<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 27, 1997
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
------------- ---------------
COMMISSION FILE NUMBER 1-5641
------
INSTRON CORPORATION
(Exact name of registrant as specified in its Charter)
<TABLE>
<CAPTION>
<S> <C>
MASSACHUSETTS 04-2057203
(State or former jurisdiction of incorporation or (I.R.S. Employer Identiication No.)
organization)
100 ROYALL STREET 02021
(Address of Principal executive offices) (Zip Code)
(617) 828-2500
(Registrant's telephone number, including area code)
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last report)
</TABLE>
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 periods 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 / /
The number of shares outstanding of each of the issuer's classes of common stock
as of November 7, 1997.
COMMON STOCK, $1 PAR VALUE -- 6,798,598 SHARES
<PAGE> 2
INSTRON CORPORATION FORM 10-Q
Consolidated Statement of Income PART I
(Unaudited) ITEM 1
(In thousands, except share data)
<TABLE>
<CAPTION>
For the three months ended
-----------------------------------------
September 27, 1997 September 28, 1996
-----------------------------------------
<S> <C> <C>
Revenue:
Sales $ 29,337 $ 32,430
Service 6,659 6,064
----------- ----------
Total revenue 35,996 38,494
----------- ----------
Cost of revenue:
Sales 16,740 19,043
Service 4,248 3,963
----------- ----------
Total cost of revenue 20,988 23,006
----------- ----------
Gross Profit 15,008 15,488
----------- ----------
Operating expenses:
Selling and administrative 10,404 10,684
Research and development 1,504 2,131
----------- ----------
Total operating expenses 11,908 12,815
----------- ----------
Income from operations 3,100 2,673
----------- ----------
Other expenses:
Interest 153 272
Foreign exchange (gains) losses (19) 83
----------- ----------
Total other expenses 134 355
----------- ----------
Income before income taxes 2,966 2,318
Provision for income taxes 1,124 881
----------- ----------
Net income $ 1,842 $ 1,437
=========== ==========
Net income per common share (Note 2) $ 0.26 $ 0.22
=========== ==========
Average common and equivalent
shares outstanding (Note 2) 6,974,760 6,496,992
=========== ==========
Dividends declared per share of
common stock $ 0.04 $ 0.04
=========== ==========
</TABLE>
See accompanying Notes to Consolidated Financial Statements
2
<PAGE> 3
INSTRON CORPORATION FORM 10-Q
Consolidated Statement of Income PART I
(Unaudited) ITEM 1
(In thousands, except share data)
<TABLE>
<CAPTION>
For the nine months ended
-----------------------------------------
September 27, 1997 September 28, 1996
-----------------------------------------
<S> <C> <C>
Revenue:
Sales $ 90,137 $ 91,570
Service 19,006 17,485
---------- ----------
Total revenue 109,143 109,055
---------- ----------
Cost of revenue:
Sales 51,689 51,896
Service 12,613 11,776
---------- ----------
Total cost of revenue 64,302 63,672
---------- ----------
Gross Profit 44,841 45,383
---------- ----------
Operating expenses:
Selling and administrative 32,057 32,781
Research and development 5,172 6,536
Special items charge 0 1,812
---------- ----------
Total operating expenses 37,229 41,129
---------- ----------
Income from operations 7,612 4,254
Other expenses:
Interest 713 746
Foreign exchange losses 75 75
---------- ----------
Total other expenses 788 821
---------- ----------
Income before income taxes 6,824 3,433
Provision for income taxes 2,593 1,305
---------- ----------
Net income $ 4,231 $ 2,128
========== ==========
Net income per common share (Note 2) $ 0.63 $ 0.33
========== ==========
Average common and equivalent shares
outstanding (Note 2) 6,700,498 6,524,899
========== ==========
Dividends declared per share of
common stock $ 0.12 $ 0.12
========== ==========
</TABLE>
See accompanying Notes to Consolidated Financial Statements
3
<PAGE> 4
INSTRON CORPORATION FORM 10-Q
Consolidated Balance Sheet PART I
(In thousands, except share data) ITEM 1
<TABLE>
<CAPTION>
September 27, December 31,
1997 1996
---------------------------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,985 $ 2,541
Accounts receivable (net of
allowance for doubtful accounts of
$1,027 in 1997 and $1,107 in 1996) 44,655 46,938
Inventories 26,409 26,320
Deferred income taxes 3,593 3,602
Prepaid expenses and other current assets 2,130 1,857
--------- ---------
Total current assets 78,772 81,258
Property, plant and equipment, net 20,445 22,466
Deferred income taxes 1,172 1,203
Other assets 17,251 16,906
--------- ---------
Total assets $ 117,640 $ 121,833
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 4,847 $ 6,510
Accounts payable 9,669 7,153
Accrued liabilities 12,803 12,805
Accrued employee compensation and benefits 4,496 6,205
Accrued income taxes 1,213 1,602
Advance payments received on contracts 1,007 2,889
--------- ---------
Total current liabilities 34,035 37,164
Long-term debt 14,251 17,409
Other long-term liabilities 5,839 4,859
--------- ---------
Total liabilities 54,125 59,432
--------- ---------
Stockholders' equity:
Preferred stock, $1 par value; 1,000,000
shares authorized, none issued 0 0
Common stock, $1 par value; 10,000,000 shares
authorized, 6,796,098 and 6,519,687 shares
issued, respectively 6,796 6,520
Additional paid in capital 6,564 3,514
Deferred compensation (2,960) 0
Retained earnings 59,434 55,997
Cumulative translation adjustment (5,605) (2,916)
--------- ---------
64,229 63,115
Less: Treasury stock of 74,952 shares
at cost 714 714
--------- ---------
Total stockholders' equity 63,515 62,401
--------- ---------
Total liabilities and stockholders' equity $ 117,640 $ 121,833
========= =========
</TABLE>
See accompanying Notes to Consolidated Financial Statements
4
<PAGE> 5
INSTRON CORPORATION FORM 10-Q
Consolidated Statement of Cash Flows PART I
(Unaudited) ITEM 1
(In thousands)
<TABLE>
<CAPTION>
For the nine months ended
--------------------------------------
September 27, 1997 September 28, 1996
--------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,231 $ 2,128
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 4,779 5,105
Provision for losses on accounts receivable 153 81
Increase (decrease) in deferred taxes 94 (97)
Changes in assets and liabilities, excluding
the effects from purchase of business:
Decrease in accounts receivable 2,119 588
Increase in inventories (117) (3,778)
(Increase) decrease in prepaid expenses
and other current assets (397) 134
Decrease in accounts payable and accrued expenses (1,023) (4,283)
Increase (decrease) in other long-term liabilities 997 (202)
Other, net (2,071) 345
------- -------
Net cash provided by operating activities 8,765 21
------- -------
Cash flows from investing activities:
Capital expenditures (2,298) (3,039)
Capitalized software costs (414) (793)
Purchase of business, net of cash acquired (2,010) 0
Other 387 165
------- -------
Net cash used by investing activities (4,335) (3,667)
------- -------
Cash flows from financing activities:
Net borrowings under revolving credit and
term loan facility (3,008) 4,123
Net short-term borrowings (1,358) 188
Cash dividends paid (794) (768)
Proceeds from exercise of stock options 264 561
------- -------
Net cash provided (used) by financing activities (4,896) 4,104
------- -------
Effect of exchange rate changes on cash (90) 1
------- -------
Net increase (decrease) in cash and cash equivalents (556) 459
------- -------
Cash and cash equivalents at beginning of year 2,541 1,644
------- -------
Cash and cash equivalents at end of period $ 1,985 $ 2,103
======= =======
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 1,219 $ 1,233
Income taxes 2,153 1,328
Supplemental disclosures of non-cash investing
and financing activities:
Liabilities incurred or assumed
in business acquisition $ 639 $ 0
</TABLE>
See accompanying Notes to Consolidated Financial Statements
5
<PAGE> 6
INSTRON CORPORATION FORM 10-Q
Notes to Consolidated Financial Statements PART I
September 27, 1997 ITEM 1
(unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and pursuant to the rules and regulations of
the Securities and Exchange Commission. Accordingly, they do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. For further
information, refer to the consolidated financial statements and footnotes
included in the Company's annual report on Form 10-K for the year ended
December 31, 1996.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain
estimates and assumptions that effect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reported periods. Actual
results could differ from those estimates.
In the opinion of management, all adjustments (which include only
normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the nine month period ended
September 27, 1997 are not necessarily indicative of the results that may
be expected for the year ended December 31, 1997.
The Financial Accounting Standard Board recently issued Statement of
Financial Accounting Standard No. 130, " Reporting Comprehensive Income."
This Statement requires that changes in comprehensive income be shown in a
financial statement that is displayed with the same prominence as other
financial statements. Comprehensive income for the Company will include
foreign currency adjustments. The Company will adopt the new standard
beginning in the first quarter of the fiscal year ending December 31, 1998.
In June 1997, the Financial Accounting Standard Board issued Statement
of Financial Accounting Standard No. 131, "Disclosures about Segments of an
Enterprise and Related Information" (SFAS No. 131). SFAS No. 131 specifies
new guidelines for determining a company's operating segments and related
requirements for disclosure. The Company is in the process of evaluating
the impact of the new standard on the presentation of the financial
statements and the disclosures therein. The Company will adopt the new
standard for the fiscal year ending December 31, 1998.
2. Net Income per Share
Net income per share is based on the weighted average number of common
shares and common share equivalents outstanding.
6
<PAGE> 7
INSTRON CORPORATION FORM 10-Q
Notes to Consolidated Financial Statements PART I
September 27, 1997 ITEM 1
(unaudited)
2. Net Income Per Share (continued)
In February 1997, The Financial Accounting Standards Board issued
Statement on Financial Accounting Standards No. 128, Earnings per Share
(SFAS 128). This statement attempts to simplify current standards used in
the United States for computing earnings per share and make them more
comparable with international standards. SFAS 128 replaces APB Opinion 15
and related interpretations (APB 15). APB 15 requires the dual presentation
of primary and fully diluted earnings per share. Primary EPS shows the
amount of income attributed to each share of common stock if every common
stock equivalent were converted into common stock. Fully diluted EPS
considers common stock equivalents and all other securities that could be
converted into common stock.
SFAS 128 simplifies the computation of EPS by replacing the
presentation of primary EPS with a presentation of basic EPS. Basic EPS
includes no dilution and is computed by dividing income available to common
stockholders by the weighted-average number of common shares outstanding
for the period. Diluted EPS reflects the potential dilution of securities
that could share in the earnings of an entity, similar to fully diluted
EPS. SFAS 128 is effective for financial statements issued for periods
ending after December 15, 1997, including interim periods, earlier
application is not permitted. SFAS 128 requires restatement of all prior
period earnings per share data.
Had the Company computed earnings per share consistent with the
provisions of SFAS 128 basic EPS would have been $0.27 and $.22 for the
three month period ended September 27, 1997 and September 28, 1996,
respectively, and $0.65 and $.33 for the nine month period ended September
27, 1997 and September 28, 1996, respectively. Diluted EPS would have been
equivalent to basic EPS.
3. Inventories
<TABLE>
<CAPTION>
(In thousands) September 27, 1997 December 31, 1996
------------------ -----------------
<S> <C> <C>
Raw Materials $12,536 $13,416
Work-in-process 7,363 5,550
Finished goods 6,510 7,354
------- -------
$26,409 $26,320
======= =======
</TABLE>
Inventories are valued at the lower of cost or market (net realizable
value). The last-in, first-out (LIFO) method of determining cost is
principally used for inventories in the United States and certain Asian
branches. The Company uses the first-in, first-out (FIFO) method for all
other inventories. Inventories valued at LIFO amounted to $10,951,000 and
$10,808,000 at September 27, 1997 and December 31, 1996, respectively. The
excess of current cost over stated LIFO value was $5,257,000 at September
27, 1997 and $4,990,000 at December 31, 1996.
4. The Company issued 250,000 shares of restricted stock as part of its
incentive compensation strategy for key employees, which resulted in
$3,062,500 of non-cash deferred compensation to be recognized as operating
expense over a 10 year period.
7
<PAGE> 8
INSTRON CORPORATION FORM 10-Q
September 27, 1997 PART I
ITEM 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations
RESULTS OF OPERATIONS
Quarter ended September 27, 1997 vs. Quarter ended September 28, 1996
As previously announced, Instron contributed its structures
business as part of the agreement to form the joint venture, Instron
Schenck Testing Systems ("IST"), with Carl Schenck AG in November of
1996. The investment in IST has been accounted for under the equity
method of accounting. Pursuant to a manufacturing and supply agreement,
Instron has supplied structures systems to IST at substantially reduced
gross margins compared to gross margins achieved on structures business
in 1996. The normal gross margin on these systems is reflected in IST's
financial results. The revenue on shipments to IST and related
manufacturing costs are included in the Company's consolidated revenue
and cost of revenue. Orders received from IST are not reflected in the
Company's total bookings and backlog figures as the expected profit
margin on this business is substantially lower than the Company's
normal operations. Pursuant to a research and development agreement,
as well as a support services agreement, Instron is reimbursed by IST
for certain development projects and support services that Instron
provided to IST. Financial comparisons of the results of the third
quarter are also impacted by Instron's disposition of the LMS business
in April 1997. Historically this operation did not contribute
significantly to operating income, however, its exclusion from the
third quarter results of 1997 has an effect on the comparison of
revenues and operating expenses.
Revenues for the third quarter of 1997 were $35,996,000,
compared to $38,494,000 for the same period last year, a decrease of
6.5%. Foreign sales accounted for approximately 58% of consolidated
third quarter revenues, compared with 57% for the third quarter of
1996. For comparison purposes, when structures shipments and revenues
of LMS are excluded from the third quarter revenues of 1997 and 1996,
revenues of the ongoing business for 1997 would have increased by 1.4%.
This increase is due primarily to higher service revenue, partially
offset by lower revenue in the Company's European operation.
The Company's consolidated gross margin as a percentage of
revenue increased to 41.7% for the third quarter of 1997 compared to
40.2% for the third quarter of 1996. This is due primarily to a
favorable mix of higher margin products and improved service margins,
partially offset by the impact of supplying IST with structures systems
at lower than normal profit margins.
8
<PAGE> 9
INSTRON CORPORATION FORM 10-Q
September 27, 1997 PART I
ITEM 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations
RESULTS OF OPERATIONS (continued)
Quarter ended September 27, 1997 vs. Quarter ended September 28, 1996
Total selling and administrative expenses decreased by 2.6%
compared to the third quarter of 1996, due to the disposition of the
LMS business and the reimbursement of certain administrative expenses
from IST. As a percentage of revenue, selling and administrative
expenses were 28.9% in the third quarter of 1997 compared to 27.8% for
the comparable period last year, due to lower product sales volume for
the three months ended September 27, 1997.
Research and development expenses decreased by 29.4% for the
third quarter of 1997 compared with the third quarter last year. The
primary reason for this decrease is the result of certain Instron
engineering resources being utilized to develop new products for IST in
accordance with the joint venture agreement. The costs associated with
the development efforts were reimbursed by IST and represent Instron's
strategy of leveraging its existing technology and application
knowledge within the structural testing market. Software development
costs of $281,000 were capitalized during the third quarter of 1997
compared with $169,000 of capitalized software development costs in the
third quarter of last year. If software capitalization costs and
engineering costs transferred to IST were included as period expenses
and engineering costs of LMS are excluded, research and development
expenses for the third quarter of 1997 would have increased by 4.8% on
a comparable basis to the third quarter of 1996.
Income from operations for the third quarter of 1997 was
$3,100,000, an increase of 16.0% compared to the third quarter last
year. Total income from operations expressed as a percentage of total
revenue has increased to 8.6% from 6.9% for the same period in 1996.
Net interest expense decreased by $119,000 or 43.8% compared
to the third quarter of 1996 due to lower borrowings. For the three
months ended September 27, 1997, foreign exchange gains of $19,000 were
recorded compared to foreign exchange losses of $83,000 in the third
quarter of 1996.
Net income of $1,842,000 for the third quarter of 1997
increased by 28.2% compared to net income of $1,437,000 for the third
quarter of 1996. Earnings for the three months ended September 27, 1997
were 26 cents per share compared to 22 cents per share for the same
period last year. This increase in earnings is principally due to the
improved gross margin and lower operating expenses due to the
reimbursement of certain expenses from IST.
Nine Months ended September 27, 1997 vs Nine Months ended September 28,
1996
Revenues for the nine months ended September 27, 1997, were
nearly flat compared to the same period in 1996. Foreign sales
accounted for approximately 59% of the consolidated first nine months
revenue compared to 61% in 1996. Removing the effect of LMS and the
structures business from both years, revenues of the ongoing business
increased by 5.3% compared to the same period in 1996. This increase
9
<PAGE> 10
INSTRON CORPORATION FORM 10-Q
September 27, 1997 PART I
ITEM 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations
RESULTS OF OPERATIONS (continued)
occurred primarily in the North America and the Asia/Latin America
operations.
Gross margin as a percentage of revenue decreased to 41.1%
compared with 41.6% for the first nine months of 1996. This is due to
the impact of supplying IST with structures systems at lower than
normal profit levels, partially offset by higher service margins. The
Company continues to expect its gross margin percentage to be
negatively effected during fiscal year 1997 resulting from its
agreement to supply products to IST at lower profit margins.
Total selling and administrative expenses decreased by 2.2%
compared to the same period in 1996 and as a percentage of revenue,
selling and administrative expenses decreased to 29.4% compared to
30.1% for the same period last year. This decrease is due primarily to
certain selling and administrative expenses being reimbursed by IST
and the exclusion of expenses relating to LMS after the sale of the
business in April 1997.
Research and development expenses decreased by 20.9% for the
first nine months of 1997 compared with the same period in 1996. During
the first nine months of 1997, the Company capitalized $414,000 of
software development costs compared with $793,000 in the first nine
months of 1996. If these costs were included and if the engineering
costs transferred to IST were included as period expenses and
engineering costs of LMS are excluded, research and development
expenses would have decreased by 3.8% on a comparable basis to 1996.
Income from operations for the first nine months of 1997 was
$7,612,000 compared to $4,254,000 for the same period last year. The
results for the first nine months of 1996 included a special items
charge of $1,812,000, representing the cost of implementing a work
force reduction and consolidation of certain manufacturing expenses.
Net income for the first nine months of 1997 was $4,231,000 or
63 cents per share compared to $2,128,000 or 33 cents per share, for
the same period last year, which included the effect of a special items
charge. Excluding this special items charge, net income would have been
$3,252,000 for the first nine months of 1996, or 50 cents per share.
The consolidated effective tax rate was 38% for the first nine
months of 1997 and 1996.
10
<PAGE> 11
INSTRON CORPORATION FORM 10-Q
September 27, 1997 PART I
ITEM 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Financial Condition
In the first nine months of 1997, the Company generated net
operating cash flows of $8.8 million which was used to acquire the
assets of the Dynatup business from GRC International for $2.0 million
in May 1997 (previously announced), fund capital expenditures of $2.3
million and pay down debt. Cash and cash equivalents decreased by $0.6
million in the first nine months of 1997.
At September 27, 1997, the Company had $20.7 million of
unutilized credit under its $35.0 million multicurrency revolving
credit and term loan facility. The Company's subsidiaries have other
overdraft and borrowing facilities for allowing advances of
approximately $26.0 million of which $4.8 million were utilized at
September 27, 1997. The ratio of total debt to debt plus equity at
September 27, 1997 was 23.1%, down from 27.7% at year-end 1996.
Accounts receivable decreased by $2.1 million from year-end
1996, which reflects quarterly revenue patterns. Inventories increased
by $0.1 million from the end of 1996. The inventory turnover ratio
increased to 2.71 at September 27, 1997 from 2.68 at year-end 1996.
The Company believes its present capital resources and
anticipated operating cash flows are sufficient for the foreseeable
future to meet its current cash requirements.
The Company's order backlog was $29.9 million at the end of
the third quarter of 1997, a decrease of 15.4% from the end of the
prior year's third quarter. For comparison purposes, if the third
quarter of 1996 is adjusted to exclude structure orders and LMS orders,
the backlog of orders at September 27, 1997 for the ongoing business
would have increased by 6.9%.
Bookings for the first nine months of 1997 were $106.0
million, a decrease of 2.6% from the same period last year. Bookings
restated to reflect ongoing business by excluding structures and LMS
orders increased by 7.6% for the first nine months of 1997, compared to
1996. Bookings for the third quarter of 1997 decreased by 5.9% from the
same period in 1996. Bookings restated to exclude structures and LMS
orders increased by 6.9% for the third quarter of 1997, compared to the
same period last year.
The Company issued 250,000 shares of restricted stock as part
of its incentive compensation strategy for key employees, which
resulted in $3,062,500 of non-cash deferred compensation to be
recognized as operating expense over a 10 year period.
On October 29, 1997, the Board of Directors declared a regular
quarterly dividend of 4 cents per share on the Company's common stock,
payable January 2, 1998 to shareholders of record on December 12, 1997.
11
<PAGE> 12
INSTRON CORPORATION FORM 10-Q
September 27, 1997 PART I
ITEM 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Financial Condition (continued)
The Company anticipates that order bookings will remain strong
through the fourth quarter of 1997. Based on this and the existing
order backlog, the Company expects to have an excellent year.
This Form 10-Q Report contains certain "forward-looking"
statements within the meaning of the federal securities laws and are
made in reliance upon the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned that
such statements are only predictions and speak only as of the date of
this report. No assurances can be given that actual results will not
differ materially from those projected in the forward-looking
statements contained in this Form 10-Q report.
Certain factors that might cause such a difference include:
the level of bookings worldwide, particularly in Europe; the operating
results of the IST Joint Venture; the Company's ability to successfully
integrate the operations of the Dynatup product line; and the impact of
fluctuations in exchange rates. Actual results may also differ
materially due to risks and uncertainties which are described from time
to time in the Company's SEC reports, including, but not limited to,
the Company's report on Form 10-K for the fiscal year 1996.
12
<PAGE> 13
INSTRON CORPORATION FORM 10-Q
September 27, 1997 PART I
ITEM 2
Part II - Other Information
Item 1. Legal Proceedings
Neither the Registrant nor any of its subsidiaries is a party to, nor
is any of their property the subject of, any material pending legal proceedings.
Item 2. Changes in the Rights of the Company's Security Holders
None.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6 Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit 11 - Computation of Primary and Fully Diluted
Earnings per Share.
b. Reports on Form 8-K
None.
13
<PAGE> 14
FORM 10-Q
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
INSTRON CORPORATION
Date: November 7, 1997 By /s/ James M. McConnell
-------------------------
James M. McConnell
President and
Chief Executive Officer
Date: November 7, 1997 By /s/ Linton A. Moulding
-------------------------
Linton A. Moulding
Chief Financial Officer
14
<PAGE> 1
INSTRON CORPORATION EXHIBIT 11
COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine months ended
-------------------------- -------------------------
September , September 28, September , September 28,
1997 1996 1997 1996
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Net income $1,842,000 $1,437,000 $4,231,000 $2,128,000
========== ========== ========== ==========
Primary earnings per share:
Weighted average number of common shares outstanding 6,707,941 6,413,157 6,546,359 6,388,796
Add: Shares arising from the assumed exercise
of stock options (as determined under the
Treasury Stock Method) 266,819 83,835 154,139 136,103
---------- ---------- ---------- ----------
Weighted average of common and equivalent shares 6,974,760 6,496,992 6,700,498 6,524,899
========== ========== ========== ==========
Primary earnings per share $ .26 $ .22 $ .63 $ .33
========== ========== ========== ==========
Fully diluted earnings per share (1):
Weighted average of common and equivalent shares
outstanding (as determined for the Primary
earnings per share calculation above) 6,974,760 6,496,992 6,700,498 6,524,899
Add: Additional shares arising from the assumed
exercise of stock options (as determined
under the Treasury Stock Method) 79,154 0 192,217 9,327
---------- ---------- ---------- ----------
Weighted average of common and equivalent shares 7,053,914 6,496,992 6,892,715 6,534,226
========== ========== ========== ==========
Fully diluted earnings per share $ .26 $ .22 $ .61 $ .33
========== ========== ========== ==========
</TABLE>
Note (1): This calculation is submitted in accordance with the
Securities Act of 1993 Release No. 5,133 although it is not
required by footnote 2 to paragraph 14 of APB Opinion No. 15
because it results in dilution of less than 3%.
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE
CONSOLIDATED STATEMENT OF INCOME, CONSOLIDATED BALANCE SHEET AND CONSOLIDATED
STATEMENT OF CASH FLOW AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B)
FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 27, 1997.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
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