<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter ended September 30, 1999 Commission File No. 0-14841
FRANKLIN ELECTRONIC PUBLISHERS, INCORPORATED
(Exact name of registrant as specified in its charter)
Pennsylvania 22-2476703
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Franklin Plaza, Burlington, New Jersey 08016-4907
(Address of principal executive office)
Registrant's telephone number (609) 386-2500
Indicate by check mark whether 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 Registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ___
---
COMMON STOCK OUTSTANDING AS OF
SEPTEMBER 30, 1999 - 7,853,605 SHARES
<PAGE>
FRANKLIN ELECTRONIC PUBLISHERS, INCORPORATED
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
<TABLE>
<CAPTION>
September 30, March 31,
1999 1999
--------------- -------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 9,643 $ 12,870
Investments in limited partnerships 0 6,045
Accounts receivable, less allowance for doubtful
accounts of $1,113 and $928 20,680 17,225
Inventories 20,369 23,934
Income tax receivable 568 3,601
Prepaids and other assets 1,349 3,201
--------------- -------------
TOTAL CURRENT ASSETS 52,609 66,876
--------------- -------------
PROPERTY AND EQUIPMENT 8,780 9,094
--------------- -------------
OTHER ASSETS:
Deferred income tax asset 5,700 5,700
Trademark, less accumulated amortization of $1,166 and $972 14,381 14,576
Advance royalties and licenses 1,403 1,580
Software development costs 4,709 5,338
Other assets 4,571 4,156
--------------- -------------
TOTAL OTHER ASSETS 30,764 31,350
--------------- -------------
TOTAL ASSETS $ 92,153 $ 107,320
=============== =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 19,038 $ 19,136
Notes payable 24,000 40,000
Mortgage note payable 3,337 3,479
Current portion of long-term liabilities - Other 130 119
--------------- -------------
TOTAL CURRENT LIABILITIES 46,505 62,734
--------------- -------------
LONG-TERM LIABILITIES
Other liabilities 1,603 1,541
--------------- -------------
TOTAL LONG-TERM LIABILITIES 1,603 1,541
--------------- -------------
SHAREHOLDERS' EQUITY:
Preferred stock, $2.50 par value, authorized 10,000,000
shares none issued or outstanding 0 0
Common stock, no par value, authorized 50,000,000
shares, issued and outstanding, 7,853,605 and 48,785 48,784
7,832,955 shares
Retained earnings (deficit) (3,801) (4,942)
Foreign currency translation adjustment (939) (797)
--------------- -------------
TOTAL SHAREHOLDERS' EQUITY 44,045 43,045
--------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 92,153 $ 107,320
=============== =============
</TABLE>
See notes to consolidated financial statements.
Page 2
<PAGE>
FRANKLIN ELECTRONIC PUBLISHERS, INCORPORATED
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except for per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
-------------------------------- -----------------------------
1999 1998 1999 1998
-------------- ----------------- -----------------------------
<S> <C> <C> <C> <C>
SALES $ 30,273 $ 32,089 $ 50,019 $ 53,130
COST OF SALES 19,686 20,212 34,729 31,828
-------------- ----------------- -------------- --------------
GROSS MARGIN 10,587 11,877 15,290 21,302
-------------- ----------------- -------------- --------------
EXPENSES:
Sales and marketing 4,965 6,343 11,668 12,170
Research and development 902 1,253 2,348 2,501
General and administrative 2,146 3,209 6,421 5,786
-------------- -------------- -------------- --------------
Total operating expenses 8,013 10,805 20,437 20,457
-------------- ----------------- -------------- --------------
OPERATING INCOME (LOSS) 2,574 1,072 (5,147) 845
Interest expense (913) (850) (1,798) (1,722)
Interest and investment income 95 121 216 476
Other, net (80) (277) (202) (637)
Gain on sale of REX 8,072 - 8,072 -
-------------- -------------- -------------- --------------
INCOME (LOSS) BEFORE INCOME TAXES 9,748 66 1,141 (1,038)
INCOME TAX PROVISION (BENEFIT) - 25 - (395)
-------------- ----------------- -------------- --------------
NET INCOME (LOSS) $ 9,748 $ 41 $ 1,141 $ (643)
============== ================= ============== ==============
NET INCOME (LOSS) PER SHARE:
Basic $ 1.24 $ 0.01 $ 0.15 $ (0.08)
============== ================= ============== ==============
Diluted $ 1.24 $ 0.01 $ 0.14 $ (0.08)
============== ================= ============== ==============
WEIGHTED AVERAGE SHARES:
Basic 7,847 7,966 7,840 7,930
============== ================= ============== ==============
Diluted 7,872 8,012 7,878 7,985
============== ================= ============== ==============
</TABLE>
See notes to consolidated financial statements.
Page 3
<PAGE>
FRANKLIN ELECTRONIC PUBLISHERS, INCORPORATED
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(in thousands, except for share data)
<TABLE>
<CAPTION>
Accumulated
Common Stock Other Total
---------------------------- Retained Comprehensive Shareholders'
Shares Amount Earnings Income * Equity
----------- ------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
BALANCE - MARCH 31, 1999 7,832,955 $ 48,784 $ (4,942) $ (797) $ 43,045
Issuance of shares and amortization
of deferred compensation expense
for shares issued for services
(unearned portion $70) 20,650 1 - - 1
Income for the period - - 1,141 - 1,141
Foreign currency translation adjustment - - - (142) (142)
----------- ------------- --------------- --------------- ---------------
BALANCE - SEPTEMBER 30, 1999 7,853,605 $ 48,785 $ (3,801) $ (939) $ 44,045
=========== ============= =============== =============== ===============
</TABLE>
* Comprehensive income, i.e., net income (loss), plus, or less, other
comprehensive income, totaled $999 for the six months ended September 30, 1999.
See notes to consolidated financial statements.
Page 4
<PAGE>
FRANKLIN ELECTRONIC PUBLISHERS, INCORPORATED
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
September 30,
------------------------------
1999 1998
------------ --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS) $ 1,141 $ (643)
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS)
TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Depreciation and amortization 2,782 3,066
Provision for losses on accounts receivable 949 79
Loss on disposal of property and equipment 65 54
Gain on sale of REX (8,072)
Provision for inventory revaluation 2,350 -
Deferred income taxes - (420)
Source (use) of cash from change in operating
assets and liabilities:
Accounts receivable (4,404) (10,816)
Inventories (3,560) (7,984)
Prepaids and other assets 4,264 364
Accounts payable and accrued expenses 851 2,696
Other, net 10 -
------------ --------------
NET CASH USED IN OPERATING ACTIVITIES (3,624) (13,604)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (911) (782)
Proceeds from sale of property and equipment 28 14
Software development costs (750) (1,050)
Proceeds form sale of REX line 12,619 -
Investments in limited partnerships - (6,000)
Redemption of investments in limited partnerships 6,045 -
Change in other assets (411) (1,393)
------------ --------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 16,620 (9,211)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payment of Senior Notes (16,000) -
Principal payments of mortgage (142) (142)
Proceeds from issuance of common shares - 174
Purchase of Company common shares - (2,332)
Other liabilities 61 (76)
------------ --------------
NET CASH USED IN FINANCING ACTIVITIES (16,081) (2,376)
EFFECT OF EXCHANGE RATE CHANGES ON CASH (142) 594
------------ --------------
DECREASE IN CASH AND CASH EQUIVALENTS (3,227) (24,597)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 12,870 33,923
------------ --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 9,643 $ 9,326
=========== =============
</TABLE>
See notes to consolidated financial statements.
Page 5
<PAGE>
FRANKLIN ELECTRONIC PUBLISHERS, INCORPORATED
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Reference is made to the financial statements included in the Company's annual
Report (Form 10-K) filed with the Securities and Exchange Commission for the
year ended March 31, 1999.
The financial statements for the periods ended September 30, 1999 and 1998 are
unaudited and include all adjustments necessary to a fair statement of the
results of operations for the periods then ended. All such adjustments are of a
normal recurring nature. The results of the Company's operations for any interim
period are not necessarily indicative of the results of the Company's operations
for a full fiscal year.
NOTES PAYABLE
The Company is in default on certain financial covenants of the agreements
pursuant to which its Senior Notes were issued pertaining to EBITDA coverage of
interest expense and fixed charges and requiring a minimum consolidated net
worth of $52.5 million. The Noteholders have given a short-term waiver of these
defaults through December 8, 1999. All payments of interest and principal on the
Senior Notes have been paid when due. The Company is presently in discussions
with the Noteholders to restructure the agreements to permit the Company to
operate under the agreements going forward without any defaults. As a result of
the ongoing negotiations, the Senior Notes have been classified as short-term
liabilities.
SALE OF REX PRODUCT LINE
The Company realized a gain of $8,072,000 on the sale of its REX product line
for $13,250,000 and the assumption of related liabilities. The assets sold
consisted primarily of inventory with a carrying value of approximately
$5,000,000 and the Company's trademarks, copyrights, contract rights and other
assets used in connection with the REX business.
OPERATIONS
The Company adopted FAS No. 131, "Disclosure about Segments of an Enterprise and
Related Information", at March 31, 1999. FAS No. 131 establishes annual and
interim reporting standards for an enterprise's operating segments and related
disclosures about its products, services, geographic areas and major customers.
Under FAS No. 131, the Company's operations are treated as one operating segment
as it only reports profit and loss information on an aggregate basis to the
chief operating decision maker of the Company.
Page 6
<PAGE>
FRANKLIN ELECTRONIC PUBLISHERS, INCORPORATED
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OPERATIONS - Continued
Information about the Company's product sales and major customers are as
follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
-----------------------------------------------------------------------------
September 30, September 30,
-----------------------------------------------------------------------------
Product Sales 1999 1998 1999 1998
- ----------------------------------------- --------------------------------------------------------
<S> <C> <C> <C> <C>
Reference $20,872 $22,842 $33,355 $38,322
Rolodex(R) Electronics 6,200 4,567 8,613 7,275
REX 2,964 4,092 6,194 6,485
Rocket eBook (65) - 1,235 -
Other 302 588 622 1,048
- ----------------------------------------- ---------------- --------------- ----------------
Total Sales $30,273 $32,089 $50,019 $53,130
========================================= ================ =============== ================
</TABLE>
Approximate foreign sources of revenues including export sales were as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
September 30, September 30,
----------------------------------------------------------------------------
Product Sales 1999 1998 1999 1998
- ----------------------------------------- --------------------------------------------------------
Europe $7,868 $6,363 $15,252 $12,147
Other International 1,199 2,332 2,445 3,843
</TABLE>
For the three month period ended September 30, 1999 one customer accounted for
more than 10% of the company's sales. Total sales to this customer were
approximately $3,600,000 for the quarter and included Reference, Rolodex(R)
Electronics and REX product. For the three months ended September 30, 1998 and
for the six months ended September 30, 1999 and 1998, no customer accounted for
more than 10% of the Company's revenues.
RECLASSIFICATIONS
Certain foreign currency losses for prior years have been reclassified from Cost
of Sales to Other, net for comparative purposes.
Page 7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three months ended September 30, 1999 as compared with September 30, 1998:
Sales
Sales of $30,273,000 for the quarter ended September 30, 1999 were 6% lower than
sales of $32,089,000 for the same quarter one year earlier. The sales decrease
is attributable to lower sales of reference products, which decreased from
$22,842,000 to $20,872,000 as a result of the deferral of customer orders
awaiting the changeover to an upgraded product line, and to lower sales of REX
products, which decreased from $4,092,000 to $2,964,000 as the Company spent
less on advertising the REX line while concentrating its efforts on divesting
that product line. The sales decreases were offset in part by an increase in
sales of organizers sold under the ROLODEX(R) Electronics brand from $4,567,000
last year to $6,200,000 and by increased technology licensing revenue of
approximately $700,000, primarily resulting from collections from licensees
relating to prior periods. Sales by Voice Powered Technology International, Inc.
("VPTI"), an 82% owned subsidiary of the Company, decreased from $588,000 last
year to $302,000 this year.
Gross Margin
Gross margin from operations was $10,587,000, or 35%, compared with $11,877,000,
or 37%, last year. Margins decreased as product mix shifted to ROLODEX(R)
Electronics organizer products that have lower margins than products that
contain reference content and as such command higher profit margins.
Operating Expenses
Total operating expenses decreased by $2,792,000 from $10,805,000 in the same
quarter last year to $8,013,000 this period as the Company strengthened expense
controls in the June quarter which began to be effective in lowering expenses
during the present period. Sales and marketing expenses decreased from
$6,343,000 (20% of sales) to $4,965,000 (16% of sales) because the Company spent
less on advertising the REX line. Research and development expenses decreased
from $1,253,000 (4% of sales) last year to $902,000 (3% of sales) primarily as a
result of a 15% reduction in personnel during the June quarter. General and
administrative expenses decreased in the present period from $3,209,000 (10% of
sales) last year to $2,146,000 (7% of sales) primarily as a result of lower
personnel costs due to the June quarter restructuring, the closing of certain
foreign offices and the inclusion in the prior year of $321,000 of severance
expense. Interest expense was $913,000 compared with $850,000 last year because
the interest rate on the
Page 8
<PAGE>
Company's Senior Notes increased in April 1999 as a result of the Company's
default on certain covenants of such Notes. Interest income decreased from
$121,000 last year to $95,000 this year as a result of lower cash levels.
Net Income
On September 27, 1999, the Company sold its REX product line to Xircom, Inc. for
$13,250,000, resulting in a gain of $8,072,000 for the current quarter. The
Company had net income of $9,748,000 or $1.24 per share for the second quarter
ending September 30, 1999, including the gain of $8,072,000 on the REX
divestiture, compared with net income of $41,000 or $.01 per share last year.
Because of net operating loss carryforwards, no income taxes have been provided
for by the Company during the period.
Six months ended September 30, 1999 as compared with September 30, 1998:
Sales
Sales of $50,019,000 were 6% lower than sales of $53,130,000 for the comparable
period one year earlier. The sales decrease is attributable to lower sales of
reference products, which decreased from $38,322,000 to $33,355,000 as a result
of the deferral of customer orders awaiting the changeover to an upgraded
product line, and to lower sales of the REX line which decreased from $6,485,000
to $6,194,000 as the Company spent less on advertising the line while
concentrating on the divestiture. Sales decreases were offset in part by higher
sales of organizers which increased from $7,275,000 to $8,613,000 and royalties
from technology licenses which were up by $700,000 over last year. VPTI's sales
decreased from $1,048,000 to $622,000.
Gross Margin
Gross margin from operations decreased from $21,302,000, or 40% of sales, to
$15,290,000, or 31% of sales. The decrease was attributable to costs of
approximately $1,500,000 related to an inventory writedown and price protection
in connection with the Rocket eBook, $2,300,000 of costs associated with the
transition to the new upgraded reference and ROLODEX(R) Electronics products,
as well as the shift in product mix to organizer products that have lower
margins than products that contain reference content.
Operating Expenses
Total operating expenses were relatively flat, decreasing from $20,457,000 (39%
of sales) in the period last year to $20,437,000 (41% of sales) as the Company's
strengthened expense controls, instituted in the June quarter, did not impact
expenses for the full period and because the restructuring referenced above
increased expenses in the June quarter. Sales and marketing
Page 9
<PAGE>
expenses decreased from last year's level of $12,170,000 (23% of sales) to
$11,668,000 (23% of sales) as the reduction in marketing expenditures in
connection with the REX line was partially offset by increased expenditures
incurred to develop the Company's internet marketing program. Research and
development expenses decreased to $2,348,000 (5% of sales) compared with
$2,501,000 (5% of sales) in the period one year earlier primarily because of a
reduction in personnel expenses. General and administrative expenses were up
from $5,786,000 (11% of sales) last year to $6,421,000 (13% of sales) this year,
primarily as a result of restructuring charges incurred in the June quarter,
that included severance costs in connection with a 15% reduction in personnel,
and the costs of closing certain foreign offices. Interest expense increased
from $1,722,000 last year to $1,798,000 this year for the reasons stated in the
quarterly comparisons, and interest income was $216,000 as compared with
$476,000 last year because of lower cash levels.
Net Income
The Company reported net income of $1,141,000, or $.15 per share, including the
gain of $8,072,000 from the REX divestiture, for the six months ending September
30, 1999 compared with a net loss of $643,000, or $.08 per share, last year.
CHANGES IN FINANCIAL CONDITION
Inventories decreased from $23,934,000 at March 31, 1999 to $20,369,000 at the
end of the September quarter mainly as a result of the REX divestiture. Cash and
cash equivalents of $12,870,000 and investments in limited partnerships of
$6,045,000 at March 31, 1999 are compared with cash of $9,643,000 at September
30, 1999. The investments in limited partnerships were redeemed by the Company
in the June quarter and the Company made a principal payment of $6,000,000 on
its Senior Notes in April 1999. The Company made an additional principal payment
on the Senior Notes of $10,000,000 from the proceeds of the REX divestiture in
September 1999, reducing Notes payable to $24,000,000 at September 30, 1999 from
$40,000,000 at March 31, 1999. Income tax receivable of $3,601,000 at March 31
decreased to $568,000 at September 30th because the Company received a portion
of its tax refund during the September quarter. Prepaids and other assets
decreased from $3,201,000 to $1,349,000 primarily as a result of a reduction in
advance payments to vendors and barter credits available. Accounts receivable
increased from $17,225,000 to $20,680,000 as a result of a seasonal increase in
sales.
LIQUIDITY AND CAPITAL RESOURCES
The Company is in default on certain financial covenants of the agreements
pursuant to which its Senior Notes were issued pertaining to EBITDA coverage of
interest expense and fixed charges and requiring a minimum consolidated net
worth of $52.5 million. The Noteholders have given a short-term wavier of these
defaults through December 8, 1999. All payments of interest and principal on the
Senior Notes have been paid when due. The Company is presently in discussions
Page 10
<PAGE>
with the Noteholders to restructure the agreements to permit the Company to
operate under the agreements going forward without any defaults. As a result of
the ongoing negotiations, the Senior Notes have been classified as short-term
liabilities. The Company has a commitment of $25,000,000 for a new credit
facility which will provide funds for a partial payment of the Senior Notes,
refinancing of the mortgage on its office and warehouse facility, and to meet
seasonal working capital requirements, if necessary. Such new credit facility
requires the approval of the Noteholders.
The Company has no material commitments for capital expenditures in the next
twenty-four months.
Year 2000 Compliance
The Company evaluates on a continuous basis software enhancements and updates
based on new technologies to improve its information systems. The Company has
finished its assessment of its current systems that support the Company's
operations in conjunction with year 2000 compliance. The Company has completed
remediation of its existing operational software to insure functionality and
continued operations beyond the year 2000. The cost of remediation is estimated
to be not more than $400,000, of which approximately $13,000 was expensed during
the six months ended September 30, 1999 and $340,000 was expensed in prior
years. The remainder is expected to be expensed as incurred. The Company does
not believe that the failure of any customer to be year 2000 compliant would
have a material adverse effect on the results of operations of the Company. The
Company has evaluated the progress of its major suppliers toward year 2000
compliance and believes that the applicable systems of its suppliers will be
year 2000 compliant.
PART II.
ITEM 1. LEGAL PROCEEDINGS
The class action complaint in the Superior Court of New Jersey
referenced in the Company's report on Form 10-Q for the quarter ended
June 30, 1999 has been settled.
In July 1999, the Company was served with a complaint in the United
States District Court for the Southern District of New York by Aral
Holdings, Inc., seeking damages of approximately $1.1 million for,
inter alia, alleged breach of contract in connection with a website
and interactive services consulting agreement, punitive damages in an
unspecified amount but alleged to be in excess of $5 million, and
injunctive relief in connection with alleged trade secret
misappropriation. The Company disputes the allegations of the
complaint and intends vigorously to defend this litigation.
The Company is subject to litigation from time to time arising in the
ordinary course of its business. The Company does not believe that any
such litigation is likely, individually or in the aggregate, to have a
material adverse effect on the financial condition of the Company.
Page 11
<PAGE>
ITEM 2. CHANGES IN SECURITIES - NONE
ITEM 3. DEFAULT UPON SENIOR SECURITIES
The Company defaulted on certain financial covenants of the agreements
pursuant to which its Senior Notes were issued pertaining to EBITDA
coverage of interest expense and fixed charges and requiring a minimum
consolidated net worth of $52.5 million. The Noteholders have given a
short-term wavier of these defaults through December 8, 1999. The
Company is presently in discussions with the Noteholders to
restructure the agreements to permit the Company to operate under the
agreements going forward. The Company has a commitment of $25,000,000
for a new credit facility which will provide funds for a partial
payment of the Senior Notes, refinancing of the mortgage on its office
and warehouse facility, and to meet seasonal working capital
requirements, if necessary. Such new credit facility requires the
approval of the Noteholders.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
The Annual Meeting of Shareholders of the Company was held on August
6, 1999. Reference is made to the Company's Proxy Statement furnished
to shareholders in connection with the solicitation of proxies in
connection with that Annual Meeting. In connection with the annual
election of directors, nine incumbent directors were re-elected with
Edward H. Cohen and Howard L. Morgan each receiving 6,170,374 votes
with 140,754 votes withheld; Barry J. Lipsky and James Meister each
receiving 6,170,774 votes with 140,354 votes withheld; Leonard M.
Lodish receiving 6,170,674 votes with 140,454 votes withheld, James H.
Simons receiving 6,170,174 votes with 140,954 votes withheld; Bernard
Goldstein receiving 6,150,874 votes with 160,254 votes withheld; Jerry
R. Schubel receiving 6,170,364 votes with 140,764 votes withheld; and
William H. Turner receiving 6,149,443 votes with 161,685 votes
withheld. Shareholders ratified the appointment of Radin, Glass & Co.
as auditors for the Company's 2000 fiscal year by vote of 6,284,038 in
favor, 24,759 against, and 2,331 abstentions.
ITEM 5. OTHER INFORMATION
ROLODEX(R) is a registered trademark of Berol Corporation, a
subsidiary of Newel Rubbermaid, Inc. Rocket eBook(TM) is a trademark
of NuvoMedia, Inc.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
No reports on Form 8-K were filed by the Company during the quarter
ended September 30, 1999. A report on Form 8-K was filed by the
Company on October 12, 1999 relating to the divestiture of the
Company's REX business.
Page 12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FRANKLIN ELECTRONIC PUBLISHERS,
INCORPORATED
Registrant
November 12, 1999 /s/ Barry J. Lipsky
- ----------------- -------------------------------------
Date Barry J. Lipsky
President and Chief Executive Officer
(Duly Authorized Officer)
NOVEMBER 12, 1999 /s/ Arnold D. Levitt
- ------------------- -------------------------------------
Date Arnold D. Levitt
Senior Vice President
(Principal Financial and Accounting Officer)
Page 13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CNSOLIDATED FINANCIAL STATMENTS OF FRANKLIN ELECTRONIC PUBLISHERS INCORPORATED
AND SUBSIDIARIES AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 9,643
<SECURITIES> 0
<RECEIVABLES> 21,793
<ALLOWANCES> 1,113
<INVENTORY> 20,369
<CURRENT-ASSETS> 52,609
<PP&E> 21,077
<DEPRECIATION> 12,297
<TOTAL-ASSETS> 92,153
<CURRENT-LIABILITIES> 46,505
<BONDS> 0
0
0
<COMMON> 48,785
<OTHER-SE> (4,740)
<TOTAL-LIABILITY-AND-EQUITY> 92,153
<SALES> 50,019
<TOTAL-REVENUES> 50,019
<CGS> 34,729
<TOTAL-COSTS> 34,729
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 949
<INTEREST-EXPENSE> 1,798
<INCOME-PRETAX> 1,141
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,141
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,141
<EPS-BASIC> .15
<EPS-DILUTED> .14
</TABLE>
