<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1997
Commission File No. 1-5562
KOLLMORGEN CORPORATION
(Exact name of registrant as specified in its charter)
New York 04-2151861
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1601 Trapelo Road, Waltham, Massachusetts 02154
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 890-5655
NONE
(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 issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at November 10, 1997
Common Stock, $2.50 par value 10,013,871 shares
<PAGE>
<PAGE>2
KOLLMORGEN CORPORATION
INDEX
Page No.
PART I - Financial Information
Consolidated Statements of Operations for 3-4
the Three Months and Nine Months Ended
September 30, 1997 and 1996 (unaudited)
Consolidated Balance Sheets as of 5
September 30, 1997 (unaudited) and
December 31, 1996
Consolidated Statements of Cash Flows 6-7
for the Nine Months Ended
September 30, 1997 and 1996 (unaudited)
Notes to Consolidated Financial Statements 8-10
Management's Discussion and Analysis of Financial 11-14
Condition and Results of Operations
PART II - Other Information 14
<PAGE>
<PAGE>3
<TABLE>
PART I - FINANCIAL INFORMATION
KOLLMORGEN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share amounts)
(unaudited)
<CAPTION>
For the For the
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -----------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 56,710 $ 52,830 $163,054 $169,658
Cost of sales 39,870 35,305 113,590 112,749
--------- --------- --------- ---------
Gross profit 16,840 17,525 49,464 56,909
--------- --------- --------- ---------
Selling and marketing expense 4,982 6,576 15,003 20,601
General and administrative expense 5,845 5,708 17,412 18,256
Research and development expense 2,963 2,670 7,249 9,024
Acquired research and development 0 0 11,391 0
--------- --------- --------- ---------
Income (loss) from operations 3,050 2,571 (1,591) 9,028
--------- --------- --------- ---------
Interest (expense) (856) (1,389) (3,915) (4,192)
Interest income 236 95 464 386
Other 339 367 583 41
--------- --------- --------- ---------
Income (loss) before income taxes,
minority interest, and joint venture2,769 1,644 (4,459) 5,263
Provision for income taxes 800 0 1,978 0
--------- --------- --------- ---------
Income (loss) before minority interest
and joint venture 1,969 1,644 (6,437) 5,263
Minority interest 98 160 222 418
Joint venture:
Equity in earnings 0 0 1,430 0
Gain on sale of investment,
net of income taxes 0 0 24,321 0
--------- --------- --------- ---------
Net income $ 2,067 $ 1,804 $ 19,536 $ 5,681
========= ========= ========= =========
<PAGE>
<PAGE>4
Earnings per common share:
Primary $ 0.20 $ 0.18 $ 1.90 $ 0.54
========= ========= ========= =========
Fully diluted $ 0.20 $ 0.18 $ 1.87 $ 0.54
========= ========= ========= =========
Weighted average number of shares
used in calculating earnings
per common share:
Primary 10,464,56710,044,000 10,290,920 10,036,000
==================== ========== ==========
Fully diluted 10,512,99010,056,000 10,443,892 10,082,000
==================== ========== ==========
<FN>
See accompanying notes to consolidated financial statements
</TABLE>
<PAGE>
<PAGE>5
<TABLE>
KOLLMORGEN CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)
<CAPTION>
ASSETS
September 30,
1997 December 31,
(unaudited) 1996
---------- ----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 17,881 $ 13,445
Accounts receivable (net of reserve of
$861 in 1997 and $772 in 1996) 41,367 43,189
Recoverable amounts on long-term contracts 4,721 4,973
Inventories 25,486 22,450
Prepaid expenses and other current assets 1,664 1,645
--------- ---------
Total current assets 91,119 85,702
--------- ---------
Property, plant and equipment, net 26,006 25,147
Goodwill and other intangible assets 14,483 4,502
Investment in joint venture 0 12,720
Other assets 10,536 13,259
--------- ---------
$ 142,144 $ 141,330
========= =========
LIABILITIES and SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable to banks $ 11,137 $ 5,545
Current portion of long-term debt 2,016 6,942
Accounts payable 18,734 21,765
Accrued liabilities 31,025 26,756
--------- ---------
Total current liabilities 62,912 61,008
--------- ---------
Long-term debt 31,622 53,054
Other liabilities 5,627 5,202
Minority interest 72 287
Common shareholders' equity:
Common stock 26,919 26,914
Additional paid-in capital 12,768 13,166
Retained earnings (accumulated deficit) 9,284 (10,054)
Cumulative translation adjustments (84) 791
Less common stock in treasury, at cost (6,976) (9,038)
--------- ---------
Total common shareholders' equity 41,911 21,779
--------- ---------
$ 142,144 $ 141,330
========= =========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>6
<TABLE>
KOLLMORGEN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Dollars in thousands)
(unaudited)
<CAPTION>
For the
Nine Months Ended
September 30,
------------------
1997 1996
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income from operations $ 19,536 $ 5,681
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 3,521 4,569
Amortization 833 798
Acquired R&D 11,391 0
(Gain) loss on sale of assets (24,403) 211
Equity in income of joint venture (1,430) 0
Minority interest (215) (418)
Other non-cash expenses 32 34
Changes in assets and liabilities:
Accounts and notes receivable 3,520 (40)
Recoverable amounts on long-term contracts 252 5,606
Inventories (817) (2,855)
Prepaid expenses (33) (466)
Accounts payable and accrued liabilities (9,395) (7,219)
Deferred income taxes and other expenses 199 (671)
Other 79 28
--------- ---------
Net cash provided by operations 3,070 5,258
--------- ---------
Cash flows from investing activities:
Capital expenditures (4,266) (3,828)
Proceeds from sale of assets 0 2,930
Proceeds from sale of investment in joint venture 41,396 0
Acquisitions of Servotronix and Seidel (15,772) 0
Cash of subsidiaries acquired 626 97
Equity investments (75) (1,404)
Long term notes receivable (net of repayments) 262 396
--------- ---------
Net cash provided by (used in) investing activities 22,171 (1,809)
--------- ---------
<PAGE>
<PAGE>7
Cash flows from financing activities:
Borrowings under credit lines 12,539 1,216
Repayments of credit lines (7,225) 0
Principal repayment on other notes 0 (1,916)
Common stock issued from treasury 1,078 312
Redemption of preferred stock 0 (25,506)
Principal payments on capital lease obligations (55) (80)
Borrowings of long-term debt 100 25,000
Repayments of long-term debt (26,525) (5,219)
Dividends paid on common and preferred stock (590) (874)
--------- ---------
Net cash used in financing activities (20,678) (7,067)
--------- ---------
Effect of exchange rate changes on cash (127) (75)
--------- ---------
Net increase (decrease) in cash and cash equivalents 4,436 (3,693)
Cash and cash equivalents at beginning of period 13,445 17,789
--------- ---------
Cash and cash equivalents at end of period $ 17,881 $ 14,096
========= =========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 3,075 $ 3,278
Income taxes (net of refunds) 5,115 703
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>8
KOLLMORGEN CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997
1. The accompanying unaudited consolidated financial statements include
the accounts of Kollmorgen Corporation (the "Company") and all of its
majority owned subsidiaries.
2. In the opinion of management, the unaudited consolidated financial
statements included herein contain all adjustments, consisting only
of normal recurring adjustments, (except for the charge for acquired
research and development, and the gain on sale of joint venture
interest), necessary to present fairly the Company s and its
consolidated subsidiaries financial condition at September 30, 1997,
the results of operations for the three-month and nine-month periods
ended September 30, 1997 and 1996 and the cash flows for the nine-
month periods ended September 30, 1997 and 1996. Certain
reclassifications have been made to the prior year's financial
statements to conform to 1997 classifications. The results of
operations for interim periods are not necessarily indicative of the
results to be expected for the full year. See Management s
Discussion and Analysis of Financial Condition and Results of
Operations for additional information. These interim financial
statements should be read in conjunction with the Company s Annual
Report on Form 10-K for the year ended December 31, 1996.
3. Effective December 31, 1996, the Company combined its Macbeth
division with the Color Control Systems business of Gretag AG and
received 48% of the shares in the Swiss holding company which
controls the two businesses (the Joint Venture ). Accordingly, at
December 31, 1996, and through the second quarter of 1997, the
Macbeth division is not consolidated in the accompanying financial
statements, but instead the Company accounted for its interest in the
Joint Venture using the equity method.
Effective June 17, 1997, the Company agreed, pursuant to a firm
underwriting agreement, to sell approximately 88% of its interest in
the Joint Venture as part of an initial public offering on the Swiss
stock exchange. On June 25, 1997 the Company sold approximately 88%
of its interest in the Joint Venture, receiving approximately $38
million. Subsequently in August, 1997, the Company sold the
remaining shares to the underwriter, receiving approximately $4.0
million in cash. The accompanying financial statements reflect a
gain in the second quarter of 1997 of approximately $24 million on
the sale of its shares in the Joint Venture. The gain is net of $2
million in income taxes and utilization of net operating loss and
other tax credit carryforwards.
Refer to Note 2 of the 1996 financial statements contained in the
Company s Annual Report on Form 10-K for the year ended December 31,
1996 for additional information.
<PAGE>
<PAGE>9
4. Inventories (in thousands) consist of the following:
September 30, December 31,
1997 1996
------------- ------------
Raw materials $ 13,906 $11,816
Work in process 7,736 8,118
Finished goods 3,844 2,516
-------- --------
$ 25,486 $ 22,450
======== ========
5. The Financial Accounting Standards Board issued Statement No. 128
( SFAS 128 ), Earnings per Share, which requires the presentation
of basic and diluted earnings per share (EPS). Basic EPS excludes
the dilutive effect of common equivalent securities and is computed
by dividing income available to common shareholders by the weighted-
average number of common shares outstanding for the period. Diluted
EPS reflects the potential dilution that could occur if securities or
other contracts to issue common stock were exercised or converted
into common stock or resulted in the issuance of common stock that
then shared in the earnings of the entity. Basic EPS replaces
primary EPS. Diluted EPS is computed similarly to fully diluted EPS
under the existing rules found in APB Opinion No. 15, "Earnings per
Share." The Company will adopt SFAS 128 as of December 31, 1997, and
upon adoption, will restate all prior period EPS data presented.
Basic EPS calculated under the provisions of SFAS 128 would have been
as follows:
For the For the
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1997 1996 1997 1996
------- ------- ------- -------
Earnings per common share:
Basic $ 0.21 $ 0.19 $ 1.99 $ 0.55
Diluted $ 0.20 $ 0.18 $ 1.90 $ 0.54
6. Effective April 2, 1997, the Company agreed to purchase all of the
remaining shares of Servotronix Ltd. ("Servotronix") for cash of $6.4
million and through the issuance of 257,522 shares of the Company s
common stock. The shares not yet purchased are a liability of the
Company in the amount of $1.8 million at September 30, 1997.
Accordingly, the Company has accounted for the purchase of
Servotronix as if 100% of the shares were purchased on April 2, 1997.
7. Effective June 10, 1997, the Company entered into a binding agreement
to purchase all of the shares of Fritz A. Seidel Elektro-Automatik
GmbH ( Seidel ). Accordingly, the Company consolidated the balance
sheet of Seidel as of June 30, 1997. The Company funded the purchase
on August 12, 1997 by borrowing $8.8 million under a line of credit
with a German bank. Effective in the third quarter of 1997, the
results of operations for Seidel are consolidated in the accompanying
financial statements.
<PAGE>
<PAGE>10
8. In connection with the acquisitions of Servotronix and Seidel, the
Company has allocated the purchase price to the assets acquired, both
tangible and intangible, and any excess of the purchase price over
the assets acquired has been classified as goodwill. A portion of
the purchase price has been allocated to in-process research and
development for products which are not yet feasible and the value of
the in-process research and development of $10.5 million was expensed
as Acquired research and development in the second quarter of 1997.
Also included in acquired research and development was a charge of
approximately $0.9 million for technology acquired unrelated to the
Servotronix and Seidel acquisitions.
9. The Company will adopt Statement of Financial Accounting Standards
No. 130, Reporting Comprehensive Income ( SFAS 130 ) in fiscal year
ending December 31, 1998. SFAS No. 130 established standards for
reporting the display of comprehensive income and its components in a
full set of general-purpose financial statements. Management has not
determined the effect of adopting SFAS No. 130.
10. The Company will adopt Statement of Financial Accounting Standards
No. 131, Disclosures About Segments of an Enterprise and Related
Information ( SFAS 131 ) in fiscal year ending December 31, 1998.
SFAS No. 131 specifies revised guidelines for determining an entity s
operating segments and the type and level of financial information to
be disclosed. Management has not determined the effect of adopting
SFAS No. 131.
<PAGE>
<PAGE>11
Management's Discussion and Analysis of Financial Condition
and Results of Operations
RESULTS OF OPERATIONS
In the first quarter of 1996 the Company sold a significant portion
of its instrumentation business located in France. Effective December 31,
1996 the Company combined its Macbeth division with the Color Control
Systems business of Gretag AG and received 48% of the shares in the Swiss
holding company which controls the two businesses (the Joint Venture ).
Accordingly, through the period ended June 30, 1997, the Company accounted
for its interest in the Joint Venture using the equity method. On
June 25, 1997, the Company sold approximately 88% of its interest in the
Joint Venture as part of the Joint Venture s initial public offering on
the Swiss Stock Exchange. The Company sold its remaining interest in the
JV in August, 1997, receiving approximately the book value of the
investment. For comparative purposes, both the French instrumentation
business and the Joint Venture will be referred to as the Businesses
Divested . The Businesses Divested represented a significant portion of
the Company s Electro-Optical Instruments segment which had been discussed
separately from the Company s motion technology segment in the prior year.
Since meaningful comparative information cannot be presented for the
Electro-Optical Instruments segment, the Company has discontinued segment
discussion.
Revenues increased $3.9 million or 7.3% for the three months ended
September 30, 1997 as compared to the same period a year ago. Excluding
the Businesses Divested, third quarter revenues increased $11.3 million or
24.8% as compared to the third quarter of 1996. Revenues declined $6.6
million or 3.9% for the first nine months of 1997 as compared to the same
period a year ago. Excluding the Businesses Divested, revenues increased
$17.1 million or 11.7% as compared to the first nine months of 1996. The
increase includes the additional revenue in connection with the
Servotronix and Seidel acquisitions. Additionally, the increase reflects
the Company s High Volume business, which manufactures fractional
horsepower motors. This business had a significant increase in its 1997
revenues as compared to 1996 as a result of increased production under
volume commitments from its customers. The increase also reflects the
Company s engineering consulting business, Proto-Power, which has seen
strong demand for its compliance services to the utility industry. These
increases more than offset a decline in revenues at the Company s
aerospace and defense businesses which was principally a result of a
weakening in the value of the dollar to the French franc, and a decrease
in revenues recognized on long term military contracts.
Gross margin as a percent of sales declined in the third quarter of
1997 as compared to the same period in 1996 from 33.2% to 29.7%.
Excluding the Businesses Divested, gross margin was approximately 30.1%
for the third quarter of 1996. For the nine months ended, gross margin as
a percent of sales declined in 1997 compared to 1996 from 33.5% to 30.3%.
Excluding the Businesses Divested, gross margin declined slightly from
30.8% to 30.3%.
Sales and marketing expenses declined $1.6 million in the third
quarter of 1997 as compared to the third quarter of 1996. When the
Businesses Divested are excluded, the result is an increase of $0.4
<PAGE>
<PAGE>12
million and a decrease as a percentage of sales from 10.2% in the third
quarter of 1996 to 8.8% in the third quarter of 1997. Sales and marketing
expenses declined $5.6 million in the nine months of 1997 as compared to
the same period in the prior year. When the Businesses Divested are
excluded, the result is an increase of $0.6 million and a decline as a
percentage of sales from 9.8% for the first nine months of 1996 to 9.2%
for the first nine months of 1997. The decline of sales and marketing
expenses as a percentage of sales reflects benefits due to the
reorganization at the Company's domestic commercial motion technology
sales channels.
General and administrative expenses increased $100 thousand in the
third quarter of 1997 as compared to the third quarter of 1996. As a
percentage of sales, general and administrative expenses declined from
10.8% in 1996 to 10.3% in 1997. Excluding the Businesses Divested,
general and administrative expenses as a percentage of sales for the third
quarter decreased from 11.6% in 1996 to 10.3% in 1997. For the nine
months ended September 30, 1997, general and administrative expenses
declined by $0.8 million compared to the prior year. When the Businesses
Divested are excluded, general and administrative expense increased $0.9
million or 5.5%, but declined as a percentage of sales for the first nine
months of 1996 from 11.3% to 10.7% for the same period in 1997.
Research and development expenses increased in the third quarter by
$0.3 million. Excluding the Businesses Divested, research and development
expense increased by $1.0 million for the third quarter and increased as a
percentage of sales from 4.3% in 1996 to 5.2% in 1997. For the nine
months ended September 30, 1997, research and development expense
decreased $1.8 million compared to 1996 and declined as a percent of sales
from 5.3% in 1996 to 4.4% in 1997. Excluding the Businesses Divested for
the nine months, research and development expense increased by $0.8
million, and remained consistent as a percentage of sales at 4.4%
As described in Note 8 to these quarterly Financial Statements, in
the second quarter of 1997 the Company incurred a charge of $11.4 million
in connection with acquired research and development, principally relating
to the two acquisitions completed in that quarter.
The Company reported income from operations of $3.1 million and $2.6
million for the three month periods ended September 30, 1997 and September
30, 1996, respectively. As a result of the charge for acquired research
and development, the Company reported a loss from operations of $1.6
million for the nine months ended September 30, 1997 compared to income
from operations of $9.0 million for the same period in the prior year.
Excluding the impact of the charge for acquired research and development,
income from operations for the nine months ended September 30, 1997
increased 8.6% to $9.8 million compared with the same period of 1996.
Interest expense decreased 38.4% and 6.6% for the three and nine
month periods ended September 30, 1997, as compared to the same periods in
1996 due to the decrease in the overall debt level of the Company. On
June 30, 1997, the Company repaid the remaining balance of approximately
$21.1 million of its term loan used to finance the redemption of the
Company s preferred stock in February 1996. Accordingly, the Company
<PAGE>
<PAGE>13
expects interest expense to be at the reduced levels for the balance of
the year compared to the comparable period in 1996.
In 1996 the Company had a zero tax rate which reflected the
utilization of net operating loss carryforwards and other tax credits.
Primarily as a result of the divestiture of the Macbeth division, the
Company s tax credit carryforwards have been utilized. Therefore, the
Company has used a blended tax rate on its worldwide income of
approximately 28% for 1997. This tax rate was applied to the Company s
income before the impact of the charge for acquired research and
development as this charge is not deductible for tax purposes.
Additionally, the rate does not include the gain on the sale of its
interest in the Joint Venture which is shown net of taxes.
The Company s 48% share of the after-tax profits of the Joint Venture
was $0.8 million for the first quarter of 1997, and $1.4 million for the
first half of 1997. The results of the Company s Macbeth division were
consolidated in the Company s results in 1996.
Bookings increased $15.5 million or 11.1% during the first three
quarters of 1997 as compared to the same period in the prior year
(excluding the Businesses Divested). The increase reflects improved
bookings for the Company s High Volume business, its engineering
consulting services and the additional bookings of recent acquisitions.
LIQUIDITY AND CAPITAL RESOURCES
The Company s cash and cash equivalents increased $4.4 million during
the first nine months of 1997. Net cash provided by operating activities
generated $3.1 million. Accounts receivable generated $3.5 million in
cash during the first three quarters of 1997 reflecting strong collections
and a reduction in days sales outstanding. Inventories, recoverable
amounts under long term contracts, and prepaid expenses used $0.6 million
in cash during the first nine months of 1997. Accounts payable and
accrued liabilities used $9.4 million in cash. The use of cash was due to
income tax payments of $5.1 million, a $1.5 million payment for the
refinancing of a building lease on more favorable terms to the Company,
and scheduled payments made in early 1997.
The Company recently entered into a five-year $50 million unsecured
credit facility. Borrowings under the agreement bear interest at the
bank's prime lending rate or the bank's Eurodollar rate plus the current
margin of .75%. The margin varies based on a financial ratio of the
Company. This facility replaces a $45 million fully secured arrangement.
Investing activities provided $22.2 million in cash during the first
nine months of 1997. The Company received proceeds of approximately $41.4
million from the sale of the majority of its interest in the Joint
Venture. In connection with the acquisition of Servotronix, the Company
paid $6.4 million. The Company funded the acquisition of Seidel for $9.3
million during the third quarter through a combination of debt and cash.
<PAGE>
<PAGE>14
Financing activities used $20.7 million in cash principally to repay
the remaining balance of its term loan using the proceeds of the sale of a
portion of its interest in the Joint Venture.
The Company believes that it has sufficient working capital and
available borrowing under its line of credit to finance its cash
requirements for capital expenditures, sinking fund payments, and working
capital needs for the next twelve months.
This filing contains forward-looking statements which involve risks
and uncertainties. The Company s actual results may differ significantly
from the results discussed in the forward-looking statements. Factors
that might cause such a difference are set forth in the Company s Form 8-K
dated January 27, 1997.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits -- Listed below are the exhibits filed with this
report.
Exhibit 10(A) Kollmorgen Deferred Compensation Plan
Exhibit 10(B) Fifth Amended and Restated Multicurrency Credit
Agreement dated as of September 30, 1997
Exhibit 11 Statement re computation of per share earnings
Exhibit 27 Financial Data Schedules
(b) Reports on Form 8-K.
On August 18, 1997, the Company filed a current report
on Form 8-K reporting the issuance of 86,522 shares of
its Common Stock, $2.50 par value, ("Common Stock") in
connection with the Servotronix acquisition.
<PAGE>
<PAGE>15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KOLLMORGEN CORPORATION
By: /s/ Robert J. Cobuzzi
Robert J. Cobuzzi, Senior Vice
President, Treasurer and
Chief Financial Officer
Date: November 14, 1997
<PAGE>
<TABLE>
Exhibit 11
KOLLMORGEN CORPORATION
COMPUTATION OF PER SHARE EARNINGS
(Amounts in thousands, except share and per share amounts)
(unaudited)
<CAPTION>
For the For the
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ----------------------
<S> <C> <C> <C> <C>
1997 1996 1997 1996
---------- ---------- ---------- ----------
Net income $ 2,067 $ 1,804 $ 19,536 $ 5,681
Less preferred stock dividends
and accretion of discount 0 0 0 (285)
---------- ---------- ---------- ----------
Earnings applicable to
primary common shares 2,067 1,804 19,536 5,396
Number of shares:
Weighted average number
of shares outstanding
- Primary 10,464,567 10,044,000 10,290,920 10,036,000
Weighted average number of
of shares outstanding
- Fully diluted 10,512,990 10,056,000 10,443,892 10,082,000
---------- ---------- ---------- ----------
Earnings per common share:
Primary $ 0.20 $ 0.18 $ 1.90 $ 0.54
======== ======== ======== ========
Fully diluted $ 0.20 $ 0.18 $ 1.87 $ 0.54
======== ======== ======== ========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE>5
<LEGEND>
KOLLMORGEN CORPORATION AND SUBSIDIARIES EXHIBIT 27
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND STATEMENT OF OPERATIONS AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 17,881
<SECURITIES> 0
<RECEIVABLES> 41,367
<ALLOWANCES> 861
<INVENTORY> 25,486
<CURRENT-ASSETS> 91,119
<PP&E> 100,231
<DEPRECIATION> 74,225
<TOTAL-ASSETS> 142,144
<CURRENT-LIABILITIES> 62,912
<BONDS> 34,840
<COMMON> 26,919
0
0
<OTHER-SE> 14,992
<TOTAL-LIABILITY-AND-EQUITY> 142,144
<SALES> 141,712
<TOTAL-REVENUES> 163,054
<CGS> 99,598
<TOTAL-COSTS> 113,590
<OTHER-EXPENSES> 51,005
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,915
<INCOME-PRETAX> (2,807)
<INCOME-TAX> 1,978
<INCOME-CONTINUING> (4,785)
<DISCONTINUED> 0
<EXTRAORDINARY> 24,321
<CHANGES> 0
<NET-INCOME> 19,536
<EPS-PRIMARY> 1.90
<EPS-DILUTED> 1.87
</TABLE>
