<PAGE>
================================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: DECEMBER 2, 1995
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
-------------- ---------------------
COMMISSION FILE NUMBER: 0-10095
UNIT INSTRUMENTS, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 33-0077406
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NUMBER)
22600 SAVI RANCH PARKWAY, YORBA LINDA, CALIFORNIA 92687
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (714) 921-2640
AUTOCLAVE ENGINEERS, INC., 2930 WEST 22ND STREET, ERIE, PA 16506
-----------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
---- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASSES OUTSTANDING AT DECEMBER 31, 1995:
------- --------------------------------
COMMON STOCK $.15 PAR VALUE... 4,079,497
================================================================================
<PAGE>
UNIT INSTRUMENTS, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page No.
<S> <C>
Part I. Financial Information
Condensed Consolidated Balance Sheets -- 3-4
December 2, 1995 and May 31, 1995
Condensed Consolidated Statements of Income -- 5
Three months and six months ended
December 2, 1995 and November 30, 1994
Condensed Consolidated Statements of Cash Flows -- 6
Six months ended December 2, 1995 and
November 30, 1994
Notes to Condensed Consolidated Financial Statements 7-8
Management's Discussion and Analysis of 9-13
Financial Condition and Results of Operations
Part II. Other Information
Item 4 Submission of Matters to a 13
Vote of Shareholders
Item 6 Exhibits and Reports on Form 8-K 14
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
UNIT INSTRUMENTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
(unaudited)
<TABLE>
<CAPTION>
12/02/95 05/31/95
--------- ---------
<S> <C> <C>
ASSETS:
Current Assets:
Cash and cash equivalents $ 15,083 $ 4,465
Short-term investments, at cost -0- 4,919
Accounts receivable 9,975 9,543
Inventories 10,472 8,440
Deferred taxes 562 1,111
Prepaid expenses and other current assets 160 458
Net assets of discontinued operations held for sale -0- 11,072
--------- ---------
Total current assets 36,252 40,008
--------- ---------
Property, plant and equipment, at cost:
Buildings and improvements 4,032 2,346
Machinery and equipment 10,984 9,338
--------- ---------
15,016 11,684
Accumulated depreciation and amortization (6,226) 5,740
--------- ---------
8,790 5,944
Construction in progress 334 880
--------- ---------
9,124 6,824
--------- ---------
Goodwill, net of amortization of $1,647
and $1,571, respectively 4,414 4,490
Other assets 1,310 580
--------- ---------
$ 51,100 $ 51,902
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
UNIT INSTRUMENTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
(unaudited)
<TABLE>
<CAPTION>
12/02/95 05/31/95
--------- ---------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts and notes payable, trade $ 3,068 $ 3,139
Accrued compensation and benefits 1,294 1,560
Income taxes 1,349 672
Current installments on term debt 2,286 3,156
Other current liabilities 2,841 3,908
--------- ---------
Total current liabilities 10,838 12,435
Term debt -0- 453
Deferred income taxes -0- 77
Other long-term liabilities and deferred credits 582 459
--------- ---------
Total liabilities and deferred credits 11,420 13,424
--------- ---------
Shareholders' equity:
Common stock, $.15 par value; authorized shares:
12,000,000; issued shares: 4,079,497 612 662
Additional paid-in capital 17,695 20,413
Retained earnings 21,801 18,171
Foreign currency translation adjustment (428) (252)
--------- ---------
39,680 38,994
Less treasury stock, at cost: -0- shares
and 173,888 shares, respectively -0- (516)
--------- ---------
Total shareholders' equity 39,680 38,478
--------- ---------
$ 51,100 $ 51,902
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
UNIT INSTRUMENTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
December 2, 1995 and November 30, 1994
(amounts in thousands, except share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------- -------------------------
12/02/95 11/30/94 12/02/95 11/30/94
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales $ 15,546 $ 10,402 $ 30,569 $ 19,877
Cost of sales 9,275 6,646 18,304 12,676
---------- ---------- ---------- ----------
Gross margin 6,271 3,756 12,265 7,201
Operating expenses:
Selling, general and administrative 3,745 2,839 7,437 5,488
Restructuring costs 290 -0- 373 -0-
Research, development and engineering 821 629 1,777 1,207
---------- ---------- ---------- ----------
Total operating expenses 4,856 3,468 9,587 6,695
Operating income 1,415 288 2,678 506
Interest income 197 21 278 42
Interest expense (30) (96) (81) (197)
Other income, net (4) 59 (21) 99
---------- ---------- ---------- ----------
Income from continuing operations
before income taxes 1,578 272 2,854 450
Provision for income taxes 610 112 1,170 194
---------- ---------- ---------- ----------
Income from continuing operations 968 160 1,684 256
Discontinued operations:
Income from discontinued operations
net of income tax provisions for the
three months of $223 in 1995 and $494
in 1994 and, for the six months of
$521 in 1995 and $533 in 1994,
respectively 146 590 750 637
Gain on disposal net of income tax
provision of $1,011 for the three
and six months periods 1,454 -- 1,454 --
---------- ---------- ---------- ----------
Net income $ 2,568 $ 750 $ 3,888 $ 893
========== ========== ========== ==========
Per common share:
Income from continuing operations $ .22 $ .04 $ .38 $ .06
Income from discontinued operations .36 .13 .49 .15
---------- ---------- ---------- ----------
Net income per share $ .58 $ .17 $ .87 $ .21
========== ========== ========== ==========
Weighted average number of common shares
and common share equivalents 4,439,000 4,329,000 4,471,000 4,318,000
========== ========== ========== ==========
Dividends per share $ .00 $ .06 $ .06 $ .12
========== ========== ========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
UNIT INSTRUMENTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
for the six months ended December 2, 1995 and November 30, 1994
(amounts in thousands) (unaudited)
<TABLE>
<CAPTION>
Six Months Ended Dec. 2 and Nov. 30
-----------------------------------
1995 1994
--------------- ----------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 3,888 $ 893
Adjustments to reconcile net income to
net cash provided from operating activities:
Depreciation and amortization 934 1,492
Deferred income taxes 717 (400)
Loss on sale of fixed assets -0- 26
Equity interest -0- (75)
(Gain) on sale of business (1,454) -0-
Changes in assets & liabilities:
Accounts receivable (432) (45)
Inventories (2,032) (1,689)
Prepaids and other assets 83 247
Accounts payable and accrued liab. (1,404) (1,297)
Income taxes 678 (701)
Other current liabilities (870) 495
Change in other long-term liabilities 123 15
Other -0- 92
------- -------
Net cash provided from (used in)
operating activities 231 (947)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (3,169) (1,409)
Proceeds from the sale of fixed assets -0- 242
Change in short-term investments 4,919 (67)
Net cash proceeds from sale of business 12,526 -0-
Other -0- (39)
------- -------
Net cash provided from
(used in) investing activities 14,276 (1,273)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on long-term debt (453) (227)
Change in short-term borrowings, net -0- 1,042
Cash dividends paid (258) (507)
Note receivable from sale of business (750) -0-
Purchase of company common stock (2,584) -0-
Proceeds from issuance of common stock 332 41
Other -0- (34)
------- -------
Net cash provided from (used in)
financing activities (3,713) 315
------- -------
Effect of exchange rate changes (176) 510
------- -------
Net increase (decrease) in cash & cash equivalents 10,618 (1,395)
Cash and cash equivalents at beginning of year 4,465 5,719
------- -------
Cash and cash equivalents at end of year $15,083 $ 4,324
======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
6
<PAGE>
UNIT INSTRUMENTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands)
1. Significant Accounting Policies
The condensed consolidated financial statements included herein are based
in part on estimates and include such adjustments (consisting solely of
normal, recurring adjustments) which management believes are necessary for
a fair presentation of the Company's financial position at December 2, 1995
and May 31, 1995, and the results of its operations for the three and six-
month periods ended December 2, 1995 and November 30, 1994. The
consolidated financial statements and related notes are condensed and have
been prepared in accordance with generally accepted accounting principles
applicable to interim periods; consequently, they do not include all
generally accepted accounting disclosures required for complete annual
financial statements. These condensed consolidated financial statements
should be read in conjunction with the financial statements and notes
thereto contained in the Company's Annual Report on Form 10-K for the year
ended May 31, 1995.
The results of operations for the period presented are not necessarily
indicative of results to be expected for the entire fiscal year. Certain
prior year items have been reclassified to conform to the current year
presentation.
2. Inventories
Inventories at December 2, 1995 and May 31, 1995 consisted of the
following:
<TABLE>
<CAPTION>
12/02/95 05/31/95
--------- ---------
<S> <C> <C>
Raw materials $ 6,595 $ 5,326
Work in process 2,333 1,896
Finished goods 1,544 1,218
--------- ---------
Total inventories $ 10,472 $ 8,440
========= =========
</TABLE>
3. Sale of Autoclave Engineers Group
The Company sold its Autoclave Engineers Group during the second quarter
for a total consideration of $16,250,000, which consisted of cash in the
amount of $15,500,000 and a five-year promissory note for $750,000.
7
<PAGE>
4. Environmental Liability
The Company has identified ground water and soil contamination at its
previously owned Erie, Pennsylvania operation of Autoclave Engineers Group.
As of December 2, 1995, the Company has accrued $685,000 for the probable
cost of remediation, further analysis and other related costs. At this
time, the Company is not able to determine if remediation activities will
be required and, if so required, the extent of these remediation efforts.
8
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion and analysis should be read in conjunction with Unit
Instruments, Inc.'s condensed consolidated financial statements and related
notes included herein.
RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 2, 1995 COMPARED TO THREE MONTHS ENDED NOVEMBER 30,
1994
Sales from continuing operations for the second fiscal quarter ended December 2,
1995 increased 49% to $15,546,000 from $10,402,000 for the comparable prior
year period. This increase in sales reflects, in part, the continued strong
demand in the semiconductor equipment market, as well as enhanced market
position for the Company. Shipments to OEM's and End Users were up 44% and 95%,
respectively, for the quarter while sales of the Company's metal seal mass flow
controllers, used in more demanding applications, advanced 75% from the
comparable prior year period.
Gross profit margin increased to 40% for the current quarter from 36% for the
same quarter last year. This improvement in the gross profit margin is
attributable to slightly higher average selling prices, more favorable product
mix, increases in productivity and higher utilization of manufacturing
facilities which resulted in higher absorption of fixed overhead costs.
Selling, general and administrative ("S,G&A") expenses increased to $3,745,000
in the second quarter of the current fiscal year from $2,839,000 in the
comparable prior year period. However, as a percent of sales, S,G&A fell to 24%
for the current period from 27% for the prior year's comparable quarter. The
Company closed its Erie, Pennsylvania corporate office on September 29, 1995 and
transferred all corporate office functions during the second quarter to Unit
Instruments' headquarters in Yorba Linda, California. The Company anticipates
that it will realize cost savings of approximately $1 million per year with the
relocation of the corporate office and other elements of the previously
announced restructuring.
A restructuring charge of $290,000 was recorded in the current quarter for
additional legal fees, employee severance expenses and other additional expense
items resulting from restructuring activities and the closure of the Erie,
Pennsylvania corporate office during the second quarter.
Research, development and engineering ("R,D&E") expenses increased to $821,000
for the current quarter from $629,000 for the prior year. These higher
expenditures reflect increased new product development charges to support
current and anticipated future sales.
9
<PAGE>
The Company believes that the continued timely development of new products and
enhancements to its existing products is essential to maintaining its
competitive position within the industry. Accordingly, the Company anticipates
that such expenses will continue to increase in absolute dollars and possibly as
a percent to sales in subsequent periods.
Interest income increased substantially for the current quarter to $197,000 from
$21,000 for the prior year period. This increase in interest income results
primarily from the restructuring activities of the past four quarters which
involved the sale of Burton Corblin and Autoclave Engineers Group and the
resultant increase in cash balances. Interest expense declined for the quarter
to $30,000 from $96,000 because debt outstanding against a domestic bank line of
credit was paid off during the current quarter.
Income from continuing operations before income taxes increased dramatically to
$1,578,000 for the current quarter from $272,000 for the prior year period.
Income taxes for continuing operations were provided for at a 39% rate for the
second quarter as compared to a 41% rate for in the prior year's second quarter.
Income from continuing operations was $968,000 for the current period or $.22
per share as compared to $160,000 or $.04 per share for the year ago quarter.
Income from discontinued operations during the phase down period for the current
fiscal quarter reflects the results of Autoclave Engineers Group for the period
from September 1, 1995 through September 22, 1995. For the prior year's
comparable period, discontinued operations reflected the results of operations
for both Autoclave Engineers Group and the Burton Corblin compressor business
segment based in France. Burton Corblin was sold in January, 1995 and Autoclave
Engineers Group was sold on September 22, 1995. For the second quarter, income
from discontinued operations during the phase down period was $146,000, net of
income tax provision of $223,000. For the prior year period, income from
discontinued operations during the phase down period was $590,000, net of income
tax provision of $494,000. The Company sold its Autoclave Engineers Group
during the second quarter and recorded a gain on sale of $1,454,000, net of tax
provision of $1,011,000. Total net income from discontinued operations was
$1,600,000 for the quarter or $.36 per share.
Net income for the second quarter of fiscal 1996, including income from
discontinued operations, was $2,568,000 or $.58 per share, which compares
favorably to net income for the prior year period of $750,000 or $.17 per share.
The Company concluded its restructuring activities during the second quarter
with the sale of Autoclave Engineers Group and the relocation of the corporate
office functions to Unit Instruments in California. Accordingly, the Company
does not expect to record additional material restructuring charges or
discontinued operating results in subsequent quarters.
10
<PAGE>
SIX MONTHS ENDED DECEMBER 2, 1995 COMPARED TO SIX MONTHS ENDED NOVEMBER 30, 1994
Sales from continuing operations for the six-month period ended December 2, 1995
increased 54% to $30,569,000 from $19,877,000 for the comparable prior year
period. This increase in sales is attributable, in part, to the continued strong
demand for semiconductor fabrication equipment, as well as enhanced market
position for the Company's mass flow controllers. Shipments to OEM's and End
Users were up 53% and 78%, respectively, while sales of metal seal mass flow
controllers were up 96% for the six-month period compared to the same prior year
period.
Gross profit margins increased to 40% for the current year from 36% last year
because of slightly higher average selling prices, more favorable product mix,
increased productivity and higher utilization of manufacturing facilities, which
resulted in higher absorption of fixed overhead costs.
Selling general and administrative expenses increased 36% to $7,437,000 for the
first half but fell as percent of sales to 24% for the current six-month period
from 28% for the prior year period. The Company closed its Erie, Pennsylvania
corporate office during the second quarter and transferred all corporate office
functions to Unit Instruments' headquarters in Yorba Linda, California. The
Company anticipates that it will realize cost savings of approximately $1
million per year with the relocation of the corporate office and other elements
of the previously announced restructuring.
A restructuring charge of $373,000 was incurred during the first half of the
current fiscal year for employee severance expense, additional legal fees and
other expenses resulting from restructuring activities for the period, including
the closure of the Erie, Pennsylvania corporate office.
Research, development and engineering expenses increased 47% for the comparative
six-month period reflecting new product development efforts and higher staffing
levels in these departments. The Company believes that the continued timely
development of new products and enhancements to its existing products is
essential to maintaining its competitive position within the industry.
Accordingly, the Company anticipates that such expenses will continue to
increase in absolute dollars and possibly as a percent to sales in subsequent
periods.
Interest income increased substantially to $278,000 from $42,000 the prior year
because of much higher cash balances resulting from the divestiture of Burton
Corblin and Autoclave Engineers Group. Interest expense declined for the
comparative period because of lower levels of borrowing outstanding as all
domestic credit facilities were repaid during the second quarter of the current
fiscal year.
11
<PAGE>
Income from continuing operations before income taxes increased dramatically to
$2,854,000 for the current six-month period from $450,000 for the prior year
period. Income taxes for continuing operations were provided for at a 41% rate
compared to a 43% rate for the prior year's period.
Income from continuing operations was $1,684,000 for the current period or $.38
per share as compared to $256,000 or $.06 per share for the prior year six-month
period.
Income from discontinued operations during the phase down period for the current
fiscal period reflects the results of Autoclave Engineers Group through
September 22, 1995. For the prior year's comparable period, discontinued
operations reflected the results of operations for both Autoclave Engineers
Group and the Burton Corblin compressor business segment based in France.
Burton Corblin was sold in January, 1995 and Autoclave Engineers Group was sold
on September 22, 1995. For the current year, income from discontinued
operations during the phase down period was $750,000, net of income tax
provision of $521,000. For the prior year period, income from discontinued
operations during the phase down period was $637,000, net of income tax
provision of $533,000. The Company sold its Autoclave Engineers Group during
the second quarter and recorded a gain on sale of $1,454,000, net of income tax
provision of $1,011,000. Total net income from discontinued operations was
$2,204,000 for the six-month period or $.49 per share.
Net income for the first half of the current fiscal year, including income from
discontinued operations, was $3,888,000 or $.87 per share, which compares
favorably to net income for the prior year period of $893,000 or $.21 per share,
including income from discontinued operations. The Company concluded its
restructuring activities during the second quarter with the sale of Autoclave
Engineers Group and the relocation of the corporate office functions to Unit
Instruments in California. Accordingly, the Company does not expect to record
additional material restructuring charges or discontinued operating results in
subsequent quarters.
The Company's results of operations may be affected in the future by a variety
of factors including: the dependency of sales on a few large customers, product
mix, new product introductions by the Company and its competitors, operating
expenses and the "nominations" of end users for the brand of mass flow
controllers on new equipment orders. In addition, the Company's results could
be affected by demand for semiconductor equipment, which has experienced strong
growth the past two years, and technology changes in the market.
FINANCIAL CONDITION
The Company sold its Autoclave Engineers Group during the second quarter for a
total consideration of $16,250,000, which consisted of cash in the amount of
$15,500,000 and a five-year promissory note for $750,000. In conjunction with
this transaction, the Company repurchased 220,000 shares of common stock during
the quarter for a total consideration of $2,584,000. In addition, the Company
repaid all outstanding borrowings under it existing domestic credit facility
which consumed $666,000 of the cash received from the sale.
12
<PAGE>
For the six months, cash was used for higher inventory and accounts receivable
balances and to liquidate accrued liabilities primarily associated with
restructuring activities. Capital expenditures were $3,169,000 for the period
and consisted of approximately $1.5 million for a fourth cleanroom "tunnel",
$1.1 million for offshore facility expansions, and approximately $.6 million for
other items. The Company expects to spend between $5 and $6 million on capital
projects this fiscal year to support current and future activity levels.
With the sale of Autoclave Engineers Group, the Company's liquidity position
improved considerably. Cash and cash equivalents were $15.1 million as of
December 2, 1995 and all borrowings under the domestic credit facility have been
repaid. The Company's only debt outstanding is a Yen denominated credit facility
through Unit Japan for approximately $2 million. The Company expects that these
current cash resources and cash generated from continuing operations will be
adequate to fund the Company's anticipated near-term capital requirements.
Subsequent to fiscal year-end 1995, the Company received the findings of further
environmental study on its previously owned property in Erie, PA. These studies
indicated that there existed some soil contamination around one of the buildings
of the Autoclave Engineers Group facility on the Erie, PA site. The study
further revealed the presence of VOC's, in one of the monitoring wells, that was
in excess of Level 1 standards established by the Pennsylvania Department of
Environmental Protection. The Company accrued additional amounts during the
second quarter for possible remediation efforts along with further study costs
and other related expenses. At this time, the Company has not determined
whether remediation activities will be required and, if remediation is required,
the extent and cost of such remediation.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Shareholders.
At the Annual Meeting of Shareholders, which was held on November 10,
1995, Messrs. James C. Levinson and A. Wade Blackman were reelected
directors of the Company. Continuing as directors were Messrs. Michael
J. Doyle, George Boyadjieff and Edward Rogas, Jr. The Shareholders
also approved, by an affirmative vote of 3,200,187 versus votes
against of 12,460, to change the Corporation's state of incorporation
from Pennsylvania to California pursuant to a Plan of Merger which
provided for the Corporation to be merged into its wholly-owned
subsidiary, Unit Instruments, Inc. Shareholders also approved the
appointment of Price Waterhouse LLP as the auditors for the fiscal
year ending May 31, 1996.
13
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11.1 - Computation of Earnings Per Share
(b) Two reports on Form 8-K were filed during the quarter. The first
report on Form 8-K dated September 22, 1995 concerned the sale of
the Company's Autoclave Engineers Group to Snap-tite, Inc. and
the repurchase of 220,000 shares of the Company's common stock
from the Registrant's largest shareholder.
The second report on Form 8-K dated November 10, 1995 concerned
Shareholder approval of a reincorporation merger and Plan of
Merger whereby Autoclave Engineers, Inc. was merged into Unit
Instruments, Inc. which served to change the state of
incorporation of the Company from Pennsylvania to California.
The report further disclosed that the Company's listing on the
NASDAQ was changed to Unit Instruments, Inc. from Autoclave
Engineers, Inc. with a new trading symbol of UNII.
14
<PAGE>
UNIT INSTRUMENTS, INC. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirement 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.
Unit Instruments, Inc.
-----------------------
Registrant
Date: January 12, 1995 /s/ Michael J. Doyle
-----------------------------------
Michael J. Doyle, President
and Chief Executive Officer
Date: January 12, 1995 /s/ Gary N. Patten
-----------------------------------
Gary N. Patten
Chief Financial Officer
15
<PAGE>
EXHIBIT 11.1
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------- -----------------------
11/30/95 11/30/94 11/30/95 11/30/94
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INCOME FROM CONTINUING
OPERATIONS $ 968,000 $ 160,000 $1,684,000 $ 256,000
---------- ---------- ---------- ----------
NET INCOME $2,568,000 $ 750,000 $3,888,000 $ 893,000
========== ========== ========== ==========
Earnings Per Share
- ------------------
Weighted average number of
shares outstanding 4,125,928 4,215,815 4,191,050 4,215,214
Common share equivalents,
assuming exercise of stock
options and warrants 312,901 113,469 279,501 102,745
---------- ---------- ---------- ----------
Average shares used in com-
puting earnings per share 4,438,829 4,329,284 4,470,551 4,317,959
========== ========== ========== ==========
Net income per share from $ .22 $ .04 $ .38 $ .06
continuing operations ---------- ---------- ---------- ----------
Net income per share $ .58 $ .17 $ .87 $ .21
========== ========== ========== ==========
Earnings Per Share-Assuming Full Dilution
- -----------------------------------------
Weighted average number of
shares outstanding 4,125,928 4,215,815 4,191,050 4,215,214
Common share equivalents,
assuming exercise of stock
options 312,901 113,469 300,900 102,745
---------- ---------- ---------- ----------
Average shares used in com-
puting earnings per share 4,438,829 4,329,284 4,491,950 4,317,959
Income from continuing
operations per share $ .22 $ .04 $ .38 $ .06
========== ========== ========== ==========
Net income per share $ .58 $ .17 $ .87 $ .21
========== ========== ========== ==========
</TABLE>
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-START> SEP-01-1995
<PERIOD-END> DEC-02-1995
<CASH> 15,083
<SECURITIES> 0
<RECEIVABLES> 10,048
<ALLOWANCES> 73
<INVENTORY> 10,472
<CURRENT-ASSETS> 36,252
<PP&E> 15,016
<DEPRECIATION> 6,226
<TOTAL-ASSETS> 51,100
<CURRENT-LIABILITIES> 10,838
<BONDS> 0
612
0
<COMMON> 0
<OTHER-SE> 39,068
<TOTAL-LIABILITY-AND-EQUITY> 51,100
<SALES> 15,546
<TOTAL-REVENUES> 15,743
<CGS> 9,275
<TOTAL-COSTS> 14,131
<OTHER-EXPENSES> 4
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30
<INCOME-PRETAX> 1,578
<INCOME-TAX> 610
<INCOME-CONTINUING> 968
<DISCONTINUED> 1,600
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,568
<EPS-PRIMARY> 0.58
<EPS-DILUTED> 0.58
</TABLE>
