<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
____________________
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED COMMISSION FILE NUMBER
MARCH 31, 1999 0-4041
(UNAUDITED)
____________________
HATHAWAY CORPORATION
(Incorporated Under the Laws of the State of Colorado)
8228 PARK MEADOWS DRIVE
LITTLETON, COLORADO 80124
TELEPHONE: (303) 799-8200
84-0518115
(IRS Employer Identification Number)
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 ninety (90) days.
YES X NO ___
---
Number of Shares of the only class of Common Stock outstanding:
(4,283,000 as of March 31, 1999)
<PAGE>
HATHAWAY CORPORATION
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
March 31, 1999 and June 30, 1998 (Unaudited).............. 1
Condensed Consolidated Statements of Operations
Three and nine months ended March 31, 1999 and
1998 (Unaudited).......................................... 2
Condensed Consolidated Statements of Cash Flows
Nine months ended March 31, 1999 and 1998 (Unaudited)..... 3
Notes to Condensed Consolidated Financial Statements
(Unaudited)............................................... 4
Item 2. Management's Discussion and Analysis of Operating
Results and Financial Condition........................... 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K................. 11
</TABLE>
<PAGE>
HATHAWAY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, JUNE 30,
1999 1998
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 1,155 $ 3,443
Restricted cash 635 480
Trade receivables, net 7,561 6,400
Inventories, net 3,782 3,649
Other 1,454 1,463
- -----------------------------------------------------------------------------------------------------
Total current assets 14,587 15,435
Property and equipment, net 1,750 1,730
Cost in excess of net assets acquired, net 425 374
Other long-term assets 172 281
- -----------------------------------------------------------------------------------------------------
Total Assets $ 16,934 $ 17,820
=====================================================================================================
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Accounts payable $ 2,537 $ 2,027
Accrued and other current liabilities 4,226 3,472
- -----------------------------------------------------------------------------------------------------
Total current liabilities 6,763 5,499
Line of credit 1,234 1,245
- -----------------------------------------------------------------------------------------------------
Total Liabilities 7,997 6,744
- -----------------------------------------------------------------------------------------------------
Stockholders' Investment:
Common stock 100 100
Additional paid-in capital 9,954 9,954
Loans receivable for stock (235) (235)
Retained earnings 2,809 4,841
Cumulative translation adjustment 282 389
Treasury stock (3,973) (3,973)
- -----------------------------------------------------------------------------------------------------
Total Stockholders' Investment 8,937 11,076
- -----------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Investment $ 16,934 $ 17,820
=====================================================================================================
</TABLE>
1
<PAGE>
HATHAWAY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
MARCH 31, MARCH 31,
1999 1998 1999 1998
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $ 10,550 $ 9,804 $ 30,207 $ 30,480
Operating costs and expenses:
Cost of products sold 6,909 6,245 19,728 19,701
Selling 1,731 1,911 5,428 5,955
General and administrative 1,126 1,043 3,393 3,076
Engineering and development 1,110 1,146 3,333 3,094
Amortization of intangibles and other 59 89 175 237
- -----------------------------------------------------------------------------------------------------
Total operating costs and expenses 10,935 10,434 32,057 32,063
- -----------------------------------------------------------------------------------------------------
Operating loss (385) (630) (1,850) (1,583)
Other income (expenses), net:
Interest and dividend income 33 39 86 155
Interest expense (28) (38) (99) (124)
Other income (expenses), net (4) (61) (173) (183)
- -----------------------------------------------------------------------------------------------------
Total other income (expenses), net 1 (60) (186) (152)
- -----------------------------------------------------------------------------------------------------
Loss before income taxes (384) (690) (2,036) (1,735)
Benefit (provision) for income taxes 5 -- 4 299
- -----------------------------------------------------------------------------------------------------
Net loss $ (379) $ (690) $ (2,032) $ (1,436)
=====================================================================================================
Basic and diluted net loss per share
(Note 4) $ (0.09) $ (0.16) $ (0.47) $ (0.33)
=====================================================================================================
Basic and diluted weighted average
shares outstanding 4,284 4,284 4,284 4,283
=====================================================================================================
</TABLE>
2
<PAGE>
HATHAWAY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
MARCH 31,
1999 1998
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(2,032) $(1,436)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and amortization 725 694
Other 2 101
Changes in assets and liabilities, net of effect in 1999 of purchase of
Ashurst Logistic Electronics Limited (Note 3):
(Increase) decrease in -
Restricted cash (155) (227)
Receivables (1,033) (130)
Inventories (133) 454
Prepaid expenses and other (1) 575
Increase (decrease) in -
Accounts payable 468 495
Accrued liabilities and other 672 194
- --------------------------------------------------------------------------------------------------------------------------
Net cash from operating activities (1,487) 720
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (616) (514)
Dividend from joint venture investment 121 --
Purchase of interest in Ashurst Logistic Electronics Limited, net of cash
acquired (Note 3) (281) --
- --------------------------------------------------------------------------------------------------------------------------
Net cash from investing activities (776) (514)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments on line of credit (150) (562)
Borrowings on line of credit 139 --
Purchase of treasury stock -- (2)
- --------------------------------------------------------------------------------------------------------------------------
Net cash from financing activities (11) (564)
Effect of foreign exchange rate changes on cash (14) 2
- --------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents (2,288) (356)
Cash and cash equivalents at beginning of year 3,443 3,431
- --------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at March 31 $ 1,155 $ 3,075
==========================================================================================================================
</TABLE>
3
<PAGE>
HATHAWAY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PREPARATION AND PRESENTATION
-------------------------------------
The accompanying unaudited condensed consolidated financial statements
include the accounts of Hathaway Corporation, its wholly-owned subsidiaries
and investments in joint ventures (the Company). All significant inter-
company accounts and transactions have been eliminated in consolidation.
Certain reclassifications have been made to prior year balances in order to
conform with the current year's presentation.
The condensed consolidated financial statements included herein have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission and include all adjustments which are,
in the opinion of management, necessary for a fair presentation. Certain
information and footnote disclosures normally included in financial
statements which are prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules
and regulations. The Company believes that the disclosures herein are
adequate to make the information presented not misleading. The financial
data for the interim periods may not necessarily be indicative of results
to be expected for the year.
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make certain
estimates and assumptions. Such estimates and assumptions affect the
reported amounts of assets and liabilities as well as disclosure of
contingent assets and liabilities at the date of the consolidated financial
statements, and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
It is suggested that the accompanying condensed interim financial
statements be read in conjunction with the Consolidated Financial
Statements and related Notes to such statements included in the June 30,
1998 Annual Report and Form 10-K previously filed by the Company.
2. INVENTORIES
-----------
Inventories, valued at the lower of cost (first-in, first-out basis) or
market, are as follows (in thousands):
MARCH 31, JUNE 30,
1999 1998
------------------------------------
Parts and raw materials, net $ 2,466 $ 2,210
Finished goods and work-in process, net 1,316 1,439
------------------------------------
$ 3,782 $ 3,649
====================================
3. BUSINESS ACQUISITION
--------------------
Effective July 1, 1998, Emoteq Corporation, a wholly-owned subsidiary of
the Company, acquired all the outstanding shares of Ashurst Logistic
Electronics Limited of Bournemouth, England (Ashurst) for $317,000 in cash.
Ashurst manufactures drive electronics and position controllers for a
variety of motor technologies as well as a family of static frequency
converters for military and aerospace applications and has extensive
experience in power electronics design and software development required
for the application of specialized drive electronics technology. The
acquired company was renamed Emoteq UK Limited.
4
<PAGE>
HATHAWAY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
3. BUSINESS ACQUISITION (CONTINUED)
--------------------------------
The acquisition has been accounted for using the purchase method of
accounting, and, accordingly, the purchase price has been allocated to the
assets purchased and the liabilities assumed based upon the fair values at
the date of acquisition. The preliminary net purchase price allocation,
which is subject to adjustment, is as follows (in thousands):
Cash $ 36
Trade receivables, net 190
Prepaid expenses 2
Property and equipment, net 25
Cost in excess of net assets acquired 195
Accounts payable ( 43)
Accrued liabilities and other ( 88)
------------------
Net purchase price $ 317
==================
4. EARNINGS PER SHARE
--------------------
In accordance with Statement of Financial Accounting Standards (SFAS) No.
128, "Earnings Per Share" (EPS), Basic and Diluted EPS have been computed
as follows (in thousands, except per share data):
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
MARCH 31, MARCH 31,
1999 1998 1999 1998
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Numerator:
Net loss $ (379) $ (690) $ (2,032) $ (1,436)
Denominator:
Weighted average outstanding shares 4,284 4,284 4,284 4,283
----------------------------------------------------------------------------
Basic and Diluted net loss per share $ (0.09) $ (0.16) $ (0.47) $ (0.33)
</TABLE>
At March 31, 1999 and 1998, stock options totaling 832,204 and 702,704,
respectively, were excluded from the calculation of diluted earnings (loss)
per share since the result would have been anti-dilutive.
5. SEGMENT INFORMATION
-------------------
In June 1997, the Financial Accounting Standards Board (FASB) issued SFAS
No. 131, "Disclosures about Segments of an Enterprise and Related
Information" (SFAS 131). SFAS 131 requires disclosure of operating
segments, which as defined, are components of an enterprise about which
separate financial information is available that is evaluated regularly by
the chief operating decision maker in deciding how to allocate resources
and in assessing performance.
The Company operates in two different segments: Power and Process Business
(Power and Process) and Motion Control Business (Motion Control).
Management has chosen to organize the Company around these segments based
on differences in markets, products and services.
5
<PAGE>
HATHAWAY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
5. SEGMENT INFORMATION (CONTINUED)
---------------------------------
The following tables provide information on the Company's segments (in
thousands):
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
MARCH 31, MARCH 31,
1999 1998 1999 1998
----------------------------------------------------------------------------------------------------
POWER POWER POWER POWER
AND MOTION AND MOTION AND MOTION AND MOTION
PROCESS CONTROL PROCESS CONTROL PROCESS CONTROL PROCESS CONTROL
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues from external
customers $ 7,349 $ 3,201 $ 6,471 $ 3,333 $20,892 $ 9,315 $20,168 $10,312
Income (loss) before income
taxes (521) 134 (1,333) 413 (2,112) 110 (3,294) 1,387
</TABLE>
<TABLE>
<CAPTION>
AS OF MARCH 31, 1999 AS OF JUNE 30, 1998
POWER AND MOTION POWER AND MOTION
PROCESS CONTROL PROCESS CONTROL
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Identifiable assets $ 10,611 $ 4,771 $ 9,985 $ 3,969
</TABLE>
The following is a reconciliation of segment information to consolidated
information:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
MARCH 31, MARCH 31,
1999 1998 1999 1998
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Segments' loss before income taxes $ (387) $ (920) $ (2,002) $ (1,907)
Corporate activities 3 230 (34) 172
-----------------------------------------------------------------------------------
Consolidated loss before income taxes $ (384) $ (690) $ (2,036) $ (1,735)
===================================================================================
</TABLE>
<TABLE>
<CAPTION>
AS OF AS OF
MARCH 31, JUNE 30,
1999 1998
-------------------------------------------
<S> <C> <C>
Segments' identifiable assets $ 15,382 $ 13,954
Corporate assets and eliminations 1,552 3,866
-------------------------------------------
Consolidated total assets $ 16,934 $ 17,820
===========================================
</TABLE>
6
<PAGE>
6. COMPREHENSIVE LOSS
------------------
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income," (SFAS 130). SFAS 130 establishes standards for reporting and
displaying comprehensive income and its components. Comprehensive income is
defined as the change in equity of a business enterprise during a period
from transactions and other events and circumstances from non-owner
sources. It includes all changes in equity during a period except those
resulting from investments by owners and distributions to owners.
Comprehensive loss is computed as follows (in thousands):
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
MARCH 31, MARCH 31,
1999 1998 1999 1998
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net loss $ (379) $ (690) $ (2,032) $ (1,436)
Translation adjustment (115) (1) (107) 29
-----------------------------------------------------------------------
Comprehensive loss $ (494) $ (691) $ (2,139) $ (1,407)
=======================================================================
</TABLE>
7. INCOME TAX RULING REQUEST
-------------------------
In June 1998, the Company filed a request for an income tax ruling by the
Internal Revenue Service (IRS) with respect to the tax-free treatment of
the possible spinoff of its Power, Systems and Process Business. The
proposed spinoff would separate the Company's Power, Systems and Process
Business from its Motion Control Business. Prior to the spinoff, the Power,
Systems and Process Business will be organized under one of Hathaway's
subsidiaries, Hathaway Systems Corporation (HSC). If such transaction were
to occur, all of the outstanding shares of HSC would be distributed to the
Hathaway shareholders, and thereafter, the Power, Systems and Process
Business would operate as a separate publicly-owned company under the name
of Hathaway Corporation and the Motion Control Business would operate as a
separate publicly-owned company under the name of Hathaway Motion Control
Corporation.
In December 1998, the IRS issued a favorable ruling on the proposed
transaction. The primary purpose for the spinoff would be to obtain
additional bank financing. The final decision as to whether to proceed with
the spinoff will be made by the Company's Board of Directors only after
approval is obtained from the Company's lenders and after consideration of
all relevantother factors at that time. Because management has not
committed to such spinoff, the Power and Process Business has not been
treated as a discontinued operation.
7
<PAGE>
HATHAWAY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
OPERATING RESULTS AND FINANCIAL CONDITION
All statements contained herein that are not statements of historical fact
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors that could
cause the actual results of the Company to be materially different from the
historical results or from any future results expressed or implied by such
forward-looking statements. Among the factors that could cause actual results to
differ materially are the following: the unavailability of sufficient capital on
satisfactory terms to finance the Company's business plan, increased
competition, the introduction of new technologies and competitors into the
systems and instrumentation markets where the Company competes, adverse changes
in the regulatory environment, and general business and economic conditions. In
addition to statements that explicitly describe such risks and uncertainties,
readers are urged to consider statements labeled with the terms "believes,"
"expects," "plans," "anticipates," or "intends" to be uncertain and forward-
looking. All cautionary statements made herein should be read as being
applicable to all related forward-looking statements wherever they appear. In
this connection, investors should consider the risks described herein.
OPERATING RESULTS
- -----------------
For the third quarter ended March 31, 1999, the Company recognized a net loss of
$379,000, or $.09 per share, compared to a net loss of $690,000, or $.16 per
share, for the same period last year. Revenues increased 78% in the third
quarter from $9,804,000 last year to $10,550,000 this year.
The Company recognized a net loss of $2,032,000, or $.47 per share, for the nine
months ended March 31, 1999, compared to a net loss of $1,436,000, or $.33 per
share, for the nine months ended March 31, 1998. Revenues for the first nine
months decreased by less than 1% from $30,480,000 in fiscal 1998 to $30,207,000
in fiscal 1999.
The 8% increase in revenues in the third quarter and the small decrease in the
first nine months were due to 14% and 4% increases, respectively, in the
Company's revenues from power and process products offset by 4% and 10%
decreases, respectively, in revenues from the Company's motion control products.
The increases in power and process revenues were primarily due to increases in
systems automation business and revenues from new products. The decreases in
motion control revenues were primarily due to decreased orders resulting from
the Asian economic crisis and the slow down in the semiconductor industry.
Sales to international customers decreased from $3,719,000 in the third quarter
of the prior year, to $2,960,000 in the third quarter of the current year. In
the first nine months, sales to international customers decreased from
$10,246,000 in fiscal year 1998 to $9,566,000 in fiscal year 1999. Foreign sales
represented 28% of total sales in the third quarter ended March 31, 1999 and 38%
of total sales in the third quarter ended March 31, 1998, and 32% and 34% of
total sales in the nine months ended March 31, 1999 and 1998, respectively.
Cost of products sold as a percentage of revenues remained reasonably consistent
with the prior year, increasing from 64% in the third quarter of fiscal year
1998 to 65% in the third quarter of the current year, and remaining at 65% for
the nine months ended March 31, 1999 and 1998.
Selling, general and administrative, and engineering and development expenses
decreased 3% in the third quarter and less than 1% in the first nine months, as
compared to the same periods last year.
For the nine months ended March 31, 1999, the Company recognized a 4,000 benefit
for income taxes compared to a benefit for income taxes of $299,000 recognized
last year. The decrease is primarily due to an increase in the valuation
allowance for the net deferred tax assets of the Company.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company's liquidity position as measured by cash and cash equivalents
(excluding restricted cash) decreased $2,288,000 during the first nine months of
fiscal 1999 to a balance of $1,155,000 at March 31, 1999, compared to $356,000
used in the first nine months of fiscal 1998. In the first nine months of fiscal
1999, $1,487,000 was used for operating activities, compared to $720,000
generated by operations for the same period last fiscal year.
8
<PAGE>
HATHAWAY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
OPERATING RESULTS AND FINANCIAL CONDITION
Cash of $776,000 was used by investing activities in the first nine months of
fiscal 1999, compared to $514,000 used by investing activities last year. The
increase in cash used was primarily due to cash used in fiscal 1999 for the
purchases of Ashurst Logistic Electronics Limited and additional property and
equipment, offset by a dividend of $121,000 received from a joint venture
investment during the first quarter of fiscal 1999. Financing activities used
$11,000 in the first nine months of fiscal 1999 compared to $564,000 used in
fiscal 1998. The decrease in cash used for financing activities was primarily
due to a decrease in repayments of the bank line- of- credit.
The Company believes that its existing cash balance of $1,155,000 and the amount
available under its long-term financing agreement (Agreement) are sufficient to
fund operations and working capital needs for at least the next twelve months.
The Agreement with Silicon Valley Bank (Silicon) is a line-of-credit that allows
for borrowing up to the lesser of $3,000,000 or 85% of the Company's eligible
receivables (Maximum Credit Limit). As of March 31, 1999, the Company could
borrow an additional $1,619,000, up to the $2,853,000 Maximum Credit Limit. The
Agreement matures on May 7, 2000 and will automatically be extended for
successive additional terms of one year each unless written notice is given at
least sixty days prior to any annual renewal date. The Agreement may be
terminated by Silicon if the Company fails to maintain compliance with certain
covenants related to tangible net worth. In addition, certain occurrences as
defined in the Agreement, including a material adverse change in the Company's
business, constitute an "Event of Default" in which Silicon may cease making
loans, declare all or any part of the outstanding balance due and payable or
take possession of any collateral securing the line-of-credit. As of May 13,
1999, the Company was in compliance with the covenants and was not aware of the
occurrence of any "Event of Default".
Recently, the Company has introduced new products, is developing additional new
products and has been awarded a significant contract, all of which are enabling
the Power and Process Business to show improved results. In addition, the
Company has started to see a recovery in its Motion Control Business as
operating results have improved each quarter from the previous quarter during
fiscal 1999. The Company believes it is making progress towards its objective of
returning to growth and profitability.
YEAR 2000 COMPLIANCE
Some computers and computer-based systems use only the last two digits to
identify a year in the date field and cannot distinguish the year 2000 from the
year 1900. The Company recognizes that the Year 2000 poses a challenge to the
proper functioning of computer systems included in its products, software
systems used in its business and items purchased from its suppliers. The Company
has adopted a "Y2K Readiness Program" and is taking what it believes to be
appropriate steps necessary in preparation for Year 2000 issues.
The Company is completing an assessment of its products to determine which
products will be affected by Year 2000 issues. Test procedures have been modeled
from the public document titled "Year 2000 Test Procedures", published by
General Motors Corporation, and include a step by step method of date
verification using each interface to the product. Modifications and updates are
being made as needed. Testing of most products is completed or under way.
Modifications and updates are being made as needed for products that are not Y2K
compliant. With the possible exception of some of the older RTU protocol
software, testing of all of the Company's current products will be complete
before December 31, 1999. Some of the Company's older products that are no
longer sold will not be tested for compliance. The Company will indicate on its
Web site which products will not be tested.
The Company is also assessing internal systems, processes and facilities for
Year 2000 compliance. The expected completion date to have all significant
internal systems, processes and facilities compliant is June 30, 1999. The
Company's assessment of its suppliers', service providers' and contractors' Year
2000 compliance is also ongoing and is expected to be completed by June 30,
1999. Alternative sources will be pursued for any non-compliant sources.
Additionally, alternative sources will be identified and qualified for all
compliant sources so that a secondary supplier will be available in the event
that disruption in supply occurs from the primary supplier.
9
<PAGE>
HATHAWAY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
OPERATING RESULTS AND FINANCIAL CONDITION
The Company currently believes it will be able to modify or offer alternative
products as well as modify or replace its affected systems in time to minimize
any detrimental effects on customer relationships or operations. Therefore, the
Company does not anticipate that the overall costs of adaptation of its products
and systems will be material to the Company's business, operations or financial
condition. However, the Company will continue to review on an ongoing basis
whether it needs to further address any anticipated costs, problems and
uncertainties associated with Year 2000 consequences.
10
<PAGE>
HATHAWAY CORPORATION
PART II. OTHER INFORMATION
- -------- -----------------
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
13. Annual Report containing Notes to Consolidated Financial
Statements in the Registrant's June 30, 1998 Annual Report to
Stockholders.
27 Financial Data Schedule.
* This document was filed with the Securities and Exchange
Commission and is incorporated herein by reference.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed in the three months ended
March 31, 1999.
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.
HATHAWAY CORPORATION
DATE: May 13, 1999 By: /s/ Richard D. Smith
-------------- ----------------------------------
President, Chief Executive Officer
and Chief Financial Officer
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> JUN-30-1999 JUN-30-1999
<PERIOD-START> JAN-01-1999 JUL-01-1999
<PERIOD-END> MAR-31-1999 MAR-31-1999
<CASH> 1,790 1,790
<SECURITIES> 0 0
<RECEIVABLES> 8,112<F1> 8,112<F1>
<ALLOWANCES> 551 551
<INVENTORY> 3,782 3,782
<CURRENT-ASSETS> 14,587 14,587
<PP&E> 9,058<F1> 9,058<F1>
<DEPRECIATION> 7,308 7,308
<TOTAL-ASSETS> 16,934 16,934
<CURRENT-LIABILITIES> 6,763 6,763
<BONDS> 0 0
100 100
0 0
<COMMON> 0 0
<OTHER-SE> 8,837 8,837
<TOTAL-LIABILITY-AND-EQUITY> 16,934 16,934
<SALES> 10,550 30,207
<TOTAL-REVENUES> 10,550 30,207
<CGS> 6,909 19,728
<TOTAL-COSTS> 6,909 19,728
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 25 55
<INTEREST-EXPENSE> 28 99
<INCOME-PRETAX> (384) (2,036)
<INCOME-TAX> 5 4
<INCOME-CONTINUING> (379) (2,032)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (379) (2,032)
<EPS-PRIMARY> (0.09) (0.47)
<EPS-DILUTED> (0.09) (0.47)
<FN>
<F1>Presented gross
</FN>
</TABLE>
