UNITED STATES
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, 1998
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 Number: 0-8125
----------------------------
DETECTION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
State of New York 16-0958589
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
130 Perinton Parkway, Fairport, New York 14450
(Address of principal executive offices) (Zip Code)
(716) 223-4060
(Registrant's telephone number, including area code)
----------------------------
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
the filing requirements for the past 90 days. Yes __X__ No _____
As of August 14, 1998 there were outstanding 6,321,872 shares of the
registrant's common stock, par value $.05 per share.
PART I FINANCIAL INFORMATION
DETECTION SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Balance Sheet
(in thousands, except per share data)
Assets June 30, 1998 March 31, 1998
Current assets: (Unaudited)
Cash and cash equivalents $1,846 $3,160
Accounts receivable, less allowance for
doubtful accounts ($1,120 and $1,033,
respectively) 23,663 23,505
Inventories 40,467 38,154
Other current assets 3,449 3,701
------ ------
69,425 68,520
------ ------
Fixed assets, net 12,077 12,142
Goodwill and other intangibles 10,024 8,907
Other assets 4,665 4,475
------ ------
$96,191 $94,044
====== ======
Liabilities
Current liabilities:
Short term borrowings $ 6,097 $ 4,002
Current portion of long term debt 366 405
Accounts payable 11,069 12,368
Accrued payroll and benefits 1,760 1,636
Other current liabilities 6,105 5,165
------ ------
25,397 23,576
Other liabilities 2,601 2,655
Long term debt 15,947 16,549
Shareholders' equity:
Common stock, par value $.05 per share;
Authorized - 12,000 shares; Issued -
6,550 shares and 6,518 shares,
respectively 328 326
Capital in excess of par value 45,080 44,805
Retained earnings 10,808 9,976
------ ------
56,216 55,107
Less - Treasury stock, at cost (3,785) (3,785)
Notes receivable for stock purchases (26) (14)
Cumulative translation adjustment (159) (44)
------ ------
52,246 51,264
------ ------
$96,191 $94,044
====== ======
(See accompanying notes to financial statements)
DETECTION SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statement of Operations and Retained Earnings (Unaudited)
(in thousands, except per share data)
June 30, 1998 June 30, 1997
For the Three Months Ended: (Current Year) (Preceding Year)
-------------- ---------------
Net sales $33,808 $28,208
Costs and expenses:
Production 21,286 17,556
Research and development 2,134 2,085
Marketing, administrative and general 8,628 6,387
------ ------
Total costs and expenses 32,048 26,028
Operating income 1,760 2,180
Other income (expense)
Interest income 54 4
Interest expense (409) (637)
Other income (expense) (42) 215
------ ------
Income before income taxes 1,363 1,762
Provision for income taxes 531 629
------ ------
Net income 832 1,133
====== ======
Retained earnings at beginning of period 9,976 8,594
Amortization of redeemable common stock 12
------ ------
Retained earnings at end of period $10,808 $9,739
====== ======
Earnings per share
Basic $0.13 $0.25
==== ====
Diluted $0.12 $0.22
==== ====
(See accompanying notes to financial statements)
DETECTION SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statement of Cash Flows (Unaudited)
(in thousands of dollars)
For the Three Months Ended June 30, 1998 1997
Cash flows from operating activities: ---- ----
Net income $ 833 $1,133
----- -----
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 924 968
Deferred compensation 457
Stock based compensation 87
Gain on sale of assets (205)
Changes in assets and liabilities:
Accounts receivable (158) (938)
Inventories (2,313) 989
Accounts payable (1,299) 243
Accrued payroll and benefits 124 (109)
Other assets & liabilities 533 (1,754)
------ ------
Total adjustments (2,189) (262)
------ ------
Net cash provided by operating
activities (1,356) 871
Cash flows from investing activities:
Capital expenditures (955) (1,374)
Proceeds from sale of assets 124 312
Acquisition of businesses (473) (3,601)
------ ------
Net cash used in investing activities (1,304) (4,663)
Cash flows from financing activities:
Proceeds from borrowings 2,095 4,441
Principal payments on debt and
capital lease obligations (641) (78)
Common stock transactions, net 7 106
----- ------
Net cash provided by financing
activities 1,461 4,469
Effect of exchange rates (115) (14)
----- -----
Net increase in cash and cash
equivalents (1,314) 663
Cash and cash equivalents at beginning
of period 3,160 2,244
----- -----
Cash and cash equivalents at end of
period $1,846 $2,907
===== =====
Cash paid during the year for:
Interest $ 419 $ 412
=== ===
Income taxes $ 313 $ 742
=== ===
(See accompanying notes to financial statements)
DETECTION SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
THREE-MONTH PERIOD ENDED JUNE 30, 1998
(in thousands, except per share data)
(Unaudited)
NOTE 1. GENERAL
The accompanying unaudited interim consolidated financial statements have
been prepared in accordance with the rules and regulations of the Securities
and Exchange Commission (SEC). The interim consolidated financial statements
include the consolidated accounts of Detection Systems, Inc. and its
majority-owned subsidiaries (collectively, "the Company") with all
significant intercompany transactions eliminated. In the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
necessary for a fair statement of the financial position, results of
operations and cash flows for the interim periods presented have been made.
Certain footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles (GAAP)
have been condensed or omitted pursuant to such SEC rules and regulations.
These financial statements should be read in conjunction with the Company's
Annual Report on Form 10-K for the year ended March 31, 1998.
Cash flow statement - During the first quarter of fiscal 1999, the Company
issued 28 shares of common stock in connection with the acquisition of
EFSEC. During the first quarter of fiscal 1998, the Company issued 222 and
34 shares of common stock in connection with the acquisitions of DA Systems
and Seriee S.A., respectively (see Note 3).
NOTE 2. INVENTORIES
Major classifications of inventory follow:
June 30, 1998 March 31, 1998
------------- --------------
Component Parts $21,858 $22,061
Work In Process 3,481 1,488
Finished Products 15,128 14,605
------ ------
$40,467 $38,154
====== ======
NOTE 3. ACQUISITIONS
Fiscal 1999 Acquisitions - In June 1998, the Company acquired all of the
outstanding shares of EFSEC AB("EFSEC")for approximately $1,250, comprised of
cash and 28 shares of its common stock. EFSEC is a Swedish distributor of
electronic security equipment with annual net sales of approximately $3,000
prior to its acquisition.
In June 1998, the Company acquired all of the outstanding stock of Alarm
Center Kft ("Alarm Center") for $125 in cash. Alarm Center is a Hungarian
distributor of electronic security equipment with annual net sales of
approximately $500 prior to its acquisition.
Fiscal 1998 Acquisitions - In May 1997, the Company acquired all of the
outstanding stock of Digital Audio Ltd. ("DA Systems"), in exchange for 222
shares of its common stock. The shares were callable at the Company's option
at $17 per share plus interest at 8.25% until June 30, 1998, and could be put
to the Company at that price after that date. The Company exercised its call
option to repurchase these shares in connection with the issuance of common
stock in September 1997. The cost of this acquisition was approximately
$4,000. DA Systems is a British manufacturer of security control equipment
with annual net sales of approximately $10,800 prior to its acquisition.
In June 1997, the Company acquired 99.5% of the outstanding stock of Seriee
S.A. ("Seriee") of France, in exchange for 34 shares of its common stock,
valued at approximately $600. Seriee is a manufacturer of electronic control
and communication equipment and had annual net sales of approximately $6,300,
prior to its acquisition.
In June 1997, the Company acquired 98.7% of the outstanding stock of
Radio-Active Systems N.V.("RAS") of Belgium for approximately $3,600 in
cash. RAS has the largest security equipment distribution network in Belgium
with annual net sales of approximately $9,900, prior to its acquisition.
In November 1997, the Company acquired all of the outstanding stock of
Security Supplies NZ Ltd. ("Security Supplies") of New Zealand for
approximately $50 in cash. Security Supplies provided the Company with
immediate access to an established market base in New Zealand. Security
Supplies had annual sales of approximately $800 prior to its acquisition.
In January 1998, the Company acquired all of the outstanding stock of
Electronics Design & Manufacturing Pty Limited ("EDM") of Australia in
exchange for 187 shares of its common stock and $2,800 in cash. EDM is a
major Australian manufacturer of security control equipment with annual net
sales of approximately $4,600, prior to its acquisition.
These transactions have been accounted for as purchases and, accordingly, the
results of DA Systems, Seriee, RAS, Security Supplies, EDM, EFSEC and Alarm
Center are included in the consolidated financial statements as of the date
of acquisition. The financial statements reflect the final allocation of
purchase price for each business, except for EDM, EFSEC and Alarm Center, for
which the purchase price allocation has not been finalized. Unallocated
excess of purchase price over net assets acquired as of June 30, 1998 is
$3,200 and is included with goodwill.
NOTE 4 - EARNINGS PER SHARE
There are no significant reconciling items between net income as presented in
the consolidated statement of operations and net income available to common
stockholders used in the calculation of earnings per share. Reconciling
items between the number of shares used in the calculation of basic and
diluted earnings per share relate to deferred compensation plans, options and
warrants, as follows:
Quarter ended June 30,
1998 1997
---- ----
Weighted average number of shares outstanding 6,291 4,613
Shares associated with deferred compensation,
option and warrant plans 542 588
NOTE 5 - RESTRUCTURING
The Company recorded a restructuring charge of approximately $400 during the
first quarter of fiscal 1999 for severance costs related to the termination
of employees at the Fairport, New York and Southall, England facilities. The
charge has been included in the results from continuing operations and had a
material impact on operating results in the first quarter of 1999. These
manufacturing employees will be terminated during fiscal 1999, thus the
accrual has been included in other current liabilities at June 30, 1998.
DETECTION SYSTEMS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview
The Company is a leading supplier of equipment to the electronic protection
industry. The Company designs, manufactures and markets electronic detection,
control and communication equipment for security, fire protection, access
control and CCTV applications, offering products primarily for the commercial
and mid- to high-end residential portions of the market. From its founding in
1968 until 1995, the Company was primarily a niche provider of intrusion
detection devices for the domestic market. In 1995, the Company adopted a
strategy designed to substantially expand its product offerings, establish an
international sales presence, increase its manufacturing capacity and improve
its manufacturing cost structure. The Company has since made nine acquisitions
and established a manufacturing facility in China. Significant acquisitions are
described in Note 3. The impact on the Company from the implementation of these
strategies is demonstrated by an increase in the Company's net sales of 19.9% to
$33.8 million in the three months ended June 30, 1998 from $28.2 million in the
comparable period in 1997. These acquisitions had a significant impact on the
comparative information for the three month periods ending June 30, 1998 and
1997 with respect to results of operations.
The Company recognizes net sales upon shipment of products to customers.
Production expenses include materials, direct labor and manufacturing
overhead as well as an allocated portion of indirect overhead. Outgoing
freight, customs and other costs associated with delivery of products to
customers are classified under marketing, administrative and general
expenses. Research and development expenses include costs associated with
salaries and benefits for certain engineering employees, supplies, agency
approvals, depreciation and occupancy, as well as charges for independent
testing and independent contractors engaged for specific projects.
Marketing, administrative and general expenses include costs related to the
Company's sales efforts and corporate and general administrative functions,
including costs of executive, administrative and sales personnel,
marketing/selling supplies, advertising, depreciation and professional fees.
Results of Operations
The following table sets forth, for the periods indicated, the
percentages which certain items of income and expense bear to net sales:
Fiscal Year Ended Three Months Ended
March 31, June 30,
1998 1997 1998 1997
Net sales 100.0% 100.0% 100.0% 100.0%
Costs and expenses:
Production 66.4 64.2 63.0 62.2
Research and development 6.8 8.0 6.3 7.4
Marketing, administrative
and general 23.2 21.2 25.5 22.6
---- ---- ---- ----
Operating income 3.6 6.6 5.2 7.8
Other income (expense)
Interest income 0.2 0.1 0.1 0.0
Interest expense (1.8) (1.7) (1.2) (2.3)
Other income (expense) (0.2) 0.2 (0.1) 0.7
---- ---- ---- ----
Income before income taxes 1.8 5.2 4.0 6.2
Provision for income taxes 0.7 1.5 1.5 2.2
---- ---- ---- ----
Net income (loss) 1.1% 3.7% 2.5% 4.0%
=== ==== ==== ====
Three Months Ended June 30, 1998 Compared to Three Months Ended June 30, 1997
The Company's net sales increased 19.9% to $33.8 million in the first
quarter of fiscal 1999 from $28.2 million in the comparable quarter last
year. The net sales of acquired businesses accounted for $5.4 million of
this increase. The remaining $0.2 million increase represents sales growth
from existing operations. The rate of sales growth in the first quarter of
fiscal 1999 was adversely impacted by lower sales to one of the Company's
major customers and the acquisition of two of the Company's customers by
other businesses.
Production expenses increased 21.2% to $21.3 million in the first quarter
of fiscal 1999 from $17.6 million in the comparable quarter last year. As a
percentage of net sales, production expenses remained relatively consistent
at 63.0% in the current quarter compared to 62.2% in the comparable quarter
last year. The increase in production expenses was primarily due to a
corresponding increase in the Company's net sales.
Research and development expenses remained consistent at $2.1 million in
the first quarter of fiscal 1999 and 1998 periods. As a percentage of net
sales, research and development expenses decreased to 6.4% in the current
quarter from 7.4% in the comparable quarter last year. The decrease in
research and development expenses as a percentage of net sales was primarily
due the acquisition of redistributor businesses during fiscal 1998 which have
sales but do not incur research and development expenditures.
Marketing, administrative and general expenses increased 35.1% to $8.6
million in the first quarter of fiscal 1999 from $6.4 million in the
comparable quarter last year. As a percentage of net sales, marketing,
administrative and general expenses increased to 25.8% in the current quarter
from 22.6% in the comparable quarter last year. The increase in marketing,
administrative and general expenses was primarily due to the acquisition of
businesses in fiscal 1998. In addition, a charge of approximately $0.4
million was recorded in the first quarter of fiscal 1999 relating to the
restructuring of the Company's Fairport, New York and Southall, England
manufacturing facilities. This restructuring relates to severance associated
with the transfer of manufacturing from those facilities to the Company's
China facility. It is expected that these actions will be substantially
completed by the end of fiscal 1999. The Company expects to save
approximately $2.0 million annually in salaries and benefits as a result of
this action.
Interest expense decreased to $0.4 million in the first quarter of fiscal
1999 from $0.6 million in the comparable quarter last year. This decrease
was primarily due to lower borrowings outstanding.
The Company's effective income tax rate for the first quarter of fiscal
1999 was 39.0% compared to 35.7% for the comparable quarter last year. The
higher effective rate is associated with the source of the Company's income
among domestic and international entities as well as the impact of
non-deductible goodwill.
Liquidity and Capital Resources
The Company considers liquidity to be its ability to meet its long- and
short-term cash requirements. Prior to 1996, those requirements were
primarily met by cash generated by the Company's operating activities and
cash reserves. Since the 1995 implementation of the Company's strategy
designed to enhance its product offerings, manufacturing capacity and
international operations, particularly its acquisitions and the development
of the China facility, the Company has required external sources of financing
to satisfy its liquidity needs.
Three Months Ended June 30, 1998. During the three months ended June 30,
1998, the Company's operating activities used $1.4 million of operating cash
flow. Net income, depreciation and amortization provided $1.8 million, an
increase in inventories used, $2.3 million and a decrease in accounts payable
used $1.3 million. Other account changes provided $0.4 million of operating
cash flow.
During the three months ended June 30, 1998, cash used for investing
activities was $1.3 million and was utilized for the acquisition of EFSEC and
Alarm Center and for capital expenditures.
During the three months ended June 30, 1998, cash provided by financing
activities was $1.5 million, primarily representing proceeds from borrowings
to finance operations and capital expenditures.
Capital Resources. On June 30, 1998, the Company had cash balances of
$1.8 million. On that date, the Company had a $17.0 million revolving credit
facility under which it had borrowed $4.8 million. This credit facility
bears interest based on the prime rate or the London Interbank Offered Rate,
plus applicable points based on the Company's degree of financial leverage.
The agreement matured on July 31, 1998. However, the line was extended
through August 31, 1998. The Company is in process of finalizing an
extension of the facility through July 2000, and expects this to be completed
by August 31, 1998.
The Company expects to continue to pursue acquisitions and the
development of new products and markets. On-going capital expenditures will
include continued investment in facilities and equipment necessary to produce
and market its security, fire detection, access control and CCTV products.
The Company also plans to continue its efforts to market its products
internationally.
The Company believes that the combination of its current cash balances,
cash flows from operations and existing credit facilities will be sufficient
to fund its planned operations during fiscal 1999. However, there can be no
assurance that existing cash flow will be sufficient to fund the Company's
on-going operations.
Year 2000 Issues. The Company has assessed the impact of the year 2000 on
its products and information systems and is currently in the process of
assessing the impact of the year 2000 on its vendors. The Company believes
its products are year 2000 compatible. The Company's domestic business
information systems will require upgrades and enhancements to be made year
2000 compliant. These upgrades are currently being performed and are
expected to be completed prior to the year 2000.
Most of the Company's non-US subsidiaries' information systems will require
various degrees of upgrade or replacement to be capable of handling year 2000
issues (excluding the Hong Kong subsidiary, which utilizes the Company's
domestic information system). The Company is in the process of finalizing
implementation plans for each of its non-US subsidiaries. The Company
expects to be capable of handling the year 2000 at all locations without
significant interruption to business activity.
The estimated remaining costs of year 2000 projects approximate $0.7
million. Management's estimate of the costs and completion dates are
dependent on various factors including availability of skilled resources and
the ability to locate and modify all relevant software code. For additional
information regarding the risks associated with the Company's compliance with
Year 2000, see "Risk Factors-Year 2000" in Item 1 of the Company's Form 10-K
for the year ended March 31, 1998.
Dividend Policy. The Company is dedicated to promoting shareholder value
through long term profitability and growth and believes that continued
investments in future product development are essential to this goal. For
this reason, it has been the Company's policy to not pay cash dividends.
Forward-Looking Statements
This quarterly report contains certain "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended
and Section 21E of the Securities Exchange Act of 1934, as amended which
represent the Company's expectations or beliefs, including, but not limited
to, statements concerning industry performance, the Company's operations,
performance, financial condition, growth and acquisition strategies, margins
and growth in sales of the Company's products. For this purpose, any
statements contained in this quarterly report that are not statements of
historical fact may be deemed to be forward-looking statements. Without
limiting the generality of the foregoing, words such as "may," "will,"
"expect," "believe," "plan," "anticipate," "intend," "could," "estimate,"
"continue," "goal" or "strategy" or the negative or other variations thereof
or comparable terminology are intended to identify forward-looking
statements. These statements by their nature involve substantial risks and
uncertainties, certain of which are beyond the Company's control, and actual
results may differ materially depending on a variety of important factors,
including those described previously in the "Risk Factors" section of the
Company's 1998 Form 10-K for the year ended March 31, 1998.
PART II OTHER INFORMATION
Item 6. Exhibits and Reports for Form 8-K.
A. Exhibits
See Exhibit Index
B. Reports on Form 8-K
No reports on Form 8-K were filed during the quarter.
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.
DETECTION SYSTEMS, INC.
Registrant
DATE: August 14, 1998 By: /s/ Karl H. Kostusiak
Karl H. Kostusiak, President
By: /s/ Frank J. Ryan
Frank J. Ryan, Vice President,
Secretary and Treasurer
(Principal Financial Officer)
By: /s/ Christopher P. Gerace
Christopher P. Gerace
Chief Accounting Officer
(Principal Accounting Officer)
EXHIBIT INDEX
Item
No. Exhibits Location
- ---- -------- --------
3(a) Detection Systems, Inc. Incorporated by reference to
Certificate of Incorporation Exhibit 3(a) of the Company's
as amended 1997 Annual Report on Form 10-K
3(b) Detection Systems, Inc. Incorporated by reference to
By-Laws as amended Exhibit 3(b) of the Company's
1997 Annual Report on Form 10-K
10(a) Medical reimbursement plan Incorporated by reference to
Exhibit 10(b) of the Company's
1997 Annual Report on Form 10-K
10(b) Employee stock purchase plan Incorporated by reference to
Exhibit 10 of the Company's 1994
Annual Report on Form 10-K
10(c) Fleet Amended & Restated Incorporated by reference to
Credit Facility Agreement Exhibit 10(d) of the Company's
dated February 12, 1996 1996 Annual Report on Form 10-K
10(d) Amended and Restated Credit Incorporated by reference to
Facility Agreement Exhibit 10(d) of the Company's
(Amendment #1) dated May 1997 Annual Report on Form 10-K
31, 1996
10(e) Amended and Restated Credit Incorporated by reference to
Facility Agreement Exhibit 10(d) of the Company's
(Amendment #2) dated 1997 Annual Report on Form 10-K
February 13, 1997
10(f) Deferred Compensation Plan Incorporation by reference to
and Deferred Bonus Plan. Exhibit 10(c) to the Company's
Quarterly Report on Form 10-Q,
for the quarter ended 12/31/97
10(g) 1992 Restated Stock Option Incorporated by reference to
Plan Exhibit 22 of the Company's 1995
Annual Report on Form 10-K
10(h) 1997 Stock Option Plan Incorporated by reference to
Exhibit 10(o)of the Company's
Registration Statement on Form
S-2 (No. 333-31951) filed on
7/24/97.
10(i) Executive Officer Cash Bonus Incorporated by reference to
Plan Exhibit 10(i) of the Company's
1998 Annual Report on Form 10-K
10(j) Executive employment Incorporated by reference to
contract with Karl H. Exhibit 10(j) of the Company's
Kostusiak. 1998 Annual Report on Form 10-K
10(k) Executive employment Incorporated by reference to
contract with David B. Exhibit 10(b) of the Company's
Lederer. Quarterly Report on Form 10-Q for
the period ended June 30, 1997.
10(l) Executive employment Incorporated by reference to
contract with Lawrence R. Exhibit 10 of the Company's 1995
Tracy. Annual Report on Form 10-K
10(m) Stock Purchase Agreements Incorporated by reference to
with Karl H. Kostusiak and Exhibit 10(n) of the Company's
David B. Lederer 1997 Annual Report on Form 10-K
11 Statement re: Computation of Included as Exhibit 11 of this
Per Share Earnings Quarterly Report on Form 10-K
24 Powers of Attorney Incorporated by reference to
Exhibit 24 of the Company's 1998
Annual Report on Form 10-K
27 Financial Data Schedule Included as Exhibit 27 of this
Quarterly Report on Form 10-Q
Exhibit 11
DETECTION SYSTEMS, INC.
COMPUTATION OF EARNINGS PER SHARE
(In thousands, except per share data)
Quarter Ended June 30, 1998 1997
---- ----
Net income $ 832 $1,133
Plus: amortization of redeemable stock 12
----- -----
Income available to common stockholders 832 1,145
===== =====
Weighted average number of shares 6,291 4,613
===== =====
Basic earnings per share $0.13 $0.25
===== =====
Shares attributable to deferred
compensation plans and stock
options and warrants 542 588
==== ====
Diluted earnings per share: $0.12 $0.22
==== ====
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