<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended March 31, 1998
--------------
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from ____________ to ______________
Commission File Number 0-28932
-------
BENTHOS, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Massachusetts 04-2381876
(State or Other Jurisdiction of (I.R.S. Employer
Corporation or Organization) Identification No.)
49 Edgerton Drive, North Falmouth, Massachusetts 02556
(Addresses of Principal Executive Offices) (Zip Code)
(508) 563-1000
Issuer's Telephone Number Including Area Code
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such
shorter period that the issuer was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
----- ----
State the number of shares outstanding of each of the issuer's classes of Common
equity as of the latest practicable date:
Common Stock par value $.0667 1,321,240
(Class) (Outstanding stock at May 6, 1998)
Traditional Small Business Disclosure Format (check one):
Yes X No
----- ----
<PAGE>
2
BENTHOS, INC. AND SUBSIDIARY
FORM 10-QSB
FOR THE THIRTEEN WEEKS AND TWENTY-SIX WEEKS ENDED
MARCH 31, 1998
INDEX
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
Face Sheet 1
Index 2
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets (unaudited) 3
March 31, 1998 and
September 30, 1997
Condensed Consolidated Statements of Earnings (unaudited) 4
Thirteen Weeks Ended
March 31, 1998 and
March 31, 1997
Condensed Consolidated Statements of Earnings (unaudited) 5
Twenty-Six Weeks Ended
March 31, 1998 and
March 31, 1997
Condensed Consolidated Statements of Cash Flow (unaudited) 6
Twenty-Six Weeks Ended
March 31, 1998 and
March 31, 1997
Notes to Financial Statements 7-8
Item 2. Management's Discussion and Analysis 9-12
of Financial Condition and Results
of Operations
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
Signature 13
</TABLE>
<PAGE>
3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Benthos, Inc. and Subsidiary
Condensed Consolidated Balance Sheets
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Assets March 31, 1998 September 30, 1997
<S> <C> <C>
Current Assets:
Cash and Cash Equivalents $ 3,077 $ 2,663
Accounts Receivable, Net 1,620 2,170
Inventories 2,310 2,063
Prepaid Expenses 368 469
Deferred Tax Asset 516 516
------- -------
Total Current Assets 7,891 7,881
Property, Plant and Equipment, Net 1,871 1,961
Other Assets 283 234
------- -------
$10,045 $10,076
======= =======
Liabilities and Stockholders' Investment
Current Liabilities:
Current Maturities of Long-term Debt $ 71 $ 34
Accounts Payable 563 314
Accrued Expenses 878 1,373
Customer Deposits 263 141
------- -------
Total Current Liabilities 1,775 1,862
Long-term Debt, Net of Current Maturities 423 791
Stockholders' Investment:
Common Stock, $.0667 par value-
Authorized 7,500 shares
Issued 1,612 shares at March 31, 1998
and 1,586 at September 30, 1997 108 106
Capital in excess of par value 1,319 1,270
Retained Earnings 7,197 6,894
Treasury Stock, at Cost (777) (847)
------- -------
Total Stockholders' Investment 7,847 7,423
------- -------
$10,045 $10,076
======= =======
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements.
<PAGE>
4
Benthos, Inc. and Subsidiary
Condensed Consolidated Statements of Earnings
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
March 31, 1998 March 31, 1997
<S> <C> <C>
Net Sales $3,517 $4,237
Cost of Sales 1,895 1,996
------ ------
Gross Profit 1,622 2,241
Selling, General & Administrative Expenses 1,141 1,140
Research and Development Expenses 318 361
------ ------
Income from Operations 163 740
Interest Income 35 3
Interest Expense (15) (20)
------ ------
Income before Provision for Income Taxes 183 723
Provision for Income Taxes 70 291
------ ------
Net Income $ 113 $ 432
====== ======
Basic Earnings Per Share $0.09 $0.35
====== ======
Diluted Earnings Per Share $0.08 $0.32
====== ======
Common Shares Outstanding 1,315 1,231
Common Shares Outstanding,
Assuming Dilution 1,397 1,360
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements
<PAGE>
5
Benthos, Inc. and Subsidiary
Condensed Consolidated Statements of Earnings
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Twenty-Six Weeks Ended
March 31, 1998 March 31, 1997
<S> <C> <C>
Net Sales $6,637 $8,917
Cost of Sales 3,177 4,152
------ ------
Gross Profit 3,460 4,765
Selling, General & Administrative Expenses 2,382 2,481
Research and Development Expenses 630 603
------ ------
Income from Operations 448 1,681
Interest Income 73 9
Interest Expense (30) (39)
------ ------
Income before Provision for Income Taxes 491 1,651
Provision for Income Taxes 188 665
------ ------
Net Income $ 303 $ 986
====== ======
Basic Earnings Per Share $0.23 $0.81
====== ======
Diluted Earnings Per Share $0.22 $0.72
====== ======
Common Shares Outstanding 1,304 1,220
Common Shares Outstanding,
Assuming Dilution 1,395 1,371
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements.
<PAGE>
6
Benthos, Inc. and Subsidiary
Condensed Consolidated Statements of Cash Flow
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Twenty-Six Weeks Ended
March 31, 1998 March 31, 1997
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income $ 303 $ 986
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and Amortization 373 477
Changes in Assets and Liabilities:
Accounts Receivable 550 (506)
Inventories (247) 555
Prepaid Expenses 101 (284)
Accounts Payable & Accrued Expenses (246) (533)
Customer Deposits 122 (85)
------ ------
Net Cash Provided by Operating Activities 956 610
Cash Flows from Investing Activities:
Purchases of Property, Plant & Equipment (130) (304)
Increase in Other Assets (81) (96)
------ ------
Net Cash Used in Investing Activities (211) (400)
Cash Flows From Financing Activities:
Payments on long-term debt, net (331) (15)
------ ------
Net Increase in Cash and Cash Equivalents 414 195
Cash and Cash Equivalents, Beginning of Period 2,663 751
------ ------
Cash and Cash Equivalents, End of Period $3,077 $ 946
====== ======
Supplemental Disclosure of Cash Flow Information:
Interest Paid $ 15 $ 20
====== ======
Income Taxes Paid $ 20 $1,555
====== ======
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements
<PAGE>
7
Benthos, Inc.
Notes to Financial Statements
1. Fiscal Periods
The fiscal year of Benthos, Inc. (the Company) ends on September 30 each year.
Interim quarters are comprised of 13 weeks unless otherwise noted and end on the
Sunday closest to December 31, March 31, and June 30. All references in the
unaudited condensed consolidated financial statements to fiscal periods ended on
December 31, March 31, or June 30 mean the interim quarters referred to above.
2. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission regarding interim financial reporting. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements and should be
read in conjunction with the consolidated financial statements and notes thereto
for the fiscal year ended September 30, 1997, included in the Company's
previously filed Form 10-KSB. The accompanying condensed consolidated financial
statements reflect all adjustments (consisting solely of normal, recurring
adjustments) which are, in the opinion of management, necessary for a fair
presentation of results for the interim periods presented. The results of
operations for the interim periods are not necessarily indicative of the results
to be expected for the full fiscal year.
3. Inventories
Inventories are stated at the lower of cost (first-in, first-out) or market and
consist of the following:
<TABLE>
<CAPTION>
March 31,1998 September 30, 1997
(in thousands)
<S> <C> <C>
Raw Materials $ 92 $ 90
Work-in-Process 2,208 1,928
Finished Goods 10 45
------ ------
$2,310 $2,063
====== ======
</TABLE>
4. Earnings Per Share
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, "Earnings Per Share" which revises the calculation and presentation
provisions of Accounting Principles Board Opinion 15 ("APB 15") and related
interpretations. Statement No. 128 has been adopted in the accompanying
financial statements with retroactive application. Basic earnings per share
excludes dilution and is computed by dividing net earnings by the weighted
average number of common shares outstanding for the period. Diluted earnings
per share reflects the potential dilution that could occur if securities or
other contracts to issue common stock were exercised or converted into common
stock. Diluted earning per share is computed based upon the weighted average
number of common shares and dilutive common equivalent shares outstanding.
Common stock options, which are common stock equivalents, have a dilutive effect
on earnings per share in all periods and are therefore included in the
computation of diluted earnings per share. Diluted earnings per share in the
accompanying statements of operations is identical to the primary earnings per
share previously presented in accordance with APB 15. The Company has stock
options for 24,000 shares of common stock at an average exercise price of $17.54
in the thirteen and twenty-six week periods ended March 31, 1998 and 15,000
shares at $14.25 in the thirteen week period ended March 31, 1998, which have
not been included in basic or diluted earnings per share as they are
antidilutive.
<PAGE>
8
Calculations of basic and diluted net income per common share and potential
common share are as follows:
<TABLE>
<CAPTION>
(in thousands, except per share amounts)
Thirteen Weeks Ended March 31, Twenty-Six Weeks Ended March 31,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net income $ 113 $ 432 $ 303 $ 986
====== ====== ====== ======
Weighted average common
shares outstanding 1,315 1,231 1,304 1,220
Potential common shares
pursuant to stock options 82 129 91 151
------ ------ ------ ------
Diluted weighted
average shares 1,397 1,360 1,395 1,371
------ ------ ------ ------
Basic net income per
common share $ .09 $ .35 $ .23 $ .81
====== ====== ====== ======
Diluted net income per share
and potential common share $ .08 $ .32 $ .22 $ .72
====== ====== ====== ======
</TABLE>
<PAGE>
9
ITEM 2.
Management's Discussion and Analysis
of Financial Condition and Results of Operations
(Dollars in thousands)
Results of Operations -- Second quarter of fiscal year 1998 compared with second
quarter of fiscal year 1997.
The following table presents, for the periods indicated, the percentage
relationship of Condensed Consolidated Statements of Earnings items to total
sales:
<TABLE>
<CAPTION>
Thirteen Weeks Ended
March 31, 1998 March 31, 1997
<S> <C> <C>
Net Sales 100.0% 100.0%
Cost of Sales 53.9% 47.1%
----- -----
Gross Profit 46.1% 52.9%
Selling, General & Administrative Expenses 32.5% 26.9%
Research and Development Expenses 9.0% 8.5%
----- -----
Income from Operations 4.6% 17.5%
Interest Income/(Expense), Net .6% (.4%)
----- -----
Income Before Provision for Income Taxes 5.2% 17.1%
Provision for Income Taxes 2.0% 6.9%
----- -----
Net Income 3.2% 10.2%
===== =====
</TABLE>
Sales. Net sales decreased by 17.0% in the second quarter of fiscal year 1998
to $3,517 as compared to $4,237 in the second quarter of fiscal year 1997.
Sales of the Container Inspection Systems Division decreased by 7.4% to $1,330
in the second quarter of fiscal year 1998 as compared to $1,437 in the second
quarter of fiscal year 1997. The decrease resulted largely from a decrease in
product orders. Sales of the Undersea Systems Division decreased by 21.9% to
$2,187 in the second quarter of fiscal year 1998 as compared to $2,800 in the
second quarter of fiscal year 1997. The decrease resulted mainly from lower
sales of hydrophones in the second quarter of fiscal year 1998 as compared to
the second quarter of fiscal year 1997 related to the transitioning to a new
hydrophone product and reduced sales of Acoustic Releases and Remotely Operated
Vehicles related to large project orders.
Gross Profit. Gross Profit decreased by 27.6% to $1,622 for the second quarter
of fiscal year 1998 as compared to $2,241 for the second quarter of fiscal year
1997. As a percentage of sales, gross profit was 46.1% in the second quarter of
fiscal year 1998 as compared to 52.9% in the second quarter of fiscal year 1997.
The decrease in gross profit percentage is attributed primarily to lower overall
sales volume as well as start-up costs related to the new hydrophone product.
<PAGE>
10
Selling, General and Administrative Expenses. Selling, general and
administrative expenses remained essentially flat at $1,141 for the second
quarter of fiscal year 1998 as compared to $1,140 in the second quarter of
fiscal year 1997. As a percentage of sales, selling, general and administrative
expenses increased to 32.5% in the second quarter of fiscal year 1998 as
compared to 26.9% for the second quarter of fiscal year 1997. This increase in
percentage of sales is primarily a result of a reduced level of sales in the
second quarter of fiscal year 1998.
Research and Development Expenses. Research and development expenses decreased
11.9% to $318 for the second quarter of fiscal year 1998 as compared to $361 in
the second quarter of fiscal year 1997. As a percentage of sales, research and
development expenses increased to 9.0% of sales in the second quarter of fiscal
year 1998 from 8.5% in the second quarter of fiscal year 1997. The overall
level of expenditures is due to investments in new product development and is
consistent with the Company's current operational plans.
Interest Income. Interest income increased to $35 in the second quarter of
fiscal year 1998 as compared to $3 in the second quarter of fiscal year 1997.
The increase in interest income was a result of higher invested cash balances.
Provision for Income Taxes. The provision for income taxes decreased to $70 in
the second quarter of fiscal year 1998 as compared to $291 in the second quarter
of fiscal year 1997. The effective tax rate used in the second quarter of
fiscal year 1998 was 38.3% as compared to the rate of 40.3% used in the second
quarter of fiscal year 1997. The rate used in the second quarter of fiscal year
1998 is the same rate as was applied to the full year of fiscal 1997 and is
lower than the statutory rate due to the benefit from the Company's Foreign
Sales Corporation.
Results of Operations. First half of fiscal year 1998 compared to first half of
fiscal year 1997.
The following table presents, for the periods indicated, the percentage
relationship of Condensed Consolidated Statements of Earnings items to total
sales:
<TABLE>
<CAPTION>
Twenty-Six Weeks Ended
March 31, 1998 March 31, 1997
<S> <C> <C>
Net Sales 100.0% 100.0%
Cost of Sales 47.9% 46.6%
----- -----
Gross Profit 52.1% 53.4%
Selling, General & Administrative Expenses 35.9% 27.8%
Research and Development Expenses 9.5% 6.8%
----- -----
Income from Operations 6.7% 18.8%
Interest Income/(Expense), net .7% (.3%)
----- -----
Income Before Provision For Income Taxes 7.4% 18.5%
Provision for Income Taxes 2.8% 7.5%
----- -----
Net Income 4.6% 11.0%
===== =====
</TABLE>
<PAGE>
11
Sales. Net sales decreased by 25.6% in the first half of fiscal year 1998 to
$6,637 as compared to $8,917 in the first half of fiscal year 1997. Sales of
the Container Inspection Systems Division decreased by 11.3% to $2,971 in the
first half of fiscal year 1998 as compared to $3,350 in the first half of fiscal
year 1997. The decrease resulted largely from the timing of project orders.
Sales of the Undersea Systems Division decreased by 34.2% to $3,666 in the first
half of fiscal year 1998 as compared to $5,567 in the first half of fiscal year
1997. The decrease resulted mainly from lower sales of hydrophones in the first
half of fiscal year 1998 as compared to the first half of fiscal year 1997
related to the transitioning to a new hydrophone product.
Gross profit. Gross profit decreased by 27.4% to $3,460 for the first half of
fiscal year 1998 as compared to $4,765 for the first half of fiscal year 1997.
As a percentage of sales, gross profit was 52.1% in the first half of fiscal
year 1998 as compared to 53.4% in the first half of fiscal year 1997. The
decrease in gross profit percentage is attributed primarily to lower sales
volume as well as start-up costs for the new hydrophone product.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased by 4.0% to $2,382 for the first half of fiscal
year 1998 as compared to $2,481 in the first half of fiscal year 1997. As a
percentage of sales, selling, general and administrative expenses increased to
35.9% in the first half of fiscal year 1998 as compared to 27.8% for the first
half of fiscal year 1997. This increase in percentage of sales is primarily a
result of a reduced level of sales in the first half of fiscal year 1998.
Research and Development Expenses. Research and development expenses increased
4.5% to $630 for the first half of fiscal year 1998 as compared to $603 in the
first half of fiscal year 1997. As a percentage of sales, research and
development expenses increased to 9.5% of sales in the first half of fiscal year
1998 from 6.8% in the first half of fiscal year 1997. The increase in the
overall level of expenditures is due to investments in new product development
and is consistent with the Company's current operational plans.
Interest Income. Interest income increased to $73 in the first half of fiscal
year 1998 as compared to $9 in the first half of fiscal year 1997. The increase
in interest income was a result of higher invested cash balances.
Provision for Income Taxes. The provision for income taxes decreased to $188 in
the first half of fiscal year 1998 as compared to $665 in the first half of
fiscal year 1997. The effective tax rate used in the first half of fiscal year
1998 was 38.3% as compared to the rate of 40.3% used in the first half of fiscal
year 1997. The rate used in the first half of fiscal year 1998 is the same rate
as was applied to the full year of fiscal 1997 and is lower than the statutory
rate due to the benefit from the Company's Foreign Sales Corporation.
Liquidity and Capital Resources. The Company's cash and cash equivalents
increased $414 from September 30, 1997 to March 31, 1998. This increase
resulted primarily from cash generated from operations of $956. Accounts
receivable decreased $550 resulting from improved collections and lower sales
volume and inventories increased by $247 to support future sales. Net cash used
in financing activities was $331 resulting from payments on the Company's long
term debt. The Company believes it is well positioned to finance future working
capital requirements and capital expenditures during the next twelve months
through cash on hand, current earnings and available credit facilities.
<PAGE>
12
Year 2000 Issues. The Year 2000 issue exists because many computer systems and
applications currently use two-digit date fields to designate a year. As the
century date change occurs, many date sensitive systems will recognize the Year
2000 as 1900, or not at all. This inability to recognize or properly treat the
Year 2000 may cause systems to process critical financial and operational
information incorrectly. The Company utilizes software and related technologies
throughout its business that will be affected by the date change in the Year
2000. An internal study is currently underway to determine the full scope and
related costs to insure that the Company's systems continue to meet its internal
needs and those of its customers. The Company began incurring expenses in 1997
to resolve this issue. All expenditures will be expensed as incurred and they
are not expected to have a significant impact on the Company's ongoing results
of operations.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995.
The statements in this Quarterly Report on Form 10-QSB and in oral statements
which may be made by representatives of the Company relating to plans,
strategies, economic performance and trends and other statements that are not
descriptions of historical facts may be forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Forward-looking information is inherently subject to risks and
uncertainties, and actual results could differ materially from those currently
anticipated due to a number of factors which include: the timing of large
project orders, competitive factors, shifts in customer demand, government
spending, economic cycles, availability of financing as well as the factors
described in this report. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results or
outcomes may vary materially from those described herein as anticipated,
believed, estimated, expected or intended.
<PAGE>
13
PART II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The exhibits set forth in the
Exhibit Index on the following
page are filed herewith as a
part of this report.
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BENTHOS, INC
By /s/ Francis E. Dunne, Jr.
Francis E. Dunne, Jr
Chief Financial Officer
and Treasurer
(Principal Financial and Accounting Officer)
DATE: May 12, 1998
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
<C> <S>
3.1 Restated Articles of Organization (1)
3.2 Articles of Amendment dated April 28, 1997 (2)
3.3 Articles of Amendment dated April 20, 1998
3.4 By-Laws (1)
3.5 By-Law Amendments adopted January 23, 1998 (4)
4.1 Common Stock Certificate (1)
10.1 Employment Contract with Samuel O. Raymond (1)
10.2 Amendment to Employment Contract with Samuel O. Raymond (2)
10.3 Employment Contract with John L. Coughlin (1)
10.4 Employee Stock Ownership Plan (1)
10.5 First Amendment to Employee Stock Ownership Plan (2)
10.6 401(k) Retirement Plan (1)
10.7 First Amendment to 401(k) Retirement Plan (2)
10.8 Second Amendment to 401(k) Retirement Plan (2)
10.9 Third Amendment to 401(k) Retirement Plan (3)
10.10 Supplemental Executive Retirement Plan (1)
10.11 1990 Stock Option Plan (1)
10.12 Stock Option Plan for Non-Employee Directors (1)
10.13 1998 Non-Employee Directors' Stock Option Plan (4)
10.14 License Agreement between the Company and The Penn State
Research Foundation dated December 13, 1993 (1)
10.15 Technical Consultancy Agreement between the Company and
William D. McElroy dated July 12, 1994 (1)
10.16 Technical Consultancy Agreement between the Company and
William D. McElroy dated October 1, 1996 (3)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
<C> <S>
10.17 General Release and Settlement Agreement between the Company
and Lawrence W. Gray dated February 8, 1996 (1)
10.18 Line of Credit Loan Agreement between the Company and Cape
Cod Bank and Trust Company dated September 24, 1990, as
amended (1)
10.19 Commercial Mortgage Loan Extension and Modification
Agreement between the Company and Cape Cod Bank and Trust
Company, dated July 6, 1994 (1)
10.20 License Agreement between the Company and Optikos
Corporation dated July 29, 1997 (3)
21 Subsidiaries of the Registrant (1)
27 Financial Data Schedule
27.1 Restated Financial Data Schedule
</TABLE>
(1) Previously filed as an exhibit to Registrant's Registration
Statement on Form 10-SB filed with the Commission on December 17, 1996
(File No. O-28932) and incorporated herein by this reference.
(2) Previously filed as an exhibit to Registrant's Quarterly Report on
Form 10-QSB for the quarterly period ended March 30, 1997 (File No. O-
28932) and incorporated herein by this reference.
(3) Previously filed as an exhibit to Registrant's Quarterly Report on
Form 10-QSB for the quarterly period ended June 29, 1997 (File No. O-28932)
and incorporated hereby by this reference.
(4) Previously filed as exhibit to the Registrant's Quarterly Report
on Form 10-QSB for the quarterly period ended December 31, 1997 (File No.
O-28932) and incorporated herein by this reference.
<PAGE>
FEDERAL IDENTIFICATION
NO. 04-2381876
-------------------
THE COMMONWEALTH OF MASSACHUSETTS
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
We, John L. Coughlin *President
--------------------------------------------------------,
and John T. Lynch *Clerk
----------------------------------------------------------,
of Benthos, Inc.
--------------------------------------------------------------------------,
(Exact name of corporation)
located at: 49 Edgerton Drive, Falmouth
-----------------------------------------------------------------,
(Street address of corporation in Massachusetts)
certify that these Articles of Amendment affecting articles number:
3
- --------------------------------------------------------------------------------
(Number those articles 1, 2, 3, 4, 5 and/or 6 being amended)
of the Articles of Organization were duly adopted at a meeting held on
April 3, 1998, by vote of:
- ------- --
817,813 shares of Common Stock of 1,317,490 shares outstanding,
- ------- ------------------- ----------------
(type, class &
series, if any)
shares of of shares outstanding,
- ------- ------------------- ----------------
(type, class &
series, if any)
shares of of shares outstanding,
- ------- ------------------- ----------------
(type, class &
series, if any)
/1/**being at least a majority of each type, class or series outstanding and
entitled to vote thereon:/or
*Delete the inapplicable words. **Delete the inapplicable clause.
/1/ For amendments adopted pursuant to Chapter 156B, Section 70.
Note: If the space provided under any article or item on this form is
insufficient, additions shall be set forth on the one side only of separate
8 1/2 x 11 sheets of paper with a left margin of at least 1 inch. Additions to
more than one article may be made on a single sheet so long as each article
requiring each addition is clearly indicated.
<PAGE>
To change the number of shares and the par value (if any) of any type, class or
series of stock which the corporation is authorized to issue, fill in the
following:
The total presently authorized is:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
- --------------------------------------------------------------------------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common: Common: 2,500,000 $0.06 2/3
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Preferred: Preferred:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
Change the total authorized to:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
- --------------------------------------------------------------------------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common: Common: 7,500,000 $0.06 2/3
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Preferred: Preferred:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
The foregoing amendment(s) will become effective when these Articles of
Amendment are filed in accordance with General Laws, Chapter 156B, Section 6
unless these articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days after such filing,
in which event the amendment will become effective on such later date.
Later effective date: .
-------------------------
SIGNED UNDER THE PENALTIES OF PERJURY, this 20th day of April , 1998,
---- ----------- --
/s/ John L. Coughlin , *President
- -----------------------------------------------------------
/s/ John T. Lynch , *Clerk
- -------------------------------------------------------------
* Delete the inapplicable words.
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(GENERAL LAWS, CHAPTER 156B, SECTION 72)
======================================================
I hereby approve the within Articles of Amendment and,
the filing fee in the amount of $_____ having been
paid, said articles are deemed to have been filed with
me this_____day of_________________ 19__________.
Effective date:_________________________________
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
Photocopy of document to be sent to:
William F. Griffin, Jr.
Davis, Malm & D'Agostine, P.C.
One Boston, Place
Boston, Massachusetts 02108
617-367-2500
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF BENTHOS, INC. AND SUBSIDIARY
CONTAINED ELSEWHERE IN THIS QUARTERLY REPORT AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> MAR-31-1998
<CASH> 3,077
<SECURITIES> 0
<RECEIVABLES> 1,620
<ALLOWANCES> 162
<INVENTORY> 2,310
<CURRENT-ASSETS> 7,891
<PP&E> 6,193
<DEPRECIATION> 4,322
<TOTAL-ASSETS> 10,045
<CURRENT-LIABILITIES> 1,775
<BONDS> 423
0
0
<COMMON> 108
<OTHER-SE> 7,739
<TOTAL-LIABILITY-AND-EQUITY> 10,045
<SALES> 6,637
<TOTAL-REVENUES> 6,637
<CGS> 3,177
<TOTAL-COSTS> 2,382
<OTHER-EXPENSES> 630
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30
<INCOME-PRETAX> 491
<INCOME-TAX> 188
<INCOME-CONTINUING> 303
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 303
<EPS-PRIMARY> .23<F1>
<EPS-DILUTED> .22<F1>
<FN>
<F1>THE EARNINGS PER SHARE INFORMATION HAS BEEN PREPARED IN ACCORDANCE WITH SFAS
NO. 128 AND BASIC AND DILUTED EARNINGS PER SHARE HAVE BEEN ENTERED IN PLACE OF
PRIMARY AND FULLY DILUTED, RESPECTIVELY.
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF BENTHOS, INC. AND SUBSIDIARY
CONTAINED ELSEWHERE IN THIS QUARTERLY REPORT AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> .81<F1>
<EPS-DILUTED> .72<F1>
<FN>
<F1> The Earnings Per Share information has been prepared in accordance with
SFAS No. 128 and Basic and Diluted Earnings per share have been entered in place
of Primary and Fully Diluted, respectively.
</FN>
</TABLE>
