<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, 1999
-------------
[_] 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 1,360,927
(Class) (Outstanding stock at August 4, 1999)
Transitional Small Business Disclosure Format (check one):
Yes No X
----- -----
<PAGE>
2
BENTHOS, INC. AND SUBSIDIARY
FORM 10-QSB
FOR THE THIRTEEN WEEKS AND THIRTY-NINE WEEKS ENDED
JUNE 30, 1999
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
June 30, 1999 and
September 30, 1998
Condensed Consolidated Statements of Earnings (unaudited) 4
Thirteen Weeks And Thirty-Nine Weeks Ended
June 30, 1999 and
June 30, 1998
Condensed Consolidated Statements of Cash Flow (unaudited) 5
Thirty-Nine Weeks Ended
June 30, 1999 and
June 30, 1998
Notes to Financial Statements 6-7
Item 2. Management's Discussion and Analysis 8-12
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 June 30, 1999 September 30, 1998
<S> <C> <C>
Current Assets:
Cash and Cash Equivalents $ 4,413 $2,509
Accounts Receivable, Net 842 1,609
Inventories 3,769 2,793
Prepaid Expenses and Other Current Assets 62 630
Deferred Tax Asset 651 651
------- -------
Total Current Assets 9,737 8,192
Property, Plant and Equipment, Net 1,625 1,860
Other Assets 344 580
------- -------
$11,706 $10,632
======= =======
Liabilities and Stockholders' Investment
Current Liabilities:
Accounts Payable $ 609 $ 990
Accrued Expenses 1,390 962
Customer Deposits 205 237
------- -------
Total Current Liabilities 2,204 2,189
------- -------
Stockholders' Investment:
Common Stock, $.0667 par value-
Authorized - 7,500 shares
Issued - 1,642 shares at June 30, 1999
and 1,635 at September 30, 1998 110 109
Capital in Excess of Par Value 1,517 1,502
Retained Earnings 8,610 7,609
Treasury Stock, at Cost (735) (777)
------- -------
Total Stockholders' Investment 9,502 8,443
------- -------
$11,706 $10,632
======= =======
</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 Thirty-Nine Weeks Ended
June 30, June 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Net Sales $4,730 $3,431 $12,926 $10,067
Cost of Sales 2,663 1,833 7,384 5,102
------ ------ ------- -------
Gross Profit 2,067 1,598 5,542 4,965
Selling, General &
Administrative Expenses 1,193 1,054 3,269 3,436
Research and Development
Expenses 331 331 961 869
------ ------ ------- -------
Income from Operations 543 213 1,312 660
Interest Income, Net 44 35 118 78
------ ------ ------- -------
Income before Provision
for Income Taxes 587 248 1,430 738
Provision for Income Taxes 176 95 429 283
------ ------ ------- -------
Net Income $ 411 $ 153 $ 1,001 $ 455
====== ====== ======= =======
Basic Earnings Per Share $0.30 $0.12 $0.74 $0.35
====== ====== ======= =======
Diluted Earnings Per Share $0.29 $0.11 $0.72 $0.33
====== ====== ======= =======
Common Shares Outstanding 1,355 1,321 1,353 1,310
====== ====== ======= =======
Common Shares Outstanding,
Assuming Dilution 1,415 1,386 1,395 1,392
====== ====== ======= =======
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements
<PAGE>
5
Benthos, Inc. and Subsidiary
Condensed Consolidated Statements of Cash Flow
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Thirty-Nine Weeks Ended
June 30,1999 June 30,1998
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income $1,001 $ 455
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and Amortization 392 376
Changes in Assets and Liabilities:
Accounts Receivable 767 58
Inventories (976) (805)
Prepaid Expenses 568 123
Accounts Payable & Accrued Expenses 47 230
Customer Deposits (32) 366
------ ------
Net Cash Provided by Operating Activities 1,767 803
------ ------
Cash Flows from Investing Activities:
Purchases of Property,
Plant & Equipment (76) (88)
Decrease (Increase) in Other Assets 213 (57)
------ ------
Net Cash Generated (Used) in
Investing Activities 137 (145)
------ ------
Cash Flows from Financing Activities:
Payments on long-term debt, net - (551)
------ ------
Net Increase in Cash and Cash Equivalents 1,904 107
Cash and Cash Equivalents, Beginning of Period 2,509 2,663
------ ------
Cash and Cash Equivalents, End of Period $4,413 $2,770
====== ======
Supplemental Disclosure of Cash
Flow Information:
Interest Paid - $ 37
====== ======
Income Taxes Paid, Net of Refunds $ 179 $ 62
====== ======
Supplemental Disclosure of Noncash Activities:
Sale of Treasury Stock to the
Company's ESOP $ 42 $ 70
====== ======
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements
<PAGE>
6
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, 1998, 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 1998 financial statements to conform with the 1999 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, 1999 September 30, 1998
(in thousands)
<S> <C> <C>
Raw Materials $ 114 $ 81
Work-in-Process 3,642 2,702
Finished Goods 13 10
------ ------
$3,769 $2,793
====== ======
</TABLE>
4. Earnings Per Share
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 earnings per share is computed based upon
the weighted average number of common shares and dilutive common equivalent
shares outstanding. Common stock options have a dilutive effect on earnings per
share in all periods and are therefore included in the computation of diluted
earnings per share. The Company has outstanding options to purchase 91,500
shares of common stock at an average exercise price of $13.60 in the thirteen
and thirty-nine week periods ended June 30, 1999 and had 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>
7
A reconciliation of basic and diluted shares outstanding is as follows:
<TABLE>
<CAPTION>
(in thousands)
Thirteen Weeks Ended June 30, Thirty-nine Weeks Ended June 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Weighted average common
shares outstanding 1,355 1,321 1,353 1,310
Potential common shares
pursuant to stock options 60 65 42 82
----- ----- ----- -----
Diluted weighted
average shares 1,415 1,386 1,395 1,392
===== ===== ===== =====
</TABLE>
5. Letter of Intent to Acquire Datasonics, Inc.
On May 19, 1999, the Company announced that it had signed a letter of intent to
acquire Datasonics, Inc., a privately held Massachusetts corporation, for
consideration of approximately $6.9 million in cash plus the assumption of
certain current liabilities.
Datasonics is a leading supplier of underwater acoustic products including side
scan sonar systems, acoustic relocation devices, and high-speed underwater
acoustic modems and data telemetry systems and is located in Cataumet,
Massachusetts, approximately two miles from the Company. The Company expects
that the transaction will close prior to the end of its current fiscal year.
<PAGE>
8
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 1999 compared with third
quarter of fiscal year 1998.
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, 1999 June 30, 1998
(unaudited)
<S> <C> <C>
Net Sales 100.0% 100.0%
Cost of Sales 56.3% 53.4%
----- -----
Gross Profit 43.7% 46.6%
Selling, General & Administrative Expenses 25.2% 30.7%
Research and Development Expenses 7.0% 9.7%
----- -----
Income from Operations 11.5% 6.2%
Interest Income, Net .9% 1.0%
----- -----
Income Before Provision for Income Taxes 12.4% 7.2%
Provision for Income Taxes 3.7% 2.7%
----- -----
Net Income 8.7% 4.5%
===== =====
</TABLE>
Sales. Net sales increased by 37.9% in the third quarter of fiscal year 1999 to
$4,730 as compared to $3,431 in the third quarter of fiscal year 1998. Sales of
the Undersea Systems Division increased by 45.8% to $3,421 in the third quarter
of fiscal year 1999 as compared to $2,347 in the third quarter of fiscal year
1998. The increase resulted mainly from higher sales of the Company's Remotely
Operated Vehicle (ROV) products in the third quarter of fiscal year 1999 as
compared to the third quarter of fiscal year 1998. Sales of the Container
Inspection Systems Division increased by 20.8% to $1,309 in the third quarter of
fiscal year 1999 as compared to $1,084 in the third quarter of fiscal year 1998.
The increase resulted largely from the timing of project orders.
Cost of Sales. Cost of sales increased by 45.3% to $2,663 in the third quarter
of fiscal year 1999 as compared to $1,833 in the third quarter of fiscal year
1998. As a percentage of sales, cost of sales was 56.3% in the third quarter of
fiscal year 1999 as compared to 53.4% in the third quarter of fiscal year 1998.
The increase in the cost of sales dollars is attributed primarily to higher
sales. The increase in the cost of sales percentage is a result of a shift in
product mix, resulting in more sales in 1999 of Undersea Systems Division
Products which have lower margins than Container Inspection Division sales.
<PAGE>
9
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased by 13.2% to $1,193 for the third quarter of
fiscal year 1999 as compared to $1,054 in the third quarter of fiscal year 1998.
As a percentage of sales, selling, general and administrative expenses decreased
to 25.2% in the third quarter of fiscal year 1999 as compared to 30.7% for the
third quarter of fiscal year 1998. This decrease in percentage of sales is
primarily a result of an increased level of sales in the third quarter of fiscal
year 1999, slightly higher selling expenses, lower commission expenses, and
increased General and Administrative expenses in support of increased sales
levels and acquisition activities as compared to the third quarter of fiscal
year 1998.
Research and Development Expenses. Research and development expenses were $331
in both the third quarter of fiscal year 1999 and in the third quarter of fiscal
year 1998. As a percentage of sales, research and development expenses
decreased to 7.0% of sales in the third quarter of fiscal year 1999 from 9.7% in
the third quarter of fiscal year 1998. The decrease in percentage of sales is a
result of higher sales. 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, net, increased to $44 in the third quarter of
fiscal year 1999 as compared to $35 in the third quarter of fiscal year 1998.
The increase in net interest income was a result of the Company having paid off
all the outstanding debt in fiscal 1998, and interest earned on higher invested
cash balances.
Provision for Income Taxes. The provision for income taxes increased to $176 in
the third quarter of fiscal year 1999 as compared to $95 in the third quarter of
fiscal year 1998. The effective tax rate used in the third quarter of fiscal
year 1999 was 30.0% as compared to the rate of 38.3% used in the third quarter
of fiscal year 1998. The rate used in the third quarter of fiscal year 1999 is
lower than the statutory rate as a result of the tax benefits of the company's
Foreign Sales Corporation.
<PAGE>
10
Management's Discussion and Analysis
of Financial Condition and Results of Operations
(Dollars in thousands)
Results of Operations -- First three quarters of fiscal year 1999 compared with
first three quarters of fiscal year 1998.
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, 1999 June 30, 1998
(unaudited)
<S> <C> <C>
Net Sales 100.0% 100.0%
Cost of Sales 57.1% 50.7%
----- -----
Gross Profit 42.9% 49.3%
Selling, General & Administrative Expenses 25.3% 34.1%
Research and Development Expenses 7.4% 8.6%
----- -----
Income from Operations 10.2% 6.6%
Interest Income, Net .9% .7%
----- -----
Income Before Provision for Income Taxes 11.1% 7.3%
Provision for Income Taxes 3.4% 2.8%
----- -----
Net Income 7.7% 4.5%
===== =====
</TABLE>
Sales. Net sales increased by 28.4% in the first three quarters of fiscal year
1999 to $12,926 as compared to $10,067 in the first three quarters of fiscal
year 1998. Sales of the Undersea Systems Division increased by 62.1% to $9,743
in the first three quarters of fiscal year 1999 as compared to $6,012 in the
first three quarters of fiscal year 1998. The increase resulted mainly from
higher sales of the Company's Geopoint hydrophone and Remotely Operated Vehicle
(ROV) products in the first three quarters of fiscal year 1999 as compared to
the first three quarters of fiscal year 1998. Sales of the Container Inspection
Systems Division decreased by 21.5% to $3,183 in the first three quarters of
fiscal year 1999 as compared to $4,055 in the first three quarters of fiscal
year 1998. The decrease resulted largely from the timing of project orders.
Cost of Sales. Cost of sales increased by 44.7% to $7,384 in the first three
quarters of fiscal year 1999 as compared to $5,102 in the first three quarters
of fiscal year 1998. As a percentage of sales, cost of sales was 57.1% in the
first three quarters of fiscal year 1999 as compared to 50.7% in the first three
quarters of fiscal year 1998. The increase in the cost of sales dollars and
percentage is attributed primarily to the increased sales volume and the higher
sales mix of the products of the Undersea Systems Division which carry a higher
cost than the products of the Container Inspection Systems Division.
<PAGE>
11
Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased by 4.8% to $3,269 for the first three quarters
of fiscal year 1999 as compared to $3,436 in the first three quarters of fiscal
year 1998. As a percentage of sales, selling, general and administrative
expenses decreased to 25.3% in the first three quarters of fiscal year 1999 as
compared to 34.1% for the first three quarters of fiscal year 1998. This
decrease in percentage of sales is primarily a result of an increased level of
sales in the first three quarters of fiscal year 1999, reduced selling
expenses, and lower commission expenses in the Container Inspection Systems
Division which is a direct result of reduced sales in that division as compared
to the first three quarters of fiscal year 1998, and increased general and
administrative expenses to support the increased sales volume and business
growth activities.
Research and Development Expenses. Research and development expenses increased
10.6% to $961 for the first three quarters of fiscal year 1999 as compared to
$869 in the first three quarters of fiscal year 1998. As a percentage of sales,
research and development expenses decreased to 7.4% of sales in the first three
quarters of fiscal year 1999 from 8.6% in the first three quarters of fiscal
year 1998. The decrease in percentage of sales is a result of a higher level of
sales. 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, net, increased to $118 in the first three
quarters of fiscal year 1999 as compared to $78 in the first three quarters of
fiscal year 1998. The increase in net interest income was a result of the
Company having paid off all the outstanding debt in fiscal 1998 and interest
earned on higher levels of invested cash balances.
Provision for Income Taxes. The provision for income taxes increased to $429 in
the first three quarters of fiscal year 1999 as compared to $283 in the first
three quarters of fiscal year 1998. The effective tax rate used in the first
three quarters of fiscal year 1999 was 30.0% as compared to the rate of 38.3%
used in the first three quarters of fiscal year 1998. The rate used in the
first three quarters of fiscal year 1999 is lower than the statutory rate due
primarily to the benefit from the Company's Foreign Sales Corporation.
Liquidity and Capital Resources. The Company's cash and cash equivalents
increased $1,904 from September 30, 1998 to June 30, 1999. Cash of $1,767 was
provided by operating activities. Inventories used $976 to support future
sales. Accounts receivable decreased by $767 as a result of advance payments
and improved collections in the current quarter. Prepaid expenses decreased
$568 as a financed receivable was collected. Accounts Payable and Accrued
Expenses provided $47 as a result of inventory purchases. 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.
Year 2000 Issues. During 1998 and 1999, the company has been actively engaged
in addressing Year 2000 ("Y2K") issues, which result from the use of two-digit,
rather than four-digit, year dates in software, a practice which could cause
date-sensitive systems to malfunction or fail because they may not recognize or
process date information correctly.
STATE OF READINESS: To manage its Y2K program, the Company has divided its
efforts into four program areas:
* Information Technology (computer hardware, and software)
* Physical Plant (manufacturing equipment and facilities)
* Products (including product development)
* Extended Enterprise (suppliers and customers)
<PAGE>
12
For each of these program areas, the Company is using a four-step approach:
* Ownership (creating awareness, assigning tasks)
* Inventory (listing items to be assessed for Y2K readiness)
* Assessment (prioritizing the inventoried items, assessing
their Y2K readiness, planning corrective actions, developing
initial contingency plans)
* Corrective Action Deployment (implementing corrective
actions, verifying implementation, finalizing and executing
contingency plans)
As of June 30, 1999, the Ownership, Inventory, and Assessment steps were
essentially complete for all program areas. The Company expects to complete the
Corrective Action Deployment steps by September 30, 1999.
COSTS TO ADDRESS Y2K ISSUES: The Company began incurring expenses in 1997 to
resolve this issue. All expenditures will be expensed as incurred and are not
expected to have a significant impact on the Company's ongoing results of
operations.
RISKS OF Y2K ISSUES AND CONTINGENCY PLANS: The Company is in the process of
assessing the Y2K issues relating to its physical plant, products and
suppliers. The Company intends to develop a contingency planning process to
mitigate worst-case business disruptions such as delays in product delivery,
which could potentially result from events such as supply chain disruptions.
The Company expects its contingency plans to be complete by September 30, 1999.
"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: August 6, 1999
<PAGE>
BENTHOS, INC.
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)
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)
10.21 Hydrophone License Agreement between the Company and
Syntron, Inc. dated December 5, 1996 (6)
10.22 Amendment Number 1 to Hydrophone License Agreement between
the Company and Syntron, Inc. dated September 11, 1998 (6)
21 Subsidiaries of the Registrant (1)
27 Financial Data Schedule
27.1 Restated Financial Data Schedule (1998)
(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.
(6) Previously filed as an exhibit to the Registrant's Quarterly
Report on Form 10-QSB for the quarterly period ended December 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-30-1999
<PERIOD-END> JUN-30-1999
<CASH> 4,413
<SECURITIES> 0
<RECEIVABLES> 842
<ALLOWANCES> 175
<INVENTORY> 3,769
<CURRENT-ASSETS> 9,737
<PP&E> 6,355
<DEPRECIATION> 4,730
<TOTAL-ASSETS> 11,706
<CURRENT-LIABILITIES> 2,204
<BONDS> 0
0
0
<COMMON> 110
<OTHER-SE> 9,392
<TOTAL-LIABILITY-AND-EQUITY> 11,706
<SALES> 12,926
<TOTAL-REVENUES> 12,926
<CGS> 7,384
<TOTAL-COSTS> 3,269
<OTHER-EXPENSES> 961
<LOSS-PROVISION> 7
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,430
<INCOME-TAX> 429
<INCOME-CONTINUING> 1,001
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,001
<EPS-BASIC> .74<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>
<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> 5,102
<TOTAL-COSTS> 3,436
<OTHER-EXPENSES> 869
<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-BASIC> .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>
