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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 3, 1998
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
- - --- OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 0-14800
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X-RITE, INCORPORATED
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(Exact name of registrant as specified in its charter)
Michigan 38-1737300
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3100 44th Street, SW, Grandville, Michigan 49418
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(Address of principal executive offices) (Zip Code)
(616) 534-7663
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(Registrant's telephone number, including area code)
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
--- ---
The number of shares outstanding of registrant's common stock, par value
$.10 per share, at October 31, 1998 was 21,178,179 shares.
Exhibit Index on page 17.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
X-RITE, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
October 3, January 3,
1998 1998
----------- -----------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 5,223,000 $ 2,808,000
Short-term investments 14,553,000 10,555,000
Accounts receivable, less allowances of
$766,000 in 1998 and $567,000 in 1997 16,653,000 20,833,000
Inventories 15,971,000 15,000,000
Deferred tax assets 829,000 1,189,000
Prepaid expenses and other current assets 1,445,000 1,848,000
----------- -----------
Total current assets 54,674,000 52,233,000
PROPERTY AND EQUIPMENT, at cost 34,100,000 33,456,000
Less accumulated depreciation (17,146,000) (16,043,000)
----------- -----------
16,954,000 17,413,000
OTHER ASSETS:
Costs in excess of net assets acquired 8,512,000 15,539,000
Other noncurrent assets 10,643,000 7,283,000
----------- -----------
19,155,000 22,822,000
----------- -----------
$90,783,000 $92,468,000
=========== ===========
See accompanying notes to condensed consolidated financial statements.
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X-RITE, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS--Continued
October 3, January 3,
1998 1998
----------- -----------
(Unaudited)
LIABILITIES AND SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Accounts payable $ 1,319,000 $ 1,604,000
Accrued liabilities--
Payroll and employee benefits 1,059,000 1,403,000
Income taxes - 249,000
Other accrued liabilities 904,000 2,454,000
----------- -----------
Total current liabilities 3,282,000 5,710,000
DEFERRED INCOME TAXES - 678,000
VALUE OF SHARES SUBJECT TO
REDEMPTION AGREEMENTS 46,887,000 -
SHAREHOLDERS' INVESTMENT:
Common stock 1,663,000 2,115,000
Additional paid-in capital 8,087,000 7,876,000
Retained earnings 35,578,000 79,969,000
Shares in escrow (4,787,000) (3,449,000)
Cumulative translation adjustment 73,000 (431,000)
----------- -----------
40,614,000 86,080,000
----------- -----------
$90,783,000 $92,468,000
=========== ===========
See accompanying notes to condensed consolidated financial statements.
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X-RITE, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Nine Months Ended
October 3, October 4, October 3, October 4,
1998 1997 1998 1997
----------- ----------- ----------- -----------
Net sales $21,461,000 $24,861,000 $69,384,000 $71,927,000
Cost of sales 7,476,000 8,547,000 23,697,000 25,047,000
----------- ----------- ----------- -----------
Gross profit 13,985,000 16,314,000 45,687,000 46,880,000
Operating expenses:
Selling & marketing 4,660,000 4,614,000 14,792,000 12,712,000
Engineering, general
& administrative 5,031,000 3,179,000 12,933,000 9,270,000
Research & development 2,011,000 1,547,000 6,105,000 4,602,000
Write-down of digital
imaging assets 6,694,000 - 6,694,000 -
----------- ----------- ----------- -----------
18,396,000 9,340,000 40,507,000 26,584,000
----------- ----------- ----------- -----------
Operating
income (loss) (4,411,000) 6,974,000 5,180,000 20,296,000
Other income 96,000 77,000 291,000 212,000
----------- ----------- ----------- -----------
Income (loss) before
income taxes (4,315,000) 7,051,000 5,471,000 20,508,000
Income taxes (1,467,000) 2,398,000 1,860,000 6,973,000
----------- ----------- ----------- -----------
NET INCOME (LOSS) $(2,848,000) $ 4,653,000 $ 3,611,000 $13,535,000
=========== =========== =========== ===========
Earnings per share:
Basic $(.14) $.22 $.17 $.64
===== ==== ==== ====
Diluted $(.14) $.22 $.17 $.64
===== ==== ==== ====
Cash dividends per share $.025 $.025 $.075 $.075
===== ===== ===== =====
See accompanying notes to condensed consolidated financial statements.
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X-RITE, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended
October 3, October 4,
1998 1997
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES $14,414,000 $14,309,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of investments 3,823,000 9,223,000
Proceeds from maturities of investments 1,930,000 920,000
Purchases of investments (9,738,000) (7,903,000)
Capital expenditures (2,371,000) (2,857,000)
Acquisitions, less cash acquired (382,000) (6,960,000)
Deposit to escrow fund in connection
with Light Source acquisition - (4,638,000)
Purchases of other assets (1,075,000) (952,000)
Initial investment in cash value of
founders life insurance policies (3,009,000) -
Other investing activities 44,000 37,000
---------- -----------
Net cash and cash equivalents
used for investing activities (10,778,000) (13,130,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (1,587,000) (1,583,000)
Issuance of common stock 213,000 687,000
---------- ----------
Net cash and cash equivalents
used for financing activities (1,374,000) (896,000)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS 153,000 (23,000)
---------- ----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 2,415,000 260,000
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 2,808,000 1,587,000
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF QUARTER $5,223,000 $1,847,000
========== ==========
See accompanying notes to condensed consolidated financial statements.
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X-RITE, INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--BASIS OF PRESENTATION
The condensed consolidated financial statements included herein have been
prepared by X-Rite Incorporated ("X-Rite" or the "Company"), without audit,
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules
and regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. It is suggested
that these condensed consolidated financial statements be read in
conjunction with the consolidated financial statements and notes thereto
included in X-Rite's 1997 annual report on Form 10-K.
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments necessary to
present fairly the financial position of the Company as of October 3, 1998
and the results of its operations and its cash flows for the three and nine
month periods ended October 3, 1998 and October 4, 1997. All such
adjustments are of a normal and recurring nature, except for the write-down
of certain digital imaging assets as discussed in Note 3.
NOTE 2--INVENTORIES
Inventories consisted of the following:
October 3, January 3,
1998 1998
----------- -----------
Raw materials $ 6,475,000 $ 5,083,000
Work in process 5,374,000 3,081,000
Finished goods 4,122,000 6,836,000
----------- -----------
$15,971,000 $15,000,000
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X-RITE, INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED), continued
NOTE 3 -WRITE-DOWN OF DIGITAL IMAGING ASSETS
During the third quarter, increased competition in the digital imaging
business and a continued rapid decline in the demand for certain digital
imaging instruments, software and technology led the Company to reevaluate
its digital imaging markets and product lines, which forced the recognition
of an asset impairment loss. The non-cash, pre-tax write down of
$6,694,000 ($4,351,000 after tax) consisted of $6,294,000 in goodwill, and
$400,000 in fixed assets and other capitalized start-up costs associated
with the 1997 acquisition of Light Source Computer Images, Inc.
The Company evaluates the recoverability of its long-lived assets by
determining whether unamortized balances can be recovered through
undiscounted future operating cash flows over the remaining lives of the
assets in accordance with the provisions of Statement of Financial
Accounting Standards No. 121. If the sum of the expected future cash flows
is less than the carrying value of the assets, an impairment loss is
recognized for the excess of the carrying value over the fair value. The
estimated fair value is determined by discounting the expected future cash
flows at a rate that would be required for a similar investment with like
risks.
NOTE 4--COMPREHENSIVE INCOME
In June of 1997, Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income," was issued. This statement requires the
disclosure of comprehensive income, which, for X-Rite, includes net income
and foreign currency translation adjustments. Comprehensive income (loss)
was approximately $(2,609,000) and $4,115,000 for the three and nine month
periods ended October 3, 1998; and approximately $4,595,000 and $13,342,000
for the three and nine month periods ended October 4, 1997.
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X-RITE, INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED), continued
NOTE 5--EARNINGS PER SHARE
Effective January 3, 1998, the Company adopted Statement of Financial
Accounting Standards No. 128, "Earnings Per Share". This statement
establishes standards for computing and presenting "basic" and "diluted"
earnings per share ("EPS"). Basic EPS excludes the dilutive effect of
common shares that could potentially be issued (i.e., stock options in the
case of X-Rite) and is computed by dividing net income by the weighted
average number of common shares outstanding for the period. Diluted EPS is
computed by dividing net income by the weighted average number of shares
outstanding plus all shares that could potentially be issued. All prior
period EPS data has been restated to conform to this statement.
The following table reconciles the numerators and denominators used in the
calculations of basic and diluted EPS for each period presented in the
accompanying financial statements:
Three Months Ended Nine Months Ended
October 3, October 4, October 3, October 4,
1998 1997 1998 1997
----------- ---------- ---------- -----------
Numerators:
Net income (loss)
numerators for both
basic and diluted EPS $(2,848,000) $4,653,000 $3,611,000 $13,535,000
=========== ========== ========== ===========
Denominators:
Denominators for basic
EPS; weighted average
common shares
outstanding 20,914,374 21,131,358 20,910,829 21,113,448
Potentially dilutive
shares resulting from
stock options - 200,245 71,635 160,171
---------- ---------- ---------- ----------
Denominators for
diluted EPS 20,914,374 21,331,603 20,982,464 21,273,619
========== ========== ========== ==========
Certain exercisable stock options were not included in any calculations of
year-to-date diluted EPS because option prices were greater than average
market prices for the periods presented. The number of stock options
outstanding at the end of each quarter presented not included in any
calculations of year-to-date EPS and the ranges of exercise prices were
583,000 and $14.50 - $19.50 in 1998, and 74,500 and $19.25 - $19.50 in
1997.
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X-RITE, INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED), continued
NOTE 6--SHARES IN ESCROW
During 1997, the Company acquired substantially all the assets of Light
Source Computer Images, Inc. The asset purchase agreement provides for
future contingent consideration if net sales of certain products reaches or
exceeds agreed upon sales goals. The Company established an escrow fund
which is equal to the maximum contingent cash consideration that could be
earned by the sellers. The investment of escrow funds must be made in
accordance with the terms of an escrow agreement, which allows for certain
money market securities or X-Rite common stock. On October 3, 1998, the
escrow fund held 257,064 shares of X-Rite common stock at a cost of
$4,769,000, plus $18,000 in dividends received. Accordingly, that portion
of the escrow fund is presented in the accompanying balance sheet as a
reduction to shareholders' investment. This contractual agreement remains
in effect until July of 2000.
NOTE 7--FOUNDERS STOCK REPURCHASE AGREEMENTS
In January of 1998, the Company entered into agreements with its founding
shareholders for the future repurchase of 4.54 million shares or 21.5
percent of the Company's outstanding stock. The stock purchases will occur
following the later of the death of each founder and his spouse. The cost
of the repurchase agreements will be funded by proceeds from life insurance
policies the Company has purchased on the lives of certain of these
individuals. The price the Company will pay the founders' estates for
these shares will reflect a 10 percent discount from the average closing
price for the ninety trading days preceding the later death of the founder
and his spouse. The discounted price may not be less than $10 per share or
more than $25 per share.
The shares subject to the agreements have been reclassified on the October
3, 1998 balance sheet to a temporary equity account entitled "Value of
Shares Subject to Redemption Agreements." The reclassification of
$46,887,000 was determined by multiplying the applicable shares by the
average closing price of the Company's common stock, after applying the 10
percent discount, for the ninety trading days preceding October 3, 1998.
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
FINANCIAL CONDITION AND LIQUIDITY
Cash provided by operating activities in the first nine months of 1998
totaled $14,414,000. The primary sources of cash were net income, after
excluding the effect of the non-cash write-down of digital imaging assets,
and the reduction in accounts receivable.
Following short-term investment transactions, the most significant
investing activity during the first nine months of 1998 was the purchase of
insurance policies on the lives of certain X-Rite founding shareholders and
their spouses. In January of 1998, the Company entered into agreements
with its founding shareholders for the future repurchase of 4.54 million
shares, or 21.5 percent of the Company's outstanding stock. The stock
purchases will occur following the later of the death of each founder and
his spouse. The cost of the repurchase agreements will be funded by
proceeds from the life insurance policies. The total face value of the
policies is $160 million. The price the Company will pay the founders'
estates for these shares will reflect a 10 percent discount from the market
price, although the discounted price may not be less than $10 per share or
more than $25 per share.
If all the stock is purchased from the founders' estates at the maximum
price of $25 per share, the aggregate stock purchases will total $113.5
million. The company anticipates that certain stock purchases will not
coincide with the receipt of insurance proceeds; therefore, borrowed funds
will be needed from time to time to finance the Company's purchase
obligations. Insurance was purchased at the $160 million level in order to
cover both the maximum aggregate purchase price and anticipated borrowing
costs. Life insurance premiums will total $4.3 million each year while all
the policies remain in effect. Of the $4.3 million paid in the first
quarter, approximately $3 million represents cash surrender value and has
been recorded as an other long-term asset on the Company's balance sheet.
Year-to-date capital expenditures in 1998 totaled $2,371,000 and consisted
mainly of building improvements, machinery and equipment. X-Rite currently
anticipates capital expenditures for the remainder of 1998 will be
approximately $1,000,000 and will consist principally of building
improvements, machinery and equipment.
Management expects that X-Rite's current liquidity, combined with cash flow
from future operations and the Company's $20 million revolving credit
agreement, will be sufficient to finance the Company's operations, expected
founders' stock repurchase obligations, capital expenditures and dividends
for the foreseeable future. In the event more funds are required,
additional short or long-term borrowing arrangements are the most likely
alternatives for meeting liquidity and capital resource needs.
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations, continued
RESULTS OF OPERATIONS
Net Sales:
Third quarter 1998 consolidated net sales were 13.7% lower than sales in
the same quarter a year ago. Consolidated net sales for the nine months
ended October 3, 1998 decreased 3.5% compared to the same period in 1997.
The year-over-year decreases were due to lower sales across all product
lines in North American.
Cost of Sales and Gross Profit:
Gross profit margins did not change significantly between the periods being
reported. Gross profit as a percentage of sales was 65.2% for the third
quarter of 1998, compared to 65.6% for the third quarter of 1997. Year to
date, gross profit as a percentage of sales was 65.8% in 1998 and 65.2% in
1997.
Operating Expenses:
Third quarter selling and marketing expenses were 1.0% higher compared to
the same quarter in the prior year and year-to-date selling and marketing
expenses increased 16.4% compared to the same period in the prior year.
The increases resulted primarily from stepped-up sales and marketing
efforts in order to develop long-term international growth opportunities.
Compared to the same periods in the prior year, engineering, general and
administrative ("EG&A") expenses in the third quarter were 58.3% higher and
year to date were 39.5% higher. The increases were due primarily to
founders life insurance premium expense and amortization of goodwill
related to the acquisition of the assets of Light Source Computer Images,
Inc. in May of 1997. Also included in third quarter and year-to-date 1998
EG&A expense is a $600,000 charge for estimated legal fees to defend
against a patent infringement lawsuit.
Research and development expenses increased 30.0% in the third quarter and
32.7% year to date compared with the same periods in 1997. The Company has
expanded its research activities in 1998 in order to expedite new product
introductions.
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Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition, continued
RESULTS OF OPERATIONS, continued
The Company recognized a nonrecurring charge of $6,694,000 in the third
quarter of 1998 for the write-down of certain digital imaging assets
associated with the 1997 acquisition of Light Source Computer Images, Inc.
(see Note 3 to the condensed consolidated financial statements). Increased
competition in the digital imaging business and a continued rapid decline
in the demand for certain digital imaging instruments, software and
technology were the primary factors that led the Company to reevaluate its
Light Source markets and product lines, which forced the recognition of
this charge. Digital imaging markets have been changing rapidly and the
demand for newer products at lower prices with enhanced performance has
impacted the Company's ability to compete in certain of these markets. In
addition, the Company has decided these assets would not be employed in a
separate strategic business unit within the reorganized corporate structure
that was announced during the third quarter. The Company will continue
developing other digital imaging products for markets where it has more
experience and greater name recognition.
Other Income:
Other income consisted mainly of interest earnings from invested funds.
Interest income in the third quarter and year to date was higher than
comparable periods in 1997 due to an increase in funds available for
investment. Invested funds declined in 1997 due to the acquisition of
Light Source in the second quarter of that year.
Net Income:
The Company recorded a net loss of $3,349,000 for the three months ended
October 3, 1998 compared to net income of $4,636,000 in the same period of
1997. On a per share basis, the third quarter net loss was $.16 in 1998
compared to net income of $.22 in 1997. For the first nine months of 1998,
net income was $6,459,000, or $.31 per share, compared to $8,882,000, or
$.42 per share in 1997. The decreases in third quarter and year-to-date
earnings were due primarily to the write-down of digital imaging assets,
founders life insurance premiums, a legal fee reserve for patent
infringement defense costs and other higher operating expenses previously
mentioned. The average number of common and common equivalent shares
outstanding was not significantly different between the periods.
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Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition, continued
YEAR 2000 READINESS DISCLOSURE
THIS YEAR 2000 READINESS DISCLOSURE IS THE MOST CURRENT INFORMATION
AVAILABLE AND REPLACES ALL PREVIOUS DISCLOSURES MADE BY THE COMPANY IN ITS
FILINGS ON FORM 10-Q AND FORM 10-K, AND IN ITS ANNUAL REPORT TO
SHAREHOLDERS.
X-Rite is actively engaged in taking steps to insure that information
technology ("IT") systems, products, embedded technology and material third
parties are all prepared to process date-related information in the Year
2000 ("Y2K"). X-Rite's senior management has assembled a project team to
address Y2K issues at the Company's world headquarters and at all
subsidiary locations. The Y2K project team is seeking to complete all
remediation solutions, testing and contingency plans by June 30, 1999.
Company's State of Readiness:
X-Rite's Y2K project team has developed a plan to inventory, assess,
correct and test all technology that may be impacted by Y2K issues. The
four primary areas covered by the plan are as follows:
IT Systems-
Mainframe IT systems are substantially Y2K compliant as a result of
the Company purchasing new hardware and software systems in 1995.
Network, desktop and communication systems are currently being
inventoried and assessed; remediation solutions for these systems are
expected to be readily available and completed on schedule.
Products-
Remediation solutions are being limited to current products produced
or supported. Products that have reached the end of the support
period, or will reach the end of the support period by the year 2000,
have not been included in the assessment process. Approximately 90%
of the Company's products have been assessed, remediated (if
necessary) and tested. The remaining 10% of the Company's products
are expected to be completed on schedule.
Physical Plant-
Embedded technology in facilities systems, machinery and equipment is
currently being inventoried and assessed. No significant Y2K
compliance issues are anticipated and completion of all remediation
and testing is expected to be on schedule.
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Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition, continued
Third Parties-
The Company has contacted its suppliers regarding Y2K readiness.
Extra attention has been paid to suppliers that are considered
essential for preventing material interruptions in X-Rite's business
operations. Y2K readiness is also being discussed with certain
strategic customers. The assessment is ongoing and is expected to be
completed on schedule.
Costs to Address the Company's Y2K Issues:
Based on costs incurred to date, the Company does not believe expenses
related to Y2K compliance will be material to the results of its
operations, financial position or cash flows. Although the Company
purchased new mainframe hardware and software in 1995, it did not
accelerate the timing of replacing these systems in order to accommodate
Y2K compliance.
Risks of the Company's Y2K Issues:
The Company believes that it will complete its Y2K project on schedule.
However, due to the uncertain and unprecedented nature of the Y2K problem,
and the uncertainty of Y2K readiness of third party suppliers and
customers, the Company is not able to provide assurance at this time that
the consequences of Y2K interruptions will not have a material impact on
its results of operations, financial position or cash flows.
Possible consequences of Y2K interruptions include, but are not limited to,
a temporary inability to manufacture or ship product; process transactions;
communicate with customers, suppliers, subsidiary locations and employees;
or conduct other similar corporate activities in a normal business
environment.
Company's Contingency Plans:
Contingency plans for Y2K-related interruptions are being developed and
will include, but will not be limited to, developing emergency backup and
recovery procedures, replacing electronic applications with manual
processes, identifying alternate suppliers, and increasing raw material and
finished goods inventories. All contingency plans are expected to be
completed by the end of the second quarter in 1999.
The preceding Year 2000 Readiness Disclosure is based in part upon repeated
information provided by certain of the Company's IT suppliers and other
third parties without independent verification by the Company.
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Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition, continued
SAFE HARBOR PROVISIONS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995.
Statements in this filing that are not historical facts are forward-looking
statements, which involve risks and uncertainties that could affect the
Company's results of operations, financial position and cash flows.
Forward-looking statements include, but are not limited to, statements
concerning the digital imaging business; the anticipated capital
expenditures for the remainder of 1998; the Company's ability to generate
cash flow from future operations; the Company's future liquidity to finance
operations, expected founders' stock repurchase obligations, capital
expenditures and dividends; the patent infringement lawsuit; the Company's
ability to implement its Y2K project in accordance with estimated
timetables and costs; and the consequences of potential Y2K business
interruptions.
Actual results may differ materially from those projected in the forward-
looking statements, due to a variety of factors, some of which may be
beyond the control of the Company. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of
the date of this report.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index on Page 17 of this Form 10-Q report.
(b) There were no reports on Form 8-K filed by the Registrant during the
quarter ended October 3, 1998.
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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.
X-RITE, INCORPORATED
November 16, 1998 /s/ Ted Thompson
----------------------
Ted Thompson
Chairman and Chief
Executive Officer
November 16, 1998 /s/ Duane F. Kluting
----------------------
Duane F. Kluting
Vice President and
Chief Financial Officer
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EXHIBIT INDEX
- - --------------------------------------------------------------------------
3(a) Restated Articles of Incorporation (filed as exhibit to Form
S-18 dated April 10, 1986 (Registration No. 33-3954C) and
incorporated herein by reference)
3(b) Certificate of Amendment to Restated Articles of Incorporation
adding Article IX (filed as exhibit to Form 10-Q for the quarter
ended June 30, 1987 (Commission File No. 0-14800) and
incorporated herein by reference)
3(c) Certificate of Amendment to Restated Articles of Incorporation
amending Article III (filed as exhibit to Form 10-K for the year
ended December 31, 1995 (Commission File No. 0-14800) and
incorporated herein by reference)
3(d) Bylaws, as amended through June 16, 1994 (filed as exhibit to
Form 10-K for the year ended December 31, 1994 (Commission File
No. 0-14800) and incorporated herein by reference)
3(e) First amendment to amended Bylaws amending Article IV (filed as
exhibit to Form 10-K for the year ended December 31, 1995
(Commission File No. 0-14800) and incorporated herein by
reference)
4 X-Rite, Incorporated common stock certificate specimen (filed
as exhibit to Form 10-Q for the quarter ended June 30, 1986
(Commission File No. 0-14800) and incorporated herein by
reference)
The following material contracts identified with "*" preceding the exhibit
number are agreements or compensation plans with or relating to executive
officers, directors or related parties.
*10(a) X-Rite, Incorporated Amended and Restated Outside Director Stock
Option Plan, effective as of September 17, 1996 (filed as exhibit
to Form 10-Q for the quarter ended September 30, 1996 (Commission
File No. 0-14800) and incorporated herein by reference)
*10(b) X-Rite, Incorporated Cash Bonus Conversion Plan (filed as
Appendix A to the definitive proxy statement dated April 8, 1996
relating to the Company's 1996 annual meeting (Commission File
No. 0-14800) and incorporated herein by reference)
-17-
<PAGE>
<PAGE> 18
EXHIBIT INDEX
- - --------------------------------------------------------------------------
*10(c) Form of Indemnity Contract entered into between the registrant
and members of the board of directors (filed as exhibit to
Form 10-Q for the quarter ended June 30, 1996 (Commission File
No. 0-14800) and incorporated herein by reference)
10(d) Asset Purchase Agreement entered into between Light Source
Acquisition Company and Light Source Computer Images, Inc.
including Escrow Agreement by and between Light Source
Acquisition Company and Light Source Computer Images, Inc. and
U.S. Trust Company of California, N.A. (filed as exhibit to
Form 8-K dated June 2, 1997 (Commission File No. 0-14800) and
incorporated herein by reference)
27 Financial Data Schedule
-18-
<PAGE>
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-02-1999
<PERIOD-END> OCT-03-1998
<CASH> 5,223,000
<SECURITIES> 14,553,000
<RECEIVABLES> 17,419,000
<ALLOWANCES> 766,000
<INVENTORY> 15,971,000
<CURRENT-ASSETS> 54,674,000
<PP&E> 34,100,000
<DEPRECIATION> 17,146,000
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<CURRENT-LIABILITIES> 3,282,000
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0
0
<COMMON> 1,663,000
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<SALES> 69,384,000
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<EPS-PRIMARY> .17
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