SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q/A
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended April 29, 1995 Commission File Number 2-37706
Bowles Fluidics Corporation
(exact name of registrant as specified in its charter)
Maryland 52-0741762
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6625 Dobbin Road, Columbia, Maryland 21045
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (410)381-0400
Indicate by check mark whether the registrant has filed
all annual, quarterly and other reports required to be
filed with the Commission within the past 90 days and
in addition has filed the most recent annual report
required to be filed.
Yes X No
Indicate the number of shares outstanding of each
issuer's classes of common stock, as of April 29, 1995.
Class Outstanding at April 29, 1995
Common Stock, $.10 12,590,011 shares
<PAGE>
BOWLES FLUIDICS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
<TABLE>
<CAPTION>
For the three months ended For the six months ended
April 29, April 30, April 29, April 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net sales $4,419,120 $3,921,939 $8,612,438 $7,445,975
Cost of sales 2,723,350 2,270,880 5,449,382 4,391,450
Gross profit 1,695,770 1,651,059 3,163,056 3,054,525
Selling, general and
administrative
expenses 689,576 634,209 1,278,320 1,252,193
Research and
development costs 151,675 203,463 305,212 424,341
Operating income 854,519 813,387 1,579,524 1,377,991
Interest expense 7,132 18,031 25,223 51,745
Other income (28,881) (63,913) (45,780) (4,878)
Income before taxes 876,268 859,269 1,600,081 1,331,124
Provision for income
taxes 328,869 242,000 599,749 351,260
Net income 547,399 617,269 1,000,332 979,864
Preferred stock
dividends accrued 18,662 18,662 37,324 37,324
Income applicable to
common shareholders $ 528,737 $ 598,607 $ 963,008 $ 942,540
Primary earnings
per share $ .04 $ .05 $ .08 $ .07
Fully diluted earnings
per share $ .03 $ .04 $ .06 $ .06
</TABLE>
The accompanying notes are an integral part of these financial
statements.
(3)
<PAGE>
BOWLES FLUIDICS CORPORATION
CONSOLIDATED BALANCE SHEETS
April 29, October 29,
1995 1994
(Unaudited) (Audited)
Assets
Current assets
Cash and cash equivalents $1,184,885 $1,557,230
Investments 578,532 484,807
Accounts receivable 2,079,124 1,916,885
Inventories 1,584,625 1,696,500
Prepaid expenses 76,135 22,514
Deferred income taxes 137,000 137,000
Total current assets 5,640,301 5,814,936
Property and equipment
Production machinery and
equipment 3,760,645 3,609,068
Office equipment and furniture 1,221,274 1,148,911
Laboratory and machine shop
equipment 1,100,798 1,137,859
Leasehold improvements 536,793 530,475
Total property and equipment 6,619,510 6,426,313
Less accumulated depreciation
and amortization (4,198,556) (3,926,055)
Net property and equipment 2,420,954 2,500,258
Other assets
Patents, net of accumulated
amortization of $372,179
and $349,232, respectively 112,823 135,770
Deposits 26,838 27,263
Total other assets 139,661 163,033
Total assets $8,200,916 $8,478,227
The accompanying notes are an integral part of these financial
statements.
(4)
<PAGE>
BOWLES FLUIDICS CORPORATION
CONSOLIDATED BALANCE SHEETS (continued)
April 29, October 29,
1995 1994
(Unaudited) (Audited)
Liabilities and Stockholders Equity
Current liabilities
Accounts payable - trade $ 789,887 $1,066,077
Accrued payroll and related expenses 644,494 720,159
Income taxes payable 157,988 543,156
Current portion of long-term debt 65,920 283,939
Accrued preferred stock dividends 37,324 74,646
Total current liabilities 1,695,613 2,687,977
Long-term debt 238,224 512,831
Other liabilities 246,407 219,755
Deferred income taxes 150,000 150,000
Total liabilities 2,330,244 3,570,563
Commitments and contingencies
Stockholders' equity
8% convertible preferred stock -
authorized 3,000,000 shares,
par value $1.00 per share;
issued and outstanding
933,080 shares. 933,080 933,080
Common stock - authorized
17,000,000 shares - par value
$.10 per share; issued and out-
standing 12,590,011 shares. 1,259,001 1,259,001
Additional paid-in capital 2,715,583 2,715,583
Retained earnings (Note 3) 963,008 -
Total stockholders' equity 5,870,672 4,907,664
Total liabilities and stockholders'
equity $8,200,916 $8,478,227
The accompanying notes are an integral part of these financial
statements.
(5)
<PAGE>
BOWLES FLUIDICS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
<TABLE>
<CAPTION>
For the six months ended
April 29, April 30,
1995 1994
<S> <C> <C>
Operating activities:
Net income $1,000,332 $ 979,864
Adjustments to reconcile net income
provided by operating activities:
Depreciation and amortization 327,708 305,327
Gain on sales of assets (8,877) (3,990)
Accretion of interest on investments (7,977) -
1,311,186 1,281,201
Change in operating accounts:
Accounts receivable (162,238) (369,903)
Inventories 111,875 (206,497)
Prepaid expenses (53,197) (84,173)
Accounts payable (276,190) (307,250)
Accrued expenses (467,167) 199,022
Other liabilities 26,652 (23,340)
Change in operating accounts (820,265) (792,141)
Cash provided by operating activities 490,921 489,060
Investing activities:
Capital expenditures (241,310) (551,142)
Proceeds from sale of equipment 31,025 10,315
Purchase of investments (475,814) -
Proceeds from sale of investments 390,105 -
Net Cash used in
investing activities (295,994) (540,827)
Financing activities:
Principal payment of debt (492,626) (636,892)
Proceeds from issuance of debt - 428,000
Preferred stock dividend (74,646) (74,648)
Proceeds from issuance of common stock - 8,700
Net cash used by financing activities (567,272) (274,840)
Decrease in cash and cash equivalents (372,345) (326,607)
Cash and cash equivalents - beginning of period 1,557,230 652,241
Cash and cash equivalents - end of period $1,184,885 $ 325,634
</TABLE>
The accompanying notes are an integral part of these financial
statements.
(6)
<PAGE>
BOWLES FLUIDICS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - General
In the opinion of the Company, the accompanying financial
statements contain all adjustments (consisting of only normal
recurring adjustments) necessary to present fairly the
financial position as of April 29, 1995, and October 29, 1994,
and the results of operations and cash flows for the three and
six months ended April 29, 1995 and April 30, 1994.
While the Company believes that the disclosures presented
are adequate to make the information not misleading, it is
suggested that these financial statements be read in
conjunction with the financial statements and the notes
included in the Company's latest annual report on Form 10-K.
The Company recently formed a wholly owned subsidiary,
Fluid Effects Corporation, in the state of Delaware to which
the Company has transferred its U.S. and Canadian patents and
patent applications together with operating capital.
NOTE 2 - Inventories
Inventories are comprised of:
April 29, April 30, October 29,
1995 1994 1994
Raw Material $ 643,924 $ 373,235 $ 506,573
Work and Tooling in Process 372,543 722,799 515,590
Finished Goods 568,159 441,554 674,337
Total $1,584,625 $1,537,588 $1,696,500
NOTE 3 - Quasi-reorganization
Effective October 29, 1994, the Board of Directors
approved a quasi-reorganization which had the impact of
eliminating the retained earnings deficit as an adjustment to
the additional paid-in capital.
(7)
<PAGE>
BOWLES FLUIDICS CORPORATION
PART II. OTHER INFORMATION
FOR THE THREE AND SIX MONTHS ENDED APRIL 29, 1995
Item 6. Exhibits and Reports on Form 8-K
Exhibits Description
(a) Exhibit 11 Computation of Earnings
Per Common Share
Exhibit 20 Report furnished to Security
Holders
(b) Reports on Form 8-K
(11)
<PAGE>
BOWLES FLUIDICS CORPORATION
PART II. OTHER INFORMATION
ITEM 6. (a) EXHIBIT 11 - CALCULATION OF EARNINGS PER SHARE
A. PRIMARY EARNINGS PER COMMON SHARE AND COMMON EQUIVALENT
SHARES:
For the three For the six
months ended months ended
April 29, April 29,
1995 1995
Calculation of Net Income
Net income per books $ 547,399 $ 1,000,332
Less: Dividends on convertible
preferred stock 18,662 37,324
Net income as adjusted $ 528,737 $ 963,008
Calculation of Outstanding
Shares
Weighted average of common
shares outstanding 12,590,011 12,590,011
Add: Assumed exercise of
stock options 108,644 97,959
Number of common shares
outstanding adjusted 12,698,655 12,687,970
Primary earnings per common
share $ .04 $ .08
(12)
<PAGE>
BOWLES FLUIDICS CORPORATION
PART II. OTHER INFORMATION
Item 6. (a) EXHIBIT 11 - CALCULATION OF EARNINGS PER SHARE
(continued)
B. FULLY DILUTED EARNINGS PER SHARE:
For the three For the six
months ended months ended
April 29, April 29,
1995 1995
Net Income per books $ 547,399 $ 1,000,332
Weighted average of common
shares outstanding 12,590,011 12,590,011
Add: Assumed conversion
of preferred stock 3,732,320 3,732,320
Assumed exercise of
stock options 130,667 130,667
Number of shares 16,452,998 16,452,998
Fully diluted earnings
per share $ .03 $ .06
(13)
<PAGE>
Exhibit 20
BOWLES FLUIDICS CORPORATION
6625 Dobbin Road, Columbia, Maryland 21045-4707 USA
Phone: 410-381-0400 Fax: 410-381-2718
June 14, 1995
TO THE STOCKHOLDERS:
Our second quarter total sales and operating income have
surpassed that of any previous quarter. The record sales were
contributed to by bringing on line new window washer and
defroster products. Net income fell short of a record due to a
higher effective income tax rate this year.
Net sales in the second quarter of FY 1995 rose 13% to
$4,419,120. Operating income gained 5.5% to $854,519, but net
income declined 11% to $547,399.
Net sales for the first six months of FY 1995 reached $8,612,438,
a 16% increase over the FY 1994 similar period. Net income was
reported at $1,000,332, reflecting an increase of 2% over last year's
first six months.
Shipments in the first six months of FY 1995 were boosted by the
introduction of new products and the strong North American
automotive industry production occurring in the first quarter.
Aside from last year's first quarter $250,000 of revenue from a
specific application engineering customer contract, sales of
prototype and production tooling reached higher levels in both
the second quarter and the first six months due to the culmina-
tion of a number of new automotive washer and defroster nozzle
programs.
Operating income advanced 5.5% in the second quarter and 3.5% in
the first six months of the 1995 fiscal year versus similar
periods in the prior fiscal year. The second quarter and first
six months results were favorably affected by the greater
automotive product sales and lower research and development costs
but also unfavorably influenced by higher engineering expenses
related to customizing new auto product models and increasing
customer service. The improvement in the first six months was
also negatively affected by the lack of the prior year's $250,000
of special contract revenue, costs of which were incurred in
prior years.
Interest expense was reduced for the current year's first six
months as a result of lower debt levels and interest rates.
Other income was higher due to the investment of available cash.
(14)
<PAGE>
TO THE STOCKHOLDERS - 2 - June 14, 1995
Provision for income taxes, both federal and state, has been
determined based upon an estimate of the total fiscal year's
pretax income. Last year's provision for the second quarter was
lower because of the anticipated use of the research and
development and investment tax credit carryforwards which were
fully utilized during fiscal year 1994.
Net income of $547,399 for the second quarter decreased 11% from
last fiscal year's comparable period due to the increase in the
effective income tax rate as discussed above.
Net income for the first six months was $1,000,332, 2% over the
last fiscal year's similar period due to higher income before
taxes but was negatively affected by the greater effective income
tax rate this year.
The Company's working capital at April 29, 1995, increased
$817,729 from the previous year-end at October 29, 1994. The
current ratio advanced from 2.16 to 3.33 during this six-month
period.
Capital expenditures were $241,310 in the first six months of FY
1995, $309,832 lower than last year as there were delays in
ordering equipment of approximately $300,000. Financing
activities included the payment of debt, primarily the early
payment of certain notes due in January 1995 and 1996, and
$74,646 of preferred stock dividends.
North American light vehicle production (excluding Mexican output
for local markets) by the three major U.S. automotive companies,
which generates most of the Company's sales, decreased 0.5% in
the first calendar quarter of 1995 from 1994. Production for the
second calendar quarter of 1995 is forecasted by Ward's
Automotive Reports to decline 4% below last year's second
quarter. There are a number of uncertainties with regard to the
forecast for the third calendar quarter of 1995. We continue to
be concerned about the degree of the U.S. economy's "soft
landing" and its impact on automotive industry sales.
Condensed consolidated balance sheets and income statements are
appended for your review.
Thank you for your continued support.
Sincerely,
Ronald D. Stouffer
President
RDS:lto
Enclosure
(15)
<PAGE>
BOWLES FLUIDICS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
4/29/95 4/30/94 4/29/95 4/30/94
<S> <C> <C> <C> <C>
Net Sales $4,419,120 $3,921,939 $8,612,438 $7,445,975
Cost of Sales 2,723,350 2,270,880 5,449,382 4,391,450
Gross Profit 1,695,770 1,651,059 3,163,056 3,054,525
Selling, General and
Administrative Expenses 689,576 634,209 1,278,320 1,252,193
Research and Development Costs 151,675 203,463 305,212 424,341
Interest Expense and Other
(Income) and Expenses, Net (21,749) (45,882) (20,557) 46,867
Income before Taxes $ 876,268 $ 859,269 $1,600,081 $1,331,124
Provision for Taxes 328,869 242,000 599,749 351,260
Net Income $ 547,399 $ 617,269 $1,000,332 $ 979,864
Net Income per Share
Primary $ .04 $ .05 $ .08 $ .07
Fully Diluted $ .03 $ .04 $ .06 $ .06
</TABLE>
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Unaudited Audited
as of as of
4/29/95 10/29/94
<S> <C> <C>
Assets
Cash and Cash Equivalents $1,184,885 $1,557,230
Investments 578,532 484,807
Accounts Receivable 2,079,124 1,916,885
Inventories 1,584,625 1,696,500
Prepaid Expense 76,135 22,514
Deferred Income Taxes 137,000 137,000
Total Current Assets 5,640,301 5,814,936
Property, Plant and Equipment, Net 2,420,954 2,500,258
Other Assets 139,661 163,033
Total Assets $8,200,916 $8,478,227
Liabilities and Stockholders' Equity
Accounts Payable--Trade $ 789,887 $1,066,077
Accrued Expenses and Dividend 681,818 794,805
Income Taxes Payable 157,988 543,156
Current Portion of Long-Term Debt 65,920 283,939
Total Current Liabilities 1,695,613 2,687,977
Long-Term Debt 238,224 512,831
Other Liabilities and Deferred Income Taxes 396,407 369,755
Total Liabilities 2,330,244 3,570,563
8% Conv. Pfd. Stock (933,080 shares outstanding) 933,080 933,080
Common Stock (12,590,011 shares outstanding) 1,259,001 1,259,001
Additional Paid-in Capital 2,715,583 2,715,583
Retained Earnings 963,008 -
Stockholders' Equity 5,870,672 4,907,664
Total Liabilities and Stockholders' Equity $8,200,916 $8,478,227
</TABLE>
(16)
<PAGE>
BOWLES FLUIDICS CORPORATION
PART II. OTHER INFORMATION
Item 6. (b) Reports on Form 8-K/A
June 23, 1995
An Annual Meeting of Stockholders of Bowles Fluidics
Corporation was held on March 16, 1995.
1. The following Board of Directors was elected:
William Ewing, Jr.
William Ewing, III
Julian Lazrus
Ronald D. Stouffer
John E. Searle, Jr.
David C. Dressler
2. Also at the meeting of Stockholders, Coopers & Lybrand
L.L.P. was appointed as the Corporation's certified
public accountants.
3. At a Directors' meeting immediately following the meeting of
Stockholders, the following officers were elected:
Chairman of the Board William Ewing, Jr.
Vice Chairman of the Board Julian Lazrus
President Ronald D. Stouffer
Vice President, Administration
and Secretary Eleanor M. Kupris
Vice President, Engineering Richard W. Hess
Vice President, Finance David A. Quinn
Vice President, Marketing Eric W. Koehler
Vice President, Quality Assurance Dharapuram N. Srinath
Corporate Controller Arlene M. Hardy
(17)
<PAGE>
FORM 10-Q/A
BOWLES FLUIDICS CORPORATION
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.
BOWLES FLUIDICS CORPORATION
By
Ronald D. Stouffer
President
Date June 23, 1995
By
David A. Quinn
Vice President, Finance
Date June 23, 1995
(18)
