_________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 28, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-9800
INCSTAR CORPORATION
(Exact name of Registrant as specified in its charter)
Minnesota 41-1254731
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1990 Industrial Boulevard
Stillwater, Minnesota 55082
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 439-9710
N/A
Former name, former address and former fiscal year,
if changed since last report.
Indicate by check mark whether the Registrant (1) has filed reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days, Yes X No .
The number of shares of the Registrant's Common Stock (par value $.01)
outstanding on August 12, 1996 was 16,502,457.
__________________________________________________________________________
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INCSTAR CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 28, June 30, June 28, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $ 11,355,000 $ 11,041,000 $ 22,810,000 $ 22,158,000
Cost of goods sold 5,676,000 5,722,000 11,214,000 11,710,000
Gross profit 5,679,000 5,319,000 11,596,000 10,448,000
Operating expenses:
Selling, general and 3,322,000 3,155,000 6,617,000 6,115,000
administrative
Research and development 946,000 875,000 2,007,000 1,788,000
Total operating
expenses 4,268,000 4,030,000 8,624,000 7,903,000
Operating income 1,411,000 1,289,000 2,972,000 2,545,000
Interest expense (7,000) (53,000) (14,000) (141,000)
Other income 63,000 17,000 39,000 12,000
INCOME BEFORE INCOME 1,467,000 1,253,000 2,997,000 2,416,000
TAXES
Provision for income 348,000 426,000 719,000 790,000
taxes
NET INCOME $ 1,119,000 $ 827,000 $ 2,278,000 $ 1,626,000
INCOME PER SHARE:
Net income per share $ 0.07 $ 0.05 $ 0.14 $ 0.10
Weighted average shares
and equivalents 16,724,429 16,447,448 16,678,897 16,413,688
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
INCSTAR CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CATION>
June 28, 1996 December 31, 1995
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,465,000 $ 460,000
Restricted cash 251,000 251,000
Accounts receivable, net of allowance
for doubtful accounts of $88,000 and 7,737,000 7,575,000
$107,000, respectively
Other receivables 23,000 24,000
Inventories 13,686,000 13,445,000
Other current assets 555,000 294,000
TOTAL CURRENT ASSETS 23,717,000 22,049,000
PROPERTY AND EQUIPMENT:
Land and land improvements 1,573,000 1,573,000
Buildings and improvements 13,279,000 13,252,000
Equipment and furniture 19,108,000 18,170,000
Construction in progress 84,000 6,000
34,044,000 33,001,000
Less allowance for depreciation and (19,216,000) (18,387,000)
amortization
14,828,000 14,614,000
INTANGIBLE ASSETS 920,000 1,105,000
OTHER ASSETS 1,043,000 993,000
$ 40,508,000 $ 38,761,000
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 12,000 $ 76,000
Accounts payable and cash overdraft 2,396,000 1,914,000
Accrued compensation 1,081,000 1,972,000
Accrued expenses 2,572,000 2,928,000
Income taxes payable 270,000 212,000
TOTAL CURRENT LIABILITIES 6,331,000 7,102,000
LONG-TERM DEBT 3,000 3,000
OTHER NON-CURRENT LIABILITIES 3,140,000 3,272,000
SHAREHOLDERS' EQUITY:
Undesignated stock, authorized 5,000,000 shares - - - - - -
Common stock, par value $.01, authorized
25,000,000 shares; issued and outstanding 165,000 164,000
16,502,457 and 16,363,477 shares, respectively
Additional paid-in capital 18,314,000 17,940,000
Foreign currency translation adjustment (154,000) (151,000)
Retained earnings 12,709,000 10,431,000
TOTAL SHAREHOLDERS' EQUITY 31,034,000 28,384,000
$ 40,508,000 $ 38,761,000
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
INCSTAR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 28, 1996 June 30, 1995
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 2,278,000 $ 1,626,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,411,000 1,511,000
Payment for unusual items (344,000) (331,000)
Provision for retirement plans 147,000 136,000
Provision for deferred taxes (221,000) ---
Changes in operating assets and liabilities:
Accounts receivable (162,000) (459,000)
Other receivables 1,000 115,000
Inventories (241,000) (173,000)
Other current assets (183,000) 36,000
Accounts payable 482,000 259,000
Accrued compensation (891,000) (28,000)
Accrued expenses (148,000) (314,000)
Income tax payable 177,000 362,000
Other, net (3,000) (10,000)
Net cash provided by operating activities 2,303,000 2,730,000
INVESTING ACTIVITIES:
Additions to property and equipment, net (1,251,000) (271,000)
Payments for intellectual property and (185,000) (9,000)
purchased technology
Increase in other assets (54,000) (9,000)
Net cash used in investing activities (1,490,000) (289,000)
FINANCING ACTIVITIES:
Net decrease in cash overdraft --- (405,000)
Payments on long-term debt (64,000) (2,242,000)
Issuance of common stock 256,000 59,000
Net cash provided by (used in) financing 192,000 (2,588,000)
activities
Net increase (decrease) in cash and cash 1,005,000 (147,000)
equivalents
Cash and cash equivalents at beginning of 460,000 153,000
period
Cash and cash equivalents at end of period $ 1,465,000 $ 6,000
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
INCSTAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 _ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated balance sheet as of June 28, 1996 and the related
consolidated statements of income and cash flows for the six month periods
ended June 28, 1996 and June 30, 1995 are unaudited. In the opinion of
management, all adjustments necessary for a fair presentation of such
financial statements have been included. Such adjustments consisted only
of normal recurring items. The consolidated financial statements and notes
should be read in conjunction with the consolidated financial statements
and notes included in the Company's 1995 Form 10K.
NOTE 2 _ INVENTORIES
<TABLE>
Inventories consist of the following:
<CAPTION>
June 28, December 31,
1996 1995
<S> <C> <C>
Raw materials $ 2,293,000 $ 2,281,000
Work in progress 9,029,000 9,421,000
Finished goods 2,364,000 1,743,000
$ 13,686,000 $ 13,445,000
</TABLE>
NOTE 3 _ INTANGIBLE ASSETS
<TABLE>
Intangible assets consist of the following:
<CAPTION>
June 28, December 31,
1996 1995
<S> <C> <C>
Patents $ 717,000 $ 717,000
Trademarks 17,000 17,000
Goodwill 619,000 619,000
Intellectual property and purchased 920,000 734,000
technology
Product distribution rights 2,700,000 2,700,000
4,973,000 4,787,000
Less accumulated amortization (4,053,000) (3,682,000)
$ 920,000 $ 1,105,000
</TABLE>
NOTE 4_ UNUSUAL ITEMS AND INVENTORY VALUATION ADJUSTMENTS
In December, 1994 the Company recorded a $750,000 charge related to the
write down of excess inventories and a $2,450,000 unusual charge related to
the termination of certain distribution and supply agreements ($540,000) as
well as severance and other costs related to senior management changes
($1,910,000). The amount remaining to be paid at June 28, 1996, exclusive
of amounts included in Note 6, Executive Retirement Plans, is $305,000 and
is included in Accrued expenses.
NOTE 5 _ LONG-TERM DEBT, LEASE AND ROYALTY COMMITMENTS
<TABLE>
Long-term debt consists of the following:
<CAPTION>
June 28, December 31,
1996 1995
<S> <C> <C>
Capitalized lease obligations, 8.0%, due $ 8,000 $ 72,000
through 1996
Other 7,000 7,000
15,000 79,000
Less current portion (12,000) (76,000)
Total long-term debt $ 3,000 $ 3,000
</TABLE>
The Company has a revolving line of credit from a bank which provides
for maximum borrowings of $1,000,000 through January 31, 1997 at the prime
interest rate or LIBOR plus 2.50% and is secured by accounts receivable.
In addition, the Company has a $4,500,000 revolving line of credit with
Fiat Finance U.S.A., Inc. through April 29, 1997.
The Company is obligated to make royalty payments under several
distribution and licensing agreements. The majority of these agreements
call for payments based on a percentage of sales and contain no minimum
royalty clause. Royalty expense under these agreements was $378,000 and
$368,000 for the quarters ended June 28, 1996 and June 30, 1995,
respectively, and $876,000 and $677,000 for the six month periods ended
June 28, 1996 and June 30, 1995, respectively.
NOTE 6 _ EXECUTIVE RETIREMENT PLANS
The Company has individual retirement agreements with certain
executive officers which are intended to provide continued compensation to
such officers or their respective beneficiaries upon retirement from the
Company. The benefits and terms under these arrangements vary depending
upon the officer's position within the Company. In connection with these
plans, included in Other non-current liabilities at June 28, 1996 and
December 31, 1995 are $3,249,000 and $3,136,000, respectively, representing
the present value of the future liability. Also, included in Accrued
expenses at June 28, 1996 and December 31, 1995 are $66,000 and $31,000,
respectively, representing the current portion of this liability. The
Company intends to fund this obligation through the purchase of life
insurance contracts on the individual executives. Included in Other assets
at June 28, 1996 and December 31, 1995 are $984,000 and $934,000,
respectively, representing the cash surrender value of these policies.
NOTE 7 _ INCOME TAXES
Upon the exercise of certain officer stock options during the year
ended December 31, 1990, the Company was entitled to a compensation
deduction allowable for income tax purposes. No compensation expense was
required for financial reporting purposes because the option price on the
original grant date equaled the then fair market value of the shares. Upon
realization of the benefit relating to the compensation deduction for tax
purposes, the benefit is credited to additional paid in capital. The
Company recognized credits of $58,000 and $110,000, respectively, to
Additional paid in capital relating to these stock options for the quarters
ended June 28, 1996 and June 30 ,1995 and $119,000 and $110,000,
respectively, for the six month periods ended June 28, 1996 and June 30,
1995.
NOTE 8 _ RELATED PARTY TRANSACTIONS
<TABLE>
As part of the ongoing operations of the Company, various transactions
were entered into with its affiliates, Sorin Biomedica Diagnostics S.p.A.
("Sorin") and its subsidiaries and Fiat Finance U.S.A., Inc. The following
tables summarize these transactions and related balances.
<CAPTION>
Sorin Fiat Finance U.S.A., Inc.
Six Months Ended Six Months Ended
June 28, June 30, June 28, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Product sales $ 4,045,000 $ 3,822,000 $ - - - $ - - -
Product purchases 1,251,000 424,000 - - - - - -
Royalty expense 307,000 83,000 - - - - - -
Interest expense - - - - - - 6,000 128,000
<CAPTION>
June 28, December 31, June 28, December 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Assets
Trade accounts $ 2,229,000 $1,965,000 $ - - - $ - - -
receivable
Other receivables 22,000 6,000 - - - - - -
Liabilities
Accounts payable $ 555,000 $ 675,000 $ - - - $ - - -
Accrued royalty 745,000 480,000 - - - - - -
Accrued interest - - - - - - - - - 4,000
</TABLE>
NOTE 9 _ SUPPLEMENTARY CASH FLOW INFORMATION
<TABLE>
<CAPTION>
Six Months Ended
June 28, June 30,
1996 1995
<S> <C> <C>
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 14,000 $ 54,000
Income taxes, net 763,000 428,000
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
QUARTER ENDED JUNE 28, 1996 VS. QUARTER ENDED JUNE 30, 1995
Sales for the quarter ended June 28, 1996 increased 3% to $11,355,000
from $11,041,000 for the same period a year earlier. The Company
experienced sales growth in its autoimmune, infectious disease and serum
proteins product lines. Additionally, contributing to the increase were
sales from the Company's hepatitis assays, as discussed below. Sales
continue to be negatively impacted by declines in the Company's
endocrinology and transplantation markets due to the continued shift in the
diagnostic industry from isotopic, manual testing to non-isotopic,
automated and semi-automated testing. As these trends are expected to
continue, the Company continues to focus development efforts on automated
and semi-automated tests which are non-isotopic. Sales levels continue to
be highly dependent upon the success of these efforts.
Domestic sales declined 2% to $5,568,000 for the quarter ended June
28, 1996 from $5,660,000 for the same period in the prior year. The
Company generated $552,000 in sales during the second quarter of 1996 from
one of its hepatitis assays due to a competitor's kit becoming unavailable
to the market in June 1995. While the competitor reentered the market
during late February, the Company has been able to maintain a certain
portion of these sales. In addition, the Company realized continued growth
in its autoimmune, infectious disease and serum protein product lines.
However, as discussed above, offsetting these increases were continuing
declines in the Company's endocrinology product offerings.
International sales increased 8% to $5,787,000 for the quarter ended
June 28, 1996 from $5,381,000 for the same period in the prior year.
International revenues continue to be favorably impacted in the infectious
disease segment by sales of the Company's second generation tests for
Epstein Barr Virus. In addition, sales were favorably impacted by
increases in the Company's autoimmune and serum protein product lines.
Sales were negatively impacted by declines in the transplantation market
segment as this market continues to shift away from manual, isotopic
testing as discussed above.
Gross margins for the second quarter of 1996 improved to 50.0% of
sales compared to 48.2% of sales for the same period in the prior year.
This improvement is due in part to a change in the mix of sales, discussed
above, compared to the same period a year earlier as well as efficiencies
derived from a restructuring of operations in the second quarter of 1995.
Notwithstanding this improvement, the Company's margins continue to be
highly sensitive to product mix and volume changes.
Selling, general and administrative ("SG&A") expenses increased 5% to
$3,322,000 in the second quarter of 1996 from $3,155,000 in the second
quarter of 1995 due to costs associated with the introduction of new
products. These expenses have remained at 29% of sales and are expected to
remain relatively consistent throughout 1996.
Research and development ("R&D") expenditures increased 8% to $946,000
in the second quarter of 1996 from $875,000 for the same period in the
prior year and remained flat at 8% of sales. This increase is mainly due
to costs associated with new product development efforts, clinical costs
and external costs associated with the Company's scientific networks.
Interest expense decreased to $7,000 compared to $53,000 for the same
period in the prior year. This decrease is attributable to lower average
debt levels.
Income tax expense for the quarter was $348,000, or 24% of income
before taxes, compared with income tax expense of $426,000, or 34% of
income before taxes, in the second quarter of 1995. The decline in the
effective tax rate is due to the recognition of certain deferred tax
assets. The Company expects the effective tax rate to remain at
approximately 24% during the remainder of 1996.
SIX MONTHS ENDED JUNE 28, 1996 VS. SIX MONTHS ENDED JUNE 30, 1995
Sales for the six month period ended June 28, 1996 increased 3% to
$22,810,000 from $22,158,000 for the same period a year earlier. The
Company experienced growth in its autoimmune, infectious disease and serum
protein market segments. In addition, sales were favorably impacted by
sales of the Company's hepatitis assays, as discussed below. Sales
continue to be negatively impacted by declines in the Company's
endocrinology and transplantation market segments due to the continued
shift in the diagnostic industry from isotopic, manual testing to non-
isotopic, automated and semi-automated testing. As these trends are
expected to continue, the Company continues to focus development efforts on
automated and semi-automated tests which are non-isotopic. Sales levels
continue to be highly dependent upon the success of these efforts.
Domestic sales increased 4% to $11,730,000 for the sixth month period
ended June 28, 1996 from $11,227,000 for the same period in the prior year.
As discussed above, the Company continues to experience an increase in
demand for one of its hepatitis assays due to a competitor's kit becoming
unavailable to the market in June 1995. This opportunity resulted in
approximately $1.7 million in sales during the first six months of 1996.
The competitor reentered the market place in late February, which has
resulted in a decline of these product sales from their levels during the
second half of 1995. In addition, the Company realized significant growth
in its TheratestTM product line and increases in its serum protein product
line. However, as discussed above, offsetting these increases were
continuing declines in the Company's endocrinology product offerings.
International sales increased 1% to $11,080,000 for the six month
period ended June 28, 1996 compared to $10,931,000 for the same period in
the prior year. International revenues continue to be favorably impacted
in the infectious disease segment by sales of the Company's second
generation tests for Epstein Barr Virus. Sales were negatively impacted,
however, in the routine endocrinology and transplantation segments as these
market continue to shift away from manual, isotopic testing as discussed
above.
Gross margins for the first six months of 1996 improved to 50.8% of
sales compared to 47.2% of sales for the same period in the prior year.
This improvement is due in part to a change in the mix of sales, discussed
above, compared to the same period a year earlier as well as efficiencies
derived from a restructuring of operations in the second quarter of 1995.
Notwithstanding this improvement, the Company's margins continue to be
highly sensitive to product mix and volume changes.
SG&A expenses increased to $6,617,000, or 29% of sales, in the first
six months of 1996 from $6,115,000, or 28% of sales, for the same period in
the prior year. The increase in expenditures is due to costs associated
with the introduction of new products. These expenses, as a percentage of
sales, are expected to remain relatively consistent throughout 1996.
R&D expenditures increased 12% to $2,007,000 in the first six months
of 1996 from $1,788,000 for the same period in the prior year and increased
as a percentage of sales to 9% compared to 8% in the prior year. This
increase is mainly due to increased emphasis on new product development,
including the establishment of scientific advisory panels for the Company's
autoimmune and bone and mineral metabolism segments. These panels are
intended to enhance and strengthen the Company's ties with the scientific
community.
Interest expense decreased to $14,000 compared to $141,000 for the
same period in the prior year. This decrease is attributable to lower
average debt levels.
Income tax expense for the six months ended June 28, 1996 was
$719,000, or 24% of income before taxes, compared with income tax expense
of $790,000, or 33% of income before taxes, for the same period in 1995.
The decline in the effective tax rate is due to the recognition of certain
deferred tax assets. The Company expects the effective tax rate to remain
at approximately 24% during the remainder of 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company's operating cash flow in the first six months of 1996 was
$2,303,000 and $2,730,000 for the same period in the prior year. Free cash
flow (operating cash flow less investment activities) decreased to $813,000
in the first six months of 1996 from $2,441,000 in the comparable period of
the prior year. This decrease is attributable to increased capital
spending associated with instrumentation, manufacturing improvements and
computer upgrades. Net working capital increased to $17,386,000 at June
28, 1996 from $14,947,000 at December 31, 1995.
At June 28, 1996, the Company's primary sources of liquidity are a $1
million revolving bank credit line secured by Company assets and a $4.5
million unsecured credit line with Fiat Finance U.S.A., Inc. At June 28,
1996, the Company had no outstanding borrowings under these credit lines.
The Company believes that its operating cash flow and existing credit lines
will provide ample sources of liquidity for all planned capital
expenditures and research and development activities. Capital spending for
the remainder of 1996 is anticipated to be approximately $1,500,000,
primarily for manufacturing improvements and laboratory equipment.
<PAGE>
PART II. OTHER INFORMATION
ITEM 4.
The Company held its Regular Meeting of Shareholders on May 21, 1996
and solicited proxies for the purpose of electing ten directors for the
ensuing year and for the amendment of the INCSTAR Stock Option Plan.
<TABLE>
The votes with respect to the election of directors were:
<CAPTION>
For Withheld
<S> <C> <C>
Pierre M. Galletti 15,189,555 22,793
John J. Booth 15,190,555 21,893
Ennio Denti 15,151,655 60,793
George H. Dixon 15,190,055 22,393
Franco Fornasari 15,189,755 29,893
Ezio Garibaldi 15,189,755 29,893
D. Ross Hamilton 15,190,555 21,893
Umberto Rosa 15,151,655 60,793
Michael W. Steffes 15,190,555 21,893
Carlo Vanoli 15,189,855 22,593
</TABLE>
The results of the voting with respect to the following additional item were
as follows:
Amendments to the Company's Stock Option Plan, as follows:
(a) Amendment to allow the issuance of non-qualified stock options to
consultants or independent contractors of the Company or any of its
subsidiaries.
(b) Addition of a provision to allow each member of the Company's
Scientific Advisory Board to automatically receive, upon execution
of an SAB agreement, a five-year non-qualified stock option to
purchase 4,000 shares of the Company's Common Stock.
(c) Addition of a provision to allow each member of one of the Company's
Scientific Advisory Panels to automatically receive, upon execution
of an SAP agreement, a five-year non-qualified stock option to
purchase 2,000 shares of the Company's Common Stock.
For Against
15,001,055 211,393
There were no abstentions or broker nonvotes.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Restated Articles of Incorporation of INCSTAR Corporation, as
amended to date [incorporated by reference to Exhibit 4.1 to the
Registrant's Registration Statement on Form S-8 (File No. 33-
84498)].
3.2 Bylaws of INCSTAR Corporation, as amended to date
[incorporated by reference to Exhibit 4.2 to the Registrant's
Registration Statement on Form S-8 (File No. 33-84498)].
4.1 Specimen Certificate representing the Registrant's Common
Stock [incorporated by reference to Exhibit 4.1 to the
Registrant's Registration Statement on Form S-3 (File No. 33-
37805)].
4.2 Note Purchase Agreement, dated December 27, 1991 between the
Registrant and Fiat Finance, U.S.A. Inc. [incorporated by
reference to Exhibit 4.2 to the Registrant's Report on Form 10-K
for the year ended December 31, 1991 (File No. 1-9800)]
4.3 Form of Warrant Certificate issued by the Registrant in favor
of Bioengineering International B.V. (now BioFin Holding
International B.V.) [incorporated by reference to Exhibit 10.11 of
the Registrant's Registration Statement on Form S-4 (File No. 33-
30785)].
4.4 Form of Purchase Rights Agreement between Bioengineering
International B.V. (now BioFin Holding International B.V.) and the
Registrant [incorporated by reference to Exhibit 10.12 of the
Registrant's Registration Statement on Form S-4 (File No. 33-
30785)].
11 Computation of Net Income per Common Share
27 Financial Data Schedule
(b) Reports on Form 8-K - There were no reports on Form 8-K filed during
the quarter ended June 28, 1996.
<PAGE>
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.
INCSTAR CORPORATION
(Registrant)
Date: 8/9/96 /S/John J. Booth
President (Principal Executive Officer)
Date: 8/9/96 /S/Thomas P. Maun
Vice President and Chief Financial
Officer
(Principal Financial and Accounting
Officer)
EXHIBIT 11
COMPUTATION OF NET INCOME PER COMMON SHARE
INCSTAR CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 28, June 30, June 28, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER
COMMON SHARE:
Average shares 16,500,257 16,363,059 16,456,973 16,362,772
outstanding
Dilutive stock options
and warrants - based 224,172 84,389 221,924 50,916
on the treasury stock
method
16,724,429 16,447,448 16,678,897 16,413,688
Net income $ 1,119,000 $ 827,000 $ 2,278,000 $ 1,626,000
Net income per share $ 0.07 $ 0.05 $ 0.14 $ 0.10
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
EXHIBIT 27
FINANCIAL DATA SCHEDULE
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheet for the period ended June 28, 1996 and the
related statements of income, cash flows and retained earnings for the period
ended June 28, 1996 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-28-1996
<CASH> 1,465,000
<SECURITIES> 0
<RECEIVABLES> 7,825,000
<ALLOWANCES> 88,000
<INVENTORY> 13,686,000
<CURRENT-ASSETS> 23,717,000
<PP&E> 34,044,000
<DEPRECIATION> 19,216,000
<TOTAL-ASSETS> 40,508,000
<CURRENT-LIABILITIES> 6,331,000
<BONDS> 0
<COMMON> 165,000
0
0
<OTHER-SE> 30,869,000
<TOTAL-LIABILITY-AND-EQUITY> 40,508,000
<SALES> 22,810,000
<TOTAL-REVENUES> 22,810,000
<CGS> 11,214,000
<TOTAL-COSTS> 11,214,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 18,000
<INTEREST-EXPENSE> 14,000
<INCOME-PRETAX> 2,997,000
<INCOME-TAX> 719,000
<INCOME-CONTINUING> 2,278,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,278,000
<EPS-PRIMARY> 0.14
<EPS-DILUTED> 0.14
</TABLE>
