<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
F O R M 10 - KSB
Annual Report Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the Fiscal Year Ended Commission File Number 0-12370
July 31, 1995
STRUCTURAL INSTRUMENTATION, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 95-3381440
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4611 South 134th Place, Tukwila, Washington 98168
------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(206) 244-6100
--------------------------------------------------
Registrant's telephone number, including area code
Securities registered pursuant to Section 12 (b) of the Act:
None
Securities registered pursuant to Section 12 (g):
Common Stock, par value $.01 per share
--------------------------------------
(Title of Class)
Check 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
----- -----
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. / /
Issuers revenues for most recent fiscal year $9,816,011.
The number of shares outstanding of each of the issuer's classes of
common stock is 2,347,240 (as of October 17, 1995).
The aggregate market value of the voting stock held by nonaffiliates of
the Registrant is $4,189,319 (as of October 17, 1995).
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive Proxy Statement for the Annual meeting of
Shareholders to be held on January 10, 1996 (the "Proxy Statement"), are
incorporated by reference into Part III.
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1
<PAGE> 2
PART I
ITEM 1. BUSINESS
(A) GENERAL DEVELOPMENT OF BUSINESS
Structural Instrumentation, Inc. (formerly Invention, Design,
Engineering Associates, Inc.) and Subsidiaries ("SI" or the "Company"), designs,
develops, manufactures and sells electronic weighing systems to the general
transportation industry. In addition, until discontinued in October, 1991, the
Company manufactured automation equipment used to facilitate device assembly and
testing of subminiaturized electronic components used in the assembly process of
semiconductor manufacturing. The Company has discontinued operations in the
semiconductor industry.
The Company was incorporated in California on May 29, 1979 and was
reincorporated in Delaware on April 20, 1983. On July 30, 1993 the Company
changed its name from Invention, Design, Engineering Associates, Inc. to
Structural Instrumentation, Inc.
The Company's executive offices are located at 4611 South 134th Place,
Tukwila, Washington. The telephone number is (206) 244-6100.
Acquisition of Structural Instrumentation, Inc.
In June 1987, the Company acquired Structural Instrumentation, Inc., a
Delaware corporation (SI). SI was a manufacturer of on-board weighing systems in
the general transportation industry. This acquisition represented the Company's
initial diversification outside of the semiconductor industry.
Acquisition of LODEC, Inc.
In March 1990, the Company acquired LODEC Inc., a Washington
corporation. LODEC was a manufacturer of on-board weighing systems and axle
platform scales. Both product lines are used in the general transportation
industry.
The acquisition of LODEC further diversified the Company by adding a
well established international distribution network with significant sales in
Europe, Asia, South America, Canada, and Australia. The Company also obtained
through the LODEC acquisition a market position in both the portable and
permanent axle scale markets. In January 1991, LODEC was merged into SI.
Asset Purchase from Advanced Recording Instruments, Inc.
In October 1995 the Company purchased the assets of Advanced Recording
Instruments, Inc. (ARI). The asset purchase included the ARI on-board recorder
and fleet information system product lines, all related technology, the trade
names; ARI, Fleet Data Master and Fleet Sum software, inventory and fixed
assets. ARI has designed, manufactured and marketed the systems since 1983. Over
the past 12 years ARI has installed over 12,000 Fleet Data Master on-board
vehicle computers and associated Fleet Sum software in a diversity of
transportation industry operations.
(B) NARRATIVE DESCRIPTION OF BUSINESS PRODUCTS
The Company operates primarily in one industry, the transportation
industry. With the acquisition of SI, in June 1987, a company that manufactured
on-board electronic scales for vehicles, the Company entered the general
transportation industry. The acquisition of LODEC, in April 1990, strengthened
the Company's position in the on-board electronic scales market and expanded the
Company's product line with the addition of portable and permanent axle scales.
In October 1995 the Company purchased the assets and product line of ARI a
designer and manufacturer of on-board vehicle recorders, data input units and
related software for the general transportation industry.
On-board Weighing Systems
The Company designs, manufactures and markets electronic weighing
systems used in the transportation industry with particular emphasis in the
forestry, waste, agriculture, railroad and special freight hauling industries.
These industries are the primary market for on-board weighing systems as they
often have loads which vary and are difficult to estimate. In addition it is
often difficult, if not impossible, to access platform scales to determine
weight due to the location in which many of these vehicles are loaded.
The Company's on-board weighing system is typically mounted on the
vehicle so that it weighs the vehicle payload. A microprocessor mounted in the
cab of the vehicle displays to the driver and records in memory the net payload
weight, the gross vehicle weight, and individual axle group weights. This
enables the driver to know the vehicle load weight at all times to ensure that
the vehicle load is maximized, but not in excess of legal weight limits.
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2
<PAGE> 3
The scale systems use load sensors (transducers) that employ electronic
strain gage technology. There are two general types of transducers that mount
onto the vehicle: primary, direct sensing transducers such as load cells which
are mounted between the load and frame, and secondary, indirect sensing
transducers which respond to changes in a key load bearing suspension component.
Examples of this secondary type of transducer include deflection transducers
which measure the change in axle deflection with increasing loads and air or
hydraulic transducers that measure the change in fluid pressure with changing
loads.
The sensors emit a millivolt signal which is converted to a more robust
signal before being transmitted to a remote cab mounted microprocessor based
indicator. The signal can be either a digital or frequency signal that varies in
proportion to the applied load on the transducers. The microprocessor based
indicator processes the signal and converts it into a displayed weight.
The scale systems are calibrated individually for each vehicle after
installation to ensure accuracy. Depending on the vehicle, the load sensors are
commonly accurate to within 1% or 100 pounds of the indicated weight on the
microprocessor mounted in the cab.
Portable and Permanent Axle Scales
The Company designs, manufacturers and markets two product lines of
platform scales - industrial axle scale systems (semi-permanent) and certified
weight enforcement systems (portable). The industrial axle scale line is used
primarily by carrier trucking fleets for axle check weighing at freight
distribution terminals. The weight enforcement system line consists of
specialized mobile weighing systems used by state and municipal agencies for
enforcing vehicle axle weight limits.
The platform systems utilize load cell technology similar to the
on-board systems, but incorporate additional technology that facilitates the
integration of load cells in steel or aluminum platforms. The platforms are
constructed to be either installed in a pit making them flush with the road
surface (industrial axle scales) or with integrated tire ramps so they are
portable and can be utilized temporarily on any flat surface (weight enforcement
systems).
On-board Recorder and Fleet Information Systems
The ARI product line purchased in October 1995 consists of
microprocessor-based hardware installed on vehicles that record operating
information, a driver data input unit located in the vehicle cab and related
software reporting applications used in base operations for development of fleet
information related to vehicle operation, driver performance and fleet
logistics.
Sales
The Company's on-board weighing systems are sold throughout the world
with principal markets in the United States, Europe, Asia, Canada, Australia and
New Zealand, using a network of dealers who in turn sell and service to the end
user. Dealers are most often, OEM's (original equipment manufacturers), OEM
dealers, truck repair and service shops or truck equipment installation
companies. As part of their representation agreement with the Company dealers
provide customers in their local trade area with on-going service and support
after the sale. The Company employs a sales and marketing force that is
primarily responsible for, establishing, training and managing the dealer
network and servicing large key accounts which the Company sells direct. The
Company's sales personnel are based in Baltimore, Maryland; Indianapolis,
Indiana; Arlington, Texas; Los Angeles, California; Eugene, Oregon; Kelowna,
British Columbia, Canada; Toronto, Ontario, Canada and Rotterdam, Holland.
The Company's portable and permanent electronic platform scales are
also sold throughout the United States, Canada, and Europe, by a network of
dealers and direct by the Company. The market for the industrial axle scales is
primarily carrier trucking fleets, which use the scales for axle check weighing
at freight distribution terminals. The portable platform scales are used
principally by state and municipal agencies to enforce vehicle axle loads. The
Company leverages the on-board marketing and sales force in taking the platform
product line to market.
The Company's new Fleet Information System business (ARI products) has
historically been sold through a combination of dealers, license agreements and
direct to end users by ARI personnel. The Company intends to continue the same
marketing strategy with the addition of the existing Company regional sales
organization to increase market penetration.
Sources of Supply
The materials and components used by the Company to manufacture its
products are available from a variety of sources. The Company believes that it
is not dependent at this time on any particular supplier for either its
materials or components and has experienced no difficulty in obtaining supplies.
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3
<PAGE> 4
Patents and Trademarks
The Company holds 11 patents on various load cell and transducer
designs and applications used on its on-board weighing systems. The patents have
expiration dates ranging from 1996 to 2007. Currently the company has 5 patents
pending approval. The Company has no reason to believe the patents are not
valid. However, if the patents were successfully contested management does not
believe it would have a material adverse impact on the Company.
Customers
The Company's primary customers in the on-board market segments are its
dealer network who, in turn, sell to individual truck operators and fleet
operators located throughout the world with principal markets in the United
States, Europe, Asia, Canada, Australia and New Zealand. The operators are
engaged in many industries including forestry, waste, agriculture, and specialty
bulk material hauling.
In the platform scale market there are two distinct segments. In the
industrial axle scale market the primary customers are carrier trucking fleets
and trucking terminals. The customers in the weight enforcement market are state
and municipal agencies responsible for enforcing weight limits.
Fleet Information System (ARI products) customers make-up the Company's
largest potential market for a single product line. The systems have application
in all types and all sizes of transportation fleets ranging from general
trucking and freight companies to small route oriented businesses, emergency
vehicles and commercial fleets transporting people.
Backlog
The Company's backlog, as of July 31, 1995 and 1994, was approximately
$570,000 and $510,000 respectively. The Company estimates that all of its
current backlog will be shipped during its fiscal year ending July 31, 1996.
Competition
Competitors in the on-board market are generally equal in size to, or
smaller than, the Company and have equal or lesser financial and other resources
than the Company. Competitors in platform weighing systems generally are larger
in size and have more financial or other resources than the Company. Examples of
these competitors are Cardinal Scale, Fairbanks Scales, Toledo Scales, and
Weigh-Tronix. Competition is based principally on product performance and price.
The Company has no significant competition in the on-board market from
manufacturers of conventional weighing products due to the specialized nature of
on-board weighing systems.
In the Company's new Fleet Information System business competitors
range in size from large corporations such as Rockwell International
Corporation and Cummins Engine who have more financial and other resources than
the Company to smaller regional competitors with financial and other resources
equal or lesser than those available to the Company.
Research & Development
The Company conducts ongoing research and development to refine and
improve its existing product line and to develop new product lines. Research and
development expenses were approximately $700,600 in the fiscal year ended July
31, 1995 as compared with $531,008 and $410,806 in the fiscal years ended July
31, 1994 and 1993, respectively.
Employees
As of October 17, 1995, the Company employed 82 full time employees.
None of the Company's employees are represented by a labor union and the Company
has experienced no work stoppages. The Company believes that its employee
relations are good.
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4
<PAGE> 5
(C) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT
SALES
The products manufactured and marketed by the Company are sold both
domestically and internationally. The following table sets forth the primary
areas in which export sales occurred.
<TABLE>
<CAPTION>
Years Ended July 31
1995 1994 1993
<S> <C> <C> <C>
CANADA $2,973,000 $2,346,000 $1,831,000
OTHER 1,080,000 1,367,000 1,514,000
---------- ---------- ----------
$4,053,000 $3,713,000 $3,345,000
========== ========== ==========
</TABLE>
Export sales accounted for approximately 41%, 45% and 42% of total
sales for fiscal year 1995, 1994, and 1993 respectively. The company presently
has no foreign manufacturing operations and does not have a material amount of
foreign identifiable assets.
ITEM 2. PROPERTIES
The Company currently leases a 30,000 square foot facility in an
industrial area of Tukwila, Washington (a suburb of Seattle), which houses its
executive and administrative offices as well as its marketing, engineering, and
manufacturing facilities. The property is leased at an annual rental of
$154,976. This lease contains an option for renewal and expires in April 1998.
The Company feels that its current facilities are fully utilized and can
accommodate the Company's operations for the foreseeable future. The Company
leases a 2,550 square foot office facility in Spokane, Washington which is
devoted to engineering activities. The Company also maintains a 3,000 square
foot sales/service office located in Kelowna, British Columbia, Canada. This
office houses sales, service and maintenance facilities for the Canadian market.
ITEM 3. LEGAL PROCEEDINGS
In 1990, the Company entered into put option agreements with five
individuals, in conjunction with its acquisition of LODEC, Inc., to repurchase
201,000 shares of the Company's common stock for aggregate consideration of
$1,005,000. During the 1994 fiscal year, the Company was served with lawsuits by
certain of these individuals, who alleged that the Company had not fulfilled
certain contractual obligations related to the put options. The Company has
settled litigation with three of the individuals through payment and has entered
into agreements with the two other individuals to extend the exercise date of
their put options. Under terms of the put option extension agreements, 65,000
shares may be exercisable during a 120-day period commencing September 1, 1996
and 12,000 shares beginning October 22, 1997. The company has the ability to
call the shares at any time during the extension agreement. Interest at either
prime plus 2% or prime plus 2-1/2% is payable during the extension period.
The currently anticipated liability associated with the Company's
agreements to repurchase 77,000 shares of the Company's stock upon exercise of
the remaining put options, is included in the put option liability on the
Company's balance sheet as of July 31, 1995.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of Security Holders during the
quarter ended July 31, 1995.
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<PAGE> 6
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
As of October 17, 1995, there were 263 shareholders of record.
Management believes this represents approximately 600 beneficial owners of SI
common stock. SI's common stock is traded on the over-the-counter market on the
NASDAQ system under the symbol "SISI." The Company has not declared or paid any
dividends since its inception. The following chart describes the price range
(bid) of Common Shares of SI, as quoted by NASDAQ, by quarter for 1995 and 1994:
<TABLE>
<CAPTION>
Price Range (Bid) of Common Shares
1995 1994
HIGH LOW HIGH LOW
---- --- ---- ---
<S> <C> <C> <C> <C>
1st Quarter 1 1/2 3/4 3 1/2 2 1/8
2nd Quarter 3 1/8 1 2 3/8 1 1/2
3rd Quarter 3 3/4 2 1/4 1 5/8 1 1/4
4th Quarter 3 5/8 2 1/2 1 3/4 1 1/4
</TABLE>
These quotations reflect inter-dealer prices, without retail markup,
mark down or commission and may not necessarily represent actual transactions.
The Company has not paid cash dividends on its common stock and does
not anticipate paying regular cash dividends in the foreseeable future. The
Company's loan agreements prohibit the payment of cash dividends without the
bank's prior approval.
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STRUCTURAL INSTRUMENTATION, INC.
Selected Consolidated Financial Data
<TABLE>
<CAPTION>
Year ended July 31
1995 1994 1993 1992(2) 1991(2)
<S> <C> <C> <C> <C> <C>
Net Sales $ 9,816,011 $ 8,288,058 $ 7,996,627 $ 7,679,845 $ 7,089,575
Net Earnings 510,465 227,068(3) (182,968) 399,174 (1,409,805)
(loss) (1)
Net Earnings (loss)
per share .21 .09(3) (.08) .18 (.63)
Weighted average 2,431,069 2,494,331 2,407,678 2,243,840 2,241,840
no. of shares
outstanding
Total Assets 6,747,068 6,676,242 7,542,214 7,785,817 8,079,357
Long Term debt, less
current portion 53,729 217,529 379,120 339,157 413,010
Other long term 407,200 412,400 -- 50,000 930,500
obligations
</TABLE>
The Company has not declared any dividends since its inception.
(1) LODEC, Incorporated ("LODEC") was acquired April 1, 1990. LODEC's
sales and net income since the acquisition date has been included
herein.
(2) Prior to October, 1991, the Company was engaged in the business of
manufacturing automation equipment for the semiconductor industry.
Revenue from this segment accounted for $139,534 and $407,663 in
fiscal 1992 and 1991 respectively.
(3) Includes cumulative effect on prior years of change in accounting
principal ($120,000 or .05 per share).
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<PAGE> 7
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
As an aid to understanding the Company's operating results, the following table
indicates the percentage of sales that each income statement item represents,
and the percentage increase or decrease in such items for the years indicated.
<TABLE>
<CAPTION>
Year ended July 31 Percentage Increase (Decrease)
------------------ ------------------------------
1995 1994 1993 1995 vs. 1994 1994 vs. 1993
<S> <C> <C> <C> <C> <C>
Net Sales 100% 100% 100% 18.4% 3.6%
Cost of Sales 51.7 52.1 59.0 17.5 (8.6)
Gross Margin 48.3 47.9 41.0 19.4 21.3
Selling, general and 31.7 35.4 31.6 6.2 15.9
administrative
Research, Development 7.1 6.4 5.1 31.9 29.3
and engineering
Amortization of intangibles 1.3 2.5 3.4 (36.5) (25.4)
Operating Expense 40.2 44.3 40.2 7.6 14.1
Income (loss) from operations 8.1 3.7 .8 163.3 403.8
Interest Expense (1.2) (2.8) (2.7) (49.6) 10.5
Other income (expense) .2 (0.4) (0.4) NM 17.6
Net income (loss) 5.2 2.7 (2.3) 124.8 NM
</TABLE>
NET SALES
Sales for 1995 increased by 18.4% over 1994. The increase in 1995 sales
came largely from increased unit volume as competitive pressure limited the
Company's opportunities to increase prices. The 1994 sales increase of 3.6% over
1993 was also volume related. The increased 1995 volume was attributable to
increased penetration of the US waste market, strong sales in the southwestern
U.S. forestry markets, and strong forestry sales in Canada. The strong Canadian
sales offset lower sales to European customers.
International sales, including Canada, accounted for 41% and 45% of
total Company sales in 1995 and 1994 respectively, and 42% of sales in 1993.
Canadian sales are in Canadian dollars. International sales outside of Canada
are in US dollars. Due to the limited fluctuation in the Canadian dollar
exchange rate there has not been a significant impact on the financial
statements for foreign currency exchange.
GROSS MARGIN
Gross margins for 1995 increased by 19.4% over 1994. Gross margin in
1994 increased by 21.3% over 1993. Gross margin as a percentage to sales
improved from 47.9% in 1994 to 48.3% in 1995. In 1994 gross margin as a
percentage of sales increased to 47.9% as compared to 41.0% in 1993. The growth
in gross margin in 1995 was due to higher sales volume. The growth in gross
margin in 1994 was due to higher sales volume as well as lower cost of materials
and improvement in manufacturing labor efficiencies.
In future periods management expects gross margins to come under
increased pressure as pricing in current markets comes under growing competitive
pressure and as moves into new markets call for lower pricing levels in order to
establish a market presence.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased 6.2% in 1995, as
compared to 1994, due to increased debt collection expenses and fees for
professional services. Selling, general and administrative expenses increased
from 1993 to 1994 by 15.9% due primarily to marketing expenses and professional
service fees.
RESEARCH AND DEVELOPMENT EXPENSES
Research, development and engineering expense increased 31.9% in 1995
and 29.3% in 1994, reflecting continued emphasis on new product development,
product certifications and new product applications for electronic weighing
systems.
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<PAGE> 8
INTANGIBLES
The amortization of intangibles decreased in 1995 from 1994 by 36.5%
and decreased from 1993 to 1994 by 25.4%. The reductions in both periods were
due to continuing reduction in the remaining LODEC non-compete and consulting
agreements.
INTEREST AND OTHER INCOME
Interest expense decreased by 49.6% in 1995 compared to 1994. Interest
expense in 1994 increased from 1993 by 10.5%. The reduction in 1995 reflects the
positive cash flow from operations of $1,692,655 which contributed to a $828,000
reduction to outstanding debt. Also reflected in the 1994 to 1995 change is the
non-recurrence of a 1994 payment of interest in arrears to certain former LODEC
stockholders with Put Agreements with the Company. As a result of strong
positive cash flow during both 1995 and 1994 interest paid on the Company's line
of credit was reduced significantly from recent prior years. Other income in
1995 was $19,000, a positive change of $55,000 from 1994. This year to year
change is largely due to 1994 Canadian currency exchange differences that did
not recur in 1995 due to the stability of the Canadian dollar in 1995.
INCOME TAXES
The provision for income taxes amounted to an expense of $187,491 in
1995. This compares to a net benefit of $75,000 in 1994.
In future periods actual federal income tax expense may differ from the
"expected" income tax expense (computed by applying the U.S. federal corporate
income tax rate of 34% to income before income tax expense) due to the
amortization of certain intangible assets not deductible for income tax
purposes.
INFLATION
Historically, the impact of inflation has been negligible, as the
Company has been able to offset the effects through efficiency and price
increases.
LIQUIDITY AND CAPITAL RESOURCES
The Company's line of credit of $2,000,000, which matures November 29,
1995, continues to be extended as requested. As of July 31, 1995 the Company had
no borrowings under the line of credit. A positive cash flow of $1,692,655 from
operations during 1995 provided the Company with the ability to make significant
reduction to outstanding debt.
The Company believes cash flow from operations and the funds available
under its bank facility will be sufficient to meet the Company's working capital
needs and remaining put obligation agreements.
ITEM 7. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
(Form 10-KSB)
Pages(s)
<S> <C>
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . 9-10
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . 11
Consolidated Statements of Operations . . . . . . . . . . . . . . . . 12
Consolidated Statements of Stockholders' Equity . . . . . . . . . . . 13
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . 14
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . 15-20
</TABLE>
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<PAGE> 9
Financial Statements and Report of
Independent Certified Public Accountants
STRUCTURAL INSTRUMENTATION, INC.
AND SUBSIDIARIES
July 31, 1995, 1994 and 1993
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9
<PAGE> 10
Report of Independent Certified Public Accountants
Board of Directors
Structural Instrumentation, Inc.
We have audited the accompanying consolidated balance sheets of Structural
Instrumentation, Inc. and Subsidiaries as of July 31, 1995 and 1994, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits. The consolidated
financial statements of Structural Instrumentation, Inc. and Subsidiaries as of
and for the year ended July 31, 1993 were audited by other auditors whose report
dated September 24, 1993 expressed an unqualified opinion on those statements.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the 1995 and 1994 financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Structural Instrumentation, Inc. and Subsidiaries as of July 31, 1995 and 1994,
and the consolidated results of their operations and their consolidated cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/ Grant Thornton
- ------------------------
Seattle, Washington
September 15, 1995
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<PAGE> 11
Structural Instrumentation, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
July 31,
<TABLE>
<CAPTION>
ASSETS
1995 1994
----------- -----------
<S> <C> <C>
CURRENT ASSETS
Cash $ 540,044 $ 17,341
Trade accounts receivable, less allowance
for doubtful accounts of $154,454 in 1995
and $139,068 in 1994 (notes E and G) 1,404,791 1,497,911
Inventories (notes A2, C, E and G) 926,088 1,184,411
Deferred tax asset (notes B and K) 318,900 242,400
Other current assets 72,255 142,926
----------- -----------
Total current assets 3,262,078 3,084,989
PROPERTY AND EQUIPMENT, less accumulated depreciation and
amortization (notes A3, D, E and G) 550,559 582,929
OTHER ASSETS
Intangible assets, net (note A4) 2,874,881 2,965,265
Other 59,550 43,059
----------- -----------
$ 6,747,068 $ 6,676,242
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable to bank (note E) $ -- $ 544,147
Current maturities of long-term debt 257,364 167,944
Put option obligation - current (note H) -- 209,700
Trade accounts payable 496,225 444,704
Income taxes payable (notes B and K) 260,991 17,200
Accrued liabilities (note F) 882,306 631,371
----------- -----------
Total current liabilities 1,896,886 2,015,066
LONG-TERM DEBT, less current maturities (note G) 53,729 217,529
PUT OPTION LIABILITY (note H) 385,000 385,000
DEFERRED TAXES (notes B and K) 22,200 27,400
COMMITMENTS AND CONTINGENCIES (notes I, M and N) -- --
STOCKHOLDERS' EQUITY
Common stock, par value $.01 per share; authorized, 5,000,000 shares;
issued and outstanding, 2,347,240 shares in 1995 and 2,497,240 in 1994 23,472 24,972
Additional paid-in capital 4,769,268 4,920,227
Retained earnings (deficit) (403,487) (913,952)
----------- -----------
4,389,253 4,031,247
----------- -----------
$ 6,747,068 $ 6,676,242
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
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<PAGE> 12
Structural Instrumentation, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
Year ended July 31,
<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Net sales (note L) $ 9,816,011 $ 8,288,058 $ 7,996,627
Cost of sales 5,072,823 4,317,163 4,721,937
----------- ----------- -----------
Gross margin 4,743,188 3,970,895 3,274,690
Operating expenses:
Selling, service, general and administrative 3,114,778 2,931,682 2,528,693
Research, development and engineering 700,600 531,008 410,806
Amortization of intangibles 130,443 205,325 275,072
----------- ----------- -----------
3,945,821 3,668,015 3,214,571
----------- ----------- -----------
Earnings from operations 797,367 302,880 60,119
Interest expense (118,754) (235,578) (213,119)
Other income (expense), net 19,343 (35,234) (29,968)
----------- ----------- -----------
Net earnings (loss) before income taxes and
cumulative effect of a change in accounting
principle 697,956 32,068 (182,968)
Income tax (expense) benefit, net (note K) (187,491) 75,000 --
----------- ----------- -----------
Earnings (loss) before cumulative effect of a
change in accounting principle 510,465 107,068 (182,968)
Cumulative effect on prior years of a
change in accounting principle (note B) -- 120,000 --
----------- ----------- -----------
NET EARNINGS (LOSS)
$ 510,465 $ 227,068 $ (182,968)
=========== =========== ===========
Earnings (loss) per common and common equivalent share Earnings
(loss) before cumulative effect of a change
in accounting principle $ .21 $ .04 $ (.08)
Cumulative effect on prior years of a change in
accounting principle -- .05 --
----------- ----------- -----------
Net earnings (loss) per share
(note A6) $ .21 $ .09 $ (.08)
----------- ----------- -----------
Weighted average shares outstanding 2,431,069 2,494,331 2,407,678
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
- -------------------------------------------------------------------------------
12
<PAGE> 13
Structural Instrumentation, Inc. and Subsidiaries
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
Years ended July 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>
Common stock Additional Retained Total
------------------------ paid-in earnings stockholders'
Shares Amount capital (deficit) equity
--------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Balance, August 1, 1992 2,243,840 $ 22,438 $ 4,794,189 $ (958,052) $ 3,858,575
Net loss -- -- -- (182,968) (182,968)
Stock options exercised 23,400 234 25,038 -- 25,272
Common stock issued for debt 120,000 1,200 118,800 -- 120,000
--------- -------- ----------- ----------- -----------
Balance, July 31, 1993 2,387,240 23,872 4,938,027 (1,141,020) 3,820,879
Net earnings -- -- -- 227,068 227,068
Adjustment of put option liability -- -- (154,200) -- (154,200)
Stock options exercised 110,000 1,100 136,400 -- 137,500
--------- -------- ----------- ----------- -----------
Balance, July 31, 1994 2,497,240 24,972 4,920,227 (913,952) 4,031,247
Net earnings -- -- -- 510,465 510,465
Settlement of put option liability (40,000) (400) 7,441 -- 7,041
Purchase of common stock (110,000) (1,100) (158,400) -- (159,500)
--------- -------- ----------- ----------- -----------
Balance, July 31, 1995 2,347,240 $ 23,472 $ 4,769,268 $ (403,487) $ 4,389,253
========= =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
- -------------------------------------------------------------------------------
13
<PAGE> 14
Structural Instrumentation, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended July 31,
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Increase (Decrease) in Cash
Cash flows from operating activities:
Net earnings (loss) $ 510,465 $ 227,068 $ (182,968)
Adjustments to reconcile net earnings (loss) to net cash
provided by operating activities:
Depreciation and amortization 288,488 348,871 421,421
Deferred income taxes (81,700) (215,000) --
Changes in operating assets and liabilities:
Decrease (increase) in trade accounts receivable 93,120 318,489 (348,554)
Decrease in inventories 258,323 469,897 429,795
Decrease (increase) in other current assets 70,671 3,844 (117,228)
Increase in trade accounts payable 51,521 43,863 44,321
Increase in accrued liabilities 257,976 224,938 88,800
Increase in income taxes payable 243,791 15,600 --
----------- ----------- -----------
Net cash provided by
operating activities 1,692,655 1,437,570 335,587
Cash flows from investing activities:
Decrease in other assets -- 19,975 --
Purchase of equipment (182,225) (77,239) (122,891)
----------- ----------- -----------
Net cash used in investing activities (182,225) (57,264) (122,891)
----------- ----------- -----------
Cash flows from financing activities:
Payment on notes payable to bank, net (544,147) (1,067,472) (16,521)
Proceeds from long-term debt 159,500 -- 200,000
Payments on long-term debt (233,880) (159,869) (86,953)
Proceeds from notes payable to stockholders -- -- 140,000
Proceeds from issuance of common stock -- 137,500 25,272
Purchase of common stock (159,500) -- --
Payments on notes payable to stockholders -- -- (240,000)
Payments on put option obligations (209,700) (265,000) --
Payments on non-compete obligations -- (50,000) (215,554)
----------- ----------- -----------
Net cash used in financing activities (987,727) (1,404,841) (193,756)
----------- ----------- -----------
Net increase (decrease) in cash 522,703 (24,535) 18,940
Cash at beginning of year 17,341 41,876 22,936
----------- ----------- -----------
Cash at end of year $ 540,044 $ 17,341 $ 41,876
=========== =========== ===========
Cash paid during the year for:
Interest $ 230,173 $ 175,384 $ 165,744
Income taxes $ 25,400 $ 2,800 $ --
Supplemental schedule of non-cash investing and financing
activities:
Common stock exchanged for debt $ -- $ -- $ 120,000
</TABLE>
The accompanying notes are an integral part of these statements.
- -------------------------------------------------------------------------------
14
<PAGE> 15
Structural Instrumentation, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1995, 1994 and 1993
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Structural Instrumentation, Inc. manufactures and markets on-board weighing
and information systems and platform scales for the transportation
industry, as well as force measurement devices for general industry. Sales
are made to customers throughout the United States and Canada, as well as
other international markets. A summary of significant accounting policies
applied in the preparation of the accompanying consolidated financial
statements follows.
1. Principles of Consolidation
The consolidated financial statements include the accounts of Structural
Instrumentation, Inc. (SI or Company) and its subsidiaries, IDEAutomation
International, Inc. and Structural Instrumentation Manufacturing Co. (SI
Manufacturing). SI Manufacturing was merged into SI effective May 1995. All
significant intercompany accounts and transactions have been eliminated in
consolidation.
2. Inventories
Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out method.
3. Property and Equipment
Property and equipment are stated at cost less accumulated depreciation and
amortization. Depreciation and amortization are provided for in amounts
sufficient to relate the cost of depreciable assets to operations over
their estimated service lives ranging from three to ten years, principally
on a straight-line basis.
The straight-line method of depreciation is followed for substantially all
assets for financial reporting purposes, but accelerated methods are used
for tax purposes.
4. Intangible Assets
Intangible assets represent the excess cost of acquiring a subsidiary over
the fair value of net assets acquired at the date of acquisition which are
amortized using the straight-line method primarily over 40 years. The
Company periodically reviews goodwill to assess recoverability. Impairment
is recognized in operating results if expected future operating
undiscounted cash flows of the acquired business are less than the carrying
value of goodwill. Accumulated amortization was $740,676 and $650,292 at
July 31, 1995 and 1994, respectively.
5. Product Warranty
Product warranty costs are estimated and accrued at the time sales are
recorded.
6. Earnings (Loss) Per Common and Common Equivalent Share
Earnings (loss) per common and common equivalent share is calculated based
upon the weighted average common and common equivalent shares outstanding
during the period.
7. Reclassifications
Certain reclassifications have been made to the 1994 and 1993 consolidated
financial statements to conform to the 1995 presentation.
- -------------------------------------------------------------------------------
15
<PAGE> 16
NOTE B - CHANGE IN ACCOUNTING PRINCIPLE
The Company adopted, effective August 1, 1993, Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes." The
cumulative effect of this change in accounting principle from the deferred
method to the liability method of accounting for income taxes increased the
Company's 1994 earnings by $120,000, or $.05 per share. Income taxes for
the year ending July 31, 1993 were not restated for this change. The effect
on the 1994 net earnings before the cumulative effect of the change in
accounting principle was to increase net earnings by approximately $95,000.
NOTE C - INVENTORIES
Inventories consist of the following at July 31:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Raw materials $ 413,052 $ 484,533
Work in process 192,292 214,572
Finished goods 455,174 674,843
---------- ----------
1,060,518 1,373,948
Less allowance for obsolescence 134,430 189,537
---------- ----------
$ 926,088 $1,184,411
========== ==========
</TABLE>
NOTE D - PROPERTY AND EQUIPMENT
Property and equipment consist of the following at July 31:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Machinery and equipment $1,530,455 $1,424,210
Motor vehicles 22,903 85,521
Leasehold improvements 98,042 95,970
---------- ----------
1,651,400 1,605,701
Less accumulated depreciation and amortization 1,100,841 1,022,772
---------- ----------
$ 550,559 $ 582,929
========== ==========
</TABLE>
NOTE E - NOTES PAYABLE TO BANK
Notes payable to bank represent borrowings under a $2,000,000 revolving
line of credit for SI Manufacturing, which expires in November 1995.
Borrowings are secured by trade accounts receivable, inventories and
certain equipment. Borrowings under the line of credit bear interest at the
prime rate plus 1%, .625% or .25% depending on certain financial ratios of
the Company (9.375% at July 31, 1995). The Company is required to maintain
certain levels of working capital, net worth and debt-to-equity ratios and
may not pay any cash dividends.
NOTE F - ACCRUED LIABILITIES
Accrued liabilities consist of the following at July 31:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Accrued salaries, wages and
other compensation $223,798 $174,359
Warranty reserve 389,635 181,610
Accrued professional fees 225,334 130,996
Accrued interest - 111,419
Other 43,539 32,987
-------- --------
$882,306 $631,371
======== ========
</TABLE>
- -------------------------------------------------------------------------------
16
<PAGE> 17
NOTE G - LONG-TERM DEBT
Long-term debt consists of the following at July 31:
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Note payable to bank in monthly installments of $10,079 including
interest at the prime rate plus 1.25% and 1.75% at July 31,
1995 and 1994, respectively (9.625% at July 31,
1995), secured by equipment, due September 1996 $134,480 $244,928
Note payable to bank in monthly installments of $5,405 plus
interest at the prime rate plus 1.25% and 1.75% at July 31,
1995 and 1994, respectively, secured by equipment, due
September 1996 70,280 140,545
Note payable to bank in monthly installments of $6,646 plus
interest at the prime rate plus 1.25%, secured by accounts
receivable and inventory, due November 1996 106,333 -
-------- --------
311,093 385,473
Less current maturities 257,364 167,944
-------- --------
$ 53,729 $217,529
======== ========
</TABLE>
Aggregate maturities of long-term debt are as follows at July 31, 1995:
<TABLE>
<CAPTION>
Year ending July 31,
--------------------
<S> <C>
1996 $257,364
1997 53,729
--------
$311,093
========
</TABLE>
These notes payable to the bank are also included in the terms of the
revolving line of credit agreement described in note E.
NOTE H - PUT OPTION OBLIGATION
The Company in 1990 entered into put option agreements with five
individuals, in conjunction with its acquisition of LODEC, Inc., to
repurchase 201,000 shares of the Company's common stock for aggregate
consideration of $1,005,000. During the 1995 and 1994 fiscal years, the
Company repurchased 124,000 shares of common of three of the individuals
through payment and entered into extension agreements with two other
individuals for their 77,000 shares. Under terms of the put option
extension agreements, 65,000 shares may be exercisable during a 120-day
period commencing September 1, 1996, and 12,000 shares beginning October
22, 1997. The Company has the ability to call the stock at $5 per share at
any time during the extension agreement. Interest at either prime plus 2%
or prime plus 2-1/2% is payable during the extension period.
The currently anticipated liability associated with the Company's
agreements to repurchase 77,000 and 121,000 shares (as of July 31, 1995 and
1994, respectively), of the Company's stock upon exercise of the remaining
put options is included in the put option liability on the Company's
balance sheet.
- -------------------------------------------------------------------------------
17
<PAGE> 18
NOTE I - COMMITMENTS AND CONTINGENCIES
1. Leases
The Company leases its manufacturing and office space and certain equipment
under terms of noncancelable operating leases.
Future minimum lease payments under noncancelable operating leases as of
July 31, 1995 are approximately as follows:
<TABLE>
<CAPTION>
Year ending July 31,
--------------------
<S> <C>
1996 $226,000
1997 204,000
1998 136,000
1999 13,000
2000 4,000
--------
$583,000
========
</TABLE>
Rent expense, net of sublease income, under noncancelable operating leases
was approximately $230,000, $197,000 and $206,000 for the years ended July
31, 1995, 1994 and 1993, respectively.
NOTE I - COMMITMENTS AND CONTINGENCIES - Continued
Sublease rental income under noncancelable operating leases was
approximately $5,000, $38,000, and $156,000 for the years ended July 31,
1995, 1994 and 1993, respectively.
2. Legal Matters
The Company is engaged in various lawsuits, as plaintiff or defendant,
involving various matters. In the opinion of management, based upon advice
of counsel, the ultimate outcome of these lawsuits will not have a material
impact on the Company's consolidated financial statements.
NOTE J - STOCK OPTION PLAN
The Company implemented a new stock option plan in 1995 for key employees
and has authorized a total of 300,000 shares of common stock to be set
aside for grants. Additionally, options are outstanding under the old plan
which expired July 31, 1994. The vesting and expiration dates of the stock
options are at the discretion of the Board of Directors. A summary of stock
options follows:
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Outstanding at beginning of year 206,600 106,600 100,000
Granted 21,500 100,000 80,000
Exercised - - (23,400)
Expired/canceled (77,100) - (50,000)
----------- ----------- -----------
Outstanding at end of year 151,000 206,600 106,600
----------- ----------- -----------
Exercisable at end of year 52,000 102,600 56,600
Price range $1.08-3.375 $1.08-3.125 $1.08-1.56
----------- ----------- ----------
Available for future grant 279,000 - 120,000
</TABLE>
- -------------------------------------------------------------------------------
18
<PAGE> 19
NOTE K - INCOME TAXES
Income taxes consist of the following at July 31:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Current expense $269,191 $ 20,000
Deferred benefit (81,700) (95,000)
-------- --------
$187,491 $(75,000)
======== ========
</TABLE>
The income tax provision reconciled to the tax computed at the statutory
federal rate was as follows at July 31:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Tax at statutory rate $237,300 $ 10,900
Valuation allowance 145,000) (125,000)
Nondeductible goodwill 47,300 48,500
State and foreign taxes 32,000 -
Non-deductible meals and entertainment 9,900 -
Other 5,991 (9,400)
-------- ----------
$187,491 $ (75,000)
======== =========
</TABLE>
The components of deferred taxes included in the balance sheet are as
follows at July 31:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Deferred tax asset:
Accrued vacation and warranty $147,600 $ 77,000
Provision for bad debts 52,500 65,400
Accrued liabilities not timely paid 51,900 34,000
Inventory reserve and capitalized overhead 66,200 92,000
Foreign currency adjustment 700 14,000
Tax credit carryforwards - 105,000
Valuation allowance - (145,000)
-------- ---------
$318,900 $ 242,400
======== =========
Deferred tax liability:
Excess of tax over book depreciation $ 22,200 $ 27,400
======== =========
</TABLE>
The Company established a valuation allowance of $145,000 as of July 31,
1994, due to the uncertainty of certain carryforwards. This allowance was
eliminated as of July 31, 1995.
- -------------------------------------------------------------------------------
19
<PAGE> 20
NOTE K - INCOME TAXES - Continued
The components of deferred income tax expense (benefit) are as follows for
the years ended July 31:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Allowance for doubtful receivables $ 12,700 $ (22,000)
Excess of book over tax depreciation (5,200) (8,000)
Inventory reserve and capitalized overhead 26,000 64,000
Foreign currency 15,300 (2,000)
Accrued warranty (70,700) (4,000)
Accrued liabilities (18,000) (30,000)
Valuation allowance reduction (145,000) (125,000)
Tax credits utilized 104,700 17,000
Net operating loss carryforward - 8,000
Other (1,500) 7,000
--------- ---------
$ (81,700) $ (95,000)
========= =========
</TABLE>
There were no income taxes provided in 1993 due to the utilization of net
operating loss carryforwards. Actual federal income tax expense would
differ from the "expected" income tax expense (computed by applying the
U.S. federal corporate income tax rate of 34% to income before income tax
expense) due to the amortization of certain intangible assets not
deductible for income tax purposes.
NOTE L - EXPORT SALES
The Company sells its products in the United States, Europe, Australia,
Canada and other parts of the world. Net export sales by foreign geographic
areas are as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Canada $2,973,000 $2,346,000 $1,831,000
Other areas 1,080,000 1,367,000 1,514,000
---------- ---------- ----------
$4,053,000 $3,713,000 $3,345,000
========== ========== ==========
</TABLE>
NOTE M - FAIR VALUE OF FINANCIAL INSTRUMENTS
In accordance with the requirements of "Statement of Financial Accounting
Standards No. 107 - Disclosure About Fair Value of Financial Instruments",
the following methods and assumptions were used to estimate the fair value
of each class of financial instruments.
1. Long-Term Debt
The carrying amount approximates fair value because of the variable
interest rates which are consistent with market changes.
2. Put Option Obligation
It was not practicable to estimate the fair value due to the specific
nature of the contract.
NOTE N - BENEFIT PLAN
The Company has a defined contribution 401(k) plan. All employees are
eligible for this plan upon completion of six months of service. The
Company matches 25% of the employee contributions up to a maximum of $200
per employee. The contribution expense was approximately $6,800, $8,000 and
$6,000 for the years ended July 31, 1995, 1994 and 1993, respectively.
- -------------------------------------------------------------------------------
20
<PAGE> 21
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
On November 1, 1993, the services of Deloitte & Touche, Certified
Public Accountants, as the principal accounting firm for audit of the Company's
consolidated financial statements were terminated by the Company. On June 20,
1994, Grant Thornton was engaged for such purpose.
The decision to change accountants was approved by the Company's board
of Directors, based on the recommendation of the Audit Committee of the Board.
The report of Deloitte & Touche on the Company's consolidated financial
statements for fiscal year ended July 31, 1993 did not contain an adverse
opinion or a disclaimer of opinion and were not qualified as to uncertainty,
audit scope or accounting principles.
In connection with the audit of the Company's consolidated financial
statements for the fiscal year ended July 31, 1993 (there having been no audit
of any subsequent interim), there was no disagreement with Deloitte & Touche on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreement if not resolved
to the satisfaction of said firm would have caused them to make reference in
connection with their report to the subject matter of the disagreement.
PART III
The information required by ITEMS 9, 10, 11, and 12 will be included in
the registrants proxy statement under the captions "Election of Directors,"
"Executive Officers," "Compensation," and "Principal Shareholders" and is
incorporated herein by reference. Such proxy statement will be filed within 120
days of the registrants last fiscal year end, July 31, 1995.
ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) Exhibits
The following documents are filed herewith for informational
purposes, but are not part of this Annual Report, except as
otherwise indicated.
3 (a) Certificate of Incorporation (Incorporated by reference to
the same exhibit number as the Company's Annual Report on
Form 10-KSB for the fiscal year ending July 31, 1993)
(b) By-Laws (1)
4 (a) Specimen certificate evidencing shares of Common Stock
(Incorporated by reference to the same exhibit number as the
Company's Annual Report on Form 10-KSB for the fiscal year
ending July 31, 1993)
10 (a) 1994 Stock Option Plan (Incorporated by reference to the
Company's Proxy Statement for the annual meeting held
January 19, 1995)
10 (b) Amended and Restated 1984-85 Stock Option Plan
(Incorporated by reference to the same exhibit number
as the Company's Annual Report on Form 10-KSB for the
fiscal year ending July 31, 1994)
(d) Lease between Halverson-Lindell and SI dated November 20,
1988, for the premises located at 4611 South 134th Place,
Tukwila, Washington. (Incorporated by reference to exhibit 1
to the Company's Annual Report on Form 10K for fiscal year
ending July 31, 1989)
22.1 Subsidiaries of the Registrant
24.1 Consent of Grant Thornton to incorporation by reference of
financial statements into Registration Statement on Form S-8
24.2 Consent of Deloitte & Touche to incorporation by reference
of financial statements into Registration Statement on Form
S-8
27 Financial Data Schedule
(1) Incorporated by reference to the same exhibit number to the Company's
Registration Statement of Form S-1 (File No. 2-83781), as amended.
- -------------------------------------------------------------------------------
21
<PAGE> 22
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this to be signed on its
behalf by the undersigned, thereunto duly authorized.
STRUCTURAL INSTRUMENTATION, INC.
DATED: October 24, 1995 /s/ Rick A. Beets
-----------------------------------------
Rick A. Beets, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed as of October 24, 1995 by the following persons in
the capacities indicated:
/s/ Rick A. Beets
-----------------------------------------
Rick A. Beets, President, CEO & CFO
(Principal Executive & Financial Officer)
/s/ Edward A. Alkire
-----------------------------------------
Edward A. Alkire, Secretary, Director
/s/ S. Scott Crump
-----------------------------------------
S. Scott Crump, Director
-----------------------------------------
Heinz Zweipfenning, Director
/s/ Ralph E. Crump
-----------------------------------------
Ralph E. Crump, Chairman of the Board,
Director, Treasurer
/s/ D. Dean Spatz
-----------------------------------------
D. Dean Spatz, Director
- -------------------------------------------------------------------------------
22
<PAGE> 1
EXHIBIT 22.1
Subsidiaries of the Registrant
IDEAutomation International, Inc.
Incorporated in the U.S. Virgin Islands
- -------------------------------------------------------------------------------
<PAGE> 1
Exhibit 24.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated September 15, 1995, accompanying the
consolidated financial statements included in the Annual Report of Structural
Instrumentation, Inc. on Form 10-KSB for the year ended July 31, 1995. We
hereby consent to the incorporation by reference of said reports in the
Registration Statement of Structural Instrumentation, Inc. on Form S-8 (File
No. 2-92865, effective August 6, 1984).
GRANT THORNTON LLP
Seattle, Washington
October 26, 1995
<PAGE> 1
Exhibit 24.2
INDEPENDENT ACCOUNTANTS' CONSENT
- -----------------------------------------------------------------------------
Board of Directors and Stockholders
Structural Instrumentation, Inc.
We consent to the incorporation by reference in the Registration Statement (as
filed with the Securities and Exchange Commission on August 6, 1984) on Form
S-8 of our report dated September 24, 1993, relating to the consolidated
financial statements of Structural Instrumentation, Inc. as July 31, 1993 and
1992, and for each of the two years in the period ended July 31, 1993, which
report appears in your 1993 Annual Report to Stockholders.
DELOITTE & TOUCHE LLP
October 26, 1995
Seattle, Washington
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-START> AUG-1-1994
<PERIOD-END> JUL-31-1995
<CASH> 540,044
<SECURITIES> 0
<RECEIVABLES> 1,404,791
<ALLOWANCES> 154,454
<INVENTORY> 926,088
<CURRENT-ASSETS> 3,262,078
<PP&E> 550,559
<DEPRECIATION> 1,100,841
<TOTAL-ASSETS> 6,747,068
<CURRENT-LIABILITIES> 1,869,886
<BONDS> 338,729
<COMMON> 23,472
0
0
<OTHER-SE> 4,365,781
<TOTAL-LIABILITY-AND-EQUITY> 6,747,068
<SALES> 9,816,011
<TOTAL-REVENUES> 9,816,011
<CGS> 5,072,823
<TOTAL-COSTS> 5,072,823
<OTHER-EXPENSES> 3,945,821
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 118,754
<INCOME-PRETAX> 697,956
<INCOME-TAX> 187,491
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 510,465
<EPS-PRIMARY> .21
<EPS-DILUTED> .21
</TABLE>
