UNITED STATES
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 September 30, 1995 Commission File Number 19309
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VERSAR, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 54-0852979
------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6850 Versar Center
Springfield, Virginia 22151
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (703) 750-3000
---------------------------
Not Applicable
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(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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Class of Common Stock Outstanding at October 31, 1995
--------------------- -------------------------------
$ .01 par value 4,867,133 shares
VERSAR, INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q
PAGE
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<TABLE>
<CAPTION>
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1 - Financial Statements
Consolidated Balance Sheets as of
September 30, 1995 and June 30, 1995. 3
Consolidated Statements of Operations for the
Three-Month Periods Ended September 30,
1995 and 1994. 4
Consolidated Statements of Cash Flows
for the Three-Month Periods Ended September 30,
1995 and 1994. 5
Notes to Consolidated Financial Statements 6-8
ITEM 2 - Management's Discussion and Analysis
of Financial Condition and Results of Operations 8-10
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings 11
ITEM 6 - Exhibits and Reports on Form 8-K 12
SIGNATURES 13
</TABLE>
<PAGE>
VERSAR, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
September 30, June 30,
1995 1995
------------- --------
(unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash. . . . . . . . . . . . . . . . $ 58 $ 58
Accounts receivable, net. . . . . . 12,480 11,723
Prepaid expenses and other current
assets . . . . . . . . . . . . . . 1,257 1,099
Assets of Sarnia transferred. . . . 428 434
Deferred income taxes . . . . . . . 536 536
Total current assets. . . . . . . 14,759 13,850
-------- --------
Property and equipment, net . . . . 1,493 1,457
Assets of Sarnia transferred . . . 12,763 12,871
Other assets. . . . . . . . . . . . 9 17
-------- --------
Total assets. . . . . . . . . . . $29,024 $28,195
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Liabilities of Sarnia transferred . $ 2,455 $ 2,133
Accounts payable. . . . . . . . . . 2,588 1,950
Bank line of credit . . . . . . . . 977 438
Current portion of long-term debt . 137 335
Accrued salaries and vacation . . . 1,299 1,390
Other liabilities . . . . . . . . . 1,315 1,564
Liabilities of discontinued operations,
net. . . . . . . . . . . . . . . . 574 615
-------- --------
Total current liabilities . . . . 9,345 8,425
Long-term debt. . . . . . . . . . . . 4 4
Liabilities of Sarnia transferred . . 12,097 12,450
Other long-term liabilities . . . . . 982 1,026
-------- --------
Total liabilities . . . . . . . . 22,428 21,905
-------- --------
Commitments and Contingencies
Stockholders' equity
Common stock, $.01 par value; 10,000,000
shares authorized; 4,855,833 shares and
4,813,236 shares issued and outstanding
at September 30 and June 30, 1995,
respectively . . . . . . . . . . . . 49 48
Capital in excess of par value. . . . 12,946 12,816
Accumulated deficit . . . . . . . . . (6,390) (6,565)
-------- --------
6,605 6,299
Less treasury stock, at cost (3,327 shares at
September 30, and June 30, 1995) . . (9) (9)
-------- --------
Total stockholders' equity . . . 6,596 6,290
-------- --------
Total liabilities and stockholders'
equity. . . . . . . . . . . . . $29,024 $28,195
======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
3
<PAGE>
VERSAR, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited - in thousands, except per share amounts)
<TABLE>
<CAPTION>
For the Three-Month
Periods Ended September 30,
---------------------------
1995 1994
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<S> <C> <C>
GROSS REVENUE . . . . . . . . . . . . . . $10,490 $ 9,418
Purchased services and
materials, at cost. . . . . . . . . . . 2,876 2,269
-------- --------
NET SERVICE REVENUE . . . . . . . . . . . 7,614 7,149
Direct costs of services and overhead . . 6,153 5,975
Selling, general and administrative
expenses. . . . . . . . . . . . . . . . 1,172 1,054
Other income. . . . . . . . . . . . . . . (7) (12)
Losses on Sarnia operations . . . . . . . 83 86
-------- --------
OPERATING INCOME. . . . . . . . . . . . . 213 46
OTHER EXPENSE
Interest expense. . . . . . . . . . . . . 24 38
Income tax expense. . . . . . . . . . . . 14 8
-------- --------
NET INCOME. . . . . . . . . . . . . . . . $ 175 $ 0
======== ========
NET INCOME PER SHARE. . . . . . . . . . . $ .03 $ .00
======== ========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING. . . . . . . . . . . . 5,178 4,824
======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
4
<PAGE>
VERSAR, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited - in thousands)
<TABLE>
<CAPTION>
For the Three-Month
Periods Ended September 30,
-----------------------------
1995 1994
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<S> <C> <C>
Cash flows from operating activities
Net income . . . . . . . . . . . . . . . . . $ 175 $ ---
Adjustments to reconcile net income to
net cash used in operating activities
Depreciation and amortization . . . . . 150 190
Provision for doubtful accounts
receivable . . . . . . . . . . . . . . --- (2)
Common stock issued to ESSOP and
stock bonus. . . . . . . . . . . . . . 109 ---
Taxes payable . . . . . . . . . . . . . --- (95)
Changes in assets and liabilities,
net of asset dispositions
Increase in accounts receivable . . . . (757) (618)
(Increase) decrease in prepaids and
other assets . . . . . . . . . . . . . (158) 417
Increase in accounts payable. . . . . . 638 521
Decrease in accrued salaries and
vacation . . . . . . . . . . . . . . . (91) (242)
Decrease in other liabilities . . . . . (292) (198)
Net change in assets and liabilities
of Sarnia. . . . . . . . . . . . . . . 83 86
-------- --------
Net cash from continuing operations (143) 59
Changes in net liabilities of
discontinued operations. . . . . . . . (41) (84)
-------- --------
Net cash used in operating activities (184) (25)
-------- --------
Cash flows from investing activities
Purchase of property and equipment . . . . . (179) (55)
-------- --------
Cash flows from financing activities
Net borrowings on the line of credit . . . . 539 462
Principal payments on long-term debt . . . . (198) (439)
Proceeds from issuance of the Company's
common stock . . . . . . . . . . . . . . . . 22 36
-------- --------
Net cash provided by financing
activities . . . . . . . . . . . . . 363 59
-------- --------
Net decrease in cash . . . . . . . . . . . . . 0 (21)
Cash at the beginning of the year. . . . . . . 58 72
-------- --------
Cash at the end of the year. . . . . . . . . . $ 58 $ 51
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for
Interest . . . . . . . . . . . . . . . . . $ 11 $ 35
Income taxes . . . . . . . . . . . . . . . 2 121
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
5
<PAGE>
VERSAR, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(A) Basis of Presentation
The accompanying consolidated financial statements are presented in
accordance with the requirements of Form 10-Q and consequently do not include
all of the disclosures normally required by generally accepted accounting
principles or those normally made in Versar, Inc.'s ("Versar" or the
"Company") Annual Report on Form 10-K filed with the Securities and Exchange
Commission. These financial statements should be read in conjunction with the
Company's Annual Report filed on Form 10-K for the year ended June 30, 1995
for additional information.
The financial information has been prepared in accordance with the
Company's customary accounting practices. In the opinion of Management, the
information reflects all adjustments necessary for a fair presentation of the
Company's consolidated financial position as of September 30, 1995, and the
results of operations for the three-month periods ended September 30, 1995 and
1994. The results of operations for such periods, however, are not
necessarily indicative of the results to be expected for a full fiscal year.
The assets, liabilities, and results of operations of Sarnia Corporation
have been reflected in the Company's financial statements. Refer to Note E
for further information regarding the financial treatment of the real estate
operations.
The Company's analytical laboratory operations assets and liabilities
have been netted together and presented as a net liability on the balance
sheet.
Certain Balance Sheet, Statement of Operations, and Statement of Cash
Flows items have been restated for comparative financial statement purposes.
(B) Debt
Versar maintains a bank line of credit for working capital purposes with
Riggs National Bank ("Riggs"), which provides for advances up to $1,500,000.
Borrowings on the line are at the prime rate of interest plus 2.5%, (11.25% at
September 30, 1995). The line is guaranteed by the Company and each
subsidiary individually and collectively, secured by accounts receivable,
equipment and intangibles, plus all insurance policies on property
constituting collateral. Advances under the line are due upon demand or on
September 30, 1996. Borrowing availability under the bank line of credit is
restricted to the borrowing base of qualifying receivables less $3,150,000.
Unused borrowing availability at September 30, 1995 was $523,000. The Company
must also obtain Riggs' approval prior to paying dividends. Additionally, the
loan has certain covenants related to maintenance of financial ratios. The
Company was in compliance with the covenants at September 30, 1995.
At June 30, 1995 the total mortgage debt of Sarnia Corporation (formerly
Versar Virginia, Inc., which was spun-off to shareholders on June 30, 1994)
was approximately $12,062,000. Versar continues to act as guarantor of the
total debt should an event of default occur. During the first three months of
fiscal year 1996, Versar loaned Sarnia $371,000 for principal payments under
Sarnia's reducing revolving loan. Principal payments due under Sarnia's
reducing revolving loan and term loan are approximately $1,405,000 and
$1,428,000 in fiscal years 1996 and 1997, respectively. The remaining
outstanding balance of $9,228,502 is due in May of fiscal year 1997. In
fiscal year 1996, Sarnia expects to have the capability to pay approximately
$400,000 in principal payments. In fiscal year 1997, Sarnia expects to have
the capability to pay between $400,000 to $500,000 in principal payments.
Therefore, Versar and Sarnia are currently seeking alternatives to refinance
6
<PAGE>
VERSAR, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(B) Debt (continued)
the existing debt in fiscal year 1996 in order to reduce the amount of
principal payments and minimize Versar's guarantee of Sarnia's debt.
(C) Income Taxes
At June 30, 1995, the Company has $2.0 million net deferred tax assets
which primarily relate to net operating loss and tax credit carryforwards.
Due to the Company's history of operating losses, a valuation allowance of
$1.4 million has been established. With increased profitability, such net
operating loss and tax credit carryforwards would be utilized and the
valuation allowance would be adjusted accordingly.
(D) Discontinued Operation
In the third quarter of fiscal year 1994, management announced that
Versar was going to discontinue further operations of Versar Laboratories,
Inc. ("VLI"). VLI had lost approximately $800,000 per year for the last three
years. Subsequent to this decision, Kemron Environmental Services, Inc.
purchased the fixed assets of VLI for $250,000 on August 1, 1994. With the
purchase of assets and the assumption of certain lease obligations, the
Company was able to reverse $300,000 of the previously recorded reserve in the
fourth quarter of fiscal year 1994.
(E) Sarnia Corporation
Sarnia Corporation owns and operates an 18.3 acre office park in
Springfield, Virginia, consisting of two office buildings which aggregate
229,000 square feet. One building is primarily occupied by Versar and the
other building primarily by unrelated third-party tenants.
On June 30, 1994, Sarnia was spun-off to Versar shareholders. The spin-
off was initially accounted for as a discontinuation of operations. However,
the spin-off did not relieve Versar of the risks of ownership due to Versar's
guarantee of Sarnia's debt. Sarnia's results of operations are presented as
single line items in the Consolidated Statement of Operations, and its assets
and liabilities are presented as separate line items in the Consolidated
Balance Sheet.
(F) Contingencies
The Company is a defendant in lawsuits that have arisen in the ordinary
course of its business. Such lawsuits include actions brought by a former
officer of the Company, certain customers, and some third parties are
currently in various stages of litigation. Management believes that any
adverse outcomes of these lawsuits will not have a material adverse effect of
the Company's consolidated financial position and results of operations.
7
<PAGE>
VERSAR, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(G) Net Income Per Share
Net income per share is computed by dividing by the weighted average
number of common shares outstanding during the applicable period being
reported.
(H) Common Stock
In fiscal year 1995, Versar issued approximately 32,348 shares to
various employee benefit plans as part of the Company's contribution to
employee benefits for fiscal year 1995. In the fiscal year 1994, Versar
issued approximately 296,000 shares to various employee benefit plans as part
of the Company's contribution to employee benefits for fiscal years 1994 and
1993.
ITEM 2 Management's Discussion and Analysis of Financial
Condition and
Results of Operations
Results of Operations
- ---------------------
First Quarter 1996 Compared to First Quarter 1995
- -------------------------------------------------
Versar's gross revenue from operations for the first quarter of fiscal
year 1996 increased by $1,072,000 (11%) compared to gross revenue for the
comparable period of fiscal year 1995. The increase is primarily due to the
receipt of new task orders in the Company's Rocky Mountain region in support
of the Air Force Center for Environmental Excellence contract.
Purchased services and materials for the first quarter of fiscal year
1996 increased by $607,000 (27%) compared to costs for the comparable period
of the previous year. The increase is principally due to the higher level of
gross revenue as mentioned above.
Net service revenue is derived by deducting the cost of purchased
services from the gross revenue. Versar considers it appropriate to analyze
operating margins and other ratios in relation to net service revenue because
such revenues reflect the actual work performed by the Company. Net service
revenue increased by 7% compared to the first quarter of fiscal year 1995.
The increase is due to the higher volume in gross revenue as mentioned above.
Direct costs of services and overhead include the cost to Versar of
direct and overhead staff, including recoverable overhead costs and
unallowable costs that are directly attributable to contracts. The percentage
of these costs to net service revenue decreased to 81% in the first quarter of
fiscal year 1996 compared to 84% in the first quarter of fiscal year 1995.
The decrease is attributable to higher direct labor utilization as a result of
the award of several task orders from the Air Force.
Selling, general and administrative expenses approximated 15.4% of net
service revenue in the first quarter of fiscal year 1996 compared to 14.7% in
the first quarter of fiscal year 1995. The slight increase is due to a higher
level of proposal activities during the first quarter of fiscal year 1996.
8
<PAGE>
ITEM 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Other costs include costs and revenues that are not directly
attributable to contracts. For the first quarter of fiscal year 1996, the
Company recognized non-compete income from the sale of its majority-owned
subsidiary, Gammaflux, Inc., of $7,000 compared to $12,000 recognized in the
first quarter of fiscal year 1995.
Losses on Sarnia operations are from the Company's real estate
operations that were spun-off to shareholders on June 30, 1994. Because the
risks of ownership have not transferred, due to Versar's guarantee of Sarnia's
debt, Sarnia's losses are included in Versar's financial statements. For the
first quarter of fiscal year 1996, Sarnia has losses of $83,000 compared to
$86,000 in the first quarter of fiscal year 1995. Sarnia's losses decreased
due to higher rental income.
Operating income for the first quarter of fiscal year 1996 was $213,000,
an increase of $167,000 compared to the first quarter of fiscal year 1995.
The increase is attributable to the increase in gross revenue as discussed
above.
Interest expense during the first quarter of fiscal year 1996 decreased
by $14,000 compared to costs for the comparable period of the previous year.
The decrease is the result of the Company's payment of $1,000,000 of debt
during fiscal year 1995, which was assumed from Sarnia as a result of the
spin-off of the Company's real estate operations.
Versar's net income for the first quarter of fiscal year 1996 was
$175,000 compared to no net income in the first quarter of fiscal year 1995.
The increase is primarily the result of the higher volume of gross revenue
during the quarter.
Liquidity and Capital Resources
- -------------------------------
The Company's working capital at September 30, 1995 approximated
$5,414,000 or $11,000 lower than June 30, 1995. The decrease is primarily due
to long term liabilities from Sarnia becoming current liabilities. In
addition, the Company's current ratio at September 30, 1995 was 1.58 to 1,
slightly less than that reported at the end of fiscal year 1995.
Versar maintains a bank line of credit for working capital purposes with
Riggs National Bank ("Riggs"), which provides for advances up to $1,500,000.
Borrowings on the line are at the prime rate of interest plus 2.5% (11.25% at
September 30, 1995). The line is guaranteed by the Company and each
subsidiary individually and collectively, secured by accounts receivable,
equipment and intangibles, plus all insurance policies on property
constituting collateral. Advances under the line are due upon demand or on
September 30, 1996. Borrowing availability under the bank line of credit is
restricted to the borrowing base of qualifying receivables less $3,150,000.
Borrowing availability at September 30, 1995 was $523,000. The Company must
also obtain Riggs' approval prior to paying dividends. Additionally, the loan
has certain covenants related to maintenance of financial ratios. The Company
was in compliance with the covenants at September 30, 1995. Management
believes that cash generated by operations and available from its line of
credit will be adequate to meet the working capital needs for fiscal year
1996, provided the Company is successful in maintaining profitability.
However, the bank is not required to make working capital advances under the
line of credit if Versar were to be in default with the covenants of the line
of credit; therefore, the Company cannot predict the bank's decision in
advance of an actual default.
At June 30, 1995 the total mortgage debt of Sarnia Corporation (formerly
Versar Virginia, Inc., which was spun-off to shareholders on June 30, 1994)
was approximately $12,062,000. Versar will continue to act as guarantor of
the total debt should an event of default occur. During the first three
months of fiscal year 1996,
9
ITEM 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Versar loaned Sarnia $371,000 for principal payments under Sarnia's reducing
revolving loan. Principal payments due under Sarnia's reducing revolving loan
and term loan are approximately $1,405,000 and $1,428,000 in fiscal years 1996
and 1997, respectively. The remaining outstanding balance of $9,228,502 is
due in May of fiscal year 1997. In fiscal year 1996, Sarnia expects to have
the capability to pay approximately $400,000 in principal payments.
Therefore, Versar and Sarnia are currently seeking alternatives to refinance
the existing debt in fiscal year 1996 in order to reduce the amount of
principal payments and minimize Versar's guarantee of Sarnia's debt.
Presently, Sarnia has a commitment letter from a major financial institution
to refinance $9 million of the outstanding mortgage debt at a favorable
interest rate. Furthermore, a major bank had provided a letter of intent to
refinance $2 million of the debt over a seven year period, at a reduced
interest rate. The remaining million dollars of debt will be financed through
a proposed equity infusion in Sarnia from the sale of cumulative, convertible
preferred shares whose approval is before the shareholders, which will be
voted on at the Annual Meeting scheduled for November 16, 1995. No assurances
can be made that these transactions will be consummated.
Spin-off of Sarnia Corporation
- ------------------------------
The Company originally reported the spin-off of its real estate holdings
in Sarnia as a divestiture on June 30, 1994. The Company's previous
independent accountants advised the Company to change its original financial
reporting to include the results of operations and financial position of
Sarnia in the Company's audited financial statements for the fiscal year ended
June 30, 1994. Accordingly, the Company adopted the change and has restated
its June 30, 1994 financial statements and has included the results of
operations and financial position of Sarnia in the Company's financial
statements included in this report.
The Company is evaluating a number of alternatives to resolve this
issue, including the refinancing of certain of Sarnia's outstanding debt to
lessen the Company's guarantee with respect to such debt so that the Company
can, at a later date, account for the spin-off of the real estate operations
as a divestiture. No assurances can be given that the Company's efforts will
be successful.
Impact of Inflation
- -------------------
Versar seeks to protect itself from the effects of inflation. The
majority of contracts the Company performs are for a period of one year or
less or are cost plus fixed-fee type contracts and, accordingly, are less
susceptible to the effects of inflation. Multi-year contracts provide for
projected increases in labor and other costs.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
10
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On June 28, 1990, Gary R. Windolph, a former officer and director of
Versar Architects & Engineers, Inc. ("VA&E", formerly ARIX Corporation, a
former subsidiary of Versar, which was merged into the parent in July 1993)
and a former officer of Versar, filed an action in the District Court for the
City and County of Denver, State of Colorado, entitled Gary R. Windolph v.
ARIX Corporation, Versar, Inc., et al., Case NO. 90-CV-7155. On October 21,
1991, jury returned verdicts for Mr. Windolph on two defamation claims against
the Company and awarded him damages in the amount of $200,000. The jury also
returned verdicts for Mr. Windolph on certain of his statutory and common law
securities claims and awarded damages in the amount of $1.00 each on all such
claims. On January 6, 1992, the Court ruled that, based upon the evidence
presented at trial, the $200,000 awarded to Mr. Windolph by the jury was
excessive as a matter of law and ordered a new damage trial on those claims.
The retrial of damages on these claims ended on October 21, 1992 with the jury
returning a verdict against Versar in the total amount of $1,000,001 including
$500,000 for damages to Mr. Windolph's reputation and $500,001 for personal
humiliation, mental anguish and suffering.
Versar promptly filed appropriate post-trial motions seeking either a
new trial or the entry of judgment in an amount less than the jury's verdict.
On January 10, 1993, the Court granted Versar's motion, in part, and gave the
plaintiff the choice of accepting the entry of judgment in the amount of
$75,000, or retrying for a third time the amount of damages for the defamation
claim. The Court also decided, as a matter of law, that the maximum amount
Mr. Windolph could recover was $250,000 due to a statutory limit on non-
economic damages. At the same time, the Court ordered the parties to
participate in good faith in a mandatory settlement conference to try to
settle this matter. The parties were unable to reach a settlement as a result
of the settlement conference held in April, 1993, and the plaintiff rejected
the opportunity to have judgment entered for $75,000 or proceed with a new
trial. On June 16, 1993, the trial court entered final judgment on all
outstanding issues.
Both parties appealed to the Colorado Court of Appeals. On May 25, 1995
the Court issued its decision affirming in part, reversing in part and
remanding a part of the case to the trial court. The Court of Appeals
reversed the trial court's dismissal of Windolph's promissory estoppel claim,
and remanded with directions for a new trial on that matter only. The Court
of Appeals affirmed the trial court as to all other matters, including the
trial court's refusal to enter judgment in Windolph's favor on the two jury
verdicts relating to the defamation claim. Both parties filed motions for
rehearing with the Court of Appeals, which were denied on August 10, 1995.
In September 1995, Windolph sought review of this case by the Colorado
Supreme Court. It is impossible to predict whether the Colorado Supreme Court
will elect to hear some or all of the issues Windolph would seek to raise.
However, based on the Court of Appeals' decision and consultation with
counsel, Versar's management believes the outcome of this lawsuit will not
have a material impact on Versar's consolidated financial position or results
of operations.
Versar and its subsidiaries are parties to various legal actions arising
in the normal course of business. The Company believes that the ultimate
resolution of these legal actions will not have a material adverse effect on
its consolidated financial condition and results of operations.
11
<PAGE>
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedules
(b) Reports on Form 8-K
The following reports were filed on Form 8-K during the first
quarter of the Company's fiscal year 1996:
Form 8-K filed on October 10, 1995 reported under Item 4, Changes
in Registrant's Certifying Accountant, dismissing Price Waterhouse
LLP and selecting Arthur Andersen LLP as its principal accountant.
From 8-K/A filed on October 24, 1995 reported under Item 4,
Changes in Registrant's Certifying Accountant, provides Price
Waterhouse LLP's response to the 8-K filed on October 10, 1995.
12
<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.
VERSAR, INC.
------------------
(Registrant)
By:___________________________
Benjamin M. Rawls
Chairman and Chief
Executive Officer
By:___________________________
Lawrence W. Sinnott
Vice President, Chief
Financial Officer,
Treasurer, and Principal
Accounting Officer
Date: November 14, 1995
