SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the year ended April 28, 1995.
Commission file no. 1-5590
Fluke Corporation
(Exact name of registrant as specified in its charter)
Washington
(State of incorporation or organization)
91 - 0606624
(I.R.S. Employer Identification No.)
6920 Seaway Boulevard Everett, Washington 98203
(Address of principal executive offices)
(206) 347 - 6100
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
registered
Common Stock, par value $.25 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Title of each class
Common Stock Purchase Rights
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 the filing requirements for the
past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [ ]
As of July 14, 1995, there were 7,981,426 shares of $0.25 par value
common stock outstanding and the aggregate market value of the common
shares (based upon the closing price of the shares on the New York
Stock Exchange) held by nonaffiliates was approximately $222 million.
Documents Incorporated By Reference
The following documents are incorporated by reference in the listed
parts of this Annual Report on Form 10-K:
Document Part of 10-K
1. Annual Report to Stockholders for the year ended
April 28, 1995
(only the portions listed in this report) Parts I and II
2. Proxy Statement dated July 25, 1995
(only the portions listed in this report) Part III
PART I
ITEM 1 - BUSINESS
Fluke Corporation (the Company), was founded in 1948 and was
incorporated under the laws of the State of Washington on October 7,
1953. In August, 1993, the Company changed its name from John Fluke
Mfg. Co., Inc. to Fluke Corporation. The Company is engaged in the
design, manufacture and marketing of compact, professional electronic
test tools. The Company's principal products are portable
instruments that measure the magnitude of voltage, current, power
quality, frequency, temperature, pressure and other key functional
parameters of electronic equipment.
The Company believes that there are a number of key trends occurring
throughout the world that are driving the need for portable
electronic test tools: increasing device complexity, growing
electronic content in existing and new applications, decentralization
of electronic systems and increasing reliance on mission critical
electronic systems. In addition, the increasing need for companies
to improve quality, document compliance with regulatory or industrial
standards, and maintain a safe working environment has further
increased the need for electronic test tools. These general trends
have greatly increased the need for trained technicians to be able to
install, maintain and diagnose electrical systems at widespread
locations. These trained technicians are responsible for enhancing
the up-time of electrical systems and have a new set of needs in the
tools they use to perform their jobs. These tools need to be
portable, precise, rugged and easy to use. These technicians use
these tools to measure electrical parameters across a wide variety of
fields and industries.
Fluke's targeted end-users are service, installation and maintenance
professionals who use the Company's tools to identify, diagnose and
solve electrical problems. Fluke's portable digital multimeters,
ScopeMeter (Registered Trademark) test tools and calibration
equipment, which have substantial and leading market shares, are used
for field testing and verification of a broad range of electronic
equipment. The Company has leveraged its competencies and market
presence by offering new products for emerging applications. These
include products that address local area networks (LANs), process
control, data acquisition (temperature control, counting and other
unattended data gathering), power analyzers and automotive
electronics. The Company also manufactures and markets traditional
bench test and measurement instruments, such as bench oscilloscopes.
PRODUCTS AND SERVICES
PRODUCTS
The Company is in a single line of business, the manufacturing and
selling of electronic test tools. Although the products vary in
capability, sophistication, use, size and price, they all
fundamentally test and measure electrical parameters such as voltage,
current, resistance, etc.
As of May 1995, the Company offered over 200 product models with over
1,300 options and accessories. These products are divided into two
product classes: handheld service tools and benchtop test
instruments.
Handheld service tools are typically used in field service
applications by technicians to install and troubleshoot electronic
and electrical equipment. Most of these tools are sold through
indirect distribution channels. Representative products include
handheld digital multimeters, ScopeMeter test tools, and LAN testers.
Benchtop test instruments are used primarily by engineers and are
most often sold through Fluke direct sales channels. Products
include bench oscilloscopes, calibrators, data acquisition systems,
and generators.
Handheld service tools were approimately 55 percent of the business in 1995,
49 percent in 1994, 50 percent in 1993 and 48 percent in 1992. Benchtop
test instruments were approximately 36 percent of the business in 1995, 42
percent in 1994, 41 percent in 1993 and 43 percent in 1992. The remaining
business consisted of service and parts for products that the Company sells.
NEW PRODUCTS
Fluke Corporation introduced the following major products in fiscal 1995.
ScopeMeter Series II. Four new models were introduced. ScopeMeter
(registered trademark) test tools combine the functions of an oscilloscope
with that of a digital multimeter in a handheld instrument.
701/702 Documenting Process Calibrators. These are the first handheld,
multifunction calibrators with full documentation capabilities designed
specifically for the calibration, troubleshooting and maintenance of process
instrumentation.
5500A Multi-Product Calibrator. This is a new class of multifunction
calibrator designed for today's increasingly broad calibration needs. It is
used to calibrate a wide range of dc/low frequency instrumentation.
860 Series Graphical(Trademark) Multimeters. These test tools combine
digital multimeter capabilities with analog, digital and graphical displays.
The 860 Series is a family of three instruments.
DSP-100 LAN CableMeter(Trademark). This handheld test tool is designed to
meet the soon to be announced standards for testing installed Category 5,
ISO and IEC local area networks (LAN) cabling to 100 MHz. The DSP-100 uses
a patented digital signal processing (DSP) technology.
NetDAQ(Trademark). These networked data acquisition units are portable, 20-
measurement channel front-end data acquisition instruments that connect
directly to a PC, or can transmit data via an Ethernet network.
PM3380A CombiScope(Trademark). This is a full function low-cost two channel
oscilloscope designed for the engineer.
PM3394A CombiScope(Trademark). This is another oscilloscope in the
CombiScope family of instruments that combine digital storage and an analog
oscilloscope.
PM 6685R Rubidium Timebase Frequency Counter. This frequency counter has a
new atomic reference that makes it the most accurate frequency counter on
the market in its price range.
SALES AND DISTRIBUTION
The Company currently markets its products in more than 80 countries through
both indirect and direct sales channels. The Company's indirect sales
channels, those in which the Company does not invoice the end-user, include
industrial distributors, catalog houses, automotive warehouses and
electrical wholesalers. The Company's direct sales channels include both
the Company's internal sales force, which the Company has in Western Europe,
Canada, Japan and Singapore and independent manufacturer's representatives
located in the U.S. and many other international markets. Direct and
indirect sales channels will typically serve different customers in the same
geographic areas.
The Company generally uses indirect distribution for its hand-held service
tools. The Company has found that the end-users purchasing these tools
often do not require ongoing product support or specific instructions on
tool applications. This distribution channel more effectively serves the
customers purchasing needs for these products.
The Company uses its direct sales channels primarily for its benchtop test
instruments. These products are generally more technically complex products
where the customer may require a greater amount of direct contact to close
or support a sale. Direct sales channels are also used effectively in 1)
those markets in which a substantial knowledge of the end-user's business is
required, such as among potential customers for the LANMeter, and 2) in
those geographic areas which do not have fully developed indirect
distribution channels or where the customer still expects to purchase hand-
held service tools through a direct sales force. In May 1995, the Company
shifted all of its direct sales responsibilities in the U.S. from an
internal sales force to fifteen manufacturer's representatives.
The Company's marketing effort consists principally of advertising in trade
publications, appearing at trade shows, and to a lesser extent, utilizing
direct mail campaigns.
SUPPLIERS
The Company generally uses standard parts and assemblies available from a
number of suppliers. However, some components are only available from a
single source. The Company has not experienced significant problems in
obtaining sole-source components but typically carries extra inventory of
any critical sole-sourced components. Fluke works closely as partners with
its suppliers in an effort to assure a continuity of supply even during
difficult allocation times. The Company is not aware of any facts which
would result in a reduction, interruption or termination in the supply of
its sole-sourced components.
PATENTS AND TRADEMARKS
The Company regards elements of its products as proprietary and relies
primarily on a combination of patent, copyright, trademark and trade secret
laws, confidentiality procedures, license agreements and other intellectual
property protection methods to protect its proprietary technology. The
Company holds or has pending United States and foreign patents to protect
product designs, processes and techniques for the duration of their value to
the Company. No significant patents have been formally upheld in court and
no representation is made as to the validity or the degree of protection
afforded by any patent. While the Company considers its existing and
pending patents to be important and expects to defend and to continue to
apply for patents with respect to any significant developments it regards as
patentable, it does not consider its business as dependent to any material
extent upon any one or more of such patents, nor would its present business
be materially adversely affected if any of the patents were held invalid.The
Company also owns trademarks, copyrights and proprietary information, which
are considered by the Company to have significant value.
SEASONAL TRENDS AND WORKING CAPITAL REQUIREMENTS
While the Company is subject to minor seasonality effects associated with
conducting business in various regions of the world, the impact of these
seasonal trends is immaterial to the Company as a whole. The Company does
not have any extraordinary working capital requirements.
CUSTOMERS
The Company's customers are generally involved in the installation, service,
repair, or calibration of electronic or electrical equipment. They are also
involved in research and development activities.
No one customer accounted for more than five percent of the Company's sales
in fiscal year 1995.
BACKLOG
The Company's backlog of unfilled orders amounted to $45.1 million as of
April 28, 1995, and $37.0 million as of April 29, 1994. The Company expects
to satisfy nearly all such unfilled orders in fiscal 1996. The backlog
consists of many different customer orders with no one customer being a
material component.
COMPETITION
The market for electronic test tools is widely fragmented, consisting of a
large number of companies, generally focused on one or a few products or
markets. Fluke maintains a broad product offering targeted to many
different applications and markets. The Company believes that its products
compete principally on the basis of performance, service and warranty, and
to a lesser extent, price. While there are numerous firms engaged in the
production of electronic test tools, no single company competes with the
Company across a substantial portion of its markets. It does, however, have
competitors that are substantially larger than the Company and have greater
financial resources.
RESEARCH AND DEVELOPMENT
The Company's research activities are directed toward the development of new
products that will complement and expand the present product line, and
toward the creation of new manufacturing techniques. Research and
development expense was $37.7 million for the year ended April 28, 1995
which was 10.0 percent of the Company's fiscal 1995 revenues. Research and
development expense was $34.9 million for the year ended April 29, 1994,
$13.7 million for the seven months ended ended April 30, 1993 and $22.5
million for the year ended September 1992 which were 9.8, 10.3 and 8.3
percent of the Company's total revenues, respectively. No research
contracts are obtained from customers, nor does the Company conduct any
research work under government development contracts.
ENVIRONMENTAL CONTROLS
The Company does not anticipate any material effects upon its capital
expenditures, earnings or competitive position as a result of compliance
with federal, state and local provisions regulating the discharge of
materials into the environment or otherwise relating to the protection of
the environment.
EMPLOYEES
The Company had 2,516 full-time employees as of April 28, 1995.
FOREIGN OPERATIONS AND EXPORT SALES
Information related to foreign operations and export sales is incorporated
herein by reference to Note 10 of the Consolidated Financial Statements on
page 52 of the Company's 1995 Annual Report to Stockholders, a copy of which
is filed as Exhibit 13 to this report.
The Company has significant revenues from outside of the United States which
increase the complexity and risk to the Company. These risks include
increased exposure to the risk of foreign currency fluctuations and the
potential economic and political impacts from doing business in foreign
countries including changes in labor and tax laws, import and export
controls and changes in governmental policies.
EXECUTIVE OFFICERS OF THE REGISTRANT
The Executive Officers, who serve at the pleasure of the Board of Directors
of the Company, as of June 23, 1995, are as follows:
WILLIAM G. PARZYBOK, JR.
Mr. Parzybok, age 53, has been Chairman of the Board, Chief Executive
Officer and a Director of the Company since 1991. He previously had been
employed for 22 years by the Hewlett-Packard Company where his most recent
position was Vice President and General Manager of Engineering Applications
Group from 1988 to 1991. Mr. Parzybok serves on the Executive Committee of
the Board. He is also a Director of PENWEST, Ltd.
GEORGE M. WINN
Mr. Winn, age 51, has been President, Chief Operating Officer and a Director
of the Company since 1982. He previously served as Chief Executive Officer
of the Company from 1987 to 1991. Mr. Winn serves on the Executive
Committee of the Board. He is also a Director of Heart Technology, Inc.
RICHARD W. VAN SAUN
Mr. Van Saun, age 57, has been a Senior Vice President of the Company and
General Manager of the Service Tools Division since 1994. He previously
served as Senior Vice President and Group Manager of the Diagnostic Tools
Division from 1992 to 1994 and as Vice President and Group Manager of the
Service Equipment Group from 1986 to 1992.
RONALD R. WAMBOLT
Mr. Wambolt, age 60, has been a Senior Vice President of the Company and
Director of Worldwide Sales and Service since 1991. He previously served as
Senior Vice President and Director of Worldwide Sales from 1987 to 1991.
WILLIAM R. HOFFMAN
Mr. Hoffman, age 59, is a Vice President of the Company and Manager of
Corporate Services. He is also General Manager of Calibration for the
Verification Tools Division. He previously served as Vice President of
Marketing Services and the Philips T&M Group from 1991 to 1992, and as Vice
President of the Company and Group Manager of the Philips T&M Group from
1987 to 1991.
DAVID E. KATRI
Mr. Katri, age 45, has been a Vice President of the Company and General
Manager of the Verification Tools Division since 1992. He previously served
as Vice President of the Company and Group Manager of the Manufacturing/R&D
Group from 1991 to 1992, and as Group Manager of the Manufacturing/R&D Group
from 1988 to 1990.
DOUGLAS G. MCKNIGHT
Mr. McKnight, age 46, has served as Vice President, General Counsel of the
Company since 1986 and as Corporate Secretary since 1983.
PATRICK J. O'HARA
Mr. O'Hara, age 42, has been Vice President, Human Resources and Facilities
Manager of the Company since September, 1994. He previously served as
Deputy Director of Human Resources at the Los Alamos National Laboratory
from 1993 to 1994, and prior to that, as Site Human Resources Manager of the
T.J. Watson Research Center of IBM Corporation from 1990 to 1993.
BARRY L. ROWAN
Mr. Rowan, age 38, has been Vice President and Chief Financial Officer of
the Company since 1992. He previously had been employed by Comlinear
Corporation where he served as President from 1989 to 1991.
JOHN R. SMITH
Mr. Smith, age 54, has been Vice President, Treasurer of the Company since
1987.
ITEM 2 - PROPERTIES
The Company owns approximately 162 acres of real estate near Everett,
Washington, the site of its corporate headquarters and U.S. manufacturing,
warehousing and distribution facilities. These facilities are housed in six
separate facilities consisting of approximately 480,000 square feet, 200,000
square feet and four smaller facilities totaling 77,800 square feet. The
Company also owns a 25,000 square foot service facility situated on 1.5
acres in Paramus, New Jersey and a 27,000 square foot service facility
situated on 4.8 acres in Palatine, Illinois. All facilities owned by the
Company are insured at their estimated replacement cost.
The Company leases three facilities in The Netherlands, consisting of a
138,400 square foot engineering and manufacturing facility located at
Almelo, a 17,600 square foot European headquarters and a 10,700 square foot
service facility both located at Eindhoven. These properties could be
duplicated, if necessary, with some disruption to operations. The Company
has approximately 189,300 square feet of additional leased facilities
throughout the world which are utilized for sales and service. The Company
believes that its existing facilities are in good condition and are suitable
and adequate for its business.
ITEM 3 - LEGAL PROCEEDINGS
Not applicable.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II
ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The information required by this Item is incorporated herein by reference to
Stock Price Information on page 58 of the Company's 1995 Annual Report to
Stockholders, a copy of which is filed as Exhibit 13 to this Report.
ITEM 6 - SELECTED FINANCIAL DATA
The information required by this Item is incorporated herein by reference to
the Financial Summary on pages 56 and 57 of the Company's 1995 Annual Report
to Stockholders, a copy of which is filed as Exhibit 13 to this Report.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information required by this Item is incorporated herein by reference to
pages 28 through 33 of the Company's 1995 Annual Report to Stockholders, a
copy of which is filed as Exhibit 13 to this Report.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is incorporated herein by reference to
pages 34 through 53 and the Selected Quarterly Financial Data (unaudited) on
page 58 of the Company's 1995 Annual Report to Stockholders, a copy of which
is filed as Exhibit 13 to this Report.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10 - DIRECTORS OF THE REGISTRANT
The information required by this Item relating to Directors is incorporated
herein by reference to pages 3 through 7 of the Company's proxy statement
dated July 25, 1995, to be filed with the Securities and Exchange Commission
pursuant to Section 14(a) of the Securities Exchange Act of 1934.
ITEM 11 - EXECUTIVE COMPENSATION
The information required by this Item is incorporated herein by reference to
pages 7 through 9 of the Company's proxy statement dated July 25, 1995, to
be filed with the Securities and Exchange Commission pursuant to Section
14(a) of the Securities Exchange Act of 1934.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is incorporated herein by reference to
pages 2 and 3 of the Company's proxy statement dated July 25, 1995, to be
filed with the Securities and Exchange Commission pursuant to Section 14(a)
of the Securities Exchange Act of 1934.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is incorporated herein by reference to
page 11 of the Company's proxy statement dated July 25, 1995, to be filed
with the Securities and Exchange Commission pursuant to Section 14(a) of the
Securities Exchange Act of 1934.
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) Financial Statements of the Company
The following financial statements of Fluke Corporation and Subsidiaries are
incorporated herein by reference to pages 34 through 58 of the Company's
1995 Annual Report to Stockholders, a copy of which is filed as Exhibit 13
to this report.
1. Consolidated Balance Sheets as of April 28, 1995 and April 29, 1994.
2. Consolidated Statements of Income for the year ended April 28, 1995, the
year ended April 29, 1994, for the seven months ended April 30, 1993 and the
year ended September 25, 1992.
3. Consolidated Statements of Cash Flows for the year ended April 28, 1995,
the year ended April 29, 1994, for the seven months ended April 30, 1993 and
the year ended September 25, 1992.
4. Consolidated Statements of Stockholders' Equity for the year ended April
28, 1995, the year ended April 29, 1994, for the seven months ended April
30, 1993 and the year ended September 25, 1992.
5. Notes to Consolidated Financial Statements.
(a)(2) Financial Statement Schedules
The following additional information should be read in conjunction with the
Consolidated Financial Statements of the Company described in Item 14
(a)(1):
Schedule II Valuation and Qualifying Accounts
Schedules other than those listed above are omitted because they are not
required or are not applicable, or because the information is furnished
elsewhere in the financial statements or the notes thereto.
(a)(3) Index to Exhibits
Exhibit Page No.
No. Exhibit Sequential
Numbering System
3. Articles of Incorporation and Bylaws
3.1 Restated copy of Articles of Incorporation as amended on August
11, 1993 (incorporated by reference to Exhibit 3.1 of the
Company's Form 10-K Report for the Fiscal Year ended April 29,
1994).
3.2 Conformed Copy of Bylaws as amended through January 16, 1995
4. Instruments Defining the Rights of Security Holders, Including
Indentures
4.1 Stockholders Rights Plan (incorporated by reference to the
Company's Form 8A Report dated July 11, 1988), the First
Amendment to the Stockholders Rights Plan (incorporated by
reference to the Company's Form 8A Report dated May 2, 1989)
and the Second Amendment to the Stockholders Rights Plan
(incorporated by reference to the Company's Form 8A report
dated February 15, 1990).
10. Material Contracts
10.1 1990 Stock Incentive Plan of the Company (incorporated by
reference to Exhibit 10.11 of the Company's Form 10-K Report
for the Fiscal Year ended September 27, 1991).
10.2 Stock Option Plan for Outside Directors (incorporated by
reference to Exhibit 10.12 of the Company's Form 10-K Report
for the Fiscal Year ended September 27, 1991).
10.3 Employment Agreement dated September 5, 1991 between the
Company and William G. Parzybok, Jr. (incorporated by reference
to Exhibit 10.7 of the Company's Form 10K Report for the Fiscal
Year ended September 27, 1992).
10.4 Employment Agreement dated September 5, 1991 between the
Company and George M. Winn (incorporated by reference to
Exhibit 10.8 of the Company's Form 10K Report for the Fiscal
Year ended September 27, 1992).
10.5 Employment Agreement dated September 5, 1991 between the
Company and Ronald R. Wambolt (incorporated by reference to
Exhibit 10.9 of the Company's Form 10K Report for the Fiscal
Year ended September 27, 1992).
10.6 Employment Agreement dated September 5, 1991 between the
Company and Richard W. Van Saun (incorporated by reference to
Exhibit 10.10 of the Company's Form 10K Report for the Fiscal
Year ended September 27, 1992).
10.7 Change of Control Agreement dated September 5, 1991 between the
Company and John R. Smith. Other executive officers of the
Company have identical change of control agreements with the
Company (incorporated by reference to Exhibit 10.12 of the
Company's Form 10-K Report for the Fiscal Year ended April 30,
1993).
10.8 Annual Variable Compensation Policy (incorporated by
reference to Exhibit 10.17 of the Company's Form 10-K Report
for the Fiscal Year ended April 30, 1993).
10.9 Purchase Agreement between the Company and Philips Electronics
N.V. dated February 26, 1993 (incorporated by reference to
Exhibit 10.18 of the Company's Form 10-K Report for the Fiscal
Year ended April 30, 1993).
10.10 Stock Purchase Agreement between the Company and Philips
Electronics N.V. dated May 26, 1993 (incorporated by reference
to Exhibit 10.19 of the Company's Form 10-K Report for the
Fiscal Year ended April 30, 1993).
10.11 Fluke Corporation 1988 Stock Incentive Plan of the Company as
amended on June 10, 1993 by stockholders on September 29, 1993
(incorporated by reference to Exhibit 10.11 of the Company's
Form 10-K Report for the Fiscal Year ended April 29, 1994
10.12 Deferred Compensation Plan for Directors of Fluke Corporation
as amended on April 29, 1994 (incorporated by reference to
Exhibit 10.12 of the Company's Form 10-K Report for the Fiscal
Year ended April 29, 1994).
10.13 Fluke Corporation Supplemental Retirement Income Plan as
amended on June 22, 1994 (incorporated by reference to Exhibit
10.13 of the Company's Form 10-K Report for the Fiscal Year
ended April 29, 1994).
11 Computation of Earnings Per Share
13 1995 Annual Report to Stockholders
18 Preferability letter from Ernst and Young, independent
auditors, dated July 22, 1993 regarding Change in Accounting
Principle (incorporated by reference to Exhibit 18 of the
Company's Form 10-K Report for the Fiscal Year ended April 30,
1993).
21 Subsidiaries
23.1 Consent of Ernst & Young LLP, independent auditors, dated July 27,
1995
Item 14 (b)Reports on Form 8-K.
No reports on Form 8-K were filed during the last quarter of the
Company's Fiscal Year ended April 28, 1995.
Item 14 (c)Exhibits: See "Index to Exhibits" at Item 14(a)(3) above.
Item 14 (d)Financial Statement Schedules: Schedules required to be
filed in response to this portion of Item 14 are listed above in Item
14 (a)(2).
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.
FLUKE CORPORATION
(Registrant)
/s/ George M. Winn President
George M. Winn Chief Operating Officer July 25, 1995
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 date indicated.
Signature Title Date
/s/ William G. Parzybok, Jr. Chairman of the Board July 25, 1995
William G. Parzybok, Jr. Chief Executive Officer
/s/ George M. Winn President, Chief Operating July 25, 1995
George M. Winn Officer and Director
/s/ Barry L. Rowan Vice President July 25, 1995
Barry L. Rowan Chief Financial Officer
/s/ John R. Smith Vice President, Treasurer July 25, 1995
John R. Smith Chief Accounting Officer
/s/ J. Peter Bingham Director July 25, 1995
J. Peter Bingham
/s/ Philip M. Condit Director July 25, 1995
Philip M. Condit
/s/ John D. Durbin Director July 25, 1995
John D. Durbin
/s/ David L. Fluke Director July 25, 1995
David L. Fluke
/s/ John M. Fluke, Jr. Director July 25, 1995
John M. Fluke, Jr.
/s/ Robert S. Miller, Jr. Director July 25, 1995
Robert S. Miller, Jr.
/s/ William H. Neukom Director July 25, 1995
William H. Neukom
/s/ Dr. David S. Potter Director July 25, 1995
Dr. David S. Potter
/s/ N. Stewart Rogers Director July 25, 1995
N. Stewart Rogers
/s/ Stephen C. Tumminello Director July 25, 1995
Stephen C. Tumminello
/s/ James E. Warjone Director July 25, 1995
James E. Warjone
<TABLE>
Schedule VIII
VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
<CAPTION>
<F1>
Column C
Column A Column B Additions Column D Column F
Balance at Charged to Balance at
Beginning Costs and <F2> End of
Classification of Period Expense Deductions Period
<S> <C> <C> <C> <C>
Year ended September 25, 1992:
Allowance for Doubtful
Accounts Receivable $454 $228 $276 $406
Seven months ended April 30, 1993:
Allowance for Doubtful
Accounts Receivable $406 $121 $ 51 $476
Year ended April 29, 1994:
Allowance for Doubtful
Accounts Receivable $476 $440 $330 $586
Year ended April 28, 1995:
Allowance for Doubtful
Accounts Receivable $586 $820 $265 $1,141
<FN>
<F1> Column C(2) has been omitted because the answer would be none.
<F2> Write-off of uncollectible accounts receivable less recoveries.
</TABLE>
AMENDED AND RESTATED
BYLAWS
OF
FLUKE CORPORATION
(A corporation incorporated under
the laws of the State of Washington)
SECTION 1
Stockholders and Stockholders' Meetings
1.1 Annual Meeting. The annual meeting of the stockholders of the
corporation for the election of Directors and for the transaction of such
other business as may properly come before the meeting shall be held each
year at the principal office of the corporation, 6920 Seaway Boulevard,
Everett, WA 98203 or at some other place, either within or without the
State of Washington as designated by the Board of Directors (the
Board), on the second Wednesday of September at 5 p.m (or if such
specified day is a legal holiday, then on the next business day at the
same time), or on such other day and time as may be set by the Board.
1.2 New Business. At an annual meeting of stockholders, only such new
business shall be conducted, and only such proposals shall be acted upon,
as shall have been brought before the annual meeting (a) by, or at the
direction of, the Board or (b) by any stockholder of the corporation who
complies with the notice procedures set forth in this Section 1.2.
For a proposal to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof in
writing to the Secretary of the corporation. To be timely, a
stockholder's notice must be delivered to, or mailed and received at, the
principal office of the corporation not less than 70 days prior to the
scheduled annual meeting, regardless of any postponements, deferrals or
adjournments of that meeting to a later date; provided, however, that, if
less than 80 days' notice or prior public disclosure of the date of the
scheduled annual meeting is given or made, notice by the stockholder to
be timely must be so delivered or received not later than the close of
business on the 10th day following the earlier of the day on which such
notice of the date of the scheduled annual meeting was mailed or the day
on which such public disclosure was made.
A stockholder's notice to the Secretary shall set forth as to each matter
the stockholder proposes to bring before the annual meeting (a) a brief
description of the proposal desired to be brought before the annual
meeting and the reasons for conducting such business at the annual
meeting, (b) the name and address, as they appear on the corporation's
books, of the stockholder proposing such business and any other
stockholders known by such stockholder to be supporting such proposal,
(c) the class and number of shares of stock of the corporation which are
beneficially owned by the stockholder on the date of such stockholder
notice and by any other stockholders known by such stockholder to be
supporting such proposal on the date of such stockholder notice, and (d)
any financial interest of the stockholder in such proposal.
The Board may reject any stockholder proposal not timely made in
accordance with the terms of this Section 1.2. If the Board, or a
designated committee thereof, determines that the information provided in
a stockholder's notice does not satisfy the informational requirements of
this Section 1.2 in any material respect, the Secretary shall promptly
notify such stockholder of the deficiency in the notice. The stockholder
shall have an opportunity to cure the deficiency by providing additional
information to the Secretary within such period of time, not to exceed
five days from the date such deficiency notice is given to the
stockholder, as the Board or such committee thereof shall reasonably
determine. If the deficiency is not cured within such period, or if the
Board or such committee thereof determines that the additional
information provided by the stockholder, together with information
previously provided, does not satisfy the requirements of this Section
1.2 in any material respect, then the Board may reject such stockholder's
proposal.
The Secretary shall notify a stockholder in writing whether such
stockholder's proposal has been made in accordance with the time and
informational requirements of this Section 1.2. Notwithstanding the
procedure set forth in this Section 1.2, if neither the Board nor such
committee thereof makes a determination as to the validity of any
stockholder proposal, the presiding officer of the annual meeting shall
determine and declare at the annual meeting whether the stockholder
proposal was made in accordance with the terms of this Section 1.2. If
the presiding officer determines that a stockholder proposal was made in
accordance with the terms of this Section 1.2, ballots shall be provided
for use at the meeting with respect to any such proposal. If the
presiding officer determines that a stockholder proposal was not made in
accordance with the terms of this Section 1.2, such proposal shall not be
acted upon at the annual meeting.
In addition to the notice procedures of this Section 1.2, stockholder
proposals may be ruled out of order if the subject matter of the proposal
is beyond the authority of stockholders as a matter of law, is unclear or
is inappropriate for stockholder consideration.
1.3 Special Meetings. Special meetings of the stockholders for any
purpose or purposes may be called at any time by the Board, to be held at
such date, time and place as the Board shall prescribe. Upon the request
of the Board, it shall be the duty of the Secretary to deliver notice of
such special meeting of the stockholders within thirty (30) days after
the receipt of said request. If said Secretary shall neglect or refuse
to deliver such notice, the Board may do so.
1.4 Notice of Meetings. Written notice stating the date, time and place
of the annual stockholders' meeting and, in the case of a special
stockholders' meeting, the purpose or purposes for which the meeting is
called, shall be delivered within the period prescribed by the Washington
Business Corporation Act either personally or by mail, by or at the
direction of the Secretary, to each stockholder of record entitled to
vote at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail addressed to the
stockholder at his or her address as it appears on the stock transfer
books of the corporation, with postage thereon prepaid.
1.5 Fixing of Record Date. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or entitled to receive payment of any dividend, or
in order to make a determination of stockholders for the payment of any
distribution, the allotment of rights, the conversion or exchange of any
securities by their terms or any other proper purpose, the Board may fix
in advance a date as the record date for any such determination of
stockholders. Such record date shall not be more than seventy (70) days
and, in case of a meeting of stockholders, not less than ten (10) days
prior to the date on which the particular action requiring such
determination is to be taken.
If no record date is fixed for the determination of stockholders entitled
to notice of or to vote at a meeting of stockholders, or stockholders
entitled to receive payment of a dividend, the date on which notice of
the meeting is mailed or the date on which the resolution of the Board
declaring such dividend is adopted, as the case may be, shall be the
record date for such determination of stockholders. When a determination
of stockholders entitled to vote at any meeting of stockholders has been
made as provided in this Section 1.5, such determination shall apply to
any adjournment thereof, unless the Board chooses to establish a new
record date or if the adjournment is more than one hundred twenty (120)
days after the date of the original meeting in which case the Board must
establish a new record date.
1.6 List of Stockholders. At least ten (10) days before each
stockholders' meeting, the Secretary or the agent having charge of the
stock transfer books of the corporation shall compile a complete list of
the stockholders entitled to vote at such meeting or adjournment thereof,
arranged in alphabetical order, with the address of each stockholder and
the number of shares owned by each stockholder. This list shall be kept
at the principal office of the corporation for ten (10) days prior to the
meeting, and shall be kept open at such meeting, for the inspection of
any stockholder or any stockholder's agent.
1.7 Quorum. The holders of a majority of the shares entitled to vote at
a meeting, present in person or by proxy, shall constitute a quorum of
stockholders for the transaction of business and the act of a majority of
the shares present in person or by proxy at a meeting at which there is a
quorum, shall be the act of the corporation, except as otherwise provided
by these Bylaws, the Articles of Incorporation, or the Washington
Business Corporation Act.
1.8 Adjourned Meetings. Whether for failure to obtain a quorum or
otherwise, an adjournment or adjournments of any stockholders' meeting
may be taken to such date, time and place as the majority of those
present may determine. Notice need not be given of the new date, time and
place if the announcement of such information is made at such meeting
before adjournment. However if a new record date is set pursuant to
Section 1.5, notice of the adjourned meeting must be given to
stockholders as of the new record date.
1.9 Proxies. The holder of any proxy for a stockholder shall present
evidence to the Secretary of his or her appointment by an instrument in
writing signed by the stockholder or by his or her duly authorized
attorney-in-fact. No proxy shall be valid after eleven (11) months from
the date of its execution unless otherwise provided in the proxy.
Revocation of a stockholder's proxy shall not be effective until written
notice thereof has actually been received by the Secretary prior to the
start of the meeting.
SECTION 2
Board of Directors
2.1 Number and Qualification. The business affairs and property of the
corporation shall be managed under the direction of a Board of Directors,
the number of members of which shall be thirteen.
2.2 Election -Term of Office. Directors shall hold office for the term
set forth in this Section 2.2, and until their respective successors are
elected and qualified, unless removed in accordance with the Articles of
Incorporation and the Washington Business Corporation Act. When the
Board shall consist of fewer than nine members, each Director shall hold
office until the next succeeding annual meeting of stockholders. When
the Board shall consist of nine or more members, the Directors shall be
divided into three classes, each class to be as nearly equal in number as
possible, the term of office of Directors of the first class to expire at
the first annual meeting of stockholders after their election, that of
the second class to expire at the second annual meeting after their
election, and that of the third class to expire at the third annual
meeting after their election. At each annual meeting after such
classification, the number of Directors equal to the number of the class
whose term expires at the time of such meeting shall be elected to hold
office until the third succeeding annual meeting. In the event of
failure to elect Directors at any annual stockholders' meeting, or in the
event of failure to hold any annual stockholders' meeting as provided by
these Bylaws, Directors may be elected at a special meeting of the
stockholders called for that purpose.
2.3 Director Nominations. Nominations of candidates for election as
Directors at any meeting of stockholders may be made (a) by, or at the
direction of, a majority of the Board or (b) by any stockholder entitled
to vote at such meeting. Only persons nominated in accordance with the
procedures set forth in this Section 2.3 shall be eligible for election
as Directors at a stockholders' meeting.
Nominations, other than those made by, or at the direction of, the Board,
shall be made pursuant to timely notice in writing to the Secretary as
set forth in this Section 2.3. To be timely a stockholder's notice shall
be delivered to, or mailed and received at, the principal office of the
corporation not less than 70 days nor more than 90 days prior to the date
of the scheduled stockholder meeting, regardless of postponements,
deferrals, or adjournments of that meeting to a later date; provided,
however, that if less than 80 days' notice or prior public disclosure of
the date of the scheduled meeting is given or made, notice by the
stockholder to be timely must be so delivered or received not later than
the close of business on the 10th day following the earlier of the day on
which such notice of the date of the scheduled meeting was mailed or the
day on which such public disclosure was made.
Such stockholder's notice shall set forth (a) as to each person whom the
stockholder proposes to nominate for election or re-election as a
Director and as to the stockholder giving the notice (i) the name, age,
business address and residence address of such person, (ii) the principal
occupation or employment of such person, (iii) the class and number of
shares of stock of the corporation which are beneficially owned by such
person on the date of such stockholder notice and (iv) any other
information relating to such person that is required to be disclosed in
solicitations of proxies with respect to nominees for election as
Directors, pursuant to Regulation 14A under the Securities Exchange Act
of 1934, as amended; and (b) as to the stockholder giving the notice (i)
the name and address, as they appear on the corporation's books, of such
stockholder and any other stockholders known by such stockholder to be
supporting such nominees and (ii) the class and number of shares of stock
of the corporation which are beneficially owned by such stockholder on
the date of such stockholder notice and by any other stockholders known
by such stockholder to be supporting such nominees on the date of such
stockholder notice. At the request of the Board, any person nominated
by, or at the direction of, the Board for election as a Director at a
stockholder meeting shall furnish to the Secretary that information
required to be set forth in a stockholder's notice of nomination which
pertains to the nominee.
No person shall be elected as a Director of the corporation unless
nominated in accordance with the procedures set forth in this Section
2.3. Ballots bearing the names of all the persons who have been
nominated for election as Directors at a stockholder meeting in
accordance with the procedures set forth in this Section 2.3 shall be
provided for use at the stockholder meeting.
The Board, or a designated committee thereof, may reject any nomination
by a stockholder not timely made in accordance with the requirements of
this Section 2.3. If the Board, or a designated committee thereof,
determines that the information provided in a stockholder's notice does
not satisfy the informational requirements of this Section 2.3 in any
material respect, the Secretary shall promptly notify such stockholder of
the deficiency in the notice. The stockholder shall have an opportunity
to cure the deficiency by providing additional information to the
Secretary within such period of time, not to exceed five (5) days from
the date such deficiency notice is given to the stockholder, as the Board
or such committee thereof shall reasonably determine. If the deficiency
is not cured within such period, or if the Board or such committee
thereof reasonably determines that the additional information provided by
the stockholder, together with information previously provided, does not
satisfy the requirements of this Section 2.3 in any material respect,
then the Board may reject such stockholder's nomination.
The Secretary shall notify a stockholder in writing whether such
stockholder's director nomination has been made in accordance with the
time and information requirements of this Section 2.3. Notwithstanding
the procedure set forth in this Section 2.3, if neither the Board nor
such committee thereof makes a determination as to the validity of any
nominations by a stockholder, the presiding officer of the meeting shall
determine and declare at the meeting whether a nomination was made in
accordance with the terms of this Section 2.3. If the presiding officer
determines that a nomination was made in accordance with the terms of
this Section 2.3, ballots shall be provided for use at the meeting with
respect to such nominee. If the presiding officer determines that a
nomination was not made in accordance with the terms of this Section 2.3,
the defective nomination shall be disregarded.
2.4 Vacancies. Except as otherwise provided by the Washington Business
Corporation Act, vacancies in the Board, whether caused by resignation,
death, retirement, disqualification, removal or otherwise, may be filled
for the remainder of the term by the affirmative vote of a majority of
the remaining Directors though less than a quorum of the Board, except
that Directors elected to fill vacancies occurring through an increase in
the number of Directors shall serve until the next election of Directors
by the stockholders.
2.5 Quorum and Voting. At any meeting of the Board, the presence in
person of a majority of the authorized number of Directors shall
constitute a quorum for the transaction of business. If a quorum is
present, the act of a majority of the Directors present at such meeting
shall be the act of the Board except as may be otherwise specifically
provided by these Bylaws, the Articles of Incorporation or the Washington
Business Corporation Act.
2.6 Annual Meeting. The first meeting of each newly elected Board shall
be known as the annual meeting thereof, and shall be held immediately
after the annual stockholders' meeting or any special stockholders'
meeting at which a Board is elected. Said meeting shall be held at the
same place as such stockholders' meeting unless some other place shall be
specified by resolution of the Board. It shall be the duty of the Board
at their annual meeting to elect the officers of the corporation.
2.7 Regular Meetings. Regular meetings of the Board, or any committee
thereof, shall be held at such date, time and place as shall from time to
time be fixed by resolution of the Board.
2.8 Special Meetings. Special meetings of the Board may be held at any
place at any time whenever called by the Chairman of the Board and Chief
Executive Officer, the President and Chief Operating Officer, any Vice
President, the Secretary or the Treasurer, or any two or more Directors.
2.9 Notice of Meetings. No notice of the annual meeting of the Board
shall be required. No notice of any regular Board or committee meeting
need be given, if the date, time and place thereof shall have been fixed
by resolution of the Board. Oral or written notice of the date, time and
place of regular meetings not fixed by Board resolution or special
meetings of the Board or committees thereof shall be given by the
Secretary, or by the person calling the meeting, at least two days prior
to the time of the meeting. Notice of any meeting of the Board may be
waived in writing by any Director at any time, either before or after
such meeting, and attendance at such meeting in person shall constitute a
waiver of notice except where a Director attends for the express purpose
of objecting to the transaction of any business because the meeting was
not lawfully convened.
2.10 Directors' Action Without a Meeting. Any action which could be
properly taken at a meeting of the Board or committee thereof, may be
taken without such a meeting if one or more written consents setting
forth the action so taken shall be signed by all the Directors, or all of
the members of the committee, as the case may be.
2.11 Committees of the Board. The Board, by resolutions adopted by a
majority of the entire Board, may designate from among its members an
Executive Committee and one or more other committees. Each such
committee may exercise the authority of the Board to the extent provided
in such resolution and any subsequent resolutions pertaining thereto and
adopted in like manner, provided that the authority of each such
committee shall be subject to the limitations set forth in the Washington
Business Corporation Act. Such committees shall keep minutes of their
proceedings and make regular reports to the Board.
2.12 Telephone Meetings. Members of the Board or any committee thereof
may participate in a meeting of such Board or committee by means of a
conference telephone or similar communications equipment by which all
directors participating in the meeting can hear each other during the
meeting. A director participating by such means is deemed to be present
in person at such meeting.
2.13 Compensation. Directors shall be paid their expenses, if any,
incurred in attending meetings of the Board or of any committee thereof,
a fixed fee for attendance at each Board or committee meeting, a fixed
annual retainer, any combination of the above, or such other
consideration as may be authorized by a majority of the entire Board from
time to time. Such payment does not preclude any Director from serving
the corporation in any other capacity and receiving compensation
therefor.
2.14 Rights Agreement. Notwithstanding any of the foregoing, any action
stated in the Rights Agreement between this corporation and the First
National Bank of Boston dated as of July 11, 1988, as such agreement may
be amended from time to time (the "Rights Agreement") to be taken by the
Board after a Person has become an Acquiring Person shall require the
presence in office of Continuing Directors and the concurrence of a
majority of the Continuing Directors. In connection with any action
stated in the Rights Agreement to be taken solely by the Continuing
Directors, the Continuing Directors shall constitute and have the full
authority of a committee of the Board. Capitalized terms in this
paragraph shall have the meaning indicated in the Rights Agreement.
SECTION 3
Officers
3.1 Officers Enumerated - Election. The officers of the corporation
shall be a Chairman of the Board and Chief Executive Officer, a President
and Chief Operating Officer, one or more Vice Presidents, a Secretary and
a Treasurer (together with one or more Assistant Secretaries and
Assistant Treasurers if such are desired by the Board), all of whom shall
be elected by the Board, to hold office at the pleasure of the Board.
3.2 Qualifications. None of the officers of the corporation need be a
director. Any two or more corporate offices may be held by the same
person, except the offices of President and Secretary.
3.3 The Chairman of the Board and Chief Executive Officer. The Chairman
of the Board and Chief Executive Officer (the Chairman) shall preside
at all meetings of the Board and of the stockholders, shall report to and
consult with the Board and shall perform such other duties as the Board
may from time to time prescribe.
3.4 The President and Chief Operating Officer. In the absence of the
Chairman, the President and Chief Operating Officer (the President)
shall preside at meetings of the Board and of the stockholders and shall
perform such other duties as the Board may from time to time prescribe.
3.5 The Vice President. The Vice President shall act as President in the
absence or disability of the President and shall perform such other
duties as the Board, the Chairman and/or the President may from time to
time prescribe.
3.6 The Secretary. The Secretary, personally or with the assistance of
others, shall keep records of the proceedings of the Directors and
stockholders; attest all certificates of stock in the name of the
corporation; keep the corporate seal and affix the same to certificates
of stock and other proper documents; keep a record of the issuance of
certificates of stock and the transfers of the same; and perform such
other duties as the Board, the Chairman and/or the President may from
time to time prescribe.
3.7 The Treasurer. The Treasurer shall have the care and custody, and be
responsible for, all funds and securities of the corporation, and shall
cause to be kept regular books of account. The Treasurer shall cause to
be deposited all such funds and securities in the name of the corporation
and shall perform such other duties as the Board, the Chairman and/or the
President may from time to time prescribe.
3.8 Vacancies. Vacancies in any office arising from any cause may be
filled by the Board at any regular or special meeting.
3.9 Removal. Any officer or agent may be removed by action of the Board
at any time, with or without cause, but such removal shall be without
prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer or agent shall not of itself create
any contract rights.
3.10 Other Officers and Agents. The Board may appoint such other
officers and agents as it shall deem necessary or expedient, who shall
hold their office for such terms, and shall exercise such powers and
perform such duties, as shall be determined from time to time by the
Board.
SECTION 4
Shares Certificates and Their Transfer
4.1 Issuance of Shares. No shares of the corporation shall be issued
unless authorized by the Board or by an authorized committee thereof
which is specifically empowered to do so.
4.2 Share Certificates. Share certificates shall be issued in numerical
order, and each stockholder shall be entitled to a certificate signed,
either manually or in facsimile, by the Chairman of the Board, President
or a Vice President, and by the Secretary or an Assistant Secretary, and
sealed, either manually or in facsimile, with the corporate seal.
4.3 Transfers. Shares may be transferred by delivery of the certificate,
accompanied either by an assignment in writing on the back of the
certificate, or by a written power of attorney to sell, assign and
transfer the same, signed by the record holder of the certificate.
Except as otherwise specially provided by these Bylaws, no shares of
stock shall be transferred on the books of the corporation until the
outstanding certificate has been surrendered to the corporation.
4.4 Loss or Destruction of Certificates. In the event of the loss or
destruction of any certificate, a new certificate may be issued in lieu
thereof upon satisfactory proof of such loss or destruction, and upon the
giving of security against loss to the corporation by bond, indemnity or
otherwise, to the extent deemed necessary by the Board or the Secretary
or Treasurer.
SECTION 5
Books and Records
5.1 Records of Meetings. The corporation shall keep as permanent
records, minutes of all Board and stockholder meetings, a record of all
Board actions taken by consent, and a record of all actions taken by a
committee of the Board exercising the authority of the Board on behalf of
the corporation.
5.2 Accounting Records. The corporation shall maintain appropriate
accounting records.
5.3 Stockholder Records. The corporation or its agent shall maintain a
record of its stockholders which includes the names and addresses of all
stockholders and the number and class of shares held by each.
5.4 Principal Office Records. The corporation shall maintain the
following records at its principal office:
a) the Articles of Incorporation and all amendments to them
currently in effect;
b) the Bylaws and all amendments to them currently in effect;
c) the minutes of all stockholders' meetings for the past three
years;
d) the consolidated balance sheets and income statements for the
past three years;
e) all written communications to the stockholders for the last three
years;
f) a list of the names and business addresses of the current
Directors and officers; and
g) the most recent annual report delivered to the Washington
Secretary of State.
5.5 Inspection of Records by Stockholders. A stockholder of the
corporation is entitled to inspect and copy, during regular business
hours, the records described in Section 5.4 if the stockholder gives the
corporation written notice of the stockholder's demand at least five
business days before the date that the stockholder wishes to inspect and
copy. Other corporate records may be available to be inspected and
copied by stockholders if such demand is made in good faith and for a
proper purpose and complies with the requirements of the Washington
Business Corporation Act.
SECTION 6
Fiscal Year
The fiscal year of the corporation shall be a 52/53 week fiscal year
ending on the last Friday in April.
SECTION 7
Corporate Seal
The corporate seal of the corporation shall consist of the name of the
corporation, the state of its incorporation and the year of its
incorporation.
SECTION 8
Amendment of Bylaws
Except as provided in the Articles of Incorporation, these Bylaws may be
adopted, altered, amended or repealed or new Bylaws enacted only: (i)
upon receiving the affirmative vote of a majority of the entire Board and
of a majority of the Continuing Directors (as defined in the Articles of
Incorporation), voting separately and as a subclass of Directors; or (ii)
at any annual meeting of the stockholders, if notice thereof is contained
in the notice of such meeting, (or at any special meeting thereof duly
called for that purpose) by the affirmative vote of the holders of eighty
percent (80%) of the voting power of the outstanding shares of Common
Stock, in addition to any other vote required for such action by law or
the provisions of any other class or series of stock of the corporation.
SECTION 9
Indemnification of Directors and Officers
9.1 Right to Indemnification. Subject to Section 9.2, each person who
was or is made a party or is threatened to be made a party to or is
involved (including, without limitation, as a witness) in any threatened,
pending, or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"),
by reason of the fact that he or she is or was a director or officer of
the corporation or who, while a director or officer of the corporation,
is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation or of a partnership,
joint venture, trust, other enterprise, or employee benefit plan, whether
the basis of such proceeding is alleged action in an official capacity as
a director or officer or in any other assigned capacity while serving as
a director, officer, employee or agent, shall be indemnified and held
harmless by the corporation to the fullest extent permitted by applicable
law, as then in effect, without the requirement of any further approval
or finding by the stockholders, the Board, or independent legal counsel,
against all expense, liability and loss (including attorneys' fees,
costs, judgments, fines, ERISA excise taxes or penalties and amounts to
be paid in settlement) reasonably incurred or suffered by such person in
connection therewith, and such indemnification shall continue as to a
person who has ceased to be a director or officer and shall inure to the
benefit of his or her heirs, executors and administrators.
9.2 Indemnification Exclusions. Notwithstanding Section 9.1, no
indemnification shall be provided hereunder to any such person (a) to the
extent that such indemnification would be prohibited by the Washington
Business Corporation Act or other applicable law as then in effect, or,
(b) except as provided in Section 9.4, in connection with a proceeding
(or part thereof) initiated by such person unless such proceeding (or
part thereof) was authorized by the Board.
9.3 Advancement of Expenses. The right to indemnification conferred in
this Section 9 shall include the right to be paid by the corporation the
expenses incurred in defending any such proceeding in advance of its
final disposition, except where the Board shall have adopted a resolution
expressly disapproving such advancement of expenses; provided, however,
that the payment of such expenses in advance of the final disposition of
a proceeding shall be made only upon delivery to the corporation of an
undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this Section
or otherwise.
9.4 Right to Bring Suit. If a claim under Section 9.1 is not paid in
full by the corporation within sixty days after a written claim has been
received by the corporation, or if a claim for expenses incurred in
defending a proceeding in advance of its final disposition authorized
under Section 9.3 is not paid within twenty days after a written claim
has been received by the corporation, the claimant may at any time
thereafter bring suit against the corporation to recover the unpaid
amount of the claim and, to the extent successful in whole or in part,
the claimant shall be entitled to be paid also the expense of prosecuting
such claim. The claimant shall be presumed to be entitled to
indemnification hereunder upon submission of a written claim (and, in an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition, where the required
undertaking has been tendered to the corporation), and thereafter the
corporation shall have the burden of proof to overcome the presumption
that the claimant is not so entitled. It shall be a defense to any such
that the claimant has not met the standards of conduct which make it
permissible hereunder or under the Washington Business Corporation Act
for the corporation to indemnify the claimant for the amount claimed, but
the burden of proving such defense shall be on the corporation.
9.5 Nonexclusivity of Rights. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its
final disposition conferred in this Section shall not be exclusive of any
other right which any person may have or hereafter acquire under any
statute, provision of the Articles of Incorporation or the Bylaws,
agreement, vote of stockholders or disinterested directors or otherwise.
9.6 Indemnification of Employees and Agents. The corporation may, by
action of its Board from time to time, provide indemnification and pay
expenses in advance of the final disposition of a proceeding to employees
and agents of the corporation on the same terms and with the same scope
and effect as set out in the provisions of this Section with respect to
the indemnification and advancement of expenses of directors and officers
of the corporation or pursuant to rights granted pursuant to, or provided
by, the Washington Business Corporation Act or on such other terms as the
Board may deem proper.
9.7 Insurance, Contracts and Funding. The corporation may maintain
insurance, at its expense, to protect itself and any director, officer,
employee or agent of the corporation or who, while a director, officer,
employee or agent of the corporation, is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the corporation
would have the power to indemnify such person against such expense,
liability or loss under the Washington Business Corporation Act. The
corporation may enter into contracts with any director or officer of the
corporation in furtherance of the provisions of this Section and may
create a trust fund, grant a security interest or use other means
(including, without limitation, a letter of credit) to ensure the payment
of such amounts as may be necessary to effect indemnification as provided
in this Section 9.
9.8 No Diminishment of Rights. This Section 9 may be altered or amended
as provided in Section 8, at any time, but no such amendment shall have
the effect of diminishing the rights of any person who is or was an
officer or director as to any acts or omissions taken or omitted to be
taken prior to the effective date of such amendment.
9.9 Contract Rights. The rights conferred by this Section 9 shall be
deemed to be contract rights between the corporation and each person who
is or was a director or officer. The corporation expressly intends each
such person to rely on the rights conferred hereby in performing his or
her respective duties on behalf of the corporation.
Date Amended and Restated Bylaws Adopted: January 16, 1995
<TABLE>
Exhibit 11 COMPUTATION OF EARNINGS PER SHARE
Fluke Corporation and Subsidiaries
<CAPTION>
Seven
Year ended Year ended months ended Year ended
April 28, April 29, April 30, September 25,
1995 1994 1993 1992
<S> <C> <C> <C> <C>
Shares issued at beginning
of period 8,807,391 8,807,391 8,807,391 8,807,391
Less repurchased shares at
beginning of period (908,701) (2,464,936) (2,472,756) (2,511,214)
Shares outstanding at
beginning of period 7,898,690 6,342,455 6,334,635 6,296,177
Net issuance of shares
under stock award plans,
weighted average (104,444) 5,208 2,398 23,515
Shares issued for
acquisiton, weighted average --- 1,000,000 --- ---
Shares issued upon conversion
of preferred shares,
weighted average --- 538,144 --- ---
Weighted average shares
outstanding 7,794,246 7,885,807 6,337,033 6,319,442
Common share equivalents
of convertible preferred
shares, weighted average --- --- 538,144 540,578
Assumed exercise of stock
options, weighted average
of incremental shares 198,558 145,889 194,286 173,425
Average shares and common
share equivalents
outstanding 7,992,804 8,031,696 7,069,463 7,033,695
Earnings per share based on
weighted average shares
and common share equivalents
outstanding $ 1.86 $ 1.10 $ 0.95 $ 2.16
Net Income (in thousands) $14,901 $8,800 $6,743 $15,204
</TABLE>
EXHIBIT 13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
FINANCIAL RESULTS 1995 VS 1994
The financial results in 1995 showed improvement over 1994. Revenues of
$382.1 million were up 7 percent over revenues of $357.9 million in 1994.
International revenues, after conversion to U.S. dollars, were up 13 percent
in 1995, while revenues in the United States were down less than one percent.
International revenues, which increased in many markets, were led by a 30
percent increase in Asian countries. Countries contributing to this growth
were South Korea, which increased over 50 percent, Singapore, increasing
almost 100 percent and Japan and Taiwan which both grew over 30 percent.
Revenues in Europe increased 9 percent in 1995 over 1994. Revenues in foreign
countries in which the Company has direct sales, when converted to U.S.
dollars, are affected by changes in the currency exchange rate. The
currencies of these countries generally strengthened against the U.S. dollar,
which caused 1995 international revenues to be approximately 5 percent higher
than 1994 from currency movements. The Company's international revenues
comprised 56 percent of total revenues in 1995 and 53 percent of total
revenues in 1994. This level of revenues from outside the United States has
added some complexity and risk to the Company. These risks include increased
exposure to the risk of foreign currency fluctuations, changes in labor and
tax laws, import and export controls and changes in governmental policies.
Beginning January 1996, the European Union will be requiring that all
electrical instrument sold within Europe have a "CE" mark, which indicates
compliance with certain electromagnetic emission and susceptibility
regulations. The Company has embarked on a process to modify its significant
products to conform to the CE requirements by the January 1, 1996 deadline.
Contributing to the flat revenues in the United States was a price increase at
the beginning of fiscal 1995 which caused some movement of business to 1994,
ahead of the price increase. There was no significant price increase at the
beginning of fiscal 1996.
Cost of goods sold as a percentage of revenues decreased to 49 percent in 1995
from 51 percent in 1994. This improvement is attributed primarily to
increased factory utilization in 1995 over 1994 and the mix of higher margin
new products. Also contributing to the improvement was the shipment of
product in 1994 which was acquired prior to the acquisition at a higher cost
from Philips pursuant to the alliance. The acquisition and the alliance are
described in Note 2, Acquisition of European Operations, to the financial
statements. The improvement in cost of goods sold allowed gross margin to
increase 12 percent on the 7 percent increase in revenues. The impact of
currency was negligible.
Operating expenses increased 7 percent in 1995 over 1994. Approximately 3
percent of the increase was due to the weakening U.S. dollar against the
currencies in which the Company has foreign operations. Marketing and
administrative expense increased 7 percent and research and development
expense increased 8 percent in 1995 over 1994. The increase in marketing and
administrative expense was due to several items including higher commission
expense from the sale of the local area network (LAN) products, higher
reserves for bad debts and increased legal costs related to the protection of
intellectual property. Research and development expense increased due to a
continued high level of product introductions in 1995.
Four years ago, the Company developed a new mission that has been discussed in
previous annual reports. The implementation of the mission has had a
significant impact on the type of products developed and on the way products
are sold in the U.S. The direct sales force in the U.S. was particularly
impacted because most of these new mission-centric products are more
effectively sold through indirect sales channels. In March 1995, it was
determined that the selling responsibility of products previously sold by the
Company's direct sales force would transfer to independent representative
organizations. Those employees impacted by the transition have either been
transferred to positions supporting indirect sales channels, hired by the
representative organizations or have left the Company. The cost of the
transition was recorded in 1995. There are fifteen representative
organizations with geographic territories that will be selling the Company's
products in the United States. This transition provides greater coverage for
these products and changes the cost of selling these products from a primarily
fixed to a variable cost.
The dynamics that caused the reorganization of the U.S. sales force are also
impacting how products are sold in international markets. Each country is
unique in the types of indirect sales channels that are available and in the
ways customers make their purchases. As the markets evolve, the Company is
evaluating the best methods of delivering its products to customers in each
international market. Although there are differences between countries, the
Company's products are increasingly sold through the various indirect channels
and this trend is expected to continue.
The Company recorded $2.8 million in amortization expense for goodwill and
intangible assets in 1995, most of which related to the acquisition of the
Philips test and measurement business. This amortization is recorded in
marketing and administrative expense. In 1994, this expense of $2.6 million
was recorded in nonoperating expense, but has been reclassified to marketing
and administrative expense in the accompanying financial statements.
The Company received a favorable settlement of $1.0 million in a legal action
taken against a company for patent infringement of which $200,000 was
recognized in nonoperating income in 1995. A reserve was established for the
remainder due to uncertainty of collectibility. Other nonoperating activities
in 1995 and 1994 included sales of facilities, interest income and expense and
currency gains and losses, none of which changed significantly from year to
year.
The effective annual tax rate increased from 37.5 percent in 1994 to 38.0
percent in 1995. Although the average statutory rate in Europe is close to
the U.S. statutory rate of 35.0 percent, losses in some of the acquired
country operations with no offsetting benefit caused the effective rate to
exceed the statutory rate. The Company has deferred tax assets which require
a minimum amount of taxable income in future years to be realized. The future
level of income before income taxes is expected to be sufficient to realize
the deferred tax assets, net of the recorded valuation allowance.
Net income and earnings per share both increased 69 percent in 1995 over 1994.
This increase resulted from the 12 percent increase in gross margin while
expenses only increased 7 percent. The Company's emphasis on revenue growth
through new products while controlling expenses and improving factory
efficiencies will continue in 1996.
FINANCIAL RESULTS 1994 VS 1993
All references to 1994 are to the fiscal year ended April 29, 1994 and all
references to 1993 are to the seven-month transition period ended April 30,
1993. Restated 1993 refers to the 1993 results that have been restated to
present 1993 on a comparable twelve month period to 1994. The transition
period resulted from a change in the fiscal year end in 1993 from the last
Friday in September to the last Friday in April.
Effective May 1, 1993, the Company completed the largest acquisition in its
history with the purchase of the test and measurement business of Philips N.V.
of the Netherlands (Philips). The completion of the acquisition ended the
five year strategic marketing alliance between the Company and Philips. The
acquisition provided the Company with several major products including
ScopeMeter test tools, oscilloscopes, and function generators, which have been
organized into the Company's Diagnostic Tools Division. It also provided the
Company with direct sales and service operations in fourteen European
countries. The addition of the Diagnostic Tools Division and the European
sales operations added over 900 people to the Company, all in Europe.
Additional financial data regarding the purchase is found in Note 2,
Acquisition of European Operations, to the financial statements.
Net income in 1994 of $8.8 million and $1.10 per share was below historical
levels. The Company planned for this reduced level of profitability for 1994
to invest in new product programs to accelerate the growth of the Company and
offset the loss in revenues from the product lines which were discontinued or
sold as a result of the restructuring initiative begun several years ago.
Revenues of $357.9 million in 1994 were 46 percent higher than the $245.3
million in restated 1993. Excluding the contribution of the acquisition, 1994
revenues were up slightly over the revenues of restated 1993. The
geographical shift in the distribution of revenues was dramatically influenced
by the acquisition. In 1993, the Company's U.S. revenues were 65 percent and
international revenues were 35 percent of total revenues. European revenues
contributed 13 percent of the total. In 1994, after the acquisition, U.S.
revenues were 47 percent and international revenues were 53 percent of total
revenues. European revenues in 1994 contributed 38 percent of the total.
Cost of goods sold as a percentage of revenues was 51 percent in 1994 compared
to 54 percent in 1993. The Company added manufacturing operations in the
Netherlands as a result of the acquisition. These new facilities produce
instruments with a similar cost structure to the Company's facilities in the
U.S. The acquired products the Company formerly purchased from Philips have a
lower manufacturing cost than the previous cost to the Company under the
alliance agreement. This reduction in cost of goods sold is offset to some
degree by the increase in operating costs discussed below.
Operating expenses as a percentage of revenues increased from 43 percent to 45
percent. The addition of the acquired European operations, which includes
marketing, selling, research and development, and administrative operations,
increased the level of the Company's operating expense. As discussed above,
the increased gross margin now generated on the sale of U.S. built products in
Europe and the revenues from the acquired products support the increase in
expense.
Marketing and administrative expenses increased as a percentage of revenues
from 33 percent in 1993 to 35 percent in 1994. One factor in this increase is
the addition of sales operations in fourteen European countries where the cost
of selling is higher than in the U.S.
Research and development activities have remained a high priority for the
Company. The Company spent 9.8 percent of revenues on research and
development in 1994 compared to 10.3 percent in 1993. The research and
development operations acquired from Philips have changed their focus to
products that fit the Company's mission. In addition, to supplement the
development resources, the Company has purchased some of its new products,
such as the Company's first LAN product offerings. This allows the Company to
get products to the market faster and then integrate this expertise into the
Company.
Goodwill of $20.8 million and intangible assets of $7.7 million were recorded
as a result of the acquisition. The goodwill is being amortized over 20 years
and the intangible assets are being amortized over five years. Amortization
expense of $2.6 million related to the intangible assets and goodwill as a
result of the acquisition are recorded in marketing and administrative
expense.
The effective annual tax rate increased from 28.2 percent in 1993 to 37.5
percent in 1994. The rate increase was caused primarily by the addition of
the European operations and partially by the increase in the U.S. statutory
rate to 35 percent. Although the average statutory rate in Europe is close to
the U.S. statutory rate, losses in some of the acquired country operations
with no offsetting benefit caused the increase in the overall rate. The
effective annual tax rates in 1993 and 1992 were below the U.S. statutory rate
of 34 percent, in those years, due to the utilization of existing foreign tax
credit carryovers and the benefit of the Company's Foreign Sales Corporation.
The significant foreign tax credit carryovers have been utilized, and in
future years, foreign tax credits are not expected to influence the effective
annual tax rate.
FINANCIAL RESULTS 1993 VS 1992
In this section, all references to 1993 are for the audited seven-month
transition period ended April 30, 1993 and all references to restated 1992 are
for the unaudited seven-month period ended May 1, 1992.
During 1993, the Company recorded two changes in accounting policies. The
Company adopted Statement of Financial Accounting Standards Number 109,
"Accounting for Income Taxes." The cumulative effect of adopting the
statement was a positive adjustment to income of $1.5 million. The Company
also changed the method used in applying overhead costs to inventory.
Overhead costs related to the procurement process are applied to inventory at
the time of the receipt of the inventory. Previously, these costs were
applied during the production process. The cumulative effect of this change
was a positive adjustment to income of $2.4 million, net of tax. The effect
of these changes on 1993 net income before the adjustment was not significant.
Prior years' financial statements were not restated for either item.
Revenues of $132.1 million in 1993 were 17 percent less than revenues of
$158.7 million in restated 1992. Almost every region of the world experienced
revenue declines, including the U.S. which was down 18 percent and Europe,
primarily sales to Philips, which decreased 28 percent. Contributing to the
decline in 1993 were lower revenues from the ScopeMeter test tools than during
the very successful introduction year of 1992.
Revenues in the U.S. were significantly affected by the depressed economic
conditions as customers reduced their capital purchases in response to
economic pressures. The Company continued to be affected by the decline in
purchases by the U.S. government. To mitigate this decline in U.S. government
business, the Company expanded into new market segments. The Company expanded
its product offering in the automotive test market and entered the LAN market.
The Company has continued to invest in the development of new products;
however, only a few products were introduced in the 1993 transition period.
Operating expenses decreased 4 percent in 1993 from restated 1992, but
increased significantly as a percentage of revenues. The Company instigated
several cost cutting measures in 1993 to reduce expenses. These included
delaying salary increases for several months and requiring days off without
pay or temporarily reducing the pay of employees and directors. In addition,
the Company reduced employees through attrition and layoffs.
Marketing and administrative expenses declined 7 percent, due primarily to
decreased expenses of the U.S. sales operation. During 1992 and 1993, fifteen
sales offices in smaller markets were closed and the sales employees then
worked out of their homes. The expense for research and development increased
6 percent in 1993 over 1992. The increase had been planned; consequently, the
cost cutting measures, other than salary reductions, did not impact research
and development to the same extent that other areas were affected.
LIQUIDITY AND CAPITAL RESOURCES
The cash position of the Company has continued to improve as cash generated
from operating activities remains strong. The borrowing under the Company's
long term lines of credit remains over $20 million. The borrowings are
utilized for working capital requirements in the European operations. It is
expected that these borrowings will be repaid with cash generated from
operations.
On June 24, 1994, the Company purchased 150,000 shares of the Company's common
stock from Philips for $4.6 million or $30.53 per share. The purchase of the
shares was made according to an agreement between the two companies which
allows Philips to sell a set number of shares over a defined period. Under
the agreement, the Company has the right to purchase any shares Philips offers
for sale or can allow them to be sold on the open market, under certain
conditions. After the transaction, Philips owned approximately 1.4 million
shares. Philips offered an additional 250,000 shares in April 1995. The
Company did not exercise its right of first refusal and these shares have been
registered and may now be sold by Philips.
The Company made capital expenditures of $14.1 million in 1995, $13.1 million
in 1994, $6.2 million in the seven months ended April 30,1993 and $9.3 million
in 1992. Capital expenditures primarily relate to manufacturing and research
and development equipment. Capital expenditures in 1995 and 1994 have
increased due to investment in computer systems for the European operations
acquired at the beginning of 1994 and new manufacturing equipment.
The current ratio was 3.08 to 1 at April 28, 1995 and 2.74 to 1 at April 29,
1994. The increase in the current ratios was caused primarily by an increase
in cash from operations.
The Company's exposure to foreign exchange currency fluctuations has increased
since the purchase of the European operations from Philips on May 1, 1993.
The currencies of most of the countries in which the Company operates
strengthened during fiscal 1995, which causes the local currency assets to
increase when stated in U.S. dollars. Goodwill and intangible assets, which
are recorded primarily in Dutch guilders, increased approximately $2.7 million
as a result of the change in the currency translation rate.
The Company has a program to hedge some of its foreign exchange exposure using
forward exchange contracts. The contracts cannot be speculative and are
limited to actual transaction exposure. The Company does not currently use
any other form of derivatives in managing its financial risk.
<TABLE>
FLUKE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
In thousands except shares and per share amounts
<CAPTION>
April 28, 1995 April 29, 1994
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 28,880 $ 6,520
Accounts receivable (less allowances:
1995-$1,141; 1994-$586) 77,222 70,510
Inventories 53,908 54,365
Deferred income taxes 15,159 13,109
Prepaid expenses 7,556 9,914
Total Current Assets 182,725 154,418
Property, Plant and Equipment
Land 5,979 6,181
Buildings 47,235 46,661
Machinery and equipment 103,968 93,406
Construction in progress 2,298 2,440
159,480 148,688
Less accumulated depreciation (97,611) (88,412)
Net Property, Plant and Equipment 61,869 60,276
Goodwill and Other Intangible Assets 23,033 24,995
Other Assets 7,895 5,913
Total Assets $275,522 $245,602
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 17,080 $ 19,413
Accrued liabilities 38,733 35,454
Accrued liabilities related
to restructuring --- 676
Income taxes payable 3,307 665
Current maturities of long-term
obligations 230 235
Total Current Liabilities 59,350 56,443
Long-Term Obligations 21,613 14,712
Deferred Income Taxes 9,409 9,152
Other Liabilities 9,870 7,466
Total Liabilities 100,242 87,773
Stockholders' Equity
Preferred stock, $0.25 par value
(authorized 2,000,000 shares) --- ---
Common stock, $0.25 par value
(authorized 20,000,000 shares, issued
including repurchased and nonvested
shares, 7,898,674 in 1995 and 8,807,391
in 1994) 1,975 2,202
Additional paid-in capital 60,006 81,081
Retained earnings 107,089 96,553
169,070 179,836
Less repurchased shares, at cost --- (19,542)
Less nonvested shares (145) (362)
Cumulative translation adjustment 6,355 (2,103)
Total Stockholders' Equity 175,280 157,829
Total Liabilities and Stockholders' Equity $275,522 $245,602
</TABLE>
The accompanying notes are an integral part of the financial statements.
<TABLE>
FLUKE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
In thousands except shares and per share amounts
<CAPTION>
For the
seven
For the For the months For the
year ended year ended ended year ended
April April April September
28, 1995 29, 1994 30, 1993 25, 1992
<S> <C> <C> <C> <C>
Revenues $382,066 $357,904 $132,139 $271,819
Cost of Goods Sold 185,873 182,475 72,167 149,776
Gross Margin 196,193 175,429 59,972 122,043
Operating Expenses
Marketing and administrative 134,343 126,088 42,986 79,197
Research and development 37,665 34,952 13,671 22,515
Total Operating Expenses 172,008 161,040 56,657 101,712
Operating Income 24,185 14,389 3,315 20,331
Nonoperating Expenses (Income)
Interest expense 1,435 1,529 24 254
Other (1,284) (1,220) (666) (1,109)
Total Nonoperating Expenses (Income) 151 309 (642) (855)
Income Before Income Taxes and
Cumulative Effect of Changes in
Accounting Principles 24,034 14,080 3,957 21,186
Provision for Income Taxes 9,133 5,280 1,116 5,982
Income Before Cumulative Effect of
Changes in Accounting Principles 14,901 8,800 2,841 15,204
Cumulative Effect on Prior Years
(to September 26, 1992) of a Change
in Accounting for Inventories, Net of Tax --- --- 2,423 ---
Cumulative Effect on Prior Years
(to September 26, 1992) of a Change
in Accounting for Income Taxes --- --- 1,479 ---
Net Income $ 14,901 $ 8,800 $ 6,743 $ 15,204
Per Share Amounts:
Income Before Cumulative Effect of
Changes in Accounting Principles $ 1.86 $ 1.10 $ 0.40 $ 2.16
Cumulative Effect of Accounting Changes:
Accounting for inventories --- --- $ 0.34 ---
Accounting for income taxes --- --- $ 0.21 ---
Earnings Per Share $ 1.86 $ 1.10 $ 0.95 $ 2.16
Average Shares and Share Equivalents
Outstanding 7,992,804 8,031,696 7,069,463 7,033,695
Pro Forma Amounts Assuming the Change
in Accounting for Inventories is
Applied Retroactively:
Net Income $ 14,901 $ 8,800 $ 4,320 $ 14,938
Earnings Per Share $ 1.86 $ 1.10 $ 0.61 $ 2.12
</TABLE>
The accompanying notes are an integral part of the financial statements.
<TABLE>
FLUKE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
In thousands
<CAPTION>
For the
seven
For the For the months For the
year ended year ended ended year ended
April April April September
28, 1995 29, 1994 30, 1993 25, 1992
<S> <C> <C> <C> <C>
Operating Activities
Net income $ 14,901 $ 8,800 $ 6,743 $ 15,204
Items not affecting cash:
Change in accounting principles --- --- (3,902) ---
Depreciation and amortization 16,042 17,071 7,091 11,460
Deferred income tax (982) 2,381 573 47
Accrued pension expense 1,583 (1,162) 103 (837)
Stock awards 189 376 222 680
Loss (gain) on disposal of property,
plant and equipment (251) 242 104 18
Net change in:
Accounts receivable (1,016) (45,023) 16,208 (104)
Inventories 4,049 4,580 (2,257) (887)
Prepaid expenses 3,093 (2,356) (1,923) (752)
Accounts payable (4,319) 12,998 (848) (2,138)
Accrued liabilities 18 5,791 (3,800) 1,561
Accrued liabilities related to
restructuring (497) 892 (726) (1,285)
Income taxes payable 4,505 394 (109) 25
Other assets and liabilities (1,804) 2,023 (895) (299)
Net Cash Provided By Operating
Activities 35,511 7,007 16,584 22,693
Investing Activities
Additions to property, plant and equipment (14,123) (13,050) (6,161) (9,337)
Proceeds from disposal of property,
plant and equipment 1,774 180 575 324
Purchase of Philips test and measurement
business --- (26,056) --- ---
Net Cash Used By Investing Activities (12,349) (38,926) (5,586) (9,013)
Financing Activities
Proceeds from short-term debt --- 2,329 775 3,257
Payments on short-term debt --- (2,329) (1,556) (3,180)
Proceeds from long-term obligations 24,113 47,879 --- ---
Payments on long-term obligations (20,067) (33,023) (592) (261)
Repurchase of common stock (4,579) --- --- ---
Repurchase of preferred stock --- --- --- (252)
Cash dividends paid (4,287) (3,970) (1,719) (3,153)
Proceeds from stock options 2,800 222 136 626
Net Cash Provided (Used) By Financing
Activities (2,020) 11,108 (2,956) (2,963)
Effect of Foreign Currency Exchange Rates
on Cash and Cash Equivalents 1,218 2,916 --- ---
Net Increase (Decrease) In Cash and Cash
Equivalents 22,360 (17,895) 8,042 10,717
Cash and Cash Equivalents at Beginning
of Period 6,520 24,415 16,373 5,656
Cash and Cash Equivalents at End of
Period $ 28,880 $ 6,520 $24,415 $ 16,373
Supplemental Cash Flow Information:
Income taxes paid $ 5,809 $ 5,142 $ 826 $ 5,544
Interest paid $ 1,409 $ 1,529 $ 24 $ 254
</TABLE>
The accompanying notes are an integral part of the financial statements.
<TABLE>
FLUKE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
In thousands except shares
<CAPTION>
Number of Par Par
Common Value of Value of Additional
Shares Preferred Common Paid-In
Outstanding Stock Stock Capital
<S> <C> <C> <C> <C>
Balance, September 27, 1991 6,296,177 $ 20 $2,202 $96,537
Net income
Net forfeiture of shares under stock award plans (1,942) 10
Vesting of 41,516 shares under stock award plans
Cash dividends declared
Income tax benefit from stock award plans 60
Repurchase of 1,538 preferred shares (252)
Exercise of stock options 40,400 (308)
Balance, September 25, 1992 6,334,635 $ 20 $2,202 $96,047
Net income
Net issuance of shares under stock award plans 220 11
Vesting of 27,394 shares under stock award plans
Cash dividends declared
Income tax benefit from stock award plans 54
Exercise of stock options 7,600 (40)
Balance, April 30, 1993 6,342,455 $ 20 $2,202 $96,072
Net income
Net forfeiture of shares under stock award plans (5,109) 145
Vesting of 17,117 shares under stock award plans
Issuance of shares for acquisition 1,000,000 (1,450)
Conversion of preferred shares 538,144 (20) (13,361)
Cash dividends declared
Income tax benefit from stock award plans 30
Exercise of stock options 23,200 (355)
Net translation adjustment
Balance, April 29, 1994 7,898,690 --- $2,202 $81,081
Net income
Net forfeiture of shares under stock award plans (934) 3
Vesting of 9,524 shares under stock award plans
Repurchase of common shares (150,000)
Income tax benefit from stock award plans 35
Cash dividends declared
Exercise of stock options 150,918 26 1,588
Net translation adjustment
Cancellation of repurchased shares (253) (22,701)
Balance, April 28, 1995 7,898,674 --- 1,975 60,006
FLUKE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
In thousands except shares
<CAPTION>
Repurchased
and Cumulative Total
Retained Nonvested Translation Stockholders'
Earnings Shares Adjustment Equity
<S> <C> <C> <C> <C>
Balance, September 27, 1991 $74,991 $(57,485) --- $116,265
Net income 15,204 15,204
Net forfeiture of shares under stock award plans (10) ---
Vesting of 41,516 shares under stock award plans 855 855
Cash dividends declared (3,294) (3,294)
Income tax benefit from stock award plans 60
Repurchase of 1,538 preferred shares (252)
Exercise of stock options 934 626
Balance, September 25, 1992 $86,901 $(55,706) --- $129,464
Net income 6,743 6,743
Net issuance of shares under stock award plans (11) ---
Vesting of 27,394 shares under stock award plans 578 578
Cash dividends declared (1,788) (1,788)
Income tax benefit from stock award plans 54
Exercise of stock options 176 136
Balance, April 30, 1993 $91,856 $(54,963) --- $135,187
Net income 8,800 8,800
Net forfeiture of shares under stock award plans (145) ---
Vesting of 17,117 shares under stock award plans 352 352
Issuance of shares for acquisition 20,894 19,444
Conversion of preferred shares 13,381 ---
Cash dividends declared (4,103) (4,103)
Income tax benefit from stock award plans 30
Exercise of stock options 577 222
Net translation adjustment (2,103) (2,103)
Balance, April 29, 1994 $96,553 $(19,904) $(2,103) $157,829
Net income 14,901 14,901
Net forfeiture of shares under stock award plans (3) ---
Vesting of 9,524 shares under stock award plans 201 201
Repurchase of common shares (4,579) (4,579)
Income tax benefit from stock award plans 35
Cash dividends declared (4,365) (4,365)
Exercise of stock options 1,186 2,800
Net translation adjustment 8,458 8,458
Cancellation of repurchased shares 22,954 ---
Balance, April 28, 1995 107,089 (145) 6,355 $175,280
</TABLE>
The accompanying notes are an integral part of the financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING PERIOD. Fluke Corporation utilizes a 52/53-week fiscal year ending
on the last Friday in April. Fiscal 1993 was a seven-month transition period
ending on April 30, 1993. Prior to fiscal 1993, the Company utilized a 52/53-
week fiscal year ending on the last Friday in September. The accompanying
financial statements include audited consolidated financial statements for the
seven-month transition period ended April 30, 1993.
PRINCIPLES OF CONSOLIDATION. The consolidated financial statements include
the accounts of the Company and its subsidiaries. All significant
intercompany accounts and transactions have been eliminated.
REVENUE RECOGNITION. Revenue is recognized at the time product is shipped or
service is rendered to an unaffiliated customer. Revenue from service
contracts is recognized ratably over the lives of the contracts.
TRANSLATION OF FOREIGN CURRENCIES. The local currency is deemed to be the
functional currency in most of the Company's foreign operations. In these
operations, translation gains and losses resulting from converting the local
financial statements to U.S. dollar financial statements are recorded in the
Cumulative Translation Adjustment account in the equity section of the balance
sheet. In the remaining foreign operations, the U.S. dollar is deemed to be
the functional currency. In these operations, translation gains or losses are
included in the statements of income.
CASH AND CASH EQUIVALENTS. Cash and cash equivalents include cash on hand and
highly liquid, short-term investments with an original maturity of less than
three months.
INVENTORIES. Inventories are valued at the lower of cost or market with cost
being currently adjusted standard cost, which approximates cost on a first-in,
first-out basis.
PROPERTY, PLANT AND EQUIPMENT. Property, plant and equipment, including
improvements and major renewals, are stated at cost. Maintenance and repairs
are expensed as incurred. Depreciation is calculated over the estimated
useful lives of the related assets on the straight-line basis for financial
statement purposes, while an accelerated method is generally used for income
tax purposes.
INCOME TAXES. The provision for income taxes is computed on pretax income
reported in the financial statements. The provision differs from income taxes
currently payable because certain items of income and expense are recognized
in different periods for financial statement and tax return purposes.
Deferred income taxes have been recorded using the liability method in
recognition of these temporary differences. The Company has provided for U.S.
and foreign taxes on all of the undistributed earnings of its foreign
subsidiaries that are expected to be repatriated.
EARNINGS PER SHARE. Earnings per share is based on the weighted average
number of common shares and share equivalents outstanding during the fiscal
year. Stock options are considered common stock equivalents and their
dilutive effect is included in the earnings per share calculation.
GOODWILL AND INTANGIBLES. Excess cost over the fair value of net assets
acquired (goodwill) is generally amortized on a straight-line basis over 20
years. Intangible assets are generally amortized over 5 years.
IMPAIRMENT OF LONG-LIVED ASSETS. Long-lived assets consist of intangible
assets, goodwill and certain capital assets. The carrying value of these
assets is regularly reviewed to verify they are valued properly. If the facts
and circumstances suggest that the value has been impaired, the carrying value
of the assets will be reduced appropriately.
RECLASSIFICATION. Certain items have been reclassified to conform to the 1995
presentation with no effect on previously reported net income.
Note 2. ACQUISITION OF EUROPEAN OPERATIONS
On May 26, 1993, the Company completed the acquisition of the test and
measurement business of Philips Electronics N.V. of the Netherlands (Philips)
with an effective date of May 1, 1993. Since 1987, the Company and Philips
had a strategic alliance pursuant to which Philips sold the Company's products
in Europe and other selected markets and the Company sold Philips' products in
North America and other selected markets.
The Company acquired manufacturing operations in the Netherlands, engineering
groups in the Netherlands and Germany and sales and service operations in
fourteen European countries. The headquarters of the Company's Diagnostic
Tools Division is in Almelo, the Netherlands. The division is responsible for
several major products including ScopeMeter test tools, oscilloscopes, and
function generators. The European sales and service headquarters are located
in Eindhoven, the Netherlands.
The purchase price for the Philips test and measurement business was
approximately $41.8 million in cash and stock. The cash portion was financed
with the Company's cash and utilization of a portion of its $55.0 million
lines of credit obtained specifically to finance the acquisition. The stock
component consisted of one million shares of the Company's common stock, which
were issued from repurchased shares. The Series A Convertible Preferred Stock
that Philips owned was converted to common shares at the rate stated in the
preferred stock agreement, or 538,144 shares of common stock. After the
transaction, Philips owned 1,538,144 shares of the Company's common stock, or
approximately 19.5 percent of the shares then outstanding. There are
restrictions on Philips' ability to sell the shares, and the Company has the
option to buy the shares before they can be offered for sale to a third party.
Accordingly, the stock was recorded at a 15 percent discount from the market
value at date of issue. In May 1994, Philips offered for sale 150,000 shares,
as allowed under the agreement. The Company exercised its right to purchase
the shares at a price of $30.53 per share for a total of $4.6 million. In
April 1995, Philips offered for sale an additional 250,000 shares, as allowed
under the agreement. The Company did not exercise its right of first refusal
and these shares have been registered and may now be sold by Philips.
The Company recorded the acquisition under the purchase method of accounting.
The components of the purchase price are as follows:
<TABLE>
(in thousands)
<S> <C>
One million shares of the Company's common stock,
at a fair value of $19.44 per share $19,444
Net cash paid for purchase 22,365
Purchase price 41,809
Acquisition costs 3,700
Purchase price and related acquisition costs $45,509
The allocation of the purchase price is as follows:
(in thousands)
Inventories $15,800
Prepaid expenses and other current assets 2,668
Plant, machinery and equipment 6,801
Intangible assets 7,700
Deferred tax assets
Gross value 27,297
Less: valuation reserve (18,000)
Net value 9,297
Deferred tax liability (3,001)
Accrued expenses and other liabilities (14,573)
Goodwill 20,817
Purchase price and related acquisition costs $45,509
</TABLE>
As part of the acquisition, the Company entered into service agreements and
facility leases with Philips related to the European operations. The Company
paid Philips $10.5 million in 1995 and $18.3 million in 1994 for such services
and facilities lease rent. In addition, the Company purchased $19.8 million
in 1995 and $16.5 million in 1994 of component parts and finished goods from
Philips. Before the completion of the acquisition in 1994, aggregate sales
and purchases with Philips totaled approximately $31.3 million in the seven
months ended April 30, 1993 and $71.5 million in 1992.
<TABLE>
Note 3. INVENTORIES
(in thousands)
<CAPTION>
April 28, 1995 April 29, 1994
<S> <C> <C>
Finished goods $17,483 $17,904
Work-in-process 10,818 10,390
Purchased parts and materials 25,607 26,071
Total Inventories $53,908 $54,365
</TABLE>
Effective in fiscal 1993, the Company changed its method of applying overhead
costs to inventories. Previously, all overhead costs were applied to
inventory during the production process based on various methods such as labor
or machine hours. Under the new method, certain overhead costs are applied to
purchased parts at the time inventory is received based on related procurement
activities, and the remaining overhead costs are applied to inventories during
the production process. The change was made to improve the accuracy of
inventory valuation by applying overhead costs to inventories as the costs are
incurred. The change in accounting for inventories is recorded as a
cumulative effect of a change in an accounting principle, which had the effect
of increasing 1993 net income by $2.4 million (net of income tax in the amount
of $952,000). This change had no significant impact on 1993 income before
cumulative effect of accounting changes. The financial statements have not
been restated to reflect this accounting change; however, pro forma
information, as if the change were made retroactively, is shown on the
Consolidated Statements of Income.
<TABLE>
Note 4. ACCRUED LIABILITIES
(In thousands)
<CAPTION>
April 28, 1995 April 29, 1994
<S> <C> <C>
Compensation payable $11,674 $ 9,674
Retirement plans contributions payable 378 960
Self-insured plans 843 1,003
Accrued expenses 14,180 15,619
Unearned service revenue 3,009 2,358
Other taxes payable 6,056 3,913
Profit-sharing bonus payable 1,265 693
Dividends payable 1,106 1,027
Other items 222 207
Total Accrued Liabilities $38,733 $35,454
</TABLE>
Note 5. GOODWILL AND INTANGIBLE ASSETS
Goodwill represents the excess of the purchase price over the fair market
value of the net assets acquired in the purchase of the European operations
from Philips. The goodwill is being amortized on a straight-line basis over
twenty years. The Company owns intangible assets, most of which were also
acquired from Philips as part of the acquisition. These intangible assets are
being amortized over five years. Amortization expense is recorded in marketing
and administrative expense. Amortization expense of goodwill and intangible
assets had been reported in nonoperating expense prior to 1995. Amortization
expense has been reclassified in applicable prior periods to conform to the
presentation in the 1995 financial statements. Cumulative amortization was
$6.0 million at April 28, 1995 and $2.6 million at April 29, 1994.
Goodwill and intangible assets, net of accumulated amortization, are as
follows:
<TABLE>
In thousands
<CAPTION>
April 28, 1995 April 29, 1994
<S> <C> <C>
Balance at beginning of year $24,995 ---
Addition resulting from acquisition --- $28,517
Amortization expense (2,764) (2,630)
Adjustment related to changes to
deferred tax asset valuation
allowance<F1> (1,925) (811)
Translation adjustment 2,727 (81)
Balance at end of year $23,033 $24,995
<FN>
<F1> This adjustment is explained in Note 6. Income Taxes.
</FN>
</TABLE>
Note 6. INCOME TAXES
Effective September 26, 1992, the Company adopted Statement of Financial
Accounting Standards No. 109 (SFAS 109), "Accounting for Income Taxes".
Adoption of SFAS 109 required the Company to change from the deferred method
to the liability method of accounting for deferred income taxes. Under the
liability method, deferred income taxes reflect the net tax effects of
temporary differences between carrying amounts of assets and liabilities for
financial reporting and the amounts used for tax purposes. Deferred income
taxes are measured using the enacted tax rates and laws that will be in effect
when the differences are expected to reverse. Prior to the adoption of SFAS
109, income tax expense was determined using the deferred method. Deferred
tax expense was based on items of income and expense that were reported in
different years in the financial statements and tax returns and was measured
at the tax rate in effect in the year the difference originated.
As permitted by SFAS 109, the Company elected to record the cumulative effect
of adopting the Statement and not restate the financial statements of prior
years. The cumulative effect of the change increased net income in 1993 by
$1.5 million or $0.21 per share. The effect of the change on 1993 net income
before the adjustment was not significant.
For financial reporting purposes, income before income taxes is as follows:
<TABLE>
(in thousands)
<CAPTION>
For the For the For the seven For the
year ended year ended months ended year ended
April 28, 1995 April 29, 1994 April 30, 1993 Sept. 25, 1992
<S> <C> <C> <C> <C>
U.S. $13,017 $13,681 $3,239 $20,201
Foreign 11,017 399 718 985
$24,034 $14,080 $3,957 $21,186
</TABLE>
The provision for income taxes is as follows:
<TABLE>
(in thousands)
<CAPTION>
LIABILITY METHOD DEFERRED METHOD
For the For the For the seven For the
year ended year ended months ended year ended
April 28, 1995 April 29, 1994 April 30, 1993 Sept. 25, 1992
<S> <C> <C> <C> <C>
Current taxes on income:
U.S. $5,239 $1,791 $ 199 $5,270
Foreign 5,687 986 344 665
10,926 2,777 543 5,935
Deferred income taxes (1,793) 2,503 573 47
$9,133 $5,280 $1,116 $5,982
</TABLE>
Significant components of the Company's deferred tax assets and liabilities
are as follows:
<TABLE>
(in thousands)
<CAPTION>
April 28,1995 April 29,1994
<S> <C> <C>
Deferred Tax Assets:
Accrued restructuring costs $ 2 $ 237
Accrued employee benefit expenses 2,525 4,457
Inventory adjustments 5,329 4,301
Net operating loss carryforwards 25,591 21,911
Product warranty accruals 721 525
Other items, net 617 259
Total Deferred Tax Assets 34,785 31,690
Valuation reserve (19,626) (18,581)
Net Deferred Tax Assets $ 15,159 $13,109
Deferred Tax Liabilities:
Fixed asset basis differences $ 5,701 $5,774
Foreign tax accruals and adjustments 199 231
Pension 1,578 1,078
Intangible assets 1,870 2,057
Other items, net 61 12
Total Deferred Tax Liabilities $ 9,409 $9,152
</TABLE>
The deferred tax asset valuation reserves are primarily related to deferred
tax assets of foreign operations, including Dutch net operating loss (NOL)
carryforwards acquired in connection with the Philips acquisition. The
acquired foreign NOLs have an unlimited carryover period. A substantial
portion of these NOLs were provided for with a valuation allowance at the time
of the acquisition. The tax benefit from adjusting the valuation allowance of
the acquired NOLs is recorded as a reduction of goodwill. Reductions in
goodwill for NOL benefit were $1,925,000 in 1995 and $811,000 in 1994.
The deferred income tax provision (benefit) under the deferred method was as
follows:
<TABLE>
(in thousands)
<CAPTION>
DEFERRED METHOD
For the
year ended
September 25, 1992
<S> <C>
Deferred income taxes:
Difference between book and tax depreciation $ 308
Inventory adjustments (855)
Accrued employee benefit expenses 248
Repatriation of foreign earnings, net of 1993 foreign tax credits (551)
Accrued restructuring costs 1,277
Other items, net (380)
$ 47
</TABLE>
A reconciliation from the U.S. statutory rate to the effective tax rate is as
follows:
<TABLE>
(in thousands)
<CAPTION> DEFERRED
LIABILITY METHOD METHOD
For the For the For the seven For the
year ended year ended months ended year ended
Apr. 28, 1995 Apr. 29, 1994 Apr. 30, 1993 Sept. 25, 1992
Amt Pct Amt Pct Amt Pct Amt Pct
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Tax at U.S. statutory rate $ 8,412 35.0% $4,928 35.0% $1,345 34.0% $7,203 34.0%
Foreign tax greater (less)
than U.S. statutory rate 847 3.5 1,528 10.8 (5) (0.1) 161 0.7
Utilization of foreign tax
credits (35) (0.1) (1,538)(10.9) (129) (3.3) (956) (4.5)
Foreign Sales Corporation tax
benefit (436) (1.8) (321) (2.3) (107) (2.7) (592) (2.8)
State taxes, net of federal
benefit 211 0.8 222 1.6 53 1.3 333 1.6
Nondeductible goodwill 302 1.3 360 2.6 --- --- --- ---
Other items, net (168) (0.7) 101 0.7 (41) (1.0) (167) (0.8)
$ 9,133 38.0% $5,280 37.5% $1,116 28.2% $5,982 28.2%
</TABLE>
Note 7. EMPLOYEE BENEFIT PLANS
The expense related to employee benefit plans is as follows:
<TABLE>
(in thousands)
<CAPTION>
For the For the For the seven For the
Year ended year ended months ended year ended
April 28, 1995 April 29,1994 April 30, 1993 Sept. 25, 1992
<S> <C> <C> <C> <C>
Pension Plan, U.S. $1,170 $1,147 $ 738 $ 901
Pension Plans, Foreign 1,281 1,519 139 210
Profit-sharing Retirement Plan 639 652 303 859
Profit-sharing Bonus Plan 2,064 1,296 --- 3,834
Other Benefit plans 760 813 407 1,154
Total Employee Benefit Plans $5,914 $5,427 $1,587 $6,958
</TABLE>
PENSION PLAN, U.S. The Company's U.S. pension plan includes all U.S.
employees with a minimum of one year of service. Pension benefits are based
upon years of service with the Company and the highest sixty months' average
compensation earned. The Company's funding policy is to contribute annually
the amount required by ERISA.
Net periodic U.S. pension cost is as follows:
<TABLE>
(in thousands)
<CAPTION>
For the For the For the seven For the
year ended year ended months ended year ended
April 28, 1995 April 29, 1994 April 30, 1993 Sept. 25, 1992
<S> <C> <C> <C> <C>
Service cost $ 1,990 $1,917 $ 1,129 $ 1,813
Interest cost 2,955 2,939 1,655 2,639
Return on plan assets (3,873) (2,590) (1,602) (2,013)
Net amortization and deferral 98 (1,119) (444) (1,538)
Net periodic pension cost $1,170 $1,147 $ 738 $ 901
</TABLE>
The funding status of the plan is as follows:
<TABLE>
(in thousands)
<CAPTION>
April 28, 1995 April 29, 1994
<S> <C> <C>
Vested benefit obligation $ 29,069 $30,520
Accumulated benefit obligation $ 29,640 $31,266
Projected benefit obligation $ 37,754 $40,925
Fair market value of plan assets 36,299 32,968
Projected benefit obligation in excess
of plan assets 1,455 7,957
Prior service cost 486 314
Unrecognized net loss (5,589) (11,740)
Unrecognized net transition asset 952 1,493
Additional minimum liability -- 94
Prepaid pension asset $ (2,696) $(1,882)
</TABLE>
For purposes of calculating the funding status of the plan, the weighted
average discount rate was 8.8 percent in 1995, 8.0 percent in 1994 and 9.0
percent in 1993 and 1992. The rate of increase in future compensation level
used in determining the actuarial present value of the projected benefit
obligation varied by age group and ranged from 4.3 to 5.6 percent in 1995,
from 3.6 to 4.9 percent in 1994 and from 5.5 to 6.8 percent in 1993 and 1992.
The expected long-term rate of return on plan assets was 9.5 percent in 1995,
10.8 percent in 1994 and 11.0 percent in 1993 and 1992. For purposes of
calculating the net periodic pension cost, the actuarial assumptions utilized
are the actuarial assumptions in place at the end of the previous fiscal year
(e.g., the fiscal 1995 net periodic pension cost was based upon the 1994
actuarial assumptions).
Upon adoption of Statement of Financial Accounting Standards No. 87 (SFAS 87),
"Accounting for Pensions" in 1988, the plan had an excess of plan assets,
including accrued contributions, over projected benefit obligations (net
transition asset) of $5.0 million. The net transition asset is being
amortized over a period of 9.3 years.
All of the plan's assets are stated at fair market value and consist primarily
of common stock, fixed income securities and cash equivalents.
PENSION PLANS, FOREIGN. The Company has various pension plans covering its
foreign employees. Most of these plans are defined contribution plans and are
fully funded. The expense for these plans was $427,000 in 1995 and $620,000
in 1994. The remaining plans qualify for accounting under the rules of SFAS
87. The tables below include only those international pension plans which
qualify for SFAS 87 treatment.
Net periodic pension expense of foreign plans under SFAS 87 is as follows:
<TABLE>
(in thousands)
<CAPTION>
For the For the
year ended year ended
April 28, 1995 April 29, 1994
<S> <C> <C>
Service cost $ 780 $ 792
Interest cost 1,101 1,000
Return on plan assets (1,015) (893)
Net amortization and deferral (12) ---
Net periodic pension cost $ 854 $ 899
</TABLE>
The funding status of the plans is as follows:
<TABLE>
(in thousands)
<CAPTION>
April 28, 1995 April 29, 1994
<S> <C> <C>
Vested benefit obligation $12,498 $10,357
Accumulated benefit obligation $13,279 $11,011
Projected benefit obligation $19,616 $16,533
Fair market value of plan assets 19,653 14,315
Projected benefit obligation in
excess of (less than) plan assets (37) 2,218
Unrecognized net gain (loss) 2,558 (290)
Accrued pension liability $ 2,521 $ 1,928
</TABLE>
The weighted average discount rate varied from 7.0 percent to 7.5 percent in
1995 and 6.5 percent to 7.0 percent in 1994 and the rate of increase in future
compensation levels used in determining the actuarial present values of the
projected benefit obligation varied from 3.0 percent to 5.0 percent in 1995
and 1994. The long-term rate of return on plan assets was 6.5 percent in 1995
and 1994.
PROFIT-SHARING RETIREMENT PLAN. The Company has a profit-sharing retirement
plan for all U.S. employees, which provides immediate eligibility and vesting.
The Company matches the employee's salary deferrals under section 401(k) of
the Internal Revenue Code, subject to certain profitability and dollar limits.
PROFIT-SHARING BONUS PLAN. The Company has a profit-sharing bonus plan, which
generally provides semiannual cash payments to certain employees. The amount
of each eligible employee's bonus is dependent upon their base salary in
relation to the total base salary of all eligible employees and the operating
performance of the Company. No profit-sharing bonus was paid for 1993.
OTHER BENEFIT PLANS. The Company has various other employee cash and stock
award plans designed to recognize and compensate key employees for
performance.
The long-term liabilities of these benefit plans constitute the major portion
of Other Liabilities on the Balance Sheet.
Note 8. STOCKHOLDERS' EQUITY
REPURCHASED SHARES. On March 10, 1995, repurchased shares of the Company
totaling 1,011,937 were canceled and retired. Repurchased shares had been
used to fund stock award and stock option plans. The balance in the
repurchased shares account was 908,701 shares in 1994.
PREFERRED STOCK. There are 2,000,000 shares of preferred stock authorized, of
which 250,000 shares have been designated Series A Convertible Preferred
Stock. On May 26, 1993, as part of the purchase of the European operations
from Philips, the 78,462 shares of Series A Convertible Preferred Stock, which
were owned by Philips, were converted into 538,144 shares of common stock.
The conversion rate was established in the original preferred stock agreement.
There were no shares of preferred stock outstanding at April 28, 1995 or April
29, 1994.
STOCK PURCHASE PLAN. The Company has a voluntary employee stock purchase plan
for eligible employees. The Company's contribution is 25 percent of the
amount invested by the employee, plus all commissions and brokerage fees. The
Company's expenses related to the plan were $473,000 in 1995, $433,000 in
1994, $252,000 for the seven months ended April 30, 1993, and $443,000 in
1992.
DIVIDENDS. The Company declared cash dividends of $0.56 per share in 1995,
$0.52 per share in 1994, $0.26 per share in the seven months ended April 30,
1993, and $0.48 per share in 1992.
STOCKHOLDER RIGHTS PLAN. The Company has a Stockholder Rights Plan and issues
one Right for each outstanding share of common stock. The Rights become
exercisable only if a person or group (an "Acquiring Person") has acquired, or
obtained the right to acquire, 25 percent or more of the outstanding shares of
common stock of the Company or following the commencement of a tender or
exchange offer for acquiring such same percentage. In the event that a person
or group becomes an Acquiring Person, each Right, upon exercise, will entitle
its holder (except for an Acquiring Person) to receive common stock of the
Company (or, in certain circumstances, cash, property or other securities of
the Company) or of any company with which the Company shall have entered into
certain transactions having a value equal to two times the exercise price of
the Right. In addition, under certain circumstances, the Continuing Directors
can require that each Right (other than Rights held by an Acquiring Person) be
exchanged for one share of common stock. The Company may redeem the Rights
for $0.01 per Right at any time before they become exercisable. The Rights do
not entitle their holders to any voting or dividend rights and, at least until
they become exercisable, have no dilutive effect on the earnings of the
Company. The plan was adopted to encourage a prospective acquirer of the
Company to negotiate acquisition terms with the Board of Directors, including
the Continuing Directors, to assure that the terms are in the best interests
of the stockholders of the Company.
STOCK OPTIONS. The Company has a 1988 and a 1990 Stock Incentive Plan. Stock
options granted under the 1990 plan and those granted after 1989 under the
1988 plan are nonqualified stock options exercisable 40 percent after one
year, 30 percent after three years and 30 percent after five years and expire
ten years from the date of grant. In addition, the Company has a Stock Option
Plan for outside Directors, which was authorized in 1990 and annually grants
nonqualified stock options to the Company's outside Directors. Grants under
this plan and those made in 1988 and 1989 under the 1988 Stock Incentive Plan
are exercisable after one year and expire ten years from the date of grant.
All options are granted at the market value on the date of grant. The Company
makes no charge to income in connection with stock options. Shares reserved
for issuance under these stock option plans totaled 2,185,000 shares at April
28, 1995 and April 29, 1994 and 1,285,000 at April 30, 1993 and September 25,
1992, of which 901,880 shares, 1,018,550 shares, 337,900 shares and 460,300
shares, respectively, were available for options to be granted in the future.
<TABLE>
<CAPTION>
Total Options Price Range
<S> <C> <C>
Balance,
September 27, 1991 (229,500 options exercisable) 550,300 $11.88 to $25.75
Granted 267,900 $23.81 to $30.75
Terminated (5,900) $25.56 to $30.75
Exercised (40,400) $11.88 to $25.75
Balance,
September 25, 1992 (204,600 options exercisable) 771,900 $11.88 to $30.75
Granted 122,400 $26.00 to $26.81
Exercised (7,600) $11.88 to $25.75
Balance,
April 30, 1993 (269,300 options exercisable) 886,700 $11.88 to $30.75
Granted 246,300 $22.44 to $28.19
Terminated (26,950) $11.88 to $30.75
Exercised (23,200) $11.88 to $20.38
Balance,
April 29, 1994 (460,500 options exercisable) 1,082,850 $11.88 to $30.75
Granted 145,300 $28.50 to $40.38
Terminated (27,130) $22.44 to $30.75
Exercised (154,900) $11.88 to $30.75
Balance,
April 28, 1995 (532,000 options exercisable) 1,046,120 $11.88 to $40.38
</TABLE>
Note 9. FINANCING AND COMMITMENTS
The Company has $55.0 million of committed, noncollateralized revolving lines
of credit which were arranged specifically for the acquisition of the European
operations from Philips. The $55.0 million lines of credit include a $30.0
million three year facility that was to be used to finance the acquisition and
corporate working capital requirements and a $25.0 million multicurrency
facility to finance the working capital requirements of the European
operations. The committed lines of credit require certain working capital and
other minimum financial requirements. The Company is in compliance with all
covenants on its lines of credit. Under the $30.0 million revolving line
there was nothing outstanding at April 28, 1995 and $9.5 million outstanding
at an interest rate of 4.55% at April 29, 1994. Under the $25.0 million
multicurrency line, there was $21.4 million outstanding at April 28, 1995 and
$4.8 million outstanding at April 29, 1994. The interest rates on these
borrowings were 5.2 percent to 11.0 percent in 1995 and 7.0 percent in 1994.
The available amount of the multicurrency facility is reduced by $1.25 million
each quarter beginning in the last quarter of fiscal 1995 through fiscal 1998.
The Company has $75.0 million in uncommitted lines of credit. There was no
debt outstanding under these lines at April 28, 1995 and April 29, 1994.
Long-term obligations include capital lease obligations.
Approximate required aggregate principal payments of all long-term debt will
be as follows: 1996 - $5.0 million; 1997 - $5.0 million; 1998 - $3.8 million.
The Company's operating lease expense, including leases with a term of less
than one year, was $7.7 million in 1995(6.9 million in 1994, $2.6 million for
the seven months ended April 30, 1993 and $4.1 million in 1992). The
principal leases are for various sales offices, storage facilities, data
processing equipment and automobiles. Most facility leases have escalation
clauses to cover increases in direct lease expenses. Below is a schedule of
future minimum lease payments under operating leases that have initial
noncancelable lease terms in excess of one year as of April 28, 1995:
<TABLE>
(in thousands)
<CAPTION>
Fiscal Year Facilities Equipment Total
<S> <C> <C> <C>
1996 $4,655 $1,764 $6,419
1997 3,101 1,120 4,221
1998 2,060 548 2,608
1999 690 40 730
2000 432 14 446
$10,938 $3,486 $14,424
</TABLE>
Note 10. OPERATIONS BY GEOGRAPHIC AREAS
The Company is engaged in one line of business, the manufacture and sale of
compact, professional electronic test tools. In the schedule below, revenues,
income before income taxes and assets are reported based on the location of
the Company's facilities. Intercompany transfers of products and services are
made at arm's length between the various geographic areas.
<TABLE>
(in thousands)
<CAPTION>
For the For the For the seven For the
year ended year ended months ended year ended
April 28, 1995 April 29, 1994 April 30, 1993 Sept. 25, 1992
<S> <C> <C> <C> <C>
Revenues
United States:
Sales to
unaffiliated customers $167,566 $168,230 $ 86,371 $179,429
Export sales 34,419 28,410 32,236 67,081
Interarea transfers 55,090 45,133 8,294 15,232
257,075 241,773 126,901 261,742
Europe:
Sales to
unaffiliated customers 148,902 136,820 --- ---
Interarea transfers 32,620 24,952 --- ---
181,522 161,772 --- ---
Other areas:
Sales to
unaffiliated customers 31,179 24,444 13,532 25,309
Eliminations (87,710) (70,085) (8,294) (15,232)
Consolidated revenues $382,066 $357,904 $132,139 $271,819
Income before income taxes:
United States $ 20,571 $ 20,699 $ 6,300 $ 26,301
Europe 7,538 228 --- ---
Other 4,316 1,158 718 985
Corporate expense and
eliminations (8,391) (8,005) (3,061) (6,100)
Consolidated income before
income taxes $ 24,034 $ 14,080 $ 3,957 $ 21,186
Assets:
United States $149,975 $141,014 $164,733 $168,004
Europe 112,783 108,129 --- ---
Other 15,201 10,977 8,211 8,443
Eliminations (2,437) (14,518) (857) (641)
Total Assets $275,522 $245,602 $172,087 $175,806
</TABLE>
In previous annual reports this schedule reported revenues based on the
location of the customer as opposed to the location of the Company's
facilities.
Note 11. FINANCIAL INSTRUMENTS
Financial instruments, which potentially subject the Company to concentrations
of credit risk, consist principally of trade receivables. As of April 28,
1995, the Company had no significant concentrations of credit risk due to a
large and diversified customer base spanning vast geographic areas.
The Company is subject to transaction exposures that arise from foreign
exchange movements between the dates foreign exchange transactions are
recorded and the date they are consummated. The Company's exposure to foreign
currency movements is somewhat mitigated through naturally offsetting currency
positions. Remaining exposure is partially reduced through the purchase of
foreign exchange contracts. At April 28, 1995, the Company had foreign
exchange contracts for various foreign currencies totaling $6.3 million.
Note 12. CONTINGENCIES
The Company is subject to various pending and threatened legal actions that
arise in the normal course of business. In the opinion of management,
liabilities arising from these claims, if any, will not have a material effect
on the Company.
Report of Ernst & Young LLP, Independent Auditors
Board of Directors and Stockholders
Fluke Corporation
Everett, Washington
We have audited the accompanying consolidated balance sheets of Fluke
Corporation and subsidiaries as of April 28, 1995 and April 29, 1994 and the
related consolidated statements of income, stockholders' equity and cash
flows for each of the two years in the period ended April 28, 1995, the seven
months ended April 30, 1993, and the year ended September 25, 1992. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements 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 provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Fluke Corporation and subsidiaries at April 28, 1995 and April 29, 1994 and
the consolidated results of their operations and their cash flows for each of
the two years in the period ended April 28, 1995, the seven months ended April
30, 1993, and the year ended September 25, 1992 in conformity with generally
accepted accounting principles.
As discussed in Note 3 and in Note 6 to the financial statements, in 1993 the
Company changed its method of applying overhead costs to inventories and its
method of accounting for income taxes.
/s/ Ernst & Young LLP
Seattle, Washington
June 2, 1995
REPORT OF MANAGEMENT
The management of Fluke Corporation (the Company) is responsible for the
preparation and integrity of the Company's consolidated financial statements
and related financial information. The statements have been prepared in
conformity with generally accepted accounting principles and include the best
estimates and judgments of management.
The Company maintains a system of internal control, which is designed to
safeguard the Company's assets and ensure that transactions are recorded in
accordance with Company policies. The Company's internal audit program is an
important part of this control.
The Audit Committee of the Board of Directors is responsible for reviewing and
approving the Company's consolidated financial statements, the system of
internal accounting controls and the selection of independent auditors. The
Audit Committee, which is comprised entirely of outside Directors, has
unrestricted access to both internal and external auditors.
George M. Winn John R. Smith
President, Vice President,
Chief Operating Officer Treasurer
<TABLE>
FINANCIAL SUMMARY
In thousands except shares and per share amounts
<CAPTION>
For the
seven
For the For the months For the For the For the
year ended year ended ended year ended year ended year ended
April April April Sept. Sept. Sept.
28, 1995 29, 1994 30, 1993 25, 1992 27, 1991 28, 1990
<S> <C> <C> <C> <C> <C> <C>
Revenues $382,066 $357,904 $132,139 $271,819 $239,651 $233,839
Cost of goods sold $185,873 $182,475 $ 72,167 $149,776 $129,095 $123,255
Gross margin $196,193 $175,429 $ 59,972 $122,043 $110,556 $110,584
Restructuring --- --- --- --- $ 10,800 ---
Total operating expenses
excluding restructuring $172,008 $158,558 $ 56,657 $101,712 $ 97,264 $ 95,213
Operating income $ 24,185 $ 16,871 $ 3,315 $ 20,331 $ 2,492 $ 15,371
Income before income taxes and
cumulative effect of changes
in accounting principles $ 24,034 $ 14,080 $ 3,957 $ 21,186 $ 3,441 $ 14,693
Cumulative effect of changes in
accounting principles --- $ --- $ 3,902 --- --- ---
Net income $ 14,901 $ 8,800 $ 6,743 $ 15,204 $ 3,205 $ 12,178
Average shares and share
equivalents outstanding 7,992,804 8,031,696 7,069,463 7,033,695 6,943,941 7,073,292
Income before cumulative effect of
changes in accounting principles
per share $ 1.86 $ 1.10 $ 0.40 $ 2.16 $ 0.46 $ 1.72
Cumulative effect of changes in
accounting principles per share --- $ --- $ 0.55 --- --- ---
Earnings per share $ 1.86 $ 1.10 $ 0.95 $ 2.16 $ 0.46 $ 1.72
Pro forma net income <F1> $ 14,901 $ 8,800 $ 4,320 $ 14,938 $ 3,156 $ 11,836
Pro forma earnings per share <F1> $ 1.86 $ 1.10 $ 0.61 $ 2.12 $ 0.45 $ 1.67
Income before cumulative effect
of changes in accounting principles
as a percentage of revenues 3.90% 2.46% 2.15% 5.59% 1.34% 5.21%
Net income as a percentage of revenues 3.90% 2.46% 5.10% 5.59% 1.34% 5.21%
Cash dividends declared per share $ 0.56 $ 0.52 $ 0.26 $ 0.48 $ 0.40 $ 0.32
Total assets $275,522 $245,602 $172,087 $175,806 $165,826 $151,892
Total stockholders' equity $175,280 $157,829 $135,187 $129,464 $116,265 $118,066
Long-term obligations $ 21,613 $ 14,712 $ 34 $ 391 $ 154 $ 94
Long-term interest expense $ 1,423 $ 1,327 $ 12 $ 31 $ 28 $ 519
<FN>
<F1> Pro forma data is presented assuming the change in accounting for inventory (explained
in Note 3) is applied retroactively.
</TABLE>
<TABLE>
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
(in thousands except per share amounts)
<CAPTION>
Gross Net Earnings Dividends
Revenues Margin Income Per Share Per Share
<S> <C> <C> <C> <C> <C>
Fiscal 1995:
1st Quarter $ 86,000 $ 42,822 $ 2,401 $0.30 $0.14
2nd Quarter 91,569 46,205 3,162 0.40 0.14
3rd Quarter 99,090 50,894 4,225 0.53 0.14
4th Quarter 105,407 56,272 5,113 0.63 0.14
Total $382,066 $196,193 $14,901 $1.86 $0.56
Fiscal 1994:
1st Quarter $ 84,687 $ 40,755 $ 1,420 $0.18 $0.13
2nd Quarter 89,554 42,824 1,899 0.24 0.13
3rd Quarter 87,615 42,509 2,380 0.30 0.13
4th Quarter 96,048 49,341 3,101 0.38 0.13
Total $357,904 $175,429 $ 8,800 $1.10 $0.52
</TABLE>
<TABLE>
STOCK PRICE INFORMATION
<CAPTION>
1995 1994
High Low High Low
<S> <C> <C> <C> <C>
1st Quarter 32 27 3/4 27 1/2 20 1/4
2nd Quarter 31 28 26 5/8 23 3/4
3rd Quarter 30 3/4 27 1/2 26 3/4 22 3/4
4th Quarter 40 5/8 29 3/8 28 3/8 25
</TABLE>
Fluke Corporation stock is traded on the New York Stock Exchange. The Company
moved to the New York Stock Exchange from the American and Pacific Stock
Exchanges on April 10, 1995.
Quarterly cash dividends of $0.14 per share were paid in 1995 and $0.13 per
share were paid in 1994 and 1993. The number of stockholders of record at
April 28, 1995 was 1,882.
<TABLE>
Exhibit 21
SUBSIDIARIES
The Company owns or controls the common stock (the only class authorized) of the following subsidiaries:
<CAPTION>
Percentage of State or Country
Name of Corporation Ownership of Incorporation
<S> <C> <C>
Fluke International Corporation 100 <F1> Washington
Fluke Deutschland GmbH 100 <F2> Germany
Fluke Electronics Canada, Inc. 100 <F2> Canada
Fluke Foreign Sales Corporation 100 <F2> Guam
Fluke Holland B.V. 100 <F2> <F3> The Netherlands
Fluke Singapore Pte. Ltd. 100 <F2> Singapore
K. K. Fluke 100 <F2> Japan
Fluke B.V. 100 <F2> The Netherlands
Fluke Europe B.V. 100 <F4> The Netherlands
Fluke Osterreich GmbH 100 <F4> Austria
Fluke Belgium N.V./S.A. 100 <F4> Belgium
Fluke Danmark A.S. 100 <F4> Denmark
Fluke Finland Oy 100 <F4> Finland
Fluke France S.A. 100 <F4> France
Fluke Italia S.r.l. 100 <F4> Italy
Fluke Norge A/S 100 <F4> Norway
Fluke Iberica S.L. 100 <F4> Spain
Fluke Sverige AB 100 <F4> Sweden
Fluke Switzerland AG 100 <F4> Switzerland
Fluke U.K. Ltd. 100 <F4> United Kingdom
Fluke Holding B.V. 100 <F4> The Netherlands
Fluke Industrial B.V. 100 <F5> The Netherlands
Fluke Nederland B.V. 100 <F5> The Netherlands
<FN>
<F1> Owned by Fluke Corporation
<F2> Owned by Fluke International Corporation
<F3> Not active but remains incorporated
<F4> Owned by Fluke B.V.
<F5> Owned by Fluke Holding B.V.
</TABLE>
The accounts of these subsidiaries are included in the accompanying
consolidated financial statements.
Exhibit 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Fluke Corporation of our report dated June 2, 1995, included in the 1995
Annual Report to Shareholders of Fluke Corporation.
Our audit also included the financial statement schedule of Fluke Corporation
listed in Item 14(a). This schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therin.
We also consent to the incorporation by reference in the Registration
Statements, (Form S-8 No. 33-20968) pertaining to the Company's Stock
Purchase Plan, (Form S-8 No. 2-81389) pertaining to the Company's 1988 Stock
Option Plan, (Form S-8 No. 33-38507) pertaining to the Company's 1990 Stock
Incentive Plan, and (Form S-8 No. 33-38506) pertaining to the Company's Stock
Option Plan for Outside Directors of our report dated June 2, 1995, with
respect to the consolidated financial statements incorporated herein by
reference and our report included in the preceding paragraph with respect to
the financial statement schedule included in this Annual Report (Form 10-K)
of Fluke Corporation.
Seattle, Washington
July 27, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheet and Income Statement and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-28-1995<F1>
<PERIOD-START> MAY-01-1994
<PERIOD-END> APR-28-1995
<CASH> 28,880
<SECURITIES> 0
<RECEIVABLES> 78,363
<ALLOWANCES> 1,141
<INVENTORY> 53,908
<CURRENT-ASSETS> 182,725
<PP&E> 159,480
<DEPRECIATION> 97,611
<TOTAL-ASSETS> 275,522
<CURRENT-LIABILITIES> 59,350
<BONDS> 0
<COMMON> 1,975
0
0
<OTHER-SE> 173,305
<TOTAL-LIABILITY-AND-EQUITY> 275,522
<SALES> 382,066
<TOTAL-REVENUES> 382,066
<CGS> 185,873
<TOTAL-COSTS> 172,008
<OTHER-EXPENSES> (1,284)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,435
<INCOME-PRETAX> 24,034
<INCOME-TAX> 9,133
<INCOME-CONTINUING> 14,901
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,901
<EPS-PRIMARY> 1.86
<EPS-DILUTED> 1.86
<FN>
<F1>All amounts are in thousands except per share amounts.
</FN>
</TABLE>
