UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Mark one
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JANUARY 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
OPTICAL COATING LABORATORY, INC.
(Exact name of registrant as specified in its charter)
COMMISSION FILE NUMBER 0-2537
DELAWARE 68-0164244
(State or other jurisdiction of (IRS Identification No.)
incorporation or organization)
2789 NORTHPOINT PARKWAY, SANTA ROSA CALIFORNIA 95407-7397
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (707) 545-6440
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Classes of Common Stock:
COMMON STOCK, $.01 PAR VALUE
Outstanding at February 28, 1997: 10,176,723 shares
This document contains 15 pages.
The Exhibit listing appears on Page 14.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OPTICAL COATING LABORATORY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JANUARY 31, OCTOBER 31,
ASSETS 1997 1996
(Amounts in thousands) (Unaudited)
CURRENT Cash and short-term investments $10,056 $ 16,027
ASSETS Accounts receivable, net of allowance for
doubtful accounts of $1,779 and $1,775 31,090 27,700
Inventories 18,995 18,701
Income taxes receivable 395 1,248
Deferred income tax assets 6,663 5,165
Other current assets 2,122 1,230
Total Current Assets 69,321 70,071
OTHER Deferred income tax assets 3,238 4,451
ASSETS Other assets and investments 9,580 10,680
PROPERTY, Land and improvements 9,176 9,200
PLANT AND Buildings and improvements 41,580 40,953
EQUIPMENT Machinery and equipment 112,977 112,326
Construction-in-progress 6,664 6,190
170,397 168,669
Less accumulated depreciation (83,556) (81,100)
Property, plant and equipment-net 86,841 87,569
Total Assets $168,980 $172,771
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT Accounts payable $ 5,853 $ 7,199
LIABIL- Accrued expenses 7,102 6,566
ITIES Accrued compensation expenses 5,980 7,057
Income taxes payable 1,701 1,823
Current maturities on long-term debt 5,583 4,981
Notes payable 2,485 3,112
Deferred revenue 1,415 1,246
Total Current Liabilities 30,119 31,984
NON-
CURRENT Accrued postretirement health benefits
LIABIL- and pension liabilities 2,293 2,308
ITIES Deferred income tax liabilities 1,821 1,804
Long-term debt 43,868 45,788
Minority interest 11,848 11,328
Convertible redeemable preferred stock 11,309 11,309
COMMON Common stock, $.01 par value; authorized
STOCK- 30,000,000 shares; issued and
HOLDERS' outstanding
EQUITY 9,791,000 and 9,761,000 shares 98 98
Paid-in capital 47,485 47,219
Retained earnings 21,065 20,984
Cumulative foreign currency
translation adjustment (926) (51)
Common Stockholders' Equity 67,722 68,250
Total Liabilities and
Stockholders' Equity $168,980 $172,771
The accompanying notes are an integral part of these financial statements.
OPTICAL COATING LABORATORY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the three months ended January 31, 1997 and 1996
(Amounts in thousands, except per share amounts)
1997 1996
REVENUES Revenues $45,720 $43,911
Cost of sales 30,199 29,495
Gross Profit 15,521 14,416
COSTS AND Operating Expenses:
EXPENSES Research and development 2,562 2,388
Selling and administrative 10,266 9,107
Amortization of intangibles 243 287
Total Operating Expenses 13,071 11,782
Income from Operations 2,450 2,634
Nonoperating Income (Expense):
Interest income 175 74
Interest expense (1,052) (911)
EARNINGS Income Before Provision for Income Taxes
and Minority Interest 1,573 1,797
Provision for income taxes 630 754
Minority interest 36 303
Net Income 907 740
Dividend on convertible redeemable
preferred stock 240 240
Net Income Applicable to Common Stock $ 667 $ 500
Net Income Per Common and Common
Equivalent Share $ .07 $ .05
Weighted average number of common shares used
to compute earnings per share 10,165 10,119
The accompanying notes are an integral part of these financial statements.
OPTICAL COATING LABORATORY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the three months ended January 31, 1997 and 1996
(Amounts in thousands, except per share amounts)
1997 1996
OPERA- Cash Flows From Operations:
TIONS Cash received from customers $41,641 $42,911
Interest received 164 101
Cash paid to suppliers and employees (41,811) (37,568)
Cash paid to ESOP+ (31)
Interest paid (1,426) (2,892)
Income taxes paid, net of refunds (51) (4,633)
Net Cash Used For Operations (1,514) (2,081)
INVEST- Cash Flows From Investments:
MENTS Purchase of plant and equipment (3,078) (5,421)
Proceeds from sale-leaseback of
new equipment 5,900
Net Cash (Used For) Provided
By Investments (3,078) 479
FINANCING Cash Flows From Financing:
Proceeds from long-term debt 2,600
Proceeds from notes payable 8 154
Proceeds from exercise of stock options 96 198
Proceeds from note to minority stockholder 484
Repayment of long-term debt (481) (2,468)
Repayment of notes payable (418)
Payment of dividend on preferred stock (240) (240)
Payment of dividend on common stock (586) (571)
Net Cash Used For Financing (1,137) (327)
Effect of exchange rate changes on cash (242) (118)
Decrease in cash and short-term investments (5,971) (2,047)
Cash and short-term investments
at beginning of period 16,027 6,602
Cash and short-term investments
at end of period $ 10,056 $ 4,555
OPTICAL COATING LABORATORY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)
For the three months ended January 31, 1997 and 1996
(Amounts in thousands)
1997 1996
ADJUST- Reconciliation of Net Income To
MENTS Cash Flows From Operations:
Net income $ 907 $ 740
Adjustments to reconcile net
income to net cash
used for operations:
Depreciation and amortization 3,246 3,178
Minority interest in earnings of
Flex Products 36 303
Loss on disposal or abandonment
of equipment 42 2
Accrued postretirement health benefits 16 11
Deferred income tax liabilities 27 97
Other non-cash adjustments to net income 109 (82)
Change in:
Accounts receivable (4,011) (1,337)
Inventories (599) (883)
Income tax receivable 852 (1,589)
Deferred income tax assets (325) 531
Other current assets and other assets
and investments (546) (875)
Accounts payable, accrued expenses and
accrued compensation expenses (1,452) (2,406)
Deferred revenue 169 74
Income taxes payable 15 155
Total adjustments (2,421) (2,821)
Net Cash Used For Operations $(1,514) $(2,081)
The accompanying notes are an integral part of these financial statements.
OPTICAL COATING LABORATORY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY
(Unaudited)
For the three months ended January 31, 1997
(Amounts in thousands) Foreign
Common Stock Paid-in Retained Currency
Shares Amount Capital Earnings Translation
BALANCE AT NOVEMBER 1, 1996 9,761 $98 $47,219 $20,984 $ (51)
Shares issued to Employee Stock
Ownership Plan 15 159
Exercise of stock options,
including tax benefit and
shares issued to directors 15 107
Foreign currency translation
adjustment (875)
Net income 907
Dividend on preferred stock (240)
Dividend on common stock (586)
BALANCE AT JANUARY 31, 1997 9,791 $98 $47,485 $21,065 $(926)
The accompanying notes are an integral part of these statements.
OPTICAL COATING LABORATORY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three Months Ended January 31, 1997 and 1996
(Unaudited)
1. GENERAL
Optical Coating Laboratory, Inc. (OCLI) develops, manufactures and sells
thin film coated products. Thin film coatings control and enhance light by
altering the transmission, reflection and absorption of the various
wavelengths of light energy to achieve a desired effect such as anti-
reflection, shielding, conductivity or abrasion resistance. OCLI markets
and sells its products worldwide to original equipment manufacturers
(OEM's) who utilize thin film coated components or devices for optical and
electro-optical systems for computers, photocopiers, LCD desktop
projectors, scanners, instruments and satellites. OCLI sells its
Glare/Guard(R) ergonomic computer display products through distributors and
office supply retailers. Flex Products, Inc. (Flex Products), OCLI's 60%
owned subsidiary, develops and manufactures thin film coatings on plastic
film with a proprietary high speed process.
The Condensed Consolidated Balance Sheet as of January 31, 1997, the
Condensed Consolidated Statements of Income for the three month periods
ended January 31, 1997 and 1996, the Condensed Consolidated Statement of
Common Stockholders' Equity for the three month period ended January 31,
1997 and the Condensed Consolidated Statements of Cash Flows for the three
month periods ended January 31, 1997 and 1996 have been prepared by the
Company without audit. In the opinion of management, all adjustments
consisting of normal recurring accruals, necessary to present fairly the
financial position, results of operations and cash flows at January 31,
1997 and for all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed consolidated financial statements be read in conjunction with the
financial statements and notes included in the Company's Annual Report on
Form 10-K for the year ended October 31, 1996.
The results of operations for the period ended January 31, 1997 are not
necessarily indicative of the operating results anticipated for the full
year.
2. INVENTORIES
Inventories consisted of the following:
JANUARY 31, OCTOBER 31,
(Amounts in thousands) 1997 1996
Raw materials and supplies $7,804 $7,483
Work-in-process 8,813 8,797
Finished goods 2,378 2,421
Total inventories $18,995 $18,701
3. ACCRUED EXPENSES
Accrued expenses at January 31, 1997 and October 31, 1996 consisted of the
following:
JANUARY 31, OCTOBER 31,
(Amounts in thousands) 1997 1996
Workers' compensation reserve $ 695 $ 659
Ground water remediation reserve 759 659
Other accrued liabilities 5,648 5,248
$7,102 $6,566
4. LONG-TERM DEBT
Long-term debt, including current maturities, at January 31, 1997 and
October 31, 1996 consisted of the following:
JANUARY 31, OCTOBER 31,
(Amounts in thousands) 1997 1996
Unsecured senior notes. Interest
at 8.71% payable semiannually.
Principal payable in annual
installments of $3.6 million
from 1998 through 2002. $18,000 $18,000
Unsecured bank term loan. Variable
interest rates averaging 6.9%
at October 31, 1996, payable
quarterly. Principal payable
semiannually as follows:
Payment Dates Amounts
April 1997 $1,000,000
Each October
and April
thereafter $2,000,000 13,000 13,000
Mortgage payable. Interest at 8%.
Collateralized by a 72,000 sq. ft.
newly constructed building and related
land. Principal and interest payments
of $25,000 per month through 2011. 2,498 2,523
Mortgage payable. Interest at 7.5%.
Collateralized by a 65,000 sq. ft.
newly constructed building and related
land leased to Flex Products.
Principal and interest
payments of $28,000 per month
through 2011. 2,916 2,945
Land improvement assessment. Interest
at an average rate of 6.75%. Principal
and interest payable in semiannual
installments of $77,000 through 1998. 210 276
Scottish Development Agency (SDA) building
loan, with a conditional interest moratorium
from February 1, 1995 through January 31, 1998
with interest at 9.5% thereafter. Semiannual
principal payments of approximately $100,000
are payable through January 1998 with
subsequent payments of $331,000, comprising
principal and interest, through 2006.
Collateralized by the land and building of
the Company's Scottish subsidiary. 3,898 3,996
Notes payable to private parties in
connection with the purchase of
the Company's wholly-owned subsidiary
in Germany (MMG). Principal and interest
at 8% payable over ten years in quarterly
installments of approximately $420,000
through 2003. 5,490 6,188
Bank loans of MMG with interest rates
ranging from 4.5% to 8.0%.
Payable in semiannual and annual
installments through 2005.
Partly collateralized by mortgages
on MMG land and buildings
and liens on equipment. 3,378 3,760
Present value of obligations under
capital leases at an imputed interest
rate of 8.0% payable in monthly
installments through 2004. 61 81
49,451 50,769
Less current maturities (5,583) (4,981)
Total long-term debt,
net of current maturities $43,868 $45,788
The Company has a $30 million unsecured credit facility comprised of a $15
million term loan and a $15 million revolving line of credit. The revolving
line of credit carries a commitment fee of .375% per year on the unused
portion of the facility and expires on April 28, 2000. The Company has an
incremental credit facility to cover a surety letter for approximately $3.1
million issued to secure 50% of the Company's notes payable arising from
the purchase of MMG. The Company also has a letter of credit for
approximately $903,000 to satisfy the Company's workers' compensation self-
insurance requirements. The surety commitment and letter of credit
facilities carry a fee of 1.25% per year.
The Company's subsidiary in Scotland has a credit arrangement of up to
approximately $490,000 at market interest rates and has outstanding letters
of credit of approximately $330,000 to guarantee import duty. There were
no borrowings under the credit arrangement in fiscal years 1997 or 1996.
The Company's subsidiary in Germany has various credit facilities with
local banks totaling approximately $3.1 million which are used for working
capital requirements. These credit facilities are utilized as part of
normal local payment practices.
During 1996, the Company entered into three sale/lease-back arrangements
for a newly acquired continuous coating machine and related equipment and
for two newly acquired coating machines to be used in the manufacturing
operations of Flex Products. The lease terms are six years with monthly
payments totaling approximately $290,000 and buyout provisions at the end
of each lease.
The Company has certain financial covenants and restrictions under its bank
credit arrangements and the unsecured senior notes.
5. STOCK OPTIONS
During the first quarter of 1997, 364,300 options were granted under the
Company's incentive compensation and employee stock option plans. At
January 31, 1997, 2,147,883 shares are subject to outstanding options, of
which 1,148,304 options are exercisable. Options to purchase 393,829 shares
of common stock are available for future grants under the plans.
6. CONVERTIBLE REDEEMABLE PREFERRED STOCK
On February 25, 1997, 4,000 shares of the Company's 8% Series C Convertible
Redeemable Preferred Stock were converted into approximately 386,000 shares
of common stock at the conversion price of $10.50 per share.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND CHANGES IN FINANCIAL CONDITION
THE INFORMATION CONTAINED IN MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION INCLUDES FORWARD LOOKING
STATEMENTS WHICH ARE TYPICALLY IDENTIFIED BY THE WORDS "ANTICIPATES,"
"BELIEVES," "EXPECTS," "INTENDS," "FORECASTS," "PLANS," "FUTURE,"
"STRATEGY," OR WORDS OF SIMILAR IMPORT. VARIOUS IMPORTANT FACTORS THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN THE
FORWARD LOOKING STATEMENTS ARE IDENTIFIED BELOW. ACTUAL RESULTS MAY VARY
SIGNIFICANTLY BASED ON A NUMBER OF FACTORS INCLUDING, BUT NOT LIMITED TO,
PRODUCT DEVELOPMENT, COMMERCIALIZATION AND TECHNOLOGICAL DIFFICULTIES;
MANUFACTURING COSTS AND YIELD ISSUES ASSOCIATED WITH INITIATING PRODUCTION
AT NEW FACILITIES; THE IMPACT OF COMPETITIVE PRODUCTS AND PRICING; CHANGING
CUSTOMER REQUIREMENTS; AND THE CHANGE IN ECONOMIC CONDITIONS OF THE VARIOUS
MARKETS THE COMPANY SERVES.
RESULTS OF OPERATIONS
REVENUE. Revenue for the first quarter of fiscal 1997 was $45.7 million,
compared to revenues of $43.9 million in the first quarter of fiscal 1996.
1997 revenues were higher in the company's defense and aerospace business
for products used on communications satellites, in the Company's security
products business for products produced by the Company's 60% owned
subsidiary, Flex Products Inc. (Flex Products) and in the Company's display
products business for computer aftermarket products and products used in
projection display applications. Revenues for the company's office
automation business decreased in the first quarter of 1997 compared to the
prior year.
GROSS PROFIT. Gross profit for the first quarter of fiscal 1997 was $15.5
million or 33.9% of revenue compared to $14.4 million or 32.8% of revenue
for the first quarter of fiscal 1996. The 1997 gross profit improvement
was primarily due to increased sales of higher margin products in the
Company's defense and aerospace business, improvements in throughput and
yield of the Company's new continuous coating facility and other benefits
resulting from the Company's yield and cycle time improvement initiatives.
Gross profit was down for the Company's manufacturing operation in Germany
due to decreased demand for its office automation products and for the Flex
Products operation due to additional costs of bringing its new coating
machine online.
RESEARCH AND DEVELOPMENT. Research and development expenditures in the
first quarter of 1997 were $2.5 million compared to $2.4 million in 1996.
Research and development expenditures were higher in the Company's Flex
Products operation for the development of state-of-the-art coating
processes for use in its new coating machine and were lower for the rest of
the company due to the focus of technical resources on improvement of the
Company's currently existing products and processes.
SELLING AND ADMINISTRATIVE. Selling and administrative expenses in the
first quarter of fiscal 1997 were $10.3 million compared to $9.1 million
for the first quarter of 1996. The 1997 increase was primarily due to
allocation of resources to marketing initiatives in targeted product areas,
the accrual of bonuses in specific business areas for meeting or exceeding
targeted financial performance and additional legal expense for defending a
lawsuit with SICPA holding, S.A.
INCOME FROM OPERATIONS. As a result of the foregoing changes in revenue,
gross profit and operating expenses, the Company's income from operations
was $2.5 million for the first quarter of fiscal 1997 compared to $2.6
million for the first quarter of fiscal 1996.
INTEREST INCOME AND EXPENSE. Interest income for the first quarter of
fiscal 1997 was $175,000 compared to interest income of $74,000 for the
first quarter of fiscal 1996. Interest expense, net of capitalized
interest, for the first quarter of 1997 was $1.1 million compared to
$911,000 for the first quarter of fiscal 1996.
INCOME TAXES AND MINORITY INTEREST. The effective income tax rate was 40%
for the first quarter of 1997 and 42% for the first quarter of 1996. The
1997 decrease is due to the benefit of business tax credits. Minority
interest, representing the 40% share of Flex Products' net income accruing
to the minority stockholder, was $36,000 in 1997 compared to $303,000 for
the first quarter of 1996.
NET INCOME. The Company had net income applicable to common stock of
$667,000, or $.07 per share, for the first quarter of fiscal 1997 compared
to $500,000, or $.05 per share, for the first quarter of fiscal 1996
FINANCIAL CONDITION
In 1997, the Company's cash and short-term investment position decreased by
$6.0 million. $1.5 million was used for operations, $3.1 million was
invested in plant and equipment, $826,000 was used to pay dividends and
$481,000 was used to pay long-term debt during the quarter.
In 1997, the Company's working capital, excluding cash and short-term
investments increased $7.1 million, primarily due to increased accounts
receivable (resulting from shipments late in the quarter), decreased
accounts payable and decreased accrued compensation (resulting from payment
of severance that had been accrued at the end of fiscal 1996).
During the first quarter of 1997, as part of an innovative program to
modernize its business processes, the Company purchased a state-of-the-art
Enterprise Resource Planning System. The estimated cost of the system,
including hardware, software, training and consulting, is approximately
$4 million to $5 million.
Management believes that the cash on hand at January 31, 1997, cash
anticipated to be generated from future operations and the available funds
from revolving credit arrangements will be sufficient for the Company to
meet its near-term working capital needs, capital expenditures, debt
service requirements and payment of dividends as declared.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1996
Except for historical information contained in this report, matters
discussed in this report are forward-looking statements that involve risks
and uncertainties. Actual results may vary significantly based on a number
of factors including, but not limited to, product development,
commercialization and technological difficulties, manufacturing costs and
yield issues associated with initiating production at new facilities, the
impact of competitive products and pricing, changing customer requirements
and the change in economic conditions of the various markets the Company
serves.
INDEPENDENT ACCOUNTANTS' REVIEW
The January 31, 1997 condensed consolidated financial statements included
in this filing on Form 10-Q have been reviewed by Deloitte & Touche LLP
(which makes reference to the report of other accountants), independent
accountants, in accordance with established professional standards and
procedures for such a review.
The report of Deloitte & Touche LLP commenting on their review follows.
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors
and Stockholders of
Optical Coating Laboratory, Inc.
Santa Rosa, California
We have reviewed the accompanying condensed consolidated balance sheet of
Optical Coating Laboratory, Inc. and subsidiaries as of January 31, 1997,
and the related condensed consolidated statements of income and cash flows
for the three-month periods ended January 31, 1997 and 1996 and the related
condensed consolidated statement of stockholders' equity for the three-
month period ended January 31, 1997. These financial statements are the
responsibility of the Company's management. We were furnished with the
report of other accountants on their review of the interim financial
information of Flex Products, Inc. (a consolidated subsidiary), whose total
assets constituted 11% of consolidated total assets at January 31, 1997 and
whose total revenues constituted 17% of consolidated total revenues for the
three-month period ended January 31, 1997.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists of applying analytical review procedures to
financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit in
accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our review and the report of other accountants, we are not aware
of any material modifications that should be made to such condensed
consolidated financial statements for them to be in conformity with
generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Optical Coating Laboratory,
Inc. and subsidiaries as of October 31, 1996, and the related consolidated
statements of income, stockholders' equity, and cash flows for the year
then ended (not presented herein); and in our report dated December 18,
1996, we expressed an unqualified opinion on those consolidated financial
statements based on our audit and the report of other auditors on their
audit of Flex Products, Inc. (a consolidated subsidiary). In our opinion,
based on our audit, and the report of other auditors, the information set
forth in the accompanying condensed consolidated balance sheet as of
October 31, 1996 is fairly stated, in all material respects, in relation to
the consolidated balance sheet from which it has been derived.
Deloitte & Touche LLP
San Jose, California
February 28, 1997
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following are filed as Exhibits to this Quarterly
Report. The numbers refer to the Exhibit Table of Item 601 of
Regulation S-K.
(2) None
(3) None
(4) None
(10) None
(11)* Computation of earnings per share for the three
months ended January 31, 1997 and 1996.
(15)* Letter of Deloitte & Touche LLP regarding
unaudited interim financial information.
(18) None
(19) None
(22) None
(23) None
(24) None
(27)* Financial Data Schedule for the three months ended
January 31, 1997.
* Items not previously filed are designated by an asterisk.
(b) Reports on Form 8-K filed for the three months ended January 31,
1997.
None
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 and in the capacity indicated.
OPTICAL COATING LABORATORY, INC.
(Registrant)
March 17, 1997 /s/ JOSEPH C. ZILS
Date Joseph C. Zils
Vice President, General Counsel
and Acting Chief Financial Officer
(Principal Financial Officer)
OPTICAL COATING LABORATORY, INC. AND SUBSIDIARIES
EXHIBIT 11. COMPUTATION OF EARNINGS PER SHARE
For the three months ended January 31, 1997 and 1996
(Amounts in thousands, except per share data) 1997 1996
PRIMARY SHARES:
Average common shares outstanding 9,777 9,514
Common equivalent shares outstanding 388 605
10,165 10,119
Net income $907 $ 740
Less dividend on preferred stock (240) (240)
Net income applicable to common stock $667 $ 500
Net income per common and common
equivalent share, primary $ .07 $ .05
FULLY DILUTED SHARES:
Average common shares outstanding 9,777 9,514
Common equivalent shares outstanding 388 605
Potential dilution of preferred stock 1,143 1,143
11,308 11,262
Net income applicable to common stock $ 667 $ 500
Add back dividend on preferred stock 240 240
Net income for calculating fully diluted
earnings per share $907 $ 740
Net income per common and common
equivalent share, fully diluted $ .08 $ .07
NOTE: Fully diluted earnings per share do not result in dilution of
three percent or more or are anti-dilutive and, therefore, are not
separately presented in the consolidated statements of income.
EXHIBIT 15. LETTER RE UNAUDITED INTERIM FINANCIAL INFORMATION
To the Board of Directors and Stockholders
of Optical Coating Laboratory, Inc.
Santa Rosa, California
We have reviewed, in accordance with standards established by the American
Institute of Certified Public Accountants, the unaudited interim financial
information of Optical Coating Laboratory, Inc. and subsidiaries for the
periods ended January 31, 1997 and 1996 as indicated in our report (which
report makes reference to the report of other accountants), dated February
28, 1997. Because we did not perform an audit, we expressed no opinion on
that information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended January 31, 1997, is
incorporated by reference in Registration Statements No. 33-41050,
No. 33-26271, No. 33-12276, No. 33-48808, No. 33-65132, and No. 33-60891 on
Forms S-8, Registration Statement No. 33-61177 and No. 33-65319 on
Form S-3.
We are also aware that the aforementioned report, pursuant to Rule 436(c)
under the Securities Act, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that
Act.
Deloitte & Touche LLP
San Jose, California
March 13, 1997
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67,722
0
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</TABLE>
