UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT Of 1934 (FEE REQUIRED)
For the fiscal year ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT Of 1934 (NO FEE REQUIRED)
For the transition period from.......to.......
Commission file number.......O-6845.......
BOWLINE CORPORATION
(Exact name of registrant as specified in its charter)
New York 13-1576392
State or other jurisdiction of (I.R.S. employer
incorporation or organization identification no.)
11 Bala Avenue
Bala Cynwyd, Pennsylvania 19004
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (610) 667-7310
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of each exchange on which registered
None None
Securities registered pursuant to section 12(g) of the Act:
Common Stock, par value $.02 a share
(Title of Class)
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
At November 30, 1995, the aggregate market value of the voting stock held by
nonaffiliates of the Registrant was $364,406.
At November 30, 1995, there were 1,287,412 shares of the Registrant's common
stock, $.02 par value per share, outstanding.
<PAGE>
PART I
ITEM 1. BUSINESS
(a) General Development of Business:
There were no changes to the Company's business during the fiscal year
ended September 30, 1995.
During the company's fiscal year ended September 30, 1994, its data
processing subsidiary reduced its expenses by reducing employees and
relocating its data processing center. Having lost the business of its
major unaffiliated customer early in 1994, the subsidiary's main
business consists of servicing an affiliated company; therefore, its
monthly revenue has been reduced to $50,000 ($600,000 annually).
(b) Narrative Description of Business:
The Company has one wholly owned subsidiary, Starboard Data Services,
Inc. (the "Subsidiary"), located in Oaks, Pennsylvania. During its
fiscal year ended September 30, 1995, the Subsidiary's main business
was to provide data processing services to an affiliated Company.
No patents, trademarks, franchise or concessions are material to the
business.
No appreciable raw materials are used in the business.
GENERAL
The Company's business is not affected by federal, state or local
environmental regulations; therefore, such regulations have no effect
upon capital expenditures, earnings or competitive position.
The Company and its subsidiary had 9 employees on September 30, 1995.
The business is not subject to seasonal fluctuations.
(c) Financial Information About Industry Segments, Foreign and Domestic
Operations And Export Sales:
Total revenue by industry segment includes sales to unaffiliated
customers as reported in the Company's Consolidated Statements of
Operations. Operating profit is total revenue less operating expenses
(including management fees paid to the Company). In computing operating
profit, interest expense, interest income, general corporate expenses
and income taxes are not considered. Identifiable assets are those
assets used in the Company's operations in each industry segment. The
Company has no foreign operations.
<PAGE>
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Industry Segments:
Revenues -
Data processing company
- Non-affiliates $ -- $ 265,107 $1,906,757
- Affiliates 600,000 604,723 430,046
---------- ---------- ----------
Total sales and operating
revenues $ 600,000 $ 869,830 $2,336,803
========== ========== ==========
Operating profit -
Data processing company $ 24,972 $ 8,142 $ 304,531
---------- ---------- ----------
Consolidated $ 24,972 $ 8,142 $ 304,531
========== ========== ==========
Identifiable assets:
Data processing company $ 345,893 $ 414,467 $ 656,366
Corporate assets 1,854,474 1,751,153 1,817,222
---------- ---------- ----------
Total assets $2,200,367 $2,165,620 $2,473,588
========== ========== ==========
</TABLE>
ITEM 2. PROPERTIES
Business is conducted from leased offices. The principal executive office is
located in approximately 1,200 square feet of office space at 11 Bala
Avenue, Bala Cynwyd, Pennsylvania. No lease is materially important to the
business since no leased property is unusual or specialized and alternative
space is readily available.
ITEM 3. LEGAL PROCEEDINGS
There are no legal proceedings to which the Company is a party.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
<PAGE>
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
(a) Price Range of Common Stock
The following table shows the range of closing prices for the Company's
common stock in the over-the-counter market for the fiscal quarters
indicated as reported by National Quotation Bureau, Inc. The quotations
represent prices between dealers in securities, do not include
commissions, mark-ups or mark-downs, and may not represent actual
transactions.
Fiscal Year Ended
September 30: 1995 Bid Prices 1994 Bid Prices
--------------- ---------------
High Low High Low
---- --- ---- ---
First Quarter 5/8 1/2 1 1/4
Second Quarter 5/8 1/2 1/2 1/4
Third Quarter 11/16 1/2 5/8 1/4
Fourth Quarter 11/16 1/2 5/8 1/2
(b) Number of Security Holders
On September 30, 1995, there were 4,219 stockholders of record.
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Year Ended September 30,
-------------------------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Revenues $ 600,000 $ 869,830 $ 2,336,803 $ 2,518,955 $ 1,975,501
Income (loss) before extraordinary items (5,302) 942 211,400 441,199 (564,519)
Extraordinary items (1) -- -- 110,000 220,000 --
Net income (loss) (5,302) 942 321,400 661,199 (564,519)
Total Assets $ 2,200,367 $ 2,165,620 $ 2,473,588 $ 2,096,247 $ 2,075,623
Long-term debt and capitalized lease
obligations -- -- -- $ 3,098 $ 55,472
Net income (loss) per common share:
Continuing operations $ .00 $ .00 $ .16 $ .34 ($ .44)
Extraordinary items -- -- .09 .17 --
----------- ----------- ----------- ----------- -----------
Net income (loss) per common share $ .00 $ .00 $ .25 $ .51 ($ .44)
=========== =========== =========== =========== ===========
</TABLE>
(1) The extraordinary items in 1992 and 1993 represent the utilization of net
operating losses carried forward.
<PAGE>
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
Operating revenues for the fiscal year ended September 30, 1995, decreased 31%
compared to revenues during the fiscal year ended September 30, 1994. The entire
decrease resulted from a reduction in business with unaffiliated customers.
Revenues from the affiliated customer were consistent with the previous fiscal
year. Operating revenues for fiscal year ended September 30, 1994, decreased
62.8% compared to revenues for the fiscal year ended September 30, 1993. This
was a result of the of the loss of the Company's largest account.
Selling and administrative expenses related to servicing the affiliate in fiscal
1995 were consistent with the previous year. These same expenses were 14.8%
higher in 1994, compared to 1993. This was a result of ongoing fixed expenses,
after the decrease in unaffiliated revenue.
Selling and administrative expenses related to servicing non-affiliated
customers decreased to zero in 1995 as a result of generating no unaffiliated
revenue. These expenses had decreased 80.3% in 1994, compared to 1993. This was
a result of decreases in personnel.
Corporate expenses increased 20.9% during the fiscal year ended September 30,
1995, compared to fiscal year ended September 30, 1994. These same expenses were
18% lower in 1994, compared to 1993. These fluctuations were a result of varying
degrees of legal and professional costs during the past three years.
Interest income was $84,000 in 1995, compared to $49,000 in 1994 and $42,000 in
1993. Interest is generated by cash balances held at various banks. Increases in
interest income were a result of higher interest rates.
The Company adopted Statement of Financial Accounting Standard No. 109,
"Accounting for Income Taxes," (SFAS No. 109") beginning October 1, 1993. The
significant components of the Company's deferred taxes were net operating losses
carried forward ($6,579,000) and investment tax credits carried forward
($255,000) (see note 6). Since the Company has no present means of utilizing
these items, a reserve has been recorded for 100% of their value. Therefore, the
adoption of SFAS No. 109 has had no effect in the Company's results of
operations.
LIQUIDITY AND CAPITAL RESOURCES
The Company generated $187,000 in positive cash flow from operating activities
in 1995, compared to negative $14,000 in 1994 and positive $654,000 in 1993.
Cash was generated through the collection of unaffiliated accounts receivable
and through other operating activities in 1995. In 1993 cash was generated from
operating income of the data processing subsidiary.
There were no purchases of capital assets during the fiscal year ended 1995.
Purchases of capital assets in 1994 were a result of relocating the data center.
During the year ended September 30, 1993, the Company made a major upgrade to
its computer system totalling $200,000.
No major capital expenditures are planned and the Company believes its liquidity
is adequate to finance its cash requirements.
<PAGE>
REPORT OF INPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Stockholders
Bowline Corporation
Bala Cynwyd, Pennsylvania
We have audited the consolidated balance sheet of Bowline Corporation and
Subsidiary as of September 30, 1995, and the related consolidated statements of
operations, stockholders' equity, and cash flows for the year then ended. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the 1995 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Bowline
Corporation and Subsidiary as of September 30, 1995, and the results of their
operations and their cash flows for the year then ended, in conformity with
generally accepted accounting principles.
We have also audited Schedule VIII of Bowline Corporation and Subsidiary for the
year ended September 30, 1995. In our opinion, this schedule presents fairly, in
all material respects, the information required to be set forth therein.
Grant Thornton LLP
Cleveland, Ohio
December 7, 1995
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
Bowline Corporation
Bala Cynwyd, Pennsylvania
We have audited the accompanying consolidated balance sheet of Bowline
Corporation and Subsidiary (the "Company") as of September 30, 1994, and the
related consolidated statements of operations, changes in stockholders' equity,
and cash flows for each of the two years in the period ended September 30, 1994.
Our audits also included the financial statement schedules listed in the Index
under Item 14(a)(2). These financial statements and financial statement
schedules are the responsibility of the Company's management. Our responsibility
is to express an opinion on the financial statements and financial statement
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provides a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the consolidated financial position of Bowline Corporation
and Subsidiary as of September 30, 1994, and the results of their operations and
their cash flows for each of the two years in the period ended September 30,
1994, in conformity with generally accepted accounting principles. Also, in our
opinion, such financial statement schedules, when considered in relation to the
basic consolidated financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.
As discussed in Notes 2 and 8 to the financial statements, a significant portion
of the Company's revenues are from an affiliate.
Deloitte & Touche
Philadelphia, Pennsylvania
December 5, 1994
<PAGE>
BOWLINE CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1995 AND 1994
<TABLE>
<CAPTION>
ASSETS
1995 1994
---- ----
<S> <C> <C>
CURRENT ASSETS:
Cash $ 1,978,008 $ 1,791,386
Accounts receivable, less allowances: 1995 - $0
and 1994 - $3,250 -- 72,657
Accounts receivable from affiliate 53,000 53,466
Other current assets 8,238 7,239
----------- -----------
Total current assets 2,039,246 1,924,748
PLANT AND EQUIPMENT - net 161,121 240,872
----------- -----------
TOTAL ASSETS $ 2,200,367 $ 2,165,620
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 36,464 $ 13,117
Other current liabilities 64,183 47,481
----------- -----------
Total current liabilities 100,647 60,598
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, par value $.02 per share; authorized
5,000,000 shares; issued and outstanding 1,287,412
in 1995 and 1994 25,748 25,748
Additional paid-in capital 6,975,428 6,975,428
Accumulated deficit (4,901,456) (4,896,154)
----------- -----------
Total stockholders' equity 2,099,720 2,105,022
----------- -----------
TOTAL LIABILITIES AND STOCKH0LDERS' EQUITY $ 2,200,367 $ 2,165,620
=========== ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
BOWLINE CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
REVENUES:
Non-affiliate $ -- $ 265,107 $ 1,906,757
Affiliate 600,000 604,723 430,046
----------- ----------- -----------
Total revenues 600,000 869,830 2,336,803
SELLING AND ADMINISTRATIVE EXPENSES
Non-affiliate -- 290,235 1,407,947
Affiliate 455,028 450,452 392,164
Corporate 230,144 190,279 232,161
----------- ----------- -----------
Total selling and administrative expenses 685,172 930,966 2,032,272
INTEREST INCOME (EXPENSE)
Income 84,303 48,958 41,941
Expense -- (880) (5,072)
----------- ----------- -----------
Net interest income 84,303 48,078 36,869
RECOVERY OF LOSS CONTINGENCY -- -- 25,000
GAIN (LOSS) ON DISPOSAL OF ASSETS (5,433) 14,000 --
----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES &
EXTRAORDINARY ITEM (6,302) 942 366,400
----------- ----------- -----------
PROVISION FOR INCOME TAXES (1,000) -- 155,000
----------- ----------- -----------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (5,302) 942 211,400
EXTRAORDINARY ITEM - Utilization of losses
carried forward -- -- 110,000
----------- ----------- -----------
NET INCOME (LOSS) ($ 5,302) $ 942 $ 321,400
=========== =========== ===========
NET INCOME (LOSS) PER COMMON SHARE
Income (loss) before extraordinary item $ .00 $ .00 $ .16
Extraordinary item -- -- .09
----------- ----------- -----------
Net income (loss) per common shares $ .00 $ .00 $ .25
=========== =========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 1,287,412 1,287,412 1,287,412
=========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
BOWLINE CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
Common Stock Additonal
------------------------ Paid-In Accumulated
Shares Amount Capital Deficit
------ ------ ------- -----------
<S> <C> <C> <C> <C>
BALANCE, SEPTEMBER 30, 1992 1,287,412 $ 25,748 $ 6,975,428 ($5,218,496)
Net income -- -- -- 321,400
--------- ----------- ----------- -----------
BALANCE, SEPTEMBER 30, 1993 1,287,412 25,748 6,975,428 (4,897,096)
Net income -- -- -- 942
--------- ----------- ----------- -----------
BALANCE, SEPTEMBER 30, 1994 1,287,412 25,748 6,975,428 (4,896,154)
Net income (loss) -- -- -- (5,302)
--------- ----------- ----------- -----------
BALANCE, SEPTEMBER 30, 1995 1,287,412 $ 25,748 $ 6,975,428 ($4,901,456)
========= =========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
BOWLINE CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ($ 5,302) $ 942 $ 321,400
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Depreciation and amortization 74,318 69,418 99,942
(Gain) loss on disposal of assets 5,433 (14,000)
(Increase) decrease in
Accounts receivable 73,123 211,496 27,472
Other current assets (999) 24,207 99,680
Increase (decrease) in
Accounts payable 23,347 (145,663) 108,397
Other current liabilities 16,702 (160,143) (2,653)
----------- ----------- -----------
Total adjustments 191,924 (14,685) 332,838
----------- ----------- -----------
Net cash provided by (used in)
operating activities 186,622 13,743 654,238
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of capital assets -- (48,270) (270,173)
Sale of capital assets -- 14,000 --
----------- ----------- -----------
Net cash (used in) investing activities -- (34,270) (270,173)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payment on capital leases -- (3,104) (49,803)
----------- ----------- -----------
Net cash used in
financing activities -- (3,104) (49,803)
NET INCREASE (DECREASE) IN CASH 186,622 (51,117) 334,262
CASH, BEGINNING OF YEAR 1,791,386 1,842,503 1,508,241
----------- ----------- -----------
CASH, END OF YEAR $ 1,978,008 $ 1,791,386 $ 1,842,503
=========== =========== ===========
</TABLE>
ADDITIONAL DISCLOSURES:
1) Interest paid during the years ended September 30, 1995, 1994 and 1993,
was $,0, $880 and $5,071, respectively.
2) Income taxes paid during the years ended September 30, 1995, 1994 and
1993, were $2,000, $16,000, and $32,000, respectively.
See notes to consolidated financial statements.
<PAGE>
BOWLINE CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements include the accounts of the Company
and its subsidiary. All material intercompany profits, transactions and
balances are eliminated.
Plant and equipment is stated at cost. Depreciation and amortization are
computed by the straight-line method based on the estimated useful lives of
the related assets which range from 3 to 5 years.
Revenue is recognized when the related services are rendered.
Net income (loss) per share is calculated based on the weighted average
number of common shares outstanding during each period.
Deferred income taxes result from timing differences between tax
recognition and financial statement reporting of depreciation, capitalized
leases, allowances for accounts receivable and the treatment of loss
contingencies. Deferred income taxes are not provided due to the existence
of significant net operating losses.
The Company adopted SFAS No. 109 in the fiscal year beginning October 1,
1993. The effect of adopting SFAS No. 109 did not have a material effect on
the financial statements.
2. MAJOR CUSTOMERS
For the year ended September 30, 1995, an affiliate accounted for 100% of
total revenues. In 1994 and 1993, two customers, including an affiliate,
accounted for 96.5% and 84.8% of revenues, respectively. Percentage of
revenues for each, in 1994 and 1993, are as follows:
1994 1993
----- -----
Affiliate 69.5% 18.4%
Non-Affiliate 27.0% 66.4%
----- -----
Total 96.5% 84.8%
===== =====
Accounts receivable from the non-affiliate on September 30, 1995 and 1994
were $0 and $74,000, respectively. Effective January 1, 1994, the company
lost its major unaffiliated customer; therefore, the Company's business
consists of solely servicing its affiliate.
3. CONCENTRATION OF CREDIT RISK
The Company maintains its cash balances with several financial institutions
located in Pennsylvania and Connecticut. In all but one of the financial
institutions, the cash balances are insured for $100,000 by the Federal
Deposit Insurance Corporation (FDIC). Uninsured cash amounts were
approximately $1,740,000 and $1,630,000 on September 30, 1995 and 1994,
respectively.
<PAGE>
4. PLANT AND EQUIPMENT
September 30,
----------------------
1995 1994
---- ----
Owned:
Furniture, fixtures and equipment $613,488 $622,588
Leasehold improvements 49,918 49,918
------- -------
Total 663,406 672,506
Less accumulated depreciation and amortization 502,285 431,634
------- -------
Total 161,121 240,872
------- -------
Leased:
Equipment -0- 30,072
Less accumulated amortization -0- 30,072
------- -------
Total -0- -0-
------- -------
Total $161,121 $240,872
======== ========
5. OTHER CURRENT LIABILITIES
September 30,
--------------------
1995 1994
---- ----
Compensation and benefits $ 8,144 $ 4,162
Professional fees 35,344 28,137
Other 22,995 15,182
------- -------
$66,483 $47,481
6. INCOME TAXES
Components of the provision for income taxes are as follows:
1995 1994 1993
---- ---- ----
State ($1,000) $ 0 $ 45,000
Federal - 0 110,000
------- ------- --------
Provision for income tax
before utilization
of net operating losses carried forward ($1,000) $ 0 $155,000
======== ======= ========
For the year ended September 30, 1993, the Company utilized net operating
losses carried forward for federal tax purposes of $323,000. For the years
ended September 30, 1995 and 1994, the Company recorded no provision for
federal income taxes.
On September 30, 1995, the Company had net operating losses carried forward
of approximately $18,800,000 for federal income tax purposes which expire
as follows: $2,600,000 in 1999, $800,000 in 2000, $2,200,000 in 2001,
$12,200,000 in 2002, $200,000 in 2004 and $800,000 in 2005.
On September 30, 1995, the Company had investment tax credits of
approximately $255,000 which expire as follow: $155,000 in 1996, $52,000 in
1997, $44,000 in 1998, $1,000 in 1999 and $3,000 in 2000.
The company adopted SFAS No. 109 beginning October 1, 1993. A valuation
reserve was established for 100% of the net operating losses and investment
tax credits carried forward. Accordingly, the adoption of SFAS 109 had no
effect on the Company's results of operations for the years ended September
30, 1995 and 1994.
<PAGE>
7. STOCKHOLDERS' EQUITY
On September 30, 1995 and 1994, there were 5,000,000 shares of preferred
stock, par value $.02 per share, authorized, of which none were issued.
8. RELATED PARTY TRANSACTIONS
The Company provided data processing services to a subsidiary of a related
company for $600,000, in 1995, $604,730 in 1994 and $430,046 in 1993 (see
note 2).
9. COMMITMENTS AND CONTINGENCIES
Future minimum payments under operating leases that had initial or
remaining lease terms in excess of one year on September 30, 1995, amounted
to $105,528 in 1996, $68,056 in 1997, $39,691 in 1998 and $4,640 in 1999.
Rent expense was $51,903 in 1995, $119,445 in 1994 and $207,555 in 1993.
The Company was a defendant in a class action lawsuit which was settled in
1992. The Company filed a related insurance claim which was received in
November 1992, of which $25,000 is included as income in the Company's
consolidated financial statements in the year ended September 30, 1993.
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Set forth below is certain information about directors, executive
officers and certain employees of the Company and its subsidiary. Unless
otherwise indicated, the occupation or position listed for each director or
officer has been held for at least the preceding five years.
Name, Age, Principal Occupation, Business Director
Experience and Certain Other Directorships Since
James Benenson, Jr. (59)(1) 1974
Chairman of the Board of Directors of the Company
Chairman of the Board and President of Vesper Corporation
Chairman of the Board and President of James Benenson & Co., Inc.
Chairman of the Board and President of Arrowhead Holdings
Corporation.
Clifford J. Demarest (63)(1) 1989
President and Chief Executive Officer of the Company
CEO and a director of Starboard Data Services, Inc.
President, Industrial Products of Vesper Corporation.
Gerald J. Carroll (61)(1) 1989
Vice President and Secretary of the Company
Secretary and a Director of Starboard Data Services, Inc.
Vice President, Secretary and a Director of Vesper Corporation
Vice President and Secretary of Arrowhead Holdings Corporation.
Michael Boniello (40) N/A
Treasurer and Principal Accounting and Financial
Officer of the Company.
(1) All directors are elected annually. The term of office of each director
expires at the next annual meeting of shareholders.
None of the above named persons was elected a director or executive officer
pursuant to any arrangement with any other person other than a director or
officer of the Company acting solely in his capacity as such. There is no family
relationship between any directors or executive officers of the Company.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to the Named
Executive Officer for the Company's last three fiscal years.
<PAGE>
Long Other
Annual Term
Compen- Compen-
Name and Principal Position Year Salary Bonus sation sation
- --------------------------- ---- ------ ----- ------- -------
Clifford J. Demarest 1995 $50,000 None None None
Chief Executive Officer 1994 $50,000 None None None
and President 1993 $50,000 None None None
Compensation of Directors
The directors receive no compensation.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information known to the Company as of September
30, 1995, with respect to beneficial ownership of more than five percent of the
only class of the Company's voting securities as well as those voting securities
owned by the Company's directors and all officers and directors of the Company
as a group. Such persons have sole voting and investment power over the stock
shown unless indicated in the footnotes.
<TABLE>
<CAPTION>
Amount and Nature
Title of Beneficial Percent
of Class Name of Owner Ownership of Class
-------- ------------- ----------------- --------
<S> <C> <C> <C>
Common Stock James Benenson, Jr. 732,169 (1)(2)(3)(4)(5) 56.9%
Common Stock Vesper Corporation 227,823 (5) 17.7%
Common Stock Arrowhead Holdings
Corporation 369,242 (6) 28.7%
Common Stock Officers and directors as
a group - four persons 732,169 56.9%
</TABLE>
(1) Includes 60,000 shares held by the Benenson Pension Trust of which Mr.
Benenson is sole trustee. Mr. Benenson has sole voting power and sole
investment power with respect to all such shares, and, therefore, is deemed
the beneficial owner of all such shares.
(2) Includes 126,001 shares held by James Benenson, Jr. and Sharen Benenson as
joint custodians for James Benenson, III (63,001 shares) and Clement
Chambers Benenson (63,000) which may be deemed to be beneficially owned by
Mr. and Mrs. Benenson and 100 shares held by Sharen Benenson as custodian
for Clement Chambers Benenson which may be deemed to be beneficially owned
by Mrs. Benenson.
(3) Includes 141,419 shares of stock held by Arrowhead Corporation. Mr.
Benenson owns beneficially 100% of the voting stock of Arrowhead, and,
therefore, may be deemed to be the beneficial owner of all such shares.
(4) Includes 227,823 shares of stock held by Vesper Corporation. Mr. Benenson
is Chairman of the Board and President of Vesper, owns beneficially 100% of
the voting stock of Arrowhead, its parent, and, therefore, may be deemed to
be the beneficial owner of such shares.
(5) James Benenson, Jr. and Sharen Benenson are husband and wife and, as such,
each may be deemed to be the beneficial owner of shares of stock owned by
the other. Mr. and Mrs. Benenson have each disclaimed such beneficial
ownership.
(6) Includes 227,823 shares of stock owned of record by Vesper.
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED RELATIONSHIPS
The Company provides data processing services to a subsidiary of a related
company for $600,000 per year. (See Note 2 of the notes to the consolidated
financial statements).
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
Page
(a)(1) Financial Statements:
The following consolidated financial
statements of Bowline Corporation
and its Subsidiariary are included in Part II, Item 8:
Report of Independent Certified Public Accountants 7-8
Consolidated Financial Statements
Balance Sheets 9
Statements of Operations 10
Statements of Changes in Stockholders' Equity 11
Statements of Cash Flows 12
Notes to Consolidated Financial Statements 13-15
(a)(2) Financial Statement Schedules:
VIII - Valuation and Qualifying Accounts 19
All other schedules have been omitted because
they are not applicable, not required or redundant.
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K during
its fourth quarter for the year ended September 30, 1995.
<PAGE>
BOWLINE CORPORATION AND SUBSIDIARY
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
Balance, Additions Balance,
Beginning Charged to Costs Charged to End
Description of Period & Expenses (Income) Other Accounts Deductions of Period
- ----------- --------- ------------------- -------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year Ended September 30, 1993:
Allowance for doubtful
accounts $ 38,630 $ 24,000 $ -- $ 45,470 $ 17,160
======== ======== ======= ======== ========
Year Ended September 30, 1994:
Allowance for doubtful
accounts $ 17,160 ($ 7,155) $ -- $ 6,755 $ 3,250
======== ======== ======= ======== ========
Year Ended September 30, 1995:
Allowance for doubtful
accounts $ 3,250 ($ 2,071) $ -- $ 1,179 $ -0-
======== ======== ======= ======== ========
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
DATE: December 22, 1995 BOWLINE CORPORATION
(Registrant)
By:__________________________
JAMES BENENSON, JR.,
CHAIRMAN OF THE BOARD
__________________________
CLIFFORD J. DEMAREST,
CHIEF EXECUTIVE OFFICER
AND PRESIDENT
__________________________
MICHAEL BONIELLO,
TREASURER, PRINCIPAL
ACCOUNTING AND FINANCIAL
OFFICER
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant, and in the capacities and on the dates indicated.
(Signature and Title) (Date)
___________________________________ __________________
James Benenson, Jr., Chairman
of the Board of Directors
___________________________________ __________________
Gerald J. Carroll, Director
___________________________________ __________________
Clifford J. Demarest, Director
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM THE
CONSOLIDATED STATEMENT OF OPERATION FOR THE TWELVE MONTHS ENDED SEPTEMBER 30,
1995 AND THE CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> SEP-30-1995
<CASH> 1,978,008
<SECURITIES> 0
<RECEIVABLES> 53,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,039,246
<PP&E> 663,406
<DEPRECIATION> 502,285
<TOTAL-ASSETS> 2,000,367
<CURRENT-LIABILITIES> 100,647
<BONDS> 0
<COMMON> 25,748
0
0
<OTHER-SE> 2,073,972
<TOTAL-LIABILITY-AND-EQUITY> 2,200,367
<SALES> 600,000
<TOTAL-REVENUES> 600,000
<CGS> 0
<TOTAL-COSTS> 685,172
<OTHER-EXPENSES> 5,433
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (6,302)
<INCOME-TAX> (1,000)
<INCOME-CONTINUING> (5,302)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,302)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
