FORM 10-Q
---------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(mark one)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended October 31, 1995
-----------------------------------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For transition period from ___________ to ___________
0-16438
-------
(Commission File Number)
NATIONAL TECHNICAL SYSTEMS, INC.
--------------------------------
(Exact name of registrant as specified in its charter)
Delaware 95-4134955
----------- -------------
(State of Incorporation) (IRS Employer
Identification
number)
24007 Ventura Boulevard, Calabasas, California
----------------------------------------------
(Address of registrant's principal executive office)
(818) 591-0776 91302
------------------------------- ---------
(Registrant's telephone number) (Zip code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [x] NO [ ]
The number of shares of common stock, par value $.01 per share,
outstanding as of October 31, 1995 was 6,660,993.
Exhibit Index on Page 18
-1- <PAGE>
NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES
Index
-----
PART I. FINANCIAL INFORMATION Page No.
------- --------------------- ---------
Financial Statements:
Condensed Consolidated Balance Sheets
October 31, 1995 and January 31, 1995 3
Condensed Consolidated Statements of Income
Nine Months Ended October 31, 1995 and 1994 5
Condensed Consolidated Statements of Income
Three Months Ended October 31, 1995 and 1994 6
Condensed Consolidated Statements of Cash Flows
Nine Months Ended October 31, 1995 and 1994 7
Notes to the Condensed Consolidated Financial Statements 8
Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION & SIGNATURE 17
--------- -----------------------------
-2- <PAGE>
PART I -- FINANCIAL INFORMATION
-------------------------------
NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (unaudited)
October 31, January 31,
ASSETS 1995 1995
----------- -----------
Current assets:
Cash $ 1,232,000 $ 1,696,000
Receivables, less allowance for
doubtful accounts of $646,000
at October 31, 1995 and
$577,000 at January 31, 1995 12,686,000 9,680,000
Inventories 2,158,000 2,082,000
Deferred income taxes 454,000 434,000
Prepaid expenses 1,194,000 757,000
---------- ----------
Total current assets 17,724,000 14,649,000
Property, plant and equipment, at
cost 41,470,000 40,413,000
Less: accumulated depreciation 25,038,000 23,500,000
---------- ----------
Net property, plant and
equipment 16,432,000 16,913,000
Intangible assets 346,000 529,000
Property held for sale 544,000 544,000
Other assets 355,000 433,000
---------- ----------
Total Assets $35,401,000 $33,068,000
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short term borrowings $ 4,600,000 $ 0
Accounts payable 4,013,000 2,866,000
Accrued expenses 2,342,000 1,627,000
Income taxes payable 13,000 184,000
Current installments of
long-term debt 1,945,000 2,060,000
---------- ----------
Total current liabilities 12,913,000 6,737,000
Long-term debt, excluding current
installments 5,321,000 10,045,000
Deferred income taxes 1,758,000 1,455,000
Minority Interest 160,000 0
-3- <PAGE>
Stockholders' equity:
Common stock of $.01 par value.
Authorized, 20,000,000; issued
and outstanding 6,661,000 as of
October 31, 1995 and 6,650,000
as of January 31, 1995 67,000 66,000
Additional paid-in capital 10,511,000 10,480,000
Retained earnings 4,671,000 4,285,000
---------- ----------
Total stockholders' equity 15,249,000 14,831,000
---------- ----------
Total Liabilities and $35,401,000 $33,068,000
Stockholders' Equity ========== ==========
See accompanying notes to Condensed
Consolidated Financial Statements.
-4- <PAGE>
NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES
-------------------------------------------------
Condensed Consolidated Statements of Income
(unaudited)
for Nine months Ended October 31, 1995 and 1994
1995 1994
---- ----
Revenues $33,364,000 $28,634,000
Cost of sales 26,177,000 21,706,000
---------- ----------
Gross profit 7,187,000 6,928,000
Selling, general and
administrative expense 5,090,000 5,291,000
---------- ----------
Operating income 2,097,000 1,637,000
Other income (expense):
Interest expense, net (889,000) (766,000)
Other 25,000 (13,000)
---------- ----------
Total other expense (864,000) (779,000)
---------- ----------
Income before income taxes and
minority interest 1,233,000 858,000
Income taxes 555,000 386,000
---------- ----------
Income before minority interest
678,000 472,000
Minority interest 33,000 0
---------- ----------
Net income $ 645,000 $ 472,000
========== ==========
Primary and fully diluted net
income per common share $ 0.10 $ 0.07
========== ==========
Weighted average number of common
shares and common stock
equivalents outstanding 6,656,000 6,617,000
========== ==========
See accompanying notes to Condensed Consolidated
Financial Statements.
-5- <PAGE>
NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES
-------------------------------------------------
Condensed Consolidated Statements of Income (unaudited)
for Three Months Ended October 31, 1995 and 1994
1995 1994
---- ----
Revenues $12,876,000 $ 9,368,000
Cost of sales 10,227,000 7,180,000
---------- ----------
Gross profit 2,649,000 2,188,000
Selling, general and
administrative expense 1,713,000 1,806,000
---------- ----------
Operating income 936,000 382,000
Other income (expense):
Interest expense, net (287,000) (175,000)
Other 12,000 (14,000)
---------- ----------
Total other expense (275,000) (189,000)
Income before income taxes and
minority interest 661,000 193,000
Income taxes 297,000 86,000
---------- ----------
Income before minority interest
364,000 107,000
Minority interest 21,000 0
---------- ----------
Net income $ 343,000 $ 107,000
========== ==========
Primary and fully diluted net
income per common share $ 0.05 $ 0.02
========== ==========
Weighted average number of common
shares and common stock
equivalents outstanding 6,661,000 6,623,000
========== ==========
See accompanying notes to Condensed Consolidated
Financial Statements.
-6- <PAGE>
NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (unaudited)
for Nine months Ending October 31, 1995 and 1994
CASH FLOWS FROM OPERATING 1995 1994
ACTIVITIES: ---- ----
Net income $ 645,000 $ 472,000
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 1,748,000 1,794,000
Provision for losses on
receivables 69,000 140,000
Deferred income taxes 283,000 199,000
Gain on sale of assets (20,000) 0
Net changes in assets and
liabilities:
Accounts receivable (3,075,000) 231,000
Inventories (76,000) (111,000)
Prepaid expenses (432,000) (385,000)
Other assets 78,000 (30,000)
Accounts payable 1,147,000 (370,000)
Accrued expenses 715,000 289,000
Income taxes (171,000) (90,000)
Undistributed earnings of 33,000 0
affiliate ---------- ----------
Net cash provided by operating
activities 944,000 2,139,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and
equipment (1,094,000) (2,469,000)
Proceeds on sale of fixed assets 25,000 3,000
---------- ----------
Net cash used for investing
activities (1,069,000) (2,466,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 1,085,000 2,454,000
Repayments of current and
long-term debt (1,324,000) (2,421,000)
Stock issued in lieu of
compensation 19,000
Cash dividends paid (133,000) (131,000)
Proceeds from stock options 14,000 27,000
exercised ---------- ----------
Net cash used for financing (339,000) (71,000)
activities ---------- ----------
Net decrease in cash (464,000) (398,000)
Beginning cash balance 1,696,000 1,419,000
---------- ----------
ENDING CASH BALANCE $ 1,232,000 $ 1,021,000
========== ==========
See accompanying notes to Condensed Consolidated
Financial Statements.
-7- <PAGE>
NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES
-------------------------------------------------
Notes to the Condensed Consolidated Financial Statements
1. In accordance with instructions to Form 10-Q the accompanying
consolidated financial statements and notes have been
condensed and, therefore, do not contain all disclosures
required by generally accepted accounting principles. These
statements should be read in conjunction with the financial
statements and notes thereto included in the Registrant's Form
10-K for the year ended January 31, 1995.
2. The statements presented as of and for the nine-month and
three-month periods ended October 31, 1995 and 1994 are
unaudited. In Management's opinion, all adjustments have been
made to present fairly the results of such unaudited interim
periods. All such adjustments are of a normal recurring
nature.
3. While the Registrant's business is not materially seasonal,
the quarterly results of operations should not be construed as
representing pro rata results of the Registrant's fiscal year.
4. Income taxes for the interim periods are computed using the
effective tax rates estimated to be applicable for the full
fiscal year. The Registrant expects to pay state and
alternative minimum federal income taxes for the fiscal year
ended January 31, 1996.
5. Net income per share for the nine-month and three-month
periods ended October 31, 1995 and 1994 was computed by
dividing net income by the weighted average number of common
shares outstanding during the periods. Common stock
equivalents were excluded because their effect was immaterial
or antidilutive.
6. The consolidated financial statements include the accounts of
the Registrant and its wholly owned and financially controlled
subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation.
7. Inventories consist of accumulated costs applicable to
uncompleted contracts and are stated at actual cost which is
not in excess of estimated net realizable value.
8. Cash paid for interest and taxes for the nine months ended
October 31, 1995 was $904,000 and $527,000 respectively. Cash
paid for interest and taxes for the nine months ended October
31, 1994 was $772,000 and $183,000, respectively.
9. On January 17, 1995, the Board of Directors declared a cash
dividend of $.01 per share to shareholders of record on
February 10, 1995. The cash dividend, which totaled $67,000,
was paid on February 24, 1995. On September 26, 1995, the
Board of Directors declared an additional cash dividend of
-8- <PAGE>
$.01 per share to shareholders of record on October 17, 1995.
This cash dividend, which totaled $66,000, was paid on October
31, 1995.
10. Minority interest in the Registrant's NQA-USA, Inc.
subsidiary is a result of 50% of the stock of NQA-USA, Inc.
being issued to NQA-UK in December 1994. Profits are
shared 65% to NQA-USA, Inc. and 35% to NQA-UK.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
-----------------------------------------------------------
The following discussion should be read in conjunction with the
consolidated quarterly financial statements and notes thereto.
All information is based upon operating results of National
Technical Systems, Inc. for the nine months ended October 31.
(tabular header information: Dollars in thousands)
---------------------------------------------------
RESULTS OF OPERATIONS
---------------------
REVENUES
--------
Nine months ended October 31 1995 % Change 1994
---- -------- ----
Technical services $25,930 10.1% $23,544
Environmental services 2,328 987.9% 214
Registration services 1,635 57.8% 1,036
Contract labor services 3,471 (9.6%) 3,840
------ ------
Total net revenue $33,364 16.5% $28,634
====== ======
For the nine months ended October 31, 1995, consolidated revenues
increased by $4,730,000 or 16.5% when compared to the same period
in 1994. In 1995, the technical services segment revenues
increased as a result of increases in its traditional defense and
aerospace related business. The Registrant's environmental
services segment revenues increased by $2,114,000 as a result of
continuing efforts by the Registrant to market its new lines of
business. Revenues in the registration services segment also
showed continued growth of $599,000. The contract labor segment
revenues decreased by $369,000, reflecting the continuing effects
of a declining backlog in the competitive nuclear market offset
to some degree by increases in other emerging markets.
-9- <PAGE>
It is anticipated by the Registrant that revenues in the
technical services segment will continue to improve and increase
slightly over last year s levels, while revenues in both the
environmental services segment and the registration services
segment should also increase at a more moderate rate for the
remainder of fiscal 1996. It is further anticipated that
revenues in the contract labor services segment will continue to
increase slightly through the end of the fiscal year.
GROSS PROFIT
Nine months ended October 31 1995 % Change 1994
---- -------- ----
Technical services $5,901 4.1% $5,666
% to segment revenue 22.8% 24.1%
Environmental services 15 116.9% (89)
% to segment revenue 0.6% (41.6%)
Registration services 529 18.1% 448
% to segment revenue 32.4% 43.2%
Contract labor services 742 (17.8%) 903
% to segment revenue 21.4% 23.5%
Total $7,187 3.7% $6,928
% to total net revenue 21.5% 24.2%
Gross profit as a percentage of net revenues decreased in the
nine months ended October 31, 1995 when compared to the same
period in 1994. This decrease was due primarily to pricing
pressures from increased competition in the technical services
and contract labor services segments in addition to a one-time
charge for cost overruns on a fixed price contract in the
environmental services segment. The Registrant anticipates the
competitive environment for aerospace and defense testing and
contract labor services to persist, however gross profits in the
environmental services segment should improve slightly through
the end of the fiscal year. In addition, due to the decline in
gross profits, the Registrant initiated an aggressive cost
reduction program which included reductions in its workforce and
consolidations of some of its operations. Therefore, barring any
unforeseen circumstances, gross profits should increase slightly
during the balance of fiscal 1996.
-10- <PAGE>
SELLING, GENERAL & ADMINISTRATIVE
---------------------------------
Nine months ended October 31 1995 % Change 1994
---- -------- ----
Technical services $3,677 (9.5%) $4,062
% to segment revenue 14.2% 17.3%
Environmental services 141 151.8% 56
% to segment revenue 6.1% 26.2%
Registration services 444 124.2% 198
% to segment revenue 27.2% 19.1%
Contract labor services 745 (17.6%) 904
% to segment revenue 21.5% 23.5%
Corporate 83 16.9% 71
Total S G & A $5,090 (3.8%) $5,291
% to total net revenue 15.3% 18.5%
Selling, general and administrative expenses as a percentage of
net revenues decreased in the nine months ending October 31, 1995
compared to the same period in 1994 as a result of managements
cost reduction programs and increased revenues. These reductions
were offset by increases in the environmental services and
registration services segments which are reflective of the cost
of pursuing business in these growing segments of the Registrant.
The Registrant continues to look for ways to reduce costs but
remain effective in these areas.
INTEREST EXPENSE
----------------
Net interest expense increased $123,000 in the nine months ending
October 31, 1995 when compared to the same period in 1994. This
increase was principally due to higher interest rates on
existing loans and increases in the term loan and line of credit
balances.
INCOME TAXES
------------
The income tax provisional rate for the first nine months of 1995
and 1994 reflects a rate in excess of the U.S. federal statutory
rate primarily due to the inclusion of state income taxes. The
Registrant's provision for the nine months ending October 31,
-11- <PAGE>
1995 was higher than the same period in 1994 due to the higher
income before taxes in 1995. Management has determined that it
is more likely than not that the deferred tax asset will be
realized on the basis of offsetting it against deferred tax
liabilities. It is the Registrant's intention to evaluate the
realizability of the deferred tax asset quarterly by assessing
the need for a valuation account.
NET INCOME
----------
The increase in net income in the nine months ending October 31,
1995 compared to the same period in 1994 was due to increased
revenues and lower selling, general and administrative costs
offset by slightly lower gross profit margins and higher interest
costs.
REVENUES
--------
Quarter ended October 31 1995 % Change 1994
---- -------- ----
Technical services $9,561 23.6% $7,733
Environmental services 1,348 961.4% 127
Registration services 617 39.0% 444
Contract labor services 1,350 26.9% 1,064
------ ------
Total net revenue $12,876 37.4% $9,368
====== ======
For the three months ended October 31, 1995, consolidated
revenues increased by $3,508,000 or 37.4% when compared to the
same period in 1994. In 1995, the technical services segment
revenues increased as a result of increases in its traditional
defense and aerospace related business. The Registrant's
environmental services segment revenues increased by $1,221,000
as a result of continuing efforts by the Registrant to market its
new lines of business. Revenues in the registration services
segment also showed continued revenue growth of $173,000. The
contract labor segment revenues increased by $286,000, reflecting
the successful shift away from the competitive market for nuclear
contract labor services and toward emerging lines of business.
It is anticipated by the Registrant that revenues in the
technical services segment will continue to improve and increase
over last year, while revenues in both the environmental services
segment and the registration services segment should also
increase at a more moderate rate for the remainder of fiscal
1996. It is further anticipated that revenues in the contract
-12- <PAGE>
labor services segment should continue to increase slightly
through the end of the fiscal year.
GROSS PROFIT
------------
Quarter ended October 31 1995 % Change 1994
---- -------- ----
Technical services $2,219 27.5% $1,741
% to segment revenue 23.2% 22.5%
Environmental services (132) (214.3%) (42)
% to segment revenue (9.8%) (33.1%)
Registration services 165 (0.6%) 166
% to segment revenue 26.7% 37.4%
Contract labor services 397 22.9% 323
% to segment revenue 29.4% 30.4%
Total $2,649 21.1% $2,188
% to total net revenue 20.6% 23.4%
Gross profit as a percentage of net revenues decreased in the
quarter ended October 31, 1995 when compared to the same quarter
in 1994. This decrease was due primarily to pricing pressures
from increased competition in the technical services and contract
labor services segments in addition to a one-time charge for cost
overruns on a fixed price contract in the environmental services
segment. The Registrant anticipates the competitive environment
for aerospace and defense testing and contract labor services
will persist for the foreseeable future, however gross profits
for automotive testing and environmental services should improve
slightly through the end of the fiscal year. In addition, due to
the decline in gross profits, the Registrant initiated an
aggressive cost reduction program which included reductions in
its workforce and consolidations of certain of its operations.
Therefore, barring any unforeseen circumstances, gross profits
should increase slightly during the balance of fiscal 1996.
-13- <PAGE>
SELLING, GENERAL & ADMINISTRATIVE
---------------------------------
Quarter ended October 31 1995 % Change 1994
---- -------- ----
Technical services $1,179 (11.0%) $1,325
% to segment revenue 12.3% 17.1%
Environmental services 43 0.0% 43
% to segment revenue 3.2% 33.9%
Registration services 204 137.2% 86
% to segment revenue 33.1% 19.4%
Contract labor services 257 (21.9%) 329
% to segment revenue 19.0% 30.9%
Corporate 30 30.4% 23
Total S G & A $1,713 (5.1%) $1,806
% to total net revenue 13.3% 19.3%
Selling, general and administrative expenses as a percentage of
net revenues decreased in the three months ending October 31,
1995 compared to the same period in 1994 as a result of
management's ongoing cost containment efforts. These reductions
were offset by increases registration services segment which are
reflective of the cost of pursuing business in this growing
segments of the Registrant. The Registrant continues to look for
ways to reduce costs but remain effective in these areas.
INTEREST EXPENSE
----------------
Net interest expense increased $112,000 in the quarter ending
October 31, 1995 when compared to the same period in 1994. This
increase was principally due to higher interest rates and
increases in the term loan and line of credit balances.
INCOME TAXES
------------
The income tax provisional rate for the quarters of 1995 and
1994 reflects a rate in excess of the U.S. federal statutory rate
primarily due to the inclusion of state income taxes. The
Registrant's provision for the quarter ending October 31, 1995
was higher than the same period in 1994 due to the increase in
income before taxes and minority interest. Management has
determined that it is more likely than not that the deferred tax
asset will be realized on the basis of offsetting it against
-14- <PAGE>
deferred tax liabilities. It is the Registrant's intention to
evaluate the realizability of the deferred tax asset quarterly by
assessing the need for a valuation account.
NET INCOME
----------
The increase in net income in the quarter ending October 31, 1995
compared to the same period in 1994 was due to increased revenues
along with a reduction in costs.
BUSINESS ENVIRONMENT
--------------------
Revenues in the Registrant's defense-related test business
continued to be very competitive due to the ongoing cutbacks and
consolidations in the aerospace and defense industry. The
Registrant has, however, maintained a significant volume of work
at lower prices compared to last year. After a detailed market
analysis, the Registrant has decided, as part of its aggressive
cost reduction program, to discontinue its aerospace test
operations at its Hartwood, Virginia facility. This facility
will continue to operate in support of the Registrant's Marine
Corps' support contract in the Virginia area as well as providing
a base of operation for the Registrant's national sales office.
The Registrant plans to sell some of the aerospace test assets at
this facility to others and reallocate the majority of the
remaining assets to its other NTS laboratories. Also, at the end
of the Marine Corps' support contract, the Registrant will decide
whether to liquidate or lease out the real property. It is
anticipated by the Registrant that the discontinuance of
operations at this facility will not have a material affect on
earnings nor the Registrant's ability to service its current
customer base.
The Registrant's strategy of establishing strategic alliances and
winning work from companies that have downsized or discontinued
their own testing operations has mitigated the trends in the
defense-related business to some degree. Furthermore, the
Registrant's strategy of growth through diversification has been
successful with the continued revenue growth in ISO registration
services and environmental services. Because of the foregoing,
as well as other factors affecting the Registrant's operating
results, past financial performance should not be considered to
be a reliable indicator of future performance and investors
should not use historical trends to anticipate results or trends
in future periods.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
In the nine months ended October 31, 1995, cash provided by
operations decreased by $1,195,000 when compared to the same
period in 1994. Major items contributing to this decrease were
significant increases in accounts receivable and prepaid expense
-15- <PAGE>
balances partially offset by increases in accounts payable and
accrued expense balances.
Net cash used in investing activities in the nine-month period
ended October 31, 1995 decreased $1,397,000 when compared to the
same period in 1994. The Registrant anticipates that its capital
spending level in fiscal 1996 will continue to be lower than
fiscal 1995. The actual level of spending will be dependent on a
variety of factors, including general economic conditions, bank
covenants and the Registrant's operating requirements.
In the nine-month period ended October 31, 1995, net cash
provided by financing activities consisted of increases in the
bank term loans and lines of credit of $1,085,000 and proceeds
from the exercise of stock options of $14,000 and stock issued in
lieu of compensation of $19,000, offset by debt reduction on
short term and long term debt of $1,324,000 and payments of a
$0.02 per share dividend totaling $133,000. During fiscal 1995
the Registrant's revolving lines of credit with Bank of America
NT & SA and Sanwa Bank California were extended to June 1996.
During the nine-month period ended October 31, 1995, long term
debt decreased by $4,932,000 from the same period in 1994. This
was due primarily to the reclassification of the revolving lines
of credit as current liabilities. The Registrant is currently
negotiating with its existing banks to renew and increase its
lines of credit. Management believes, based upon its current
profitable operations and discussions with its banks, that these
lines will be renewed. The Registrant also has a term loan
agreement with Bank of America NT & SA and Sanwa Bank California
for an aggregate amount of $5,000,000 payable in monthly
installments of $83,000 through August 31, 1998 and an additional
$1,000,000 loan with Sanwa Bank California entered into in
January 1995 with payments of $16,667 through January 31, 2000.
Management is not aware of any significant demands for capital
funds that may materially affect the short or long-term liquidity
in the form of large fixed asset acquisitions, unusual working
capital commitments or contingent liabilities. The Registrant's
future working capital will be provided from operations,
supplemented by its bank credit lines. The Registrant's bank
revolving lines of credit, which currently aggregate $5,000,000
for short-term liquidity needs had $400,000 available at
October 31, 1995.
-16- <PAGE>
PART II. OTHER INFORMATION
-------- -----------------
Item 6. Exhibits and Reports on Form 8-K
------- --------------------------------
a. Exhibit 27 - Financial Data Schedule
b. During the quarter ended October 31, 1995 the registrant
did not file a current report on Form 8-K.
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of
1934 the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
NATIONAL TECHNICAL SYSTEMS, INC.
--------------------------------
Date: December 13, 1995 By: /s/ Lloyd Blonder
----------------- ------------------------
Lloyd Blonder
Senior Vice President
Chief Financial Officer
(Signing on behalf of the
registrant and as principal
financial officer)
-17- <PAGE>
EXHIBIT INDEX
-------------
No. Description Page
-----------------------------------------------------------
27 Financial Data Schedule 19
-18- <PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> OCT-31-1995
<CASH> 1,232
<SECURITIES> 0
<RECEIVABLES> 12,686
<ALLOWANCES> 646
<INVENTORY> 2,158
<CURRENT-ASSETS> 17,724
<PP&E> 41,470
<DEPRECIATION> 25,038
<TOTAL-ASSETS> 35,401
<CURRENT-LIABILITIES> 12,913
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 35,401
<SALES> 33,364
<TOTAL-REVENUES> 33,364
<CGS> 26,177
<TOTAL-COSTS> 26,177
<OTHER-EXPENSES> 5,090
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 889
<INCOME-PRETAX> 1,233
<INCOME-TAX> 555
<INCOME-CONTINUING> 645
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 645
<EPS-PRIMARY> 0.10
<EPS-DILUTED> 0.10
</TABLE>
