<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1994
<PERIOD-END> SEP-30-1994 SEP-30-1994
<CASH> 1,677 1,677
<SECURITIES> 0 0
<RECEIVABLES> 28,324 28,324
<ALLOWANCES> 1,054 1,054
<INVENTORY> 46,155 46,155
<CURRENT-ASSETS> 93,730 93,730
<PP&E> 60,165 60,165
<DEPRECIATION> 22,414 22,414
<TOTAL-ASSETS> 134,866 134,866
<CURRENT-LIABILITIES> 40,020 40,020
<BONDS> 18,700 18,700
<COMMON> 1,961 1,961
0 0
0 0
<OTHER-SE> 73,392 73,392
<TOTAL-LIABILITY-AND-EQUITY> 134,866 134,866
<SALES> 49,021 157,941
<TOTAL-REVENUES> 49,021 157,941
<CGS> 37,805 121,683
<TOTAL-COSTS> 37,805 121,683
<OTHER-EXPENSES> 8,041 24,037
<LOSS-PROVISION> 17 141
<INTEREST-EXPENSE> 119 331
<INCOME-PRETAX> 3,377 11,888
<INCOME-TAX> 246 669
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 3,131 11,219
<EPS-PRIMARY> 0.32 1.14
<EPS-DILUTED> 0.32 1.14
</TABLE>
FORM 10-Q
SECURITIES & EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[ X ] Quarterly report pursuant to section 13 or
15(d) of the Securities Exchange Act of 1934. For the
quarterly period ended September 30, 1994.
[ ] 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 0-14714
Astec Industries, Inc.
(Exact Name of Registrant as Specified in its Charter)
Tennessee 62-0873631
(State or other jurisdiction of
I.R.S. Employer Identification No.)
incorporation or organization)
4101 Jerome Avenue, Chattanooga, Tennessee 37407
(Address of Principal Executive Offices) (Zip Code)
(615) 867-4210
(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__________
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares outstanding of registrant's
Common Stock, par value $0.20 per share, as of
September 30, 1994 was 9,805,402.
<PAGE>
ASTEC INDUSTRIES, INC.
INDEX
Page Number
PART I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of
September 30, 1994, December 31, 1993
and September 30, 1993
Consolidated Statements of Income
for the Three and Nine Months Ended
September 30, 1994 and 1993
Consolidated Statements of Cash Flows
for the Nine Months Ended September 30, 1994
and 1993
Notes to Unaudited Consolidated Financial
Statements
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
PART II - Other Information
Item 1. Legal Proceedings
Item 6. Exhibits
Signature Page
<PAGE>
ASTEC INDUSTRIES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. The information contained in the unaudited
consolidated balance sheets, the unaudited consolidated
statements of income, and the unaudited consolidated
statements of cash flows reflect all adjustments
consisting of normal recurring accruals which are, in
the opinion of management, necessary to present a fair
statement of the results for the periods covered.
2. Receivables are net of allowance for doubtful
accounts of $ 1,054,000, $1,191,000 and $904,000 for
September 30, 1994, December 31, 1993 and September 30,
1993, respectively.
3. Inventories are stated at the lower of first-in,
first-out, cost or market and consist of the following:
(in thousands)
September 30, December 31, September 30,
1994 1993 1993
Raw Materials $ 19,028 $ 18,419 $ 17,825
Work-in-Process 7,242 6,018 6,557
Finished Goods 19,885 15,569 13,239
Total $ 46,155 $ 40,006 $ 37,621
4. Property and equipment is stated at cost.
Property and equipment is net of accumulated
depreciation of $22,414,000, $20,062,000 and
$19,675,000 for September 30, 1994, December 31, 1993
and September 30, 1993, respectively.
5. Earnings per share are computed in accordance with
APB No. 15 and are based on the weighted average number
of shares outstanding for each respective period.
6. Certain customers have financed purchases of Astec
products through arrangements in which Astec is
contingently liable for customer debt aggregating
approximately $12,215,000 at September 30,1994,
$13,700,000 at December 31, 1993, and $10,293,000 at
September 30, 1993.
7. There have been material developments in legal
proceedings previously reported. See Management's
Discussion and Analysis of Financial Conditions and
Results of Operations in Part I - Item 2
Contingencies of this Report.
8. Approximately 80% of Astec's business volume
normally occurs during the first nine months of each
year.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
Results of Operations
For the three-month period ended September 30,
1994, net sales increased by $10,183,000 compared to
sales for the three-month period ended September
30,1993, representing a 26.2% increase. For the nine-
month period ended September 30, 1994, net sales
increased $23,266,000 compared to net sales for the
same period of 1993, representing a 17.3% increase.
International sales increased $10,397,000 for the
quarter ended September 30, 1994 compared to the
quarter ended September 30, 1993 and increased
$10,603,000 for the nine months ended September 30,
1994 compared to the prior year.
Gross profit increased $1,948,000 for the quarter
ended September 30, 1994 compared to the quarter ended
September 30, 1993. For the nine months ended
September 30, 1994, the gross profit increased
$4,732,000 compared to the prior year. The gross
profit percentage for the nine months ended September
30, 1994 was 23.0% compared to 23.4% for the same
period in 1993.
Selling, general, and administrative expenses for
the third quarter of 1994 were $7,998,000 compared to
$6,550,000 for the same period of 1993. Selling,
general and administrative expenses as a percentage of
net sales were 16.3% for the quarter ended September
30, 1994 compared to 16.9% in the third quarter of
1993. These expenses increased during the third
quarter of 1994 due to increased sales during the
quarter. For the nine months ended September 30, 1994,
selling, general and administrative expenses as percent
of net sales were 15.1% compared to 17.3% for the nine
months ended September 30, 1993. For the nine months
ended September 30, 1994 compared to the same period in
1993, selling, general and administrative expenses have
remained relatively stable, the decrease in the
percentages relates to the increased sales during the
same periods.
Interest expense decreased to $119,000 for the
quarter ended September 30, 1994 from $257,000 for the
quarter ended September 30, 1993. Interest expense as
a percentage of net sales decreased to .2% for the
quarter ended September 30, 1994 from .7% for the same
period of 1993. For the nine months ended September
30, 1994, interest expense was .2% of net sales
compared to 1.3% for the same period in the prior year.
The decrease in interest expense for the year is mainly
attributable to the decrease in long-term debt during
the first quarter of the year. The 1994 debt consists
mainly of industrial revenue bonds which have a lower
interest rate than that of the debt outstanding in
1993.
Other income, net of other expense, was $321,000,
or .7% of net sales for the quarter ended September 30,
1994, compared to a net other income of $326,000, or
.8% of net sales for the quarter ended September 30,
1993. Other income, net of other expense for the nine
months ended September 30, 1994 is a net expense of
$2,000, or .001% of net sales compared to a net other
income of $1,674,000, or 1.2% of net sales for the same
period last year. Other income, net of other expense,
includes a loss of approximately $517,000 relative to
the Wibau-Astec joint venture in Germany for the third
quarter of 1994. The Company has incurred losses of
approximately $1,740,000 for the nine months ended
September 30, 1994 relative to the Wibau-Astec joint
venture. Other income, net of other expense, for the
nine months of 1993 and 1994 would be at comparable
levels except for the Wibau-Astec joint venture losses.
Backlog at September 30, 1994 was $28,737,000
compared to $20,366,000 at September 30, 1993.
Earnings per share were $.32 for the third quarter
of 1994 compared to $.22 for the same period of 1993.
For the nine months ended September 30, 1994, earnings
per share were $1.14 compared to $.86 for the same
period last year.
Liquidity and Capital Resources
As of September 30, 1994, the Company had working
capital of $53,710,000 compared to $42,083,000 at
September 30, 1993.
Total short-term borrowings, including current
maturities of long-term debt, were $500,000 at
September 30, 1994. Long-term debt less current
maturities was $18,700,000 at September 30,1994. Debt
outstanding at September 30, 1994 consists of
industrial revenue bonds issued to finance capital
expenditures and the outstanding balance on the
revolving line of credit.
With the purchase and renovation of a facility for
Trencor, Inc., and capital expenditures in 1994 for
plant expansion and further modernization of the
Company's manufacturing processes, we now expect
capital expenditures to approach approximately
$22,000,000 for the year. These expenditures are being
financed using internally generated funds and
industrial revenue bonds. Capital expenditures at
September 30,1994 were $16,977,000.
In July, 1994, a new loan agreement was signed for
$15,000,000 with The First National Bank of Chicago
that expires June 30, 1997. The new loan agreement is
an unsecured revolving line of credit. The outstanding
balance on the revolving line of credit at September
30, 1994 was $5,200,000. The Company was in compliance
with all financial covenants at September 30, 1994.
On August 9, 1994, the Company announced that its
wholly owned subsidiary Trencor, Inc., a manufacturer
of trenching equipment, completed an asset purchase
from Capitol Trencher Corporation, also a manufacturer
of trenching equipment. The acquisition encompasses
the entire product line from manufacturing rights,
trademarks, and patents to intellectual property and
engineering designs; however, none of the manufacturing
plant or equipment was included in the purchase. The
Company assumes no liabilities of Capitol Trencher
Corporation. The product line has been relocated to
and will be manufactured at Trencor's new facility in
Grapevine, Texas.
On October 14, 1994, the Company announced that it
had utilized cash and Astec Industries, Inc. stock to
complete the acquisition Gibat Ohl
Ingenieurgesellschaft fur Anlagntechnik mbH of
Hasselroth, Germany. Gibat Ohl is a manufacturer of
asphalt batch plants and related equipment.
On October 14, 1994, the Company also announced a
second transaction. The Company signed a definitive
agreement to purchase the remaining 50% interest in
Wibau-Astec Maschinenfabrik GmbH of Grundau, Germany.
Astec previously acquired the initial 50% interest in
July, 1993. This acquisition will provide the Company
100% ownership. The Company hopes the completion of
these acquisitions will strengthen its position in the
European market and allow it to restructure the Wibau-
Astec operations and return Wibau-Astec to
profitability in 1995.
Contingencies
The Company is engaged in certain pending
litigation involving claims or other matters arising in
the normal course of business. Most of these claims
involve product liability or other tort claims for
property damage or personal injury against which the
Company is insured. As a part of its litigation
management program, the Company maintains general
liability insurance covering product liability and
other similar tort claims providing the Company
coverage of $8,000,000 subject to a substantial self-
insured retention under the terms of which the Company
has the right to coordinate and control the management
of its claims and the defense of these actions.
The Company and its former Barber-Greene
subsidiary (now Telsmith, Inc.) are defendants in two
patent infringement actions brought by CMI Corporation
(CMI), a competitor, seeking monetary damages and an
injunction to cease the alleged infringement.
The U.S. District Court for the Eastern District
of Tennessee ruled in 1988 in the Robert L. Mendenhall
and CMI case against Astec and Astec's counterclaims
against CMI that the trial of the cases be bifurcated
into two sequential phases, liability and damages. In
the liability phase of the trial in 1988, the Court
determined that two CMI patents were valid and
infringed by Astec and that three Astec patents were
valid and infringed by CMI. Both CMI and Astec
appealed the Court's decision. In separate decisions
rendered in September 1989 and in November 1989, the
Court of Appeals for the Federal Circuit affirmed the
District Court's decisions with respect to validity and
infringement of both the CMI and Astec patents.
During July and August 1990, a bench trial was
held in the U.S. District Court for the Eastern
District of Tennessee to determine damages in
connection with the foregoing suit. The trial covered
the calculation of damages against Astec with respect
to two CMI patents and against CMI with respect to
three Astec patents. On June 20, 1991, the Court
entered its findings on the damages phase of the
litigation rejecting CMI's claims for lost profits and
damages in excess of $50,000,000 and determined that
damages would be calculated based on reasonable
royalties. In connection with this finding, the court
ruled that Astec owes CMI damages $8,463,000 plus pre-
judgment interest of $5,309,000 and attorneys' fees of
$737,000 and that CMI in turn owes Astec damages of
$667,000 plus $391,000 of pre-judgment interest. The
net damages and expenses determined by the Court to be
payable to CMI total approximately $13,451,000.
In the foregoing litigation, the Court ruled that
both CMI and Astec are to pay royalties on patented
articles sold. However, in computing the royalties
owed by Astec to CMI, the Court included the entire
asphalt plant price (the convoyed price) in its
computations, while only specific patented articles
were considered in the computation of royalties owed by
CMI to Astec. In the opinion of the Company and its
litigation counsel, the Court's method of computation
is contrary to law and is inconsistent with the Court's
rulings on other issues in the case. Based on the
Court's method of computation, Astec is being required
to pay royalties to CMI on Astec's own patented
equipment which CMI has been found to have infringed.
The Company appealed the Court's decision on these
computations and other issues. Pending the outcome of
the appeal, the Company was directed by the Court to
pledge substantially all of its real property and to
deposit approximately $3,000,000 in an escrow to secure
the judgment against the Company.
In the CMI and Robert L Mendenhall case against
Barber-Greene, on October 24, 1990, the U.S. District
Court for the Northern District of Illinois amended a
previous order and determined that the Company was
liable for approximately $2,838,000 in pre-judgment
interest in addition to the previously announced jury
verdict of approximately $4,457,000. CMI filed an
appeal regarding the trial court's determination of pre-
judgment interest. The Barber-Greene Company also
filed an appeal. In connection with such appeal, the
Company deposited in an account at the Court's
direction, approximately $7,295,000 representing the
amount of the judgment (including pre-judgment interest
which is the subject of the appeal) entered by the
trial court.
One CMI patent and all but one claim of a second
patent used as a basis for their suit against Astec and
Barber-Greene, were invalidated in a jury trial in
Cedar Rapids, Iowa in a suit against Cedarapids, Inc.
CMI appealed the decision to the U.S. Court of Appeals
for the Federal Circuit. Astec also appealed the two
CMI cases discussed above to the U.S. Court of Appeals
for the Federal Circuit. Oral argument in all three
appeals was heard concurrently by the Federal Circuit
on December 7, 1992. The invalidity decision in the
Cedarapids case was upheld and CMI then petitioned the
U.S. Supreme Court to review the case. In April 1994,
the Supreme Court declined to do so, thus leaving the
Federal Circuit's decision in the Cedarapids case
intact.
On June 9, 1994, the Company announced that the
United States Court of Appeals for the Federal Circuit
had reversed, and did not remand to the lower court for
further proceedings, the judgments previously entered
against Astec and its former Barber-Greene subsidiary
in the Robert L. Mendenhall and CMI Corporation patent
litigation. Those judgments had totaled approximately
$22 million. The Federal Circuit Court ruled in favor
of Astec because the allegedly infringing patents had
been held invalid in a separate third party case. CMI
asked the Federal Circuit to reconsider its decision
and to have all of the Federal Circuit judges rehear
the appeal. The Company responded to this request. On
September 20, 1994, the Company announced that the
United States Court of Appeals for the Federal Circuit
denied requests from Mendenhall and CMI to reconsider
its earlier ruling reversing the judgments previously
entered against Astec And Barber-Greene. With the
issuance of this ruling, the Federal Circuit's review
of this ongoing patent litigation is ended.
On October 11, 1994, CMI Corporation and Robert L.
Mendenhall filed a Petition for Writ of Certiorari
asking the U. S. Supreme Court to review the decision
of the Federal Circuit Court of Appeals which reversed
the judgments entered against Astec and Barber-Greene.
The Company has filed a response opposing the Petition.
Review by the U. S. Supreme Court is not a right. The
Supreme Court must agree to hear the case which occurs
in a very small percentage of the cases presented for
discretionary review. In the opinion of the Company's
legal counsel, it is highly unlikely that the Supreme
Court will hear the case which will bring the
litigation process to a close and leave the Company's
counterclaim against CMI Corporation intact. The
Company is taking the necessary steps to recover in
excess of thirteen million dollars held in escrow.
While the Company and its legal counsel are
optimistic as to the anticipated outcome, because of
the uncertainties in the litigation process, there can
be no assurances as to the ultimate resolution of these
lawsuits. An unfavorable result, were the case heard
and reversed by the Supreme Court could have a material
adverse effect on the Company's results of operations
and financial condition, however, management believes
that the Company can satisfy its cash needs from funds
already deposited in escrow and, to the extent
necessary, from cash flow or through additional short
or long-term borrowing.
The Company's Telsmith subsidiary is also a
defendant in a patent infringement action brought by
Nordberg, Inc. , a manufacturer of a competing line of
rock crushing equipment, seeking monetary damages and
an injunction to cease an alleged infringement of a
patent on certain components used in the production of
its rock crushing equipment. This case, being heard
before the U.S. District Court for the Eastern District
of Wisconsin, has been bifurcated into liability and
damages phases. The liability phase was tried on
January 11, 1993, however no decision has been rendered
by the Court. Because of the uncertainties inherent in
the litigation process, the Company is unable to
predict the ultimate outcome of this litigation.
Management has reviewed all claims and lawsuits
and, upon the advice of its litigation counsel, has
made provision for any estimable losses; however, the
Company is unable to predict the ultimate outcome of
the outstanding claims and lawsuits.
Effective January 1, 1994, the Company guaranteed
50% of the debt utilized by Wibau-Astec under credit
agreements with three German banks. The amount
outstanding under these agreements at September 30,
1994 was approximately $5,491,000. As part of the
definitive agreement to purchase the 100% ownership of
Wibau-Astec, Astec Industries, Inc. will guarantee 100%
of the debt outstanding at Wibau-Astec. At September
30, 1994, this amount was $10,982,000, which includes
the $5,491,000 above.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There have been material developments in the legal
proceedings previously reported by the registrant since
the filing of its Annual Report on Form 10-K for the
fiscal year ended December 31, 1993, described on Part
I-Item 2, Contingencies of this report. See
Management's Discussion and Analysis of Financial
Condition and Results of Operations in Part I - Item 2
Contingencies of this Report.
Item 6. Exhibits 1
(a) The following Exhibits 1 are filed with this
Report:
11 Statement Regarding Computation of Per
Share Earnings.
(b) Reports on Form 8-K.
There were no reports on Form 8-K filed for
the three months ended September 30, 1994.
<PAGE>
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.
ASTEC INDUSTRIES, INC.
(Registrant)
11/08/94 /s/ J. Don Brock
Date
J. Don Brock
Chairman of
the Board
11/08/94 /s/ Albert E.Guth
Date
Albert E. Guth
Senior Vice
President
Treasurer ,
Secretary
and Principal
Financial
Officer
<PAGE>
EXHIBIT 11
Statement Regarding Computation of Per Share Earnings
<PAGE>
<TABLE>
ASTEC INDUSTRIES, INC.
EXHIBIT (11) - COMPUTATIONS OF EARNINGS PER SHARE
9/30/94
(in thousands)
Shares for Earnings Per Share Computations: 2
Primary:
<CAPTION>
<S> <C>
Weighted average outstanding during year 9,801
Common Stock equivalents for stock options 144
TOTAL 9,945
Fully Diluted:
Weighted average outstanding during year 9,801
Common Stock equivalents for stock options 149
TOTAL 9,950
Earnings Applicable to Common Stock:
Net Income 11,219
Earnings Per Share (Based on Weighted Average Number
of Common and Common Equivalent Shares
Outstanding):
Net Income 1.14
Additional Computations of EPS:
Fully Diluted:
Net Income 1.14
</TABLE>
[FN]
1 The Exhibits are numbered in accordance with Item 601
of Regulation S-K.
2 Dilutive effect of common stock equivalents on both
primary and fully diluted Earnings Per Share is less
than 3% and, in accordance with APB Opinion No. 15,
Earnings Per Share on the face of the Statements of
Income is based on only the weighted average number of
common shares outstanding. The above calculations have
been provided for reporting purposes only.
<PAGE>
<TABLE>
ASTEC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ACCOUNT DESCRIPTION SEPTEMBER 30 DECEMBER 31 SEPTEMBER 30
1994 1993 1993
ASSETS
CURRENT ASSETS
<CAPTION>
<S> <C> <C> <C>
CASH AND CASH EQUIVALENTS $1,677 $3,458 $3,889
RECEIVABLES - NET 27,270 19,091 20,360
INVENTORIES 46,155 40,006 37,621
PREPAID EXPENSES AND OTHER 5,833 1,622 1,404
PATENT DAMAGE ESCROW FUNDS 12,795 12,309 11,875
TOTAL CURRENT ASSETS 93,730 76,486 75,149
PROPERTY AND EQUIPMENT - NET 37,751 23,659 20,930
OTHER ASSETS 3,385 2,822 2,092
TOTAL ASSETS $134,866 $102,967 $98,171
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
CURRENT MATURITIES OF LONG-TERM DEBT $500 $10 $16
ACCOUNTS PAYABLE - TRADE 13,183 10,170 10,759
RESERVE FOR PATENT DAMAGES 13,736 13,250 12,815
OTHER ACCRUED LIABILITIES 12,601 12,289 9,476
TOTAL CURRENT LIABILITIES 40,020 35,719 33,066
LONG-TERM DEBT, LESS CURRENT
MATURITIES 18,700
OTHER LONG-TERM LIABILITIES 793 3,143 3,164
TOTAL SHAREHOLDERS' EQUITY 75,353 64,105 61,941
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $134,866 $102,967 $98,171
</TABLE>
<TABLE>
ASTEC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
THREE MONTHS ENDED NINE MONTHS ENDED
1994 1993 1994 1993
<CAPTION>
<S> <C> <C> <C> <C>
NET SALES $49,021 $38,838 $157,941 $134,675
COST OF SALES 37,805 29,570 121,683 103,149
GROSS PROFIT 11,216 9,268 36,258 31,526
S,G, & A EXPENSES 7,998 6,550 23,832 23,320
PATENT SUIT DAMAGES
& EXPENSES 43 96 205 280
INCOME FROM OPERATIONS 3,175 2,622 12,221 7,926
INTEREST EXPENSE 119 257 331 1,701
LOAN PREPAYMENT PENALTY
AND EXPENSES 545 545
OTHER INCOME,
NET OF EXPENSE 321 326 (2) 1,674
INCOME BEFORE
INCOME TAXES 3,377 2,146 11,888 7,354
INCOME TAXES 246 30 669 179
NET INCOME $3,131 $2,116 $11,219 $7,175
EARNINGS PER
COMMON AND COMMON
EQUIVALENT SHARE $0.32 $0.22 $1.14 $0.86
WEIGHTED AVERAGE
NUMBER OF COMMON AND
COMMON EQUIVALENT
SHARES OUTSTANDING 9,805,185 9,788,710 9,801,032 8,323,591
</TABLE>
<PAGE>
<TABLE>
ASTEC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
SEPTEMBER 30 SEPTEMBER 30
1994 1993
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES:
<CAPTION>
<S> <C> <C>
NET INCOME $11,219 $7,175
ADJUSTMENTS TO RECONCILE NET INCOME TO
NET CASH (USED) BY OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 2,898 2,214
PROVISION FOR DOUBTFUL ACCOUNTS 141 266
PROVISION FOR INVENTORY RESERVE 1,422 876
PROVISION FOR WARRANTY RESERVE 2,313 1,683
PROVISION FOR PENSION LIABILITY (192)
GAIN ON SALE OF FIXED ASSETS (144) 2
(INCREASE) DECREASE IN:
RECEIVABLES (9,149) (8,368)
INVENTORIES (7,572) 1,472
PREPAID EXPENSES AND OTHER (4,211) (173)
PATENT DAMAGE ESCROW FUNDS (486) (284)
OTHER RECEIVABLES 828 474
OTHER ASSETS (710) 70
INCREASE (DECREASE) IN:
ACCOUNTS PAYABLE 3,014 1,644
ACCRUED PRODUCT WARRANTY (1,590) (1,390)
OTHER ACCRUED LIABILITIES (2,521) (474)
TAXES PAYABLE (241) 191
RESERVE FOR PATENT DAMAGES 486 261
TOTAL ADJUSTMENTS (15,522) (1,728)
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES (4,303) 5,447
CASH FLOWS FROM INVESTING ACTIVITIES:
PROCEEDS FROM SALE OF PROPERTY
AND EQUIPMENT - NET 278 36
EXPENDITURES FOR PROPERTY AND EQUIPMENT (16,977) (5,215)
NET CASH USED BY INVESTING ACTIVITIES (16,699) (5,179)
CASH FLOWS FROM FINANCING ACTIVITIES:
NET BORROWINGS (REPAYMENTS) UNDER
REVOLVING CREDIT LOAN 5,200 (4,675)
BORROWINGS (REPAYMENTS) UNDER LOAN
AND NOTE AGREEMENTS 13,990 (21,072)
PROCEEDS FROM ISSUANCE OF COMMON STOCK 31 27,134
NET CASH PROVIDED BY FINANCING ACTIVITIES 19,221 1,387
NET INCREASE (DECREASE) IN CASH (1,781) 1,655
CASH AT BEGINNING OF PERIOD 3,458 2,234
CASH AT END OF PERIOD $1,677 $3,889
</TABLE>
