<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________
FORM 10-Q
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15(d) of
-----
the Securities Exchange Act of 1934
for the quarterly period ended June 30, 1996
or
Transition Report Pursuant to Section 13 or 15(d) of
-----
the Securities Exchange Act of 1934
for the transition period from_____to_____
Commission File No. 0-8836
NUCLEAR METALS, INC.
----------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MASSACHUSETTS 04-2506761
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2229 MAIN STREET
CONCORD, MASSACHUSETTS 01742
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(508) 369-5410
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
REPORT)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve 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
---- ----
As of August 1, 1996 there were issued and outstanding 2,387,964 shares of the
Registrant's Common Stock.
<PAGE>
NUCLEAR METALS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
INDEX
PAGE
Part I. Financial Information 2
Item 1. Financial Statements
Consolidated Balance Sheets,
June 30, 1996 and September 30, 1995 3
Consolidated Statements of Income:
Three Months Ended June 30, 1996 and June 30, 1995 4
Consolidated Statements of Income:
Nine Months Ended June 30, 1996 and June 30, 1995 5
Consolidated Statements of Cash Flow:
Nine Months Ended June 30, 1996 and June 30, 1995 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-11
Part II Other Information
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
-1-
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PREPARATION OF FINANCIAL STATEMENTS
The financial statements included herein have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange Commission
and are subject to year-end audit by independent public accountants. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. It is suggested
that the financial statements be read in conjunction with the financial
statements and notes included in the Company's most recent Annual Report on Form
10-K.
The information furnished reflects all adjustments which, in the opinion of
management, are necessary for a fair statement of results for the interim
periods. It should also be noted that results for the interim periods are not
necessarily indicative of the results expected for any other interim period and
the full year.
-2-
<PAGE>
NUCLEAR METALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
June 30, September 30,
1996 1995
------------ ------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 576,000 $ 1,076,000
Restricted Cash 250,000 --
Marketable Securities -- 170,000
Accounts receivable, net of allowances
for doubtful accounts of $883,000 at
June 30, 1996 and September 30, 1995 6,365,000 4,730,000
Inventories 15,665,000 17,468,000
Other current assets 428,000 343,000
------------ ------------
Total current assets 23,284,000 23,787,000
------------ ------------
Property, Plant and Equipment 46,633,000 45,766,000
Less accumulated depreciation 31,442,000 30,479,000
------------ ------------
Net property, plant and equipment 15,191,000 15,287,000
------------ ------------
Other assets 1,758,000 1,812,000
------------ ------------
$ 40,233,000 $ 40,886,000
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,614,000 $ 2,405,000
Accounts payable and accrued expenses 6,628,000 5,516,000
------------ ------------
Total current liabilities 8,242,000 7,921,000
------------ ------------
Long term obligations 677,000 2,075,000
------------ ------------
Other long-term liabilities 3,441,000 3,645,000
------------ ------------
Stockholders' equity:
Common stock, par value $.10; authorized-
6,000,000 shares; 2,390,964 issued and
outstanding for June 30, 1996 and
2,387,464 issued and outstanding
for September 30,1995 239,000 239,000
Additional paid-in capital 14,258,000 14,226,000
Retained earnings 13,376,000 12,780,000
------------ ------------
Total stockholders' equity 27,873,000 27,245,000
------------ ------------
$ 40,233,000 $ 40,886,000
------------ ------------
------------ ------------
</TABLE>
-3-
<PAGE>
NUCLEAR METALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE PERIODS ENDED:
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
----------------------------
June 30, June 30,
1996 1995
------------ ------------
<S> <C> <C>
Net sales and contract revenues $ 6,434,000 $ 3,753,000
------------ ------------
Cost and expenses
Cost of sales 4,330,000 2,562,000
Selling, general and administrative 1,312,000 1,052,000
Research and development 269,000 94,000
------------ ------------
Total Cost and expenses 5,911,000 3,708,000
------------ ------------
Operating profit 523,000 45,000
Other income (expense) (158,000) 8,000
Interest expense, net (121,000) (56,000)
------------ ------------
Income (loss) before income taxes 244,000 (3,000)
Benefit for income taxes 5,000 42,000
------------ ------------
Net Income $ 249,000 $ 39,000
------------ ------------
------------ ------------
PER SHARE INFORMATION
Net Income per common and common
equivalent share $ 0.10 $ 0.02
------------ ------------
------------ ------------
Weighted average number of common and
common equivalent shares outstanding 2,390,964 2,369,364
</TABLE>
-4-
<PAGE>
NUCLEAR METALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE PERIODS ENDED:
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
----------------------------
June 30, June 30,
1996 1995
------------ ------------
<S> <C> <C>
Net sales and contract revenues $ 23,126,000 $ 13,592,000
------------ ------------
Cost and expenses
Cost of sales 17,729,000 10,850,000
Selling, general and administrative 3,760,000 3,490,000
Research and development 629,000 342,000
------------ ------------
Total Cost and expenses 22,118,000 14,682,000
------------ ------------
Operating income (loss) 1,008,000 (1,090,000)
Other income (expense) (88,000) 243,000
Interest expense, net (333,000) (271,000)
------------ ------------
Income (loss) before income taxes and
extraordinary item 587,000 (1,118,000)
Benefit for income taxes 9,000 978,000
Extinguishment of Debt, net of taxes of
$10,000 -- 585,000
------------ ------------
Net Income $ 596,000 $ 445,000
------------ ------------
------------ ------------
PER SHARE INFORMATION
Income/(loss) before extraordinary item 0.25 (0.06)
Gain on Extinguishment of Debt,
net of taxes of $10,000 -- 0.25
------------ ------------
Net Income per common and common
equivalent share $ 0.25 $ 0.19
------------ ------------
------------ ------------
Weighted average number of common and
common equivalent shares outstanding 2,388,964 2,358,547
</TABLE>
-5-
<PAGE>
NUCLEAR METALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE PERIODS ENDED:
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
----------------------------
June 30, June 30,
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 596,000 $ 445,000
Adjustments to reconcile net income
to net cash provided (used) by operating
activities:
Depreciation and amortization 1,101,000 1,158,000
Changes in assets and liabilities, net
(Increase) decrease in accounts receivable (1,635,000) 697,000
(Increase) decrease in inventories 1,803,000 (2,174,000)
(Increase) decrease in other current assets (85,000) (67,000)
Increase (decrease) in accounts payable and
accrued expenses 1,112,000 489,000
Change in other long-term liabilities (204,000) --
Gain on sale of building (75,000) (175,000)
Other Assets 54,000 (124,000)
------------ ------------
Net cash provided (used) by operating
activities 2,667,000 249,000
------------ ------------
Cash flows from investing activities:
Capital expenditures, net (1,102,000) (611,000)
(Purchase) Sale of Marketable Securities 170,000 325,000
Proceeds from sale of Property, Plant &
Equipment 173,000 487,000
Other -- --
------------ ------------
Net cash provided (used) in investing
activities (759,000) 201,000
------------ ------------
Cash flows from financing activities:
Total payments of debt, gross (4,153,000) (3,594,000)
Proceeds from bank debt 1,963,000 2,400,000
(Purchases) issuances of common stock 32,000 398,000
------------ ------------
Net cash provided (used) in financing
activities (2,158,000) (796,000)
------------ ------------
Net increase (decrease) in cash and equivalents (250,000) (346,000)
Cash and equivalents at beginning of the
period 1,076,000 1,213,000
------------ ------------
Cash and equivalents at end of the period $ 826,000 $ 867,000
------------ ------------
------------ ------------
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized $ 349,000 $ 65,000
Income taxes $ -- $ --
</TABLE>
-6-
<PAGE>
NOTES
1. The significant accounting policies followed by the Company in
preparing its consolidated financial statements are set forth in Note (3) to
such financial statements included in Form 10-K for the year ended September 30,
1995.
2. Inventories are stated at the lower of cost (first-in, first-out) or
market, and include labor, materials, and overheads for manufacturing and
engineering. Inventories at June 30, 1996 and September 30, 1995 consist of:
<TABLE>
<CAPTION>
June 30, September 30,
1996 1995
---------- -------------
<S> <C> <C>
Work-in process $ 12,116,000 $ 13,942,000
Raw materials 2,812,000 2,794,000
Spare parts 737,000 732,000
------------ -------------
$ 15,665,000 $ 17,468,000
------------ -------------
------------ -------------
</TABLE>
-7-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
THIRD QUARTER FISCAL 1996 COMPARED WITH THIRD QUARTER FISCAL 1995
Net sales increased by $2,681,000 or 71% to $ 6,434,000 in the third
quarter of fiscal 1996. Sales in the Uranium Services & Recycle industry
segment increased by $995,000 or 97% due to production of depleted uranium alloy
material for use in the United States Enrichment Corporation (USEC) Atomic Vapor
Laser Isotope Separation process (AVLIS). Sales in the Specialty Metal Products
industry segment increased by $970,000 or 36%, primarily as a result of
increased sales of beryllium products. Sales in the Penetrator industry
segment increased by $716,000, due to the increase of large caliber penetrator
sales.
During third quarter of fiscal 1996, the Company reduced its workforce from
55 to 23 employees at the Carolina Metal's (CMI) facility due to reduced
production requirements resulting from the completion of a multi-year contract
for the manufacture of depleted uranium. All severance and payroll related
costs associated with the reduction are included in third quarter results.
Currently CMI is operating at approximately 40% capacity on a one shift basis.
Based on backlog as of June 30, 1996 CMI would run at this percentage through
fiscal 1996 and 1997. The Company continues to pursue alternate production
contracts. The under-utilized capacity will be evaluated on an on-going basis.
Gross margin in the third quarter was $2,104,000. An improvement of
$913,000 from the prior year's $1,191,000. As a percentage of sales, gross
margin was 33% as compared to 32% for the third quarter of fiscal 1995. The
minimal change in gross margin as a percentage of sales is primarily
attributable to increased sales volumes during the third quarter of fiscal 1996
coupled with a reduction of inventory reserves of $575,000 during the third
quarter of fiscal 1995.
Selling, general and administrative expenses increased by $260,000 or 25%
as compared to the third quarter of fiscal 1995. The increase is primarily due
to an increase in employees to support the growth in business. As a percentage
of sales, these expenses decreased to 20% as compared to 28% for the same period
a year earlier, as a result of sales increasing at a higher rate than expenses.
Other expense increased by $166,000 to $158,000, compared to other income
of $8,000 for the third quarter of fiscal 1995. The increase in other expense is
primarily from a $150,000 restructuring fee associated with amendments to the
Company's credit facility.
Interest expense increased by $65,000 to $121,000, from $56,000 for the
same period a year earlier as a result of higher interest rates and fees
associated with
-8-
<PAGE>
outstanding debt during third quarter of fiscal 1996.
Income taxes provided for during the third quarter of fiscal 1996 was at an
effective rate of 2% offset by a benefit of a tax refund of $12,000. The
Company has significant unrecognized net operating loss carryforwards resulting
in a minimal effective tax rate. The income tax benefit for the third quarter
of fiscal 1995 includes a tax refund of $42,000.
NINE MONTHS FISCAL 1996 COMPARED WITH NINE MONTHS FISCAL 1995
Net sales increased by $9,534,000 or 70% to $23,126,000 in the first nine
months of fiscal 1996. Sales in the Uranium Services & Recycle industry segment
increased by $2,375,000 or 68%, primarily due to increased sales of depleted
uranium metal and depleted uranium alloy material for the AVLIS program. Sales
in the Specialty Metal Products industry segment increased by $1,578,000 or 18%,
largely due to increased sales of beryllium products. Sales in the Penetrator
segment increased by $5,581,000 or 400% primarily resulting from higher large
caliber penetrator sales.
Gross margin increased by $2,655,000 or 97% to $5,397,000. The higher
gross margin is a result of increased sales volume during fiscal 1996. As a
percentage of sales, gross margin was 23% as compared to 20% for the first nine
months of fiscal 1995.
Selling, general and administrative expenses increased by $270,000 or 8% as
compared to the first nine months of fiscal 1995. This increase was the result
of higher sales volume during fiscal 1996. As a percentage of sales, these
expenses decreased to 16%, as compared to 26% for the same period a year
earlier.
Other expense increased by $331,000 to $88,000, compared to other income of
$243,000 for the same period in fiscal 1995. This was primarily due to
restructuring fees associated with amendments to the credit facility coupled
with a gain recognized during the second quarter of fiscal 1995 on the sale of
an office building in Acton, Massachusetts.
Interest expense increased by $62,000 to $333,000, from $271,000 for the
same period a year earlier. This increase was primarily a result of higher
interest rates and fees on outstanding debt during fiscal 1996.
Income taxes provided during the first nine months of fiscal 1996 were at
an effective rate of 2% resulting from unrecognized net operating loss
carryforwards offset by a benefit of tax refunds of $21,000. The income tax
benefit for the nine months ended June 30, 1995 included tax refunds received of
$960,000.
-9-
<PAGE>
THIRD QUARTER FISCAL 1996 COMPARED WITH SECOND QUARTER FISCAL 1996
Net sales decreased by $3,587,000, or 38% in the third quarter of fiscal
1996 as compared to the second quarter. Sales in the Uranium Services & Recycle
industry segment decreased by $34,000, or 2% primarily due to increased AVLIS
sales offset by lower depleted uranium metal sales. Sales in the Specialty
Metal Products industry segment decreased by $196,000 or 6%, primarily due to
decreased sales of beryllium products offset by an increase in sales of
commercial depleted uranium and medical powders. Sales in the Penetrator
industry segment decreased by $3,749,000 or 83%. The sales decrease in the
Penetrator industry segment was mainly due to lower large caliber sales.
Gross profit increased by $246,000 or 13% to $2,104,000 for the third
quarter of fiscal 1996, compared to $1,858,000 for the second quarter. As a
percentage of sales, gross profit was 33%, as compared to 19% for the second
quarter of fiscal 1996, primarily a result of the change in product sales.
Selling, general and administrative expenses decreased by $33,000 compared
to the second quarter of fiscal 1996. As a percentage of sales, these expenses
increased to 20% for the third quarter of fiscal 1996 as compared to 13% for the
second quarter of fiscal 1996.
Income taxes provided for during the third quarter of fiscal 1996 and the
second quarter of fiscal 1996 were at an effective rate of 2%. The income taxes
benefited during the second and third quarter of fiscal 1996 included the
benefit of a tax refund of $12,000 and $9,000, respectively.
-10-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Working capital at the end of the first nine months of fiscal 1996 was
$15,042,000, a decrease of $824,000. Cash and investments at the end of this
nine month period were $826,000, a decrease of $250,000 from September 30, 1995.
This is primarily due to the repayment of debt and capital investments.
The Company expects that, given adequate funds, capital spending will
continue in support of facilities both in Concord, Massachusetts and at Carolina
Metals, Inc., the Company's Barnwell, South Carolina subsidiary. The Company
has spent $1,102,000 on capital this fiscal year and anticipates it will
spend approximately $1,200,000 by fiscal 1996 year end. The capital
requirements will be funded through existing cash balances.
During the fiscal 1996 third quarter, the Company entered into a Second
Amendment to the Forebearance and Amendment Agreement dated January 11, 1996
with its working capital lender. This agreement was amended to continue the
extension of credit facilities based upon receipt of the last payment from a
foreign customer which the Company received on July 1, 1996. The amendment
changed the formula used to determine eligibility to receive funds under the
Company's credit facility dated March 30, 1995. As of June 30, 1996 the Company
had $2,250,000 in letters of credit and $900,000 cash advance outstanding on
the $3,250,000 credit facility.
In a current report on Form 8-K which was filed by the Company on July 23,
1996 the Company reported that it had received notice from the United States
Nuclear Regulatory Commission ("NRC") that the NRC believed that the Company has
not yet provided satisfactory financial assurances pursuant to the NRC
regulations for the eventual cost of decommissioning its facility in Concord,
Massachusetts. The Company is currently taking all necessary steps to attempt
to comply with the NRC regulations to avoid any formal action by the NRC which
could impair the Company's NRC licenses, which are necessary for the Company to
continue its current depleted uranium business. The Company expects that unless
these licensing issues are resolved, its bank will not advance further funds
under its credit facility. Any decision on the part of the bank to refrain from
advancing additional funds could have a material adverse impact upon the
Company's results of operations and financial condition. There can be no
assurance that the Company will be able to satisfy the NRC with respect to the
licensing requirements, as the Company's financial resources would not be
adequate to meet NRC financial assurances requirements. The Company will
require the cooperation of the US Government to satisfy these requirements.
Reference is hereby made to the aforementioned current report on Form 8-K which
is hereby incorporated herein by such reference.
-11-
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits:
10 Second Amendment to Forebearance and Amendment Agreement dated as
of June 4, 1996 among the Company, Carolina Metals, Inc. and State
Street Bank and Trust Company.
27 Financial Data Schedule
b. No reports on Form 8-K were filed during the quarter for which this
report is filed.
-12-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Nuclear Metals, Inc.
By /s/ Robert E. Quinn
---------------------------------------------------
Robert E. Quinn, President
Chief Executive Officer
Date August 14, 1996
---------------------------------------------------
By /s/ James M. Spiezio
---------------------------------------------------
James M. Spiezio, Vice President, Finance & Controller
Chief Financial Officer
Date August 14, 1996
---------------------------------------------------
By /s/ Rebecca L. Perry
---------------------------------------------------
Rebecca L. Perry, Assistant Controller
Chief Accounting Officer
Date August 14, 1996
---------------------------------------------------
-13-
<PAGE>
SECOND AMENDMENT TO
FORBEARANCE AND AMENDMENT AGREEMENT
THIS SECOND AMENDMENT is made as of June 4, 1996 by and among Nuclear
Metals, Inc., a Massachusetts corporation ("Nuclear Metals"), Carolina
Metals, Inc., a Delaware corporation ("Carolina Metals")(Nuclear Metals and
Carolina Metals are herein collectively referred to as the "Borrowers") and
State Street Bank and Trust Company, a Massachusetts trust company (the
"Bank"). The Borrowers and the Bank have executed a Forbearance and Amendment
Agreement dated as of January 11, 1996, as modified by a letter agreement
dated January 31, 1996 and by a First Amendment to Forbearance and Amendment
Agreement dated as of February 15, 1996 (as amended, the "Agreement") and
wish to further modify the Agreement. Terms not otherwise defined herein
shall be used as defined in the Agreement. Therefore, for good and valuable
consideration, the receipt of which is hereby acknowledged, the Borrowers and
the Bank hereby agree as follows:
1. The definition of "Eligible Accounts" in Section 1.02b of the Credit
Agreement is hereby amended by deleting subsection (g) therefrom and relettering
existing subsections "(h)" and "(i)" as subsections "(g)" and "(h)".
2. Section 7(d) of the Agreement is hereby amended by deleting from the
definition of "Overadvance Amount" the following: "(c) for the period May 16,
1996 to October 31, 1996, $1,000,000, and (d) at any time after October 31,
1996, $0" and substituting the following therefor: "(c) for the period May 16,
1996 through December 31, 1996, $1,000,000, and (d) at all times thereafter,
$0".
3. Exhibit 1.02(b)(ii) to the Agreement is hereby amended by (i) deleting
subsections 2.(g) and 5.(g) therefrom, (ii) deleting the following from
subsection 3: "((d), (e), (f) and (g))" and substituting the following
therefor: "((d), (e) and (f))" and (iii) deleting the following from subsection
6: "((d), (e), (f) and (g))" and substituting the following therefor: "((d),
(e) and (f))". All Borrowing Base information and Borrowing Base Certificates
hereafter delivered by the Borrower to the Bank shall reflect the amendments
described herein. The form of Exhibit 1.02(b)(ii) attached hereto shall
hereafter constitute the form of Borrowing Base Certificate and Exhibit
1.02(b)(ii) to be delivered in connection with the Credit Agreement.
<PAGE>
-2-
4. Other than as amended hereby, all terms and conditions of the
Agreement remain in full force and effect and the Borrowers ratify and affirm
the terms thereof as of the date hereof. In addition, the Borrowers ratify and
affirm the terms of the Loan Documents and the Bond Documents and all security
documents executed in connection therewith including the Security Agreement, and
Carolina Metals confirms the terms of the 1995 Guaranty, as amended, as of the
date hereof.
5. Based on the Borrowing Base Certificate delivered by the Borrowers to
the Bank dated May 24, 1996 (the "May 24 Borrowing Base Certificate"), the
amount of outstanding Advances under the Credit Agreement exceeded the
applicable Borrowing Base as of the date of the May 24 Borrowing Base
Certificate (such condition, the "Formula Noncompliance"), and as a result, an
Event of Default has occurred under Article V of the Credit Agreement. The Bank
hereby waives the foregoing Event of Default provided that on or before June 7,
1996 the Borrower eliminates the Formula Noncompliance and submits to the Bank a
current Borrowing Base Certificate showing elimination of the Formula
Noncompliance. In the event that the Borrower has not complied with the
foregoing on or before June 7, 1996, such event shall constitute a default under
the Agreement and an Event of Default under the Credit Agreement. Other than
with respect to the Formula Noncompliance, the Borrowers represent to the Bank
that no default or event of default has occurred under the Bond Documents or
Loan Documents other than as contemplated under the Agreement.
6. The Borrowers jointly and severally release, remise and forever
discharge the Bank and each of its past, present and future officers, directors,
stockholders, agents, employees, affiliates, attorneys, successors and assigns
of and from any and all claims, obligations, demands, causes of action,
counterclaims and defenses of any kind or nature whatsoever (including any
claims, counterclaims or defenses based on so-called lender liability), which
either or both of the Borrowers now has against the Bank and/or any of its past,
present and future officers, directors, stockholders, agents, employees,
affiliates, attorneys, successors and assigns, or ever had from the beginning of
the world to the date hereof.
7. This Second Amendment may be executed in counterparts each of which
shall be deemed to be an original document.
<PAGE>
-3-
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
as an instrument executed under seal to be governed by the laws of The
Commonwealth of Massachusetts effective as of May 31, 1996.
NUCLEAR METALS, INC.
By: /s/ James M. Spiezio
-------------------
Title: VP of Finance
----------------
CAROLINA METALS, INC.
By: /s/ James M. Spiezio
-------------------
Title: VP of Finance
----------------
STATE STREET BANK AND TRUST COMPANY
By: /s/ Kenneth J. Mooney
---------------------
Title: Vice President
------------------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> JUN-30-1996
<CASH> 826,000
<SECURITIES> 0
<RECEIVABLES> 6,365,000
<ALLOWANCES> 883,000
<INVENTORY> 15,665,000
<CURRENT-ASSETS> 23,284,000
<PP&E> 46,633,000
<DEPRECIATION> 31,442,000
<TOTAL-ASSETS> 40,233,000
<CURRENT-LIABILITIES> 8,242,000
<BONDS> 0
0
0
<COMMON> 239,000
<OTHER-SE> 27,634,000
<TOTAL-LIABILITY-AND-EQUITY> 40,233,000
<SALES> 23,126,000
<TOTAL-REVENUES> 23,126,000
<CGS> 17,729,000
<TOTAL-COSTS> 22,118,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 333,000
<INCOME-PRETAX> 587,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 596,000
<EPS-PRIMARY> .25
<EPS-DILUTED> .25
</TABLE>
