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 December 29, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number 1-8048
----------------------
TII INDUSTRIES, INC.
----------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 66-0328885
- ------------------------------ ---------------------------------
(State or other jurisdiction of (I.R.S.Employer Identification No.)
incorporation or organization)
1385 Akron Street, Copiague, New York 11726
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 516-789-5000
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 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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at February 1, 1996
- ---------------------------- -------------------------------
Common Stock, par value $.01 7,387,018
<PAGE>
TII INDUSTRIES, INC. AND SUBSIDIARIES
Form 10-Q for the Quarter Ended December 29, 1995
INDEX
Part I - FINANCIAL INFORMATION
Item 1: Financial Statements: Page No.
Consolidated Balance Sheets -
December 29, 1995 and June 30, 1995 3
Consolidated Statements of
Operations - Three and Six Months Ended
December 29, 1995 and December 30, 1994 4
Consolidated Statement of Stockholders'
Investment - Three and Six Months Ended
December 29, 1995 5
Consolidated Condensed Statements of
Cash Flows - Three and Six Months Ended
December 29, 1995 and December 30, 1994 6
Notes to Consolidated Condensed
Financial Statements 7-10
Item 2: Management's Discussion and Analysis
of Financial Condition and Results
of Operations 11-15
Part II- OTHER INFORMATION
Item 4: Submission of Matters to a Vote of
Security Holders 17
Item 6: Exhibits and Reports on Form 8-K 18
Signature 19
-2-
<PAGE>
TII INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
UNAUDITED
(Dollars in thousands except share and per share data)
<TABLE>
<CAPTION>
December 29, June 30,
1995 1995
------------------ ------------------
(Unaudited)
------------------ ------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 211 $ 1,152
Marketable securities 2,038 2,266
Trade receivables 6,070 5,655
Other receivables 213 478
Inventories 15,134 12,278
Prepaid expenses 715 645
------------------ ------------------
Total current assets 24,381 22,474
------------------ ------------------
PROPERTY AND EQUIPMENT, AT COST:
Machinery and equipment 16,755 16,228
Tools, dies and molds 6,797 6,027
Leasehold improvements 5,256 5,655
Office fixtures, equipment and other 2,753 2,606
------------------ ------------------
31,561 30,516
Less - Accumulated depreciation and amortization 21,159 20,302
------------------ ------------------
10,402 10,214
------------------ ------------------
OTHER ASSETS 1,555 1,726
------------------ ------------------
$36,338 $34,414
================== ==================
LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Current portion of long-term debt $ 56 $ 63
Accounts payable 5,212 4,851
Accrued liabilities 669 1,613
------------------ ------------------
Total current liabilities 5,937 6,527
------------------ ------------------
LONG-TERM DEBT 909 2,704
------------------ ------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S INVESTMENT:
Preferred Stock, par value $1.00 per share; 1,000,000 authorized and issuable
in series:
Series A Cumulative Convertible Redeemable Preferred Stock, 100,000 shares
authorized; no shares outstanding at Dec. 29, 1995 and 27,626 outstanding at
June 30, 1995 (issued and valued at liquidation value of $100.00 per share). 0 2,763
Series B Cumulative Redeemable Preferred Stock, 20,000 shares authorized; no
shares outstanding at Dec. 29, 1995 and June 30, 1995. -- --
Common Stock, par value $.01 per share; 30,000,000 shares authorized (with one
vote per share); 7,114,155 and 5,496,229 shares issued at Dec. 29, 1995 and
June 30, 1995, respectively. 71 55
Class B Stock, par value $.01 per share; 10,000,000 shares authorized (with
each share having ten votes and convertible into one share of Common Stock);
no
shares outstanding at Dec. 29, 1995 and 370,366 at June 30, 1995, respectively. -- 4
Class C Stock, par value, $.01 per share; 100,000 shares authorized (non-voting);
no shares issued -- --
Warrants outstanding 120 120
Capital in excess of par value 27,130 21,394
Retained earnings 2,452 1,118
Unrealized gain on marketable securities -- 10
------------------ ------------------
29,773 25,464
Less - 17,637 common shares in treasury, at cost 281 281
------------------ ------------------
29,492 25,183
------------------ ------------------
$36,338 $34,414
================== ==================
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
-3-
<PAGE>
TII INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERTATIONS
UNAUDITED
(Dollars in thousands except share and per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------------------------------- --------------------------------------------
December 29, December 30, December 29, December 30,
1995 1994 1995 1994
-------------------- -------------------- -------------------- ------------------
<S> <C> <C> <C> <C>
NET SALES $11,241 10,661 20,841 21,117
------------ ------------ ------------ ------------
COSTS AND EXPENSES
Cost of sales 8,130 7,484 15,164 14,825
Selling, general and administrative 1,394 1,777 2,887 3,487
expenses
Research and development expenses 762 640 1,387 1,345
------------ ------------ ------------ ------------
Total costs and expenses 10,286 9,901 19,438 19,657
------------ ------------ ------------ ------------
Operating income 955 760 1,403 1,460
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE)
Interest expense (147) (133) (181) (293)
Other income (expense), net 87 (20) 112 (24)
------------ ------------ ------------ ------------
Total other expense, net (60) (153) (69) (317)
------------ ------------ ------------ ------------
Net profit 895 607 1,334 1,143
============ ============ ============ ============
NET PROFIT PER SHARE -
PRIMARY 0.12 0.11 0.17 0.21
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER
OF COMMON AND COMMON
EQUIVALENT SHARES
OUTSTANDING 7,769,000 8,090,000 7,846,000 7,881,000
============ ============ ============ ============
NET PROFIT PER SHARE- FULLY
DILUTED 0.11 0.11 0.17 0.20
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER
OF COMMON AND COMMON
EQUIVALENT SHARES
OUTSTANDING 8,176,000 8,540,000 8,199,000 8,519,000
============ ============ ============ ============
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
-4-
<PAGE>
TII INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' INVESTMENT
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Capital
Class B in exess Treasury
Preferred Common Common Warrants of par Retained Stock
Stock Stock Stock Outstanding Value Earnings Amount
----- ----- ----- ----------- ----- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, June 30, 1995 $ 2,763 $ 55 $ 4 $ 120 $ 21,394 $ 1,118 $ 281
Issuance of Common Stock from
exercise of private placement
Warrants and Unit Purchase Options
net of $128 expenses --- 12 --- --- 5,481 --- ---
Conversion of Class B Common Stock --- 4 (4) --- --- --- ---
Redemption of Preferred A Stock (2,763) --- --- --- --- --- ---
Exercise of Stock options --- --- --- --- 255 --- ---
Net Income for the six months ended
December 29, 1995 --- --- --- --- --- 1,334 ---
---------- --------- -------- -------- -------- -------- --------
BALANCE, December 29, 1995 $ --- $ 71 $ --- $ 120 $ 27,130 $ 2,452 $ 281
========== ========= ======== ======== ======== ======== ========
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
-5-
<PAGE>
TII INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Six Months Ended
December 29, December 30,
1995 1994
------------ -------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net Profit $ 1,334 $ 1,143
------------ -------------
Adjustments to reconcile net profit to net cash
provided by (used in) operating activities
Depreciation and amortization 857 880
Provision for inventory obsolescence, net 100 37
Decrease in doubtful accounts (10)
Amortization of other assets, net 93 64
Changes in assets and liabilities
(Increase) Decrease in trade receivables (405) 86
Decrease in other receivables 265 33
(Increase) in inventories (2,965) (819)
Decrease (Increase) in prepaid expenses and other assets 8 (418)
(Decrease) in accounts payable and accrued liabilities (583) (63)
------------ -------------
Total adjustments (2,631) (200)
------------ -------------
Net cash (used in) provided by operating activities (1,297) 943
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Capital expenditures, net (1,013) (1,265)
Net decrease in marketable securities 228 1,379
------------ -------------
Net cash (used in) provided by investing activities (785) 114
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of options, warrants and unit purchase options 5,738 471
Payment of long-term debt (1,834) (2,151)
Redemption of Preferred Stock (2,763) 0
------------ -------------
Net cash provided by (used in) financing activities 1,141 (1,680)
------------ -------------
Net decrease in cash (941) (623)
Cash at beginning of period 1,152 1,099
------------ -------------
Cash at end of period $ 211 $ 476
============ =============
</TABLE>
The accompaning notes to consolidated financial statements are an integral part
of these statements
-6-
<PAGE>
TII INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
December 29, 1995
(1) INTERIM FINANCIAL STATEMENTS:
The unaudited interim financial statements presented herein have been
prepared in accordance with generally accepted accounting principles
for interim financial statements and with the instructions to Form
10-Q and Regulation S-X pertaining to interim financial statements.
Accordingly, they do not include all information and footnotes
required by generally accepted accounting principles for complete
financial statements. The financial statements reflect all
adjustments (consisting of normal recurring adjustments and accruals)
which, in the opinion of management, are considered necessary for a
fair presentation of financial position at December 29, 1995 and
results of operations for the three and six months ended December 29,
1995 and December 30, 1994. The financial statements should be read
in conjunction with the summary of significant accounting policies
and notes to consolidated financial statements included in the
Company's Annual Report on Form 10-K for the year ended June 30,
1995. The results of operations for the three and six months ended
December 29, 1995 are not necessarily indicative of the results that
may be expected for the full year ending June 28, 1996.
-7-
<PAGE>
(2) NET PROFIT PER COMMON SHARE:
Net profit per common and common equivalent share is calculated using
the weighted average number of common shares outstanding and the net
additional number of shares which would be issuable upon the exercise
of dilutive stock options and warrants assuming that the Company used
the proceeds received to purchase additional shares (up to 20% of
shares outstanding) at market value, retire debt and invest any
remaining proceeds in U.S. government securities. The effect on net
profit of these assumed transactions is considered in the
computation.
(3) STATEMENTS OF CASH FLOWS:
During the six months ended December 29, 1995 and December 30, 1994,
the Company made cash payments of $61,000 and $366,000 respectively,
for interest.
(4) MARKETABLE SECURITIES AVAILABLE FOR SALE:
Prior to fiscal 1995, the portfolio of marketable securities was
valued at the lower of cost or market. Effective for fiscal 1995 and
thereafter, SFAS 115, Accounting for Certain Investments in Debt and
Equity Securities, requires the Company to categorize its investments
as: held-to-maturity securities, reported at cost; trading
securities, reported at fair value; or available-for-sale securities,
reported at fair value. Changes in the fair value of trading
securities are included in earnings, while changes in the unrealized
gains and losses of available-for-sale securities are
-8-
<PAGE>
reported as a separate component of stockholders' investment. All of
the Company's marketable securities are classified as
available-for-sale. At December 29, 1995, the portfolio was valued at
market, which approximated unamortized cost of $2,038,000 and
consisted of U.S. Treasury Bills and Notes, other federal backed
agency bonds and notes and other liquid investment grade investments
with the primary investment goal being near-term liquidity and safety
of principal.
(5) CAPITAL STOCK:
STOCK OPTIONS- The following summarizes stock option activity for the
quarter ended December 29, 1995:
Granted 125,200
Exercise Price $6.75 - $8.25
Exercised 25,760
Exercise Price $2.50 - $5.375
Options Cancelled/Expired/Terminated 20,000
Exercise Price $5.25
WARRANTS - During the quarter ended December 29, 1995, 50,000 shares
were issued as a result of the exercise of Common Stock Purchase
Warrants and the Company received net proceeds of approximately
$203,000 from such exercise.
-9-
<PAGE>
(6) LONG TERM DEBT:
On December 29, 1995, the Company's Long-Term Debt consisted of a
note payable in the amount of $750,000 with the Overseas Private
Investment Corporation (OPIC) and various notes totaling $216,000. On
January 31, 1995, the Company entered into an $8,000,000 Revolving
Credit Loan Agreement with Chemical Bank, which, at December 29,
1995, entitled the Company to have outstanding borrowings of up to
$6,400,000, reducing by $400,000 each calendar quarter thereafter. At
December 29, 1995, there were no outstanding borrowings under the
revolving loan facility. Loans bear interest equal to (a) the greater
of 1% above the bank's prime rate, 2% above a certificate of deposit
rate or 1.5% in excess of a federal funds rate or (b) 3% above the
LIBOR rate for periods selected by the Company. A commitment fee of
1/4 of 1% is payable on the unused portion of the bank's commitment.
The loan is secured primarily by the Company's accounts receivable
and the Company's continental United States assets. The loan
agreement requires the Company to maintain a minimum net worth of
$17,500,000 in fiscal 1996 and $20,000,000 thereafter, current ratio
of 1.25 through fiscal 1997 and 1.50 thereafter and debt service
ratio of 1.35 and maximum ratio of debt to equity of 1.0, all as
defined, limits capital expenditures generally to $3,500,000 per
annum and lease obligations to $400,000 per annum (excluding rentals
for the Company's Dominican Republic facilities and the Company's
equipment lease with PRC Leasing, Inc.). In addition, the Company may
not incur a consolidated net loss for any two fiscal quarters in any
four
-10-
<PAGE>
consecutive quarters and may not pay cash dividends or repurchase
capital stock without the consent of the bank.
7) EQUIPMENT FINANCING
In January, 1996 a subsidiary of the Company entered into an
equipment financing agreement with Chem Lease World Wide, Inc.,
leasing company for $3,500,000 covering new equipment to be purchased
in 1996 and equipment previously delivered and installed in 1995
("1995 items"). In January 1996, the leasing company funded
approximately $1,841,000 of the 1995 items under this agreement with
lease terms of five and seven years. This agreement is guaranteed by
the Company and its subsidiaries.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS:
The following discussion and analysis should be read in conjunction
with the foregoing financial statements and notes thereto.
RESULTS OF OPERATIONS
Net sales for the second quarter of fiscal 1996 increased 5.4% to
$11,241,000 from $10,661,000 reported during the second quarter of
fiscal 1995 and 17% above sales of $9,600,000 reported during the
first quarter of fiscal 1996 primarily as a result of increased sales
of the Company's core overvoltage protector and network interface
products to its telephone company customers, including to a large
degree those customers that decreased their inventory levels during
the first quarter in anticipation of the delivery of newly
-11-
<PAGE>
released products developed pursuant to the Company's agreement with
Access Network Technologies ("ANT"). The improvement in sales during
the second quarter offset to a large degree the decrease in sales
during the first quarter so that net sales for the first six months
of fiscal 1996 was only 1.3% below the first half of fiscal 1995 (to
$20,841,000 from $21,117,000). This decline in sales was primarily
the result of certain customers decreasing inventory levels of
certain TII products during the Company's first quarter of fiscal
1996. The Company does not anticipate, at this time, any other
customers reducing inventory levels. Limited shipments of these
products have begun; however, volume sales continue to be delayed as
TII and ANT gear-up their production facilities as well as their
marketing and sales organizations. While the Company believes that
delays in volume shipments of the ANT Agreement products will
continue for the remainder of fiscal year 1996, the Company continues
to expect net sales for fiscal 1996 to exceed fiscal 1995 levels.
Principally as a result of the delays in the volume shipments of the
ANT products, inventory increased to $15,134,000 during the second
quarter of fiscal 1996, from $12,278,000 at June 30, 1995.
Cost of sales, as a percentage of sales, increased for the second
quarter and first six months of fiscal 1996 (72.3% and 72.8%,
respectively) as compared to the second quarter and first six months
of fiscal 1995 (70.2% and 70.2%, respectively) principally due to the
Company not being able to pass on increases in raw materials and
other manufacturing costs to customers on a similar mix of products
shipped during these periods. The Company expects fiscal 1996 cost
-12-
<PAGE>
of sales levels to remain at relatively the same percentage of sales
for the remainder of the fiscal year.
Selling, general and administrative expenses decreased in dollar
amounts for the second quarter and first six months of fiscal 1996
($1,394,000 and $2,887,000, respectively) as compared to the second
quarter and first six months of fiscal 1995 ($1,777,000 and
$3,487,000, respectively) principally due to reductions in many of
the items of this category throughout the Company.
Research and development expenses increased in dollar amounts for the
second quarter and first six months of fiscal 1996 ($762,000 and
$1,387,000, respectively) as compared to the second quarter and first
six months of fiscal 1995 ($640,000 and $1,345,000, respectively) due
to the development expenses associated with the ANT Agreement
projects, as well as other new products, exclusive of the ANT
Agreement, being developed by the Company for the telecommunications
industry.
Interest expense increased slightly during the second quarter of
fiscal 1996 ($14,000) as compared to the second quarter of fiscal
1995 due to increased borrowings against the Company's line of
credit. These borrowings were principally the result of increased
inventory levels resulting primarily from the delay in the volume
shipments of the ANT product and the decline in sales resulting from
the customer's decrease in inventory levels. Interest expense
-13-
<PAGE>
decreased by $112,000 during the first six months of fiscal 1996 as
compared to the first six months of fiscal 1995 due principally to
decreased borrowings during the period.
Other income, (net), was $87,000 in the second quarter of fiscal 1996
compared to a net expense of $20,000 during the comparable period in
fiscal 1995, and a net income of $112,000 in the first six months of
fiscal 1996 compared to a net expense of $24,000 during the first six
months of fiscal 1995. The improvements were primarily due to an
increase in funds available for investment resulting from exercises,
primarily during the fourth quarter of fiscal 1995 and first quarter
of fiscal 1996, of Warrants issued in an August 1992 private
placement.
As a result of the foregoing, the Company's net profit increased
during the second quarter and first six months of fiscal 1996 to
$895,000 and $1,334,000, respectively, from $607,000 and $1,143,000,
respectively, reported during the second quarter and first six months
of fiscal 1995.
-14-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Key factors in the Company's financial position were:
As Of
December 29 June 30,
1995 1995
(Dollars in Thousands)
Working capital $18,444 $15,947
Current ratio 4.11 3.44
Total debt to equity ratio .23 .37
During the first six months of fiscal 1996, cash was provided
principally by the Company's net profit, $1,334,000; depreciation and
amortization, $857,000; an increase in receivables, $140,000; and the
proceeds from Common Stock Purchase Warrants and Unit Purchase
Options exercised (see below), $5,488,000. These sources and existing
cash were used to support the increase of inventories ($2,956,000),
for capital expenditures ($1,013,000), the paydown of the Company's
revolving credit facility ($1,834,000) and the redemption of all
outstanding Series A Cumulative Convertible Redeemable Preferred
Stock at their liquidation value and redemption amount ($2,763,000).
During the prior fiscal year ended June 30, 1995, Common Stock
Purchase Warrants and Unit Purchase Options issued in the 1992
private placement were exercised for 1,582,000 shares of Common
Stock. Net proceeds to the Company from such exercises aggregated
approximately $7,100,000. During the six months ended December 29,
1995, the remaining Common Stock Purchase Warrants and Unit Purchase
-15-
<PAGE>
Options were exercised for 1,130,000 shares of Common Stock and the
Company received additional net proceeds of approximately $5,488,000.
Funds anticipated to be generated from operations, together with
available cash and marketable securities and borrowings available
under the Company's Revolving Credit Agreement, are considered to be
adequate to finance the Company's operational and capital needs for
the foreseeable future.
-16-
<PAGE>
PART II
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's 1995 Annual Meeting of Shareholders held on December 6,
1995, stockholders:
1. Re-elected C. Bruce Barksdale, Joseph C. Hogan and William G. Sharwell
to serve as Class I directors until the 1998 Annual Meeting of Stockholders and
until their respective successors are elected and qualified. The following is
the vote received by each director, Messrs. C. Bruce Barksdale, Joseph C. Hogan
and William G. Sharwell:
Authority To
For Vote Withheld
----- ---------------
C. Bruce Barksdale 6,208,901 39,517
Joseph C. Hogan 6,206,951 41,467
William G. Sharwell 6,206,955 41,463
2. Approved the Company's 1995 Stock Option Plan.
For Against Abstain Broker Non-Votes
----- ------- ------- ----------------
3,619,315 1,297,124 127,887 1,204,092
3. Approved amendments to the Company's 1994 Non-Employee Director Stock
Option Plan by the following vote:
For Against Abstain Broker Non-Votes
----- ------- ------- ----------------
4,133,091 850,276 134,809 1,130,242
4. Ratified the selection by the Board of Directors of Arthur Andersen LLP
as the Company's independent public accountants for the fiscal year ending June
28, 1996 by the following vote:
For Against Abstain Broker Non-Votes
----- ------- ------- ----------------
6,225,824 20,097 2,497 0
-17-
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11. Statement Re: Computation of Per Share Earnings
(b) Reports on Form 8-K
No Reports on Form 8-K were filed during the quarter ended
December 29, 1995.
-18-
<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.
TII INDUSTRIES, INC.
(Registrant)
/s/ John T. Hyland, Jr.
------------------------------
Date: February __, 1996 John T. Hyland, Jr.
Vice President, Treasurer and
Chief Financial Officer
-19-
EXHIBIT 11
Page 1 of 2
<TABLE>
<CAPTION>
TII INDUSTRIES, INC AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
Three Months Six Months
Ended Ended
December 29, 1995 December 29, 1995
---------------- ----------------
<S> <C> <C>
PRIMARY EARNINGS PER SHARE
Weighted Average of Common Stock
Beginning of period (shares)
Common Stock outstanding 7,021,000 5,479,000
Class B Common Stock -- 370,000
---------------- ----------------
7,021,000 5,849,000
Issuance of common stock 45,000 1,007,000
---------------- ----------------
7,066,000 6,856,000
Common Stock Equivalents
Options and warrants 703,000 831,000
Preferred Stock
Preferred Stock, Series A
convertible at $6.25 -- 159,000
---------------- ----------------
7,769,000 7,846,000
================ ================
Primary Earnings Per Share Computation
Net profit $895,000 $1,334,000
================ ================
Adjusted Net profit / weighted average of common stock
$895,000/7,769,000 and $1,334,000/7,846,000 $0.12 $0.17
================ ================
Memo: Market price at end of period $8.88 $8.88
================ ================
Average market price for the period $8.11 $8.28
================ ================
</TABLE>
<PAGE>
EXHIBIT 11
page 2 of 2
<TABLE>
<CAPTION>
TII INDUSTRIES, INC AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
Three Months Six Months
Ended Ended
December 29, 1995 December 29, 1995
---------------- ----------------
<S> <C> <C>
FULLY DILUTED EARNINGS PER SHARE
Weighted average of Common Stock outstanding 7,066,000 6,856,000
Incremental shares from options and warrants * 810,000 884,000
Preferred stock conversion -- 159,000
OPIC loan 300,000 300,000
---------------- ----------------
8,176,000 8,199,000
================ ================
Fully Diluted Earnings Per Share Computation
Net profit $914,000 $1,372,000
================ ================
Adjusted net profit (loss) / weighted average of common stock
$912,000/8,176,000 and $1,372,000/8,199,000 $0.11 $0.17
================ ================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000277928
<NAME> TII INDUSTRIES, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-28-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> DEC-29-1995
<CASH> 211
<SECURITIES> 2,038
<RECEIVABLES> 6,283
<ALLOWANCES> 0
<INVENTORY> 15,134
<CURRENT-ASSETS> 24,381
<PP&E> 31,561
<DEPRECIATION> (21,159)
<TOTAL-ASSETS> 36,338
<CURRENT-LIABILITIES> 5,937
<BONDS> 0
0
0
<COMMON> 71
<OTHER-SE> 29,421
<TOTAL-LIABILITY-AND-EQUITY> 36,338
<SALES> 20,841
<TOTAL-REVENUES> 20,841
<CGS> 15,164
<TOTAL-COSTS> 4,274
<OTHER-EXPENSES> (112)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 181
<INCOME-PRETAX> 1,334
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,334
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,334
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
</TABLE>
