FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: September 30, 1999
Commission File Number: 0-18393
WINLAND ELECTRONICS, INC.
(Exact name of small business issuer as specified in its charter)
Minnesota 41-0992135
(state or other juris- (I.R.S. Employer
diction of incorporation) Identification No.)
1950 Excel Drive, Mankato, Minnesota 56001
(Address of principal executive offices)(zip code)
Registrant's telephone number, including area code:
(507) 625-7231
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: As of November 8, 1999, the
Registrant had 2,896,631 shares of Common Stock, $.01 par value, outstanding.
Transitional Small Business Disclosure Format (check one):
Yes No x
<PAGE>
PART I-FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
WINLAND ELECTRONICS, INC.
BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS September 30, December 31,
1999 1998
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 178,627 $ 20,656
Accounts Receivable, Net 1,806,410 2,482,507
Other Receivables 0 47,454
Inventories 3,684,381 3,763,939
Prepaid Expenses 133,271 62,882
Deferred Taxes 145,400 124,000
------------ ------------
Total Current Assets 5,948,089 6,501,438
------------ ------------
OTHER ASSETS:
Patent and Trademarks, net of amortization 4,401 5,505
------------ ------------
Property and Equipment, at cost:
Land and Land Improvements 272,901 270,009
Building 2,980,268 2,497,067
Machinery and Equipment 3,180,182 3,001,256
Data Processing Equipment 1,231,287 842,352
Office Furniture and Equipment 346,395 267,472
------------ ------------
Total 8,011,033 6,878,156
Less Accumulated Depreciation (2,317,275) (1,754,500)
------------ ------------
Property and Equipment, Net of Depreciation 5,693,758 5,123,656
------------ ------------
TOTAL ASSETS $ 11,646,248 $ 11,630,599
------------ ------------
</TABLE>
<PAGE>
WINLAND ELECTRONICS, INC.
BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY September 30, December 31,
1999 1998
----------- -----------
<S> <C> <C>
CURRENT LIABILITIES:
Notes Payable $ 1,577,227 $ 1,629,227
Current Maturities of Long Term Debt 618,527 573,183
Accounts Payable 888,002 1,263,326
Accrued Expenses:
Compensation 442,350 310,136
Other 62,288 47,757
Income Taxes Payable 163,657 228,843
----------- -----------
Total Current Liabilities 3,752,051 4,052,472
----------- -----------
LONG TERM LIABILITIES:
Deferred Revenue 203,892 209,084
Long Term Debt, Less Current Maturities 3,121,268 3,429,975
Deferred Taxes 111,000 111,000
----------- -----------
TOTAL LONG TERM LIABILITIES 3,436,160 3,750,059
----------- -----------
SHAREHOLDERS' EQUITY:
Common Stock 28,966 28,867
Additional Paid-In Capital 2,160,591 2,142,008
Retained Earnings 2,268,480 1,657,193
----------- -----------
Total Shareholders' Equity 4,458,037 3,828,068
----------- -----------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $11,646,248 $11,630,599
----------- -----------
</TABLE>
<PAGE>
WINLAND ELECTRONICS, INC.
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1999 1998
----------- -----------
<S> <C> <C>
NET SALES $ 4,176,717 $ 4,117,831
COST OF GOODS SOLD 3,432,756 3,238,929
----------- -----------
Gross Profit 743,961 878,902
OPERATING EXPENSES:
General and Administrative 285,929 299,462
Marketing 103,552 69,651
Research and Development 227,237 179,264
----------- -----------
Total Operating Expenses 616,718 548,377
----------- -----------
OPERATING INCOME 127,243 330,525
----------- -----------
OTHER INCOME (EXPENSE), NET 36,373 48,461
INTEREST EXPENSE (94,222) (139,140)
----------- -----------
(57,849) (90,679)
----------- -----------
NET INCOME BEFORE INCOME TAXES 69,394 239,846
----------- -----------
PROVISION FOR INCOME TAXES 22,000 83,946
----------- -----------
NET INCOME $ 47,394 $ 155,900
BASIC EARNINGS PER SHARE $ 0.016 $ 0.055
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 2,896,631 2,838,555
DILUTED EARNINGS PER SHARE $ 0.016 $ 0.054
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING, INCLUDING POTENTIALLY
DILUTIVE SHARES 2,998,580 2,883,244
</TABLE>
<PAGE>
WINLAND ELECTRONICS, INC.
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1999 1998
------------ ------------
<S> <C> <C>
NET SALES: $ 15,445,778 $ 12,810,906
COST OF GOODS SOLD 12,184,265 10,055,376
------------ ------------
Gross Profit 3,261,513 2,755,530
OPERATING EXPENSES:
General and Administrative 1,177,621 942,552
Marketing 294,366 207,009
Research and Development 599,540 529,063
------------ ------------
Total Operating Expenses 2,071,527 1,678,624
------------ ------------
OPERATING INCOME 1,189,986 1,076,906
------------ ------------
OTHER INCOME (EXPENSE), NET 98,136 140,480
INTEREST EXPENSE (318,835) (407,060)
------------ ------------
(220,699) (266,580)
------------ ------------
NET INCOME BEFORE INCOME TAXES 969,287 810,326
------------ ------------
PROVISION FOR INCOME TAXES 358,000 283,614
------------ ------------
NET INCOME $ 611,287 $ 526,712
BASIC EARNINGS PER SHARE $ 0.211 $ 0.186
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 2,891,962 2,835,491
DILUTED EARNINGS PER SHARE $ 0.203 $ 0.183
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING, INCLUDING POTENTIALLY
DILUTIVE SHARES 3,014,663 2,880,180
</TABLE>
<PAGE>
WINLAND ELECTRONICS, INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998
CASH FLOW FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net Income $ 611,287 $ 526,712
Adjustments to reconcile net income to net cash provided by
(used in) operating activeties:
Depreciation and Amortization 569,759 471,184
Loss on Disposal of Equipment -- 3,633
Deferred Taxes (21,400) --
Changes in Assets and Liabilities
(Increase) Decrease in:
Accounts Receivable 676,097 (686,201)
Other Receivables 47,454 --
Inventories 79,558 (885,092)
Prepaid Expenses (70,389) 41,015
Increase / (Decrease) in:
Accounts Payable (375,324) 6,042
Accrued Expenses and Other 141,553 144,071
Income Taxes Payable (65,186) 274,388
----------- -----------
Net Cash Provided By (Used In) in Operating Activities 1,593,409 (104,248)
----------- -----------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchases of Property and Equipment (1,138,757) (350,920)
Proceeds from sale of Equipment -- 484
----------- -----------
Net Cash Used in Investing Activities (1,138,757) (350,436)
----------- -----------
CASH FLOW FROM FINANCING ACTIVITIES:
Net Borrowings (Repayments) on Revolving Credit Agreement (52,000) 721,000
Principal Payments on Long-term Borrowings, Including
Capital Lease Obligations (490,148) (413,307)
Proceeds From Long Term Debt 226,785 115,000
Proceeds From Issuance of Common Stock 18,682 13,222
----------- -----------
Net Cash Provided by (used in) Financing Activities (296,681) 435,915
----------- -----------
Net Decrease in Cash 157,971 (18,769)
CASH
Beginning 20,656 23,542
----------- -----------
End $ 178,627 $ 4,773
----------- -----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash Payments For:
Interest $ 320,287 $ 413,055
Income Taxes 445,241 9,226
----------- -----------
Supplemental Schedule of Noncash Investing and Financing Activities
Capital Lease Obligations Incurred for the Purchase of Equipment $ 226,785 $ 421,980
----------- -----------
</TABLE>
<PAGE>
WINLAND ELECTRONICS, INC.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
September 30, 1999
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared by the
Company in accordance with generally accepted accounting principles, pursuant to
the rules and regulations of the Securities and Exchange Commission. In
management's opinion all adjustments necessary to a fair presentation of the
results for the interim period have been reflected in the interim financial
statements. The results of operations for any interim period are not necessarily
indicative of the results for a full year. Except for those described in note 2
below, all other adjustments are of a normal recurring nature. Certain
information and footnote disclosures normally included in financial statements
have been condensed or omitted. Such disclosures are those that would
substantially duplicate information contained in the most recent audited
financial statements of the Company, such as significant accounting policies,
lease and license commitments and stock options. Management presumes that users
of the interim statements have read or have access to the audited financial
statements included in the Company's most recent annual report on Form 10-KSB.
NOTE 2 - ALLOWANCE FOR DOUBTFUL ACCOUNTS
The Company maintains an allowance for doubtful accounts based on the aging of
accounts receivable. The balance of the allowance for doubtful accounts is
$154,500 at September 30, 1999 and $154,800 at December 31, 1998.
NOTE 3 - INVENTORY
Major components of inventory at September 30, 1999 and December 31, 1998 are as
follows:
September 30, December 31,
1999 1998
---------- ----------
Raw Materials $2,802,291 $2,676,738
Work In Process 381,628 565,229
Finished Goods 500,462 521,972
---------- ----------
Total $3,684,381 $3,763,939
---------- ----------
NOTE 4 - FINANCING ARRANGEMENTS AND LONG -TERM DEBT
Financing Arrangement: The Company has a $3,500,000 revolving line-of -credit
agreement through August 31, 2000. Interest on advances accrues at the bank's
reference rate (8.25 percent at September 30, 1999), and is due monthly.
Advances are due on demand, are secured by substantially all assets of the
Company, and are subject to a defined borrowing base equal to 80 percent of
qualified accounts receivable and 60 percent of inventories. In addition, the
agreement contains certain reporting and operating covenants. Advances
outstanding on the revolving line-of-credit agreement at September 30, 1999 and
December 31, 1998, were $1,577,227 and $1,629,227, respectively.
<TABLE>
<CAPTION>
Long-term Debt: The following is a summary of long-term debt: September 30, December 31,
1999 1998
---------- ----------
<S> <C> <C>
6.941% note payable due in monthly installments of $13,117,
including interest, to January 1, 2000, when the remaining
balance is payable, secured by property and equipment. $1,478,491 $1,522,723
4% note payable due in monthly installments of $3,030,
including interest, to January 1, 2000, when the remaining
balance is payable, secured by property and equipment. 414,579 430,761
Note payable in monthly installments of $8,334, plus interest at
prime plus 0.75%, to October 2001, secured by accounts
receivable. 208,351 283,316
8.75% note payable due in monthly installments of $1,400,
including interest, to July 2003, secured by equipment. 166,327 167,660
Capitalized lease obligations, due in various monthly
installments, with interest ranging from 8.95% to 9.5%, to
October 2000, secured by equipment. 50,015 130,584
</TABLE>
<PAGE>
WINLAND ELECTRONICS, INC.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
September 30, 1999
(UNAUDITED)
NOTE 4 - FINANCING ARRANGEMENTS AND LONG -TERM DEBT(Continued)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
---------- ----------
<S> <C> <C>
Capitalized lease obligations, due in various monthly
installments, with interest ranging from 8.5% to 9.96%, to
August 2001, secured by equipment. $ 254,493 $ 342,219
Capitalized lease obligations, due in various monthly
installments, with interest ranging from 8.88% to 10.04%, to
October 2002, secured by equipment. 471,482 342,389
Capitalized lease obligations, due in various monthly
installments, with interest ranging from 8.5% to 9.3%, to April
2003, secured by equipment. 203,217 235,804
Capitalized lease obligations, due in monthly installments of
$9,399, with interest at 8.97%, to November 2004, secured by
equipment. 492,840 547,702
---------- ----------
3,739,795 4,003,158
Less current maturities 618,527 573,183
---------- ----------
Total Long-term Debt $3,121,268 3,429,975
---------- ----------
</TABLE>
NOTE 5 - STOCK OPTIONS AND WARRANTS
As of September 30, 1999, options to purchase an aggregate of 209,000 shares of
the Company's common stock were outstanding under the Company's 1989 Stock
Option Plan (the "1989 Plan"). As of September 30, 1999, options to purchase
154,800 shares granted under the 1989 Plan were exercisable. The exercise prices
of all outstanding options under the 1989 Plan range from $1.75 to $1.925 per
share. Options to purchase 196,000 shares were outstanding under the 1997 Stock
Option Plan (the "1997 Plan") as of September 30, 1999, of which 84,750 shares
were exercisable. The exercise prices of options under the 1997 Plan range from
$1.75 to $2.938 per share.
As of September 30, 1999, warrants to purchase an aggregate of 37,000 shares of
the Company's Common Stock at $2.20 per share were outstanding, all of which are
currently exercisable.
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
Three and nine months ended September 30, 1999 v.
Three and nine months ended September 30, 1998
Net Sales:
The Company recorded net sales of $4,176,717 for the three months ended
September 30, 1999, an increase of 1.4%, compared to $4,117,831 for the same
period in 1998. Net sales of $15,445,778 were recorded for the first nine months
of 1999, an increase of 20.6% from net sales of $12,810,906 for the same period
in 1998. The increase in sales for the three months ended September 30, 1999
arose primarily from increases in security/industrial product sales. Sales to
OEM customers were down slightly for the same period when compared to 1998.
Increased sales for the first nine months of 1999 were due to increased sales to
OEM customers, as well as increased sales of security/industrial products.
Major OEM customers have given the Company purchase commitments for delivery in
the remainder of 1999 and 2000 in excess of $12.9 million. Such commitments
include an $8.5 million purchase agreement from Select Comfort Corporation for
delivery in 2000. The Company also has several smaller agreements with various
OEM customers to be fulfilled in late 1999 and 2000.
The Company has continued to position itself as a full service designer and
manufacturer of custom controls and assemblies for OEM customers. The loss of
any of the Company's significantly OEM customers could potentially have an
adverse effect on the Company's short-term results.
Gross Profits:
Gross profit was $743,961 or 17.8% of net sales for the three months ended
September 30, 1999, compared to $878,902 or 21.3% of net sales for the same
period in 1998. For the first nine months of 1999, the gross profit was
$3,261,513 or 21.1% of net sales, compared to $2,755,530 or 21.5% of net sales
for the same period in 1998. Gross profits as a percentage of sales declined for
both the third quarter and the first nine months of 1999 compared to 1998. This
decline relates primarily to additional fixed manufacturing costs, including (i)
indirect costs incurred for Y2K readiness, (ii) additional staffing in the
manufacturing area needed to support increased production levels, (iii)
additional costs associated with the purchase of capital manufacturing test
equipment to increase speed and reliability of in-process and final product
testing, and (iv) direct and indirect costs associated with ISO 9001
registration, which the Company achieved in the third quarter of 1999.
Operating Expense:
General and administrative expense was $285,929 or 6.8% of net sales for the
three months ended September 30, 1999, compared to $299,462 or 7.3% of net sales
for the same period in 1998. General and administrative expense for the first
nine months of 1999 was $1,177,621 or 7.6% of net sales, compared to $942,552 or
7.4% of net sales for the same period in 1998. The decrease in general and
administrative expense for the third quarter of 1999 was primarily attributed to
reduced bonus allowances resulting from lower profits during the quarter.
Several factors contributed to the increase in general and administrative
expense for the first nine months of 1999, including indirect costs related to
Y2K readiness, additional expenses associated with completion of a 5,000 square
foot addition to the current facility, increased professional fees, and
increased staff expenses needed to support the growth of the organization, and
to aid in ISO 9001 registration and continued monitoring to ensure compliance
with certification requirements.
<PAGE>
Marketing and customer relations expense was $103,552 or 2.5% of net sales for
the three months ended September 30, 1999, compared to $69,651 or 1.7% of net
sales for the same period in 1998. For the first nine months of 1999, the
marketing and customer relations expense was $294,366 or 1.9% of net sales,
compared to $207,009 or 1.6% of net sales for the same period in 1998. The
increase in marketing and customer relations expense for both the third quarter
and first nine months of 1999 was primarily due to the addition of marketing and
customer relations personnel necessary to introduce a new line of direct current
motor controls (dc motor controls) and to continue to provide appropriate levels
of service to OEM and security/industrial customers, as well as to assist in
securing new, long-term OEM relationships. Research and development expense was
$227,237 or 5.4% of net sales for the third quarter of 1999, compared to
$179,264 or 4.4% of net sales for the same period in 1998. For the first nine
months of 1999, research and development expense was $599,540 or 3.9% of net
sales, compared to $529,063 or 4.1% of net sales for the same period in 1998.
Although as a percentage of net sales, research and development expense
increased for the third quarter of 1999 and declined for the first nine months
of 1999, actual expenses increased $47,973 and $70,477 for the three and nine
months ending September 30, 1999 compared to 1998. The research and development
staff continues to concentrate efforts on design and support services for the
Company's OEM customers, as well as research and design of possible new product
designs, including the new dc motor control product line.
Interest Expense:
Interest expense was $94,222 or 2.3% of net sales for the three months ended
September 30, 1999, compared to $139,140 or 3.4% of net sales for the same
period in 1998. For the first nine months of 1999, interest expense was $318,835
or 2.1% of net sales, compared to $407,060 or 3.2% of net sales for the same
period in 1998. The decline in interest expense both in actual dollars and as a
percentage of sales primarily relates to a reduction of the interest rate and
lower outstanding balances on the revolving line of credit, due to reinvesting
of Company profits. The interest rate on the revolving credit agreement was also
reduced from 1/2 of a percent over the prime rate for the first nine months of
1998 to the prime rate for the first nine months of 1999.
Net Earnings:
The Company reported net income of $47,394 or $0.016 per diluted share for the
third quarter of 1999, compared to $155,900 or $0.054 per diluted share for the
same period in 1998. Net income rose 16.1% to $611,287 or $0.0.203 per diluted
share for the first nine months of 1999, compared to $526,712 or $0.183 per
diluted share for the same period in 1998.
The Company believes inflation has not significantly affected its results of
operations.
Liquidity and Capital Resources
The current ratio on September 30, 1999 was 1.59 to 1, compared to 1.60 to 1 on
December 31, 1998. Working capital on September 30, 1999 was $2,196,038 compared
to $2,448,966 on December 31, 1998. The decrease in working capital primarily
relates to decreases in accounts receivable and inventories, as well as a
reduction in accounts payable.
The Company has a revolving credit agreement with the Norwest Bank Minnesota
South N.A. ("Norwest"), with a maximum loan limit of $3,500,000, subject to
additional limitations set forth in the credit agreement. The interest rate per
annum on the revolving credit agreement is equal to the reference rate (8.25% on
September 30, 1999). On September 30, 1999, advances outstanding on the
revolving line of credit equaled $1,577,227. The Company's management believes
that capital available through the current credit agreement, together with cash
flows from operations, will be sufficient to meet the Company's capital needs in
the near future.
<PAGE>
The Company completed a 5000 square foot addition to the facility in May of
1999. Financing for the addition has been secured, including a mortgage loan
with the Norwest Bank for $363,700 and a $100,000 loan from the Minnesota
Investments Fund through the City of Mankato.
Year 2000:
Year 2000 Background
The Company's overall goal is to be Year 2000 compliant. To accomplish this
goal, the Company has been actively addressing the issue with respect to both
its information technology (IT) and non-IT systems, as well as its business
relationships with key third parties.
The Company began addressing the Year 2000 issue in 1996 using a multi-step
approach, including inventory and assessment, remediation and testing, and
contingency planning. The Company began by assessing its internal computer
systems, including their components and machinery, that were susceptible to
system failure or processing errors as a result of the Year 2000 issue. This
phase is substantially complete, and changes or updates have been made to cure
any known issues to the extent possible.
The Company's Year 2000 efforts have also included assessment of "embedded"
systems (such as automated systems and telephone systems). In 1998, the Company
hired an outside consultant to assist in the assessment and remediation phases
of handling the Year 2000 issue. With the help of such consultant, each
department of the Company has taken action to assess and fix any foreseen
issues. The Company has also continued to communicate with certain key third
parties, including suppliers, distributors, and customers, in order to determine
the extent to which the Company is vulnerable to those third parties' failure to
remediate their own Year 2000 issues. The Company has received written or oral
assurances from several key third parties. The Company will continue to monitor
and request updates from such third parties through early 2000, but it cannot
predict the actual outcome of other companies' remediation efforts.
Year 2000 Costs
To date, the Company estimates it has spent $20,000, including direct and
indirect expenses relating to Y2K readiness. As the Company continues to monitor
the Y2K situation, it does not anticipate any material additional expenses.
Risk Assessment
At this time, the Company believes that its most reasonably likely worst case
scenario is that the Company and/or its key customers could experience minor
disruptions. The Company believes the biggest risk relates to the readiness of
mission critical providers and customers. In the event that disruptions do
occur, the Company does not expect that they would have a material adverse
effect on the Company's financial condition and results of operations. Due to
the complex issues surrounding Year 2000 and other significant business issues,
however, it is difficult to predict outcomes and resulting consequences that
could have a material adverse impact on the Company's results of operations,
financial condition and cash flows.
Contingency Plans
Each of the Company's major departments has prepared a contingency plan in the
event certain Year 2000 issues cannot be resolved by December 1999 or by other
potentially troublesome dates, including February 29, 2000. Such plans are
designed so that the Company's critical business processes can be expected to
continue to function on January 1, 2000 and beyond.
Cautionary Statements:
As provided for under the Private Securities Litigation Reform Act of 1995, the
Company wishes to caution investors that the following important factors, among
others, in some cases have affected and in the future could affect the Company's
actual results of operations and cause such results to differ materially from
those anticipated in forward-looking statements made in this document by or on
behalf of the Company.
The Company derives a significant portion of its revenues from a limited number
of major OEM customers which are not subject to any long-term contracts with the
Company. If any major customer should for any reason stop doing business with
the Company, the Company's business would be significantly adversely affected.
Some of the Company's key customers are not large well-established companies,
and the business of each customer is subject to various risks such as market
acceptance of new products and continuing availability of financing. To the
extent that the Company's customers encounter difficulties, or the Company is
unable to meet the demands of its OEM customers, the Company could be adversely
affected.
The accuracy of the Company's belief that its current capital resources will be
sufficient to fund current and anticipated business operations in the near
future depends, in part, on meeting anticipated revenue goals, operating
efficiencies and effective expense management, in addition to general and
competitive conditions.
The impact of Year 2000 issues on the Company's business depends on the
accuracy, reliability and effectiveness of the Company's and its suppliers' and
customers' assessment and remediation of Year 2000 issues. There can be no
assurance that the Company's efforts will result in complete resolution of Year
2000 issues in order to prevent a material effect on its critical business
systems.
<PAGE>
PART II-OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) The exhibit to this reports is:
27.1 Financial Data Schedule (included in electronic
version only)
(b) No reports on Form 8-K were filed during the quarter ended
September 30, 1999
<PAGE>
SIGNATURES
Pursuant to the requirement 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.
WINLAND ELECTRONICS, INC.
Dated: November __, 1999 By: /s/ W. K. Hankins
William K. Hankins,
Chief Executive Officer and
Chief Financial Officer
(Principal Executive Officer
and Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 178,627
<SECURITIES> 0
<RECEIVABLES> 1,960,910
<ALLOWANCES> 154,500
<INVENTORY> 3,684,381
<CURRENT-ASSETS> 5,948,089
<PP&E> 8,011,033
<DEPRECIATION> 2,317,275
<TOTAL-ASSETS> 11,646,248
<CURRENT-LIABILITIES> 3,752,051
<BONDS> 1,893,070
28,966
0
<COMMON> 0
<OTHER-SE> 4,429,071
<TOTAL-LIABILITY-AND-EQUITY> 11,646,248
<SALES> 15,445,778
<TOTAL-REVENUES> 15,543,914
<CGS> 12,184,265
<TOTAL-COSTS> 14,255,792
<OTHER-EXPENSES> 318,835
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 318,835
<INCOME-PRETAX> 969,287
<INCOME-TAX> 358,000
<INCOME-CONTINUING> 611,287
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 611,287
<EPS-BASIC> 0.211
<EPS-DILUTED> 0.203
</TABLE>
