<PAGE> 1
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 MARCH 31, 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: 0-15383
CEM CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
North Carolina 56-1019741
- --------------------------------------------------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
3100 Smith Farm Road, Matthews, NC 28105
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Post Office Box 200, Matthews, North Carolina 28106
- --------------------------------------------------------------------------------
(Mailing address of principal executive offices)
(704) 821-7015
- --------------------------------------------------------------------------------
(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 [ ]
3,445,327 shares of the issuer's $.05 par value common stock, its only class of
common stock, were outstanding as of April 23, 1998.
Page 1 of 17
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. Financial statements
QUARTERLY REPORT ON FORM 10-Q
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Quarter Ended March 31, 1998
CEM Corporation
Matthews, North Carolina
The condensed financial statements included herein have been prepared by 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 financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company's Annual Report on Form
10-K for the fiscal year ended June 30, 1997.
Page 2 of 17
<PAGE> 3
CEM CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
(in thousands)
March 31 June 30
-------- -------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ............ $ 6,161 $ 5,833
Short-term investments ............... 3,200 3,100
Trade receivables .................... 5,983 5,990
Inventories .......................... 5,548 5,139
Deferred taxes and other ............. 702 742
------- -------
Total current assets .............. 21,594 20,804
LONG-TERM INVESTMENTS ................... 3,347 2,268
PROPERTY, PLANT AND EQUIPMENT, NET ...... 5,017 5,296
OTHER ASSETS ............................ 913 846
------- -------
$30,871 $29,214
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 3,256 $ 2,868
Deferred income ...................... 1,276 1,039
Income taxes payable ................. 861 488
------- -------
Total current liabilities ......... 5,393 4,395
LONG-TERM DEBT, NET OF CURRENT MATURITIES 1,151 1,229
DEFERRED TAXES .......................... 110 110
SHAREHOLDERS' EQUITY .................... 24,217 23,480
------- -------
$30,871 $29,214
======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 3 of 17
<PAGE> 4
CEM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
(in thousands, except per share data)
1998 1997
------ ------
<S> <C> <C>
Net sales ....................................................... $8,012 $7,138
Cost of goods sold .............................................. 3,778 3,096
------ ------
Gross profit ................................................ 4,234 4,042
Selling, general and administrative expenses .................... 2,745 2,784
Research and development expenses ............................... 737 754
------ ------
Income from operations ...................................... 752 504
Investment income ............................................... 124 115
Other expenses, net ............................................. 26 27
------ ------
Income before income taxes .................................. 850 592
Provision for income taxes ...................................... 268 201
------ ------
Net income .................................................. $ 582 $ 391
====== ======
Earnings Per Share:
Basic ...................................................... $ .17 $ .11
====== ======
Diluted .................................................... $ .17 $ .11
====== ======
Common and equivalent shares used in computing per-share amounts:
Basic ...................................................... 3,442 3,534
====== ======
Diluted .................................................... 3,476 3,546
====== ======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 4 of 17
<PAGE> 5
CEM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
(in thousands, except per share data)
1998 1997
------- -------
<S> <C> <C>
Net sales ....................................................... $23,320 $21,920
Cost of goods sold .............................................. 10,890 9,853
------- -------
Gross profit ................................................ 12,430 12,067
Selling, general and administrative expenses .................... 8,342 8,503
Research and development expenses ............................... 2,163 2,106
------- -------
Income from operations ...................................... 1,925 1,458
Investment income ............................................... 419 315
Other expenses , net ............................................ 66 93
------- -------
Income before income taxes .................................. 2,278 1,680
Provision for income taxes ...................................... 729 578
------- -------
Net income .................................................. $ 1,549 $ 1,102
======= =======
Earnings Per Share:
Basic ...................................................... $ .45 $ .31
======= =======
Diluted .................................................... $ .44 $ .31
======= =======
Common and equivalent shares used in computing per-share amounts:
Basic ...................................................... 3,466 3,536
======= =======
Diluted .................................................... 3,495 3,559
======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 5 of 17
<PAGE> 6
CEM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
(in thousands)
1998 1997
------- -------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES .......... $ 3,041 $ 3,482
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale of available-for-sale investments ......... 3,100 1,000
Purchase of available-for-sale investments ..... (3,200) (500)
Purchase of long-term investment ............... (1,152) (250)
Acquisition of intangibles ..................... (208) (310)
Capital expenditures, net ...................... (589) (445)
------- -------
Net cash used in investing activities ... (2,049) (505)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of notes payable ....................... 18 --
Proceeds from issuance of common stock ......... 409 142
Repurchase of common stock ..................... (1,097) (348)
------- -------
Net cash used in financing activities ... (670) (206)
------- -------
EFFECTS OF EXCHANGE RATES ON CASH .................. 6 (37)
------- -------
Net increase (decrease) in cash and cash equivalents 328 2,734
Cash and cash equivalents at beginning of period ... 5,833 1,832
------- -------
Cash and cash equivalents at end of period ......... $ 6,161 $ 4,566
======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 6 of 17
<PAGE> 7
CEM CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting of normal recurring
adjustments) which are, in the opinion of management, necessary for a fair
presentation of results for the interim periods.
2. INVENTORIES
The components of inventories at current cost at March 31, 1998 and June 30,
1997 are as follows:
<TABLE>
<CAPTION>
(in thousands)
March 31 June 30
-------- -------
<S> <C> <C>
Parts and raw materials .......... $3,453 $2,560
Work-in-process and finished goods 2,095 2,579
------ ------
$5,548 $5,139
====== ======
</TABLE>
3. NET INCOME PER COMMON SHARE
Basic Earnings Per Share Computation:
The computation of basic earnings per share is computed by dividing income
available to common shareholders by the weighted average number of common shares
outstanding during the period. Shares issued during the period and shares
repurchased by the Company during the period are weighted for the portion of the
period that they were outstanding.
Income and share information for the three months ended March 31, 1998 follows:
<TABLE>
<CAPTION>
(in thousands, except per share data)
<S> <C>
Net income ............................ $582
Less: preferred stock dividends ....... --
----
Income available to common stockholders $582
====
</TABLE>
<TABLE>
<CAPTION>
Dates Fraction Weighted
Outstanding Shares of Period Average Shares
----------- ------ --------- --------------
<S> <C> <C> <C>
Shares outstanding, January 1, 1998 ..... 3,436
Shares repurchased during the period .... (21) 43/90 (10)
Stock options exercised during the period 22 66/90 16
-----
Weighted average shares ................. 3,442
=====
Basic earnings per common share ......... $ .17
=====
</TABLE>
Page 7 of 17
<PAGE> 8
3. NET INCOME PER COMMON SHARE (CONTINUED)
Income and share information for the three months ended March 31, 1997 follows:
<TABLE>
<CAPTION>
(in thousands, except per share data)
<S> <C>
Net income.................................................................. $ 391
Less: preferred stock dividends............................................. -
------
Income available to common stockholders..................................... $ 391
======
</TABLE>
<TABLE>
<CAPTION>
Dates Fraction Weighted
Outstanding Shares of Period Average Shares
----------- ------ --------- --------------
<S> <C> <C> <C>
Shares outstanding, January 1, 1997 ..... 3,534
Shares repurchased during the period .... - - --
Stock options exercised during the period - - --
-----
Weighted average shares ................. 3,534
=====
Basic earnings per common share ......... $ .11
=====
</TABLE>
Income and share information for the nine months ended March 31, 1998 follows:
<TABLE>
<CAPTION>
(in thousands, except per share data)
<S> <C>
Net income.................................................................. $ 1,549
Less: preferred stock dividends............................................. -
---------
Income available to common stockholders..................................... $ 1,549
=========
</TABLE>
<TABLE>
<CAPTION>
Dates Fraction Weighted
Outstanding Shares of Period Average Shares
----------- ------ --------- --------------
<S> <C> <C> <C>
Shares outstanding, July 1, 1997 ........ 3,487
Shares repurchased during the period .... (101) 115/274 (42)
Stock options exercised during the period 51 112/274 21
------
Weighted average shares ................. 3,466
======
Basic earnings per common share ......... $ .45
======
</TABLE>
Income and share information for the nine months ended March 31, 1997 follows:
<TABLE>
<CAPTION>
(in thousands, except per share data)
<S> <C>
Net income.................................................................. $ 1,102
Less: preferred stock dividends............................................. -
----------
Income available to common stockholders..................................... $ 1,102
==========
</TABLE>
<TABLE>
<CAPTION>
Dates Fraction Weighted
Outstanding Shares of Period Average Shares
----------- ------ --------- --------------
<S> <C> <C> <C>
Shares outstanding, July 1, 1996 ........ 3,551
Shares repurchased during the period .... (32) 240/274 (28)
Stock options exercised during the period 16 222/274 13
------
Weighted average shares ................. 3,536
======
Basic earnings per common share ......... $ .31
======
</TABLE>
Page 8 of 17
<PAGE> 9
3. NET INCOME PER COMMON SHARE (CONTINUED)
Diluted Earnings Per Share Computation:
The computation of diluted earnings per common share is similar to the
computation of basic earnings per common share except that the denominator is
increased to include the number of additional common shares that would have been
outstanding if the dilutive potential common shares had been issued. Potential
common shares consist of dilutive stock options using the treasury stock method.
<TABLE>
<CAPTION>
(in thousands, except per share data)
For the three months For the nine months
ended March 31, 1998 ended March 31, 1998
-------------------- --------------------
<S> <C> <C>
Income available to common shareholders ........ $ 582 $1,549
Plus: preferred stock dividends ................ -- --
------ ------
Income available to common stockholders ........ $ 582 $1,549
====== ======
Weighted average shares ........................ 3,442 3,466
Dilutive potential common shares (stock options) 34 29
------ ------
Adjusted weighted average shares ............... 3,476 3,495
====== ======
Diluted earnings per share ..................... $ .17 $ .44
====== ======
</TABLE>
Options to purchase 130,000 and 196,000 shares of common stock at a weighted
average price of $10.55 and $10.14 per share were outstanding during the three
and nine months ended March 31, 1998, respectively, which were not included in
the computation of diluted earnings per share because the option exercise prices
were greater than the average market price of the common shares during the
periods.
<TABLE>
<CAPTION>
(in thousands, except per share data)
For the three months For the nine months
ended March 31, 1997 ended March 31,1997
-------------------- -------------------
<S> <C> <C>
Income available to common shareholders ........ $ 391 $1,102
Plus: preferred stock dividends ................ -- --
------ ------
Income available to common stockholders ........ $ 391 $1,102
====== ======
Weighted average shares ........................ 3,534 3,536
Dilutive potential common shares (stock options) 12 23
------ ------
Adjusted weighted average shares ............... 3,546 3,559
====== ======
Diluted earnings per share ..................... $ .11 $ .31
====== ======
</TABLE>
Options to purchase 381,000 and 361,000 shares of common stock at a weighted
average price of $8.96 and $9.81 per share were outstanding during the three and
nine months ended March 31, 1997, respectively, which were not included in the
computation of diluted earnings per share because the option exercise prices
were greater than the average market price of the common shares during the
periods.
4. NEW PRONOUNCEMENTS
There have been no new pronouncements issued which have not already been
implemented by the Company which management believes would have a material
impact on the financial statements.
Page 9 of 17
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following table sets forth, for the three-month periods indicated, the
percentages which certain components of the condensed consolidated statements of
income bear to net sales and the percentage of change of such components from
the same period of the prior year.
<TABLE>
<CAPTION>
Three Months Ended
------------------------------------------
3/31/98 3/31/97 % Change
------- ------- --------
<S> <C> <C> <C>
Net sales .................................. 100.0% 100.0% 12.2%
Cost of goods sold ......................... 47.2 43.4 22.0
----- -----
GROSS PROFIT ........................ 52.8 56.6 4.8
Selling, general and administrative expenses 34.3 39.0
(1.4)
Research and development expenses .......... 9.2 10.5
(2.3)
----- -----
INCOME FROM OPERATIONS .............. 9.3 7.1 49.2
Investment income .......................... 1.6 1.6 7.8
Other expenses, net ........................ 0.3 0.4 (3.7)
----- -----
INCOME BEFORE INCOME TAXES .......... 10.6 8.3 43.6
Provision for income taxes ................. 3.3 2.8 33.3
----- -----
NET INCOME .......................... 7.3% 5.5% 48.8
===== =====
</TABLE>
RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 1998
The 12.2% increase in net sales resulted primarily from the Company's Microwave
Accelerated Reaction System (MARS), which accounted for approximately $1.5
million or 19% of total net sales for the quarter. Net sales in the United
States and Europe, which increased by 19% and 36%, respectively, offset lower
net sales in certain Asian countries resulting from the currency weakness there.
Sales from Asia declined 41% and we expect the difficulties with Asian
currencies to continue to have a negative impact on Asian sales. Foreign sales
as a percent of total sales decreased from 45% to 42%.
As expected, gross profit margin declined from 56.6% to 52.8% primarily due to
high manufacturing costs of our MARS product line and the sales mix of our
products. The Company expects the cost of the MARS platform to decline slightly
in the fourth quarter of fiscal 1998 and the first half of fiscal 1999 based on
cost reduction measures and slightly greater economies of scale.
Selling, general and administrative expenses remained relatively flat with the
prior year due to the effectiveness of cost containment measures. Although
research and development decreased slightly from the prior year, the Company
remains committed to new product development and enhancements and expects
research and development expenses to remain between 8% and 10% of net sales for
the foreseeable future.
The Company's effective tax rate declined from 34.0% to 31.5% resulting from an
increase in tax-exempt foreign sales income and higher non-taxable investment
income as a percentage of income before income taxes. Management expects the tax
rate to remain near 32% for the remainder of fiscal 1998.
Page 10 of 17
<PAGE> 11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
The following table sets forth, for the nine-month periods indicated, the
percentages which certain components of the condensed consolidated statements of
income bear to net sales and the percentage of change of such components from
the same period of the prior year.
<TABLE>
<CAPTION>
Nine Months Ended
--------------------------------------------
3/31/98 3/31/97 % Change
------- ------- --------
<S> <C> <C> <C>
Net sales .................................. 100.0% 100.0% 6.4%
Cost of goods sold ......................... 46.7 45.0 10.5
----- -----
GROSS PROFIT ........................ 53.3 55.0 3.0
Selling, general and administrative expenses 35.8 38.8 (1.9)
Research and development expenses .......... 9.3 9.6 2.7
----- -----
INCOME FROM OPERATIONS .............. 8.2 6.6 32.0
Investment income .......................... 1.8 1.4 33.0
Other expenses, net ........................ 0.3 0.4 (29.0)
----- -----
INCOME BEFORE INCOME TAXES .......... 9.7 7.6 35.6
Provision for income taxes ................. 3.1 2.6 26.1
----- -----
NET INCOME .......................... 6.6% 5.0% 40.6
===== =====
</TABLE>
RESULTS OF OPERATIONS - NINE MONTHS ENDED MARCH 31, 1998
The increase in total sales resulted primarily from the same factors described
for the quarter ended March 31, 1998. Foreign sales as a percent of total sales
remained flat at 46%.
Gross profit declined primarily due to the factors described for the quarter
ended March 31, 1998. Selling, general and administrative expenses declined due
to cost containment measures while research and development expenses increased
based on MARS development costs.
Investment income increased due to an increase in short-term and long-term
investments which resulted from cash provided by operating activities.
The Company's effective tax rate declined from 34.4% to 32.0% primarily due to
the factors described for the quarter ended March 31, 1998.
FINANCIAL CONDITION
For the nine months ended March 31, 1998, the Company generated cash from
operations of approximately $3.0 million including $1.5 million in net income.
Temporary increases in current liabilities, which represent temporary changes in
working capital, also significantly contributed to cash generated from
operations.
In November 1997, the Company invested $1.2 million in long-term held to
maturity investments denominated in 2.0 million German marks. This transaction
was designated as a hedge of a future investment in our German subsidiary which
will be used to retire long-term debt when it matures in fiscal 2000.
During the nine months ended March 31, 1998, the Company used approximately $1.1
million to acquire 101,000 shares of the Company's common stock under the stock
repurchase program. On January 26, 1998, the Company's Board of Directors
authorized the use of up to $4.0 million for additional repurchases of shares of
CEM's common stock which extends through September 1999. Including the $1.0
million remaining from a previous authorization which expires in June 1998, the
Company has a total of $5.0 million available for repurchases.
Page 11 of 17
<PAGE> 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONTINUED)
FINANCIAL CONDITION (CONTINUED)
The Company is in the process of assessing its systems and other exposures
related to customers, suppliers and other constituents for compatibility with
the year 2000. The Company expects to upgrade or replace its existing systems by
the year 2000. Based on our preliminary assessment, management does not believe
the cost to upgrade or replace its systems for compatibility with the year 2000
will be material to the financial statements.
Management believes that working capital, planned capital expenditures, debt
servicing and stock repurchases can be funded currently with cash on hand and
cash generated from operations. The Company has never paid, and does not
anticipate paying, cash dividends in the foreseeable future.
Management expects sales in the United States and Europe and continued worldwide
market penetration of the new MARS product to offset potential declines in Asia.
The Company also expects the cost of the MARS platform to decline slightly due
to cost reduction measures and greater economies of scale during the fourth
quarter of fiscal 1998 and the first half of fiscal 1999. The preceding
forward-looking statements should be considered with the following cautionary
statement.
CAUTIONARY STATEMENT
The following cautionary statement identifies important factors that could cause
the Company's actual results to differ materially from those projected in
forward-looking statements made by or on behalf of the Company. Except for the
historical information contained herein, the matters discussed in "Management's
Discussion and Analysis of Results of Operations and Financial Condition" are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995.
The industry in which the Company competes, as well as the markets that it
serves, is characterized by cyclical market patterns as a consequence of, among
other things, business cycles, foreign exchange fluctuations, regulatory
changes, government spending levels and general economic conditions. These
factors affect the timing of orders from the Company's customers and cause
substantial variations in sales and profitability from quarter to quarter.
Likewise, supplier-related delays and the timing of the release of orders by the
Company's customers may affect quarter-to-quarter sales and profitability. The
Company's sales may also be adversely affected by direct and indirect
competition from third parties including, but not limited to, legal challenges
to existing patents or pending patent applications.
Demand for the Company's instrumentation is substantially affected by the
enactment, timing, extent and severity of state, federal and foreign laws
governing environmental testing standards as well as product labeling
requirements including foods and pharmaceuticals. The Company has and may
experience fluctuations in sales of such products as well as in demand for
particular product enhancements as a result of actual or perceived changes in
regulatory requirements. Legislation or regulations resulting in the development
or expansion of acceptance standards for specific testing methods has and may
result in periodic delays in sales, especially in the United States. Conversely,
increases in international sales have resulted, and may result in the future,
from less stringent or nonexistent acceptance standards in a given country.
Moreover, the Company's success is dependent on its ability to continue to
develop and engineer high-quality, high-performance products that are
commercially acceptable. Risks associated with new product development include
market acceptance, competition from other products and the Company's ability to
manufacture and market products on an efficient and timely basis at a reasonable
cost and in sufficient volume.
PART II. OTHER INFORMATION
Page 12 of 17
<PAGE> 13
ITEMS 1, 2, 3, 4, and 5 are not applicable and are omitted.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27.1 Financial Data Schedule (filed in electronic format
only). This schedule shall not be deemed filed for
purposes of Section 11 of the Securities Act of 1933
or Section 18 of the Securities Exchange Act of 1934
or otherwise be subject to the liabilities of such
sections, nor shall it be deemed a part of any
registration statement to which it relates.
27.2 Restated Financial Data Schedule for the year ended
June 30, 1996 (filed in electronic format only). This
schedule shall not be deemed filed for purposes of
Section 11 of the Securities Act of 1933 or Section
18 of the Securities Exchange Act of 1934 or
otherwise be subject to the liabilities of such
sections, nor shall it be deemed a part of any
registration statement to which it relates.
(b) Reports on Form 8-K:
No Reports on Form 8-K were filed during the quarter ended
March 31, 1998.
Page 13 of 17
<PAGE> 14
CEM CORPORATION
SIGNATURE
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.
Date: April 27, 1998 CEM CORPORATION
BY: \s\ Richard N. Decker
----------------------------
Richard N. Decker
Secretary, Treasurer and
Chief Financial Officer
Page 14 of 17
<PAGE> 15
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
ITEM 6(a)
Quarterly Report on Form 10-Q
For the quarter ended March 31, 1998 Commission File Number: 0-15383
CEM CORPORATION
EXHIBIT INDEX
Exhibit Number: Exhibit Description
- --------------- -------------------
27.1 Financial Data Schedule (filed in electronic format only)
27.2 Restated Financial Data Schedule for the year ended June 30,
1996 (filed in electronic format only)
Page 15 of 17
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998<F1>
<PERIOD-END> MAR-31-1998
<CASH> 6,161,000
<SECURITIES> 3,200,000
<RECEIVABLES> 5,983,000
<ALLOWANCES> 0
<INVENTORY> 5,548,000
<CURRENT-ASSETS> 21,594,000
<PP&E> 5,017,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 30,871,000
<CURRENT-LIABILITIES> 5,393,000
<BONDS> 1,151,000
0
0
<COMMON> 172,000
<OTHER-SE> 24,045,000
<TOTAL-LIABILITY-AND-EQUITY> 30,871,000
<SALES> 23,320,000
<TOTAL-REVENUES> 23,320,000
<CGS> 10,890,000
<TOTAL-COSTS> 21,395,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,278,000
<INCOME-TAX> 729,000
<INCOME-CONTINUING> 1,549,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,549,000
<EPS-PRIMARY> .45
<EPS-DILUTED> .44
<FN>
<F1>CERTAIN INFORMATION IN THE FINANCIAL DATA SCHEDULE ABOVE HAS BEEN CONDENSED FOR
INTERIM FINANCIAL REPORTING PURSUANT TO THE RULES AND REGULATIONS OF THE
SECURITIES AND EXCHANGE COMMISSION.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996<F1>
<PERIOD-END> JUN-30-1996
<CASH> 1,832,000
<SECURITIES> 4,100,000
<RECEIVABLES> 7,306,000
<ALLOWANCES> 245,000
<INVENTORY> 5,639,000
<CURRENT-ASSETS> 19,311,000
<PP&E> 10,405,000
<DEPRECIATION> 4,836,000
<TOTAL-ASSETS> 27,584,000
<CURRENT-LIABILITIES> 3,762,000
<BONDS> 0
0
0
<COMMON> 178,000
<OTHER-SE> 22,173,000
<TOTAL-LIABILITY-AND-EQUITY> 27,584,000
<SALES> 31,477,000
<TOTAL-REVENUES> 31,477,000
<CGS> 13,096,000
<TOTAL-COSTS> 13,096,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 110,000
<INTEREST-EXPENSE> 147,000
<INCOME-PRETAX> 4,519,000
<INCOME-TAX> 1,611,000
<INCOME-CONTINUING> 2,908,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,908,000
<EPS-PRIMARY> .80
<EPS-DILUTED> .78
<FN>
<F1>THE RESTATED FINANCIAL DATA SCHEDULE HAS BEEN SUBMITTED TO REFLECT ANY CHANGES
DUE TO FAS 128.
</FN>
</TABLE>
