FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended January 30, 1999
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number: 0-3947
Hach Company
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 42-0704420
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5600 Lindbergh Drive, Loveland, Colorado 80538
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(Address of principal executive offices) (Zip code)
(970) 669-3050
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(Registrant's telephone number including area code)
Not applicable
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(Former name, former address, and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ____
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of March 12, 1999.
Title Outstanding
Common Stock 9,305,074
Class A Common Stock 8,606,024
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
Summarized Financial Statements
The accompanying Consolidated Balance Sheet as of January 30, 1999 and the
Consolidated Statements of Income for the quarters and the nine months ended
January 30, 1999 and January 31, 1998 and the Consolidated Statements of Cash
Flows for the nine months ended January 30, 1999 and January 31, 1998 are
unaudited; however, in the opinion of management all adjustments (consisting
only of normal recurring adjustments) considered necessary for a fair
presentation of the results of such periods have been made. The results of
operations for the quarters and nine months ended January 30, 1999 and January
31, 1998 are not necessarily indicative of the results of operations to be
expected for the full year.
The financial data included herein pursuant to Rule 10-01 of Regulation S-X
has been subjected to a review by PricewaterhouseCoopers LLP, the Registrant's
independent accountants.
<PAGE>
HACH COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Thousands of Dollars Except Share Data)
(Unaudited)
<TABLE>
<CAPTION>
QUARTER ENDED NINE MONTHS ENDED
1/30/99 1/31/98 1/30/99 1/31/98
--------- --------- -------- ---------
<S> <C> <C> <C> <C>
Net sales $ 33,068 $ 30,337 $ 103,258 $ 94,293
Cost of sales 16,530 15,552 51,404 48,113
--------- --------- --------- ---------
Gross profit 16,538 14,785 51,854 46,180
Selling, general and administrative expense 9,401 8,521 29,559 26,189
Research and development expense 2,513 1,976 7,521 6,213
--------- --------- --------- ---------
Income from operations 4,624 4,288 14,774 13,778
Interest income 128 187 388 786
Interest expense (431) (437) (1,477) (1,093)
--------- --------- --------- ---------
Income before income taxes 4,321 4,038 13,685 13,471
Income tax expense 1,506 1,438 4,870 4,796
--------- --------- --------- ---------
Net income $ 2,815 $ 2,600 $ 8,815 $ 8,675
========= ========= ========= =========
Net income per common share:
Basic $ 0.16 $ 0.16 $ 0.51 $ 0.48
Diluted $ 0.16 $ 0.16 $ 0.51 $ 0.48
========= ========= ========= =========
Dividends per common share
Common stock $ 0.03 $ 0.03 $ 0.09 $ 0.09
Class A common stock $ 0.04 $ 0.04 $ 0.12 $ 0.10
========= ========= ========= =========
Weighted average shares outstanding
Basic 17,218,000 16,479,000 17,151,000 18,011,000
Diluted 17,348,000 16,614,000 17,270,000 18,125,000
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
HACH COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)
<TABLE>
<CAPTION>
JANUARY 30, 1999 April 30, 1998
---------------- --------------
(Unaudited)
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 5,875 $ 4,358
Marketable securities, available for sale 460 680
Accounts receivable, less reserves
of $406 and $305, respectively 18,435 20,937
Inventories 13,995 15,360
Deferred taxes and other current assets 6,027 5,282
--------- ---------
Total current assets 44,792 46,617
Property, plant and equipment at cost:
Buildings and improvements 33,130 30,615
Machinery and equipment 56,692 52,412
--------- ---------
89,822 83,027
Less allowance for depreciation
and amortization 51,739 47,211
--------- ---------
38,083 35,816
Land 1,090 1,083
--------- ---------
Net property, plant and equipment 39,173 36,899
Marketable securities, available for sale 420 1,018
Acquired product technology 11,742 12,199
Goodwill 3,248 3,204
Other assets 2,769 2,413
--------- ---------
Total Assets $ 102,144 $ 102,350
========= =========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
HACH COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)
<TABLE>
<CAPTION>
JANUARY 30, 1999 April 30, 1998
---------------- --------------
(Unaudited)
LIABILITIES
Current liabilities:
<S> <C> <C>
Current portion of long term debt $ 82 $ 1,069
Accounts payable 3,185 4,591
Accrued liabilities:
Compensation 605 1,407
Compensated absences 3,836 3,933
Profit sharing 2,566 3,483
Income taxes payable - 720
Other 2,266 1,974
--------- ---------
Total current liabilities 12,540 17,177
Long term debt 31,000 35,994
Other long term liabilities 3,121 2,771
Deferred income taxes 6,525 6,589
--------- ---------
Total liabilities 53,186 62,531
STOCKHOLDERS' EQUITY
Common stock, $1 par value; (authorized
25,000,000 shares; issued 11,622,953 shares 11,623 11,623
Class A Common stock, $1 par value; (authorized
20,000,000 shares; issued 11,622,953 shares 11,623 11,623
Retained earnings 79,573 72,714
Unearned ESOP shares (2,390) (2,629)
Accumulated other comprehensive income (loss);
accumulated foreign currency translation adjustment 330 (437)
--------- ---------
100,759 92,894
Less: Shares held in treasury at cost:
(2,617,879 Common, 3,016,929 Class A at
January 30, 1999 and 2,667,001 Common,
3,123,074 Class A at April 30, 1998) (51,801) (53,075)
--------- ---------
Total Stockholders' Equity 48,958 39,819
--------- ---------
Total Liabilities and Stockholders' Equity $ 102,144 $ 102,350
========= =========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
HACH COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED NINE MONTHS ENDED
January 30, 1999 January 31, 1998
---------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 8,815 $ 8,675
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation & amortization 5,321 4,677
Benefit for deferred income taxes (492) (376)
Decrease in accounts receivable 2,502 848
(Increase) decrease in inventories 1,365 (1,967)
Increase in prepaid expenses & other assets (317) (692)
Decrease in accounts payable (1,406) (615)
Decrease in accrued liabilities (1,646) (671)
------- -------
Net cash provided by operating activities 14,142 9,879
Cash flows from investing activities:
Capital expenditures (7,025) (6,412)
Purchases of investments - (2,737)
Proceeds from the maturity or sale of short-term investments 818 26,554
Increase in long-term assets (389) (454)
------- -------
Net cash (used) provided by investing activities (6,596) 16,951
Cash flows from financing activities:
Dividends paid (1,801) (1,565)
Proceeds from borrowings - 30,000
Capital lease obligations - 230
Payments on long-term borrowings (5,990) -
Purchases of treasury stock - (60,532)
Exercise of stock options 1,119 669
------- -------
Net cash used by financing activities (6,672) (31,198)
Effects of exchange rate changes 643 (450)
------- -------
Net increase (decrease) in cash & cash equivalents 1,517 (4,818)
Cash & cash equivalents at the beginning of the period 4,358 14,575
------- -------
Cash & cash equivalents at the end of the period $ 5,875 $ 9,757
======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
HACH COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Financial Statements
The consolidated balance sheet at January 30, 1999 and the consolidated
statements of income and retained earnings and cash flows for the interim
periods ended January 30, 1999 and January 31, 1998, have been prepared by the
Company, without audit. The April 30, 1998 balance sheet was derived from
audited financial statements and as presented does not include all the
disclosures required by generally accepted accounting principles. In the opinion
of management, all adjustments, consisting only of normal recurring accruals,
necessary to present fairly the consolidated financial position, results of
operations and cash flows have been made. These financial statements include
forward looking information as defined by the Private Securities Litigation
Reform Act of 1995 and therefore results of operations for the interim periods
are not necessarily indicative of the operating results for a full year of
future operations.
Certain prior period amounts have been reclassified to conform with the
current periods presentation.
2. Inventories
The components of inventories are: (Thousands of Dollars)
January 30, 1999 April 30, 1998
---------------- --------------
Raw materials and purchased parts $ 4,290 $ 4,545
Work-in-progress 1,383 1,555
Finished goods 7,902 8,882
Resale 420 378
--------- ---------
$ 13,995 $ 15,360
========= =========
3. Investments
During the first quarter of fiscal year 1999 the Company sold approximately
$770,000 of investments previously classified as held-to-maturity. Proceeds from
the sale of these investments were used for the acquisition of Environmental
Test Systems, Inc. (ETS). Upon the sale of the investments the Company realized
a gain of $1,000. In addition, all remaining investments previously classified
as held-to-maturity have been reclassified as available-for-sale. At the time of
the reclassification, these investments had a carrying value of $930,000, which
approximated the fair value. These investments have been reclassified because of
the liquidity needs brought about by the acquisition of ETS on April 30, 1998.
4. Property, Plant and Equipment
The Company capitalizes interest costs on certain assets that require a
period of time to prepare them for their intended use. Total interest costs
incurred during the nine month periods ended January 30, 1999 and January 31,
1998 were $1,732,000 and $1,175,000, respectively, of which $255,000 and $82,000
were capitalized to fixed assets, respectively.
5. Long-Term Debt
Long-term debt represents borrowings under a revolving credit agreement
with U.S. Bank National Association, f/k/a Colorado National Bank. As of January
30, 1999, the Company had interest rate contracts with U.S. Bank National
Association on $30 million at 5.91% which expires October 5, 1999 and $1 million
at 5.97% which expires April 26, 1999.
6. Income Taxes
For all periods presented, the provision for income taxes is based upon an
expected annual effective income tax rate. The rates utilized for the quarters
ended January 30, 1999 and January 31, 1998 were 34.9% and 35.6% respectively.
7. Earnings Per Share
The Company adopted the Statement of Financial Accounting Standards No.
128, "Earnings Per Share" in the quarter ended January 31, 1998 and all
historical net income per share data presented has been restated to conform to
the provisions of this statement. The standard established a different method of
computing net income per share than was required under the provisions of
Accounting Principles Board Opinion No. 15. The following table reconciles the
basic and diluted earnings per share (EPS) computations as shown on the
Consolidated Statements of Income and Retained Earnings included in this report
on Form 10-Q.
<PAGE>
EARNINGS PER SHARE
(Thousands of Dollars Except Share Data)
(Unaudited)
<TABLE>
Quarter Ended
-------------
January 30, 1999 January 31, 1998
---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Per Per
Share Share
Income Shares Amount Income Shares Amount
Basic earnings per share
Income available to common stockholders $2,815 17,218 $ 0.16 $2,600 16,479 $ 0.16
Effect of dilutive securities
Stock options - 130 - - 135 -
------ ------ ------ ------ ------ ------
Diluted earnings per share
Income available to common stockholders $2,815 17,348 $ 0.16 $2,600 16,614 $ 0.16
====== ====== ====== ====== ====== ======
Nine Months Ended
-----------------
January 30, 1999 January 31, 1998
---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Per Per
Share Share
Income Shares Amount Income Shares Amount
Basic earnings per share
Income available to common stockholders $8,815 17,151 $ 0.51 $8,675 18,011 $ 0.48
Effect of dilutive securities
Stock options - 119 - - 114 -
------ ------ ------ ------ ------ ------
Diluted earnings per share
Income available to common stockholders $8,815 17,270 $ 0.51 $8,675 18,125 $ 0.48
====== ====== ====== ====== ====== ======
</TABLE>
Options to purchase 6,000 shares of the Company's common stock were
outstanding but were not included in the computation of diluted EPS for the nine
months ended January 30, 1999 because the price of the options, which are $10.00
per share, was greater than the average market price of the common stock for the
period reported. The outstanding options not included in the calculation for the
nine months ended January 30, 1999 will expire in September 2008.
<PAGE>
8. Recently Issued Financial Accounting Standards
The Company has adopted Statement of Financial Accounting Standards (SFAS)
No. 130, "Reporting Comprehensive Income," which requires that all components of
comprehensive income and total comprehensive income be reported and that changes
be shown in a financial statement displayed with the same prominence as other
financial statements. The Company has decided it will present this information
in its statement of stockholders' equity in its annual financial statements. The
total comprehensive income for the quarters and nine months ended January 30,
1999 and January 31, 1998, was comprised of the following:
Quarter Ended
-------------
January 30, 1999 January 31, 1998
---------------- ----------------
Net income $ 2,815 $ 2,600
Foreign currency translation adjustment,
net of tax 173 68
---------------- ----------------
Comprehensive income $ 2,988 $ 2,668
================ ================
Nine Months Ended
-----------------
January 30, 1999 January 31, 1998
---------------- ----------------
Net income $ 8,815 $ 8,675
Foreign currency translation adjustment,
net of tax (767) 529
---------------- ----------------
Comprehensive income $ 8,048 $ 9,204
================ ================
In July 1997, the Financial Accounting Standards Board (FASB) issued SFAS
No. 131, "Disclosures about Segments of an Enterprise and Related Information,"
which is effective for fiscal years beginning after December 15, 1997. The
interim reporting disclosures are not required in the first year of adoption.
SFAS No. 131 specifies revised guidelines for determining an entity's operating
segments and the type and level of financial information to be disclosed. SFAS
No. 131 changes current practice under SFAS No. 14, "Financial Reporting for
Segments of a Business Enterprise," by establishing a new framework on which to
base segment reporting. The "management" approach expands the required
disclosures for each segment. The Company will adopt SFAS No. 131 in its annual
financial statements for the year ended April 30, 1999.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operation
Analysis of Financial Condition:
Cash and short-term investments increased $1,297,000 during the nine month
period to $6,335,000. Prior to the purchase of Environmental Test Systems (ETS),
approximately $770,000 of investments used in the transaction had been
classified as held-to-maturity. Upon the sale of these investments, the Company
realized a gain of $1,000. All remaining securities previously classified as
held-to-maturity have been reclassified as available-for-sale. Additionally,
long-term debt decreased during the nine month period by $4,994,000 to
$31,000,000.
The Company monitors cash flow and capital expenditures in great detail as
part of its total budgeting process. During fiscal year 1999, the Company
completed the construction of a 66,000 square foot building at the Loveland,
Colorado site. Capital needs in the near future will be for production equipment
as well as computer hardware and software to support distribution, research and
development and administration. In addition, the Company plans to expand
manufacturing capacity at its Elkhart, Indiana facility.
The Company intends to finance its capital projects and dividend payments
through existing cash and cash equivalents, short-term investments, projected
cash flow from operations and bank borrowings.
As of January 30, 1999, the aggregate average interest rate on the $31
million of long-term debt was 5.91%. As of January 30, 1999, the Company had an
interest rate contract on $30 million at 5.91% which expires October 5, 1999 and
an interest rate contract on $1 million at 5.97% which expires April 26, 1999.
Year 2000 Computer Systems Compliance
The Year 2000 issue is a result of computer programs being written using
two digits rather than four to define the applicable year. Any of the Company's
computer programs that have date-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
or job failure or miscalculations causing disruptions of operations, including,
among other things, a temporary inability to process transactions, send invoices
or engage in similar business activities.
The Company utilizes many different systems and software programs to
process and summarize business transactions. The Company is continuing the
evaluation of its various operating systems and determining the additional
remediation efforts required to ensure that its computer systems will properly
utilize dates beyond December 31, 1999. Preliminary results of this assessment
have revealed that remediation efforts required will vary from system to system.
For example, it appears some systems will not require any additional programming
efforts, while others may require significant programming changes.
The Company has initiated formal communications with all of its significant
suppliers and large customers to determine the extent to which the Company is
vulnerable to those third parties' failure to remediate their own Year 2000
issue. However, there can be no guarantee that the systems of other companies on
which the Company's systems rely will be timely converted, or that a failure to
convert by another company, or conversion that is incompatible with the
Company's systems, would not have a material effect on the Company.
The Company has also conducted extensive work regarding the status of its
currently available and installed base of products. The Company believes that
its current products are largely Year 2000 compliant. Further information about
the Company's products is available on its Internet Website.
For those systems identified as non-compliant, the Company has begun and,
in certain cases, completed remediation efforts. The Company will utilize both
internal and external resources to reprogram, or replace, and test the software
for Year 2000 modifications. The Company plans to complete the Year 2000 project
during the first half of calendar year 1999. The total cost of the Year 2000
project is estimated to be between $4,000,000 and $6,000,000 and is being funded
through operating cash flows. Of the total project cost, approximately
$3,000,000 is attributable to the purchase of new software or equipment which
will be capitalized. The remaining $1,000,000 to $3,000,000 will be expensed as
incurred. The Company may decide to upgrade versions of the new software
programs which are Year 2000 compliant. In these instances, the Company may
capitalize certain costs of the new system in accordance with current accounting
guidelines.
<PAGE>
The Company presently believes that, with modifications to existing
software and conversions to new software for those sites which it believes may
be affected, the Year 2000 issue can be mitigated. However, if such
modifications and conversions are not made, or are not completed timely, the
Year 2000 issue could have a material adverse impact on the operations of the
Company.
The costs of the project and the date on which the Company plans to
complete the Year 2000 modifications are based on management's best estimates,
which were derived utilizing numerous assumptions of future events including the
continued availability of certain resources, third party modification plans and
other factors. However, there can be no assurance that these estimates will be
achieved, and actual results could differ materially from those plans. Specific
factors that might cause such material differences include, but are not limited
to, the availability and cost of personnel trained in this area, the ability to
locate and correct all relevant computer codes, and similar uncertainties.
Recently Issued Financial Accounting Standards
In July 1997, the Financial Accounting Standards Board (FASB) issued SFAS
No. 131, "Disclosures about Segments of an Enterprise and Related Information,"
which is effective for fiscal years beginning after December 15, 1997. The
interim reporting disclosures are not required in the first year of adoption.
SFAS No. 131 specifies revised guidelines for determining an entity's operating
segments and the type and level of financial information to be disclosed. SFAS
No. 131 changes current practice under SFAS No. 14, "Financial Reporting for
Segments of a Business Enterprise," by establishing a new framework on which to
base segment reporting. The "management" approach expands the required
disclosures for each segment. The Company will adopt SFAS No. 131 in its annual
financial statements for the year ended April 30, 1999.
<PAGE>
Results of Operations: Quarter and nine months ended January 30, 1999 compared
to quarter and nine months ended January 31, 1998.
Net sales for the third quarter increased 9% to 33,068,000 from $30,337,000
and for the nine months increased 9.5% to $103,258,000 from $94,293,000. The
increase was primarily due to the acquisition of Environmental Test Systems,
Inc. (ETS) which was completed on April 30, 1998. For the third quarter, ETS'
net sales were $3,043,000 and for the nine months ended January 30, 1999, ETS'
net sales were $9,269,000. Approximately 60% of ETS' yearly sales are pool and
spa testing products which are seasonal in nature. Historically, about 80.0% of
pool and spa testing products sales occurred between January and July. Exclusive
of ETS, domestic sales increased .5% while international net sales decreased
1.9% for the nine months ended January 30, 1999. For the quarter, exclusive of
ETS, domestic sales increased .2 % while international net sales decreased 3.3%.
Sales throughout Asia, which represent approximately 6.6% of consolidated sales
decreased 15.7% from the nine months ended January 31, 1998 as compared to
January 30, 1999 and decreased .3% for the quarter. Asian sales were down due to
weaker economic conditions and a stronger dollar versuses local currencies.
Sales for the Company's European subsidiary increased approximately 9.8% for the
nine months ended January 30, 1999.
Cost of sales for the third quarter increased 6.3% to $16,530,000 from
$15,552,000. and for the nine months increased 6.8% to $51,404,000 from
$48,113,000. This item, composed of material, labor and product overhead,
increased primarily because of unit volume increases. The gross profit percent
for the quarter increased to 50% from 48.7% and for the nine months increased to
50.2% from 49% Both increases were mainly due to the mix of products sold.
Selling, general and administrative expense for the third quarter increased
10.3% to $9,401,000 from $8,521,000 and for the nine months increased 12.9% to
$29,559,000 from $26,189,000. The increases were due primarily to the inclusion
of selling, general and administration expenses for ETS in the current year
amounts.
Research and development expense for the third quarter increased 27.2% to
$2,513,000 from $1,976,000 and for the nine months increased 21.1% to $7,521,000
from $6,213,000. The increase was due primarily to the inclusion of research and
development expenses for ETS in the current year amounts.
Interest income for the third quarter decreased to $128,000 from $187,000
and for the nine months decreased to $388,000 from $786,000. The decrease was
due to lower average investment balances for both periods and an increase in
interest capitalized.
Interest expense for the third quarter decreased to $431,000 from $437,000.
The decrease was due to lower interest rate charges on current borrowings during
the period. Interest expense for the nine months increased to $1,477,000 from
$1,093,000. The increase was due to higher average borrowings in the nine month
period.
The effective income tax rate for the quarters ended January 30, 1999 and
January 31, 1998 was 34.9% and 35.6%, respectively. The effective income tax
rate for the nine months ended January 30, 1999 and January 31, 1998 was 35.6%.
Part II. Other Information
Item 1. Legal Proceedings
None
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
On September 15, 1998, Hach Company held its annual meeting of
stockholders. At this meeting, the stockholders were asked to consider and vote
upon a proposal to amend the 1993 Stock Option Plan to authorize the Company to
issue up to an additional 1,500,000 shares of Class A Common Stock under the
plan. A total of 7,921,610 votes were cast of which 7,484,812 were affirmative,
409,410 were negative and 27,388 abstained.
Item 6. Exhibits and Reports on Form 8-K
(a) 1. Report of Independent Accountants.
2. Awareness Letter of Independent Accountants.
3. Financial Data Schedule
(b) During the quarter ended January 30, 1999, the Registrant filed no report
on From 8-K.
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.
Hach Company
By: /s/ Bruce J. Hach
----------------------------------------------------
Bruce J. Hach, President and Chief Executive Officer
March 10, 1999
Date
By: /s/ Gary R. Dreher
----------------------------------------------------------
Gary R. Dreher, Vice President and Chief Financial Officer
March 10, 1999
Date
[Letterhead]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and
Board of Directors of
Hach Company:
We have reviewed the accompanying consolidated balance sheet of Hach Company and
Subsidiaries as of January 30, 1999, the related consolidated statements of
income for the three and nine month periods ended January 30, 1999 and January
31, 1998 and the related consolidated statements of cash flows for the nine
month periods ended January 30, 1999 and January 31, 1998. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of the interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.
PRICEWATERHOUSECOOPERS LLP
Denver, Colorado
February 16, 1999
[Letterhead]
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Hach Company and Subsidiaries
Registration on Form S-8
Gentlemen:
We are aware that our report dated February 16, 1999 on our review of interim
financial information of Hach Company and Subsidiaries for the three and
nine months ended January 30, 1999, and included in the quarterly report on Form
10-Q for the three and nine months then ended, is incorporated by reference into
the registration statements of Hach Company and Subsidiaries on Form S-8 (File
No. 333-39675), Form S-8 (File No. 33-90584), Form S-8 (File No. 33-64793), and
Form S-8 (File No. 33-39019). Pursuant to Rule 436(c) under the Securities Act
of 1933, this report should not be considered a part of the registration
statements prepared or certified by us within the meaning of Section 7 and 11 of
that Act.
PRICEWATERHOUSECOOPERS LLP
Denver, Colorado
March 10, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND CONSOLIDATED BALANCE SHEETS ON
PAGES 3, 4 AND 5 OF THE COMPANY'S FROM 10-Q FOR THE QUARTERLY PERIOD ENDING
JANUARY 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000044764
<NAME> HACH COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1999
<PERIOD-START> MAY-01-1998
<PERIOD-END> JAN-30-1999
<CASH> 5,875
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<RECEIVABLES> 18,841
<ALLOWANCES> 406
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<PP&E> 90,912
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<CURRENT-LIABILITIES> 12,540
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0
0
<COMMON> 23,246
<OTHER-SE> 25,712
<TOTAL-LIABILITY-AND-EQUITY> 102,144
<SALES> 103,258
<TOTAL-REVENUES> 103,258
<CGS> 51,404
<TOTAL-COSTS> 51,404
<OTHER-EXPENSES> 37,080
<LOSS-PROVISION> 0
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<INCOME-PRETAX> 13,685
<INCOME-TAX> 4,870
<INCOME-CONTINUING> 8,815
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<EPS-PRIMARY> .51
<EPS-DILUTED> .51
</TABLE>
