<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark one)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period JUNE 30, 1995
-------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934
For the transition period __________ to ___________
Commission file number 0-6845
-------------------------------
BOWLINE CORPORATION
-------------------------------------------------------------------------------
(Exact name of registrant as specified in 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)
(610) 667-7310
-------------------------------------------------------------------------------
(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 l2 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 August 10, 1995, there were 1,287,412 shares of the Registrant's common
stock, $.02 par value per share, outstanding.
Page 1 of 7
<PAGE>
BOWLINE CORPORATION AND SUBSIDIARY
PART I
Item 1. FINANCIAL STATEMENTS
BOWLINE CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
6/30/95 6/30/94 6/30/95 6/30/94
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Non-affiliates $ $ 260,759 $ $ 1,834
Affiliates 450,307 452,996 150,132 150,472
----------- ----------- ---------- -----------
Total operating revenue 450,307 713,755 150,132 152,306
SELLING AND ADMINISTRATIVE
EXPENSE:
Non-affiliate 288,995 4,736
Affiliate 427,408 423,703 138,718 129,067
Corporate 81,890 85,082 29,488 28,665
----------- ----------- ---------- -----------
Total Selling and
Administrative Expense 509,298 797,780 168,206 162,468
INTEREST INCOME:
Income ( 61,875) ( 32,890) ( 22,763) ( 11,957)
Expense 230
----------- ----------- ---------- -----------
Net interest (income) ( 61,875) ( 32,660) ( 22,763) ( 11,957)
LOSS ON DISPOSAL OF ASSETS 5,433
----------- ----------- ---------- -----------
INCOME (LOSS) BEFORE INCOME
TAXES ( 2,549) ( 51,365) 4,689 1,795
PROVISION FOR INCOME TAXES 2,100 600
----------- ----------- ---------- -----------
NET INCOME (LOSS) ($ 4,649) ($ 51,365) $ 4,089 $ 1,795
=========== =========== ========== ===========
NET INCOME (LOSS) PER COMMON
SHARE: ($ - ) ($ .04) ($ - ) ($ - )
=========== =========== ========== ===========
WEIGHTED AVERAGE NUMBER
OF SHARES 1,287,412 1,287,412 1,287,412 1,287,412
=========== =========== ========== ===========
</TABLE>
See notes to consolidated financial statements
Page 2 of 7
<PAGE>
BOWLINE CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, September 30,
1995 1994
------------- ---------------
<S> <C> <C>
ASSETS
CURRENT:
Cash $1,947,108 $1,791,386
Accounts receivable - Less allowance
of $3,250 72,657
Accounts receivable from affiliate 51,412 53,466
Other current assets 7,267 7,239
---------- -----------
Total current asssets 2,005,787 1,924,748
PLANT AND EQUIPMENT 184,608 240,872
---------- -----------
TOTAL ASSETS $2,190,395 $2,165,620
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 32,112 $ 13,117
Other current liabilities 57,910 47,481
---------- -----------
Total current liabilities 90,022 60,598
---------- -----------
STOCKHOLDERS' EQUITY:
Common stock, par value $.02 per share;
authorized 5,000,000 shares; issued and
outstanding 1,287,412 in l995 and 1994 25,748 25,748
Additional paid-in capital 6,975,428 6,975,428
Accumulated deficit (4,900,803) (4,896,154)
---------- -----------
Total stockholders' equity 2,100,373 2,105,022
---------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,190,395 $2,165,620
========== ===========
</TABLE>
See notes to consolidated financial statements
Page 3 of 7
BOWLINE CORPORATION AND SUBSIDIARY
STATEMENTS OF CASH FLOW
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months
Ended June 30,
1995 1994
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($ 4,649) ($ 51,365)
------------ ------------
Adjustments to reconcile net earnings
to net cash provided by (used in)
operating activities
Depreciation and amortization 50,831 47,993
Loss on disposal of assets 5,433
Increase (decrease) in
Accounts receivable 74,711 181,945
Other current assets ( 28) ( 4,989)
Increase (decrease) in
Accounts payable 18,995 ( 145,281)
Other current liabilities 10,429 ( 93,127)
------------ ------------
Total adjustments 160,371 ( 13,459)
------------ ------------
Net cash provided by (used in)
operating activities 155,722 ( 64,824)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of capital assets ( 49,062)
------------ ------------
Net cash (used in)
investing activities ( 49,062)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments made on capital
leases ( 1,994)
------------ ------------
Net cash provided by (used in)
financing activities ( 1,994)
------------ ------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 155,722 ( 115,880)
CASH AND CASH EQUIVALENTS
Beginning of period 1,791,386 1,842,503
End of period $1,947,108 $1,726,623
============ ============
</TABLE>
See notes to consolidated financial statements
Page 4 of 7
<PAGE>
BOWLINE CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Preparation
The accompanying financial statements have been prepared by Bowline
Corporation (the "Company") pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of management, these
financial statements give effect to all normal recurring adjustments necessary
to present fairly the financial position of the Company as of June 30, 1995, and
September 30, 1994, and the results of operations and cash flow for the
nine-month periods ended June 30, 1995, and June 30, 1994.
Certain reclassifications have been made to the prior year's financial
statements to conform to classifications used in the current fiscal year.
Although the Company believes that the disclosures included herein are
adequate to make the information not misleading, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted.
Accordingly, the accompanying financial statements should be read in conjunction
with the financial statements and the related financial review included in the
Company's latest annual report on Form 10-K for the year ended September 30,
1994.
Note 2. Computation of Net Income Per Common Share
Net income per common share was computed by dividing the net income by the
number of common shares outstanding during each period presented.
Note 3. Income Taxes
Components of the provision for income taxes are as follows:
<TABLE>
<CAPTION>
June 30, June 30,
1995 1994
-------- --------
<S> <C> <C>
State - current $ 2,100 $ 0
Federal 0 0
-------- --------
Provision for income tax $ 2,100 $ 0
======== ========
</TABLE>
On June 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 June 30, 1995, the Company had investment tax credits of approximately
$288,000 which expire as follows: $33,000 in 1995, $155,000 in 1996, $52,000 in
1997, $44,000 in 1998, $1,000 in 1999 and $3,000 in 2000.
The Company adopted Statement of Financial Accounting Standard No. 109,
"Accounting for Income Taxes," ("SFAS No. 109") beginning October 1, 1993. No
provision for federal income taxes is recorded due to the existence of net
operating losses carried forward. The Company has no means of realizing value
from any of the above; therefore, a valuation reserve was established in
accordance with SFAS 109 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 operation.
Page 5 of 7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Nine months ended June 30, 1995, compared to nine months ended June 30, 1994
Revenues for the nine months ended June 30, 1995, decreased 36.9% compared to
revenues for the nine months ended June 30, 1994. This decrease was a result
of discontinued business with unaffiliated customers. The Company's revenues
now consist of providing data processing services to an affiliate.
Selling and administrative expenses for the period ended June 30, 1995, are
solely related to servicing the affiliate. These expenses were approximately
equal to those during the period ended June 30, 1994. Corporate expenses were
also equivalent to the same period a year ago.
Interest income increased 88%, mostly a result of higher interest rates.
The loss on disposal of assets relates to the scrapping of equipment no longer
useful for continuing operations.
Liquidity and Capital Resources
Cash flow for the nine months ended June 30, 1995, was positive $156,000. This
was primarily a result of a reduction of accounts receivable from unaffiliated
customers and cash generated from operations.
The Company's business consists mainly of servicing an affiliate. Expen-
ditures have been reduced through reduction of personnel and relocating the
computer center to a lower cost facility. No major capital expenditures are
planned and the Company believes its liquidity is adequate to finance its cash
requirements.
Page 6 of 7
<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.
BOWLINE CORPORATION
-------------------------------------
JAMES BENENSON, JR., CHAIRMAN OF
THE BOARD
DATE: August 10, 1995
-------------------------
-------------------------------------
CLIFFORD J. DEMAREST, CHIEF
EXECUTIVE OFFICER AND PRESIDENT
-------------------------------------
MICHAEL BONIELLO, TREASURER,
PRINCIPAL ACCOUNTING AND FINANCIAL
OFFICER
Page 7 of 7
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM THE
CONSOLIDATED STATEMENT OF OPERATION FOR THE NINE MONTHS ENDED JUNE
30, 1995 AND THE CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1995 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> JUN-30-1995
<CASH> 1,947,108
<SECURITIES> 0
<RECEIVABLES> 54,662
<ALLOWANCES> 3,250
<INVENTORY> 0
<CURRENT-ASSETS> 2,005,787
<PP&E> 663,407
<DEPRECIATION> 478,799
<TOTAL-ASSETS> 2,190,395
<CURRENT-LIABILITIES> 90,022
<BONDS> 0
<COMMON> 25,748
0
0
<OTHER-SE> 2,074,625
<TOTAL-LIABILITY-AND-EQUITY> 2,190,395
<SALES> 450,307
<TOTAL-REVENUES> 450,307
<CGS> 0
<TOTAL-COSTS> 509,298
<OTHER-EXPENSES> 5,433
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,549)
<INCOME-TAX> 2,100
<INCOME-CONTINUING> (4,649)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,649)
<EPS-PRIMARY> $(0)
<EPS-DILUTED> $(0)
</TABLE>
