<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 July 31, 1995 or
Transition report pursuant to Section 13 or 15(d)
- ----- of the Securities Exchange Act of 1934
For the transition period from to
----------- -----------
Commission File Number 0-14836
GENERAL PARAMETRICS CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 94-2835068
(State of incorporation) (I.R.S. Employer Identification No.)
1250 Ninth Street, Berkeley, California 94710
(Address of principal executive office including zip code)
(510)-524-3950
(Telephone 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 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
----- -----
At August 28, 1995, there were 5,122,818 shares of Common Stock of the
Registrant outstanding.
<PAGE> 2
GENERAL PARAMETRICS CORPORATION
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I FINANCIAL INFORMATION
ITEM 1: Financial Statements (Unaudited)
Consolidated Condensed Balance Sheets
July 31, 1995 and October 31, 1994 3
Consolidated Condensed Statements of Operations
Quarter ended July 31, 1995 and 1994 4
Consolidated Condensed Statements of Cash Flows
Quarter ended July 31, 1995 and 1994 5
Notes to Consolidated Condensed Financial Statements 6
ITEM 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II OTHER INFORMATION
Item 5: Other Items 12
Item 6: Exhibits and Reports on Form 8-K 12
SIGNATURES
</TABLE>
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<PAGE> 3
GENERAL PARAMETRICS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
Part I- Financial Information
Item 1
<TABLE>
<CAPTION>
ASSETS
July 31,
(unaudited) October 31,
1995 1994
----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,580,000 $ 639,000
Marketable securities 2,111,000 1,981,000
Accounts receivable, net 1,813,000 2,864,000
Inventories (Note 2) 3,293,000 3,398,000
Other current assets 123,000 339,000
----------- -----------
Total current assets 8,920,000 9,221,000
Marketable securities 2,025,000 2,871,000
Property and equipment, net 300,000 400,000
Capitalized software development costs, net (Note 3) 845,000 994,000
----------- -----------
Total assets $12,090,000 $13,486,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 504,000 $ 540,000
Accrued compensation and benefits 178,000 243,000
Other accrued liabilities 103,000 210,000
Income taxes payable -- --
Deferred income tax 50,000 98,000
----------- -----------
Total current liabilities 835,000 1,091,000
----------- -----------
Stockholders' equity (Note 5):
Common stock 51,000 51,000
Additional paid-in capital 2,794,000 2,763,000
Retained earnings 8,410,000 9,581,000
----------- -----------
11,255,000 12,395,000
----------- -----------
$12,090,000 $13,486,000
=========== ===========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
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<PAGE> 4
GENERAL PARAMETRICS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Quarters Ended Nine Months Ended
July 31, July 31,
------------------------ -------------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $2,060,000 $3,028,000 $7,354,000 $9,165,000
Cost of sales 1,472,000 1,951,000 4,796,000 5,776,000
---------- ---------- ---------- ----------
Gross margin 588,000 1,077,000 2,558,000 3,389,000
---------- ---------- ---------- ----------
Operating expenses:
Marketing and sales 488,000 783,000 1,656,000 2,334,000
Research and development (Note 3) 355,000 347,000 891,000 1,005,000
General and administrative 257,000 384,000 706,000 835,000
---------- ---------- ---------- ----------
1,100,000 1,514,000 3,253,000 4,174,000
---------- ---------- ---------- ----------
Income (loss) from operations (512,000) (437,000) (695,000) (785,000)
Interest income 89,000 103,000 239,000 238,000
---------- ---------- ---------- ----------
Income (loss) before income taxes (423,000) (334,000) (456,000) (547,000)
Provision for (benefit) (from) income taxes (168,000) (204,000) (204,000) (354,000)
---------- ---------- ---------- ----------
Net income (loss) $ (255,000) $ (130,000) $ (252,000) $ (193,000)
---------- ---------- ---------- ----------
Net income (loss) per share $ (0.05) $ (0.03) $ (0.05) $ (0.04)
---------- ---------- ---------- ----------
Average number of common shares
and common share equivalents 5,123,000 5,098,000 5,123,000 5,098,000
---------- ---------- ---------- ----------
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
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<PAGE> 5
GENERAL PARAMETRICS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
July 31,
----------------------------
1995 1994
----------------------------
<S> <C> <C>
Cash flows provided (used) by operating
activities:
Net income (loss) $ (252,000) $ (193,000)
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation, amortization and
deferred taxes 652,000 432,000
(Increase) decrease in current assets other than
cash, cash equivalents and
marketable securities 1,372,000 1,617,000
Increase (decrease) in current liabilities (208,000) (389,000)
---------- ----------
Net cash provided by operating activities 1,564,000 1,467,000
---------- ----------
Cash flows provided (used) by investing activities:
Marketable securities 716,000 (24,000)
Purchases of property and equipment (27,000) (70,000)
Capitalized software development costs (424,000) (596,000)
---------- ----------
Net cash provided (used) by investing
activities 265,000 (690,000)
---------- ----------
Cash flows provided (used) by financing activities:
Common Stock issued under Employee Stock
Purchase, Employee Stock Option and
Executive Bonus Plans 31,000 63,000
Payment of cash dividends (919,000) (915,000)
---------- ----------
Net cash provided (used) by financing
activities (888,000) (852,000)
---------- ----------
Net increase (decrease) in cash and cash equivalents 941,000 (75,000)
Cash and cash equivalents at beginning of period 639,000 893,000
---------- ----------
Cash and cash equivalents at end of period $1,580,000 $ 818,000
========== ==========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
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<PAGE> 6
GENERAL PARAMETRICS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note 1 - Financial Statements
The accompanying Consolidated Condensed Balance Sheet of General Parametrics
Corporation at July 31, 1995 and the Consolidated Condensed Statements of
Operations for the quarters ended July 31, 1995 and 1994, respectively, and the
Consolidated Condensed Statements of Cash Flows for the three months ended July
31, 1995 and 1994, respectively, have not been audited by independent
accountants. However, in the opinion of management, all adjustments, consisting
only of normal, recurring adjustments necessary for a fair statement of the
results of operations for the interim periods, have been made.
The results of operations for the quarter ended July 31, 1995 are not
necessarily indicative of results expected for the fiscal year ended October 31,
1995 (see also Note 5 - Other). The Consolidated Condensed Financial Statements
included in this Form 10-Q should be read in conjunction with the audited
Consolidated Financial Statements and Notes thereto included in the Company's
Annual Report on Form 10-K for the fiscal year ended October 31, 1994.
Note 2 - Inventories
Inventories consisted of:
<TABLE>
<CAPTION>
July 31, October 31,
1995 1994
---------- ----------
<S> <C> <C>
Raw materials $1,906,000 $1,630,000
Work-in-progress 214,000 175,000
Finished goods 1,173,000 1,593,000
---------- ----------
$3,293,000 $3,398,000
========== ==========
</TABLE>
Note 3 - Research and development expenses
The Company capitalizes software development costs in accordance with Statement
of Financial Accounting Standards No. 86 "Accounting for the Costs of Computer
Software to be Sold, Leased or Otherwise Marketed". Software development costs
are capitalized when technological feasibility has been achieved. Amortization
of these costs begins when the products are available for general release to
customers and is computed on a product-by-product basis using amortization
periods not exceeding three years. Amortization represents the greater of the
amount computed using: (a) the ratio that current gross revenues for a product
bears to the total of current and anticipated future gross revenues for that
product; or (b) the straight-line method over the remaining estimated economic
life of the product.
On a quarterly basis, management reviews each capitalized software development
cost to assure the expected revenues less anticipated costs to produce and
support the product is greater than the net capitalized cost. For the three
months ended July 31, 1995, there have been no writedowns of net capitalized
cost.
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<PAGE> 7
<TABLE>
<CAPTION>
Quarter ended July 31,
1995 1994
----------------------------------
<S> <C> <C>
Gross research and development
expenditures $ 241,000 $ 347,000
Less: Software development costs
capitalized during the period (147,000) (206,000)
Add: Amortization of software
development costs capitalized
in prior periods 261,000 206,000
----------- ----------
$ 355,000 $ 347,000
=========== ==========
</TABLE>
<TABLE>
<CAPTION>
Nine months ended July 31,
1995 1994
----------------------------------
<S> <C> <C>
Gross research and development
expenditures $ 742,000 $ 997,000
Less: Software development costs
capitalized during the period (424,000) (546,000)
Add: Amortization of software
development costs capitalized
in prior periods 573,000 554,000
----------- ----------
$ 891,000 $1,005,000
=========== ==========
</TABLE>
Note 4 - Marketable securities
Effective November 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities" ("SFAS No. 115"). SFAS No. 115 has been adopted on a
prospective basis and the financial statements of prior years have not been
restated. The cumulative effect as of November 1, 1994 of adopting SFAS No. 115
is immaterial.
Under SFAS No. 115, management is required to determine the appropriate
classification of its securities at the time of purchase and reevaluate such
designation as of each balance sheet. Held-to-maturity securities are reported
at amortized cost. Available-for-sale securities are carried at fair value, with
unrealized gains and losses, net reported in a separate component of
shareholders' equity until disposition. Realized gains and losses and declines
in value judged to be other than temporary are included in interest income.
Marketable securities include the following held-to-maturity and available-for
sale securities as of July 31, 1995:
<TABLE>
<S> <C>
Held-to-maturity securities $3,397,000
Available-for-sale 739,000
----------
$4,136,000
==========
</TABLE>
Gross unrealized losses were not material to the financial statements taken as a
whole as of July 31, 1995.
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<PAGE> 8
Note 5 - Other
On July 17, 1995, Herbert B. Baskin, currently the President, Chief Executive
Officer and Chairman of the Board of Directors of the Company sold an aggregate
of 1,400,000 shares of Common Stock of the Company (the "Shares") to Gerard M.
Jacobs, T. Benjamin Jennings, Donald F. Moorehead and Blue Bird Partners (Louis
Paolino, General Partner) (the "Purchasers") at a purchase price of $2.00 per
share, for a total purchase price of $2,800,000 pursuant to a Common Stock
Purchase Agreement between Mr. Baskin and the Purchasers dated July 7, 1995. The
allocation of the Shares was as follows: Gerard M. Jacobs, 450,000 Shares, T.
Benjamin Jennings, 450,000 Shares, Donald F. Moorehead, 250,000 Shares and Blue
Bird Partners, 250,000 Shares. Following the purchase of the Shares, the
Purchasers held an aggregate of approximately 27.4% of the outstanding Common
Stock of the Company. On July 24, 1995, Gerard M. Jacobs, T. Benjamin Jennings
and Blue Bird Partners (the "Group") delivered a written request to the Company
to hold a Special Meeting of Stockholders on August 30, 1995 in order to propose
the removal of four out of the five then current directors and to elect four
replacement directors chosen by the Group. As required by the Company's Bylaws,
the Company has called the Special Meeting for such date and purpose. At the
completion of a Board meeting held on July 27, 1995, two members of the Board,
J. Thomas Bentley and Luther J. Nussbaum resigned from their positions as
directors. The Group has proposed that the stockholders vote in favor of the
removal of the following directors elected at the Company's 1995 Annual Meeting
of Stockholders held on March 27, 1995: Herbert B. Baskin and Victor D. Poor
(the "Specified Directors"). The Group is not seeking the removal of current
director Eugene T. Sanders. Additionally, the Group has proposed that at the
Special Meeting, stockholders elect the Group's four nominees to fill the
vacancies left by the removal of the Specified Directors and the prior
resignations of Messrs. Bentley and Nussbaum.
The Company has been advised by the Group that if the Replacement Nominees are
elected as directors of the Company, the Replacement Nominees intend to cause
the Company to actively pursue acquisitions and mergers in unrelated fields,
including, but not limited to scrap metal recycling and/or telecommunications.
The Group has also advised the Company that the Replacement Nominees have not
developed any plans with regard to the Company's current business, although they
would attempt to improve its marketing activities. The Company has been further
advised by the Group that the Replacement Nominees also intend to seek to have
the full board of directors review the Company's dividend policy in order to
consider whether or not the dividend thereof should remain the same or be
reduced or eliminated.
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales were $2,060,000 and $7,354,000 during the third quarter and first nine
months of fiscal 1995, compared to $3,028,000 and $9,165,000 for the same
periods one year ago. The significant decrease in net sales was attributed to:
lower average sales prices for the Company's color thermal printers (the
Spectra*Star 240 and 280) resulting from promotions associated with their recent
introduction; the overall trend of significantly lower color thermal and
di-sublimation pricing industry wide; and lower units shipments of the Company's
color printer and electronic presentation products due to competitive product
-8-
<PAGE> 9
pressures and less dealer activity. The Company's operations continued its
decline, consistent with the trend of the last few years. Management believes
that the Company's current operations could continue to decline further without
additional marketing activities and new product offerings.
Gross profit was 28.5% and 34.8% of net sales for the third quarter and first
nine months of fiscal 1995, compared to 35.6% and 37.0% for the same periods
one year ago. The decrease in gross profit was due to several factors, which
include: lower average sales prices for the Company's color thermal printers
(the Spectra*Star 240 and 280) resulting from promotions associated with their
recent introduction; the overall trend of significantly lower color thermal and
di-sublimation pricing industry wide; the continued shift in the Company's
product mix to lower margin products; higher product costs resulting from
sourcing certain material components denominated in foreign currencies that
strengthened as compared to the U.S. dollar; and lower overall sales to absorb
manufacturing overhead. In addition, the Company recorded reserves totaling
approximately $41,000 for slow-moving and/or obsolete inventory. Increased
competitive pressures are expected to further reduce prices of the Company's
products, which could have an adverse impact on gross margins and operating
results.
Marketing and sales expenses were $488,000 and $1,656,000 (23.7% and 22.5% of
the net sales, respectively) for the third quarter and first nine months of
fiscal 1995, compared to $783,000 and $2,334,000 (25.9% and 25.5% of the net
sales, respectively) for the same periods one year ago. The decreases in
expenditures were the result of planned reductions in payroll and related
expenditures, travel and entertainment costs and other related marketing
expenditures.
Research and development costs (before taking into effect the net capitalization
of software development costs) were $241,000 and $742,000 (11.7% and 10.1% of
the net sales, respectively) for the third quarter and first nine months of
fiscal 1995, compared to $347,000 and $997,000 (11.5% and 10.9% of the net
sales, respectively) for the same periods one year ago. The decreased
expenditures were the result of planned reductions in payroll and related costs
as a result of project completions and cost containment efforts.
General and administrative expenditures were $257,000 and $706,000 (12.5% and
9.6% of the net sales, respectively) for the third quarter and first nine months
of fiscal 1995, compared to $384,000 and $835,000 (12.7% and 9.1% of the net
sales, respectively) for the same periods one year ago. The decreased
expenditures were primarily due to cost containment efforts. Also, during the
third quarter of 1994, the Company recorded a one-time charge of $107,000 for
costs associated with the consolidation of its office and manufacturing
facilities,
As a result of the above-mentioned factors, the losses from operations were
$512,000 and $695,000 for the third quarter and first nine months of fiscal
1995, compared to the losses from operations of $437,000 and $785,000 for the
same periods one year ago.
Interest income was $89,000 and $239,000 for the third quarter and first nine
months of fiscal 1995, compared to $103,000 and $238,000 for the same periods
one year ago. During the third quarter of 1995, the Company reversed a portion
of its reserve ($35,000) associated with the decline in value of certain
marketable securities, a portion of such instruments having been sold during the
quarter. Also, during the third quarter of 1994, the Company received $38,000
associated with a state tax refund.
As a result of the above mentioned factors, the losses before income taxes were
$423,000 and $456,000 for the third quarter and first nine months of fiscal
1995, compared to the losses before income taxes of $334,000 and $547,000 for
the same periods one year ago.
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<PAGE> 10
The benefits from income taxes were $168,000 and $204,000 for the third quarter
and first nine months of fiscal 1995, compared to the benefits from income taxes
of $204,000 and $354,000 for the same periods one year ago. The effective
benefit rates for the third quarter and first nine months of fiscal 1995 were
higher than the normal statutory rates due to both tax-free interest income and
the availability of research and development credits.
The net losses for the third quarter and first nine months of fiscal 1995 were
$255,000 ($.05 per share) and $252,000 ($.05 per share) respectively, compared
to the net losses of $130,000 ($.03 per share) and $193,000 ($.04 per share) for
the same periods one year ago.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal source of cash is the collection of accounts receivable
arising from the sale of its products. At July 31, 1995, the Company had cash,
cash equivalents and marketable securities of $5,716,000 compared to $5,491,000
at October 31, 1994. During the third quarter of fiscal 1995, the Company paid a
quarterly cash dividend totaling $307,000 ($ 0.06 per share). At July 31, 1995,
accounts receivable were $1,813,000 compared to $2,864,000 at October 31, 1994.
The decrease in accounts receivable was the result of the net collections
exceeding newly generated receivables (which resulted from decreased sales).
On July 17, 1995, Herbert B. Baskin, currently the President, Chief Executive
Officer and Chairman of the Board of Directors of the Company sold an aggregate
of 1,400,000 shares of Common Stock of the Company (the "Shares") to Gerard M.
Jacobs, T. Benjamin Jennings, Donald F. Moorehead and Blue Bird Partners (Louis
Paolino, General Partner) (the "Purchasers") at a purchase price of $2.00 per
share, for a total purchase price of $2,800,000 pursuant to a Common Stock
Purchase Agreement between Mr. Baskin and the Purchasers dated July 7, 1995. The
allocation of the Shares was as follows: Gerard M. Jacobs, 450,000 Shares, T.
Benjamin Jennings, 450,000 Shares, Donald F. Moorehead, 250,000 Shares and Blue
Bird Partners, 250,000 Shares. Following the purchase of the Shares, the
Purchasers held an aggregate of approximately 27.4% of the outstanding Common
Stock of the Company. On July 24, 1995, Gerard M. Jacobs, T. Benjamin Jennings
and Blue Bird Partners (the "Group") delivered a written request to the Company
to hold a Special Meeting of Stockholders on August 30, 1995 in order to propose
the removal of four out of the five then current directors and to elect four
replacement directors chosen by the Group. As required by the Company's Bylaws,
the Company has called the Special Meeting for such date and purpose. After a
Board meeting held on July 27, 1995, two members of the Board, J. Thomas Bentley
and Luther J. Nussbaum resigned from their positions as directors. The Group has
proposed that the stockholders vote in favor of the removal of the following
directors elected at the Company's 1995 Annual Meeting of Stockholders held on
March 27, 1995: Herbert B. Baskin and Victor D. Poor (the "Specified
Directors"). The Group is not seeking the removal of current director Eugene T.
Sanders. Additionally, the Group has proposed that at the Special Meeting,
stockholders elect the Group's four nominees to fill the vacancies left by the
removal of the Specified Directors and the prior resignations of Messrs. Bentley
and Nussbaum.
The Company has been advised by the Group that if the Replacement Nominees are
elected as directors of the Company, the Replacement Nominees intend to cause
the Company to actively pursue acquisitions and mergers in unrelated fields,
including, but not limited to scrap metal recycling and/or telecommunications.
The Group has also advised the Company that the Replacement Nominees have not
developed any plans with regard to the Company's current business, although they
would attempt to improve its marketing activities. The Company has been further
advised by the Group that the Replacement Nominees also intend to seek to have
the full board of directors review the Company's dividend policy in order to
consider whether or not the dividend should remain the same or be reduced or
eliminated. It is expected that after the Special Meeting, the Board of
Directors will review the dividend policy for the third quarter.
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<PAGE> 11
As described above, the Replacement Nominees have stated that they intend to
pursue additional business strategies if they are elected at the Special Meeting
of Shareholders scheduled for August 30, 1995. Depending on the nature and size
of potential acquisitions, mergers and other transactions, if any, the Company's
cash flows from operating and investing activities, together with its cash, cash
equivalents and marketable securities may not be sufficient in the future. The
Company may have to supplement these sources of liquidity with additional
sources of funds such as borrowings, stock offerings, etc. To date, the Company
has not attempted to arrange any such additional sources of funds.
The Company has a $2,000,000 unsecured documentary letter of credit line
("Letter of Credit") specifically intended to facilitate the purchase of
components through Letters of Credit. Under the terms of this arrangement, the
Company may utilize credit for up to three days for each purchase that utilizes
the Letter of Credit facility. This Letter of Credit is subject to issuance and
negotiation fees of 0.25% and expires March 31, 1996. As of July 31, 1995, the
Company had $61,000 due under its Letter of Credit facility, such amount having
been paid in early August 1995. Also, the Company has approximately $156,000 of
purchase commitments outstanding through this credit facility as of July 31,
1995.
During the first nine months of fiscal 1995, additions to property and equipment
were $27,000 compared to $70,000 for the same period one year earlier.
OTHER
The Company currently designs, manufactures and markets a range of presentation
hardware and software products for the business and government marketplaces that
include: color printers and supplies, electronic video presentation products,
and software products used for preparing and giving presentations.
From its inception, the Company has maintained a continuous program of enhancing
existing products and introducing new products that have extended its various
product lines. The Company believes that the future success of its current
business (see also the discussion under the caption titled "LIQUIDITY AND
CAPITAL RESOURCES" regarding potential new business areas) will depend on its
ability to continue to enhance its existing products and/or to develop new
products which meet specific market needs in a cost-effective manner. There can
be no assurance, however, that the Company's products will not be rendered
obsolete by changing technology. Additionally, the introduction of new or
enhanced products by its competitors could adversely affect the company's sales
of existing products. In addition, lack of commercial acceptance of enhanced or
new products introduced by the Company could adversely affect the Company's
results of operations.
The Company principally uses standard components from multiple vendors. However,
in many of its products, certain components which are purchased from sole-source
suppliers. The Company also purchases some printer consumables from
sole-sources. There is no guarantee that the supply of sole-source components
and consumables from these suppliers, along with any new, improved and lower
cost components will continue to be made available to the Company. The Company
attempts to reduce the risk of interruption in supply of components by
maintaining adequate inventory. Loss or interruption of the supply of components
from sole-source supplier would require additional management and engineering
efforts to develop and qualify alternate sources and any such loss could result
in delays in product shipments which could adversely affect the Company's
results of operations.
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<PAGE> 12
PART II OTHER INFORMATION
Item 5. Other items.
On July 17, 1995, Herbert B. Baskin, currently the President, Chief Executive
Officer and Chairman of the Board of Directors of the Company sold an aggregate
of 1,400,000 shares of Common Stock of the Company (the "Shares") to Gerard M.
Jacobs, T. Benjamin Jennings, Donald F. Moorehead and Blue Bird Partners (Louis
Paolino, General Partner) (the "Purchasers") at a purchase price of $2.00 per
share, for a total purchase price of $2,800,000 pursuant to a Common Stock
Purchase Agreement between Mr. Baskin and the Purchasers dated July 7, 1995. The
allocation of the Shares was as follows: Gerard M. Jacobs, 450,000 Shares, T.
Benjamin Jennings, 450,000 Shares, Donald F. Moorehead, 250,000 Shares and Blue
Bird Partners, 250,000 Shares. Following the purchase of the Shares, the
Purchasers held an aggregate of approximately 27.4% of the outstanding Common
Stock of the Company. On July 24, 1995, Gerard M. Jacobs, T. Benjamin Jennings
and Blue Bird Partners (the "Group) delivered a written request to the Company
to hold a Special Meeting of Stockholders on August 30, 1995 in order to propose
the removal of four out of the five then current directors and to elect four
replacement directors chosen by the Group. As required by the Company's Bylaws,
the Company has called the Special Meeting for such date and purpose. After a
Board meeting held on July 27, 1995, two members of the Board, J. Thomas Bentley
and Luther J. Nussbaum resigned from their positions as directors. The Group
has proposed that the stockholders vote in favor of the removal of the following
directors elected at the Company's 1995 Annual Meeting of Stockholders held on
March 27, 1995: Herbert B. Baskin and Victor D. Poor (the "Specified
Directors"). The Group is not seeking the removal of current director Eugene T.
Sanders. Additionally, the Group has proposed that at the Special Meeting,
stockholders elect the Group's four nominees to fill the vacancies left by the
removal of the Specified Directors and the prior resignations of Messrs. Bentley
and Nussbaum.
Item 6. Exhibits and Reports of Form 8-K.
(a) Exhibits - None.
(b) Reports on Form 8-K. The Company filed a Form 8-K Current Report on July 26,
1995, reporting under Item 5, Other Events, the July 17, 1995 sale of 1,400,000
shares of common stock of the Company by Herbert B. Baskin to Gerard M. Jacobs,
T. Benjamin Jennings, Donald F. Moorehead and Blue Bird Partners and describing
the agreement, along with reference to the copy of the Agreement attached as an
exhibit to the Form 8-K.
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.
GENERAL PARAMETRICS CORPORATION
Dated: August 28, 1995 By /s/ William A. Spazante
------------------------
William A. Spazante
Vice President, Finance and Chief
Financial Officer
(Principal Financial and Accounting
Officer)
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<PAGE> 13
EXHIBIT INDEX
Exhibit
27 - Financial Data Schedule for General Parametics
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> JUL-31-1995
<CASH> 1,580,000
<SECURITIES> 4,136,000
<RECEIVABLES> 1,813,000
<ALLOWANCES> (256,000)
<INVENTORY> 3,293,000
<CURRENT-ASSETS> 8,920,000
<PP&E> 300,000
<DEPRECIATION> (4,516,052)
<TOTAL-ASSETS> 12,090,000
<CURRENT-LIABILITIES> (835,000)
<BONDS> 0
<COMMON> 51,000
0
0
<OTHER-SE> 11,204,000
<TOTAL-LIABILITY-AND-EQUITY> 12,090,000
<SALES> 7,354,000
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 4,796,000
<OTHER-EXPENSES> 3,253,000
<LOSS-PROVISION> 66,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (695,000)
<INCOME-TAX> (239,000)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (252,000)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
