<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 March 28, 1998
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 number 33-67908
MOSLER INC.
(Exact name of registrant as specified in its charter)
Delaware 31-1172814
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
8509 Berk Boulevard
Hamilton, Ohio 45015-2213
(Address of principal executive offices) (Zip Code)
(513) 870-1900
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since
last report)
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 periods
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 practical date.
Common Stock, $0.10 Par Value 2,086,219.420340 shares as of
March 28, 1998
<Page 1>
<TABLE>
INDEX
<CAPTION>
<S> <C>
Financial Information (Part I)
Page
Item 1. Financial Statements (Unaudited)
Consolidated condensed balance sheets - March 28, 1998
and June 28, 1997 3-4
Consolidated condensed statements of operations - Three months
ended March 28, 1998 and March 29, 1997 5
Consolidated condensed statements of operations - Nine months
ended March 28, 1998 and March 29, 1997 6
Consolidated condensed statement of common stockholders'
deficiency - Nine months ended March 28, 1998 7
Consolidated condensed statements of cash flows - Nine months
ended March 28, 1998 and March 29, 1997 8
Notes to consolidated condensed financial statements 9-13
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14-18
Other information (Part II)
Item 1. Legal Proceedings 19
Signatures 20
</TABLE>
<Page 2>
<TABLE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
MOSLER INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
<CAPTION>
<S> <C> <C>
Mar. 28, June 28
1998 1997
(Unaudited) (Derived from
Audited
Financial
Statements)
Assets
Current assets:
Cash and cash equivalents $ 301 $ 389
Accounts receivable, net 50,191 47,538
Inventories 23,109 23,299
Other current assets 3,124 1,237
Total current assets 76,725 72,463
Facilities:
Land and land improvements 802 802
Buildings 4,739 4,809
Machinery and equipment 33,089 37,852
Improvement in progress 887 296
Gross facilities 39,517 43,759
Less accumulated depreciation 30,228 32,935
Net facilities 9,289 10,824
Other assets:
Service agreements 10,152 13,537
Deferred debt issuance costs 2,859 3,291
Goodwill 3,416 4,548
Other intangible assets 964 964
Sundry 750 1,626
Total Other Assets 18,141 23,966
$104,155 $107,253
</TABLE>
<Page 3>
<TABLE>
<S> <C> <C>
Mar. 28, June 28,
1998 1997
Liabilities, redeemable stock and common (Unaudited) (Derived from
Audited
stockholders' deficiency Financial
Statements)
Current liabilities:
Accounts payable $ 14,701 $ 17,574
Accrued liabilities:
Compensation & payroll taxes 5,450 4,274
Product warranty 934 857
Accrued workers' compensation 4,250 4,746
Accrued interest 2,676 5,772
Other 6,513 5,858
Unearned revenue 16,508 17,021
Income taxes payable 237 233
Long-term debt due within one year 1,317 1,317
Total current liabilities 52,586 57,652
Long-term debt due after one year 132,651 126,671
Post retirement health benefits 11,912 11,552
Pension liability 1,745 1,745
Commitments and contingencies
Redeemable stock:
Series D increasing rate preferred stock 52,653 47,135
Series C adjustable rate preferred stock 42,082 38,554
Common Stock 409 409
95,144 86,098
Common stockholders' deficiency:
Common stock 254 254
Accumulated deficit (184,069) (170,719)
Excess of additional pension liability over
unrecognized prior service cost (13) (13)
Redemption value of common stock held by ESOP (409) (409)
Foreign currency translation adjustments (1,268) (1,200)
Common stock held in treasury (4,378) (4,378)
Total common stockholders' deficiency (189,883) (176,465)
$104,155 $107,253
See accompanying notes to financial statements.
</TABLE>
<Page 4>
<TABLE>
MOSLER INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands except per share amounts)
<CAPTION>
<S> <C> <C>
Three months ended
Mar. 28, Mar. 29,
1998 1997
Net sales: (as restated)
Service $ 25,792 $ 26,765
Product 29,756 23,532
55,548 50,297
Cost of sales:
Service 19,912 20,037
Product 23,477 19,542
43,389 39,579
Gross profit 12,159 10,718
Selling and administrative expense 9,755 9,939
Other (income) expense (249) 123
9,506 10,062
Operating income 2,653 656
Debt expense:
Interest expense 4,506 4,290
Amortization of debt expense 146 145
4,652 4,435
Loss before income taxes and preferred stock
charges (1,999) (3,779)
Provision for income taxes 3 25
Loss before preferred stock charges (2,002) (3,804)
Preferred stock charges:
Preferred dividends (2,858) (2,151)
Amortization of preferred stock discount (186) (170)
Net loss applicable to common stockholders ($5,046) ($6,125)
Net loss per common share ($2.41) ($2.91)
See accompanying notes to financial statements.
</TABLE>
<Page 5>
<TABLE>
MOSLER INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands except per share amounts)
<CAPTION>
<S> <C> <C>
Nine months ended
Mar. 28, Mar. 29,
1998 1997
Net sales: (as restated)
Service $ 77,727 $ 79,667
Product 89,632 73,819
167,359 153,486
Cost of sales:
Service 58,143 61,010
Product 72,151 59,023
130,294 120,033
Gross profit 37,065 33,453
Selling and administrative expense 27,571 29,005
Other (income) expense 174 (185)
27,745 28,820
Operating income 9,320 4,633
Debt expense:
Interest expense 13,682 13,214
Amortization of debt expense 433 432
14,115 13,646
Loss before income taxes, cumulative effect of
change in accounting and preferred stock charges (4,795) (9,013)
Provision for income taxes 73 72
Loss before cumulative effect of change in
accounting and preferred stock charges (4,868) (9,085)
Cumulative effect of change in accounting 7,420
Net loss before preferred stock charges (4,868) (1,665)
Preferred stock charges:
Preferred dividends (7,924) (6,500)
Amortization of preferred stock discount (558) (504)
Net loss applicable to common stockholders ($13,350) ($8,669)
Loss before cumulative effect of change in
accounting ($6.38) ($7.55)
Cumulative effect of change in accounting 0.00 3.49
Net loss per common share ($6.38) ($4.06)
See accompanying notes to financial statements.
</TABLE>
<Page 6>
<TABLE>
MOSLER INC.
CONSOLIDATED CONDENSED STATEMENT OF COMMON STOCKHOLDERS' DEFICIENCY
NINE MONTHS ENDED MARCH 28, 1998
(Unaudited)
(In thousands of dollars)
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Redemption
Common Value of Foreign
Stock Common Currency
$.10 Par Accumulated Pension Stock held Translation Treasury
Value Deficit Liability by ESOP Adjustments Stock Total
Balance at June 28, 1997 $254 ($170,719) ($13) ($409) ($1,200) ($4,378) ($176,465)
Net loss before preferred stock charges (4,868) (4,868)
Amortization of Series D preferred
stock discount (558) (558)
Dividends on Series D preferred stock (2,398) (2,398)
Dividends on Series C preferred stock (5,526) (5,526)
Foreign currency translation adjustment (68) (68)
Balance at March 28, 1998 $254 ($184,069) ($13) ($409) ($1,268) ($4,378) ($189,883)
See accompanying notes to financial statements.
</TABLE>
<Page 7>
<TABLE>
MOSLER INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<CAPTION>
<S> <C> <C>
Nine months ended
Mar. 28, Mar. 29,
1998 1997
(As restated)
Net loss $ (4,868) $ (1,665)
Adjustments to reconcile net income (loss)
to net cash provided (used) by operating
activities:
Cumulative effect of change in accounting (7,420)
Depreciation 1,937 1,848
Amortization 4,967 4,951
Loss (gain) on disposal of facilities (479) 2
Interest paid in shares of preferred stock 2,564 2,665
Provision for doubtful accounts 75 73
Decrease (increase) in:
Accounts receivable (2,728) 9,233
Inventories 190 (274)
Other current assets (1,887) (810)
Increase (decrease ) in:
Accounts payable (2,873) 2,450
Accrued liabilities (1,037) (5,725)
Unearned revenue (513) 3,120
Income taxes payable 4 (16)
Net cash provided (used) by operating activities (4,648) 8,432
Cash flows from investing activities:
Proceeds from sale of property and equipment 607
Capital expenditures (1,076) (3,890)
Decrease in other assets 858 624
Net cash provided (used) by investing activities 389 (3,266)
Cash flows from financing activities
Purchase of common stock (19) (556)
Purchase of preferred stock (1,989) (1,684)
Net proceeds from (payments on) revolving
line of credit 6,997 (2,675)
Principal payment on long-term debt (750) (750)
Net cash provided (used) by financing activities 4,239 (5,665)
Effect of exchange rate changes on cash (68) (2)
Net decrease in cash and cash equivalents (88) (501)
Cash and cash equivalents at beginning of period 389 0
Cash and cash equivalents at end of period $ 301 $ (501)
See accompanying notes to financial statements.
</TABLE>
<Page 8>
FINANCIAL INFORMATION
Item 1. Notes to Consolidated Condensed Financial Statements
1. Basis of Presentation
In the opinion of management, the unaudited consolidated financial
statements include all adjustments (which consist of only normal,
recurring accruals) necessary to present fairly the consolidated
financial position as of March 28, 1998, and the results of operations
for the three months and nine months ended March 28, 1998 and
March 29, 1997 and the cash flows for the nine months ended March
28, 1998 and March 29, 1997. In accordance with generally accepted
accounting principles for interim financial information, these
statements do not include all of the information and footnotes required
by generally accepted accounting principles for complete annual
financial statements. Financial information as of June 28, 1997 has
been derived from the audited consolidated financial statements of the
Registrant. The results of operations for the three months and nine
months ended March 28, 1998 and March 29, 1997 and cash flows for
the nine months ended March 28, 1998 and March 29, 1997 are not
necessarily indicative of the results to be expected for the full year.
For further information, refer to the consolidated financial statements
and footnotes thereto for the year ended June 28, 1997, included in
the Registrant's Annual Report on Form 10-K.
2. Accounting Method Change
During the fourth quarter of fiscal 1997, the Company changed its
method of accounting for service van inventory from immediately
expensing the cost of inventory placed in its service van fleet to that of
capitalizing such inventory and recording its usage through cost of
sales. The cumulative effect of this change as of June 30, 1996 was
to increase inventory and reduce net loss by $7,420,000 (net of
reserve of $1,466,000). The effect of this restatement on the three
months and nine months ended March 29, 1997 is as follows (amounts
in thousands except per share amounts):
Nine Months Ended March 29, 1997:
As originally
Reported As Restated
Operating income $6,203 $4,633
Net loss before
preferred stock charges ($7,515) ($1,665)
Net loss applicable to common
stockholders ($14,519) ($8,669)
Net loss per common share ($6.83) ($4.06)
<Page 9>
Three Months Ended March 29, 1997:
As originally
Reported As Restated
Operating Income $449 $656
Net loss before preferred stock
charges ($4,011) ($3,804)
Net loss applicable to common
stockholders ($6,332) ($6,125)
Net loss per common share ($3.01) ($2.91)
Statement of Financial Accounting Standards (SFAS) No. 130,
"Reporting Comprehensive Income" was issued in June 1997 and is
effective for fiscal years beginning after December 15, 1997.
Reclassification of financial statements for earlier periods provided for
comparative purposes is required. The statement requires that an
enterprise classify items of other comprehensive income by their
nature in a financial statement and display the accumulated balance of
other comprehensive income separately from retained earnings and
additional paid-in capital in the equity section of the balance sheet.
Adoption of this new standard will result in additional financial
statement disclosures.
SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information," was issued in June 1997 and is effective for
financial statements for periods beginning after December 15, 1997.
In the initial year of application, comparative information for earlier
years is to be restated. The statement requires that a public business
enterprise report financial and descriptive information about its
reportable operating segments. Adoption of this new standard may
result in additional financial statement disclosures.
<Page 10>
3. Inventories
The Company's inventories are stated at the lower of cost (determined
using the first-in, first-out method) or market.
The components of inventories are as follows:
March 28, June 28,
1998 1997
(in thousands)
Finished products and service $22,474 $19,649
Products in Process 1,787 3,996
Raw materials 3,066 3,514
Less Allowance (4,218) (3,860)
Total $23,109 $23,299
4. Net Loss per common share
Net loss per common share is computed based on the weighted
average number of common shares outstanding for the period after
deducting preferred dividend requirements including amortization of
preferred stock discount. The average number of common shares for
the nine month period of fiscal 1998 is 2,093,669 as compared to
2,126,527 shares for the same period of fiscal 1997.
SFAS No. 128, "Earnings Per Share," was adopted during the quarter
ended March 28, 1998. The adoption of SFAS No. 128 had no effect
on previously reported per share amounts. Additionally there is no
difference in the calculations of basic and diluted net loss per common
share.
5. Contingencies
The Internal Revenue Service (IRS) has conducted examinations of
the Company's income tax returns for fiscal years 1988 through 1993
and has proposed various adjustments to increase taxable income.
The Company has agreed to certain issues and has previously
recorded a provision for additional income tax and interest in the
accompanying consolidated financial statements. Two issues remain
unresolved, and the IRS has issued deficiency notices on these
issues. The issues related to 1) the allocation of the company's
purchase price of assets from American Standard, 2) the value of the
Company's Series C preferred stock contributed to its ESOP.
<Page 11>
The Company allocated approximately $70 million of the purchase
price of assets from American Standard to intangible assets which are
being amortized over a period of generally 14 years. The IRS
proposes to reduce this allocation to approximately $45 million and
increase the amortization period to generally 45 years.
In 1990 and 1993, the Company contributed to its ESOP, and claimed
a tax deduction for, shares of Series C preferred stock having a value
aggregating approximately $9.6 million. The IRS proposes to reduce
this value to approximately $7.1 million.
Previously the IRS had informed the Company that if their proposed
adjustments are sustained, the Company would be liable for
additional income taxes of approximately $3.7 million plus interest
through 1993. However the IRS recently informed the Company that
the additional income taxes, for which the Company would be liable,
is approximately $4.1 million. The Company would have a future tax
liability of approximately $2.4 million for the same issues carrying
forward into, as yet, unaudited years.
Management believes that it has meritorious defenses to the
adjustments proposed by the IRS and that the ultimate liability, if any,
resulting from this matter will have no material effect on the
Company's consolidated financial position. The significance of this
matter on the Company's future operating results depends on the
level of future results of operations as well as on the timing and
amount of the ultimate outcome. On December 9, 1994 and October
6, 1995, the Company filed a protest to the proposed adjustments of
the IRS for the tax years ended June 1988 through June 1993. An
informal initial conference with the Northeast Region office of the
Internal Revenue Service was held on March 6, 1996. As a result of
this meeting, letters were issued on April 10, 1996 and April 29, 1996,
from the Internal Revenue Service Appeal Officer requesting
additional information on several issues. On February 10, 1998 the
company met with the Internal Revenue Appeals Officer to provide
additional information to support its position and to attempt to resolve
the matter. No resolution was reached, and subsequent to that
meeting the Company received a Final Defiency Notice from the IRS.
The Company will file a petition for a Tax Court hearing. The
Company maintains its position that it has a meritorious defense to
the adjustment, proposed by the IRS.
<Page 12>
The Company is involved in an audit by the Department of Labor
("DOL") of its Employee Stock Ownership Plan. On June 23, 1995,
the Department of Labor issued an audit letter claiming the
Company's Employee Stock Ownership Plan engaged in a prohibited
transaction. Essentially, the DOL alleges that Series C Preferred
Stock contributed to the Plan was not a proper investment since it
was neither stock nor a qualified equity as required by ERISA. The
Company has responded to the claim and intends to pursue the
matter vigorously as it believes the Series C Preferred Stock is stock
and, therefore, constitutes a proper investment for the Plan.
Various lawsuits and claims arising during the normal course of
business are pending against the company. In the opinion of
management, the ultimate liability, if any, resulting from these matters
will have no significant effect on the company's consolidated financial
position, results of operations or cash flows.
6. Reclassification
Certain prior quarter and prior year's data has been reclassified to
conform to current presentation.
<Page 13>
MOSLER INC.
Item 2
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward looking statements that are
subject to risks and uncertainties, including, but not limited to, the impact
of competitive products and pricing, product demand and market
acceptance, fluctuations in operating results and other risks detailed from
time to time in the Company's fillings with the Securities and Exchange
Commission.
Results of Operations:
Three months Ended March 28, 1998 Compared to the Three Months
Ended March 29, 1997
Sales
The Company's sales increased during the three months ended March 28,
1998 by 10.4% to $55.5 million from $50.3 million for the same period of
the prior year. Product net sales increased during the three months
ended March 28, 1998 by 26.4% to $29.8 million from $23.5 million for the
three months ended March 29, 1997. Electronic Security Systems sales
increased in the period by 24.4% and Physical Security Systems sales
increased by 30.3%. Service sales decreased in the period by 3.6% to
$25.8 million from $26.8 million. The decrease was primarily due to lower
time and material revenues. The decline in time and materials revenue is
a result of a refinement in the Company's method of recording certain
revenues and costs formally classified as service and now allocated
directly to product lines.
Gross Profit
Gross profit for the three months ended March 28, 1998 increased to
$12.2 million from $10.7 million for the same period in the prior year.
Gross profit as a percentage of sales increased to 21.9% for the three
months ended March 28, 1998 from 21.3% for the three months ended
March 29, 1997. The increase in gross margin dollars and percentages
are a result of improved volumes and efficiencies.
<Page 14>
Selling and Administrative Expense
Selling and administrative expense decreased in the three months ended
March 28, 1998 by 1.8% to $9.7 million from $9.9 million. The decrease
was a result of cost cutting measures implemented by the Company.
Selling and administrative expense as a percentage of net sales
decreased to 17.5% for the three months ended March 28, 1998 from
19.8% for the same period in the prior year.
Operating Income
The Company's operating income for the three months ended March 28,
1998 of $2.7 million is $2.0 million more than for the three months ended
March 29, 1997. Included in operating income for the three months
ended March 28, 1998 were plant closing costs of $.3 million. These cost
relate to the closing of the Company's Counter Services Operation in
Buffalo, NY.
Debt Expense
Debt expense increased for the three months ended by 4.9% to $4.7
million from $4.4 million for the three months ended March 29, 1997. The
increase was due to an increase in the interest on the unpaid dividends
for preferred stock.
Net Loss
Net loss before preferred stock charges decreased $1.8 million for the
three months ended March 28, 1998 to $2.0 million as compared to $3.8
million for the three months ended March 29, 1997.
Nine Months Ended March 28, 1998 Compared to the
Nine Months Ended March 29, 1997.
Sales
The Company's sales increased by 9.0% during the nine months ended
March 28, 1998 to $167.4 million from $153.5 million for the same period
ended March 29, 1997.
<Page 15>
Service sales decreased by $1.9 million or 2.4% for the nine month period
ending March 28, 1998 to $77.7 million from $79.6 million for the nine
months ended March 29, 1997. The decrease was due to lower time and
material sales of $1.9 million. The decline in time and material sales is a
result of a refinement in the Company's method of recording certain
revenues and costs formally classified as service and now allocated
directly to product lines.
Product sales increased by 21.4% for the nine months ended March 28,
1998 to $89.6 million from $73.8 million for the nine months ended March
29, 1997. Electronic Security Systems sales increased by 28.7% with
increases in Alarm Systems of $1.1 million, COMSEC of $4.2 million,
CCVS of $2.9 million, Currency Handling of $1.6 million offset by a
decrease in Access Control of $.9 million. Physical Security System sales
increased by 16.7% with increases in Vaults of $1.9 million, RTS of $2.6
million, Counter Products of $.5 million, and increases in other products of
$1.5 million offset by a decrease in Government Containers of $1.0
million.
Gross Profit
Gross profit increased during the nine months ended March 28, 1998 by
10.8% to $37.1 million from $33.5 million for the same period in the prior
fiscal year. Gross profit as a percentage of sales increased to 22.1% from
21.8%. The increase in gross profit dollars was a result of higher sales
volume. The Company experienced improved gross profit percentages in
Service and Physical Security offset by lower gross profits on Electronic
Security Sales.
Selling and Administrative Expense
Selling and Administrative expenses decreased by 4.9% to $27.6 million
for the nine months ended March 28, 1998 from $29.0 million for the nine
months ended March 29, 1997. The decrease related to cost savings
measures implemented in the fourth quarter of fiscal 1997 offset by higher
commission expenses on an increased orders volume.
Operating Income
The Company's operating income for the nine months ended March 28,
1998 of $9.3 million is $4.7 million more than for the nine months ended
March 29, 1997. Included in operating income for the nine months ended
March 28, 1998 were plant closing costs of $.5 million. This cost related
to closing of the Counter Systems Operation in Buffalo, NY. A third party
vendor was found to manufacture counter systems products for the
Company.
<Page 16>
Debt Expense
Debt expense increased for the nine months ended March 28, 1998 by
$.5 million to $14.1 million from $13.6 million. The increase was primarily
due to an increase in the interest rate on the unpaid dividends and
interest on preferred stock.
Net Loss
Net loss before the cumulative effect of the change in accounting
decreased by $4.2 million for the nine months ended March 28, 1998.
Inflation
The Company believes that its business is affected by inflation to
approximately the same extent as the national economy. Generally, the
Company has been able to offset the inflationary impact of wages and
other costs through a combination of improved productivity, cost reduction
programs and price increases. The Company has had difficulty in
effecting significant price increases because of the discounting practices
of its competitors.
Liquidity and Capital Resources
On April 23, 1998 the Company entered into an Amendment to its
Financing Agreement with Star Bank N.A., under which future financial
convenants were set. Under the terms of the Amendment, the credit
facility was increased to $30.25 million. Borrowings under the amended
credit facility will bear interest at the prime lending rate plus 1.5%.
Cash used by operating activities was $4.6 million for the nine months
ended March 28, 1998 as compared to cash provided of $8.4 million for
the same period of fiscal 1997 for a decrease of $13.0 million. This
variance was a result of increased working capital requirements due to the
increase in sales volume.
The Company's unfinanced capital expenditures were $1.1 million for the
first nine months of fiscal 1997 as compared to $2.4 million the nine
months end March 29, 1997. The Company anticipates Capital
expenditures for fiscal 1998 will not exceed $2.0 million.
<Page 17>
The Company currently makes cash contributions to the ESOP only to the
extent necessary to fund the cash needs of the ESOP for payments to
retired, terminated and deceased participants and for administrative
expenses.
Other Business Information - Year 2000 Disclosure
The Company is in the process of implementing a new business and
accounting software system which will be fully capable of processing
transactions relating to the year 2000 and beyond. This project is
scheduled to be completed in the first half of 1999. The cost is not
expected to have a material impact on the Company's financial position or
results of operation. The Company, as part of its ongoing product
evaluation and improvement process, has reviewed its products for
compliance with the year 2000 processing issues. As such the Company
has made available information to its customers on any known issues.
Based on these reviews the Company is not aware of any significant
product issues which would result in a material impact on the Company's
financial position or results of operations.
<Page 18>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
<Page 19>
MOSLER INC.
Signature
Pursuant to the requirements of Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Mosler Inc.
(Registrant)
Date: May 7, 1998 /s/ Thomas J. Bell
Thomas J. Bell
Chief Financial Officer
<Page 20>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-27-1998
<PERIOD-END> MAR-28-1998
<CASH> 301,000
<SECURITIES> 0
<RECEIVABLES> 50,191,000
<ALLOWANCES> 942,000
<INVENTORY> 23,109,000
<CURRENT-ASSETS> 3,124,000
<PP&E> 39,517,000
<DEPRECIATION> 30,228,000
<TOTAL-ASSETS> 104,155,000
<CURRENT-LIABILITIES> 52,586,000
<BONDS> 132,651,000
<COMMON> 409,000
0
94,735,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 104,155,000
<SALES> 89,632,000
<TOTAL-REVENUES> 167,359,000
<CGS> 72,151,000
<TOTAL-COSTS> 130,294,000
<OTHER-EXPENSES> 28,178,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,682,000
<INCOME-PRETAX> (4,795,000)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,868,000)
<EPS-PRIMARY> (6.38)
<EPS-DILUTED> 0
</TABLE>
