SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1994
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: 0-7304
DYNAMICS CORPORATION OF AMERICA
(Exact name of registrant as specified in its charter)
NEW YORK 13-0579260
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
475 Steamboat Road, Greenwich, Connecticut 06830-7197
(Address of principal executive offices) (Zip Code)
(203) 869-3211
(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 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 October 30, 1994:
Voting 3,868,692
Non-Voting 4,742
<PAGE>
DYNAMICS CORPORATION OF AMERICA
AND SUBSIDIARIES
INDEX
Page No.
Part I - Financial Information:
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
As of September 30, 1994 and December 31, 1993 2
Condensed Consolidated Statements of
Operations - For the Three and Nine Months
Ended September 30, 1994 and 1993 3
Condensed Consolidated Statement of
Stockholders' Equity - For the Nine
Months Ended September 30, 1994 4
Condensed Consolidated Statements of
Cash Flows - For the Nine Months
Ended September 30, 1994 and 1993 5
Notes to Condensed Consolidated Financial
Statements 6 - 8
Item 2. Management's Discussion and
Analysis of Results of Operations
and Financial Condition 9 - 11
Part II - Other Information:
Item 6. Exhibits and Reports on Form 8-K 12
Signature Page 13
<PAGE>
<TABLE>
Part 1 - Financial Information
Item 1 - Financial Statements
DYNAMICS CORPORATION OF AMERICA
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 1994 (Unaudited) AND DECEMBER 31, 1993
(DOLLAR AMOUNTS IN THOUSANDS)
<CAPTION>
September 30, December 31,
ASSETS 1994 1993
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 7,614 $ 8,969
Accounts receivable, less allowances of $657
and $531 15,972 16,287
Inventories - Note 1 19,535 18,092
Other current assets 2,031 1,897
Current assets of division held for sale
- Note 2 2,170 1,408
Deferred income taxes 4,425 4,542
TOTAL CURRENT ASSETS 51,747 51,195
Property, Plant and Equipment - at cost, less
accumulated depreciation and amortization of
$32,065 and $31,252 3,472 3,906
Equity Investment in CTS Corporation - Note 3 65,760 57,037
Other Assets 1,827 1,769
Deferred Income Taxes 980 1,457
TOTAL ASSETS $123,786 $115,364
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current installments of long-term debt $ 195 $ 400
Accounts payable 5,064 3,617
Accrued expenses and sundry liabilities 14,565 12,602
Federal income taxes payable 2,357 2,354
TOTAL CURRENT LIABILITIES 22,181 18,973
Long-term Debt - Note 4 428 623
Other Liabilities 2,626 2,954
TOTAL LIABILITIES 25,235 22,550
Contingencies - Note 7
Stockholders' Equity:
Preferred stock, par value $1 per share --
authorized 894,000 shares - none issued
Series A Participating Preferred Stock, par
value $1 per share - authorized 106,000
shares - none issued
Stockholders' equity - see accompanying
statement 98,551 92,814
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $123,786 $115,364
<FN>
See accompanying notes to condensed consolidated financial statements.
-2-
</TABLE>
<PAGE>
<TABLE>
DYNAMICS CORPORATION OF AMERICA
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
(DOLLAR AMOUNTS IN THOUSANDS,
EXCEPT PER SHARE DATA)
Unaudited
<CAPTION>
For the three months For the nine months
ended September 30, ended September 30,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net sales $24,732 $24,241 $71,446 $75,551
Cost of sales 17,929 18,477 51,927 56,540
Gross profit 6,803 5,764 19,519 19,011
Selling, general and administrative
expenses 6,121 5,790 17,755 18,521
682 (26) 1,764 490
Other income, net - Note 5 127 128 378 310
Income from continuing operations before
items shown below 809 102 2,142 800
Provision for income taxes - Note 6 295 58 783 329
Income from continuing operations before
equity in CTS Corporation 514 44 1,359 471
Income from equity investment in CTS
Corporation 648 189 2,469 1,107
Income from continuing operations 1,162 233 3,828 1,578
Income from discontinued operation, net
of income tax charge of $2,022 -
Note 2 3,334
Income before changes in accounting methods 1,162 233 7,162 1,578
Equity in CTS' cumulative effect to
January 1, 1993 of changes in accounting
methods - Note 3 (1,716)
Net income (loss) $ 1,162 $ 233 $ 7,162 $ (138)
Weighted average number of common and
common equivalent shares
outstanding 3,878,527 3,901,872 3,881,468 3,903,044
Income (loss) per common share:
Continuing operations $ .30 $ .06 $ .99 $ .40
Discontinued operation .86
Equity in CTS' cumulative effect to
January 1, 1993 of changes in
accounting methods (.44)
Net income (loss) $ .30 $ .06 $ 1.85 $ (.04)
Dividends per common share $ .10 $ .10 $ .20 $ .20
<FN>
See accompanying notes to condensed consolidated financial statements.
-3-
</TABLE>
<PAGE>
<TABLE>
DYNAMICS CORPORATION OF AMERICA
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994
(DOLLAR AMOUNTS IN THOUSANDS)
Unaudited
<CAPTION>
Common Stock
(Authorized 10,000,000
voting shares and 600,000
non-voting shares) Paid-in Total
Shares Additional Retained Deferred Stockholders'
Outstanding* Par Value Capital Earnings Compensation Equity
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1993 3,889,751 $389 $11,451 $81,125 $(151) $92,814
Shares issued and issuable
from treasury pursuant to
benefit plans 35,055 4 522 (507) 19
Shares acquired for
treasury and pursuant to
benefit plans (51,233) (5) (173) (576) (754)
Amortization of deferred
compensation and related
tax charges (3) 90 87
Net income 7,162 7,162
Cash dividends (777) (777)
Balance at September 30, 1994 3,873,573 $388 $11,797 $86,934 $(568) $98,551
<FN>
* Net of shares held in treasury at $.10 par value per share (3,301,588 voting shares at September 30, 1994 and 3,285,410
voting shares at December 31, 1993). The cumulative cost of treasury shares held at September 30, 1994 amounted to
approximately $34,800. Includes non-voting shares outstanding of 4,742 at September 30, 1994.
See accompanying notes to condensed consolidated financial statements.
-4-
</TABLE>
<PAGE>
<TABLE>
DYNAMICS CORPORATION OF AMERICA
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
(DOLLAR AMOUNTS IN THOUSANDS)
Unaudited
<CAPTION>
September 30,September 30,
1994 1993
<S> <C> <C>
Operating activities:
Net income (loss) $ 7,162 $ (138)
Adjustments to reconcile net income
(loss) to net cash provided by operating
activities:
Depreciation and amortization 867 850
Deferred income taxes 594 51
Loss (income) from equity investment in
CTS before income taxes (2,987) 571
Dividends from CTS 596 575
Increase in other assets (82) (48)
Decrease in other liabilities (328) (225)
Issuance of Company common stock 19 33
Other--net 87 82
Changes in operating assets and liabilities:
Decrease in accounts receivable 315 2,688
Decrease (increase) in inventory (1,443) 1,870
Increase in other current assets (134) (117)
Increase (decrease) in accounts payable,
accrued expenses and sundry liabilities 2,085 (2,598)
Increase in Federal income taxes payable 3 29
Decrease (increase) in current assets of
division held for sale (762) 1,180
Net cash provided by operating activities 5,992 4,803
Investing activities:
Purchases of CTS common stock (5,007)
Purchases of marketable securities (604)
Purchases of property, plant and equipment (433) (775)
Other 24 24
Net cash used in investing activities (5,416) (1,355)
Financing activities:
Principal payments under capital
lease obligations and mortgages (400) (283)
Purchases of treasury stock (754) (138)
Dividends paid (777) (781)
Net cash used in financing activities (1,931) (1,202)
Increase (decrease) in cash and cash equivalents (1,355) 2,246
Cash and cash equivalents at beginning of period 8,969 6,095
Cash and cash equivalents at end of period $ 7,614 $ 8,341
<FN>
See accompanying notes to condensed consolidated financial statements.
-5-
</TABLE>
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to
Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not
include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion
of Management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
Operating results for the nine months ended September 30, 1994 are not
necessarily indicative of the results that may be expected for the year
ending December 31, 1994. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended December 31, 1993.
Note 1 - Inventories:
Quarterly inventories are estimated based on perpetual inventory
records of the Company and the gross profit method under the first-
in, first-out and the last-in, first-out methods.
Inventories are summarized as follows:
September 30, December 31,
1994 1993
(in thousands)
Raw materials and supplies $ 8,662 $ 7,251
Work in process 7,095 6,426
Finished goods 3,445 4,076
19,202 17,753
Inventories subject to progress billings 1,063 1,189
Progress billings (730) (850)
333 339
$19,535 $18,092
Note 2 - Division Held for Sale:
A proposed change order was submitted in April 1992 to the
Government seeking equitable compensation for constructive changes
and associated delays by the Government in a contract for the
supply of 3KW generator sets to be manufactured by the Company's
then discontinued Fermont division. In May 1994 the Company agreed
to accept $6,450,000 from the Government in settlement of the
preproduction portion of its proposed change order. The
settlement, net of related expenses and income taxes, amounted to
$3,334,000, or $.86 per share, and was reported as income from
discontinued operations in the quarter ended June 30, 1994.
Negotiations to settle the production portion of the proposed
change order have not yet commenced and the Government has
contracted for further testing of prototype units.
In July 1994, management bid on a major new government generator
set contract and decided to pursue other contracts in order to
enhance the marketability of Fermont. Accordingly, commencing on
July 1, 1994, the division is no longer classified as a
discontinued operation but as a business held for sale and
operating results will be reported as part of continuing
operations. A reserve for projected operating losses for the
ensuing twelve month period, including the estimated costs to
consummate the division's sale and adjustments for the net
realizable value of the division's assets, was provided from the
remainder of the reserve established in 1991 to discontinue the
operation.
-6-
<PAGE>
Note 3 - Equity Investment in CTS Corporation:
At September 30, 1994, the Company's holdings aggregated 2,149,100
shares of CTS common stock, increased from 1,920,900 shares at
December 31, 1993, and the Company's percentage of equity ownership
in CTS increased to 41.5% from 37.3%. At November 9, 1994, the
Company's holdings aggregated 2,175,100 shares of CTS common stock,
or 42.0%. Included in Accounts Payable at September 30, 1994 was
$1,380,000 for purchases of CTS common stock.
The market value of the Company's investment in CTS amounted to
$61,787,000 at September 30, 1994 and $37,938,000 at December 31,
1993. The market value at November 9, 1994 was $64,709,000. Under
the Control Share Acquisitions Chapter of the Indiana Business
Corporation Law, 1,020,000 of the Company's shares of CTS stock
presently have no voting rights.
Summarized unaudited financial information derived from CTS'
Quarterly Report on Form 10-Q for the quarter ended October 2, 1994
follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
October 2, October 3, October 2, October 3,
1994 1993 1994 1993
(in thousands)
<S> <C> <C> <C> <C>
Net sales $65,950 $58,107 $200,925 $181,159
Gross earnings $13,667 $10,285 $ 43,427 $35,616
Earnings before cumulative effect of
changes in accounting principles $3,031 $1,063 $9,410 $4,640
Cumulative effect of accounting change -
postretirement benefits (5,096)
Cumulative effect of accounting change -
income taxes 482
Net earnings $ 3,031 $ 1,063 $ 9,410 $ 26
</TABLE>
The Company recognized its proportionate share under equity accounting
of CTS' adoption of Financial Accounting Standards Board ("FASB")
Statement No. 106, "Employers' Accounting for Post-Retirement Benefits
Other Than Pensions," a charge of $1,896,000, or $.49 per share, and
FASB Statement No. 109, "Accounting for Income Taxes," a credit of
$180,000, or $.05 per share. These onetime, non-cash accounting
changes were adopted by CTS as cumulative effects to January 1, 1993.
Note 4 - Credit Facilities:
The Company's Revolving Credit Agreement with banks has been
extended from its September 30, 1994 expiration date to November
30, 1994, and negotiations are under way to amend and restate the
Agreement.
Note 5 - Other Income, Net:
Three Months Ended Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
(in thousands)
Interest:
Income $74 $63 $172 $127
Expense (14) (28) (59) (92)
60 35 113 35
Other, net 67 93 265 275
$127 $128 $378 $310
-7-
<PAGE>
Note 6 - Provision for Income Taxes:
The effective tax rate for the three and nine months ended September 30,
1994 exceeds the Federal statutory rate primarily due to the effect of
state income and franchise taxes. The effective tax rate for the three
and nine months ended September 30, 1993 exceeds the Federal statutory
rate primarily due to minimum state income, franchise and capital taxes.
Note 7 - Contingencies:
The Company is a supplier to the United States Government under contracts
and subcontracts on which there are cost allocation, cost allowability and
compliance issues under examination by various agencies or departments of
the Federal government. In the course of the resolution of these issues,
the Company may be required to adjust certain prices or refund certain
payments on its government contracts and subcontracts. The Company
believes that any such price adjustments or refunds will not have a
material adverse effect on the financial position of the Company.
In May 1994 the Company settled the preproduction portion of its proposed
change order submitted to the Government in April 1992 seeking equitable
compensation for constructive changes and associated delays by the
Government in a contract for the supply of 3KW generator sets to be
manufactured by the Company's Fermont division. (See Note 2 for further
information.) Negotiations to settle the production portion of the
proposed change order have not yet commenced and the Government has
contracted for further testing of prototype units.
In October 1994 the Company, after notifying the Consumer Products Safety
Commission, commenced a recall of approximately 2,700 electronic toasters
manufactured in the United Kingdom by a third party and distributed in the
U.S. by the Company's Waring Products Division, because of a defect in the
electronic timer on the units. The Company has advised the manufacturer
that it will seek full indemnity from the manufacturer, as provided in the
agreement between the parties, for all costs of the recall. The U.K.
manufacturer has not responded to the Company's demand for
indemnification. It is not possible to reasonably estimate the extent of
the Company's liability at this time. However, the costs of the recall
are not expected to materially affect the financial condition of the
Company.
The Company has been notified by the U.S. Environmental Protection Agency
("EPA") that it is a Potentially Responsible Party ("PRP") regarding
hazardous waste cleanup at a non-Company site in Connecticut and at a
Company site in California. Certain of the PRPs at the Connecticut site
have agreed with the EPA to fund a feasibility study at the site and have
sued the Company and other PRPs who have not agreed to share the costs. A
property owner neighboring the Company site in California has sued the
Company and others for allegedly causing contamination at the neighbor's
property. In addition, the Company has received notice from a state
environmental agency that it is a PRP with respect to a non-Company site
in Pennsylvania, and is also a defendant in two lawsuits seeking
contribution towards the Superfund cleanup costs relating to two other
non-Company sites in that state. Based upon its knowledge of the extent
of the Company's exposure and current statutes, rules and regulations,
management believes that the anticipated costs resulting from claims and
proceedings with respect to the above mentioned sites, including
remediation, the extent and cost of which are presently unknown, will not
materially affect the financial position of the Company.
With respect to other claims and actions against the Company, it is the
opinion of Management that they will not have a material effect on the
financial position of the Company.
-8-
<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
Results of Operations - Three Months Ended September 30, 1994 Compared to Three
Months Ended September 30, 1993
Sales increased $491,000, or 2.0%. Sales in the Electrical Appliances and
Electronic Devices segment increased $1,970,000. Sales of heat dissipating
devices, especially those for computer microprocessors, showed gains of
$2,554,000, and sales of frequency control products also improved by $155,000.
Sales of electrical appliances, primarily blenders and specialty products,
declined $739,000. Sales in the Fabricated Metal Products and Equipment
segment increased $630,000 as commercial air, door and systems product sales
improved. Sales in the Power and Controlled Environmental Systems segment
decreased $2,109,000, due primarily to a decline in custom mobile shipments
following completion of a large order from a Government prime contractor in the
prior year.
Gross profit increased $1,039,000 and increased as a percentage of sales to
27.5% from 23.8%. Gross profit in the Electrical Appliances and Electronic
Devices segment improved due to higher sales and favorable sales mix for heat
dissipating devices, which was partially offset by lower sales and unfavorable
sales mix for electrical appliances. Gross profit in the Fabricated Metal
Products and Equipment segment increased due to improved sales volume and
increased margins on systems product business. In the Power and Controlled
Environmental Systems segment gross profit declined due to reduced sales
volume.
Selling, general and administrative expenses increased $331,000 due primarily
to increased worker's compensation insurance expense.
The provision for income taxes increased $237,000 due to greater income from
continuing operations before equity in the income of CTS Corporation. The
income tax rate decreased to 36.5% from 56.9% due to the effect of minimum
state income, franchise and capital taxes in the prior year's quarter.
Income from the Company's equity investment in CTS Corporation increased
$459,000, reflecting CTS' $1,968,000 increase in net earnings and the Company's
increase in percentage of equity ownership to 41.5% from 37.2%.
Results of Operations - Nine Months Ended September 30, 1994 Compared to Nine
Months Ended September 30, 1993
Sales decreased $4,105,000, or 5.4%. Sales in the Electrical Appliances and
Electronic Devices segment increased $2,866,000. Sales of heat dissipating
devices, primarily for computer microprocessors, increased $5,807,000, and
sales of frequency control products improved by $261,000. Sales of electrical
appliances, primarily blenders and specialty products, decreased $3,202,000.
Sales in the Fabricated Metal Products and Equipment segment increased
$1,158,000, as improved sales of commercial air and door products were offset
somewhat by reduced systems product revenues. Sales in the Power and
Controlled Environmental Systems segment declined $8,129,000 due primarily to
the decline in custom mobile shipments.
Gross profit increased $508,000 and increased as a percentage of sales to 27.3%
from 25.2%. Gross profit in the Electrical Appliances and Electronic Devices
segment improved due to higher sales, especially of higher margined heat
dissipating devices, partially offset by lower sales and an unfavorable sales
mix for electrical appliances. Gross profit in the Fabricated Metal Products
and Equipment segment improved due to sales volume increases and improved
margins on systems products. In the Power and Controlled Environmental Systems
segment gross profit decreased due to significantly lower sales volume.
Selling, general and administrative expenses declined $766,000 due primarily to
reduced advertising expenditures for electrical appliances and lower
-9-
<PAGE>
salary-related costs following staff reductions at the end of 1993, offset
partially by increased worker's compensation insurance expense.
The provision for income taxes increased $454,000 due to greater income from
continuing operations before equity in the income of CTS Corporation. The
income tax rate decreased to 36.6% from the 41.1% rate in the prior year which
resulted from minimum state tax obligations and the effect of income
apportionment factors for state income tax purposes. Income taxes as a
percentage of income were higher than the Federal statutory rate of 34% in the
current period primarily because of state income, franchise and capital taxes.
Income from the Company's equity investment in CTS Corporation increased
$1,362,000, reflecting CTS' $4,770,000 increase in earnings, before the prior
year's accounting changes, and the Company's increase in ownership of CTS
stock.
During the quarter ended June 30, 1994, the Company agreed to accept $6,450,000
from the Government in settlement of the preproduction portion of its proposed
change order on a contract for 3KW generator sets to be manufactured by the
Company's Fermont division. The settlement, net of related expenses and income
taxes, amounted to $3,334,000, or $.86 per share, and was reported as income
from discontinued operations. Effective July 1, 1994, Fermont is no longer
classified as a discontinued operation but as a business held for sale, based
upon management's decision to bid on new contracts to enhance the marketability
of Fermont.
During the quarter ended March 31, 1993, the Company recognized its
proportionate share of CTS' adoption of Financial Accounting Standards Board
("FASB") Statement No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions," a charge of $1,896,000, or $.49 per share, and FASB
Statement No. 109, "Accounting for Income Taxes," a credit of $180,000, or $.05
per share. These onetime, non-cash accounting changes were adopted by CTS as
cumulative effects to January 1, 1993.
Financial Condition
Cash and cash equivalents decreased $1,355,000 during the nine months ended
September 30, 1994. Cash of $5,992,000 was provided by operating activities,
including cash received from the Government in settlement of the preproduction
portion of the Company's proposed change order concerning the contract for 3KW
generator sets. Cash of $5,416,000 was used in investing activities, primarily
to purchase CTS common stock. Cash of $1,931,000 was used in financing
activities to purchase treasury stock, fund the Company's dividend payments,
and to make principal payments under mortgage and capital lease obligations.
Cash at September 30, 1994 amounted to $7,614,000. The Company's $27,000,000
Revolving Credit Agreement with banks has been extended from its September 30,
1994 expiration date to November 30, 1994, and negotiations are under way to
amend and restate the Agreement. The Company has not borrowed this year under
the Agreement, nor under its $10,000,000 uncommitted line with a bank. The
entire amount of these credit facilities is available for use by the Company.
Liquidity and financial resources are considered adequate to fund planned
Company operations, including capital expenditures and payment of dividends.
The Company intends to continue its stated policy of reviewing potential
acquisitions of companies and product lines which it believes would enhance its
growth and profitability.
Subsequent to September 30, 1994 and through November 9, 1994, the Company has
purchased an additional 26,000 shares of CTS common stock at a cost of
$769,000, which raises the Company's percentage of equity ownership in CTS to
42.0%. The shares were paid for with available funds.
-10-
<PAGE>
Management anticipates that the Company's deferred tax assets will be realized
based upon its expectation of future taxable income. The Company will require
taxable income of $15,194,000 ($14,540,000 of ordinary income and $654,000 of
capital gain income) to realize its net deferred tax assets of $5,405,000 as of
September 30, 1994.
With respect to environmental matters (see Note 7 - Contingencies in the Notes
to the Condensed Consolidated Financial Statements), the Company has accrued
$75,000 and $236,000 for mandated testing and remediation expenditures at a
Company site in California during the current three and nine month periods,
respectively, compared to $33,000 and $164,000 for the comparable prior year
periods. In complying with federal, state and local environmental protection
statutes and regulations, the Company has altered or modified certain
manufacturing processes and expects to do so in the future. Such modifications
to date have not significantly increased capital expenditures or materially
affected earnings or the competitiveness of the Company. It is possible, but
unanticipated at this time, that future results of operations or cash flows
could be materially affected by an unfavorable resolution of environmental
matters.
With respect to the product recall by the Company's Waring Products Division
(see Note 7 - Contingencies in the Notes to the Condensed Consolidated
Financial Statements), the impact on the Company's results of operations and
cash flows cannot be quantified at this time. The costs of the recall are not
expected to materially affect the financial condition of the Company.
-11-
<PAGE>
Part II - Other Information
Item 6 - Exhibits and Reports on Form 8-K
(b) There were no reports on Form 8-K for the three months ended
September 30, 1994.
-12-
<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.
DYNAMICS CORPORATION OF AMERICA
(Registrant)
/s/ Patrick J. Dorme
(Signature)
Patrick J. Dorme
Vice President - Finance and
Chief Financial Officer
Date: November 10, 1994
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1994 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 7614
<SECURITIES> 0
<RECEIVABLES> 16629
<ALLOWANCES> 657
<INVENTORY> 19535
<CURRENT-ASSETS> 51747
<PP&E> 35537
<DEPRECIATION> 32065
<TOTAL-ASSETS> 123786
<CURRENT-LIABILITIES> 22181
<BONDS> 428
<COMMON> 388
0
0
<OTHER-SE> 98163
<TOTAL-LIABILITY-AND-EQUITY> 123786
<SALES> 71446
<TOTAL-REVENUES> 71446
<CGS> 51927
<TOTAL-COSTS> 51927
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 59
<INCOME-PRETAX> 2142
<INCOME-TAX> 783
<INCOME-CONTINUING> 3828
<DISCONTINUED> 3334
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7162
<EPS-PRIMARY> 1.85
<EPS-DILUTED> 1.85
</TABLE>
