<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
_X_ Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1998
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 0-12728
-------
MEDAR, INC.
-----------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Michigan 38-2191935
- --------------------------------------------------- ------------------------------------------
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification Number)
organization)
38700 Grand River Avenue,
Farmington Hills, Michigan 48335
- --------------------------------------------------- ------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (248) 471-2660
------------------------------------------
</TABLE>
(not applicable)
- -------------------------------------------------------------------------------
(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 and (2) has been subject to the filing requirements for
at least the past 90 days.
YES _X_ NO ___
The number of shares outstanding of the registrant's Common Stock, no par value,
stated value $.20 per share, as of July 31, 1998 was 9,024,901.
1
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEETS
MEDAR, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1998 1997
--------------------------------------------
(Unaudited)
(In thousands)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 540 $ 831
Accounts receivable, less allowance of $400 9,259 10,682
Inventories 9,317 14,227
Costs and estimated earnings in excess of billings on incomplete
contracts 1,404 2,568
Other current assets 679 881
------------------------------------------
TOTAL CURRENT ASSETS 21,199 29,189
PROPERTY, PLANT AND EQUIPMENT
Land and land improvements 377 377
Building and building improvements 6,317 6,317
Production and engineering equipment 3,911 3,791
Furniture and fixtures 1,023 1,022
Vehicles 483 875
Computer equipment 5,633 5,241
------------------------------------------
17,744 17,623
Less accumulated depreciation 8,650 8,021
------------------------------------------
9,094 9,602
OTHER ASSETS
Capitalized computer software development costs, net of
amortization 5,339 10,796
Patents 2,003 2,127
Other 1,174 1,444
------------------------------------------
8,516 14,367
------------------------------------------
$ 38,809 $ 53,158
============================================
</TABLE>
See accompanying notes.
2
<PAGE> 3
CONSOLIDATED BALANCE SHEETS - CONTINUED
MEDAR, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1998 1997
---------------------------------------------
(Unaudited)
(In thousands)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 2,871 $ 4,472
Employee compensation 804 1,110
Accrued and other liabilities 702 714
Current maturities of long term debt 16,825 19,415
---------------------------------------------
TOTAL CURRENT LIABILITIES 21,202 25,711
LONG-TERM DEBT, less current maturities 4,842 4,892
STOCKHOLDERS' EQUITY
Common stock, without par value, stated value $.20 per share;
15,000,000 shares authorized; 9,024,901 shares issued and
outstanding 1,805 1,805
Additional paid-in capital 31,187 31,187
Retained-earnings deficit (20,271) (10,444)
Accumulated translation adjustment 44 7
---------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 12,765 22,555
---------------------------------------------
$ 38,809 $ 53,158
=============================================
</TABLE>
See accompanying notes.
3
<PAGE> 4
CONSOLIDATED STATEMENTS OF OPERATIONS
MEDAR, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30
1998 1997
---------------------------------------------
(Unaudited)
(In thousands, except per share data)
<S> <C> <C>
Net revenues $ 8,832 $ 10,985
Direct costs of sales 5,232 7,654
---------------------------------------------
3,600 3,331
Other costs and expenses:
Marketing 880 1,052
General and administrative 706 639
Research, development, and engineering 1,310 751
---------------------------------------------
2,896 2,442
Interest:
Expense 616 499
Income (14) (11)
---------------------------------------------
602 488
---------------------------------------------
Net Earnings $ 102 $ 401
=============================================
Basic and diluted earnings per share $ .01 $ .04
=============================================
Weighted average number of shares of common stock and common
stock equivalents, where applicable 9,046 8,902
=============================================
</TABLE>
See accompanying notes.
4
<PAGE> 5
CONSOLIDATED STATEMENTS OF OPERATIONS
MEDAR, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30
1998 1997
---------------------------------------------
(Unaudited)
(In thousands, except per share data)
<S> <C> <C>
Net revenues $ 15,459 $ 21,196
Direct costs of sales 12,769 15,088
---------------------------------------------
2,690 6,108
Other costs and expenses:
Marketing 1,857 2,084
General and administrative 1,512 1,258
Research, development, and engineering 2,343 1,367
Product Restructuring and Other Charges - Note B 5,571
---------------------------------------------
11,283 4,709
Interest:
Expense 1,262 996
Income (28) (23)
---------------------------------------------
1,234 973
---------------------------------------------
Net Earnings (Loss) $ (9,827) $ 426
=============================================
Basic and diluted earnings (loss) per share $ (1.09) $ .05
---------------------------------------------
Weighted average number of shares of common stock and common
stock equivalents, where applicable 9,025 8,898
=============================================
</TABLE>
See accompanying notes.
5
<PAGE> 6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
MEDAR, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30
1998 1997
--------------------------------------------
(Unaudited)
(In thousands)
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings (loss) $ (9,827) $ 426
Adjustments to reconcile net earnings (loss) to net cash provided by
operating activities:
Depreciation and amortization 2,114 2,830
Changes in operating assets and liabilities 4,345 (150)
Restructuring charges 6,973
--------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,605 3,106
INVESTING ACTIVITIES
Purchase of property and equipment (121) (277)
Investment in capitalized software and patents (1,172) (2,341)
--------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (1,293) (2,618)
FINANCING ACTIVITIES - Decrease in long term debt (2,640) 44
Effect of exchange rate changes on cash 37 42
--------------------------------------------
INCREASE (DECREASE) IN CASH (291) 574
Cash at beginning of period 831 215
============================================
CASH AT END OF PERIOD $ 540 $ 789
============================================
</TABLE>
See accompanying notes.
6
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MEDAR, INC. AND SUBSIDIARIES
June 30, 1998
Note A - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the six month period ended June 30, 1998
are not necessarily indicative of the results that may be expected for the year
ended December 31, 1998. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Registrant Company
and Subsidiaries' annual report on Form 10-K for the year ended December 31,
1997.
Note B - Restructuring of Operations
Early in the second quarter of 1998, management completed an evaluation of
competitive conditions and product offerings in the vision and welding
divisions. A charge of $6,973,000 was recorded as of March 31,1998 to give
effect to the impairment of assets identified in this review. The charge
consisted of $5,268,000 related to capitalized software development costs,
$1,402,000 related to inventory (included in direct costs of sales) and $303,000
of other accruals.
Note C - Inventories
Inventories are stated at the lower of first-in, first-out cost or market, and
the major classes of inventories at the dates indicated were as follows:
JUNE 30 DECEMBER 31
1998 1997
----------------------------------------
(In thousands)
Raw materials $ 4,298 $ 6,076
Work-in-process 1,399 1,654
Finished goods 3,620 6,497
----------------------------------------
$ 9,317 $ 14,227
========================================
Note D - Costs and Estimated Earnings in Excess of Billings on Incomplete
Contracts
Revenues on long-term contracts are recognized using the percentage of
completion method. The effects of changes to estimated total contract costs are
recognized in the period determined and losses, if any, are recognized fully
when identified. Costs incurred and earnings recognized in excess of amounts
billed are classified under current assets as costs and estimated earnings in
excess of billings on incomplete contracts. Long-term contracts include a
relatively high percentage of engineering costs and are generally less than one
year in duration.
7
<PAGE> 8
Note D - Costs and Estimated Earnings in Excess of Billings on Incomplete
Contracts (cont)
Activity on long-term contracts is summarized as follows:
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1998 1997
--------------------------------------
(In thousands)
<S> <C> <C>
Contract costs to date $ 3,808 $ 3,499
Estimated contract earnings 2,091 3,377
--------------------------------------
5,899 6,876
Less billings to date (4,495) (4,308)
--------------------------------------
Costs and estimated earnings in excess of billings on
incomplete contracts $ 1,404 $ 2,568
======================================
</TABLE>
Note E - Long Term Debt and Other Financing Arrangements
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1998 1997
--------------------------------------
(In thousands)
<S> <C> <C>
Revolving note payable to bank $ 9,612 $ 12,258
Subordinated debentures, interest at 12.95%, (Net of unaccreted
value assigned to related warrents) 6,537 6,490
Term notes payable to bank 3,437 3,660
Patent license to corporation, payable $300,000 yearly including
interest 1,715 1,715
Other 366 184
--------------------------------------
21,667 24,307
Less current maturities 16,825 19,415
--------------------------------------
$ 4,842 $ 4,892
======================================
</TABLE>
The revolving note payable to bank is due August 31, 1999, and provides for
advances of up to $10,000,000 based upon levels of eligible accounts receivable
and inventory. At June 30,1998, $10,000,000 was available for advances and
interest was at the bank's prime rate plus 1/4%. Substantially all company
assets not previously pledged under term notes (see below), have been pledged as
collateral for this indebtedness.
The term notes to bank are payable as follows:
- - $62,500 quarterly plus interest at the bank's prime rate, plus 1/4%, due
June 29, 2002; collateralized by a first mortgage on the Company's Grand
River facility;
- - $14,111 monthly, plus interest at 7.7%, due October 31, 2000; collateralized
by a first mortgage on the Company's Crestview facility;
- - $2,189 monthly, plus interest at the bank's prime rate, plus 1/4%; due March
20, 2002;
The subordinated debentures mature $700,000 on each June 30 in the years 2000 to
2004, with the balance due June 30, 2005. Interest on the debentures is payable
quarterly at 12.95%. Substantially all company assets are secondarily pledged as
collateral for the debentures.
The debenture holders have warrants for the purchase of 1,400,000 shares of
Medar common stock at $6.86. These warrants expire June 30, 2005.
8
<PAGE> 9
Note E - Long Term Debt and Other Financing Arrangements (cont)
The agreements related to the revolving note and the subordinated debentures
require that the Company maintain certain levels of tangible net worth and
certain debt to equity ratios. During the second quarter of 1998, management
successfully negotiated the terms of the agreement related to the Company's
revolving debt and expects to remain in compliance with the renegotiated terms
of the agreement. Similar negotiations with the debenture holders are in
process. As the Company is not currently in compliance with covenants related to
the debentures, amounts due under both the junior and senior issues have been
classified as current. Although management believes it will be successful in
negotiating an acceptable agreement with the debenture holders, there is no
assurance that this success will be achieved.
The patent license payable relates to future payments to a corporation for use
of certain patents. The payments are due in eight remaining installments and
have been discounted at 8%.
The fair values of these financial instruments approximates their carrying
amounts at June 30, 1998.
Maturties of long-term debt and capitalized lease obligations, excluding those
payable within twelve months from June 30, 1998 (which are stated as current
maturties of long-term debt) are $694,000 in 1999; $2,378,000 in 2000; $549,000
in 2001, $554,000 in 2002 and $667,000 thereafter.
Note F - Income Taxes
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax liabilities and assets are as follows:
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1998 1997
--------------------------------------
(In thousands)
<S> <C> <C>
Deferred tax liabilities:
Deductible software development costs, net of amortization $ 1,870 $ 3,609
Tax over book depreciation 177 275
Percentage of completion 477 873
--------------------------------------
Total deferred tax liabilities 2,524 4,757
Deferred tax assets:
Net operating loss carry forwards 8,171 7,592
Credit carry forwards 1,061 1,061
Reserve for warranty 68 68
Reserve for inventory 812 144
Other 184 181
--------------------------------------
Total deferred tax assets 10,296 9,046
Valuation allowance for deferred tax assets 7,772 4,289
--------------------------------------
Net deferred tax assets 2,524 4,757
--------------------------------------
Net deferred tax liabilities $ -0- $ -0-
======================================
</TABLE>
9
<PAGE> 10
Note F - Income Taxes (cont)
The reconciliation of income taxes computed at the U.S. federal statutory rates
to income tax expense for the six months ended June 30 is as follows:
<TABLE>
<CAPTION>
1998 1997
-------------------------------------
(In thousands)
<S> <C> <C>
Tax at U.S. statutory rates $ (3,341) $ 145
Change in valuation allowance 3,483
Utilization of net operating loss carry forward (17)
Other (142) 128
-------------------------------------
$ - $ -
=====================================
</TABLE>
Note G - Earnings per Share
The following table sets forth the computation of basic and diluted earnings per
share.
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
1998 1997 1998 1997
- --------------------------------------------------------------------------------------------------------------------
(In thousands except share and per share amounts)
<S> <C> <C> <C> <C>
Numerator:
Net earnings (loss) for basic and diluted
earnings per share: $ 102 $ 401 $ (9,827) $ 426
*there was no effect of dilutive securities
Denominator:
Denominator for basic earnings per share
- - weighted-average shares 9,025,000 8,852,000 9,025,000 8,852,000
Effect of dilutive securities:
Employee stock options 21,000 50,000 46,000
Denominator for diluted earnings per ---------------------------------------------------------------------
share - adjusted weighted-average shares 9,046,000 8,902,000 9,025,000 8,898,000
Basic and diluted earnings (loss) per
share $ .01 $ .04 $ (1.09) $ .05
====================================================================================================================
</TABLE>
For additional disclosures regarding stock options and warrants see Note H.
Warrants to purchase 1,400,000 shares of common stock and options to purchase
662,100 shares of common stock were outstanding during 1998 but were not
included in the computation of diluted earnings per share because the inclusion
of these options would have an antidilutive effect.
Note H - Stock Options and Warrants
At June 30, 1998, there were options outstanding to purchase 662,100 shares at
prices ranging from $1.75 to $9.25 per share and warrants outstanding to
purchase 1,400,000 shares at $6.86 per share.
10
<PAGE> 11
Note I - Segment Data
Quarter Ended June 30, 1998
<TABLE>
<CAPTION>
Optical Resistance Welding
Inspection Systems Controls Consolidated
- -------------------------------------------------------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C>
Net revenues $ 3,565 $ 5,267 $ 8,832
Amortization of software development cost 192 65 257
Research, development and engineering expense 846 464 1,310
Earnings from operations 467 237 704
Net interest expense 602
- -------------------------------------------------------------------------------------------------------------------
Earnings before income taxes $ 102
===================================================================================================================
</TABLE>
Quarter Ended June 30, 1997
<TABLE>
<CAPTION>
Optical Resistance Welding
Inspection Systems Controls Consolidated
- -------------------------------------------------------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C>
Net sales $ 4,986 $ 5,999 $ 10,985
Amortization of software development cost 617 233 850
Research, development and engineering expense 507 244 751
Earnings (loss) from operations (26) 915 889
Net interest expense 488
- -------------------------------------------------------------------------------------------------------------------
Earnings before income taxes $ 401
===================================================================================================================
</TABLE>
11
<PAGE> 12
Six Months Ended June 30, 1998
<TABLE>
<CAPTION>
Optical Resistance Welding
Inspection Systems Controls Consolidated
- -------------------------------------------------------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C>
Net revenues $ 5,158 $ 10,301 $ 15,459
Amortization of software development cost 1,001 277 1,278
Research, development and engineering expense 1,674 669 2,343
Loss from operations (a) (7,483) (1,110) (8,593)
Net interest expense 1,234
- -------------------------------------------------------------------------------------------------------------------
Loss before income taxes $ (9,827)
===================================================================================================================
</TABLE>
Six months Ended June 30, 1997
<TABLE>
<CAPTION>
Optical Resistance Welding
Inspection Systems Controls Consolidated
- -------------------------------------------------------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C>
Net sales $ 8,490 $ 12,706 $ 21,196
Amortization of software development cost 1,212 465 1,677
Research, development and engineering expense 836 531 1,367
Earnings (loss) from operations (724) 2,123 1,399
Net interest expense 973
- -------------------------------------------------------------------------------------------------------------------
Earnings before income taxes $ 426
===================================================================================================================
</TABLE>
(a) loss from operations for the six months ended June 30, 1998 includes
restructuring charges of $5,785 for Vision-based Inspection Systems and
$1,188 for Resistance Welding Controls (see note B).
12
<PAGE> 13
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Three Months Ended June 30, 1998 Compared to June 30, 1997.
Net sales in the second quarter of 1998 decreased 20% to $8.8 million from $11.0
million in 1997. The decrease resulted from decreases of resistance welding
product revenues of $.8 million and optical inspection revenues of $1.4 million.
Welding product sales decreased as fewer large automotive programs were
scheduled in the second quarter of 1998 as compared to the second quarter of
1997. Optical inspection product revenues, which included $1.5 million from the
sale of patent technology in 1998, were down due to decreases in sales of CD and
DVD inspection products due to the management's first quarter decision to stop
pursuit of the CD market, slow consumer acceptance of DVD products, and lower
sales in Asia caused by economic conditions in the region.
Gross margin increased as a percentage of net sales to 40.8% from 30.3% in the
second quarter of 1997. Welding product gross margins were down as a result of
lower levels of fixed cost absorption during 1998 as the result of lower levels
of production during the period in response to lower order levels. Vision
product margins increased as a result of sales of patent technology during the
quarter for which there was no recorded cost and increases in margins on
products based on VisionBlox technology. Additionally, a reduction in
amortization of software development costs following the product restructuring
charges described below contributed to the increase in vision product margins.
The sales backlog for the Company at June 30, 1998 was $4.5 million compared to
$6.8 million at June 30, 1997. Welding product backlogs are lower than the
levels the Company has experienced in recent quarters and are expected to
strengthen in the second half of 1998. Vision product backlogs are historically
low because of the buying patterns of vision customers who generally expect
expedited delivery of products following placement of the order.
Marketing expense decreased to $.9 million from $1.1 million and as a percentage
of net sales increased to 10.0% from 9.6%. The decrease in expenses expressed in
dollars came principally from reduction of expenditures related to CD products.
General and Administrative expense increased to $.7 million from $.6 million and
as a percentage of net sales increased to 8.0% from 5.8% The percentage increase
results principally from the fixed nature of many of these expenses with the
decrease in the level of net sales in 1998.
Research development and engineering expense increased to $1.3 million from $.8
million and as a percentage of net sales to 14.8% from $6.8% in 1997. This
increase resulted from less software meeting the criteria for capitalization in
1998 as compared to 1997 as the development of VisionBlox and DVD products are
substantially completed. Many of the personnel formerly dedicated to these
products are now assigned directly to customer projects.
Net interest expense increased to $.6 million from $.5 million in the prior year
and as a percentage of net sales to 6.8% from 4.4% due to lower sales volumes
combined with increased average debt and debt at higher interest rates.
Results of Operations
Six Months Ended June 30, 1998 Compared to June 30, 1997.
Net sales in the six months ended June 30, 1998 decreased 27% to $15.5 million
from $21.2 million in 1997. The decrease resulted from decreases of resistance
welding product revenues of $2.4 million and optical inspection revenues of $3.3
million. Welding product sales decreased as fewer large automotive programs were
scheduled in the period as compared to the first six months of 1997. Optical
inspection product revenues, which included $1.5 million from the sale of patent
technology in 1998, were down due to decreases in sales of CD and DVD inspection
products due to the management's first quarter decision to stop pursuit of the
CD market, slow consumer acceptance of DVD products, and lower sales in Asia
caused by economic conditions in the region.
During the first quarter of 1998 in response to the financial conditions that
arose due to heavy investments necessary to complete certain projects under
development and unexpected low levels of orders and sales, management
13
<PAGE> 14
terminated 15% of the Company's employees with combined salaries totaling 20% of
total compensation. As these terminations severely constrained resources
available for product support, it was quickly followed by an extensive review of
product offerings. This review determined that the Company would concentrate its
efforts going forward toward products for the inspection of DVD discs, products
based on VisionBlox technology and certain higher margin and better selling
welding products. Other products including those related to compact disc
production and certain other products that were selling poorly or at low margins
or which were no longer supportable in the software configurations in use were
identified for phase out or abandonment. These products had recorded software
development costs totaling $5.3 million which was charged off to operations. In
addition, reserves totaling $1.4 million to reduce the cost of inventory related
to these products to estimated realizable value were established. Finally, in
connection with a decision to offer for sale one of the Company's buildings, a
reserve in the amount of $300,000 to cover the costs to carry the building until
the estimated sale date was established.
The charges related to inventory ($1.4 million) were recorded as part of direct
cost of sales and the charges related to software development costs and the
building reserve (totaling $5.6 million) were reflected as product restructuring
and other charges with other costs and expenses in the consolidated statements
of operations in the first quarter of 1998.
Gross margin in the six-month period ended June 30, 1998 decreased as a
percentage of net sales to 17.4% from 28.8% in the comparable period 1997.
Welding product gross margins were down as a result of lower levels of fixed
cost absorption during 1998 as the result of lower levels of production during
the period in response to lower order levels. Vision product margins increased
as a result of sales of patent technology during the second quarter for which
there was no recorded cost, offset by reduced sales of lower margin CD
inspection products and increases in margins on products based on VisionBlox
technology. Additionally, a reduction in amortization of software development
costs following the product restructuring charges described above contributed to
the increase in vision product margins.
Marketing expense decreased to $1.9 million from $2.1 million and as a
percentage of net sales increased to 12.0% from 9.8%. The decrease in expenses
expressed in dollars came principally from reduction of expenditures related to
CD products.
General and Administrative expense increased to $.1.5 million from $1.3 million
and as a percentage of net sales increased to 9.8% from 5.9%. The percentage
increase results principally from the fixed nature of many of these expenses
with the decrease in the level of net sales in 1998.
Research development and engineering expense increased to $2.3 million from $1.3
million and as a percentage of net sales to 15.2% from 6.4% in 1997. This
increase resulted from less software meeting the criteria for capitalization in
1998 as compared to 1997 as the development of VisionBlox and DVD products are
substantially completed. Many of the personnel formerly dedicated to these
products are now assigned directly to customer projects.
Net interest expense increased to $1.2 from $1.0 in the prior year and as a
percentage of net sales to 8.0% from 4.6% due to lower sales volumes combined
with increased average debt and debt at higher interest rates.
Liquidity and Capital Resources
At June 30, 1998 the Company had a revolving note payable to bank, due August
1999, subordinated debentures due 2000 through 2005 and various term notes that
generally mature in 2 to 4 years. Levels of advances under the revolving note
are based on levels of acceptable accounts receivable and inventory. The
revolving note payable provides for advances of up to $10,000,000. At June 30,
1998 $10,000,000 was available for advances of which $9,100,000 had been
advanced. The Company is prohibited from paying dividends under terms of the
credit agreement.
The agreements related to the revolving note and the subordinated debentures
require that the Company maintain certain levels of tangible net worth and
certain debt to equity ratios. During the second quarter of 1998, management
successfully negotiated the terms of the agreement related to the Company's
revolving debt and expects to remain in compliance with the renegotiated terms
of the agreement. Similar negotiations with the
14
<PAGE> 15
debenture holders are still in process. As the Company remains in violation of
covenants related to the debentures, amounts due under both the junior and
senior issues have been classified as current.
Although management believes it will be successful in negotiating an acceptable
agreement with the debenture holders, there is no assurance that this success
will be achieved.
The Company generated $3.6 million of cash from operations in the six months
ended June 30, 1998. The cash was used principally to fund additions to
capitalize software and to reduce bank debt. The company has no material
commitments for the purchase of property and equipment or software development
costs. The amount of software development costs incurred and capitalized over
the remainder of 1998 will be dependent on determinations throughout the year of
the long and short-term revenue opportunities for the Company's various
products.
Management believes that the Company's current financial resources together with
any cash generated from operations are adequate to meet cash needs for the next
twelve months
15
<PAGE> 16
PART II. OTHER INFORMATION
ITEM 4. RESULTS OF VOTES OF SECURITY HOLDERS
The annual meeting of the Company was held on May 27, 1998. The matters voted
upon were the election of directors and other business which may come before the
meeting (of which there was none). The results of the votes were as follows:
For Withheld Non-Votes
--- -------- ---------
Max Coon 8,532,095 107,010 0
Richard R. Current 8,530,075 109,030 0
Charles J. Drake 8,510,531 128,574 0
Stephan Sharf 8,526,155 112,950 0
Vincent Shunsky 8,528,905 110,200 0
William B. Wallace 8,532,505 106,600 0
Stephen R. Zynda 8,529,505 109,600 0
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit
Number Description of Document
- ------------------------------------------------------------------------------
3.1 Articles of Incorporation, as amended (filed as Exhibit 3.1 to the
registrant's Form 10-K for the year ended December 31, 1995,
SEC file 0-12728, and incorporated herein by reference).
3.2 Bylaws of the Registrant, as amended (filed as Exhibit 3.1 to the
registrant's Form 10-K for the year ended December 31, 1994, SEC file
0-12728, and incorporated herein by reference).
4.1 Note and Warrant Purchase Agreement (filed as Exhibit 4.1 to the
registrants Form 8-K dated July 15, 1997, SEC file 0-12728, and
incorporated herein by reference).
4.2 Form of 12.95% Senior Subordinated Secured Note (filed as Exhibit 4.2
to the registrants Form 8-K dated July 15, 1997, SEC file 0-12728,
and incorporated herein by reference).
4.3 Form of Medar, Inc. Common Stock Purchase Warrant Certificate (filed
as Exhibit 4.3 to registrants Form 8-K dated July 15, 1997, SEC file
0-12728, and incorporated herein by reference).
10.1 Incentive Stock Option Plan of the Registrant as amended (filed as
Exhibit 10.4 to the registrant's Form S-1 Registration Statement
effective July 2, 1985, SEC File 2-98085, and incorporated herein by
reference).
10.2 Second Incentive Stock Option Plan (filed as Exhibit 10.2 to the
registrant's Form 10-K for the year ended December 31, 1992, SEC File
0-12728, and incorporated herein by reference).
10.3 Amendment to Medar, Inc. Incentive Stock Option Plan dated May 10,
1993 (filed as Exhibit 10.3 to the registrant's Form 10-K for the
year ended December 31, 1993, SEC File 0-12728, and incorporated
herein by reference).
10.4 Non-qualified Stock Option Plan (filed as Exhibit 10.3 to the
registrant's Form 10-K for the year ended December 31, 1992, SEC File
0-12728, and incorporated herein by reference).
16
<PAGE> 17
10.5 Medar, Inc. Employee Stock Option Plan (filed as Exhibit 10.5 to the
registrant's Form 10-Q for the quarter ended September 30, 1995, SEC
file 0-12728, and incorporated herein by reference).
10.6 Form of Confidentiality and Non-Compete Agreement Between the
Registrant and its Employees (filed as Exhibit 10.4 to the
registrant's Form 10-K for the year ended December 31, 1992, SEC File
0-12728, and incorporated herein by reference).
10.7 Contract between Shanghai Electric Welding Machine Works, Medar,
Inc. and Lida U.S.A. dated August 30, 1993, related to joint venture
agreement (both the original Chinese version and the English
translation) (filed as Exhibit 10.7 to the registrant's Form 10-K for
the year ended December 31, 1993, SEC File 0-12728, and incorporated
herein by reference).
10.8 Asset Purchase Agreement between Medar, Inc. and Air Gage Company
dated February 28, 1994 (filed as Exhibit 10.8 to the registrant's
Form 10-K for the year ended December 31, 1993, SEC File 0-12728, and
incorporated herein by reference).
10.9* License Agreement number 9303-004 between Medar, Inc. and Allen-
Bradley Company, Inc. dated April 12, 1993 (filed as Exhibit 10.9 to
the registrant's Form 10-K for the year ended December 31, 1993, SEC
File 0-12728, and incorporated herein by reference).
10.10* License Agreement number 9304-009 between Medar, Inc. and
Allen-Bradley Company, Inc. dated May 10, 1993 (filed as Exhibit
10.10 to the registrant's Form 10-K for the year ended December 31,
1993, SEC File 0-12728, and incorporated herein by reference).
10.11 Agreement by and between Medar, Inc. and ABB Robotics, Inc. dated
December 1992 regarding joint development to integrate a weld
controller into the S3 robot control (filed as Exhibit 10.11 to the
registrant's Form 10-K for the year ended December 31, 1993, SEC File
0-12728, and incorporated herein by reference).
10.15 Amended and Restated Mortgage and Security Agreement dated June 29,
1993 by and between Medar, Inc. and NBD Bank, N.A. (filed as Exhibit
4.5 to the registrant's Form 10-K for the year ended December 31,
1993, SEC File 0-12728, and incorporated herein by reference).
10.16 Revolving Credit and Loan Agreement dated August 10, 1995 by and
between Medar, Inc., Automatic Inspection Devices, Inc. and Integral
Vision, Ltd. and NBD Bank (filed as Exhibit 10.1 to the registrant's
Form 10-Q for the quarter ended June 30, 1995, SEC File 0-12728, and
incorporated herein by reference).
10.17 Amendment No. 2 to Loan and Credit Agreement and Term Note dated
August 10, 1995 by and between Medar, Inc., Automatic Inspection
Devices, Inc. and NBD Bank (filed as Exhibit 10.2 to the registrant's
Form 10-Q for the quarter ended June 30, 1995, SEC File 0-12728, and
incorporated herein by reference).
10.18 First Amendment to Revolving Credit and Loan Agreement dated October
12, 1995, by and between Medar, Inc., Automatic Inspection Devices,
Inc. and Integral Vision, Ltd. and NBD Bank (filed as Exhibit 10.18
to the registrant's Form 10-Q for the quarter ended September 30,
1995, SEC File 0-12728, and incorporated herein by reference).
10.19 Second Amendment to Revolving Credit and Loan Agreement dated October
31, 1995, by and between Medar ,Inc., Automatic Inspection Devices,
Inc. and Integral Vision, Ltd. and NBD Bank (filed as Exhibit 10.20
to the registrant's Form 10-Q for the quarter ended September 30,
1995, SEC File 0-12728, and incorporated herein by reference).
10.20 Mortgage dated October 31, 1995 by and between Medar, Inc. and NBD
Bank (filed as Exhibit 10.21 to the registrant's Form 10-Q for the
quarter ended September 30, 1995, SEC File 0-12728, and incorporated
herein by reference).
17
<PAGE> 18
10.21 Installment Business Loan Note dated October 31, 1995, by and
between Medar, Inc. and NBD Bank (filed as Exhibit 10.22 to the
registrant's Form 10-Q for the quarter ended September 30, 1995, SEC
File 0-12728, and incorporated herein by reference).
10.22 Guarantee and Postponement of Claim dated August 10, 1995 between
Medar Canada, Ltd. and NBD Bank (filed as Exhibit 10.23 to the
registrant's Form 10-Q for the quarter ended September 30, 1995, SEC
File 0-12728, and incorporated herein by reference).
10.23* Patent License Agreement dated October 4, 1995 by and between Medar,
Inc. and Square D Company (filed as Exhibit 10.24 to the registrant's
Form 10-Q for the quarter ended September 30, 1995, SEC File 0-12728,
and incorporated herein by reference).
10.24 Third Amendment to Revolving Credit and Loan Agreement dated
March 29, 1996 by and between Medar, Inc., Integral Vision-AID, Inc.,
Integral Vision Ltd. and NBD Bank (filed as Exhibit 10.24 to the
registrant's Form 10-Q for the quarter ended March 31, 1996, SEC file
0-12728, and incorporated herein by reference).
10.25 Third Amended and Restated Revolving Note dated March 29, 1996 by
and between Medar, Inc., Integral Vision-AID, Inc., Integral Vision
Ltd. and NBD Bank (filed as Exhibit 10.25 to the registrant's Form
10-Q for the quarter ended March 31, 1996, SEC file 0-12728, and
incorporated herein by reference).
10.26 General Security Agreement dated March 29, 1996 by and between
Medar, Inc. and NBD Bank (filed as Exhibit 10.26 to the registrant's
Form 10-Q for the quarter ended March 31, 1996, SEC file 0-12728, and
incorporated herein by reference).
10.27 General Security Agreement dated March 29, 1996 by and between
Integral Vision-AID, Inc. and NBD Bank (filed as Exhibit 10.27 to the
registrant's Form 10-Q for the quarter ended March 31, 1996, SEC file
0-12728, and incorporated herein by reference).
10.28 General Security Agreement dated May 1, 1996 by and between Medar
Canada Ltd. and NBD Bank (filed as Exhibit 10.28 to the registrant's
Form 10-Q for the quarter ended June 30,1996, SEC file 0-12728, and
incorporated herein by reference).
10.29 Composite Guarantee and Debenture dated May 29, 1996 by and between
Integral Vision Ltd. and NBD Bank (filed as Exhibit 10.29 to the
registrant's Form 10-Q for the quarter ended June 30,1996, SEC file
0-12728, and incorporated herein by reference)..
10.30 Fourth Amendment to Revolving Credit and Loan Agreement dated
August 11, 1996 by and between Medar, Inc., Integral Vision-AID,
Inc., Integral Vision Ltd. and NBD Bank (filed as Exhibit 10.30 to
the registrant's Form 10-Q for the quarter ended September 30, 1996,
SEC file 0-12728, and incorporated herein by reference).
10.31 Fifth Amendment to Revolving Credit and Loan Agreement dated
February 27, 1997 by and between Medar, Inc. and Integral Vision,
Ltd. and NBD Bank (filed as Exhibit 10.31 to the registrant's Form
10-K for the year ended December 31, 1996, SEC file 0-12728, and
incorporated herein by reference).
10.32 Over Formula Loan Note dated February 27, 1997 by and between
Medar, Inc., Integral Vision, Ltd., and NBD Bank (filed as Exhibit
10.32 to the registrant's Form 10-K for the year ended December 31,
1996, SEC file 0-12728, and incorporated herein by reference).
10.33 Bridge Loan Note dated February 27, 1997 by and between Medar, Inc.,
Integral Vision, Ltd., and NBD Bank (filed as Exhibit 10.33 to the
registrant's Form 10-K for the year ended December 31, 1996, SEC file
0-12728, and incorporated herein by reference).
18
<PAGE> 19
10.34 Sixth Amendment to Revolving Credit and Loan Agreement dated
March 28, 1997 by and between Medar, Inc. and Integral Vision, Ltd.
and NBD bank (filed as Exhibit 10.34 to the registrant's Form 10-Q
for the quarter ended June 30, 1997, SEC file 0-12728, and
incorporated herein by reference).
10.35 Seventh Amendment to Revolving Credit and Loan Agreement dated
June 27, 1997 by and between Medar, Inc. and Integral Vision, Ltd.
and NBD bank (filed as Exhibit 10.35 to the registrant's Form 10-Q
for the quarter ended June 30, 1997, SEC file 0-12728, and
incorporated herein by reference).
10.36 Eighth Amendment to Revolving Credit and Loan Agreement dated
July 15, 1997 by and between Medar, Inc. and Integral Vision, Ltd.
and NBD bank (filed as Exhibit 10.36 to the registrant's Form 10-Q
for the quarter ended June 30, 1997, SEC file 0-12728, and
incorporated herein by reference).
10.37 Amended and Restated Term Note dated July 15, 1997 by and between
Medar, Inc. and NBD bank (filed as Exhibit 10.37 to the registrant's
Form 10-Q for the quarter ended June 30, 1997, SEC file 0-12728, and
incorporated herein by reference).
10.38 Collateral Assignment of Property Rights and Security Agreement
dated July 15, 1997 by and between Medar, Inc. and NBD bank (filed as
Exhibit 10.38 to the registrant's Form 10-Q for the quarter ended
June 30, 1997, SEC file 0-12728, and incorporated herein by
reference).
10.39 Stock Purchase Agreement between Maxco, Inc. and Medar, Inc. dated
July 23, 1997 (filed as Exhibit 10.39 to the registrant's Form 10-Q
for the quarter ended June 30, 1997, SEC file 0-12728, and
incorporated herein by reference).
10.40 Ninth Amendment to Revolving Credit and Loan Agreement dated March 9,
1998 by and between Medar, Inc. and Integral Vision, Ltd. and NBD
bank ( filed as Exhibit 10.40 to the registrant's Form 10-K for the
year ended December 31, 1997, SEC file 0-12728, and incorporated
herein by reference).
10.41 Waiver of debt covenants from sub-debt holders (filed as Exhibit
10.41 to the registrant's Form 10-K for the year ended December 31,
1997, SEC file 0-12728, and incorporated herein by reference).
10.42 Waiver and Amendment to Revolving Credit and Loan Agreement dated
May 12, 1998 by and between Medar, Inc. and Integral Vision, Ltd. and
NBD bank ( filed as Exhibit 10.42 to the registrant's Form 10-Q for
the quarter ended March 31, 1998, SEC file 0-12728, and incorporated
herein by reference).
27 Financial Data Schedule
(b) There were no reports on Form 8-K filed in the quarter ended
June 30, 1998.
* The Company has been granted confidential treatment with respect to
certain portions of this exhibit pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.
19
<PAGE> 20
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.
/S/CHARLES J. DRAKE
________________________________________________________________________8/14/98
Charles J. Drake
CEO and Chairman of the Board
Medar, Inc.
(Principal Executive Officer)
/S/RICHARD R. CURRENT
________________________________________________________________________8/14/98
Richard R. Current
Executive Vice President, Finance & Operations
Medar, Inc.
(Principal Financial & Accounting Officer)
20
<PAGE> 21
Exhibit Index
-------------
Exhibit
Number Description
- ------- -----------
3.1 Articles of Incorporation, as amended (filed as Exhibit 3.1 to the
registrant's Form 10-K for the year ended December 31, 1995,
SEC file 0-12728, and incorporated herein by reference).
3.2 Bylaws of the Registrant, as amended (filed as Exhibit 3.1 to the
registrant's Form 10-K for the year ended December 31, 1994, SEC file
0-12728, and incorporated herein by reference).
4.1 Note and Warrant Purchase Agreement (filed as Exhibit 4.1 to the
registrants Form 8-K dated July 15, 1997, SEC file 0-12728, and
incorporated herein by reference).
4.2 Form of 12.95% Senior Subordinated Secured Note (filed as Exhibit 4.2
to the registrants Form 8-K dated July 15, 1997, SEC file 0-12728,
and incorporated herein by reference).
4.3 Form of Medar, Inc. Common Stock Purchase Warrant Certificate (filed
as Exhibit 4.3 to registrants Form 8-K dated July 15, 1997, SEC file
0-12728, and incorporated herein by reference).
10.1 Incentive Stock Option Plan of the Registrant as amended (filed as
Exhibit 10.4 to the registrant's Form S-1 Registration Statement
effective July 2, 1985, SEC File 2-98085, and incorporated herein by
reference).
10.2 Second Incentive Stock Option Plan (filed as Exhibit 10.2 to the
registrant's Form 10-K for the year ended December 31, 1992, SEC File
0-12728, and incorporated herein by reference).
10.3 Amendment to Medar, Inc. Incentive Stock Option Plan dated May 10,
1993 (filed as Exhibit 10.3 to the registrant's Form 10-K for the
year ended December 31, 1993, SEC File 0-12728, and incorporated
herein by reference).
10.4 Non-qualified Stock Option Plan (filed as Exhibit 10.3 to the
registrant's Form 10-K for the year ended December 31, 1992, SEC File
0-12728, and incorporated herein by reference).
<PAGE> 22
10.5 Medar, Inc. Employee Stock Option Plan (filed as Exhibit 10.5 to the
registrant's Form 10-Q for the quarter ended September 30, 1995, SEC
file 0-12728, and incorporated herein by reference).
10.6 Form of Confidentiality and Non-Compete Agreement Between the
Registrant and its Employees (filed as Exhibit 10.4 to the
registrant's Form 10-K for the year ended December 31, 1992, SEC File
0-12728, and incorporated herein by reference).
10.7 Contract between Shanghai Electric Welding Machine Works, Medar,
Inc. and Lida U.S.A. dated August 30, 1993, related to joint venture
agreement (both the original Chinese version and the English
translation) (filed as Exhibit 10.7 to the registrant's Form 10-K for
the year ended December 31, 1993, SEC File 0-12728, and incorporated
herein by reference).
10.8 Asset Purchase Agreement between Medar, Inc. and Air Gage Company
dated February 28, 1994 (filed as Exhibit 10.8 to the registrant's
Form 10-K for the year ended December 31, 1993, SEC File 0-12728, and
incorporated herein by reference).
10.9* License Agreement number 9303-004 between Medar, Inc. and Allen-
Bradley Company, Inc. dated April 12, 1993 (filed as Exhibit 10.9 to
the registrant's Form 10-K for the year ended December 31, 1993, SEC
File 0-12728, and incorporated herein by reference).
10.10* License Agreement number 9304-009 between Medar, Inc. and
Allen-Bradley Company, Inc. dated May 10, 1993 (filed as Exhibit
10.10 to the registrant's Form 10-K for the year ended December 31,
1993, SEC File 0-12728, and incorporated herein by reference).
10.11 Agreement by and between Medar, Inc. and ABB Robotics, Inc. dated
December 1992 regarding joint development to integrate a weld
controller into the S3 robot control (filed as Exhibit 10.11 to the
registrant's Form 10-K for the year ended December 31, 1993, SEC File
0-12728, and incorporated herein by reference).
10.15 Amended and Restated Mortgage and Security Agreement dated June 29,
1993 by and between Medar, Inc. and NBD Bank, N.A. (filed as Exhibit
4.5 to the registrant's Form 10-K for the year ended December 31,
1993, SEC File 0-12728, and incorporated herein by reference).
10.16 Revolving Credit and Loan Agreement dated August 10, 1995 by and
between Medar, Inc., Automatic Inspection Devices, Inc. and Integral
Vision, Ltd. and NBD Bank (filed as Exhibit 10.1 to the registrant's
Form 10-Q for the quarter ended June 30, 1995, SEC File 0-12728, and
incorporated herein by reference).
10.17 Amendment No. 2 to Loan and Credit Agreement and Term Note dated
August 10, 1995 by and between Medar, Inc., Automatic Inspection
Devices, Inc. and NBD Bank (filed as Exhibit 10.2 to the registrant's
Form 10-Q for the quarter ended June 30, 1995, SEC File 0-12728, and
incorporated herein by reference).
10.18 First Amendment to Revolving Credit and Loan Agreement dated October
12, 1995, by and between Medar, Inc., Automatic Inspection Devices,
Inc. and Integral Vision, Ltd. and NBD Bank (filed as Exhibit 10.18
to the registrant's Form 10-Q for the quarter ended September 30,
1995, SEC File 0-12728, and incorporated herein by reference).
10.19 Second Amendment to Revolving Credit and Loan Agreement dated October
31, 1995, by and between Medar ,Inc., Automatic Inspection Devices,
Inc. and Integral Vision, Ltd. and NBD Bank (filed as Exhibit 10.20
to the registrant's Form 10-Q for the quarter ended September 30,
1995, SEC File 0-12728, and incorporated herein by reference).
10.20 Mortgage dated October 31, 1995 by and between Medar, Inc. and NBD
Bank (filed as Exhibit 10.21 to the registrant's Form 10-Q for the
quarter ended September 30, 1995, SEC File 0-12728, and incorporated
herein by reference).
<PAGE> 23
10.21 Installment Business Loan Note dated October 31, 1995, by and
between Medar, Inc. and NBD Bank (filed as Exhibit 10.22 to the
registrant's Form 10-Q for the quarter ended September 30, 1995, SEC
File 0-12728, and incorporated herein by reference).
10.22 Guarantee and Postponement of Claim dated August 10, 1995 between
Medar Canada, Ltd. and NBD Bank (filed as Exhibit 10.23 to the
registrant's Form 10-Q for the quarter ended September 30, 1995, SEC
File 0-12728, and incorporated herein by reference).
10.23* Patent License Agreement dated October 4, 1995 by and between Medar,
Inc. and Square D Company (filed as Exhibit 10.24 to the registrant's
Form 10-Q for the quarter ended September 30, 1995, SEC File 0-12728,
and incorporated herein by reference).
10.24 Third Amendment to Revolving Credit and Loan Agreement dated
March 29, 1996 by and between Medar, Inc., Integral Vision-AID, Inc.,
Integral Vision Ltd. and NBD Bank (filed as Exhibit 10.24 to the
registrant's Form 10-Q for the quarter ended March 31, 1996, SEC file
0-12728, and incorporated herein by reference).
10.25 Third Amended and Restated Revolving Note dated March 29, 1996 by
and between Medar, Inc., Integral Vision-AID, Inc., Integral Vision
Ltd. and NBD Bank (filed as Exhibit 10.25 to the registrant's Form
10-Q for the quarter ended March 31, 1996, SEC file 0-12728, and
incorporated herein by reference).
10.26 General Security Agreement dated March 29, 1996 by and between
Medar, Inc. and NBD Bank (filed as Exhibit 10.26 to the registrant's
Form 10-Q for the quarter ended March 31, 1996, SEC file 0-12728, and
incorporated herein by reference).
10.27 General Security Agreement dated March 29, 1996 by and between
Integral Vision-AID, Inc. and NBD Bank (filed as Exhibit 10.27 to the
registrant's Form 10-Q for the quarter ended March 31, 1996, SEC file
0-12728, and incorporated herein by reference).
10.28 General Security Agreement dated May 1, 1996 by and between Medar
Canada Ltd. and NBD Bank (filed as Exhibit 10.28 to the registrant's
Form 10-Q for the quarter ended June 30,1996, SEC file 0-12728, and
incorporated herein by reference).
10.29 Composite Guarantee and Debenture dated May 29, 1996 by and between
Integral Vision Ltd. and NBD Bank (filed as Exhibit 10.29 to the
registrant's Form 10-Q for the quarter ended June 30,1996, SEC file
0-12728, and incorporated herein by reference)..
10.30 Fourth Amendment to Revolving Credit and Loan Agreement dated
August 11, 1996 by and between Medar, Inc., Integral Vision-AID,
Inc., Integral Vision Ltd. and NBD Bank (filed as Exhibit 10.30 to
the registrant's Form 10-Q for the quarter ended September 30, 1996,
SEC file 0-12728, and incorporated herein by reference).
10.31 Fifth Amendment to Revolving Credit and Loan Agreement dated
February 27, 1997 by and between Medar, Inc. and Integral Vision,
Ltd. and NBD Bank (filed as Exhibit 10.31 to the registrant's Form
10-K for the year ended December 31, 1996, SEC file 0-12728, and
incorporated herein by reference).
10.32 Over Formula Loan Note dated February 27, 1997 by and between
Medar, Inc., Integral Vision, Ltd., and NBD Bank (filed as Exhibit
10.32 to the registrant's Form 10-K for the year ended December 31,
1996, SEC file 0-12728, and incorporated herein by reference).
10.33 Bridge Loan Note dated February 27, 1997 by and between Medar, Inc.,
Integral Vision, Ltd., and NBD Bank (filed as Exhibit 10.33 to the
registrant's Form 10-K for the year ended December 31, 1996, SEC file
0-12728, and incorporated herein by reference).
<PAGE> 24
10.34 Sixth Amendment to Revolving Credit and Loan Agreement dated
March 28, 1997 by and between Medar, Inc. and Integral Vision, Ltd.
and NBD bank (filed as Exhibit 10.34 to the registrant's Form 10-Q
for the quarter ended June 30, 1997, SEC file 0-12728, and
incorporated herein by reference).
10.35 Seventh Amendment to Revolving Credit and Loan Agreement dated
June 27, 1997 by and between Medar, Inc. and Integral Vision, Ltd.
and NBD bank (filed as Exhibit 10.35 to the registrant's Form 10-Q
for the quarter ended June 30, 1997, SEC file 0-12728, and
incorporated herein by reference).
10.36 Eighth Amendment to Revolving Credit and Loan Agreement dated
July 15, 1997 by and between Medar, Inc. and Integral Vision, Ltd.
and NBD bank (filed as Exhibit 10.36 to the registrant's Form 10-Q
for the quarter ended June 30, 1997, SEC file 0-12728, and
incorporated herein by reference).
10.37 Amended and Restated Term Note dated July 15, 1997 by and between
Medar, Inc. and NBD bank (filed as Exhibit 10.37 to the registrant's
Form 10-Q for the quarter ended June 30, 1997, SEC file 0-12728, and
incorporated herein by reference).
10.38 Collateral Assignment of Property Rights and Security Agreement
dated July 15, 1997 by and between Medar, Inc. and NBD bank (filed as
Exhibit 10.38 to the registrant's Form 10-Q for the quarter ended
June 30, 1997, SEC file 0-12728, and incorporated herein by
reference).
10.39 Stock Purchase Agreement between Maxco, Inc. and Medar, Inc. dated
July 23, 1997 (filed as Exhibit 10.39 to the registrant's Form 10-Q
for the quarter ended June 30, 1997, SEC file 0-12728, and
incorporated herein by reference).
10.40 Ninth Amendment to Revolving Credit and Loan Agreement dated March 9,
1998 by and between Medar, Inc. and Integral Vision, Ltd. and NBD
bank ( filed as Exhibit 10.40 to the registrant's Form 10-K for the
year ended December 31, 1997, SEC file 0-12728, and incorporated
herein by reference).
10.41 Waiver of debt covenants from sub-debt holders (filed as Exhibit
10.41 to the registrant's Form 10-K for the year ended December 31,
1997, SEC file 0-12728, and incorporated herein by reference).
10.42 Waiver and Amendment to Revolving Credit and Loan Agreement dated
May 12, 1998 by and between Medar, Inc. and Integral Vision, Ltd. and
NBD bank ( filed as Exhibit 10.42 to the registrant's Form 10-Q for
the quarter ended March 31, 1998, SEC file 0-12728, and incorporated
herein by reference).
27 Financial Data Schedule
(b) There were no reports on Form 8-K filed in the quarter ended
June 30, 1998.
* The Company has been granted confidential treatment with respect to
certain portions of this exhibit pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 540
<SECURITIES> 0
<RECEIVABLES> 9,259
<ALLOWANCES> 400
<INVENTORY> 9,317
<CURRENT-ASSETS> 21,199
<PP&E> 17,744
<DEPRECIATION> 8,650
<TOTAL-ASSETS> 38,809
<CURRENT-LIABILITIES> 21,202
<BONDS> 4,842
0
0
<COMMON> 1,805
<OTHER-SE> 10,960
<TOTAL-LIABILITY-AND-EQUITY> 38,809
<SALES> 8,832
<TOTAL-REVENUES> 8,832
<CGS> 5,232
<TOTAL-COSTS> 5,232
<OTHER-EXPENSES> 2,896
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 616
<INCOME-PRETAX> 102
<INCOME-TAX> 0
<INCOME-CONTINUING> 102
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 102
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
