FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 27, 2000
Commission file number 0-12611
AULT INCORPORATED
MINNESOTA________ 41-0842932
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7105 Northland Terrace
Minneapolis, Minnesota 55428-1028
(Address of principal executive offices)
Registrant's telephone number: (763) 592-1900
Indicate by check mark whether 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 such filing requirements
for the past 90 days.
YES __X___ NO _______
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date.
Outstanding at
Class of Common Stock March 28, 2000
No par value 4,439,432 shares
Total pages 20
Exhibits Index on Page 19
Page 2
PART 1. FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
AULT INCORPORATED & SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(in Thousands, Except Amounts Per Share)
(Unaudited)
Third Quarter Ended Nine Months Ended
Feb. 27, Feb. 28, Feb. 27, Feb. 28,
2000 1999 2000 1999
Net Sales $17,570 $13,965 $45,491 $36,348
Cost of Goods Sold 13,154 10,159 33,796 26,429
Gross Profits $ 4,416 3,806 11,695 9,919
Gross Profits % 25.1 27.3 25.7 27.3
Operating Expenses
Marketing 1,381 1,100 3,890 3,181
Design Engineering 863 549 2,466 1,545
General and Administrative 1,291 1,269 3,659 3,132
3,535 2,918 10,015 7,858
Operating Income 881 888 1,680 2,061
Other Income (Expense)
Other (56) 104 (35) 358
Interest Expense (131) (50) (240) (103)
Income Before Taxes 694 942 1,405 2,316
Income Taxes 180 336 368 772
Net Income $514 $606 $1,037 $1,544
Earnings Per Common and
Equivalent Shares
Outstanding (Note 2)
Basic EPS $0.12 $0.14 $0.24 $0.37
Diluted EPS $0.11 $0.14 $0.22 $0.36
Common and Equivalent Shares
Outstanding
Basic EPS 4,393 4,209 4,378 4,179
Diluted EPS 4,774 4,458 4,695 4,348
See NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Page 3
PART 1. FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
AULT INCORPORATED & SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
( in Thousands, Except Amounts Per Share)
(Unaudited)
Third Quarter Ended Nine Months Ended
Feb. 27, Feb. 28, Feb. 27, Feb. 28,
2000 1999 2000 1999
Net Income $514 $606 $1,037 $1,544
Other Comprehensive Income
Net of Tax:
Foreign Currency Translation
Adjustments (Note 9) 275 143 207 249
Comprehensive Income $789 $749 $1,244 $1,793
See NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Page 4
AULT INCORPORATED & SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(in Thousands)
(Unaudited)
February 27, May 30,
2000 1999
Assets:
Current Assets
Cash & Cash Equivalents (Note 3) $1,323 $3,303
Invest. in Securities Available for Sale 308 850
Trade Receivables, Less Allowance
for doubtful Accounts of $73,000
at February 27, 2000, and $30,000
at May 30, 1999 13,203 10,467
Inventories:
Finished Goods 4,620 3,876
Work in Process 305 216
Raw Material 7,245 4,959
Total Inventories 12,170 9,051
Prepaid and Other Expenses (Note 4) 1,574 854
Deferred Taxes 265 265
Total Current Assets 28,843 24,790
Other Assets:
Intangibles, Net of Amortization (Note 5) 1,457 1,560
Deferred Taxes 105 105
Other 10 40
1,572 1,705
Property Equipment and Leasehold
Improvements at Cost:
Land 2,166 2,117
Building 5,120 816
Machinery and Equipment 7,418 6,423
Office Furniture 1,432 930
E.D.P. Equipment 1,499 1,465
Leasehold Improvements 27 975
Construction in Progress 815
17,662 13,541
Less Accumulated Depreciation 6,325 6,733
Net Equipment and Leasehold
Improvements 11,337 6,808
Total Assets $41,752 $33,303
See NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Page 5
AULT INCORPORATED & SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(in Thousands)
(Unaudited)
February 27, May 30,
2000 1999
Liabilities and Stockholders' Equity
Current Liabilities:
Note Payable to Bank and Other $2,334 $1,428
Current Maturities of Long-Term Debt (Note 6) 656 402
Accounts Payable 7,764 5,557
Accrued Expenses:
Compensation 561 417
Other (Note 7) 1,056 622
Income Taxes Payable 214 0
Total Current Liabilities 12,585 8,426
Long-Term Debt, Less Current Maturities
Included Above (Note 6) 4,081 1,187
Deferred Rent Expense 0 14
Retirement and Severance Benefits (Note 8) 361 234
Stockholders' Equity:
Preferred Stock, No Par Value, Authorized,
1,000,000 Shares: None Issues.
Common Shares. No Par Value, Authorized
10,000,000 Shares: Shares Outstanding:
February 27, 2000; 4,394,527
and May 30, 1999; 4,372,789 Shares 19,866 19,827
Less Note Receivable
From Sale of Common Stock (145) (145)
Retained Earnings 5,396 4,359
Accumulated Other Comprehensive
Income (Note 9) (392) (599)
TOTAL 24,725 23,442
Total Liabilities and Stockholders' Equity $41,752 $33,303
See NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Page 6
AULT INCORPORATED & SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in Thousands)
(Unaudited)
Nine Months Ended
February 27, February 28,
2000 1999
Cash Flows From Operating Activities
Net Income: $1,037 $1,544
Adjustments to Reconcile Net Income to
Net Cash (Used in) Operating Activities:
Depreciation 643 516
Changes in Assets and Liabilities:
(Increase) Decrease in:
Trade Receivables (2,736) (3,779)
Inventories (3,119) (2,481)
Prepaid and Other Expenses (690) (325)
(Decrease) Increase in:
Accounts Payable 2,207 1,557
Accrued Expenses 689 370
Income Tax Payable 214 16
Net Cash Used in Operating Activities (1,755) (2,582)
Cash Flows From Investing Activities:
Purchase of Equipment and
Leasehold Improvements (5,069) (1,334)
Proceeds from Sale of Investments 542 19
(Increase) in Other Assets 0 (1,459)
Net Cash Used in Investment Activities (4,527) (2,774)
Cash Flows From Financing Activities:
Net Borrowings (Payments) on
Revolving Credit Agreements 906 1,008
Net Proceeds From Issuance of
Convertible Note 0 34
Proceeds from Long-Term Borrowings 3,300 1,116
Proceeds from Issuance of Common Stock 39 523
Principal Payments on Long-Term Borrowings
Including Capital Leases (152) (275)
Net Cash Provided by Financing Activities 4,093 2,406
Effect of Foreign Currency Exchange Rate
Changes on Cash 207 249
Cash and Equivalents:
Increase (1,982) (2,701)
Beginning 3,303 5,935
Ending $1,321 $3,234
AULT INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THIRD QUARTER ENDING FEBRUARY 27, 2000
NOTE 1, Principles of Consolidation
The accompanying consolidated financial statements include
the accounts of Ault Incorporated, its wholly-owned
subsidiaries, Ault Korea Corporation and Ault Xianghe Co.
Ltd. All significant intercompany transactions have been
eliminated.
NOTE 2, Net Income Per Share
The Company has presented basic and diluted per share
earnings in accordance with FASB Statement No. 128. Basic
per share earnings are presented only for outstanding common
stock. In addition to outstanding common stock,
presentation of diluted per share earnings also assumes the
conversion, exercise or issuance of all potential common
stock instruments that are not antidilutive, using average
common market values.
The Company also has adopted the disclosure-only provisions
of Statement of Financial Accounting Standards No. 123,
Accounting for Stock-Based Compensation. Accordingly, no
compensation cost has been recognized for the Company's
stock option plan. Had compensation cost been determined
for the nine months of fiscal 1999 and fiscal 2000 based on
the fair value of options at the grant dates consistent with
the provisions of SFAS No. 123, the Company's net income and
net income per share would have changed to the pro forma
amounts indicated below:
Nine Months Ending
February 27, February 28,
2000 1999
Net Income, as reported $1,037,000 $1,544,000
Net Income (loss) pro forma 35,712 1,207,552
Net Income, per share, 0.12 0.37
as reported, basic
Net income, per share, 0.11 0.36
as reported, diluted
Net Income, per share, 0.01 0.30
basic, pro forma
Net Income, per share, 0.01 0.29
diluted, pro forma
The fair value of each option grant is estimated on the date
of grant using the Black-Scholes option-pricing model with
the following weighted-average assumptions used for grants
included in fiscal 2000 and fiscal 1999 calculations:
AULT INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THIRD QUARTER ENDING FEBRUARY 27, 2000
Nine Months Ending
February 27, February 28,
2000 1999
Expected dividend yield --- ---
Expected stock price 79.31% 63.14%
volatility
Risk free interest rate 6.50% 5.99%
Expected life of options 1-8 1-5
NOTE 3, Cash and Investments
For the purpose of reporting cash and cash flows, the
Company considers all highly liquid instruments purchased
with a maturity of three months or less to be cash
equivalents. Investment in securities available for sale
is comprised of preferred stocks.
NOTE 4, Prepaid and Other Expenses
Prepaid and other expenses are principally customs duty and
value-added taxes, and certain deferred expenses that are
related to, and are absorbed against revenue during the
fiscal year, as well as receivables for cash advances made
to foreign subcontractors of the Company. The customs duty
and value added taxes are paid by Ault Korea Corporation to
the Korean authority on products that are manufactured for
exportation. These payments are refundable when the
subsidiary submits to the Korean Government the appropriate
claim and proof of exportation. Advances to sub-contractors
are amortized against order deliveries.
NOTE 5, Patent
Patent cost, net of amortized amounts represents the
contract price of US Patent #5,303,137,1 which was acquired
from a source external to and independent of the Company.
The Company believes that products using the power
conversion technology it represents will generate
significant revenues into fiscal 2002. For amortization
purposes, the patent had been assigned a life of four years.
AULT INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THIRD QUARTER ENDING FEBRUARY 27, 2000
NOTE 6, Long-term Debt
Long-term debt, including current maturities contain the
following:
FEBRUARY 27, MAY 30,
2000 1999
($000) ($000)
GE Capital
8.0% mortgage due in monthly installments
of $28,756, including interest to January
2015, secured by Minneapolis building $2,980 ----
Marquette Bank
7.9% capital lease due in monthly
installments of $6,144, including interest
to October 2004, secured by office
furniture 274 ----
US Bancorp
7.2% to 8.1% term loan due in monthly installments
secured by equipment 546 712
8.0% note payable, quarterly interest payments
until August 1999, thereafter due in quarterly
principal installments of $46,588, plus
interest through November 2001, secured by
Korean government-funded agency 326 373
7.5% note payable, quarterly interest
payments until April 2000, thereafter due
in quarterly principal payments of $52,464
plus interest, through April 2002,
secured by Korean government-funded agency 418 420
8.0% note payable, due in quarterly
installments of $20,985 plus interest,
through April 2000, secured by
Land, buildings and Korean government-funded
agency 21 84
7.5% note payable, September 2000 plus interest 172 ---
Sub-Total $4,737 $1,589
Less Current Maturities 656 402
Total $4,081 $1,187
AULT INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THIRD QUARTER ENDING FEBRUARY 27, 2000
NOTE 7, Accrued Expenses, Other
Accrued expenses, other, relates to commissions, fees to
product certifying agencies and warranty commitments.
NOTE 8, Retirement & Severance Benefits
The Company accrues a severence obligation for all current
employees in accordance with requirements of the Korea
Government. The National Pension Scheme of Korea, does not
require the Company to fund this obligation, but requires
the transfer of certain portions of the liability to the
Korean National Pension Fund. The liabilities recorded by
the Company are net of these transfers.
NOTE 9, Accumulated Other Comprehensive Income
Accumulated other comprehensive income is comprised of
foreign currency translation adjustments resulting from
translation of the financial statements of Ault Korea
Corporation from its functional currency, Korean Won, to US
dollars. Adjustments that were recorded during each fiscal
year are as follows:
FEBRUARY 27, FEBRUARY 28,
2000 1999
($000) ($000)
Beginning cumulative exchange
gain (loss) $(599) $(898)
Gain (loss) for the period from:
a. Long-term inter-company receivables 112 319
b. Other 95 (70)
Total $(392) $(649)
The amounts attributed to long-term inter-company
receivables for the NINE MONTHS ending February 27, 2000,
reflect changes in the Won rate from 1,191.3 Wons to $1.00
at May 30, 1999, to 1,136.6 Wons to $1.00 at February 27,
2000. Amounts attributed to long-term inter-company
receivables for the nine months ending February 28, 1999,
reflect changes in the Won rate from 1,400.0 Wons to $1.00
at May 31, 1998, to 1,724.0 Wons to $1.00 at February 28,
1999. Amounts were computed on outstanding receivables of
$2,311,000.
ITEM 2 - MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATIONS
From time to time, in reports filed with the Securities and
Exchange Commission, in press releases, and in other
communications to shareholders or the investing public, the
Company may make forward-looking statements concerning
possible or anticipated future results of operations or
business developments which are typically preceded by the
words "believes", "expects", "anticipates", "intends" or
similar expressions. For such forward-looking statements,
the Company claims the protection of the safe harbor for
forward looking statements contained in the Private
Securities Litigation Reform Act of 1995. Shareholders and
the investing public should understand that such forward-
looking statements are subject to risks and uncertainties
which could cause results or developments to differ
significantly from those indicated in the forward-looking
statements. Such risks and uncertainties include, but are
not limited to, the overall level of sales by original
equipment manufacturers (OEMs) in the telecommunications,
data communications, computer peripherals and the medical
markets; buying patterns of the Company's existing and
prospective customers; the impact of new products introduced
by competitors; delays in new product introductions; higher
than expected expense related to sales and new marketing
initiatives; availability of adequate supplies of raw
materials and components; and other risks affecting the
Company's target markets generally.
RESULTS OF OPERATIONS
Third Quarter Ended February 27, 2000
Fiscal Fiscal Increase / (Decrease)
2000 1999 Amount Percent
Net Sales $17,570,000 $13,965,000 $3,605,000 26%
Operating Income 881,000 888,000 (7,000) (1)%
Net sales were $17,570,000 for the third quarter of fiscal
2000 up 26% from $13,965,000 for the third quarter of fiscal
1999. The growth was primarily due to significantly higher
power supply shipments to major OEM's of high-speed ADSL
modems. The Company is also benefiting from growing
business volumes with OEM's serving the wireless
communication, medical equipment and cable modem markets.
Sales to cable modem OEM's increased to support the strong sales
change. The Company is a supplier for several major cable
modem manufacturers and believes the market for cable modems
will remain strong.
Operating income totaled $881,000 for the third quarter of
fiscal 2000 and $888,000 for the same period in fiscal 1999
equaling, respectively, 5.0% and 6.4% of net sales. The
change in operating income for fiscal 2000 is due primarily
to increased operating expenses. The increased operating
expenses were incurred principally due to (1) sales
commissions paid to sales representatives on the increased
sales and (2) continued support of strategic initiatives,
including new product and sales development:
New Product Development: Service to customers continues as
a strong strategic focus of the Company. To this end, the
Company's engineering activities are directed to developing
products for various customer applications that are
anticipated to generate revenue in fiscal 2000 and later
years. In addition to data convergence and portable medical
products, these applications include uninterruptible power
supplies, hubs, routers and switchers for the networking
market.
Sales Development: During the latter half of fiscal 1999,
the Company opened sales offices in Shanghai and in Europe
and strengthened the Korean Sales office.
Nine months Ended February 27, 2000
Fiscal Fiscal Increase / (Decrease)
2000 1999 Amount Percent
Net Sales $45,491,000 $36,348,000 $9,143,000 25%
Operating Income 1,680,000 2,061,000 (381,000) (18)%
Net sales were $45,491,000 for the nine months ended
February 27, 2000 up 25% from $36,348,000 for the same
period in 1999. The growth was primarily due to securing a
significant amount of new business with OEM's in the growing
ADSL modem market, wireless communications, medical
equipment, local area networks and the acquisition in fiscal
1999 of the power supply business of LZR Electronics, Inc.
Operating income totaled $1,680,000 for the nine month
period of fiscal 2000 and $2,061,000 for the same period in
fiscal 1999, a decrease of 18%. The change in operating
income for fiscal 2000 is due primarily to increased
operating expenses. The increased operating expenses were
incurred principally due to (1) sales commissions paid to
sales representatives on the larger sales, (2) integration
of LZR into the Company, and (3) continued support of
strategic initiatives, including new product development
and sales development.
Order Backlog: The Company's order backlog at February 27,
2000 totaled $15,422,000 compared to $12,963,000 at May 30,
1999. The order backlog represents sales for approximately
nine weeks and reflected the posture of many OEMs to limit
their contractual commitments to the best lead-times of
their suppliers. This requires the Company to place greater
reliability on its ability to forecast customer needs and
requirements for on-time shipment of products.
Non-Operating Income: Other expenses of ($35,000) for the
nine months of fiscal 2000 and income of $358,000 for the
same period in fiscal 1999 represented principally interest
income, currency exchange rate gains (losses) on foreign
contracts by the Korean subsidiary and income derived from
rented portions of the Korean manufacturing facility. The
Company incurred interest expenses of $240,000 in fiscal
2000 and $103,000 in fiscal 1999, paid principally on bank
credit facilities and long-term borrowings.
Income Tax: The Company had pre-tax income of $1,405,000 for
the nine month period in fiscal 2000 on which it accrued US
and Korean income taxes totaling $368,000. For the nine
month period in fiscal 1999, the Company had pre-tax income
of $2,316,000 on which US and Korean income taxes totaling
$772,000 were accrued.
Net Income: The Company reported diluted per share earnings
of $0.11 for the third quarter of fiscal 2000 based on
4,774,000 outstanding weighted average shares, compared to
diluted per share earnings of $0.14 for the third quarter of
fiscal 1999, which were based on 4,458,000 outstanding
weighted average shares. For the nine months of fiscal 2000
the Company reported diluted per share earnings of $0.22
based on 4,695,000 outstanding weighted average shares,
compared to diluted per share earnings of $0.36 for the same
period in fiscal 1999, which were based on 4,348,000
outstanding weighted average shares.
LIQUIDITY AND CAPITAL RESOURCES
The following table describes the Company's working capital
position at February 27, 2000, and at May 30, 1999:
February 27, May 30,
2000 1999
($000) ($000)
Working capital $16,258 $16,364
Cash 1,323 3,303
Securities Available for Sale 308 850
Unutilized bank credit facilities 3,558 2,491
Cash provided by (used in) operations (1,213) 22
Current Working Capital Position
At February 27, 2000, the Company had current assets of
$28,843,000 and current liabilities of $12,585,000 which
amounted to working capital of $16,258,000 and current ratio
of 2.29 to 1.00. This represents a change from its working
capital of $16,364,000 at May 30, 1999. The Company relies
on its credit facilities and cash flows from operations as
sources of working capital to support normal growth in revenue,
capital expenditures and attainment of profit goals.
Cash and Investments: At February 27, 2000, the Company had
cash and securities totaling $1,631,000, down from
$4,153,000 at May 30, 1999, principally because of cash
payments made to acquire and relocate to a new manufacturing
and office facility in Minneapolis, Minnesota.
Credit Facilities: The Company maintains two credit
facilities. Its primary credit facility is with US Bank and
a smaller facility with Korea Exchange Bank supports the
South Korean subsidiary. See Note 7, under NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS.
The credit arrangement with US Bank includes:
(a) A revolving credit facility of $4.0 million, secured by
Company assets. At February 27, 2000, borrowings against it
amounted to $442,000.
(b) One or more term loans, each up to $400,000. At
February 27, 2000, borrowings totaling $546,000 were
outstanding on three term loans.
The South Korean credit facility is approximately $2.0
million of which borrowings at February 27, 2000 totaled
$1,891,000
CASH FLOWS FOR 2000
Operations: Operations used $1,755,000 of cash during the
nine months of fiscal 2000 due principally to the following
activities in trade receivables, inventories, accounts
payables and accrued expenses:
(a) Increases in trade receivables mainly due to the
increased net sales in fiscal 2000 used $2,736,000 of cash.
Further use of cash from increased net sales is anticipated
for the rest of fiscal 2000.
(b) Increases in inventories used $3,119,000 of cash. The
increases are due principally to requirements of customers
that the Company carry additional stockings of finished
products to support their emergency needs. This is a normal
business practice in the power supply market. No changes
that are anticipated over the near term are expected to be
of any significant impact on this use of cash.
(c) Increases in accrued expenses and accounts payable
provided $2,896,000 of cash from liabilities associated with
purchases of material to support customer orders and
emergency stockings of finished products. Further
contribution to cash from increased liabilities for these
purposes is anticipated in fiscal year 2000.
Investing Activities: Investing activities used net cash of
$4,527,000 relating principally to the construction of the
new manufacturing/office facility in Minneapolis.
Financing Activities: Financing activities provided net cash
of $4,095,000, comprised principally of borrowings in
connection with the construction of the new
manufacturing/office facility in Minneapolis.
Effect of Foreign Currency Exchange Rate Fluctuations: The
effect of translating the Korean financial statements, which
were prepared in Won, to US dollars, resulted in a net asset
value increase of $207,000 during the year, which related
principally to long-term inter-company receivables. See
Note 9, under NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
Summary: The Company's cash and working capital positions
are sound and, together with its credit facilities, are
adequate to support the Company's strategies for the
remainder of fiscal 2000.
Information about Products and Services: The Company's
business operations are comprised of principally one
activity-the design, manufacture and sale of equipment for
converting electric power to a level used by OEM's
principally in computer peripherals, data
communications/telecommunications and medical markets to
charge batteries, and/or power equipment. The Company
supports these power requirements by making available to the
OEM products that have various technical features. These
products are managed as one product segment under the
Company's internal organizational structure and the Company
does not consider any financial distinctive measures,
including net profitability and segmentation of assets to be
meaningful to performance assessment.
Information About Revenue by Geography
Distribution of revenue from the US, from each foreign
country that is the source of significant revenue and from
all other foreign countries as a group are as follows:
NINE MONTHS ENDING
February 27, February 27,
2000 1999
($000) ($000)
US $35,643 $29,667
Canada 1,684 1,310
Ireland 924 2,474
Korea 2,380 1,123
Mexico 640 667
Belgium 1,161 287
Other Foreign 3,059 820
Total $45,491 $36,348
The Company considers a country to be the geographic source
of revenue if it has contractual obligations, including
obligation to pay for trade receivable invoices.
Impact of Foreign Operations and Currency changes:
Products manufactured by the Korean subsidiary contributed a
large portion of total sales. The value of the Won had no
significant impact on the Company's consolidated sales for
the quarter because the predominant portions of the
subsidiary's sales were made under inter-company contracts
with the US operations. Sales by the subsidiary in its
local market are not material in amounts in contrast to its
inter-company sales. The Company's US operations have no
significant exposure to currency risks because the
predominant portions of its foreign contracts are made in US
dollars.
AULT INCORPORATED AND SUBSIDIARY
PART II. OTHER INFORMATION
ITEMS 1-5 OTHER INFORMATION: Not Applicable
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
Reference Title of Document Location
Part 1 Exhibits
11 Computation of Per Share Earnings Filed herewith at page 19
27 Financial Data Scheduling Filed Electronically
(a) None
(b) Reports on Form 8-K
Form 8-K was filed February 20, 2000 and Form 8-K/A was
filed March 31, 2000. Reported Items:
(1) Item 4. Changes in Registrant's Certifying Accountant
(2) Item 7. Financial Statements and Exhibits.
Exhibit 16. McGladrey & Pullen, LLP letter
regarding Change in Certifying Accountant.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.
AULT INCORPORATED
(REGISTRANT)
DATED: /s/ Frederick M. Green
Frederick M. Green, President
Chief Executive Officer and
Chairman
DATED: /s/ Donald L. Henry
Donald L. Henry
Chief Financial Officer
EXHIBIT 11
AULT INCORPORATED & SUBSIDIARY
COMPUTATION OF CONSOLIDATED EARNINGS PER SHARE
(In Thousands of Dollars, Except Per Share Data)
(Unaudited)
Three Months Nine Months
Ended Ended
February 27, February 27,
2000 2000
Basic EPS Computation
Net Income to Common Stockholders $514 $1,037
Common Shares Outstanding:
Beginning of Period 4,391,787 4,372,789
Common Shares from Exercise of
Employee Stock Options
Daily Weighted: 1,437 5,256
Total Weighted Common Shares 4,393,224 4,378,045
Earnings Per Basic Common and
Equivalent Shares Oustanding $0.12 $0.24
Diluted EPS Computation
Net Income to Common Stockholders $514 $1,037
Total Weighted Common Shares 4,393,224 4,378,045
Dilutive Potential Common Shares,
Daily Weighted:
Assumed Conversion of Outstanding
Dilutive
Employee Stock Options 304,439 263,826
Employee Stock Purchase Plan 75,860 52,800
380,299 316,626
Adjusted Weighted Average Shares 4,773,523 4,694,671
Earnings per Diluted Common and
Equivalent Shares Outstanding $0.11 $0.22
*For the third quarter of fiscal 2000 and fiscal 1999,
options totaling 126,261 and 143,871, respectively,
were excluded from dilutive EPS calculations because of
their higher exercise prices compared to the market values.
EXHIBIT 11 (cont.)
AULT INCORPORATED & SUBSIDIARY
COMPUTATION OF CONSOLIDATED EARNINGS PER SHARE
(In Thousands of Dollars, Except Per Share Data)
(Unaudited)
Three Months Nine Months
February 28, February 28,
1999 1999
Basic EPS Computation
Net Income to Common Stockholders $606 $1,544
Common Shares Outstanding:
Beginning of Year 4,161,758 4,161,758
Daily Weighted:
Common Shares from Exercise
of Employee Stock Options 15,191 6,974
Conversion of Notes 32,001 10,667
Total Weighted Common Shares 4,208,950 4,179,399
Earnings Per Basic Common and
Equivalent Shares Outstanding $0.14 $0.37
Diluted EPS Computation
Net Income to Common Stockholders $606 $1,544
Total Weighted Common Shares 4,208,950 4,179,399
Dilutive Potential Common Shares,
Daily Weighted, Assumed Conversion
of Outstanding Dilutive:
Employee Stock Options 242,117 167,220
Employee Stock Purchase Plan 3,044 0
Convertible Note 3,615 1,206
248,776 168,426
Adjusted Weighted Average Shares* 4,457,726 4,347,825
Earnings per Diluted Common and
Equivalent Shares Outstanding $0.14 $0.36
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS OF THE
COMPANY'S FORM 10-Q FOR THE PERIOD ENDED FEBRUARY 27, 2000, AND IS QUALIFIED IN
ITS ENTIRELY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-28-2000
<PERIOD-END> FEB-27-2000
<CASH> 1323
<SECURITIES> 308
<RECEIVABLES> 13203
<ALLOWANCES> 73
<INVENTORY> 12170
<CURRENT-ASSETS> 28843
<PP&E> 17662
<DEPRECIATION> 6325
<TOTAL-ASSETS> 41752
<CURRENT-LIABILITIES> 12585
<BONDS> 0
0
0
<COMMON> 19868
<OTHER-SE> 4857
<TOTAL-LIABILITY-AND-EQUITY> 41752
<SALES> 45491
<TOTAL-REVENUES> 45491
<CGS> 33796
<TOTAL-COSTS> 33796
<OTHER-EXPENSES> 10015
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 240
<INCOME-PRETAX> 1405
<INCOME-TAX> 368
<INCOME-CONTINUING> 1037
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1037
<EPS-BASIC> 0.24
<EPS-DILUTED> 0.22
</TABLE>
