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 September 30, 2000
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 November 8, 2000 there were outstanding 6,333,408 shares of
the registrant's common stock, par value $.05 per share.
<PAGE>
PART I FINANCIAL INFORMATION
DETECTION SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Balance Sheet
(in thousands, except share and per share data)
Sept 30, March 31,
2000 2000
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $1,966 $ 7,799
Accounts receivable, less allowance for
doubtful accounts ($959 and $1,020,
respectively) 24,507 22,505
Inventories, net 41,429 32,594
Other current assets 5,866 5,822
------ ------
73,768 68,720
------ ------
Fixed assets, net 12,781 12,565
Goodwill, net 8,822 9,169
Other assets 5,406 5,164
------ ------
$100,777 $95,618
====== ======
Liabilities
Current liabilities:
Short term borrowings $ 20 $ 336
Current portion of long term debt 346 657
Accounts payable 13,186 9,515
Accrued payroll and benefits 1,860 1,933
Income taxes payable 723 1,703
Other current liabilities 3,699 3,447
------ ------
19,834 17,591
Other liabilities 3,008 2,968
Long term debt 19,565 16,595
Shareholders' equity:
Common stock, par value $.05 per
share;
Authorized - 24,000,000 shares;
Issued - 329 329
6,579,341 shares and 6,579,341
shares,
respectively
Capital in excess of par value 43,568 43,601
Other accumulated comprehensive loss (1,660) (695)
Retained earnings 19,471 17,915
------ ------
61,708 61,150
Less - Treasury stock, at cost -
251,174 shares and 177,400 shares, (3,227) (2,561)
respectively
Notes receivable for stock purchases (111) (125)
------ ------
58,370 58,464
------ ------
$100,777 $95,618
====== ======
(See accompanying notes to consolidated financial statements)
<PAGE>
DETECTION SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statement of Operations and Retained Earnings
(Unaudited)
(in thousands, except per share data)
For the Three Months Ended: Sept. 30, 2000 Sept. 30, 1999
(Current Year) (Preceding
Year)
-------------- --------------
Net sales $35,377 $36,699
Costs and expenses:
Production 19,711 22,091
Research and development 2,635 2,617
Marketing, administrative and 10,777 9,297
general
----- ------
Total costs and expenses 33,123 34,005
Operating income 2,254 2,694
Other expense:
Net interest expense (352) (267)
Foreign exchange loss (453) (18)
Other expense (37) (13)
------ ------
Income before income taxes 1,412 2,396
Provision for income taxes 534 895
------ ------
Net income $878 $1,501
Other comprehensive(loss)income:
Foreign currency translation (877) 18
adjustment
------ ------
Total comprehensive income 1 1,519
Retained earnings at beginning of 18,593 15,868
period
Other comprehensive(loss)income 877 (18)
------ ------
Retained earnings at end of period $19,471 $17,369
====== ======
Earnings per share
Basic $0.14 $0.24
==== ====
Diluted $0.13 $0.22
==== ====
(See accompanying notes to consolidated financial statements)
<PAGE>
DETECTION SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statement of Operations and Retained Earnings
(Unaudited)
(in thousands, except per share data)
For the Six Months Ended: Sept. 30, 2000 Sept. 30, 1999
(Current Year) (Preceding Year)
-------------- ---------------
Net sales $69,174 $71,465
Costs and expenses:
Production 39,218 43,055
Research and development 5,378 4,910
Marketing, administrative and 20,686 18,356
general
------ ------
Total costs and expenses 65,282 66,321
Operating income 3,892 5,144
Other expense
Net interest expense (577) (487)
Foreign exchange loss (772) (10)
Other income (expense) (41) 19
------ ------
Income before income taxes 2,502 4,666
Provision for income taxes 946 1,744
------ ------
Net income $ 1,556 $ 2,922
Other comprehensive(loss)income:
Foreign currency translation (965) 5
adjustment
------ ------
Total comprehensive income 591 2,927
Retained earnings at beginning of 17,915 14,447
period
Other comprehensive(loss)income 965 (5)
------ ------
Retained earnings at end of period $19,471 $17,369
====== ======
Earnings per share
Basic $0.25 $0.46
==== ====
Diluted $0.23 $0.43
==== ====
(See accompanying notes to consolidated financial statements)
<PAGE>
DETECTION SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statement of Cash Flows (Unaudited)
(in thousands of dollars)
For the Six Months Ended September 30, 2000 1999
---- ----
Cash flows from operating activities:
Net income $ 1,556 $2,922
----- -----
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation and amortization 2,091 1,450
Changes in assets and liabilities:
Accounts receivable (2,002) (3,139)
Inventories (8,835) 7,833
Accounts payable 3,671 1,391
Accrued payroll and benefits (73) 117
Other assets & liabilities (972) (1,924)
------ ------
Total adjustments (6,120) 5,728
------ ------
Net cash (used in) provided by operating (4,564) 8,650
activities
Cash flows from investing activities:
Capital expenditures (2,042) (1,416)
Acquisition of businesses - (601)
------ ------
Net cash used in investing activities (2,042) (2,017)
Cash flows from financing activities:
Net (payments) borrowings from short term debt (317) 130
Proceeds from long term borrowing 4,000 -
Principal payments on debt and
capital lease obligations (1,334) (174)
Common stock transactions, net (77) (28)
Repurchase of common stock (609) -
----- -----
Net cash provided by (used in) financing 1,663 (72)
activities
Effect of exchange rates (890) 5
----- -----
Net (decrease) increase in cash and cash (5,833) 6,566
equivalents
Cash and cash equivalents, beginning of period 7,799 4,414
----- -----
Cash and cash equivalents, end of period $1,966 $10,980
===== =====
Cash paid during the period for:
Interest $ 410 $ 791
=== ===
Income taxes $1,764 $ 2,062
===== ===
(See accompanying notes to consolidated financial statements)
<PAGE>
DETECTION SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTH PERIODS ENDED SEPTEMBER 30, 2000 AND 1999
(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 prior period balances
have been reclassified to conform with the current period
presentation. 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,
2000.
NOTE 2. INVENTORIES
Major classifications of inventory follow (in thousands):
Sept. 30, 2000 March 31, 2000
-------------- --------------
Component Parts $13,992 $11,823
Work In Process 2,504 1,851
Finished Products 24,933 18,920
------ ------
$41,429 $32,594
====== ======
NOTE 3. ACQUISITIONS
Fiscal 2000 Acquisitions - During the second quarter ended
September 30, 1999, the Company acquired all of the outstanding
shares of Caetec S.r.l. ("Caetec") for approximately $700,000 in
cash. Caetec is an Italian technology company with a new line of
fire control products.
This transaction has been accounted for as a purchase and,
accordingly, the results of the business are included in the
consolidated financial statements as of the date of acquisition.
The financial statements reflect the final allocation of the
purchase price for the business.
NOTE 4 - EARNINGS PER SHARE
There are no reconciling items between net income as presented in
the consolidated statement of operations and net income available
to common shareholders 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 (in
thousands):
Three months Six months
ended Sept. ended Sept.
30, 30,
2000 1999 2000 1999
---- ---- ---- ----
Weighted average number of shares
outstanding 6,342 6,348 6,355 6,363
Shares associated with deferred
compensation, option and warrant 404 490 405 476
plans
NOTE 5 - GEOGRAPHIC INFORMATION
The Company's operating structure includes operating segments in
the Americas, Asia-Pacific and Europe. Management evaluates the
performance of its operating segments separately to monitor the
different factors affecting financial performance in the different
regions. Segment profit or loss includes substantially all of the
segment's costs of production, distribution and administration.
The Company manages income taxes on a global basis, thus, the
Company evaluates segment performance based on profit or loss
before income taxes.
The following table presents net sales and income (loss) before
income taxes of the Company's domestic and foreign operations.
Net sales and income (loss) before income taxes of the Company's
domestic operations include the impact of export sales.
Inter-area sales are presented on a basis intended to reflect the
market value of the products as nearly as possible.
For the Three Months Ended September 30, 2000 1999
---- ----
(in thousands)
Sales to unaffiliated customers
America operations $21,494 $22,435
Asia-Pacific operations 6,228 6,686
European operations 7,655 7,578
------- -------
$35,377 $36,699
======= =======
Sales between affiliates
America operations $ 2,055 $ 2,209
Asia-Pacific operations 10,599 8,642
European operations 242 131
------ ------
$12,896 $10,982
====== ======
Income (loss) before income taxes
America operations $ 817 $ 1,109
Asia-Pacific operations 1,612 1,827
European Operations (842) (393)
Eliminations (175) (147)
----- -----
$1,412 $ 2,396
===== =====
For the Six Months Ended September 30, 2000 1999
---- ----
(in thousands)
Sales to unaffiliated customers
America operations $41,727 $43,657
Asia-Pacific operations 11,840 12,339
European operations 15,607 15,469
------- -------
$69,174 $71,465
======= =======
Sales between affiliates
America operations $4,889 $ 4,471
Asia-Pacific operations 20,039 15,892
European operations 454 248
------ ------
$25,382 $20,611
====== ======
Income (loss) before income taxes
America operations $ 1,895 $ 2,179
Asia-Pacific operations 2,606 2,701
European Operations (1,672) (598)
Eliminations (327) 384
----- -----
$ 2,502 $ 4,666
===== =====
NOTE 6 - NEW ACCOUNTING PRONOUNCEMENT
In December 1999, the SEC issued Staff Accounting Bulletin No. 101
(SAB 101). This guidance summarizes the SEC staff's views on
various issues related to revenue recognition. SAB 101, as
amended, is effective for the fourth quarter 2001. The impact of
this new guidance is not expected to be material to the Company.
DETECTION SYSTEMS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview
The Company is a 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 closed circuit
television ("CCTV") applications. The Company's products are used
primarily in the commercial and mid- to high-end residential
market. From its founding in 1968 until 1995, the Company was
primarily a provider of security sensor devices for the U.S.
market. In 1995, the Company adopted a strategy designed to
expand its product offerings, establish an international sales
presence, increase its manufacturing capacity and improve its
overall cost structure. Since then, the Company has made ten
acquisitions, opened six sales offices and established a
manufacturing facility in Asia. These initiatives have enabled
the Company to significantly expand its product catalog and market
reach and to increase its net sales.
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:
Three Months Six Months
Ended Sept. 30, Ended Sept. 30,
2000 1999 2000 1999
Net sales 100.0% 100.0% 100.0% 100.0%
Costs and expenses:
Production 55.7 60.2 56.7 60.2
Research and development 7.4 7.1 7.8 6.9
Marketing, administrative
and general 30.5 25.4 29.9 25.7
---- ---- ---- ----
Operating income 6.4 7.3 5.6 7.2
Net interest expense (1.0) (0.7) (0.8) (0.7)
Foreign exchange loss (1.3) (0.1) (1.1) -
Other expense (0.1) - (0.1) -
---- ---- ---- ----
Income before income taxes 4.0 6.5 3.6 6.5
Provision for income taxes 1.5 2.4 1.4 2.4
---- ---- ---- ----
Net income 2.5% 4.1% 2.2% 4.1%
=== === === ===
Three Months Ended September 30, 2000 Compared to Three Months
Ended September 30, 1999
The Company's net sales were $35,377,000 in the second quarter
of fiscal 2001 compared to $36,699,000 during the same period in
fiscal 2000. Sales in the Asia-Pacific market were $6,228,000
compared to $6,686,000 last year. European operations reported
quarterly sales of $7,655,000 compared to $7,578,000. Sales in
Europe and Asia-Pacific were impacted by the decline in foreign
currencies against the U.S. dollar. This was offset, in part, by
increased sales in Spain and Italy, which began operations during
the second quarter of fiscal 2000. Sales in the North American
market were $21,494,000 for the second quarter 2001 compared to
$22,435,000 a year ago. Sales in North America were impacted by
lower sales to certain major customers and by acquisitions within
the U.S. market.
Production expenses decreased 10.8% to $19,711,000 in the
fiscal 2001 period from $22,091,000 in the comparable period in
fiscal 2000. As a percentage of net sales, production expenses
decreased to 55.7% in the fiscal 2001 period compared to 60.2% in
the same period in fiscal 2000. The decrease in production
expenses in the aggregate is due to the decline in sales while the
decrease in production expenses as a percentage of sales is due to
the continued effect of improvements in the Company's
manufacturing cost structure and changes in product mix.
Research and development expenses increased 0.7% to $2,635,000
in the fiscal 2001 period from $2,617,000 in the comparable period
in fiscal 2000. As a percentage of net sales, research and
development expenses increased to 7.4% in the fiscal 2001 period
from 7.1% in the comparable period in 2000. The increase in
research and development expenses in the aggregate and as a
percentage of net sales is primarily attributable to personnel
increases to support the Company's technology initiatives.
Marketing, administrative and general expenses increased 15.9%
to $10,777,000 in the fiscal 2001 period from $9,297,000 in the
comparable period in fiscal 2000. As a percentage of net sales,
marketing, administrative and general expenses increased to 30.5%
in the fiscal 2001 period from 25.4% in the comparable period in
fiscal 2000. The increase in marketing, administrative and
general expenses is attributable to additional headcount to
support the expansion of the Company's market reach and an
incremental expense of $643,000 associated with the proxy
challenge.
Net interest expense increased to $352,000 in the fiscal 2001
period from $267,000 in the comparable period in 2000, due to
additional borrowings made during the quarter.
The Company's effective income tax rate for the fiscal 2001
period was 37.8% compared to 37.4% for the comparable period in
fiscal 2000.
Six Months Ended September 30, 2000 Compared to Six Months Ended
September 30, 1999
The Company's net sales were $69,174,000 in the fiscal 2001
period compared to $71,465,000 in the same period in fiscal 2000.
Sales in the Asia-Pacific market were $11,840,000 compared to
$12,339,000 in the same period last year. European operations
reported six month sales of $15,607,000 compared to $15,469,000
for the same period last year. International sales were impacted
by the decline in foreign currencies against the U.S. dollar.
This was offset, in part, by sales in Spain and Italy, which began
operations during the second quarter of fiscal 2000. Sales in the
North American market were $41,727,000 compared to $43,657,000 a
year ago. Sales in North America were impacted by lower sales to
certain major customers and by acquisitions within the U.S. market.
Production expenses decreased 8.9% to $39,218,000 in the fiscal
2001 period from $43,055,000 in the comparable period in fiscal
2000. As a percentage of net sales, production expenses decreased
to 56.7% in the fiscal 2001 period compared to 60.2% last year.
The decrease in production expenses in the aggregate is due to the
decline in sales while the decrease in production expenses as a
percentage of sales is due to the continued effect of improvements
in the Company's manufacturing cost structure and changes in
product mix.
Research and development expenses increased 9.5% to $5,378,000
in the fiscal 2001 period from $4,910,000 in the comparable period
in fiscal 2000. As a percentage of net sales, research and
development expenses increased to 7.8% in the fiscal 2001 period
from 6.9% during the same period last year. The increase in
research and development expenses in the aggregate and as a
percentage of net sales is primarily attributable to personnel
increases to support the Company's technology initiatives.
Marketing, administrative and general expenses increased 12.7%
to $20,686,000 in the fiscal 2001 period from $18,356,000 in the
comparable period in fiscal 2000. As a percentage of net sales,
marketing, administrative and general expenses increased to 29.9%
in the fiscal 2001 period from 25.7% in the comparable period in
fiscal 2000. The increase is attributable to additional headcount
to support the expansion of the Company's market reach and an
incremental expense of $836,000 associated with the proxy
challenge.
Net interest expense increased to $577,000 in the fiscal 2001
period from $487,000 in the comparable period in 2000, as
borrowings outstanding were higher during the current period.
The Company's effective income tax rate for the fiscal 2001
period was 37.8% compared to 37.4% for the comparable period in
fiscal 2000.
Liquidity and Capital Resources
The Company considers liquidity to be its ability to meet its
long-term 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 then, the Company's
growth strategy has required external sources of financing to
satisfy its liquidity needs.
Six Months Ended September 30, 2000. During the six months
ended September 30, 2000, the Company's operating activities used
$4,564,000 of cash flow. Net income, depreciation and
amortization provided $3,647,000. An increase in inventories used
$8,835,000. The increase in inventories is primarily attributable
to incremental purchases associated with new product
introductions, particularly in the fire product line, as well as
bulk purchases of parts with longer lead times. An increase in
accounts receivable used $2,002,000, while an increase in accounts
payable provided $3,671,000. The increase in accounts receivable
is attributable to the increase in sales during the quarter
compared with the fourth quarter of fiscal 2000. Other account
changes used $1,045,000 of operating cash flow.
During the six months ended September 30, 2000, cash used for
investing activities was $2,042,000 and was utilized for capital
expenditures.
During the six months ended September 30, 2000, cash provided
by financing activities was $1,663,000, primarily representing
proceeds from long-term borrowings.
Capital Resources. On September 30, 2000, the Company had cash
balances of $1,966,000. On that date, the Company had a
$35,000,000 revolving line of credit facility. This credit
facility bears interest based upon either the federal funds rate,
the prime rate or LIBOR, each adjusted by a factor which varies
based upon the rates of funded debt to earnings before interest,
tax, depreciation and amortization. The facility requires
interest only payments through June 2003 and principal and
interest payments from June 2003 through May 2007. As of
September 30, 2000, $4,000,000 has been drawn on the line of
credit.
The Company expects to continue to pursue expansion and/or
acquisition opportunities and the development of new products and
markets. Significant expenditures will include continued research
and development in detection, control and communication projects.
The Company also plans to continue its efforts to expand its
international market presence.
During the three months ended September 30, 2000, the Company
repurchased $78,500 of its common stock. The Company has
repurchased $1,415,000 or 151,080 shares of its common stock since
the stock repurchase program's inception in August 1999.
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 2001.
Euro Conversion. The Company is continuing to assess the
potential impact that may result from the completion of the euro
conversion in a number of areas, including the following: (1)
accounting and tax; (2) management information systems required to
accommodate euro-denominated transactions; (3) the impact on
currency exchange costs and currency exchange rate risk; and (4)
the impact on existing contracts. At this time, the Company does
not anticipate any significant impact resulting from conversion.
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.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Ultrak, Inc., a competitor and 21% shareholder of the
Company, is waging a proxy contest to gain control of
the Company's Board of Directors at the Company's 2000
Annual Meeting of Shareholders.
In connection with its proxy contest, on June 30, 2000,
Ultrak filed a purported shareholder derivative action
in federal district court in the Western District of New
York against all five members of the Company's Board of
Directors (the "Directors") and the Company as a nominal
defendant. The Ultrak action included allegations that:
(i) the executive agreements then in place were
excessive; (ii) the Directors had breached their
fiduciary duties in approving such agreements; and (iii)
the agreements should be set aside.
The Company and the Directors moved to dismiss Ultrak's
action on the ground that Ultrak was not a proper
derivative plaintiff, since among other things, Ultrak
was motivated in bringing the action by its proxy
contest and Ultrak's interests were potentially in
conflict with those of other shareholders. On September
27, 2000, the Company amended its executive agreements.
On the same date, the Company notified the Court of the
amendments and asserted that Ultrak's lawsuit had become
moot. On October 25, 2000, the Court issued an order
dismissing the lawsuit on the ground that it was moot.
Ultrak has indicated that it may seek to recover from
the Company its attorneys fees and expenses related to
the action. The Company intends to vigorously contest
any claim by Ultrak for an award of its fees and
expenses.
Item 5. Other Information
None
Item 6. Exhibits and Reports for Form 8-K.
A. Exhibits
See Exhibit Index
B. Reports on Form 8-K
On August 15, 2000 a Form 8-K was filed under Item 5,
related to the Company's first quarter fiscal 2001 press
release. No financial reports were included with this
report.
On September 27, 2000, a Form 8-K was filed under Item 5,
related to the amendments in the employment agreements
with Karl H. Kostusiak, Chairman, President & CEO and
David B. Lederer, Executive Vice President. No
financial reports were included with this report.
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 2000 Form 10-K for the year ended March 31, 2000.
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: November 14, 2000 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
Vice President & Chief Accounting Officer
(Principal Accounting Officer)
EXHIBIT INDEX
Item
No. Exhibits Location
3(a) Detection Systems, Inc. Incorporated by reference to
Certificate of Exhibit 3 of the Company's
Incorporation as amended Quarterly Report on Form 10-Q
for the quarter ended 9/30/00
3(b) Detection Systems, Inc. Incorporated by reference to
By-Laws as amended Exhibit 3(b) of the Company's
Quarterly Report on Form 10-Q
for the quarter ended 6/30/00
10(a) Medical reimbursement Incorporated by reference to
plan Exhibit 10(b) of the
Company's 1997 Annual Report
on Form 10-K
10(b) Employee stock purchase Incorporated by reference to
plan Exhibit 10 of the Company's
1994 Annual Report on Form
10-K
10(c) Fleet 2000 Amended & Incorporated by reference to
Restated Credit Facility Exhibit 10(c) of the
Agreement dated July 28, Company's Quarterly Report on
2000 Form 10-Q for the quarter
ended 6/30/00
10(d) First Amendment to the Incorporated by reference to
2000 Amended and Exhibit 10(d) of the
Restated Credit Facility Company's Quarterly Report on
Agreement Form 10-Q for the quarter
ended 6/30/00
10(e) Deferred Compensation Incorporated by reference to
Plan and Deferred Bonus Exhibit 10(c) to the
Plan Company's Quarterly Report on
Form 10-Q, for the quarter
ended 12/31/97
10(f) 1992 Restated Stock Incorporated by reference to
Option Exhibit 22 of the Company's
Plan 1995 Annual Report on Form
10-K
10(g) 1997 Stock Option Plan Incorporated by reference to
Exhibit A of the Company's
Definitive Proxy Form DEF 14A
filed on 7/8/99
10(h) Non-Employee Director Incorporated by reference to
Stock Option Plan Exhibit B of the Company's
Definitive Proxy Form DEF 14A
filed 7/8/99
10(i) Executive employment Incorporated by reference to
contract with Karl H. Exhibit 99-1 of the Company's
Kostusiak 8-K filed on September 27,
2000
10(j) Executive employment Incorporated by reference to
contract with David B. Exhibit 99-2 of the Company's
Lederer Form 8-K filed on September
27, 2000
10(k) Stock Purchase Incorporated by reference to
Agreements with Karl H. Exhibit 10(n) of the
Kostusiak and David B. Company's 1997 Annual Report
Lederer on Form 10-K
10(l) Employment contract with Included as Exhibit 10(l) of
George Behlke this Quarterly Report on Form
10-Q
11 Computation of Earnings Included as Exhibit 11 of
Per Share Statement this Quarterly Report on Form
10-Q
27 Financial Data Schedule Included as Exhibit 27 of
this Quarterly Report on Form
10-Q
