SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20459
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 June 30, 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 No. 0-9919
PSC INC.
(Exact name of registrant as specified in its charter)
New York 16-0969362
(State or other jurisdiction of (I. R. S. Employer ID #)
incorporation or organization)
675 Basket Road, Webster, New York 14580
---------------------------------- ------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (716) 265-1600
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 12 months preceding (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No ___
As of August 4, 1995 there were 9,950,685 shares of common stock outstanding.
<PAGE>
PSC Inc. AND SUBSIDIARIES
INDEX
PAGE NUMBER
PART I FINANCIAL INFORMATION
Item 1 -Financial Statements
Consolidated Balance Sheets as of
June 30, 1995 (Unaudited) and
December 31, 1994......................................................3-4
Consolidated Statements of Operations and
Retained Earnings for the three
and six months ended:
June 30, 1995 (Unaudited) and
June 30, 1994 (Unaudited) .............................................5-6
Consolidated Statements of Cash Flows
for the six months ended:
June 30, 1995 (Unaudited) and
June 30, 1994 (Unaudited) ...............................................7
Notes to Consolidated Financial
Statements (Unaudited) ...............................................8-10
Item 2 -Management's Discussion and Analysis of
Financial Condition and Results of
Operations ..................................................11-13
PART II OTHER INFORMATION
Item 1 -Legal Proceedings ...........................................14
Item 2 -Changes in Securities .......................................14
Item 3 -Defaults upon Senior Securities .............................14
Item 4 -Submission of Matters to a Vote of Security Holders ......14-15
Item 5 -Other Information............................................15
Item 6 -Exhibits and Reports on Form 8-K ............................15
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements
PSC Inc. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(All amounts in thousands)
June 30, Dec. 31,
1995 1994
-------- -------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and short-term investments ................ $10,302 $ 2,720
Accounts receivable, net of allowance
for doubtful accounts of $622
and $576, respectively ...................... 15,272 13,139
Inventories .... ............................... 10,175 6,446
Prepaid expenses and other ..................... 890 1,148
------- -------
TOTAL CURRENT ASSETS ............................ 36,639 23,453
INVESTMENTS ............................................ 4,218 4,234
PROPERTY, PLANT AND EQUIPMENT, net
of accumulated depreciation of $3,246
and $3,327, respectively ....................... 20,153 16,459
DEFERRED TAX ASSETS .................................... 1,806 1,950
INTANGIBLE ASSETS, net of accumulated
amortization of $1,735 and $1,265, respectively ...... 6,705 6,667
------- -------
TOTAL ASSETS ........................................... $69,521 $52,763
======= =======
SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
PSC Inc. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(All amounts in thousands)
(Continued)
June 30, Dec. 31,
1995 1994
------- ---------
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt ......... $ 105 $ 300
Accounts payable .......................... 10,067 7,698
Accrued expenses .......................... 4,834 4,738
Accrued payroll and commissions ........... 1,170 1,570
Accrued acquisition related
restructuring costs .................... 422 1,133
--------- ---------
TOTAL CURRENT LIABILITIES ............... 16,598 15,439
LONG-TERM DEBT, less current maturities .......... 413 13,309
OTHER LONG-TERM LIABILITIES ...................... 1,940 1,782
SHAREHOLDERS' EQUITY
Common stock, par value $.01;
25,000 authorized, 9,933 and
7,472 shares issued and outstanding .... 99 75
Additional paid-in capital ................ 44,994 20,288
Retained earnings ......................... 5,714 2,099
Cumulative translation adjustment ......... -- 8
Less treasury stock, 39 shares
repurchased, at cost ..................... (237) (237)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY .............. 50,570 22,233
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY ...................................... $ 69,521 $ 52,763
========= =========
SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
PSC Inc. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(All amounts in thousands, except per share data)
(Unaudited)
Three Months
Ended June 30
1995 1994
-------- --------
NET SALES ............................................... $ 21,315 $ 13,119
COST OF SALES ........................................... 12,007 6,997
-------- --------
Gross profit ................................... 9,308 6,122
OPERATING EXPENSES
Engineering, research and development .......... 1,131 942
Selling, general and administrative ............ 5,689 3,656
-------- --------
Income from operations .................... 2,488 1,524
INTEREST AND OTHER (EXPENSE) INCOME ..................... 286 (18)
-------- --------
Income before provision for income taxes .. 2,774 1,506
INCOME TAX PROVISION .................................... 1,040 565
-------- --------
NET INCOME .............................................. $ 1,734 $ 941
======== ========
NET INCOME PER COMMON AND COMMON
EQUIVALENT SHARE ........................... $ .16 $ .12
==== ====
WEIGHTED AVERAGE NUMBER OF
COMMON AND COMMON EQUIVALENT
SHARES OUTSTANDING:
Common shares ................................. 9,786 7,272
Common equivalent shares ...................... 895 439
------- -------
10,681 7,711
======= =======
RETAINED EARNINGS:
Retained earnings, beginning of period ........ $ 3,980 $ 3,503
Net income .................................... 1,734 941
------- -------
Retained earnings, end of period .............. $ 5,714 $ 4,444
======= =======
SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
PSC Inc. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(All amounts in thousands, except per share data)
(Unaudited)
Six Months Ended
June 30
1995 1994
NET SALES ................................................ $43,577 $29,858
COST OF SALES ............................................ 23,767 15,535
------- -------
Gross profit .................................... 19,810 14,323
OPERATING EXPENSES
Engineering, research and development ........... 2,217 1,807
Selling, general and administrative ............. 11,912 7,855
------- -------
Income from operations ..................... 5,681 4,661
INTEREST AND OTHER (EXPENSE) INCOME ...................... 127 11
------- -------
Income before provision for income taxes ... 5,808 4,672
INCOME TAX PROVISION ..................................... 2,193 1,715
------- -------
NET INCOME ............................................... $ 3,615 $ 2,957
======= =======
NET INCOME PER COMMON AND COMMON
EQUIVALENT SHARE
Primary ................................... $ .38 $ .39
==== ====
Fully diluted ............................. $ .38 $ .38
==== ====
WEIGHTED AVERAGE NUMBER OF
COMMON AND COMMON EQUIVALENT
SHARES OUTSTANDING:
Primary:
Common Shares................................. 8,720 7,264
Common equivalent shares..................... 743 346
----- -----
9,463 7,610
===== =====
Fully Diluted:
Common shares ................................. 8,720 7,264
Common equivalent shares ...................... 895 439
------ ------
9,615 7,703
====== ======
RETAINED EARNINGS:
Retained earnings, beginning of period ........ $2,099 $1,487
Net income .................................... 3,615 2,957
------ ------
Retained earnings, end of period .............. $5,714 $4,444
====== ======
SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
PSC INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(All amounts in thousands)
(Unaudited)
Six Months Ended
June 30
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income ..................................... $ 3,615 $ 2,957
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization ............. 1,261 980
Gain on disposition of assets...... ....... (161) --
Decrease (increase) in assets:
Accounts receivable ................... (1,764) (868)
Inventories ........................... (3,766) 676
Prepaid expenses and other ............ 258 (109)
Deferred tax assets ................... 144 --
Increase (decrease) in liabilities:
Accounts payable ...................... 2,369 (1,818)
Accrued expenses ...................... 96 863
Accrued payroll and commissions ....... (400) 183
Accrued acquisition related
restructuring costs ................... (536) --
-------- --------
Net cash provided by
operating activities ............ 1,116 2,869
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................... (4,641) (5,037)
Additions to intangible assets ................ (507) (14)
Purchase of investments, net .................. -- (3,464)
------ ------
Net cash (used in) investing activities.. (5,148) (8,515)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Additions to long-term debt ...................... 1,199 3,205
Principal repayments of long-term debt ........... (14,307) (71)
Purchase of treasury shares ...................... -- (46)
Exercise of stock options and
sale of stock .................................... 24,534 125
Tax benefit from exercise or
early disposition
of certain stock options ......................... 196 --
------- -------
Net cash provided by financing activities ....... 11,622 3,213
------- -------
FOREIGN CURRENCY TRANSLATION ..................... (8) --
NET INCREASE/(DECREASE) IN CASH
AND SHORT-TERM INVESTMENTS .............. 7,582 (2,433)
CASH AND SHORT-TERM INVESTMENTS:
Beginning of period ..................... 2,720 6,221
-------- --------
End of period ........................... $ 10,302 $ 3,788
======== ========
SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
PSC Inc. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED June 30, 1995 and 1994
(All amounts in thousands, except per share data)
(Unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements have been prepared by
the Company without audit. In the opinion of management, these financial
statements include all adjustments necessary to present fairly the
Company's financial position as of June 30, 1995, and the results of
operations and its cash flows for the six months ended June 30, 1995 and
1994. The results of operations for the three months and six months ended
June 30, 1995 are not necessarily indicative of the results to be expected
for the full year.
Certain information and disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. The accompanying financial
statements should be read in conjunction with the financial statements and
notes thereto included in the Company's December 31, 1994 annual report on
Form 10-K.
NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE
Net income per common and common equivalent share is based on the weighted
average number of common and common equivalent shares (stock options
determined under the treasury stock method) outstanding during the period.
(2) INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out method)
or market. Elements of cost include materials, labor, and overhead and
consist of the following:
June 30, Dec. 31,
1995 1994
------- -------
Raw materials .......................................... $ 7,413 $ 4,337
Work-in-process ........................................ 1,717 1,605
Finished goods ......................................... 1,045 504
------- -------
$10,175 $ 6,446
<PAGE>
PSC Inc. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED June 30, 1995 and 1994
(All amounts in thousands, except per share data)
(Unaudited)
(3) INVESTMENTS
The Company has classified its investment securities as held to maturity
in accordance with Statement of Financial Accounting Standards No. 115
(SFAS 115) "Accounting for Certain Investments in Debt and Equity
Securities." SFAS 115 requires debt and equity securities to be classified
into one of three categories: held to maturity, available for sale or
available for trading. Securities held to maturity are limited to debt
securities that the holder has the positive intent and the ability to hold
to maturity; these securities are reported at amortized cost.
At June 30, 1995, the investment portfolio was classified as follows:
Unrealized
Fair Holding Amortized
Value Losses Cost
Municipal Obligations:
After 1 year through 5 years ......... $ 2,025 ($ 35) $ 2,060
After 5 years through 10 years ....... 2,100 ( 58) 2,158
------- ------- ------
$ 4,125 ($ 93) $ 4,218
======= ======= =======
(4) ACCRUED EXPENSES
Accrued expenses consist of the following:
June 30, Dec.31,
1995 1994
------ ------
Accrued warranty cost ........................................ $1,250 $1,250
Accrued royalty .............................................. 1,493 1,332
Accrued income taxes ......................................... 713 765
Other miscellaneous accrued expenses ......................... 1,378 1,391
------ ------
Total accrued expenses ....................................... $4,834 $4,738
====== ======
<PAGE>
PSC Inc. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED June 30, 1995 and 1994
(All amounts in thousands, except per share data)
(Unaudited)
(5) LONG-TERM DEBT
Long-term debt consists of the following:
June 30, Dec. 31,
1995 1994
--------- ---------
Term loan .......................................... -- $ 6,800
Construction loan .................................. -- 6,219
Capital lease obligations .......................... 518 590
--------- ---------
518 13,609
Less: current maturities .......................... 105 300
--------- ---------
$ 413 $ 13,309
========= =========
(6) SHAREHOLDERS' EQUITY
Changes in the status of options under the Company's stock option plans are
summarized as follows:
Jan. 1, 1995 Jan. 1, 1994
to to
June 30, 1995 Dec. 31, 1994
------------- -------------
Options outstanding at
beginning of period ............................ 2,299 1,320
Options granted .................................. 86 1,354
Options exercised ................................ (151) (226)
Options forfeited/canceled ....................... (24) (149)
------- -------
Options outstanding at
end of period .................................. 2,210 2,299
======= =======
Number of options at end of period:
Exercisable ................................... 1,319 1,133
Available for grant ........................... 1,614 1,676
Average price of options
outstanding at end of period ................... $ 8.23 $ 8.02
During the six month period ended June 30, 1995, employees purchased
approximately 5 shares at $7.23 per share under the provisions of the Company's
1990 Employee Stock Purchase Plan.
<PAGE>
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
Consolidated Financial Statements and Notes to Consolidated Financial Statements
of the Company's December 31, 1994 annual report on Form 10-K.
Results of Operation: Three Months Ended June 30, 1995 and 1994
Net Sales. Net sales during the three months ended June 30, 1995 increased
$8.2 million or 63% compared with the same period in 1994. The increase is
primarily due to increased sales volume of the Company's handheld products and
the inclusion of the recently acquired LazerData product group's line of fixed
position scanners. Geographically, domestic net sales increased by 60% and
international net sales increased by 73%. International net sales represented
approximately 22% of net sales in the second quarter of 1995 versus 21% of net
sales in the second quarter of 1994.
Gross Profit. Gross profit during the three months ended June 30, 1995
increased $3.2 million or 52% compared with the same period in 1994. As a
percentage of sales, gross profit decreased from 46.7% to 43.7%. The decrease in
gross profit percentage is due to a change in the sales mix of the Company's
handheld products and the inclusion of the recently acquired LazerData product
group. LazerData's operating results reflect lower gross profit margins than
historical gross profit margins of the Company. The Company expects to achieve
future operating synergies, particularly in the areas of purchasing and
manufacturing automation of components, to lower LazerData's manufacturing
costs. However, there can be no assurance that the Company will be able to
achieve future operating synergies at LazerData.
Engineering, Research and Development. Engineering, Research and Development
(ER&D) expenses increased $189 or 20%, as compared to the same period in 1994.
As a percentage of sales, ER&D was 5.3% in the second quarter of 1995 versus
7.2% in the second quarter of 1994. The dollar increases were primarily related
to the Company's new product development for its handheld laser scanner products
and its newly acquired LazerData product group's fixed position scanners.
Selling, General and Administrative. Selling, General and Administrative
(SG&A) expenses increased $2.0 million or 56%, as compared to the same period in
1994. However, as a percentage of sales, SG&A was 26.7% in 1995 and 27.9% in
1994. The increased dollar amount is primarily due to higher patent related
expenses, higher royalty expenses related to sales volume, and increased
promotion and advertising expenses to support a higher revenue base. The
increase in patent related expenses was due to the increased number of patent
applications being filed and an increase in litigation expenses related to
patent infringement lawsuits.
<PAGE>
Acquisition Related Restructuring and Other Costs. During the 1994 fourth
quarter, the Company recognized a pre-tax restructuring charge of $3.0 million.
The charge related to the integration of the Company's existing fixed
position scanner product lines with those of LazerData, which was acquired in
December 1994. The restructuring program in part, provided for employee
severance and benefit costs for the elimination of approximately 12
manufacturing and engineering support positions. As of June 30, 1995, all
positions targeted in the restructuring program have been eliminated. The amount
of the restructuring accrual at June 30, 1995 was approximately $1.4 million.
Restructuring actions are expected to be substantially completed by the end of
1995. There have been no re-allocations and/or re-estimates to date.
Provision for Income Taxes. Provision for income taxes increased substantially
due to the increase in pre-tax net income. The Company's effective tax rate was
37.5% in 1995 and 1994. The Company expects to record income tax expense at or
about the combined federal and state statutory tax rate in 1995.
Results of Operation: Six Months Ended June 30, 1995 and 1994
Net Sales. Net sales during the six months ended June 30, 1995 increased
$13.7 million or 46% compared with the same period in 1994. The increase is
primarily due to increased sales volume of the Company's handheld products and
the inclusion of the recently acquired LazerData product group. Geographically,
domestic net sales increased by 39% and international net sales increased by
79%. International net sales represented approximately 21% of net sales in the
first six months of 1995 versus 17% of net sales in the first six months of
1994.
Gross Profit. Gross profit during the six months ended June 30, 1995
increased $5.5 million or 38% compared with the same period in 1994. As a
percentage of sales, gross profit decreased from 48.0% to 45.5%. The decrease in
gross profit percentage is due to a change in the sales mix of the Company's
handheld products and the inclusion of the recently acquired LazerData product
group. LazerData's operating results reflect lower gross profit margins than
historical gross profit margins of the Company. The Company expects to achieve
future operating synergies, particularly in the areas of purchasing and
manufacturing automation of components, to lower LazerData's manufacturing
costs. However, there can be no assurance that the Company will be able to
achieve future operating synergies at LazerData.
Engineering, Research and Development. Engineering, Research and Development
(ER&D) expenses increased $409 or 23%, as compared to the same period in 1994.
As a percentage of sales, ER&D was 5.1% in the first six months of 1995 versus
6.1% in the first six months of 1994.The dollar increases were primarily related
to the Company's new product development for its handheld laser scanner products
and its newly acquired LazerData product group's fixed position scanners.
Selling, General and Administrative. Selling, General and Administrative
(SG&A) expenses increased $4.1 million or 52%, as compared to the same period in
1994. As a percentage of sales, SG&A was 27.3% in 1995 and 26.3% in
1994. The increased dollar amount is primarily due to higher patent related
expenses, higher royalty expenses related to sales volume, and increased
promotion and advertising expenses to support a higher revenue base. The
increase in patent related expenses was due to the increased number of patent
applications being filed and an increase in litigation expenses related to
patent infringement lawsuits.
Provision for Income Taxes. Provision for income taxes increased substantially
due to the increase in pre-tax net income. The Company's effective tax rate was
37.8% in 1995 and 36.7 in 1994. The Company expects to record income tax
expense at or about the combined federal and state statutory tax rate in 1995.
<PAGE>
Liquidity and Capital Resources
The Company utilizes a number of measures of liquidity, including the following:
June 30, 1995 June 30, 1994
Cash provided by operations $1,116 $2,869
Working capital $20,041 $7,571
Long-term debt to capital
(Long-term debt to long-term
debt plus equity) 0.8% 6.6%
Cash provided by operations decreased $1.7 million versus the first six months
of 1994 primarily due to increased accounts receivables and inventories.
Working capital increased $12.0 million from December 31, 1994 primarily due to
an increase of cash and short-term investments ($7.6 million), accounts
receivable ($1.8 million), and inventories ($3.8 million), offset, in part, by
increases to accounts payable ($2.4 million). The increase in cash and
short-term investments is principally the result of the Company's secondary
stock offering completed during the period. The increases in accounts
receivable, inventories, and accounts payable are due to the higher sales and
operating levels.
Property, plant and equipment expenditures totaled $4.6 million for the six
months ended June 30, 1995 compared with $5.0 million for the six months ended
June 30, 1994. The 1995 and 1994 expenditures primarily related to the
construction costs of the recently completed headquarters, manufacturing and
engineering facility.The 1995 expenditures also include additional manufacturing
equipment to increase capacity and automation.
<PAGE>
During the six months ended June 30, 1995, the Company completed its secondary
stock offering. In March, the Company sold 2.0 million common shares at a
price of $11.00 per share. The net proceeds to the Company from the offering
were approximately $20.4 million. The Company used approximately $7.1 million of
the net proceeds from the offering to repay in full the outstanding indebtedness
under the Company's construction loan used to finance its new headquarters,
manufacturing and engineering facility. The Company also used approximately $6.8
million of the net proceeds from the offering to repay in full the outstanding
indebtedness under the Company's term loan that was used to finance the
acquisition of LazerData in December 1994. In April, the Underwriters exercised
their option to sell another 0.3 million shares to cover over-allotments. The
net proceeds from the exercise of the over-allotment were approximately $3.2
million.
The long-term debt to capital percentage decreased from 37.4% at December 31,
1994 to 0.8% at June 30, 1995. The decrease is due to the repayment in full of
the Company's construction loan and term loan, as discussed above.
At June 30, 1995, liquidity immediately available to the Company consisted of
cash and short-term investments of approximately $10.3 million. In addition, the
Company has a revolving loan agreement with Manufacturers and Traders Trust
Company pursuant to which the bank has agreed to provide a line of credit
totaling $5.0 million. The agreement expires January 1, 1998. As of June 30,
1995, the Company had no outstanding borrowings under this agreement. The
Company believes that it has adequate liquidity for the next twelve months to
meet its current and anticipated operating needs from the results of its
operations, existing credit facilities and working capital. As part of its
overall business strategy, the Company may from time to time evaluate other
acquisition opportunities. The funding for these future transactions, if any,
may require the Company to obtain additional sources of financing.
<PAGE>
Part II: OTHER INFORMATION
Item 1: Legal Proceedings: Incorporated by reference to Item 2 of the Annual
Report on Form 10K for the fiscal period ended December 31, 1994.
Item 2: Changes in Securities: None
Item 3: Defaults upon Senior Securities: None
Item 4: Submission of Matters to a Vote of Security Holders:
(a) The Annual Meeting of Shareholders was held on May 3, 1995.
(b) The names of the directors elected at the Annual Meeting for a
three-year term are as follows:
Robert S. Ehrlich
L. Michael Hone
Jack Rosenfeld
The name of each other director whose term of office as a director
continued after the meeting is as follows:
Milton P. Axelrod
James W. Henry
Donald K. Hess
James O'Shea
Abby R. Solomon
Justin L. Vigdor
(c) (i) At the Annual Meeting, the tabulation of votes with respect to
each nominee for director was as follows:
Nominee Votes FOR Authority Withheld
Robert S. Ehrlich 6,717,110 226,663
L. Michael Hone 6,748,310 195,463
Jack Rosenfeld 6,748,310 195,463
<PAGE>
(ii) At the Annual Meeting, the shareholders voted upon three other
matters. The description of each other matter voted upon and the
tabulation of votes with respect to each such matter are as follows:
Votes Votes Votes Broker
FOR AGAINST ABSTAINING NON-VOTES
(a) Proposal to amend the
Certificate of
Incorporation to increase
the number of authorized
Common Shares .................... 6,591,299 313,752 38,722 -0-
(b) Proposal to approve
the 1994 Stock Option Plan....... 3,899,105 1,348,606 49,900 1,646,162
(c) Proposal to approve
the 1995 Employee Stock
Purchase Plan .................. 5,127,944 367,375 35,117 1,413,337
Item 5: Other Information: None
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits:
3.1 Restated Certificate of Incorporation of the Company and amendments
thereto.
10.1 Consulting Agreement between the Company and Robert S. Ehrlich as of
January 2, 1995.
(b) Reports on Form 8-K: None
<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.
PSC Inc.
DATE: August 9, 1995 By: /s/ L. Michael Hone
L. Michael Hone, Chairman,
Chief Executive Officer, and President
DATE: August 9, 1995 By: /s/ William J. Woodard
William J. Woodard
Vice President, Finance and Treasurer
(Principal Financial Officer)
DATE: August 9, 1995 By: /s/ Scott D. Deverell
Scott D. Deverell
(Principal Accounting Officer)
<PAGE>
Exhibit Index
-------------
3.1 Restated Certificate of Incorporation of the Company and amendments
thereto.
10.1 Consulting Agreement between the Company and Robert S. Ehrlich as
of January 2, 1995.
Exhibit 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
PHOTOGRAPHIC SCIENCES CORPORATION
Under Section 807 of the
Business Corporation Law
The undersigned, being the President and Secretary, respectively, of
Photographic Sciences Corporation, pursuant to Section 807 of the Business
Corporation Law of the State of New York, do hereby certify and set forth:
1. The name of the Corporation is Photographic Sciences Corporation.
2. The Certificate of Incorporation of the Corporation was filed by the
Department of State on December 8, 1969. Amendments to the Certificate of
Incorporation were filed with the Department of State on December 2, 1970,
September 19, 1972, September 7, 1977, October 29, 1980, March 12, 1985, and
August 3, 1988, respectively.
3. The Certificate of Incorporation of the Corporation, as amended
heretofore, is hereby further amended to effect the following amendments
authorized by the Business Corporation Law: (a) to provide that the size of the
Board of Directors (the "Board") shall not be less than nine nor more than
twenty directors, with the exact number of directors to be determined from time
to time by the By-laws and to classify the Board into three classes, as nearly
equal in number as possible, each of which after an interim period, will serve
for three years, with one class being elected each year, (b) to provide that
directors may be removed only for cause and only with the approval of 66-2/3% of
the voting power of the Company entitled to vote generally in the election of
directors, (c) to provide that any vacancy on the Board shall be filled by the
remaining directors then in office, (d) to provide that special meetings of
shareholders may be called only by the Board, and (e) to provide that the
shareholder vote required to amend or repeal the foregoing amendments and
related amendments to the Company's By-laws, or to adopt any provision
inconsistent herewith, shall be 66-2/3% of the voting power of the Company. The
Certificate of Incorporation is hereby further changed to effect a change in the
post office address to which the Secretary of State shall mail a copy of any
process against the Corporation served upon him.
4. The text of the Restated Certificate of Incorporation of the Corporation
is hereby restated as amended to read as herein set forth in full:
"1.The name of the Corporation is Photographic Sciences Corporation.
2. The purposes for which it is to be formed are as follows:
<PAGE>
To engage in the business of manufacturing, designing, creating,
developing, formulating, inventing, patenting, owning, acquiring, producing,
processing, constructing, storing, applying, assembling, adapting, conducting,
operating, using, preparing for market, exhibiting, distributing, installing,
disposing, leasing, exploiting, licensing, exchanging, repairing, importing,
exporting, and generally dealing in and with photographic films and plates, of
every type and description including, without limitation, those involving the
production of microimages with the use of precision cameras, and related
equipment, devices, appliances and chemicals and all other accessories and
supplies necessary for the production of photographic film and plates by means
of cameras and related equipment and dealing in and with audio-visual equipment
and apparatus of every kind and description;
To engage in applied photographic research and development; and
To manufacture, purchase or otherwise acquire, invest in, own, mortgage,
pledge, sell, assign and transfer or otherwise dispose of, trade, deal in and
deal with goods, wares, and merchandise and personal property of every class and
description; and
To purchase, receive, take by grant, gift, devise, bequest or otherwise,
lease, or otherwise acquire, own, hold, improve, maintain, develop, employ, use
and otherwise deal in and with real property, or any interest therein, or any
right, license or privilege appurtenant thereto, wherever situated and to sell,
convey, lease, exchange, transfer or otherwise dispose of, or mortgage or
pledge, all or any of the Corporation's property and assets, or any interest
therein, or any right, license or privilege appurtenant thereto, wherever
situated.
The foregoing clauses shall be construed both as objects and powers, in
furtherance, and not in limitation, of the general powers conferred by the laws
of the State of New York, and it is hereby expressly provided that the
enumeration herein of specific objects and powers shall not be held to limit
or restrict in any way the general powers of the Corporation.
3. The office of the corporation shall be located in the Town of Webster,
County of Monroe, State of New York.
4. The aggregate number of shares which the corporation shall have the
authority to issue is Fifteen Million (15,000,000) shares of common stock with a
par value of $.01 per share, all of which are to be of one class.
5. The Secretary of State of the State of New York is hereby designated as
the agent of the corporation upon whom process of any action or proceeding
against it may be served. The address to which the Secretary of State shall mail
copy of process in any action or proceeding against the corporation which may be
served upon him is:
770 Basket Road, Webster, New York 14580.
<PAGE>
6. No holder of any shares of any class of stock of this Corporation shall,
by reason of holding such shares, have preemptive or preferential right to
purchase, receive or subscribe to any shares of any class of this Corporation,
now or hereafter to be authorized, or any notes, debentures, bonds or other
securities convertible into or carry options or warrants to purchase shares of
any class now or hereafter to be authorized (whether or not the issuance of any
such shares, or of such notes, debentures, bonds or other securities would
adversely affect the dividends or voting rights of such a shareholder) other
than such rights, if any, as the Board of Directors, in its discretion, from
time to time may grant, and on such terms as the Board of Directors may fix.
7. No director of this Corporation shall be personally liable to this
Corporation or its shareholders for monetary damages for any breach of duty in
such capacity, provided that this provision shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty to this
Corporation if a judgment or other final adjudication adverse to such director
establishes that such director's acts or omissions were in bad faith or involved
intentional misconduct or a knowing violation of law or that such director
personally gained in fact a financial profit or other advantage to which such
director was not legally entitled or that such director's acts violated Section
719 of the New York Business Corporation Law or (ii) for any breach of the
director's duty under circumstances where the liability of such director for any
act or omission which occurred prior to the adoption of this Article.
8. Board of Directors.
(a) Number, Election and Terms. The business and affairs of the Corporation
shall be managed and controlled by a Board of Directors consisting of not less
than nine (9) nor more than twenty (20) persons. The exact number of directors
within the minimum limitations specified in the preceding sentence shall be
fixed from time to time by the by-laws pursuant to a resolution adopted by a
majority of the entire Board of Directors. At the 1989 Annual Meeting of
Shareholders, the directors shall be divided into three classes, as nearly equal
in number as possible, with the term of office of the first class to expire at
the 1990 Annual Meeting of Shareholders, the term of office of the second class
to expire at the 1991 Annual Meeting of Shareholders, and the term of office of
the third class to expire at the 1992 Annual Meeting of Shareholders. At each
Annual Meeting of Shareholders following such initial classification and
election, directors elected to succeed those directors whose terms expire shall
be elected for a term of office to expire at the third succeeding Annual Meeting
of Shareholders after their election.
<PAGE>
(b) Newly Created Directorships and Vacancies. Subject to the rights of the
holders of any series of Preferred Stock the outstanding , newly created
directorships resulting from any increase in the authorized number of directors
or any vacancies in the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office or other cause shall be filled
by a majority vote of the directors then in office, and directors so chosen
shall hold office for a term expiring at the next Annual Meeting of Shareholders
and until his successor is elected and qualified. No decrease in the number of
directors constituting the Board of Directors shall shorten the term of any
incumbent director.
(c) Removal. Subject to the rights of the holders of any series of
Preferred Stock then outstanding, any director, or the entire Board of
Directors, may be removed from office at any time, but only for cause and only
by the affirmative vote of the holders of at least 66-2/3% of the voting power
of all of the shares of the Corporation entitled to vote for the election of
directors.
(d) Special Meetings of Shareholders. Special meetings of shareholders of
the Corporation may be called only by the Board of Directors pursuant to a
resolution approved by a majority of the entire Board of Directors.
(e) Amendment, Repeal, Etc. Notwithstanding anything contained in this
Certificate of Incorporation to the contrary, the affirmative vote of the
holders of at least 66-2/3% of the voting power of all of the shares of the
Corporation entitled to vote for the election of directors shall be required to
amend or repeal, or to adopt any provision inconsistent with, this Article 8."
5. This restatement of the Certificate of Incorporation of Photographic
Sciences Corporation was authorized by a vote of the Board of Directors of the
Corporation followed by a vote of the holders of two-thirds of all outstanding
shares entitled to vote thereon.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury this 23rd day of
June, 1989.
L. Michael Hone, President
David A. Kostizak, Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PHOTOGRAPHIC SCIENCES CORPORATION
Under Section 805 of the
Business Corporation Law
The undersigned, being the President and Secretary, respectively, of
Photographic Sciences Corporation, do hereby certify and set forth:
1. The name of the Corporation is Photographic Sciences Corporation.
2. The Certificate of Incorporation was filed by the Department of State on
December 8, 1969.
3. The Certificate of Incorporation is hereby amended to change the name of
the Corporation.
4. Paragraph 2 of the Certificate of Incorporation is hereby amended to
read as follows:
"1. The name of the corporation is PSC Inc."
5. The above amendment to the Certificate of Incorporation was authorized
by vote of the Board of Directors followed by vote of the holders of a majority
of all outstanding shares entitled to vote thereon at a meeting of shareholders.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury this 27th day of
May, 1992.
L. Michael Hone, President
David A. Kostizak, Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PSC INC.
Under Section 805 of the
Business Corporation Law
The undersigned, being the President and Secretary, respectively, of PSC
Inc., do hereby certify and set forth:
1. The name of the Corporation is PSC Inc.
2. The Certificate of Incorporation was originally filed with the
Department of State on the 8th day of December, 1969, under the original name of
Photographic Sciences Corporation. It was amended on the 28th day of May, 1992.
3. The Certificate of Incorporation is hereby amended to effect a change in
the aggregate number of shares which the Corporation shall have authority to
issue from Fifteen Million (15,000,000) shares of common stock having a par
value of $.01 per share to Twenty-Five Million (25,000,000) shares of common
stock having a par value of $.01 per share.
4. Paragraph 4 of the Certificate of Incorporation is hereby amended to
read as follows:
"4. The aggregate number of shares of which the Corporation shall have
authority to issue is Twenty Five Million (25,000,000) shares of common stock
with a par value of $.01 per share, all of which are to be of one class."
5. The stated capital of the Corporation shall not be changed as a result
of the foregoing change of issued shares.
6. The above amendment to the Certificate of Incorporation was authorized
by vote of the Board of Directors followed by vote of the holders of a majority
of all outstanding shares entitled to vote thereon at a meeting of shareholders.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury this 3rd day of May,
1995.
L. Michael Hone, President
Martin S. Weingarten, Secretary
Exhibit 10.1
AGREEMENT
THIS AGREEMENT dated as of January 2, 1995 by and between PSC INC., a New
York corporation ("PSC" or the "Company") and ROBERT S. EHRLICH ("Ehrlich").
WHEREAS, PSC and Ehrlich entered into a certain Employment Agreement as of
August 1, 1991 which Agreement was thereafter amended on June 12, 1992; and
WHEREAS, the parties have mutually terminated Ehrlich's status as an
employee and have changed the nature of the relationship between them as
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the parties as follows:
1. Definitions.
Business of the Company. The Business of the Company is the development,
manufacturing and marketing of technologies products and services for the
automatic identification and keyless data entry industry, and includes, but is
not limited to, products, services, applications, systems and technologies
relating to bar coded data, magnetic stripe encoded data, radio frequency
communications of bar coded or related data, optical character recognition,
machine vision as applied to the recognition of bar coded data, and electronic
interchange of bar coded or related data. The Business of the Company shall also
include any business in which the Company is actually engaged or as to which it
is doing research and development during the Term of this Agreement. Cause.
Conduct described in Section 10b.
Company. PSC, its subsidiaries and divisions and all entities controlled
by, under common control with or controlling PSC .
Confidential Information. The information described in Section 7.
Term. That period described in Section 3.
2. Services. Ehrlich shall render to the Company such consulting services
as may be, from time to time, reasonably requested by PSC's President and Chief
Executive Officer in such areas as strategic planning, corporate development,
mergers and acquisitions and development of overseas markets. During the Term,
in good faith, Ehrlich shall exert all reasonable efforts to promote the
interests of the Company and shall devote such time, attention and energies to
the performance of his responsibilities and duties hereunder and at such
locations as may reasonably be deemed necessary or appropriate by the parties.
During the Term, Ehrlich may have other business investments and participate in
other unrelated and non competitive business ventures, but these shall not
interfere or be inconsistent with his duties hereunder. Ehrlich may perform his
consulting services at such times, at such locations and by such means (i.e. in
person, by phone, by fax or other electronic devices) as shall be reasonably
appropriate and mutually agreeable.
<PAGE>
3. Term. Ehrlich's engagement to provide consulting services to the Company
under this Agreement shall commence as of the date of this Agreement and shall
terminate on December 31, l996 (the "Term"), unless extended by the mutual
agreement of Ehrlich and PSC.
4. Compensation. For all consulting services to be rendered to the Company
by Ehrlich, PSC shall pay to Ehrlich an annual consulting fee of $54,000 The fee
shall be payable biweekly. As an independent contractor Ehrlich shall be
responsible for such taxes as may be due thereon.
5. Options. Notwithstanding the termination of Ehrlich's employment as an
employee, the parties agree that the Non-Qualified Stock Option held by Ehrlich
dated February 14, 1992 for 83,000 shares which is fully vested and the
Non-Qualified Stock Option held by Ehrlich dated May 27, 1992 for 10,000 shares
which is fully vested, will be exercisable in accordance with their respective
terms throughout the Term and for three months thereafter or until the
expiration date set forth in the respective option agreements, whichever is
earlier.
6. Independent Contractor. The Company and Ehrlich shall act solely as
independent contractors, and nothing herein shall at any time be construed to
create the relationship of employer and employee, partnership, principal and
agent, or joint venturers as between the Company and Ehrlich. Neither the
Company nor Ehrlich shall have any right or authority, and shall not attempt to
enter into any contract, commitment or agreement or incur any debt or liability,
of any nature, in the name of or on behalf of the other.
7. Confidential Information. Ehrlich agrees that during the Term and for
five years thereafter, he will not, except as required by the performance of his
duties under this Agreement, disclose or authorize anyone else to disclose or
use or make known for his or another's benefit, any confidential information,
knowledge or data of the Company, whether or not patentable or copyrightable, in
any way acquired by him from the inception of his original relationship with the
Company in any capacity through the expiration of the Term (herein "Confidential
Information"). Confidential Information, for purposes of this Agreement, shall
include, but not be limited to, matters not readily available to the public
which are:
(a) of a technical nature, such as, but not limited to, methods, know-how,
formulae, compositions, drawings, blueprints, compounds, processes, discoveries,
machines, inventions, computer programs, and similar items;
(b) of a business nature, such as, but not limited to, information about
sales or lists of customers, prices, costs, purchasing, profits, markets,
strengths and weaknesses of products, business processes, business and marketing
plans and activities and employee personnel records;
<PAGE>
(c) pertaining to future developments, such as, but not limited to,
research and development, future marketing or merchandising plans or ideas.
Immediately upon termination of Ehrlich's services, Ehrlich shall deliver
to the Company all originals and copies of everything in his possession or under
his control which embodies or contains Confidential Information, including,
without limitation, all documents, correspondence, specifications, blueprints,
notebooks, reports, sketches, formulae, computer programs, computer discs, sales
and other materials, price lists, customer lists or information, samples, and
all other materials.
Confidential Information shall not include information which (i) is
published or otherwise becomes generally available to the public other than by a
breach of confidentiality, or (ii) Ehrlich can show by documentation was
properly in his possession prior to the commencement of his original
relationship with the Company, or (iii) becomes available to Ehrlich from an
independent source without breach of this Agreement or violation of law, or (iv)
is independently developed by Ehrlich without the use of the Company's
Confidential Information.
8. Covenant Not to Compete.
a. In light of the special and unique services that have been and will be
furnished to the Company by Ehrlich and the Confidential Information that has
been and will be disclosed to him during his relationship with the Company,
Ehrlich agrees that during the Term, and for a period of eighteen (18) months
thereafter he will not, without the written consent of the Company, directly or
indirectly, whether as principal, agent, officer, director, consultant,
employee, partner, stockholder or owner of or in any capacity with any
corporation, partnership, business, firm, individual company or any entity
located in the United States, Canada, Europe, the Near East or Asia engage in,
or assist another to engage in, any work or activity in any way competitive with
the Business of the Company. However, nothing herein shall prevent Ehrlich from
owning not more than five percent (5%) of the outstanding publicly traded shares
of common stock of a corporation, as to which corporation Ehrlich has no
relationship other than as a shareholder.
Ehrlich specifically agrees that because of his special expertise and the
special and unique services that he will be furnishing the Company, and because
of the Confidential Information that has been acquired by him or that will be
disclosed to him during the Term, the above stated geographic areas and time
period, in and during which he will not compete with the Company, are reasonable
in scope and duration and are necessary to afford the Company just and adequate
protection against the irreparable damage which would result to the Company from
any activities prohibited by this Section.
b. If Ehrlich in any way breaches the obligations specified in this
Section, the Company shall have the right, in addition to any other remedies
available to it, to terminate the further payment of any amounts due under
Section 4 hereof, if, and only if, Ehrlich is terminated in accordance with the
provisions of Section 10 below.
<PAGE>
c. If any provision hereof is found to be unreasonably broad, it shall
nevertheless be enforceable to the extent reasonably necessary for the
protection of the Company and to carry out to the fullest extent the parties'
mutual intent in entering into this Agreement, which intent is that the
provisions of this Section will be strictly enforced as agreed to.
9. Injunctive Relief. Ehrlich agrees that in the event of a breach or
threatened breach by Ehrlich of any of the provisions of Sections 7 or 8 hereof,
the Company shall be entitled to an injunction restraining Ehrlich from such
breach or threatened breach without posting any bond or other security. Nothing
herein, however, shall be construed as prohibiting the Company from pursuing, in
conjunction with an injunction or otherwise, any other remedies available to the
Company for such breach or threatened breach, including the recovery of damages
from Ehrlich.
10. Termination of Services.
(a) Death or Disability of Ehrlich. The services of Ehrlich under this
Agreement shall terminate if he dies or, at the option of the Company, if he
shall be prevented from performing his duties under this Agreement because of
disability or illness for a continuous period of 180 days.
(b) Termination for Cause. The parties acknowledge that among the several
justifications for payment of the consulting fees set forth in Section 4 hereof
are Ehrlich's continued good faith and reasonable efforts to promote the
interests of the Company. The Company shall have the right to terminate the
services of Ehrlich at any time without further liability or obligations to
Ehrlich upon the happening of any of the following events:
<PAGE>
(i) Ehrlich engages in dishonesty, willful misconduct, any criminal act
(other than minor infractions) or habitual neglect of his duties, which is
inconsistent with the foregoing acknowledged exercise of good faith and
reasonable efforts or with the responsibilities associated with Ehrlich's duties
under this Agreement, or which is seriously detrimental to the Company; or
(ii) Ehrlich violates or breaches in any material respect any material
term, covenant, or condition contained in this Agreement.
Termination of the services of Ehrlich for cause pursuant to the provisions
of Section 10(b)(i) or (ii) above shall not be effective unless and until acted
upon by the Board of Directors and unless and until written notice shall have
been given to Ehrlich which notice shall include (i) identification with
specificity of the provision of this Agreement on which the termination is based
and (ii) identification with specificity of each and every factual basis or
incident upon which the termination is based.
(a) Termination Without Cause. Any termination of services of Ehrlich for
reasons other than those specified in Sections 10(a) or (b) above shall be
deemed to be "without cause", and the Company shall be obligated to continue to
pay to Ehrlich the consulting fees provided for by Section 4 of this Agreement.
Said consulting fees shall be paid in the same manner, at the same times, and
for the same term as specified in Sections 3 and 4.
11. Notices. All notice given in connection with this Agreement shall be in
writing and shall be delivered either by personal delivery, by telegram, telex,
telecopy or similar facsimile means, by certified or registered mail, return
receipt requested, or by express courier or the parties hereto at the following
addresses:
To Ehrlich: To PSC:
Robert S. Ehrlich PSC Inc.
P.O. Box 1334 675 Basket Road
Efrat 90962 Webster, NY 14580
Israel Attn: President
Fax: 011-972-293-2189 Fax: 716/265-6406
or at such other address and number as either party shall have previously
designated by written notice given to the other party in the manner hereinabove
set forth. Notice shall be deemed given when received, if sent by telegram,
telex, telecopy or similar facsimile means (confirmation of such receipt by
confirmed facsimile transmission being deemed receipt of communications sent by
telex, telecopy or other facsimile means); and when delivered and receipted for
(or upon the date of attempted delivery where delivery is refused), if
hand-delivered, sent by express courier or delivery service, or sent by
certified or registered mail, return receipt requested.
12. Waiver. Any waiver of a breach of any of the terms of this Agreement
shall not operate as a waiver of any other breach of such terms or of any other
terms, nor shall failure to enforce any term hereof operate as a waiver of any
such term or of any other term.
<PAGE>
13. Severability. If any term of this Agreement or the application thereof
is held invalid or unenforceable, the validity or unenforceability shall not
affect any other terms of this Agreement which can be given effect without the
invalid or unenforceable term.
14. Governing Law: Venue. This Agreement shall be construed and enforced in
accordance with and governed by the internal laws of the State of New York,
without reference to conflict of law principles or the domicile or residence of
any individual party if other than New York. The parties hereby submit and
consent to the exclusive personal jurisdiction of the Supreme Court of New York,
Monroe County or of the United States District Court for the Western District of
New York for any legal action instituted by any party against any other with
respect to the subject matter hereof and process in such action shall be
effectively served if served in accordance with Section 11 hereof.
15. Prior Agreements. This Agreement supersedes all previous agreements
related to the subject matter herein.
16. Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof. This Agreement may not be
amended or changed except by a writing signed by both parties.
IN WITNESS WHEREOF, Ehrlich has executed this Agreement and the Company
has caused this Agreement to be executed as of the date set forth above.
PSC INC.
Attest:
By:
L. Michael Hone, President
Robert S. Ehrlich
<TABLE> <S> <C>
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<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> APR-01-1995
<PERIOD-END> JUN-30-1995
<CASH> $10,302
<SECURITIES> 0
<RECEIVABLES> 15,272
<ALLOWANCES> 622
<INVENTORY> 10,175
<CURRENT-ASSETS> 36,639
<PP&E> 20,153
<DEPRECIATION> 3,246
<TOTAL-ASSETS> 69,521
<CURRENT-LIABILITIES> 16,598
<BONDS> 0
<COMMON> 99
0
0
<OTHER-SE> 50,471
<TOTAL-LIABILITY-AND-EQUITY> 69,521
<SALES> 43,577
<TOTAL-REVENUES> 43,577
<CGS> 23,767
<TOTAL-COSTS> 14,129
<OTHER-EXPENSES> 0
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<INCOME-TAX> 2,193
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