<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 NOVEMBER 1, 1997
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 December 2, 1997:
9,112,754 (18,225,508 shares after giving effect to the stock split described
herein).
1
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FURON COMPANY
INDEX
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
- -------------------------------
PAGE NO.
--------
<S> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
November 1, 1997 and February 1, 1997 3
Condensed Consolidated Statements of Income
Three and nine months ended November 1, 1997 and
November 2, 1996 5
Condensed Consolidated Statements of Cash Flows
Three and nine months ended November 1, 1997
and November 2, 1996 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
(Unaudited)
<TABLE>
<CAPTION>
November 1, February 1,
In thousands 1997 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ..................... $ -- $ --
Accounts receivable, less allowance for
doubtful accounts of $1,742 at November 1, 1997
and $2,093 at February 1, 1997 ................ 74,670 72,315
Inventories ................................... 57,078 58,611
Deferred income taxes ......................... 10,413 10,411
Prepaid expenses and other current assets ..... 5,320 5,389
--------- ---------
Total current assets .................................. 147,481 146,726
Property, plant & equipment, at cost:
Land .......................................... 7,080 7,096
Buildings and leasehold improvements .......... 31,558 30,712
Machinery and equipment ....................... 159,857 152,998
--------- ---------
198,495 190,806
Less accumulated depreciation and amortization (87,403) (76,214)
--------- ---------
Net property, plant and equipment ..................... 111,092 114,592
Intangible assets, at cost less accumulated
amortization of $34,007 at November 1, 1997
and $29,971 at February 1, 1997 ....................... 81,792 74,640
Other assets .......................................... 7,612 8,385
--------- ---------
TOTAL ASSETS .......................................... $ 347,977 $ 344,343
========= =========
</TABLE>
See accompanying notes.
3
<PAGE> 4
FURON COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
November 1, February 1,
In thousands, except share data 1997 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Cash, less checks outstanding ....................... $ 240 $ 1,665
Accounts payable .................................... 25,058 24,319
Salaries, wages and related benefits payable ........ 17,071 14,141
Current portion of long-term debt ................... 916 1,001
Facility rationalization and severance .............. 7,926 10,369
Other current liabilities ........................... 20,143 16,407
--------- ---------
Total current liabilities .................................. 71,354 67,902
Long-term debt ............................................. 158,273 176,983
Other long-term liabilities ................................ 26,306 21,933
Deferred income taxes ...................................... 16,008 16,181
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, 9,055,397 shares issued and outstanding
at November 1, 1997 and 9,003,140 at February 1, 1997 39,665 38,787
Foreign currency translation adjustment ............. (1,070) (977)
Unearned ESOP shares ................................ (3,316) (3,224)
Unearned compensation ............................... (280) (238)
Additional pension liability ........................ (1,413) (1,413)
Retained earnings ................................... 42,450 28,409
--------- ---------
Total stockholders' equity ................................. 76,036 61,344
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................. $ 347,977 $ 344,343
========= =========
</TABLE>
See accompanying notes.
4
<PAGE> 5
FURON COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
-----------------------------------------------------
November 1, November 2, November 1, November 2,
In thousands, except per share amounts 1997 1996 1997 1996
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales .......................... $ 123,209 $ 96,227 $ 361,554 $ 287,206
Cost of sales ...................... 84,304 70,559 245,848 208,995
--------- --------- --------- ---------
Gross profit ....................... 38,905 25,668 115,706 78,211
Selling, general and administrative
expenses ........................... 28,898 19,894 85,662 60,239
Other (income), expense ............ (813) (955) (1,622) (2,918)
Interest expense ................... 2,842 585 8,796 1,939
--------- --------- --------- ---------
Income before income taxes ......... 7,978 6,144 22,870 18,951
Provision for income taxes ......... 2,513 2,089 7,204 6,443
--------- --------- --------- ---------
Net income ......................... $ 5,465 $ 4,055 $ 15,666 $ 12,508
========= ========= ========= =========
Net income per share of common stock $ 0.58 $ 0.44 $ 1.68 $ 1.37
========= ========= ========= =========
Cash dividends per share ........... $ 0.06 $ 0.06 $ 0.18 $ 0.18
========= ========= ========= =========
</TABLE>
See accompanying notes.
5
<PAGE> 6
FURON COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
--------------------------------------------------
November 1, November 2, November 1, November 2,
In thousands 1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income ................................... $ 5,465 $ 4,055 $ 15,666 $ 12,508
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation .............................. 4,111 3,162 12,412 9,870
Amortization .............................. 1,489 838 4,274 2,483
Provision for losses on accounts
receivable ................................ (64) (155) 85 132
Deferred income taxes ..................... 4 (265) (23) (189)
Loss on sale of assets .................... 37 -- 45 --
Working capital changes, net of
acquisitions and disposals:
Accounts receivable ....................... (5,190) (866) (3,044) 1,239
Inventories ............................... (237) 3,740 3,823 619
Accounts payable and accrued liabilities .. 4,026 (2,552) 2,759 (4,202)
Income taxes payable ...................... (525) 238 2,262 1,546
Other current assets and liabilities,
net ....................................... (43) 1,395 (290) 1,751
Changes in other long-term operating
assets and liabilities .................... 130 (352) 862 (1,251)
-------- -------- -------- --------
Net cash provided by operating
activities ............................ 9,203 9,238 38,831 24,506
INVESTING ACTIVITIES
Acquisition of businesses .................... (11,100) -- (11,100) (4,071)
Purchases of property, plant and equipment ... (3,156) (3,004) (8,633) (13,856)
Proceeds from sale of businesses ............. 395 275 814 1,054
Proceeds from sale of equipment .............. 196 1,542 229 1,592
Proceeds from notes receivable ............... -- 252 -- 257
Increase in notes receivable ................. -- (200) -- (200)
-------- -------- -------- --------
Net cash used in investing
activities ............................ (13,665) (1,135) (18,690) (15,224)
FINANCING ACTIVITIES
Proceeds from long-term debt ................. 15,077 -- 19,158 13,000
Principal payments on long-term debt ......... (11,168) (4,135) (37,973) (18,312)
Proceeds, net of cancellations, from
issuance of common stock ..................... (35) 457 612 1,226
Loan to ESOP ................................. (355) -- (621) (566)
Principal payments received from loan to
ESOP ......................................... -- -- 529 458
Dividends paid on common stock ............... (541) (538) (1,625) (1,614)
-------- -------- -------- --------
Net cash provided by (used in)
financing activities .................. 2,978 (4,216) (19,920) (5,808)
EFFECT OF EXCHANGE RATE CHANGES ON CASH .......... 1,320 (15) (221) 398
-------- -------- -------- --------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS.. (164) 3,872 -- 3,872
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD ........................................... 164 -- -- --
-------- -------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ....... $ -- $ 3,872 $ -- $ 3,872
======== ======== ======== ========
</TABLE>
See accompanying notes.
6
<PAGE> 7
FURON COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
November 1, 1997
(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 1, 1997.
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 November 1, 1997, and the
results of operations and cash flows for the three and nine months ended
November 1, 1997 and November 2, 1996. Results of the Company's
operations for the three and nine months ended November 1, 1997 are not
necessarily indicative of the results to be expected for the full year.
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings per Share, which is effective for financial
statements for periods ending after December 15, 1997. The Company will
be required to change the method currently used to compute earnings per
share and to restate all prior periods. Under the new requirements for
calculating basic earnings per share, the dilutive effect of stock
options will be excluded. The impact is expected to result in an
increase in basic earnings per share for the three and nine months ended
November 1, 1997 of $.03 and $.07 per share, respectively. The impact is
expected to result in an increase in basic earnings per share for the
three and nine months ended November 2, 1996 of $.02 and $.04 per share,
respectively. The impact of Statement 128 on the calculation of fully
diluted earnings per share for these periods is not expected to be
material.
2. INVENTORIES
Inventories, stated at the lower of cost (first-in, first-out) or
market, are summarized as follows:
<TABLE>
<CAPTION>
November 1, February 1,
In thousands 1997 1997
------------------------------------------------------------------------------
<S> <C> <C>
Raw materials and purchased parts $26,419 $22,841
Work-in-process 12,580 14,121
Finished goods 18,079 21,649
-------- -------
$57,078 $58,611
======== =======
</TABLE>
7
<PAGE> 8
FURON COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
November 1, 1997
(Unaudited)
3. INTANGIBLES
Intangible assets, primarily acquired in business combinations, net of
accumulated amortization, are summarized as follows:
<TABLE>
<CAPTION>
November 1, February 1,
In thousands 1997 1997
-------------------------------------------------------------------------------
<S> <C> <C>
Goodwill $52,163 $42,016
Other intangible assets 29,629 32,624
-------- -------
$81,792 $74,640
======== =======
</TABLE>
4. LONG-TERM DEBT
Long-term debt is summarized as follows:
<TABLE>
<CAPTION>
November 1, February 1,
In thousands 1997 1997
--------------------------------------------------------------------------------
<S> <C> <C>
Loans under bank credit agreements
due through fiscal year 2000 $151,000 $169,000
Industrial Revenue Bonds 6,175 6,775
Other 2,014 2,209
-------- ---------
Total long-term debt 159,189 177,984
Less current portion 916 1,001
-------- ---------
Due after one year $158,273 $176,983
========= ========
</TABLE>
Effective March 27, 1997, the Company amended and restated its Credit
Agreement to increase the aggregate credit facility from $200.0 million
to $250.0 million.
For the three and nine months ended November 1, 1997, the weighted
average interest rate on the loans under the bank credit agreement was
6.6%.
Interest paid for the three and nine months ended November 1, 1997 was
$2.7 million and $7.7 million, respectively. Interest paid for the three
and nine months ended November 2, 1996 was $0.6 million and $1.9
million, respectively.
8
<PAGE> 9
FURON COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
November 1, 1997
(Unaudited)
5. INCOME TAXES
The Company's effective tax rate for the three and nine months ended
November 1, 1997 was 31.5% as compared with 34.0% for the same periods
in the prior year. The lower effective tax rate was primarily due to
increases in research and experimental credits and foreign tax credits.
Income taxes paid for the three and nine months ended November 1, 1997
were $2.5 million and $4.7 million, respectively. Income taxes paid for
the three and nine months ended November 2, 1996 were $1.6 million and
$3.2 million, respectively.
6. CONTINGENCIES
At November 1, 1997, the Company had approximately $2.2 million of
foreign currency hedge contracts outstanding consisting of
over-the-counter forward contracts. Net unrealized losses from hedging
activities were not material as of November 1, 1997.
At November 1, 1997, the Company is obligated under irrevocable letters
of credit totaling $8.5 million.
The Company is currently involved in various litigation. 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
November 1, 1997
(Unaudited)
6. CONTINGENCIES (CONTINUED)
As of November 1, 1997 the Company's reserves for environmental matters
totaled approximately $1.7 million. The Company or one or more of its
subsidiaries is currently involved in environmental investigation or
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 in Southington, Connecticut; Gallup's
Quarry in Plainfield, Connecticut; Davis Liquid Waste and Picillo in
Coventry, Rhode Island; Malvern in Malvern, Pennsylvania; and Granville
in Granville, Ohio. While neither the timing nor the amount of the
ultimate costs associated with these matters 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 incurred and other factors, the Company presently
believes that its environmental 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.
7. SUBSEQUENT EVENT
On November 20, 1997, the Company's Board of Directors approved a
two-for-one stock split. As a result of this action, shareholders will
receive, on or about December 16, 1997, one share of the Company's
common stock for each full share of common stock outstanding to holders
of record on December 2, 1997. Pro forma earnings per share, giving
retroactive effect to the two-for-one split, are $0.29 and $0.84 for the
three and nine months ended November 1, 1997, respectively and $0.22 and
$0.69 for the three and nine months ended November 2, 1996,
respectively. Share and per share information contained elsewhere in
this filing have not been adjusted to reflect the impact of the common
stock split.
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 nine months ended November 1, 1997 rose 28%
to $123.2 million and 26% to $361.6 million, respectively, over the same periods
of the prior year. Comparing sales for the most recent quarter reflects a 4%
increase over the previous quarter ended August 2, 1997. For the quarter and
nine months ended November 1, 1997, Medex, having been acquired January 2, 1997,
recorded sales of $24.6 and $74.3 million, respectively. For the current
quarter, this represents a slight increase over the second quarter at $24.5
million, coming from improved European results.
In August, 1997 the Company acquired the product lines of Scientific Device
Manufacturer, Inc. (SDM), based in San Rafael, California, and an affiliated
company, AS Medical GmbH of Fraureuth, Germany. The combined companies currently
have annualized sales of approximately $7 million and will operate as part of
Furon's Medex subsidiary, which is headquartered in Columbus, Ohio. SDM and AS
Medical manufacture a complete line of sheath introducers, catheters and related
products for use in cardiology and anesthesia/intensive care.
Exclusive of the Medex acquisition, the Company has benefited from continued
strength in specific industrial markets over the prior year. Consistent with
last quarter of the current year, sales to the aerospace, heavy duty truck, OEM
medical devices, and general industrial markets were particularly strong during
the third quarter compared to the same period of the prior year. Partially
offsetting this was a shortfall in the chemical processing market that is the
result of major offshore exploration projects included in last year's sales that
were not repeated this year. Excluding Medex, sales for the three and nine
months ended November 1, 1997 for the Company's European operations were down 8%
and 9%, respectively, over the same periods of the prior year. However, after
removing the unfavorable effect of foreign currency exchange rate changes, sales
for the three and nine months ended November 1, 1997 were up 9% and 5%,
respectively, over the same periods of the prior year.
Gross profit as a percentage of sales for the three and nine months ended
November 1, 1997 was up 4.9% and 4.8%, respectively, from the same periods of
the prior year to 31.6% and 32.0%, respectively. This continues to be the result
of significantly higher margins earned by Medex, which were 44.7% and 44.8% for
the three and nine months ended November 1, 1997. Gross profit as a percentage
of sales for Medex on the current quarter, increased slightly from 44.6% in the
second quarter. This was attributable to reduced material costs from the
European operations. Exclusive of Medex, the current quarter benefited from
improved yields resulting in reduced material usage and cost containment
programs on increasing sales volumes compared to the same period of the prior
year. Compared to the second quarter, overall gross margin was lower as a result
of higher overhead due to performance based incentive compensation, reduced
material yields and a shift in product mix to higher material content products.
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 23.5%
and 23.7% for the three and nine months ended November 1, 1997, up from 20.7%
and 21.0%, respectively, for the same periods a year ago. The increase in
operating expenses as a percentage of sales from last year is primarily the
result of the Medex addition, at 33.0% and 31.4% for the three and nine months
ended November 1, 1997. After removing the effect of acquisitions and
divestitures, these same operating expenses were 21.0% and 21.6%, for the three
and nine months ended November 1, 1997, up slightly from 20.9% and 21.2%,
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, partially offset by
lower sales commissions and travel costs.
Interest expense for the three and nine months ended November 1, 1997 increased
significantly from the same periods of the prior year. This increase is due in
full to the debt incurred for the acquisition of Medex. Interest expense for the
three months ended November 1, 1997 reflects a 2.2% decrease over the previous
quarter ended August 2, 1997 due to the repayment of principal.
Pretax results of operations for the three and nine months ended November 1,
1997 improved 29.9% and 20.7%, respectively, compared to the same periods last
year. The improvement generally reflected higher sales, improved margins and
continued productivity improvements, which were somewhat offset by higher
material costs in Europe and higher operating and interest expenses. Net of
acquisitions and divestitures, pretax results of operations were up 24.2% and
17.1%, respectively, for the three and nine months ended November 1, 1997.
The Company's effective tax rate for the three and nine months ended November 1,
1997 was 31.5%, compared with 34.0% in the same periods last year. The lower
effective tax rate was primarily due to increases in research and experimental
credits and foreign tax credits.
LIQUIDITY AND CAPITAL RESOURCES
The Company's financial condition remained strong at November 1, 1997. The ratio
of current assets to current liabilities was 2.1 to 1.0, down slightly from the
beginning of the year. Net working capital decreased $2.7 million from the
beginning of the year to a total of $76.1 million. Cash provided by operations
for the three and nine months ended November 1, 1997 was $9.2 million and $38.8
million, respectively, compared with $9.2 million and $24.5 million,
respectively, provided in the same periods of the prior year. Investing
activities included the acquisition of SDM and AS Medical. Capital expenditures
for the nine months ended November 1, 1997 totaled $8.6 million and were
primarily for renovating existing facilities, leasehold improvements and
replacement of existing equipment. Cash and cash equivalents increased $1.4
million,
12
<PAGE> 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
in addition to a decrease in long-term debt of $18.8 million which was a result
of funds generated by operations. The Company's debt to equity ratio is
currently 2.1 to 1.0, a decrease from 2.9 to 1.0 at the beginning of the period.
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 continually evaluates its employment of capital resources including
asset management and other sources of financing.
The Company continually reviews possible acquisitions and should the Company
make a substantial acquisition, it would require the utilization of the
remaining $99.0 million available on its existing credit facility or financing
from other sources.
CONTINGENCIES
For information regarding environmental matters and other contingencies, see
note 6 to the Notes to Condensed Consolidated Financial Statements.
While the Year 2000 considerations are not expected to materially impact Furon's
internal operations, it may have an effect on some of our customers and
suppliers, and thus indirectly affect Furon. It is not possible to quantify the
aggregate cost to Furon with respect to customers and suppliers with Year 2000
problems, although the Company does not anticipate it will have a material
adverse impact on its business.
STATEMENT REGARDING FORWARD LOOKING DISCLOSURE
Except for the historical information contained in this report, certain matters
discussed herein, including (without limitation) in the section entitled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" (Item 2) in Part I, are forward looking statements. These statements
involve risks and uncertainties, including (without limitation) the matters
identified in that section and the following: the effect of economic and market
conditions and raw material price increases; the impact of costs, insurance
recoveries and governmental, judicial and other third party interpretations and
determinations in connection with legal and environmental proceedings; potential
Year 2000 considerations; and the impact of current or pending legislation and
regulation.
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.
Not applicable.
ITEM 5. OTHER INFORMATION.
Not applicable.
14
<PAGE> 15
PART II - OTHER INFORMATION (CONTINUED)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
11 Statement re: Computation of Net
Income Per Share
27 Financial Data Schedule
(b) Reports on Form 8-K:
None
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
December 4, 1997
16
<PAGE> 1
EXHIBIT 11
FURON COMPANY
Computation of Net Income Per Share
<TABLE>
<CAPTION>
Three months ended Nine months ended
-----------------------------------------------------------
November 1, November 2, November 1, November 2,
1997 1996 1997 1996
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY NET INCOME PER SHARE
Earnings:
Net income $ 5,465,000 $ 4,055,000 $15,666,000 $12,508,000
=========== =========== =========== ===========
Shares:
Weighted average number of
common shares outstanding 8,962,353 8,881,450 8,948,367 8,874,382
Shares issuable from assumed
exercise of stock options 475,189 257,672 377,716 250,153
----------- ----------- ----------- -----------
Average shares as adjusted 9,437,542 9,139,122 9,326,083 9,124,535
=========== =========== =========== ===========
Primary net income per share $ 0.58 $ 0.44 $ 1.68 $ 1.37
=========== =========== =========== ===========
FULLY DILUTED NET INCOME PER SHARE
Earnings:
Net income $ 5,465,000 $ 4,055,000 $15,666,000 $12,508,000
=========== =========== =========== ===========
Shares:
Weighted average number of
common shares outstanding 8,962,353 8,881,450 8,948,367 8,874,382
Shares issuable from assumed
exercise of stock options 485,340 257,711 497,466 250,920
----------- ----------- ----------- -----------
Average shares as adjusted for
full dilution 9,447,693 9,139,161 9,445,833 9,125,302
=========== =========== =========== ===========
Fully diluted net income per share $ 0.58 $ 0.44 $ 1.66 $ 1.37
=========== =========== =========== ===========
</TABLE>
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED CONDENSED STATEMENTS OF INCOME, CONDENSED BALANCE SHEETS AND
CONDENSED 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
NINE MONTHS ENDED NOVEMBER 1, 1997.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-END> NOV-01-1997
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 76,412
<ALLOWANCES> 1,742
<INVENTORY> 57,078
<CURRENT-ASSETS> 147,481
<PP&E> 198,495
<DEPRECIATION> 87,403
<TOTAL-ASSETS> 347,977
<CURRENT-LIABILITIES> 71,354
<BONDS> 6,175
0
0
<COMMON> 39,665
<OTHER-SE> 36,371
<TOTAL-LIABILITY-AND-EQUITY> 347,977
<SALES> 361,554
<TOTAL-REVENUES> 361,554
<CGS> 245,848
<TOTAL-COSTS> 331,510
<OTHER-EXPENSES> (1,622)
<LOSS-PROVISION> 85
<INTEREST-EXPENSE> 8,796
<INCOME-PRETAX> 22,870
<INCOME-TAX> 7,204
<INCOME-CONTINUING> 15,666
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,666
<EPS-PRIMARY> 1.68
<EPS-DILUTED> 1.66
</TABLE>
