<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/ x / Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended October 31, 1995, or
/ / Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission File No. 0-16115
AIRSENSORS, INC.
----------------
(Exact name of registrant as specified in its charter)
Delaware 91-1039211
------------------------ ---------------------
(State of Incorporation) IRS Employer I.D. No.
16804 Gridley Place, Cerritos, CA 90703
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 860-6666
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No
------ ------
Number of shares outstanding of each of the issuer's classes of common
stock, as of November 30, 1995:
5,649,869 shares of Common Stock, $.001 par value per share
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
AIRSENSORS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
-----------
October 31, April 30,
ASSETS 1995 1995
- ------ ----------- -----------
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 94,286 $ 65,489
Accounts receivable 7,412,008 5,549,550
Less allowance for doubtful accounts 160,302 153,802
----------- -----------
Net accounts receivable 7,251,706 5,395,748
Inventories:
Raw materials and parts 5,430,565 4,720,035
Work-in-process 870,099 495,132
Finished goods 5,531,111 2,158,493
----------- -----------
Total inventories 11,831,775 7,373,660
Other current assets 457,010 791,209
----------- -----------
Total current assets 19,634,777 13,626,106
Equipment and leasehold improvements:
Dies, molds and patterns 2,838,167 2,419,448
Machinery and equipment 4,554,570 4,197,209
Office furnishings and equipment 2,415,910 1,939,757
Leasehold improvement 1,955,616 1,620,767
----------- -----------
11,764,263 10,177,181
Less accumulated depreciation and amortization 6,269,437 5,767,565
----------- -----------
Net equipment and leasehold improvements 5,494,826 4,409,616
Intangibles arising from acquisition 7,956,050 5,701,916
Less accumulated amortization 2,567,305 2,449,757
----------- -----------
Net intangibles arising from acquisition 5,388,745 3,252,159
Other assets 952,781 821,255
----------- -----------
$31,471,129 $22,109,136
=========== ===========
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AIRSENSORS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Continued)
-----------
October 31, April 30,
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1995
- ------------------------------------ ----------- -----------
(unaudited)
<S> <C> <C>
Current liabilities:
Notes payable $ 49,243 $ 406,413
Accounts payable 3,242,382 2,200,335
Accrued payroll obligations 1,258,492 1,248,957
Other accrued expenses 2,405,601 1,255,042
Current portion of long-term notes 681,600 -
----------- -----------
Total current liabilities 7,637,318 5,110,747
Line of credit 1,500,000 1,000,000
Term Loan - Bank of America NT&SA 1,640,000 -
Term Loan - DEPA Holding B.V. 2,427,124 -
Other Long Term Liabilities 1,908,440 855,446
Commitments and contingencies - -
Minority Interest 77,628 -
Stockholders' equity:
1993 Series 1 Preferred Stock, $0.01 par value,
5,950 shares authorized, issued and
outstanding $5,950,000 liquidation value 5,650,000 5,650,000
Common stock, $.001 par value, authorized
25,000,000 shares; 5,648,203 issued and
outstanding at October 31, 1995
(5,641,370 at April 30, 1995) 5,650 5,641
Additional paid-in capital relating to
common stock 28,704,445 28,660,181
Deficit (18,079,476) (19,172,879)
----------- -----------
Total stockholders' equity 16,280,619 15,142,943
----------- -----------
$31,471,129 $22,109,136
=========== ===========
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AIRSENSORS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
---------
Three Months Ended Six Months Ended
October 31, October 31,
----------------------- -----------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue:
Product sales $10,401,789 $10,670,279 $22,197,914 $20,771,691
Contract revenue 982,239 365,924 1,323,510 521,340
----------- ----------- ----------- -----------
Net revenue 11,384,028 11,036,203 23,521,424 21,293,031
Costs and expenses:
Cost of sales 7,105,114 7,127,606 14,716,289 13,704,802
Research and
development expense 2,015,903 1,425,411 3,795,680 2,712,655
Selling, general and
administrative expense 1,483,415 1,534,323 3,315,655 3,139,420
----------- ----------- ----------- -----------
Total costs and expenses 10,604,432 10,087,340 21,827,624 19,556,877
----------- ----------- ----------- -----------
Operating income 779,596 948,863 1,693,800 1,736,154
Financing Charges 85,302 85,026 161,262 150,626
----------- ----------- ----------- -----------
Income before income taxes 694,294 863,837 1,532,538 1,585,528
Provision for income taxes 29,000 141,316 128,000 239,749
----------- ----------- ----------- -----------
Net income 665,294 722,521 1,404,538 1,345,779
Dividends on preferred stock 154,948 132,636 311,135 255,354
----------- ----------- ----------- -----------
Net income applicable
to common stock $ 510,346 $ 589,885 $ 1,093,403 $ 1,090,425
=========== =========== =========== ===========
Net income per share $0.09 $0.09 $0.19 $0.18
=========== =========== =========== ===========
Number of shares used in
per share calculation 6,637,629 6,556,166 6,639,966 6,547,117
=========== =========== =========== ===========
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AIRSENSORS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
---------------
Six Months Ended
October 31,
------------ ------------
1995 1994
------------ ------------
<S> <C> <C>
Net cash provided by operating activities: $ 1,445,423 $ 784,698
Cash flows from investing activities:
Purchase of equipment and leasehold
improvements (800,653) (971,671)
Investment in Media (1,965,678) -
Deferred software production costs (338,088) (23,631)
Other, net (93,244) 4,044
------------ ------------
Net cash used in investing activities (3,197,663) (991,258)
Cash flows from financing activities:
Net borrowings on line of credit 500,000 582,710
Payments on notes payable (357,170) (277,964)
Proceeds from sales of common stock 44,272 344,862
Proceeds from issuance of bank term note 2,050,000 -
Payments on bank term notes - (332,800)
Payments of other long-term liabilities (144,930) (44,019)
Dividends paid on preferred stock (311,135) (255,354)
------------ ------------
Net cash provided by
financing activities 1,781,037 17,435
------------ ------------
Net increase (decrease) in cash
and cash equivalents 28,797 (189,125)
Cash and cash equivalents, beginning of year 65,489 1,104,501
------------ ------------
Cash and cash equivalents, end of quarter $ 94,286 $ 915,376
============ ============
</TABLE>
See accompanying notes.
<PAGE>
AIRSENSORS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 1995 and 1994
--------------
(1) The accompanying condensed consolidated financial statements
are unaudited and reflect all adjustments (consisting only of normal
recurring adjustments) which are, in the opinion of management,
necessary for the fair presentation of the financial position and
operating results for the interim periods. The condensed consolidated
financial statements should be read in conjunction with the
consolidated financial statements and notes thereto, together with
management s discussion and analysis of financial condition and the
results of operations, contained in the Company's Annual Report on Form
10-K for the fiscal year ended April 30, 1995. The results of
operations for the three months and six months ended October 31, 1995
are not necessarily indicative of the results that may be expected for
the entire fiscal year ending April 30, 1996. Certain
reclassifications have been made to the prior periods' condensed
consolidated financial statements to conform to the current interim
period presentation.
(2) Acquisition
On October 31, 1995, the Company, through its wholly owned
subsidiary IMPCO Technologies, Inc. (IMPCO), acquired 51% of the
outstanding stock of Technisch Bureau Media B.V. (Media), a private
company in the Netherlands, from Centradas B.V., a private company in
the Netherlands, for cash in the amount of 3,187,500 Dutch Guilders
(U.S.$2,023,425). The Company also guaranteed 51% of a 4,250,000 Dutch
Guilders term loan (U.S.$2,698,724) owed by Media to DEPA Holding B.V.
(Note 3(b)). Media has distributed IMPCO's gaseous fuel carburetion
systems and related devices for use in internal combustion engines
since 1972. Media services the European marketplace from its
headquarters in the Netherlands and through its subsidiaries and
facilities in Germany and France.
The purchase price was financed through a term loan provided by
Bank of America NT&SA which will be repaid over a five-year period with
interest at market rates (Note 3(a)). The acquisition has been
accounted for under the purchase method of accounting and is included
in the condensed consolidated financial statements of AirSensors as of
October 31, 1995 and will be included in the results of operations from
this date. The Company recognized approximately $2,254,000 of
intangible assets arising from acquisition which will be amortized over
20 years. The purchase price allocation is preliminary and based on
management's best estimates at the acquisition date. The tangible
assets and liabilities of Media have been recorded at their estimated
fair values at the date of acquisition as follows:
<PAGE>
Cash $ 57,747
Accounts Receivable 1,808,570
Inventory 3,062,471
Equipment 591,109
Other Assets 98,591
----------
5,618,488
Accounts payable and accrued expenses (1,954,004)
Term Loan - DEPA Holding B.V. (2,698,724)
Other long term liabilities-related party ( 908,597)
-----------
Net tangible assets acquired $ 57,163
===========
The following table presents the unaudited pro forma consolidated
results of operations as if the acquisition had occurred at the
beginning of each period (Dollars in thousands, except for net income
per share):
Six Months Ended
October 31,
-----------------------
1995 1994
---------- ----------
Revenue $25,927 $23,818
Net income applicable
to common stock 1,101 1,344
Net income per share $ .19 $ .22
The proforma consolidated results of operations are not
necessarily indicative of the actual results of operations that would
have occurred had the purchase actually been made at the beginning of
the respective periods, or of results which may occur in the future.
IMPCO and Centradas B.V. also entered into a Shareholders
Agreement pursuant to which IMPCO has the right to name two of three
members of Media's Board of Supervisory Directors, and the right to
purchase the remaining interest of 49% of Media's outstanding stock
from Centradas B.V. at fair market value after November 1, 1998.
Centradas B.V. has the right of first refusal if IMPCO decides to
relinquish its interest in Media. Media will continue its current
business of manufacturing, marketing, and distributing gaseous fuel
carburetion systems and related devices as an IMPCO distributor in
Europe and may engage in other related businesses in the future.
<PAGE>
(3) Debt Payable
(a) Term loan for acquisition
On September 13, 1995, IMPCO amended its credit facility with Bank
of America NT&SA to include a $2,050,000 term loan, which was funded on
October 30, 1995, to provide for the acquisition of Media and related
costs. The term loan carries interest, payable on a monthly basis, at
Bank of America's fluctuating Reference Rate (which was 8.75% at
October 31, 1995). IMPCO may elect to have all or certain portions of
the term loan bear interest at an alternative interest rate agreed upon
by the Bank and IMPCO for periods of not less than 30 days nor more
than one year. The alternative interest rate is based on either a
London Inter-bank Offer Rate (LIBOR) plus 1.5%, (which was 7.35% on
October 31, 1995) or a Grand Cayman Rate plus 1.5% (which was 7.35% on
October 31, 1995). Each alternative rate portion must be for an amount
not less than $250,000 and may not include any portion of principal
which is scheduled to be repaid before the last day of the applicable
interest period. Prepayments of principal subject to interest at an
elected alternative rate are subject to a prepayment fee equal to the
additional interest which would have been earned by the lender if the
prepaid principal had been invested in the alternative interest rate
for the remainder of the period. The term loan is to be repaid in
twenty consecutive quarterly installments of $102,500 (principal only)
each, starting November 30, 1995. The term loan also allows for
voluntary prepayments in inverse order of maturity, in whole or in
part, at any time. The effective rate of interest at October 31, 1995
was 8.75%.
(b) Term Loan - DEPA Holding B.V.
On October 31, 1995, Media converted an outstanding debt
obligation, of 4,250,000 Dutch Guilders (U.S.$ 2,698,724) owed to DEPA
Holding B.V. (DEPA), the parent company of Centradas B.V., into a term
loan. Interest on the term loan is payable quarterly. Media may elect
a fixed rate of interest for a three, six, twelve or sixty month period
based on the Amsterdam Interbank Offer Rate (AIBOR) plus 1% (which was
4.93%, 4.96% and 5.05% for three, six, or twelve month periods,
respectively, at October 31, 1995) or a sixty month interest period
based on a preferred rate of interest at a major Netherlands bank plus
1% (which was 7.6% on October 31, 1995). Once an interest period is
elected, it may not be lengthened or shortened. If an interest period
is not elected, the default interest period will be three months. As
of October 31, 1995, the effective rate of interest was 4.72% with an
interest period elected through January 31, 1996.
The term loan is to be repaid in thirty-nine consecutive quarterly
installments of 107,000 Dutch Guilders each (U.S.$67,900 at October 31,
1995), starting January 1996, with the unpaid balance due in the
fortieth installment. The term loan may be prepaid in inverse order of
maturity, in whole or in part, at the expiration of any interest
period. The term loan must be prepaid in full if IMPCO exercises its
right, which may not be exercised prior to November 1, 1998, to
purchase the remaining 49% interest in Media owned by Centradas B.V.
<PAGE>
(c) Capital Lease Facility
On September 22, 1995, IMPCO increased its $2.6 million capital
lease facility with BA Leasing & Capital Corporation to approximately
$3.5 million, and extended the expiration date to December 31, 2001.
The capital lease facility may be used to finance acquisitions of
machinery and equipment, dies, molds and patterns, office furniture and
fixtures and motor vehicles in incremental draws of $50,000 each. As
of October 31, 1995 approximately $2.5 million was available under the
capital lease facility.
The variable and fixed rates of interest under the capital lease
facility were decreased by the September 22, 1995 amendment to LIBOR
plus 2.45 percent and the U.S. Treasury note bond-equivalent yield per
annum corresponding to the number of months remaining on the draw, plus
2.899 percent, respectively. The lease facility also now includes sale
and leaseback transactions.
(d) Operating line of credit
During the first quarter, the Company amended its revolving line
of credit agreement with Bank of America NT&SA, extending the term for
a twelve month period ending on August 31, 1997 and lowering the
interest rate to the Bank of America Reference Rate (8.75% at October
31, 1995). The Offshore Rate, which the Company may elect to have all
or portions of the line of credit bear interest at, was changed from a
calculated rate to LIBOR plus 1.5% (7.375% at October 31, 1995).
(4) Income taxes
The provision for taxes for the three months ended
October 31, 1995 has been reduced by the utilization of approximately
$1,375,000 of federal net operating loss carryforwards of which
$7,406,000 is available to offset future taxable income. The effective
tax rate for the six months ended October 31, 1995 was 8.3% which
reflects the application of research and development tax credits in the
second quarter.
<PAGE>
ITEM 2 Management's Discussion and Analysis of Financial Condition
and Results of Operation
Acquisition of Technisch Bureau Media B.V.
- ------------------------------------------
Effective October 31, 1995, the Company, through its wholly owned
subsidiary, IMPCO Technologies, Inc. (IMPCO), acquired 51% of the
outstanding stock of Technisch Bureau Media B.V. (Media), a private
company in the Netherlands. Media has distributed IMPCO's gaseous fuel
carburetion systems and related products since 1972. Media services
the European marketplace from its headquarters in the Netherlands and
through its subsidiaries and facilities in Germany and France. The
acquisition has been accounted for under the purchase method of
accounting. The Company recognized approximately $2,254,000 of
intangible assets arising from acquisition and recorded the tangible
assets and liabilities of Media at their estimated fair values at the
date of acquisition. The Condensed Consolidated Balance Sheet of
AirSensors, Inc. as of October 31, 1995 includes the accounts of the
Company, its wholly-owned subsidiary, IMPCO Technologies, Inc. and its
majority-owned subsidiary IMPCO Europe Media B.V. (formerly Technisch
Bureau Media B.V.).
Results of Operations
- ---------------------
Total revenues for the three months and six months ended
October 31, 1995, increased by approximately 3% and 10%, respectively,
as compared to the three months and six months ended October 31, 1994.
Product sales for the three months ended October 31, 1995, decreased by
approximately 3% as compared to the same period last year, but were
offset by a 168% increase in contract revenues this year. For the six
months ended October 31, 1995 product sales and contract revenue
increased by approximately 7% and 153%, respectively, as compared to
the same period in the prior fiscal year. The following table sets
forth the Company's product sales by application (all dollars in
thousands):
<TABLE>
<CAPTION>
Three months ended Six months ended
October 31, October 31,
-------------------- --------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Motor vehicle $ 3,318 $ 4,402 $ 7,256 $ 8,551
Forklifts and other material
handling equipment 5,063 4,398 11,014 8,441
Small portable to
large stationary 2,021 1,870 3,928 3,780
-------- -------- -------- --------
Total $ 10,402 $ 10,670 $ 22,197 $20,772
======== ======== ======== ========
</TABLE>
<PAGE>
Motor vehicle product sales for the three months and six months
ended October 31, 1995, decreased by approximately 25% and 15%
respectively as compared to the same period in the prior fiscal year.
The decrease was primarily attributable to lower shipments to an
international market and to a domestic original equipment truck
manufacturer. Management anticipates motor vehicle sales will be lower
over the six months ending April 30, 1996 as compared to the same
period last fiscal year.
During the three months and six months ended October 31, 1995,
sales of the Company's products for forklifts and other material
handling equipment increased by approximately 15% and 30%,
respectively, as compared to the same period in the prior fiscal year.
This increase was primarily attributable to sustained demand for new
forklifts. Management believes that these product sales will be higher
for fiscal year 1996 than the level realized in the prior fiscal year
due to continuing demand for new forklifts and the acquisition of
Media.
Contract revenue for the three months and six months ended October
31, 1995 increased by approximately $616,000 and $802,000,
respectively. The increase was primarily attributable to the extension
of the development contract with General Motors Corporation (GM) in
August 1995, and the addition of other OEM development programs.
Management anticipates that contract revenue during fiscal year 1996
will continue to be significantly higher than the prior fiscal year.
The Company's cost of sales for the three months and six months
ended October 31, 1995 was comparable with the three months ended
October 31, 1994 and higher than the six months ended October 31, 1994.
The year to date increase in cost of sales is attributed to product mix
in conjunction with higher product sales. The Company's gross profit
margin on product sales for the three months and six months ended
October 31, 1995 decreased slightly due to the lower gross profit
margin on sales of compressed natural gas systems and increases in
expenditures for current product support during the second quarter.
Research and development ("R&D") expense for the three months and
six months ended October 31, 1995, increased by approximately $590,000
(41%) and $1,083,000 (40%) as compared to the three months and six
months ended October 31, 1994. These increases are primarily
attributable to Development and testing of the Company's new products,
durability testing, enhancements to products to maintain mandated
emission standards, efforts expended to obtain California s Title XIII
engine certification, and efforts on the GM contract. Management
believes the Company s future success depends on its ability to design,
develop and market new products to meet mandated emission standards and
new emission related customer product specifications, and will
therefore continue to incur significant R&D costs. Management
anticipates R&D expense during fiscal year 1996 will continue to be
significantly higher than the prior fiscal year, primarily as a result
of development efforts for the GM contract and the Company s new
products and markets.
<PAGE>
Selling, general and administrative (SG&A) expense for the six
months ended October 31, 1995 increased by approximately $176,000 or 6%
over the same period last fiscal year. The increase was primarily due
to an increase in the sales force. Management anticipates that SG&A
expense during fiscal year 1996 will significantly increase as compared
to fiscal year 1995, primarily as a result of including Media's SG&A
expenses.
The provision for income taxes for the three months and six months
ended October 31, 1995 decreased by $112,316 and $111,749 respectively.
This decrease reflects the application of a lower net effective tax
rate in the current year due to the utilization of research and
development tax credits.
Financing charges for the remainder of the current fiscal year are
expected to be significantly higher than the first half of this fiscal
year due to the additional interest expense to be incurred on loans
associated with the acquisition of Media.
<PAGE>
Liquidity and Capital Resources
- -------------------------------
During the six months ended October 31, 1995, cash provided by
operations, excluding working capital, was approximately $2,292,000 or
$254,000 higher than the same period last year. The increase was
primarily attributable to higher net income of approximately $59,000
and an increase in depreciation expense of $152,000. During the six
months ended October 31, 1995, the Company had a net use of working
capital of approximately $963,000, which was a decrease of $290,000
compared to the same period last fiscal year. The most significant
changes in the Company s current assets and liabilities during the six
months ended October 31, 1995 were an increase in inventory and
accounts receivable of $1,436,000 and $244,000 respectively and a
decrease in accrued expenses of $311,000 which were offset by an
increase in accounts payable of $788,000. The increase in inventory
was primarily attributed to a temporary buildup of inventory in
anticipation of future sales of compressed natural gas systems and core
products. The increase in accounts receivable was due to the increase
in sales for the month ended October 31 1995 as compared to the month
ended April 30, 1995. The decrease in accrued expenses was due to
decreases in payroll obligations and other liabilities. The increase
in accounts payable was directly related to the increase in inventory.
The decrease in other current assets was due to a reduction of prepaid
insurance expenses. Management anticipates that cash provided by
operations will continue to increase over the prior year primarily due
to the acquisition of Media.
Net cash used in investing activities for the six months ended
October 31, 1995 was approximately $3,198,000 compared with
approximately $992,000 for the same period last fiscal year. Investing
activities principally included the purchase of Media which resulted in
a net use of cash of approximately $1,966,000. It also included the
purchase of dies, molds and patterns, machinery and equipment, and the
incurring of software production costs which have been capitalized.
Management projects an increase in capital expenditures during the
remaining two quarters of fiscal year 1996 as compared to the same
periods in fiscal year 1995, primarily as a result of equipment
enhancements, and capital expenditures by Media.
Net cash provided by financing activities for the six months ended
October 31, 1995, was approximately $1,781,000 as compared to $17,000
for the same period last fiscal year. Financing activities principally
included the term loan of $2,050,000 with Bank of America to finance
the purchase of Media. Proceeds from the issuance of common stock
decreased by approximately $301,000 from the prior fiscal year due to
fewer stock options exercised in the current periods. Although the
company has made no material commitments for future capital
expenditures, it expects to incur significant expenditures relating to
equipment and facilities for the development and production of new
products. The Company expects to fund a major portion of these
expenses from cash generated from operations and by use of its B of A
Credit facility.
<PAGE>
Part II - OTHER INFORMATION
Items 1-5 Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 11.1 - Computation of net income per share.
(b) Reports on Form 8-K.
No reports were filed on Form 8-K during the Company's fiscal
quarter ended October 31, 1995
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.
AirSensors, Inc.
(Registrant)
Date: December 15, 1995 By /s/Thomas M. Costales
---------------------
Thomas M. Costales
Chief Financial Officer
and Treasurer
[Authorized Signatory]
<PAGE>
<TABLE>
<CAPTION>
AIRSENSORS, INC.
COMPUTATION OF NET INCOME PER SHARE
Six months ended October 31, 1995 and 1994
---------------
Three months ended Six months ended
October 31, October 31,
------------------------ ------------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PRIMARY CALCULATION:
Net income $ 665,293 $ 722,521 $1,404,537 $1,345,779
Dividends on
preferred stock (154,948) (132,636) (311,135) (255,354)
----------- ----------- ----------- -----------
Net income applicable
to common stock 510,345 589,885 1,093,402 1,090,425
Add: Effect of treasury
stock on repayment
of borrowings 52,801 32,916 98,188 75,662
Add: Effect of treasury
stock on purchase of
investments/securities 3,827 - 60,970 -
----------- ----------- ----------- -----------
Net income applicable
tocommon stock for
calculation of net
income per share 566,973 622,801 1,252,560 1,166,087
Weighted average number
of common shares
outstanding 5,646,177 5,613,693 5,643,801 5,601,401
Dilutive effect of
outstanding stock options
and warrants(As determined
by application of the
modified treasury
stock method) 991,552 942,473 996,165 945,716
----------- ----------- ----------- -----------
Weighted average number
of common shares, as
adjusted for calculation
of net income per share 6,637,729 6,556,166 6,639,966 6,547,117
=========== =========== =========== ===========
Net income per share $0.09 $0.09 $.19 $0.18
=========== =========== =========== ===========
FULLY DILUTED CALCULATION:
Net income applicable
to common stock for
calculation of net
income per share before
effect of treasury
stock on repayment
of borrowings 510,345 589,885 1,093,402 1,090,425
Add: Effect of treasury
stock on repayment
of borrowings 52,801 32,916 97,188 75,662
Add: Effect of treasury
stock on purchase of
investments/securities 3,827 - 60,970 -
----------- ----------- ----------- -----------
Net income applicable
to common stock for
calculation of net
income per share 566,973 622,801 1,251,560 1,166,087
Weighted average number
of common shares
outstanding 5,646,177 5,613,693 5,643,801 5,601,401
Dilutive effect of
outstanding stock options
and warrants(As determined
by application of the
modified treasury
stock method) 991,552 942,473 996,165 945,716
----------- ----------- ----------- -----------
Weighted average number
of common shares, as
adjusted for calculation
of net income per share 6,637,729 6,556,166 6,639,966 6,547,117
=========== =========== =========== ===========
Net income per share $0.09 $0.09 $0.19 $0.18
=========== =========== =========== ===========
</TABLE>
(1) The conversion of preferred stock was not assumed since its effect would be
antidilutive.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-END> OCT-31-1995
<CASH> 94,286
<SECURITIES> 0
<RECEIVABLES> 7,412,008
<ALLOWANCES> 160,302
<INVENTORY> 11,831,775
<CURRENT-ASSETS> 19,634,777
<PP&E> 11,764,263
<DEPRECIATION> 6,239,437
<TOTAL-ASSETS> 31,471,129
<CURRENT-LIABILITIES> 7,637,318
<BONDS> 0
<COMMON> 5,650
0
5,650,000
<OTHER-SE> 10,624,969
<TOTAL-LIABILITY-AND-EQUITY> 31,471,129
<SALES> 22,197,914
<TOTAL-REVENUES> 23,521,424
<CGS> 14,716,289
<TOTAL-COSTS> 21,827,624
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 161,262
<INCOME-PRETAX> 1,532,538
<INCOME-TAX> 128,000
<INCOME-CONTINUING> 1,404,538
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,404,538
<EPS-PRIMARY> .19
<EPS-DILUTED> .19
</TABLE>
