
follows at April 30, 1995 (in thousands):
[Download Table]
Costs and estimated Billings in excess
earnings in excess of costs and
of billings estimated earnings Total
----------- ------------------ -----
Costs and estimated $5,029 $8,035 $13,064
earnings of $1,425
Billings 4,206 8,557 12,763
------- ------- --------
$ 823 $ (522) $ 301
======= ======== ========
Accounts receivable at April 30, 1996 and 1995 included amounts billed but
not yet paid by customers under retainage provisions of approximately
$1,754,000 and $2,366,000, respectively. Such amounts are generally due
within 1 year.
6. Property and Equipment
----------------------
Property and equipment are as follows at April 30, 1996 and 1995 (in
thousands):
1996 1995
---- ----
Furniture and fixtures $ 142 $ 84
Machinery and equipment 2,080 1,937
Buildings & leasehold improvements 1,320 1,098
------- -------
3,542 3,119
Less accumulated depreciation
and amortization 2,140 1,470
------- -------
$1,402 $1,649
====== =======
F-12
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1996, 1995, and 1994
(CONTINUED)
Depreciation and amortization expense for the years ended April 30, 1996,
1995 and 1994 was $1,016, $502 and $1,475, respectively.
7. Debt
----
Debt consists of the following at April 30, 1996 and 1995 (in thousands):
1996 1995
---- ----
Industrial Development Loan (a) $ -- $1,115
Revolving credit loans (b) & (c) 1,252 1,379
Term loan (c) 1,200 --
Indebtedness to The Alpine
Group, Inc.(d) 3,335 --
------ ------
Total 5,787 2,494
Less short-term borrowings, current maturities
and Indebtedness to The Alpine
Group, Inc. 4,807 2,494
------ ------
Long term bank debt $ 980 $ --
====== ======
(a) The Industrial Development Loan was made by the Connecticut Development
Authority ("CDA") to APV and was collateralized by substantially all of
APV's assets. The loan was subject to a 15 year amortization schedule with
all remaining unpaid amounts due in December 2002 with interest at 7.8%.
The loan agreement provided for, among other things, restrictions on cash
dividends.
The Loan, with an outstanding principal and interest amount due of
$1,101,000, was repaid by Alpine on behalf of the Company on July 21, 1995
in connection with satisfying certain conditions of the CDA related to the
Merger (see Note 16).
(b) As of April 30, 1995, IDT had a $5,000,000 credit line under a short-term
credit facility with Congress Financial Corporation (Congress). The credit
facility was collateralized by accounts receivable, inventory and
equipment. The interest rate on loans under the credit facility was 2.5%
over the prime rate (9% at April 30, 1995) and IDT paid a commitment fee of
.5% on the unused portion of the credit facility. As of April 30, 1995,
$1,379,000 had been borrowed under this credit facility. In addition, at
April 30, 1995, IDT had an outstanding irrevocable standby letter of credit
totaling $700,000, which reduced the availability under such credit
facility in a like amount. The outstanding borrowings under this financing
agreement were repaid in full by Alpine on behalf of the Company on July
21, 1995 and the line of credit agreement was terminated. In addition,
Alpine provided Congress with cash collateral of $770,000 to continue the
$700,000 letter of credit. Payments by Alpine to Congress on behalf of the
Company aggregated approximately $1,517,000 and were comprised of the
outstanding borrowings under the credit line of $1,431,000 and $86,000 of
accrued interest, fees and expenses (see Note 16).
IDT was also a guarantor of Adience's credit facility with Congress and had
pledged its own accounts receivable, inventory and equipment to secure the
guarantee. On July 21, 1995, Adience also repaid their outstanding
borrowings and terminated their financing agreement. Accordingly, the
Company is no longer a guarantor of the Adience credit facility.
(c) On April 25, 1996, Greensteel as borrower and the Company as Guarantor
entered into a $5,000,000 Master Credit Agreement (the "Agreement") with
the Bank of Boston Connecticut to provide financing for Greensteel's
general working capital requirements. In connection with obtaining such
financing, Greensteel
F-13
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1996, 1995, and 1994
(CONTINUED)
repaid $2,453,000 to Alpine on April 30, 1996 pursuant to a $2,500,000
temporary credit facility provided by Alpine (see Note 16). The Agreement
further provides for a revolving credit facility of up to $3,800,000 based
upon eligible accounts receivable and inventory as defined (unused and
available borrowings after repayment to Alpine were $1,611,000 at April 30,
1996) at the Bank's prime rate plus 1% (9.25% at April 30, 1996) and a
$1,200,000 term loan payable in equal monthly installments of $20,000 with
interest at the Bank's prime rate plus 1-1/2% (9.75% at April 30, 1996)
beginning June 1, 1996 through August 1, 1997 with the remaining unpaid
principal amount of $900,000 due on August 31, 1997. The Agreement
terminates August 31, 1997 and provides for renewal at the Bank's sole and
absolute discretion.
Substantially all of Greensteel's assets are pledged as collateral for the
credit facility. The Agreement requires Greensteel's compliance with
certain financial covenants including maintenance of a minimum tangible net
worth and minimum debt service coverage, as defined, and a restriction on
dividends to the Company, which requires maintenance of a modified debt
service coverage after taking into account any such dividends, and on
other transfers of funds to the Company or its other subsidiaries. The
Company is a guarantor of the Agreement and has pledged Greensteel's common
stock in connection therewith. Greensteel is in compliance with all
covenants at April 30, 1996.
(d) On May 24, 1995, the Company entered into an agreement with Alpine,
pursuant to which the Company may borrow from time to time, until May 24,
1997, up to $5,000,000 from Alpine to be used by the Company to fund its
working capital needs, including research, development and
commercialization activities in connection with APV's PolyVisionTM display
technology. Borrowings under the agreement are unsecured and bear interest
at a market rate reflecting Alpine's cost of borrowing such funds (13% at
April 30, 1996), with interest payable semiannually in cash (but added to
the outstanding principal amount for the first 18 months). For the year
ended April 30, 1996, Alpine agreed with the Company to a modification of
terms whereby the Company issued 9,177 shares of the Company's Series A
Preferred Stock to Alpine in lieu of the addition of approximately $229,000
of interest to the outstanding principal amount at April 30, 1996 (see Note
16).
The aggregate amounts of minimum maturities relating to the long-term bank
debt for the five years subsequent to April 30, 1996 are as follows (in
thousands):
Fiscal Year Amount
----------- ------
1997 $220
1998 980
F-14
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1996, 1995, and 1994
(CONTINUED)
8. Accrued Expenses
----------------
Accrued expenses are as follows at April 30, 1996 and 1995 (in thousands):
1996 1995
---- ----
Accrued wages, salaries and employee
benefits $1,064 $ 495
Accrued workers' compensation 450 568
Other accrued expenses 1,153 2,242
------ ------
$2,667 $3,305
====== ======
9. Employee Benefits
-----------------
401(k) savings plan
-------------------
This plan covers substantially all nonbargaining employees who meet minimum
age and service requirements. The Company matches employee contributions
of up to 6 percent of compensation at a rate of 50 %. Amounts charged
against income totaled approximately $179,000, $95,000 and $11,000 in 1996,
1995 and 1994, respectively.
Union Agreement
---------------
On February 28, 1996, Greensteel entered into a new three-year labor
agreement with the local bargaining unit of the Carpenters Union at its
Dixonville, Pennsylvania facility (the "Union"), whose members voted on
that date to accept the new labor agreement. The labor agreement provides
for a "working partnership" between Greensteel management and the Union
whereby bargaining unit members received an aggregate of 229,000 shares of
the Company's common stock and will share in 50% of the excess of "targeted
gross profit" generated at the Dixonville facility. In exchange for such
equity participation and the understanding of the importance of reducing
Greensteel's cost structure to the future growth of the business, Union
members agreed to an approximate 14% reduction in direct wages and a 6%
reduction in benefits. The labor agreement further provided for the
termination of the bargaining employees' defined benefit pension plan with
any excess funding to be distributed to its participants. The issuance of
common stock and the termination of the pension plan resulted in a fourth
quarter charge of approximately $700,000.
Defined benefit pension plan
----------------------------
Greensteel maintained a defined benefit pension plan covering substantially
all hourly employees. The plan provided pension benefits based on the
employee's years of service. Greensteel's funding policy was to make
annual contributions to the extent deductible for federal income tax
purposes. In connection with the Union agreement noted above, and after
required notice to the participants, benefits under the plan were curtailed
and ceased to accrue on March 31, 1996. Benefits will be provided for in
the form of a lump sum distribution of each participant's accrued benefit.
The final termination settlement of the plan and distribution of benefits
is subject to approval of the termination of the plan by the Pension
Benefit Guarantee Corporation and the Internal Revenue Service. Greensteel
has undertaken the process to seek such approvals and will distribute all
plan assets, including any excess funding in the plan to plan participants
in the bargaining unit.
F-15
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1996, 1995, and 1994
(CONTINUED)
Greensteel's pension plan benefit obligations and assets were valued as of
December 31, 1994. Net pension cost for the eleven months ended March 31,
1996 and the four months ended April 30, 1995 was as follows (in
thousands):
1996 1995
---- ----
Service cost - Benefits earned during
the period $ 51 $ 17
Interest cost on projected
benefit obligations 35 10
Return on plan assets (54) (18)
Amortization of net asset existing at date
of adoption (8) (2)
Amortization of actuarial gain -- (1)
Loss on curtailment 186 --
----- ------
Net pension cost $ 210 $ 6
===== =====
The following table sets forth the funding status of the plan and amounts
recognized in the accompanying balance sheets at April 30, 1996 and 1995 as
follows (in thousands):
1996 1995
---- ----
Actual present value of benefit obligations:
Vested benefits $(810) $(391)
Nonvested benefit (21)
--
------- ------
Accumulated benefit obligations $(810) $(412)
====== ======
Projected benefit obligations $(810) $(412)
Assets available for benefits -
Funded assets at fair value 872 690
Funded status 62 278
Unrecognized transition amount -- (157)
Unrecognized net gain -- (62)
Excess funding to be distributed (62) --
------ ------
Prepaid pension costs $ 0 $ 59
====== ======
The plan assets are invested in cash, treasury bonds and listed stocks and
bonds.
Assumptions used to develop the net pension costs for the March 31, 1996
and December 31, 1994 valuations were as follows:
Discount rate 7.5%
Expected long-term rate of return on assets 7.5%
Plan curtailment (March 31, 1996) 6.6%
F-16
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1996, 1995, and 1994
(CONTINUED)
Certain union employees of Greensteel are covered by multiemployer defined
benefit retirement plans. Expenses relating to these plans amounted to
approximately $97,000 and $47,000 for the year and four months ended 1996
and 1995, respectively.
10. Stock Option and Stock Grant Plans
----------------------------------
On November 12, 1990, the Board of Directors of IDT approved an incentive
stock option plan, pursuant to which a maximum aggregate of 300,000 shares
were reserved for grants to key personnel. Generally, options became
exercisable 6 months following the date of grant and expire 10 years from
the date of grant. The plan provides for the option price to be paid in
cash, in shares of Company common stock owned by the option holder, or in a
combination of such shares and cash. As of April 30, 1996 and 1995, 11,833
options were outstanding at an exercise price of $37.50, which was
above market value at the date of the grant. At December 21, 1994, the
stock option plan was terminated without any effect on any outstanding
options under such plan and a new stock option plan was adopted, which was
approved by shareholders on May 24, 1995. Under the new stock option plan,
6,000,000 shares are reserved for grants to key personnel. During the year
ended April 30, 1996, options to purchase and aggregate of 250,000 shares
were granted to key employees at an exercise price of $3.86 per share which
was above market value at the date of grant.
During the year ended April 30, 1996, the Board of Directors adopted the
1995 Directors Stock Option Plan and the 1995 Directors Stock Grant Plan.
The Company reserved for issuance 300,000 and 200,000 shares of the
Company's common stock for the stock option and stock grant plans,
respectively. Options to purchase an aggregate of 150,000 shares were
granted during fiscal 1996 by the Board of Directors at an exercise price
of $3.86 per share which was above market value at the date of grant. In
addition, the Board of Directors approved stock grants of an aggregate of
100,000 shares for directors and key employees. The options and grants are
generally subject to 3 to 5 year vesting requirements with all unexercised
options expiring 10 years after the date of grant. The fiscal 1996 charge
relating to the current year vesting of these grants was $87,000. No
options expired, were exercised or canceled during fiscal 1996.
11. Royalties Payable
-----------------
Connecticut Innovations, Inc. ("CII") has advanced amounts to APV pursuant
to a Development Agreement to finance a portion of APV's product
development costs. The Development Agreement provides for a minimum annual
royalty of $75,000 per annum or 5% of sponsored product sales up to a
cumulative royalty of $3,250,000. Thereafter a royalty of 1/2% on
sponsored product sales is payable. The Development Agreement contains
covenants relating to technology licensing of the sponsored product. In
addition, the Development Agreement provides for an assignment of and
collateral interest in the technology, including all patents and know-how.
Included in the accompanying consolidated balance sheets is a $750,000
liability representing the aggregate amount advanced by CII under the terms
of the agreement.
F-17
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1996, 1995, and 1994
(CONTINUED)
12. Series A Preferred Stock
------------------------
On January 6, 1995, Alpine and the APV minority shareholder exchanged
3,005,124 shares of APV common stock for 1,020,076 shares of APV Series A
Preferred Stock. In connection with the Merger, the APV Series A Preferred
Stock was exchanged for an equal number of PolyVision Series A Preferred
Stock (Series A Preferred).
The Company is authorized to issue up to 1,500,000 shares of Series A
Preferred. The Series A Preferred earns quarterly cash dividends at an
annual rate of $2.00 per share and has priority as to dividends over the
common stock. In the case of the voluntary or involuntary liquidation or
dissolution of the Company, the holders of the Series A Preferred will be
entitled to receive a liquidation price of $25.00 per share ($25,731,000
aggregate liquidation value at April 30, 1996) plus any accrued and unpaid
dividends. The holders of the Series A Preferred have no voting rights
except as required by New York law as noted below.
Effective April 30, 1996, the Company agreed to issue an additional 9,177
shares of Series A Preferred Stock to The Alpine Group, Inc. in lieu of
payment of deferred interest in the amount of $229,425 (see Note 7).
The Company may at any time, at its option and subject to certain
restrictions and conditions, redeem all or part of the outstanding shares
of the Series A Preferred at a redemption price of $25.00 per share plus
accrued and unpaid dividends. In addition, so long as any shares of Series
A Preferred are outstanding and for a period of ten years from date of
issuance, not less than 30% of the net proceeds received by the Company in
a public offering (as defined) must be used to redeem an equivalent amount
of Series A Preferred Stock at $25.00 per share.
So long as any shares of Series A Preferred are outstanding, the Company
will not, without the affirmative vote of at least a majority of the
outstanding shares of Series A Preferred voting, (i) amend the Certificate
of Incorporation or By-laws if such change will adversely affect the rights
of the Series A Preferred, (ii) merge or consolidate with or into another
corporation, (iii) permit a sale of substantially all of the assets of the
Company, (iv) permit any liquidation or dissolution of the Company or (v)
declare or make any dividends or distributions on, or redemptions or
purchases of, any stock other than the Series A Preferred Stock.
13. Income Taxes
------------
The Company recognizes income taxes in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" (SFAS 109). SFAS 109 utilizes the liability method and deferred
taxes are determined based on the estimated future tax effects of
differences between the financial statement and tax basis of assets and
liabilities given the provisions of enacted tax laws. The Company and its
subsidiaries will file a consolidated Federal income tax return from the
effective date of the Merger.
APV and Posterloid were included in Alpine's consolidated Federal return
through the effective date of the Merger. State tax returns for APV and
Posterloid are filed as separate companies.
F-18
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1996, 1995, and 1994
(CONTINUED)
Until November 10, 1993, APV filed Federal and state income tax returns as
a separate company. On November 10, 1993, Alpine acquired an additional
27% of APV's outstanding common stock from minority shareholders resulting
in Alpine increasing its equity interest from 71% to 98%. At November 10,
1993, APV had unused Federal net operating loss carryforwards of
approximately $8,500,000, that may be used to offset future taxable income.
Such carryforwards expire in various amounts from fiscal 2003 to 2009. The
use of these carryforwards may be restricted as a result of ownership
changes under Section 382 of the Internal Revenue Code and other
limitations.
At April 30, 1996, APV and Posterloid had additional unused Federal net
operating loss carryforwards of approximately $8,129,000 and $2,992,000,
respectively, that may be used to offset future taxable income. These
carryforwards expire in various amounts from fiscal 2009 through 2011. The
use of these carryforwards may also be restricted as a result of ownership
changes under Section 382 of the Internal Revenue Code and other
limitations.
As of December 31, 1994, IDT, on a separate-company basis, had net
operating loss carryforwards for Federal income tax purposes of
approximately $1,648,000 which will expire in 2008 and 2009. Under
Internal Revenue Code Section 382 and other limitations, the use of the
loss carry forwards will be limited as a result of the December 21, 1994,
ownership change. Subsequent to December 21, 1994, IDT incurred tax losses
resulting in additional federal net operating loss carry forwards of
$2,479,000 which expire in various amounts from fiscal 2010 through 2011.
As a result of the transaction described further in Note 1, Posterloid's
and APV's loss carryforwards may not be available to Posterloid, APV or
Greensteel. Based on APV's history of prior operating losses and the
expenditures associated with current research, development and engineering
programs, no assurance can be given that sufficient taxable income will be
generated for utilization of any net operating loss carryforwards and
reversal of temporary differences.
Income taxes have been accounted for in the accompanying consolidated
financial statements as if the consolidated entity of APV, Greensteel and
Posterloid filed its own consolidated return. The Company did not record
any current or deferred income tax expense during the fiscal years ended
April 30, 1996, 1995 and 1994 due to losses incurred during such periods
and the availability of net operating loss carryforwards.
F-19
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1996, 1995, and 1994
(CONTINUED)
The differences between the Company's Federal effective tax rate and the
statutory tax rate for the years ended April 30, 1996, 1995 and 1994
arises from the following:
1996 1995 1994
---- ---- ----
Federal statutory rate (35)% (35)% (34)%
Increase resulting from:
Goodwill amortization not deductible 1 1 --
Purchased R & D -- -- 27
Net loss of foreign subsidiary -- -- 1
Increase in valuation allowance 34 34 6
---- ---- ----
-- -- --
===== ===== =====
The tax effect of the primary temporary differences giving rise to the
Company's consolidated deferred tax assets and liabilities at April 30,
1996 and 1995 are as follows (in thousands):
[Download Table]
1996 1995
-------------------- -------------------
Current Long-Term Current Long-Term
Asset Asset Asset Asset
----- ----- ----- -----
Bad debt reserve $ 242 $ -- $ 219 --
Inventory related 113 -- 168 --
Accrued commissions
and payroll costs 188 -- 280 --
Reserve for future losses 53 -- 137 --
Reserve for merger fees -- -- 182 --
Fixed assets -- 1,060 -- 979
NOL carryforwards -- 9,974 -- 7,451
Other 220 296 501 --
Valuation allowance (816) (11,330) (1,487) (8,430)
------ ------- ------- -------
$ -- $ -- $ -- $ --
======= ========= ======== ========
A valuation allowance has been recorded for the net deferred assets as a
result of uncertainties regarding the realization of the assets, including
the lack of profitability to date and the variability of operating results.
14. Purchased Research and Development
----------------------------------
On November 9, 1993, Alpine merged with Superior TeleTec Inc. ("STI"). As
a condition precedent to consummation of the merger with STI, Alpine
concluded on November 10, 1993, an exchange transaction with certain
minority stockholders of APV. Pursuant to the agreement, certain minority
stockholders of APV exchanged a 27% equity interest in APV for a total of
2,164,099 shares of Alpine resulting in Alpine owning approximately 98% of
APV's outstanding common stock.
F-20
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1996, 1995, and 1994
(CONTINUED)
In accordance with generally accepted accounting principles, this
transaction has been accounted for as purchased research and development.
Accordingly, the excess of the market value of the APV and Alpine common
stock issued plus expenses and other related non-cash charges over the fair
value of the tangible assets acquired has been expensed resulting in a
charge to operations of $21,687,000 in fiscal 1994.
APV has entered into certain royalty license, distribution and technical
assistance agreements with unrelated third parties to commercialize the
PolyVision technology for certain applications, subject to certain minimum
royalty payments and other conditions. During fiscal 1994, APV received
$410,000 for technical assistance to such third parties. Such amounts have
been reflected as a reduction of research and development costs. During
fiscal 1996 and 1995, no payments for technical assistance were received.
15. Development Stage Company
-------------------------
APV is a development stage enterprise. Since its inception, APV has
generated no revenue from the sale of commercially viable products and
there is no assurance that a commercially successful product will be
developed. A commercially viable product is dependent not only on the
success of future product research and development but also on developing a
product and related manufacturing technique such that the product can be
manufactured at a commercially acceptable cost. However, a risk exists
that even if a viable product is developed, manufacturing in commercial
quantities at viable costs will be unsuccessful. In addition to the
development of a successful product and related production techniques,
significant additional financing will be required in order for APV to
manufacture the product in commercial quantities. Since inception, the
majority of APV's financing has been contributed by Alpine. However, there
is no assurance that sufficient financing will continue to be available in
the future (see Notes 7 and 16).
Summary information relating to APV as a development stage enterprise is as
follows (in thousands):
April 30, 1996
--------------
Balance Sheet Data
------------------
Current assets $ 5
Property and equipment, net 481
Total assets 762
Long-term borrowing 750
Deficit accumulated during the
development stage 51,457
Total stockholders' deficit 783
F-21
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1996, 1995, and 1994
(CONTINUED)
[Enlarge/Download Table]
For the Period
from May 27, 1986
For the Year (inception)
ended April 30, 1996 through April 30, 1996
-------------------- ----------------------
Income Statement Data
---------------------
Development and license fees received $ -- $ 2,454
Research and development expense,
excluding purchased research and development 2,886 28,679
Purchased research and development -- 24,534
Net (loss) (2,980) (50,177)
Cash Flow Statement Data
------------------------
Cash used for operating expenses $ 1,677 $ 21,415
Capital expenditures -- 4,640
Advances from The Alpine Group, Inc. -- 19,672
Investment from PolyVision Corporation 5,070 5,070
Proceeds from sale of stock -- 1,918
16. Related-Party Transactions
--------------------------
On May 24, 1995, PolyVision entered into an agreement with Alpine pursuant
to which PolyVision may borrow from time to time, prior to May 24, 1997,
up to $5,000,000 from Alpine to be used by PolyVision to fund its working
capital needs, including research, development and commercialization
activities in connection with APV's PolyVision(TM) display technology (see
Note 7). Alpine further agreed to fund working capital deficiencies on a
temporary basis and in an amount not to exceed $2,500,000. As of April
30, 1995, the Company had an outstanding receivable of $3,584,000 from
Adience and an APV intercompany account due to Alpine of $2,052,000,
resulting in a net receivable from affiliates of $1,532,000. In
connection with Alpine's payoff of Greensteel's indebtedness with Congress
and APV indebtedness with the Connecticut Development Authority,
Greensteel's receivable from Adience and APV's payable to Alpine were
offset and the excess of the aggregate of $2,618,000 paid by Alpine on
behalf of the Company over the net receivable and payable at July 21, 1995
was advanced pursuant to the foregoing agreements. The net amount of
interest income recognized by the Company from Adience for fiscal 1996 was
$71,000 through July 21, 1995 and $118,000 for the four months ended April
30, 1995. In addition, Adience performs certain financial and
administrative services for the Company for an annual fee of $300,000.
F-22
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1996, 1995, and 1994
(CONTINUED)
17. Commitments and Contingencies
-----------------------------
In 1994, Reliance Insurance Company of New York (the "Plaintiff") commenced
an action in the Supreme Court of the State of New York, County of Suffolk,
against several defendants including PolyVision seeking money damages based
on the purported sale and delivery by defendants of some 860 insulated
metal curtain wall panels manufactured by the Company. Plaintiff has
alleged that such panels were defective in their design and manufacture.
In its original complaint, Plaintiff seeks damages of $385,000 allegedly
already incurred and unspecified future damages. The alleged sales fall
into two categories, an original sale in 1987 and two or more sales in 1991
and 1992 of so-called replacement panels. Among the theories of liability
advanced by Plaintiff are breach of contract, breach of express warranty
and implied warranty. Pursuant to orders of the Court, the causes of
action based on the 1987 transaction were dismissed on statute of
limitation grounds. However, Plaintiff has been granted leave to serve an
amended complaint to allege, among other things, a claim under the New
Jersey Consumer Fraud Act (which might permit treble damages), while
preserving the right of the defendants, including PolyVision to challenge
the applicability of such Act. Since an amended complaint has not yet been
served, Plaintiff's theories of liability and damages are as yet not
completely certain. Moreover, since an answer to the amended complaint, if
served, remains to be served, and, as well, discovery has yet to commence,
it is premature to render an estimate of the outcome of this litigation.
In February 1992, the Company was cited by the Ohio Environmental
Protection Agency (the Ohio EPA) for violations of Ohio's hazardous waste
regulations, including speculative accumulation of waste and illegal
disposal of hazardous waste on the site of its Alliance, Ohio, facility.
In December 1993, the Company and Adience signed a consent order with the
Ohio EPA and Ohio Attorney General that required the Company and Adience to
pay to the State of Ohio a civil penalty of $200,000 of which the Company
paid $175,000 and Adience paid $25,000. In addition, the consent order
required the payment of stipulated penalties of up to $1,000 per day for
failure to satisfy certain requirements of the consent order, including
milestones in the closure plan. Removal and remediation activities as
contemplated under the consent order have been completed.
The Company has submitted risk assessment reports which demonstrate, in
management's opinion, that no further cleanup actions will be required on
the remaining property area not addressed under the closure plan. Based on
administrative precedent, the Company believes that it is likely that the
Ohio EPA will agree with the risk assessment reports. The Company is
currently waiting for a determination from the Ohio EPA as to whether the
submitted reports are approved. If such an agreement is not reached,
additional costs may have to be incurred to complete additional remediation
efforts. Although there are no assurances that additional costs will not
have to be incurred, the Company believes that such costs will not need to
be incurred. At April 30, 1996, environmental accruals amounted to
$20,000, which represents management's reasonable estimate of the amounts
to be incurred in the resolution of this matter. Since 1991, the Company
and Adience have together paid $1,423,000 (excluding the $200,000 civil
penalty) for the environmental cleanup related to the Alliance facility.
Under the acquisition agreement pursuant to which the Company acquired the
Alliance facility from Adience, Adience represented and warranted that,
except as otherwise disclosed to the Company, no hazardous material had
been stored or disposed of on such property and agreed to indemnify the
Company
F-23
POLYVISION CORPORATION AND SUBSIDIARIES
(formerly known as Information Display Technology, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1996, 1995, and 1994
(CONTINUED)
for any losses in excess of $250,000. The Company has notified Adience
that it is claiming the right to indemnification for all costs in excess of
$250,000 incurred by the Company in this matter, and has received assurance
from Alpine that Adience will honor such claim. Adience has reimbursed the
Company $1,373,000 through April 30, 1996. If Adience is financially
unable to honor its remaining obligation, such costs would be borne by the
Company.
The Company is involved in other various matters of litigation incidental
to the normal conduct of its business. In management's opinion, the
disposition of that litigation will not have a material adverse impact on
the Company.
18. Lease Commitments
-----------------
The Company and its subsidiaries lease property, plant and equipment under
a number of leases extending for varying periods of time. Operating lease
rental expense amounted to approximately $664,000, $398,000 and $545,000
for the years ended April 30, 1996, 1995, and 1994, respectively.
Minimum rental commitments as of April 30, 1996, under non-cancelable
leases with terms of more than one year, are as follows:
Year ending
April 30, Amount
----------- ------
(in thousands)
1997 $451
1998 79
19. Concentration of Credit Risk
----------------------------
Financial instruments which potentially subject the Company to
concentration of credit risk consist principally of trade receivables.
Greensteel's concentration of credit risk within the construction industry
is somewhat mitigated by the large number of customers comprising
Greensteel's customer base. In addition, a majority of Greensteel's
revenues are derived from educational institutions in the eastern half of
the United States. Most public school projects require performance bonds
from general contractors which allow Greensteel to make bond claims or file
liens in the event of nonpayment for bonafide contract work performed by
Greensteel. Ultimately the taxing authority of municipalities and public
school districts provides much of the funding for Greensteel's business.
Posterloid's revenues are derived from a large customer base of fast food
restaurant chains and outfitters of municipal arenas throughout the United
States. Retrofits of large chains can result in significant customer
concentrations of credit risk to Posterloid from time to time.
F-24
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
POLYVISION CORPORATION
(formerly know as Information Display Technology, Inc.)
CONDENSED BALANCE SHEETS
April 30, 1996 and 1995
(amounts in thousands, except share amounts)
1996 1995
---- ----
ASSETS
------
Current Assets:
Cash $ -- $ --
Accounts receivable, net of allowance for
doubtful accounts of $476 in 1995 -- 7,708
Receivable from affiliate -- 3,584
Inventories -- 4,704
Costs and estimated earnings in excess of billings
on uncompleted contracts -- 823
Prepaid expenses and other current assets -- 282
-------- ---------
Total current assets -- 17,101
Property and equipment, net -- 66
Investment in subsidiaries 9,459 1,917
-------- ---------
TOTAL ASSETS $ 9,459 $ 19,084
======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Note payable $ -- $ 1,379
Accounts payable -- 2,122
Accrued expenses 2,936
Accrued dividends 2,040 --
Billings in excess of costs and estimated earnings
on uncompleted contracts -- 522
-------- ---------
Total current liabilities 2,040 6,959
Indebtedness to The Alpine Group, Inc. 3,335 --
Excess of net assets over purchase price of acquisition -- 1,035
Commitments and contingencies
Stockholders' Equity:
Series A Preferred Stock, $.01 par value, at
$25 per share liquidation value;
authorized 1,500,000 shares, issued
1,029,253 and 1,020,076 shares 25,731 25,502
Common stock, $.001 par value; authorized 25,000,000
shares, issued 8,530,073 and 8,301,073 shares 9 8
Capital in excess of par value 38,524 37,951
Accumulated deficit (60,180) (52,371)
-------- --------
Total stockholders' equity 4,084 11,090
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,459 $ 19,084
======== ========
The accompanying notes are an integral part of these condensed financial
statements.
S-1
SCHEDULE I - (CONTINUED)
POLYVISION CORPORATION
(formerly known as Information Display Technology, Inc.)
CONDENSED STATEMENTS OF OPERATIONS
For the years ended April 30, 1996, 1995, and 1994
(amounts in thousands, except per share amounts)
1996 1995 1994
---- ---- ----
Net sales $ 24,203 $ 8,654 $ --
Cost of goods sold 18,606 7,201 --
--------- -------- ---------
Gross profit 5,597 1,453 --
Selling, general and administrative 6,428 2,364 --
--------- -------- ---------
Operating (loss) (831) (911) --
Equity in loss of subsidiaries (4,594) (4,901) (25,732)
Interest income 71 118 --
Interest expense (416) (19) --
Other income (expense), net 1 (15) --
--------- -------- ---------
Loss before income taxes (5,769) (5,728) (25,732)
Income tax expense -- -- --
--------- -------- ---------
Net loss (5,769) (5,728) (25,732)
Preferred stock dividends 2,040 448 448
--------- -------- ---------
Loss applicable to common stock ($ 7,809) ($ 6,176) ($26,180)
========= ========= =========
Loss per share of common stock ($ 0.94) ($ 0.67) ($ 2.56)
========= ========= =========
The accompanying notes are an integral part of these condensed financial
statements.
S-2
SCHEDULE I - (CONTINUED)
POLYVISION CORPORATION
(formerly known as Information Display Technology, Inc.)
CONDENSED STATEMENTS OF OPERATIONS
For the years ended April 30, 1996, 1995, and 1994
(amounts in thousands, except per share amounts)
[Enlarge/Download Table]
1996 1995 1994
---- ---- ----
Cash flows from operating activities:
(Loss) from operations ($5,769) ($5,728) ($25,732)
Adjustments to reconcile (loss) from operations
to net cash (used for) operations:
Equity in loss of subsidiaries 4,594 4,901 25,732
Depreciation and amortization 6 6 --
Deferred interest 229 -- --
Compensation expense for stock grants 87 -- --
Change in assets and liabilities:
Accounts receivable (352) 1,550 --
Inventories 1,489 (892) --
Other current assets 273 (307) --
Accounts payable and accrued expenses (2,514) (437) --
Other -- (149) --
-------- -------- --------
Cash (used for) operating activities (1,957) (1,056) --
-------- -------- --------
Cash flows from investing activities:
Capital expenditures (525) (72) --
Net cash received in acquisition -- 315 --
-------- -------- --------
Cash provided by (used for) investing activities (525) 243
--
-------- -------- --------
Cash flows from financing activities:
Net short-term borrowings 1,121 579 --
Long term borrowings from The Alpine Group, Inc. 3,335 -- --
Net repayments of affiliate receivables 76 234 --
Additional investment in subsidiaries (2,050) -- --
-------- -------- --------
Cash provided by financing activities 2,482 813 --
-------- -------- --------
Net increase (decrease) in cash -- -- --
Cash at beginning of period -- -- --
-------- -------- --------
Cash at end of period $ -- $ -- $ --
======== ======== ========
The accompanying notes are an integral part of these condensed
financial statements.
S-3
SCHEDULE I - (CONTINUED)
POLYVISION CORPORATION
(formerly known as Information Display Technology, Inc.)
CONDENSED STATEMENTS OF OPERATIONS
For the years ended April 30, 1996, 1995, and 1994
(amounts in thousands, except per share amounts)
Years Ended April 30
---------------------------
1996 1995 1994
---- ---- ----
(in thousands)
Supplemental disclosures:
Interest paid $ 182 $ 19
====== ======
Non-cash investing and financing activities:
Conversion of The Alpine Group, Inc.
indebtedness to Preferred stock $ 229
========
Common stock issued in connection with
Union Agreement $ 487
========
Acquisition (net of cash acquired):
Assets acquired $17,686
Liabilities assumed 8,001
--------
Common stock issued $ 9,685
========
The accompanying notes are an integral part of these condensed financial
statements.
S-4
SCHEDULE I - (CONTINUED)
POLYVISION CORPORATION
(formerly known as Information Display Technology, Inc.)
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. Basis of Presentation
---------------------
On April 25, 1996, the Company and Greensteel entered into a $5,000,000
Master Credit Agreement (the "Agreement") with the Bank of Boston
Connecticut. Among other things, the Agreement restricts the ability of
the Company to declare dividends or transfer funds from Greensteel to the
Company or the Company's other subsidiaries. As Greensteel's restricted
net assets of $5,728,000 are in excess of the Company's consolidated equity
of $4,084,000 at April 30, 1996, separate presentation of parent company
financial statements is required. Prior to December 21, 1994 the Company
consisted only of APV and Posterloid with Greensteel's operations included
in the accompanying financial statements since that date. In addition, the
former Greensteel division was separately incorporated to facilitate the
above financing and has operated as a wholly-owned subsidiary of the
Company since February 1, 1996. Accordingly, the accompanying presentation
of parent company financial statements includes the net assets of the
former Greensteel division at April 30, 1995 and its results of operations
for the nine months ended January 31, 1996 and for the four months ended
April 30, 1995.
2. Indebtedness to The Alpine Group Inc.
-------------------------------------
On May 24, 1995, the Company entered into an agreement with Alpine,
pursuant to which the Company may borrow from time to time, until May 24,
1997, up to $5,000,000 from Alpine to be used by the Company to fund its
working capital needs, including research, development and
commercialization activities in connection with APV's PolyVision display
technology. Borrowings under the agreement are unsecured and bear interest
at a market rate reflecting Alpine's cost of borrowing such funds (13% at
April 30, 1996), with interest payable semiannually in cash (but added to
the outstanding principal amount for the first 18 months). For the year
ended April 30, 1996, Alpine agreed with the Company to a modification of
terms whereby the Company issued 9,177 shares of the Company's Series A
Preferred Stock to Alpine in lieu of the addition of approximately $229,000
of interest to the outstanding principal amount at April 30, 1996 (see Note
7).
S-5
[Enlarge/Download Table]
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
POLYVISION CORPORATION
(Dollars in thousands)
Charged to Balance
Balance at Charged to Other Deduction at
Beginning Costs and Accounts- End of
of Period Expenses Describe Describe Period
---------- ---------- ----------- -------- -------------
Year ended April 30, 1996:
Deducted from asset accounts:
Allowance for doubtful accounts $521 $289 $235(1) $575
Inventory obsolescence reserve 400 20 150(2) 270
----- ----- ---- ----
Totals $921 $309 $385 $845
==== ==== ==== ====
Environmental Liability $179 $159(3) $ 20
==== ==== ====
Year ended April 30, 1995:
Deducted from asset columns:
Allowance for doubtful accounts $ 8 $ 75 $462(4) $ 24(1) $521
Inventory obsolescence reserve 150 125 125(4) 400
----- ----- ---- ----- ----
Totals $158 $ 200 $587 $ 24 $921
==== ===== ==== ===== ====
Environmental Liability $750(4) $571(3) $179
==== ==== ====
Year ended April 30, 1994:
Deducted from asset accounts:
Allowance for doubtful accounts $ 19 $ 8 $ 19(1) $ 8
Inventory obsolescence reserve 150 150
------- ----- ------- ====
Totals $ 19 $ 158 $ 19 $158
===== ===== ===== ====
(1) Uncollectible accounts written off, net of recoveries.
(2) Disposal of obsolete inventory in connection with plant consolidations.
(3) Payments made related to the Ohio EPA Consent Order (See Note 17).
(4) Accounts of Greensteel at the December 21, 1994 acquisition date.
S-6
POLYVISION CORPORATION
LIST OF EXHIBITS
[Enlarge/Download Table]
Exhibit No. Document
----------- --------
2.1 Agreement and Plan of Merger, dated as of December 21,
1994, as amended, among IDT, The Alpine Group, Inc., Alpine
PolyVision, Inc. and Posterloid Corporation.(1)
3.1 Restated Certificate of Incorporation of the Company.(1)
3.2 By-laws of the Company.(2)
4.4 Specimen form of Common Stock Certificate of the Company.(3)
10.1 Asset Acquisition Agreement, dated as of April 21, 1990, relating to the purchase of
the Information Display Division of Adience, Inc. by IDT.(4)
10.2 Management and Administrative Services Agreement, dated as of April 24, 1990,
between IDT and Adience, Inc.(5)
10.3 Employment Agreement, dated as of October 8, 1990, between IDT and N. Roy
Anderson.(2)
10.4 Tax Sharing Agreement, dated as of April 24, 1990, between IDT and Adience,
Inc.(5)
10.7 1990 Stock Incentive Plan of IDT.(2)
10.8 Nonstatutory Stock Option Agreement, dated November 12, 1990, between IDT and
N. Roy Anderson.(2)
10.15 1994 Stock Option Plan of the Company.(1)
10.16 Credit Commitment Letter Agreements, dated May 24, 1995, between the Company
and The Alpine Group, Inc.(3)
10.17 Registration Rights Agreement, dated May 24, 1995, between the Company and The
Alpine Group, Inc.(3)
10.18 Form of Indemnification Agreement for Directors of the Company.(3)
10.19 1996 Union Stock Grant Plan of the Company.(6)
10.20 1995 Directors Stock Grant Plan of the Company.
10.21 1995 Directors Stock Option Plan of the Company.
[Enlarge/Download Table]
10.22 Amended and Restated Employment Agreement, dated as of May 1, 1995, between
the Company and Ivan Berkowitz.
10.23 Amended and Restated Employment Agreement, dated as of May 1, 1995, between
the Company and Joseph A. Menniti.
10.24 Employment Agreement, dated as of May 1, 1995, between the Company and Mel
Schrieberg.
10.25 Articles of Agreement, dated February 28, 1996, between Greensteel and The
Carpenters' District Council of Western Pennsylvania.
10.26 Master Credit Agreement, dated as of April 25, 1996, among
Bank of Boston Connecticut (the "Bank"), Greensteel and the
Company.
10.27 Security Agreement, dated as of April 25, 1996, between the Bank and Greensteel.
10.28 Pledge Agreement, dated as of April 25, 1996, between the Bank and Greensteel.
10.29 Unlimited Continuing Guaranty Agreement, dated as of April 25, 1996, between the
Bank and the Company.
10.30 Stock Pledge Agreement, dated as of April 25, 1996, between the Bank and the
Company.
10.31 Agreement of Transfer, dated as of January 31, 1996, between the Company and
Greensteel.
22.1 Subsidiaries of the Company.
-------------
(1) Incorporated herein by reference from Proxy Statement for the Annual
Meeting of Shareholders, dated May 1, 1995.
(2) Incorporated herein by reference from Annual Report on Form 10-K for the
fiscal year ended December 31, 1990.
(3) Incorporated herein by reference to Registration Statement on From S-2 (No.
33-93010), effective June 9, 1995.
(4) Incorporated herein by reference from Current Report on Form 8-K, dated
April 24, 1990.
(5) Incorporated herein by reference from Post-Effective Amendment No. 1 to
Registration Statement No. 33-22701 NY.
(6) Incorporated herein by reference to Registration Statement on Form S-8 (No.
333-3897), effective May 16, 1996.
Dates Referenced Herein and Documents Incorporated by Reference
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