<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED AUGUST 3, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-8088
FURON COMPANY
(Exact name of registrant as specified in its charter)
California 95-1947155
- ---------------------------- ----------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
29982 Ivy Glenn Drive
Laguna Niguel, CA 92677
- ---------------------------- ----------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (714) 831-5350
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Number of shares of common stock outstanding as of September 6, 1996: 8,967,111.
1
<PAGE> 2
FURON COMPANY
INDEX
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
August 3, 1996 and February 3, 1996 3
Condensed Consolidated Statements of Income
Three and six months ended August 3, 1996 and July 29, 1995 5
Condensed Consolidated Statements of Cash Flows
Three and six months ended August 3, 1996 and July 29, 1995 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
PART II - OTHER INFORMATION 14
</TABLE>
2
<PAGE> 3
ITEM 1. FINANCIAL STATEMENTS
FURON COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(Unaudited)
<TABLE>
<CAPTION>
August 3, February 3,
In thousands 1996 1996
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ -- $ --
Accounts receivable, less allowance for doubtful
accounts of $1,471 at August 3, 1996 and $1,367 at
February 3, 1996 52,971 51,681
Inventories 45,178 39,827
Deferred income taxes 5,102 5,178
Prepaid expenses and other assets 4,696 5,367
-------- --------
Total current assets 107,947 102,053
Property, plant & equipment, at cost:
Land 2,479 1,305
Buildings and leasehold improvements 19,865 18,044
Machinery and equipment 136,377 128,396
-------- --------
158,721 147,745
Less accumulated depreciation and amortization (74,167) (68,093)
-------- --------
Net property, plant and equipment 84,554 79,652
Intangible assets, at cost less accumulated amortization
of $28,087 at August 3, 1996 and $26,612 at
February 3, 1996 25,420 23,543
Other assets 5,779 6,236
-------- --------
$223,700 $211,484
======== ========
</TABLE>
See accompanying notes.
3
<PAGE> 4
FURON COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
August 3, February 3,
In thousands, except share data 1996 1996
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Current liabilities:
Cash, less checks outstanding $ 2,820 $ 1,052
Accounts payable 19,691 18,851
Salaries, wages and related benefits payable 9,659 11,101
Current portion of long-term debt 309 278
Other current liabilities 10,341 10,345
-------- --------
Total current liabilities 42,820 41,627
Long-term debt 39,137 38,443
Other long-term liabilities 22,292 20,807
Deferred income taxes 7,843 7,725
Commitments and contingencies
Stockholders' equity:
Preferred stock without par value, 2,000,000 shares
authorized, none issued or outstanding -- --
Common stock without par value, 15,000,000 shares
authorized, 8,967,111 shares issued and outstanding at
August 3, 1996 and 8,906,905 at February 3, 1996 38,401 37,575
Foreign currency translation adjustment 855 403
Unearned ESOP shares (3,314) (3,205)
Unearned compensation (376) (556)
Additional pension liability (1,649) (1,649)
Retained earnings 77,691 70,314
-------- --------
Total stockholders' equity 111,608 102,882
======== ========
$223,700 $211,484
======== ========
</TABLE>
See accompanying notes.
4
<PAGE> 5
FURON COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
------------------ ----------------
August 3, July 29, August 3, July 29,
In thousands, except per share amounts 1996 1995 1996 1995
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $96,216 $82,300 $190,979 $170,753
Cost of sales 70,170 59,957 138,436 122,850
------- ------- -------- --------
Gross profit 26,046 22,343 52,543 47,903
Selling, general and administrative expenses 20,340 18,123 40,345 38,503
Other (income), net (873) (736) (1,963) (1,512)
Interest expense 678 787 1,354 1,581
------- ------- -------- --------
Income before income taxes 5,901 4,169 12,807 9,331
Provision for income taxes 2,006 1,459 4,354 3,266
------- ------- -------- --------
Net income $ 3,895 $ 2,710 $ 8,453 $ 6,065
======= ======= ======== ========
Net income per share of Common Stock $ 0.43 $ 0.30 $ 0.93 $ 0.67
======= ======= ======== ========
</TABLE>
See accompanying notes.
5
<PAGE> 6
FURON COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
------------------ ----------------
August 3, July 29, August 3, July 29,
In thousands 1996 1995 1996 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 3,895 $ 2,710 $ 8,453 $ 6,065
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation 3,420 2,465 6,708 4,975
Amortization 867 925 1,645 1,957
Provision for losses on accounts receivable 182 155 287 260
Increase in deferred income taxes -- 235 76 235
Loss on sale of assets -- 50 -- 61
Working capital changes, net of acquisitions and
disposals:
Accounts receivable 2,083 6,860 2,105 5,629
Inventories (683) 1,009 (3,121) (4,603)
Accounts payable and accrued liabilities (83) (6,332) (1,650) (7,124)
Income taxes payable 750 (709) 1,308 (58)
Other current assets and liabilities, net 121 (176) 356 1,042
Changes in other long-term operating assets and
liabilities 530 (190) (899) (165)
-------- ------- -------- --------
Net cash provided by operating activities 11,082 7,002 15,268 8,274
INVESTING ACTIVITIES
Acquisition of businesses (777) -- (4,071) (23,763)
Purchases of property, plant and equipment (6,497) (3,679) (10,852) (7,021)
Proceeds from sale of divestitures 373 200 779 767
Proceeds from sale of equipment 26 1,391 50 1,438
Proceeds from notes receivable 1 593 5 593
Increase in notes receivable -- (1,109) -- (1,100)
-------- ------- -------- --------
Net cash used in investing activities (6,874) (2,604) (14,089) (29,086)
FINANCING ACTIVITIES
Proceeds from long-term debt 6,000 2,008 13,000 23,008
Principal payments on long-term debt (10,177) (4,002) (14,177) (7,003)
Proceeds from issuance of common stock 72 163 769 764
Loan to ESOP (243) (231) (566) (231)
Principal payments received from loan to ESOP 458 384 458 384
Dividends paid on common stock (538) (532) (1,076) (1,063)
-------- ------- -------- --------
Net cash provided by (used in) financing
activities (4,428) (2,210) (1,592) 15,859
EFFECT OF EXCHANGE RATE CHANGES ON CASH 220 (145) 413 521
-------- ------- -------- --------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS -- 2,043 -- (4,432)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD -- -- -- 6,475
-------- ------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ -- $ 2,043 $ -- $ 2,043
======== ======= ======== ========
</TABLE>
See accompanying notes.
6
<PAGE> 7
FURON COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 3, 1996
(Unaudited)
1. GENERAL
The accompanying unaudited consolidated financial statements have been
condensed in certain respects and should therefore be read in
conjunction with the consolidated financial statements and related
notes, thereto, contained in the Company's Annual Report to
Shareholders on Form 10-K for the fiscal year ended February 3, 1996.
Certain reclassifications have been made to prior year amounts in order
to be consistent with the current year presentation.
In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements contain all adjustments necessary
(consisting only of normal recurring adjustments) to present fairly the
financial position of the Company as of August 3, 1996, and the results
of operations and cash flows for the three and six months ended August
3, 1996 and July 29, 1995. Results of the Company's operations for the
three and six months ended August 3, 1996 are not necessarily
indicative of the results to be expected for the full year.
2. INVENTORIES
Inventories, stated at the lower of cost (first-in, first-out) or
market, are summarized as follows:
<TABLE>
<CAPTION>
August 3, February 3,
In thousands 1996 1996
- --------------------------------------------------------------------------
<S> <C> <C>
Raw materials and purchased parts $16,780 $13,604
Work-in-process 12,515 11,503
Finished goods 15,883 14,720
------- -------
$45,178 $39,827
======= =======
</TABLE>
3. INTANGIBLES
Intangible assets, primarily acquired in business combinations, net of
accumulated amortization, are summarized as follows:
<TABLE>
<CAPTION>
August 3, February 3,
In thousands 1996 1996
- -------------------------------------------------------------------------
<S> <C> <C>
Goodwill $10,492 $ 9,113
Other intangible assets 14,928 14,430
------- -------
$25,420 $23,543
======= =======
</TABLE>
7
<PAGE> 8
FURON COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 3, 1996
(Unaudited)
4. LONG-TERM DEBT
Long-term debt is summarized as follows:
<TABLE>
<CAPTION>
August 3, February 3,
In thousands 1996 1996
- ---------------------------------------------------------------------------
<S> <C> <C>
Loans under bank credit agreements
due through fiscal year 2000 $37,000 $38,000
Other 2,446 721
------- -------
Total long-term debt 39,446 38,721
Less current portion 309 278
------- -------
Due after one year $39,137 $38,443
======= =======
</TABLE>
For the three and six months ended August 3, 1996, the weighted average
interest rate on the loans under bank credit agreements was 6.2% and
6.3%, respectively.
In August 1988, the Company entered into an 8-year Interest Rate Swap
agreement. The notional amount of the swap totaled $2.0 million at
August 3, 1996. The swap agreement effectively changes the Company's
interest rate on $2.0 million of its variable borrowings to a fixed
interest rate of 9.938%.
Interest paid for the three and six months ended August 3, 1996 was
$542,000 and $1,317,000, respectively. Interest paid for the three and
six months ended July 29, 1995 was $822,000 and $1,450,000,
respectively.
5. STOCKHOLDERS' EQUITY
During June 1996, the Company contributed $662,000 to the Employee
Stock Ownership Plan (ESOP) for the plan year ended April 30, 1996. Of
this amount, $458,000 served to reduce loans previously made to the
plan. In addition, during the first six months of the fiscal year, the
Company loaned $566,000 to the ESOP which is presented as unearned ESOP
shares in the accompanying condensed consolidated balance sheet. The
ESOP used the funds to acquire 25,000 shares of the Company's common
stock from a director of the Company.
8
<PAGE> 9
FURON COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 3, 1996
(Unaudited)
6. INCOME TAXES
The Company's effective tax rate for the three and six months ended
August 3, 1996 was 34% as compared with 35% for the same periods last
year. The lower effective tax rate in the current periods as compared
with the same periods in the prior year was primarily due to lower
state income taxes.
Income taxes paid for the three and six months ended August 3, 1996
were $1,100,000 and $1,600,000, respectively. Income taxes paid for the
three and six months ended July 29, 1995 were $2,250,000 and
$2,900,000, respectively.
7. CONTINGENCIES
At August 3, 1996, the Company had approximately $1,500,000 of foreign
currency hedge contracts outstanding consisting of over-the-counter
forward contracts. The contracts reflect the selective hedging of the
Belgium Franc with varying maturities up to six months. Net unrealized
losses from hedging activities were not material as of August 3, 1996.
At August 3, 1996, the Company is obligated under irrevocable letters
of credit totaling $2,177,000.
The Company is currently involved in various litigation in the normal
course of business. Management of the Company is of the opinion that
the ultimate resolution of such litigation should not have a material
adverse effect on the Company's consolidated financial position or
results of operations.
Compliance with environmental laws and regulations designed to regulate
the discharge of materials into the environment or otherwise protect
the environment requires continuing management effort and expenditures
by the Company. The Company does not believe that the operating costs
incurred in the ordinary course of business to satisfy air and other
permit requirements, properly dispose of hazardous wastes and otherwise
comply with these laws and regulations form or will form a material
component of its operating costs or have or will have a material
adverse effect on its competitive or consolidated financial positions.
9
<PAGE> 10
FURON COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 3, 1996
(Unaudited)
7. CONTINGENCIES (CONTINUED)
The Company or one of its subsidiaries is currently involved in
environmental remediation directly or as an EPA-named potentially
responsible party or private cost recovery/contribution action
defendant at various sites, including the following "superfund" waste
disposal sites: Solvents Recovery Service of New England site in
Southington, Connecticut; Gallups Quarry site in Plainfield,
Connecticut; and the Picillo Superfund site in Coventry, Rhode Island.
As of August 3, 1996 the Company's reserves for environmental matters
totaled approximately $1,800,000. While neither the timing nor the
amount of the ultimate costs associated with the remediation matters
described above can be determined with certainty, based on information
currently available to the Company, including investigations to
determine the nature of the potential liability, the estimated amount
of investigation and remedial costs expected to be necessary to
complete the remediation and other factors, the Company presently
believes that these reserves should be sufficient to cover the
Company's aggregate liability for these matters and, accordingly, does
not expect them to have a material adverse effect on its consolidated
financial position or results of operations. The actual costs to be
incurred by the Company at each site will depend on a number of
factors, including one or more of the following: the final delineation
of contamination; the final determination of the remedial action
required; negotiations with governmental agencies with respect to
cleanup levels; changes in regulatory requirements; innovations in
investigatory and remedial technology; effectiveness of remedial
technologies employed; and the ultimate ability to pay of any other
responsible parties.
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Consolidated sales for the three and six months ended August 3, 1996 rose 17% to
$96 million and 12% to $191 million, respectively, over the same periods of the
prior year.
Effective April 1, 1996 the Company completed the acquisition of all the assets
of Econocruise Ltd. based in Rugby, England. Econocruise is expected to have
sales of approximately $14 million for this current fiscal year ended February
1, 1997. Econocruise manufactures state-of-the-art electronic control products
such as speed control systems, electronic foot pedals and drive-by-wire systems
for mobile equipment and major truck manufacturers in Europe. With this
acquisition, Furon, can now offer its global customers mechanical control
systems, electronic control systems, and hybrid electro-mechanical control
systems.
The Company has benefited from continued strength in specific industrial markets
over the prior year. However, the rate of expansion slowed from the first
quarter. Sales during the second quarter to the hydrocarbon processing,
electronics, healthcare, beverage, paint and appliance markets increased from
the same period of the prior year. Despite a general industry decline in the
heavy duty truck market of 20% to 30%, consistent with industry expectations,
the Company held its sales to this portion of the business constant through
additional penetration. Company sales to the processing industry were up 10%
over last year's second quarter despite declines in the pulp and paper, and oil
exploration markets. However, both of these markets were up significantly over
the first quarter of this year. The Company's sales into the semi-conductor
market were up 55% in the second quarter over the same quarter last year
significantly outpacing this market on the strength of new products and
increased market penetration. Sales for the three and six months ended August 3,
1996 for the Company's European operations were up 22% and 17%, respectively,
over the same periods of the prior year (32% and 25% after removing the effect
of foreign currency exchange rate changes).
Gross profit as a percentage of sales for the three and six months ended August
3, 1996 was flat and down 0.5%, respectively from the same periods of the prior
year to 27.1% and 27.5%, respectively. For the current quarter, spending on
direct and variable costs was favorable to the prior year. Offsetting these
gains were higher fixed costs in relation to sales associated with recent
acquisitions. Compared to the first quarter, the operating leverage effect of
favorable domestic manufacturing costs, and continued productivity and process
improvements were not enough to offset the impact of higher manufacturing costs
experienced in Europe; in part due to seasonal softness in sales (somewhat
magnified by Econocruise) and a shift in product mix.
11
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
Selling, general and administrative expenses as a percentage of sales were 21.1%
for both the three and six months ended August 3, 1996, down from 22.0% and
22.6%, respectively, for the same periods a year ago. The increase in selling,
general and administrative expense in terms of dollars from last year was
primarily the result of higher performance based incentive compensation and
increased product development expenses, reflecting the Company's continued
commitment to new products and materials development (new product sales were 20%
of total sales in the second quarter compared with 15% for the full year in
fiscal 1996 and 10% in fiscal 1995). Partially offsetting these expenses were
fewer costs incurred related to travel and professional fees.
Other income and expense net, reflected increased income from the Company's
investments, as well as decreased other expense, which was attributable to the
elimination of higher income related to businesses previously held for sale in
the same period last year.
Interest expense for the three and six months ended August 3, 1996 decreased 14%
from the same periods of the prior year. Although there has been an increase in
the amount of debt as a result of acquisitions of the assets of Fluorglas and
Econocruise, higher interest rate bearing long-term debt has been paid off,
resulting in lower expense.
Pretax results of operations for the three and six months ended August 3, 1996
were up 42% and 37%, respectively, compared to the same periods last year. The
improvement generally reflected higher sales, continued productivity
improvements and lower operating expenses, which were somewhat offset by higher
material costs in Europe.
For the three months ended August 3, 1996, net of acquisitions and divestitures,
total sales were up 6% compared to the same period the prior year. Similarly,
European sales, after removing the effect of foreign currency exchange rates,
were up 1%, reflecting the general economic slowdown in European economies.
Gross margins increased 0.2% to 27.6%, and operating expenses decreased 0.2% to
22.3% of sales. Pretax results of operations increased 20% for the three months
ended August 3, 1996 compared to the same period last year.
For the six months ended August 3, 1996, net of acquisitions and divestitures,
total sales were up 3% while European sales, after removing the effect of
foreign currency exchange rates, were up 4% compared to the same period of the
prior year. Gross profit margin decreased 0.3% to 28.0%, and operating expenses
decreased 0.9% to 22.3% of sales. Pretax results of operations increased 24% for
the six months ended August 3, 1996 compared to the same period last year.
12
<PAGE> 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
The Company's effective tax rate for the three and six months ended August 3,
1996 was 34% compared with 35% in the same periods last year. The lower
effective tax rate in the current periods as compared with the same periods last
year was primarily due to lower state income taxes.
LIQUIDITY AND CAPITAL RESOURCES
The Company's financial condition remained strong at August 3, 1996. The ratio
of current assets to current liabilities was 2.5 to 1.0, unchanged from the
beginning of the year. Net working capital increased $4.7 million from the end
of the prior year to a total of $65.1 million. Cash provided by operations for
the three and six months ended August 3, 1996 was $11.1 million and $15.3
million, respectively, compared with $7.0 million and $8.3 million,
respectively, provided in the same periods of the prior year. Net of the
Econocruise acquisition, accounts receivable decreased $2.1 million, inventories
increased $3.1 million, income taxes payable increased $1.3 million and accounts
payable and accrued liabilities decreased $1.7 million from the prior year end.
Capital expenditures totaled $10.9 million and were primarily for renovating
existing facilities, leasehold improvements, or replacement of existing
equipment, in addition to implementation of the operating systems to support the
Company's new structure.
Cash and cash equivalents (cash, less checks outstanding) decreased $1.8 million
primarily as a result of cash used in the Econocruise acquisition and to fund
capital expenditures and working capital requirements. Long-term debt increased
slightly as a result of funds borrowed to complete the acquisition of
Econocruise. The Company's debt to equity ratio was 0.35 to 1.0 at August 3,
1996, a decrease from 0.38 to 1.0 at the beginning of the year.
The Company continues to believe that it generates sufficient cash flow from its
operations to finance near and long-term internal growth, capital expenditures
and the principal and interest payments on its loans payable to banks. The
Company will continue to evaluate its employment of capital resources including
asset management and other sources of financing.
Management continually reviews possible acquisitions, and should the Company
make a substantial acquisition, it could require the utilization of the
remaining $63 million available on its existing credit facility or financing
from other sources.
ENVIRONMENTAL MATTERS
For information regarding environmental matters and other contingencies, see
note 7 of the Notes to Condensed Consolidated Financial Statements.
13
<PAGE> 14
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not applicable.
ITEM 2. CHANGES IN SECURITIES.
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Annual Meeting of the Shareholders of the registrant was held on June 4,
1996. The following matters were voted upon and approved at the meeting:
<TABLE>
<CAPTION>
VOTES CAST
------------------------------------ BROKER
MATTER FOR AGAINST WITHHELD ABSTENTIONS NONVOTES
- -------------------------------------- --------- ------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
1. Election of Class III Directors:
J. Michael Hagan 8,133,720 -- 25,069 -- --
Peter Churm 8,132,752 -- 26,037 -- --
William D. Cvengros 8,131,131 -- 27,658 -- --
2. Ratification of Appointment of
Ernst & Young LLP as Independent
Auditors for Fiscal Year Ending
February 1, 1997 7,675,836 20,811 -- 462,142 --
</TABLE>
ITEM 5. OTHER INFORMATION.
Not applicable.
14
<PAGE> 15
PART II - OTHER INFORMATION (CONTINUED)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
<TABLE>
<CAPTION>
(a) Exhibits: PAGE NUMBER
-----------
<S> <C>
11 Statement re: Computation of Net
Income Per Share 17
27 Financial Data Schedule 18
(b) Reports on Form 8-K:
</TABLE>
There were no reports on Form 8-K for the three months ended August 3,
1996.
15
<PAGE> 16
PART II (CONTINUED)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FURON COMPANY
--------------------------------------------------------
REGISTRANT
/S/MONTY A. HOUDESHELL /S/DAVID L. MASCARIN
- --------------------------------------- ------------------------------------
Monty A. Houdeshell David L. Mascarin
Vice President, Chief Financial Officer Controller
and Treasurer
September 10, 1996
16
<PAGE> 1
EXHIBIT 11
FURON COMPANY
Computation of Net Income Per Share
<TABLE>
<CAPTION>
Three months ended Six months ended
------------------ ----------------
August 3, July 29, August 3, July 29,
1996 1995 1996 1995
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY NET INCOME PER SHARE
Earnings:
Net income $3,895,000 $2,710,000 $8,453,000 $6,065,000
========== ========== ========== ==========
Shares:
Weighted average number of
common shares outstanding 8,886,221 8,825,941 8,870,848 8,806,857
Shares issuable from assumed
exercise of stock options 271,908 273,284 246,576 258,831
---------- ---------- ---------- ----------
Average shares as adjusted 9,158,129 9,099,225 9,117,424 9,065,688
========== ========== ========== ==========
Primary net income per share $ 0.43 $ 0.30 $ 0.93 $ 0.67
========== ========== ========== ==========
FULLY DILUTED NET INCOME PER SHARE
Earnings:
Net income $3,895,000 $2,710,000 $8,453,000 $6,065,000
========== ========== ========== ==========
Shares:
Weighted average number of
common shares outstanding 8,886,221 8,825,941 8,870,848 8,806,857
Shares issuable from assumed
exercise of stock options 271,967 273,606 247,619 267,058
---------- ---------- ---------- ----------
Average shares as adjusted for
full dilution 9,158,188 9,099,547 9,118,467 9,073,915
========== ========== ========== ==========
Fully diluted net income per share $ 0.43 $ 0.30 $ 0.93 $ 0.67
========== ========== ========== ==========
</TABLE>
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED STATEMENTS OF INCOME, CONSOLIDATED BALANCE SHEETS AND
CONSOLIDATED STATEMENTS OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS CONTAINED WITHIN THE COMPANY'S FORM 10-Q
FOR THE SIX MONTHS ENDED AUGUST 3, 1996.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-01-1997
<PERIOD-END> AUG-03-1996
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 54,442
<ALLOWANCES> 1,471
<INVENTORY> 45,178
<CURRENT-ASSETS> 107,947
<PP&E> 158,721
<DEPRECIATION> 74,167
<TOTAL-ASSETS> 223,700
<CURRENT-LIABILITIES> 42,820
<BONDS> 0
0
0
<COMMON> 38,401
<OTHER-SE> 73,207
<TOTAL-LIABILITY-AND-EQUITY> 223,700
<SALES> 190,979
<TOTAL-REVENUES> 190,979
<CGS> 138,436
<TOTAL-COSTS> 178,781
<OTHER-EXPENSES> (1,963)
<LOSS-PROVISION> 287
<INTEREST-EXPENSE> 1,354
<INCOME-PRETAX> 12,807
<INCOME-TAX> 4,354
<INCOME-CONTINUING> 8,453
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,453
<EPS-PRIMARY> 0.93
<EPS-DILUTED> 0.93
</TABLE>
