<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 June 30, 1998
-------------
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from ____________ to ______________
Commission file number 0-29024
-------
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 August 7, 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 THIRTY-NINE WEEKS ENDED
JUNE 30, 1998
INDEX
Page No.
Face Sheet 1
Index 2
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets (unaudited) 3
June 30, 1998 and
September 30, 1997
Condensed Consolidated Statements of Earnings (unaudited) 4
Thirteen Weeks Ended
June 30, 1998 and
June 30, 1997
Condensed Consolidated Statements of Earnings (unaudited) 5
Thirty-Nine Weeks Ended
June 30, 1998 and
June 30, 1997
Condensed Consolidated Statements of Cash Flow (unaudited) 6
Thirty-Nine Weeks Ended
June 30, 1998 and
June 30, 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 4. Submission of Matters to a Vote of Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 13
Signature 14
<PAGE>
3
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Item 1. Financial Statements
Benthos, Inc. and Subsidiary
Condensed Consolidated Balance Sheets
(in thousands, except per share amounts)
(unaudited)
Assets June 30, 1998 September 30, 1997
<S> <C> <C>
Current Assets:
Cash and Cash Equivalents $ 2,770 $2,663
Accounts Receivable, Net 2,112 2,170
Inventories 2,868 2,063
Prepaid Expenses 346 469
Deferred Tax Asset 516 516
------- ------
Total Current Assets 8,612 7,881
Property, Plant and Equipment, Net 1,809 1,961
Other Assets 276 234
------- -------
$10,697 $10,076
======= =======
Liabilities and Stockholders' Investment
Current Liabilities:
Current Maturities of Long-term Debt $ 72 $ 34
Accounts Payable 890 314
Accrued Expenses 1,027 1,373
Customer Deposits 507 141
------- ------
Total Current Liabilities 2,496 1,862
Long-term Debt, Net of Current Maturities 202 791
Stockholders' Investment:
Common Stock, $.0667 par value-
Authorized - 7,500 shares
Issued - 1,612 shares at June 30, 1998
and 1,586 at September 30, 1997 108 106
Capital in Excess of Par Value 1,319 1,270
Retained Earnings 7,349 6,894
Treasury Stock, at Cost (777) (847)
------- -------
Total Stockholders' Investment 7,999 7,423
------- -------
$10,697 $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
June 30, 1998 June 30, 1997
<S> <C> <C>
Net Sales $3,431 $3,751
Cost of Sales 1,775 1,787
------ ------
Gross Profit 1,656 1,964
Selling, General & Administrative Expenses 1,054 1,117
Research and Development Expenses 389 405
------ ------
Income from Operations 213 442
Interest Income 42 7
Interest Expense (7) (19)
------ ------
Income before Provision for Income Taxes 248 430
Provision for Income Taxes 95 132
------ ------
Net Income $ 153 $ 298
====== ======
Basic Earnings Per Share $ 0.12 $ 0.24
====== ======
Diluted Earnings Per Share $ 0.11 $ 0.22
====== ======
Common Shares Outstanding 1,321 1,254
Common Shares Outstanding,
Assuming Dilution 1,386 1,369
</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>
Thirty-Nine Weeks Ended
June 30, 1998 June 30, 1997
<S> <C> <C>
Net Sales $10,067 $12,669
Cost of Sales 4,951 5,940
------- -------
Gross Profit 5,116 6,729
Selling, General & Administrative Expenses 3,436 3,597
Research and Development Expenses 1,020 1,008
------- -------
Income from Operations 660 2,124
Interest Income 115 15
Interest Expense (37) (59)
------- -------
Income before Provision for Income Taxes 738 2,080
Provision for Income Taxes 283 796
------- -------
Net Income $ 455 $ 1,284
======= =======
Basic Earnings Per Share $0.35 $1.04
======= =======
Diluted Earnings Per Share $0.33 $0.94
======= =======
Common Shares Outstanding 1,310 1,232
Common Shares Outstanding,
Assuming Dilution 1,392 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>
Thirty-Nine Weeks Ended
June 30, 1998 June 30, 1997
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income $ 455 $1,284
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and Amortization 386 685
Changes in Assets and Liabilities:
Accounts Receivable 58 52
Inventories (805) 892
Prepaid Expenses 123 (259)
Accounts Payable & Accrued Expenses 230 (648)
Customer Deposits 366 (151)
------ ------
Net Cash Provided by Operating Activities 813 1,855
Cash Flows from Investing Activities:
Purchases of Property, Plant & Equipment (88) (404)
Increase in Other Assets (67) (110)
------ ------
Net Cash Used in Investing Activities (155) (514)
Cash Flows from Financing Activities:
Payments on long-term debt, net (551) (23)
------ ------
Net Increase in Cash and Cash Equivalents 107 1,318
Cash and Cash Equivalents, Beginning of Period 2,663 751
------ ------
Cash and Cash Equivalents, End of Period $2,770 $2,069
====== ======
Supplemental Disclosure of Cash Flow Information:
Interest Paid $ 37 $ 59
====== ======
Income Taxes Paid $ 62 $1,624
====== ======
</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 period are not necessarily indicative of the results
to be expected for the full fiscal year. Certain reclassifications have been
made to the 1997 financial statements to conform with the 1998 presentation.
3. Inventories
Inventories are stated at the lower of cost (first-in, first-out) or market and
consist of the following:
<TABLE>
<CAPTION>
June 30,1998 September 30, 1997
(in thousands)
<S> <C> <C>
Raw Materials $ 102 $ 90
Work-in-Process 2,757 1,928
Finished Goods 9 45
------ -------
$2,868 $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 36,000 shares of common stock at an average exercise price of $16.17 in the
thirteen and thirty-nine week periods ended June 30, 1998 and 46,500 shares at
an average exercise price of $12.25 in the thirteen week period ended June 30,
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 June 30, Thirty-Nine Weeks Ended June 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income $ 153 $ 298 $ 455 $1,284
====== ====== ====== ======
Weighted average common
shares outstanding 1,321 1,254 1,310 1,232
Potential common shares
pursuant to stock options 65 115 82 139
------ ------ ------ ------
Diluted weighted
average shares 1,386 1,369 1,392 1,371
------ ------ ------ ------
Basic net income per
common share $ .12 $ .24 $ .35 $ 1.04
====== ====== ====== ======
Diluted net income per share
and potential common share $ .11 $ .22 $ .33 $ .94
====== ====== ====== ======
</TABLE>
<PAGE>
9
Item 2.
Management's Discussion and Analysis
of Financial Condition and Results of Operations
(Dollars in thousands)
Results of Operations -- Third quarter of fiscal year 1998 compared with third
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
June 30, 1998 June 30, 1997
<S> <C> <C>
Net Sales 100.0% 100.0%
Cost of Sales 51.7% 47.6%
----- -----
Gross Profit 48.3% 52.4%
Selling, General & Administrative Expenses 30.7% 29.8%
Research and Development Expenses 11.4% 10.8%
----- -----
Income from Operations 6.2% 11.8%
Interest Income/(Expense), Net 1.0% (.3%)
----- -----
Income Before Provision for Income Taxes 7.2% 11.5%
Provision for Income Taxes 2.7% 3.6%
----- -----
Net Income 4.5% 7.9%
===== =====
</TABLE>
Sales. Net sales decreased by 8.5% in the third quarter of fiscal year 1998 to
$3,431 as compared to $3,751 in the third quarter of fiscal year 1997. Sales of
the Undersea Systems Division increased by 9.0% to $2,347 in the third quarter
of fiscal year 1998 as compared to $2,154 in the third quarter of fiscal year
1997. The increase resulted mainly from higher sales of new and existing
hydrophone products and Remotely Operated Vehicles in the third quarter of
fiscal year 1998 as compared to the third quarter of fiscal year 1997 and
reduced sales of Acoustic Releases and Imaging products. Sales of the Container
Inspection Systems Division decreased by 32.1% to $1,084 in the third quarter of
fiscal year 1998 as compared to $1,597 in the third quarter of fiscal year 1997.
The decrease resulted largely from reduced orders from Asia and the timing of
large project orders.
Gross Profit. Gross Profit decreased by 15.7% to $1,656 for the third quarter of
fiscal year 1998 as compared to $1,964 for the third quarter of fiscal year
1997. As a percentage of sales, gross profit was 48.3% in the third quarter of
fiscal year 1998 as compared to 52.4% in the third quarter of fiscal year 1997.
The decrease in gross profit percentage is attributed primarily to product mix.
<PAGE>
10
Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased by 5.6% to $1,054 for the third quarter of
fiscal year 1998 as compared to $1,117 in the third quarter of fiscal year 1997.
As a percentage of sales, selling, general and administrative expenses increased
to 30.7% in the third quarter of fiscal year 1998 as compared to 29.8% for the
third quarter of fiscal year 1997. This increase in percentage of sales is
primarily a result of a reduced level of sales in the third quarter of fiscal
year 1998.
Research and Development Expenses. Research and development expenses decreased
4.0% to $389 for the third quarter of fiscal year 1998 as compared to $405 in
the third quarter of fiscal year 1997. As a percentage of sales, research and
development expenses increased to 11.4% of sales in the third quarter of fiscal
year 1998 from 10.8% in the third 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 $42 in the third quarter of fiscal
year 1998 as compared to $7 in the third 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 $95 in
the third quarter of fiscal year 1998 as compared to $132 in the third quarter
of fiscal year 1997. The effective tax rate used in the third quarter of fiscal
year 1998 was 38.3% as compared to the rate of 30.7% used in the third quarter
of fiscal year 1997. The rate used in the third quarter of fiscal year 1998 is
the same rate applicable to the full fiscal year 1997 and is lower than the
statutory rate due to the benefit from the Company's Foreign Sales Corporation.
The effective tax rate used in the third quarter of fiscal year 1997 of 30.7%
was the result of a cumulative adjustment of the first three quarters of fiscal
year 1997.
Results of Operations. First three quarters of fiscal year 1998 compared to the
first three quarters 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>
Thirty-Nine Weeks Ended
June 30, 1998 June 30, 1997
<S> <C> <C>
Net Sales 100.0% 100.0%
Cost of Sales 49.2% 46.9%
----- -----
Gross Profit 50.8% 53.1%
Selling, General & Administrative Expenses 34.1% 28.4%
Research and Development Expenses 10.1% 7.9%
----- -----
Income from Operations 6.6% 16.8%
Interest Income/(Expense), Net .7% (.4%)
----- -----
Income Before Provision for Income Taxes 7.3% 16.4%
Provision for Income Taxes 2.8% 6.3%
----- -----
Net Income 4.5% 10.1%
===== =====
</TABLE>
<PAGE>
11
Sales. Net sales decreased by 20.5% in the first three quarters of fiscal year
1998 to $10,067 as compared to $12,669 in the first three quarters of fiscal
year 1997. Sales of the Container Inspection Systems Division decreased by
18.0% to $4,055 in the first three quarters of fiscal year 1998 as compared to
$4,947 in the first three quarters of fiscal year 1997. The decrease resulted
largely from reduced orders from Asia and the timing of large project orders.
Sales of the Undersea Systems Division decreased by 22.1% to $6,012 in the first
three quarters of fiscal year 1998 as compared to $7,722 in the first three
quarters of fiscal year 1997. The decrease resulted mainly from lower sales of
hydrophones related to the transitioning to a new hydrophone product as well as
fewer product and the timing of deliveries on project orders in the Acoustic
Release, Imaging, and Remotely Operated Vehicle product areas in the first three
quarters of fiscal year 1998 as compared to the first three quarters of fiscal
year 1997.
Gross Profit. Gross Profit decreased by 24.0% to $5,116 for the first three
quarters of fiscal year 1998 as compared to $6,729 for the first three quarters
of fiscal year 1997. As a percentage of sales, gross profit was 50.8% in the
first three quarters of fiscal year 1998 as compared to 53.1% in the first three
quarters of fiscal year 1997. The decrease in gross profit percentage is
attributed primarily to product mix as well as start-up costs for the new
hydrophone product.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased by 4.5% to $3,436 for the first three quarters
of fiscal year 1998 as compared to $3,597 in the first three quarters of fiscal
year 1997. As a percentage of sales, selling, general and administrative
expenses increased to 34.1% in the first three quarters of fiscal year 1998 as
compared to 28.4% for the first three quarters of fiscal year 1997. This
increase in percentage of sales is primarily a result of a reduced level of
sales in the first three quarters of fiscal year 1998.
Research and Development Expenses. Research and development expenses increased
1.2% to $1,020 for the first three quarters of fiscal year 1998 as compared to
$1,008 in the first three quarters of fiscal year 1997. As a percentage of
sales, research and development expenses increased to 10.1% of sales in the
first three quarters of fiscal year 1998 from 7.9% in the first three quarters
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 $115 in the first three quarters
of fiscal year 1998 as compared to $15 in the first three quarters 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 $283 in
the first three quarters of fiscal year 1998 as compared to $796 in the first
three quarters of fiscal year 1997. The effective tax rate used in the first
three quarters of fiscal year 1998 was 38.3% which is the same rate used for the
first three quarters and full fiscal year 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 $107 from September 30, 1997 to June 30, 1998. This increase resulted
primarily from cash generated from operations of $813. Customer deposits
increased by $366 as the Company booked more orders with advance payments
required and inventories increased by $805 to support future sales. Net cash
used in financing activities was $551 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 4. Submission of Matters to a Vote of Security Holders
(a) The Special Meeting in lieu of the Annual Meeting of Shareholders of the
Registrant (the "Meeting") was held on April 3, 1998.
(b) The Registrant solicited proxies for the Meeting pursuant to Regulation
14A; there was no solicitation in opposition to management's nominees for
directors as listed in the Proxy Statement, and all such nominees were
elected.
(c) The following describes the matters voted upon at the Meeting and sets
forth the number of votes cast for, against or withheld and the number of
abstentions as to each such matter:
(i) Election of Directors:
Nominee For Withheld
Stephen D. Fantone 1,176,856 5,413
A. Theodore Mollegen, Jr. 1,182,119 150
The directors whose term of office as a director continued after the
Meeting are John L. Coughlin, Thurman F. Naylor, Samuel O. Raymond and
Gary K. Willis.
(ii) Authorization of appointment of Arthur Andersen LLP as independent
auditors for 1998:
For Against Abstain
1,180,690 759 820
(iii) The Company's 1998 Non-Employee Directors' Stock Option Plan was approved:
there were 830,763 votes cast in favor of the proposal, 68,866 votes cast
against, 10,521 abstentions, and 272,119 broker non-votes.
(iv) The proposal to amend the Articles of Organization of the Company to
increase the authorized common stock to 7,500,000 shares was approved:
there were 817,813 votes cast in favor of the proposal, 85,664 votes cast
against, 26,673 abstentions, and 272,119 broker non-votes.
(v) The proposal to amend the Articles of Organization to create a new class
of preferred stock received less than two-thirds vote of the total
outstanding shares entitled to vote and therefore did not pass. There were
817,813 votes cast in favor of the proposal, 85,664 votes cast against,
26,673 abstentions, and 272,119 broker non-votes.
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
<PAGE>
14
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: August 7, 1998
<PAGE>
EXHIBIT INDEX
Exhibit
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 (5)
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)
<PAGE>
Exhibit
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
(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-29024) 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-29024) 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-29024)
and incorporated herein by this reference.
(4) Previously filed as an exhibit to the Registrant's Quarterly
Report on Form 10-QSB for the quarterly period ended December 31, 1997
(File No. O-29024) and incorporated herein by this reference.
(5) Previously filed as an exhibit to the Registrant's Quarterly
Report on Form 10-QSB for the quarterly period ended March 31, 1998 (File
No. 0-29024) and incorporated herein by this reference.
<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> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> JUN-30-1998
<CASH> 2,770
<SECURITIES> 0
<RECEIVABLES> 2,112
<ALLOWANCES> 162
<INVENTORY> 2,868
<CURRENT-ASSETS> 8,612
<PP&E> 6,151
<DEPRECIATION> 4,342
<TOTAL-ASSETS> 10,697
<CURRENT-LIABILITIES> 2,496
<BONDS> 202
0
0
<COMMON> 108
<OTHER-SE> 7,891
<TOTAL-LIABILITY-AND-EQUITY> 10,697
<SALES> 10,067
<TOTAL-REVENUES> 10,067
<CGS> 4,951
<TOTAL-COSTS> 3,436
<OTHER-EXPENSES> 1,020
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 37
<INCOME-PRETAX> 738
<INCOME-TAX> 283
<INCOME-CONTINUING> 455
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 455
<EPS-PRIMARY> .35<F1>
<EPS-DILUTED> .33<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> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<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> 1.04<F1>
<EPS-DILUTED> .94<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>