<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the period ended April 30, 1994
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 0-3717
PURITAN-BENNETT CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 44-0399150
- - ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9401 Indian Creek Parkway
Building #40, Suite 300
P.O. Box 25905
Overland Park, Kansas 66225
- - ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Company's telephone number, including area code 913-661-0444
--------------------
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
----------- -----------
As of April 30, 1994, there were 12,468,493 shares of the Company's $1.00 par
value common stock outstanding.
<PAGE>
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------
The unaudited condensed consolidated financial statements incorporated by
reference to the Puritan-Bennett Corporation First Quarter Report, 1995, have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended April 30,
1994 are not necessarily indicative of the results that may be expected for the
year ended January 31, 1995. For further information refer to the consolidated
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended January 31, 1994.
2
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
Item 1. - Financial Statements.
Company or group of companies for which report is filed:
PURITAN-BENNETT CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations Unaudited) - Three months ended
April 30, 1994 and 1993; (incorporated herein by reference to the Puritan-
Bennett Corporation First Quarter Report, 1995).
Condensed Consolidated Balance Sheets (Unaudited) - April 30, 1994 and January
31, 1994 (incorporated herein by reference to the Puritan-Bennett
Corporation First Quarter Report, 1995).
Condensed Consolidated Statements of Cash Flows (Unaudited) - Three months ended
April 30, 1994 and 1993 (incorporated herein by reference to the Puritan-
Bennett Corporation First Quarter Report, 1995).
3
<PAGE>
Notes to Condensed Consolidated Financial Statements (Unaudited)
Note A: Leases
The Company entered into a 15 year capital lease relating to a building and land
during the first quarter of fiscal year 1995. The lease contains a purchase
option exercisable after the third year. The following is a schedule by years of
future minimum lease payments together with the present value of the net minimum
lease payments as of April 30, 1994:
<TABLE>
<CAPTION>
Year ended January 31:
<S> <C>
1995 $ 357,558
1996 427,047
1997 427,047
1998 500,643
1999 500,643
Thereafter 5,852,275
----------
Total minimum lease payments 8,065,213
Amount representing interest 3,216,365
----------
Present value of minimum lease payments $4,848,848
==========
</TABLE>
4
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS - April 30, 1994 compared to April 30, 1993.
(All dollars in thousands except where noted)
NET SALES
Net sales volume for the quarter ended April 30, 1994, increased 6.7% compared
to the quarter ended April 30, 1993. The following table shows sales volume for
the significant markets in which the Company operates:
<TABLE>
<CAPTION>
PERCENT
Q1 1995 Q1 1994 CHANGE
-------- -------- --------
<S> <C> <C> <C>
Home Care Markets $29,332 $26,583 10.3%
Hospital/Physician Markets 44,336 42,792 3.6%
Aviation Markets 6,740 6,016 12.0%
------- -------
Total Net Sales $80,408 $75,391 6.7%
======= =======
</TABLE>
Sales growth in the home care markets continues with revenues and orders up 10%
and 13%, respectively, from the same period last year. Two major clinical
areas - home oxygen therapy and the diagnosis and treatment of adult sleep
disorders contributed to this growth. As the size of the home oxygen therapy
portion of this business continues to grow, the Company expects the rate of
growth in the United States to slow but international growth to increase. The
Company expects the diagnosis and treatment of adult sleep disorders to become
an increasingly larger portion of its worldwide home care business. This new
area is a relatively young and rapidly growing market.
Hospital/Physician sales have increased as the U.S. demand for the 7200(R)
series ventilator has stabilized generally around last year's levels yet,
international demand has continued to grow. The level of interest in our
CliniVision(R) Respiratory Care Management Information System continues to be
high and revenues are expected to grow. After a very slow start caused by U.S.
health care reform uncertainty, CliniVision orders increased significantly in
the second half of FY 1994 as hospitals increasingly focused on CliniVision as a
valuable solution to their cost-containment challenge and as the Company
continued to enhance the CliniVision system. Considering this, the Company
expects the hospital/physician market revenues to grow moderately in FY 1995.
The Company has resolved to improve the profitability of this part of its
business within the context of considerably lower revenue expectations than the
Company has had in the past.
The aviation portion of the Company's business is experiencing growth in orders
and revenues, up 45% and 12%, respectively, from first quarter levels last year.
This increase is due in large part, although not entirely, to a growing interest
in the offerings of the Airborne Closed Circuit Television (ACCTV(TM))
operation. The Company believes ACCTV is on the verge of becoming a meaningful
revenue and profit contributor.
5
<PAGE>
The Company is cautiously optimistic that second quarter revenue will improve
over first quarter levels. The Company has adopted a conservative posture with
respect to spending levels and additional commitments.
INTERNATIONAL SALES GROWTH
The following tables reflect the amount of sales and operating profits from the
United States and foreign geographic segments:
<TABLE>
<CAPTION>
NET SALES PERCENT
Q1 1995 Q1 1994 CHANGE
------------------------------
<S> <C> <C> <C>
U.S. Operations $61,187 $63,347 (3.4%)
Foreign Operations 19,221 12,044 59.6%
------- -------
Total Net Sales $80,408 $75,391 6.7%
======= =======
OPERATING PROFIT PERCENT
Q1 1995 Q1 1994 CHANGE
------------------------------
<S> <C> <C> <C>
U.S. Operations $ 1,544 $ 1,633 (5.5%)
Foreign Operations 3,514 1,598 119.9%
------- -------
Total Net Sales $ 5,058 $ 3,231 56.5%
======= =======
</TABLE>
The increase in foreign operations net sales and operating profit from Q1 1994
was primarily due to an increase in Canadian sales and the addition of the SEFAM
S.A. product line.
The following table reflects sales by customer location:
<TABLE>
<CAPTION>
Q1 1995 Q1 1994
---------------- ----------------
<S> <C> <C> <C> <C>
Customers Within the U.S. $51,376 63.9% $54,547 72.4%
Customers Outside the U.S. 29,032 36.1% 20,844 27.6%
------- ----- ------- -----
Total Net Sales $80,408 100.0% $75,391 100.0%
======= ===== ======= =====
</TABLE>
During the past decade, the Company's business profile has changed substantially
from predominantly a supplier of life-support capital equipment to the United
States hospital market to the home care market. Home care has been, and is
expected to continue to be, the fastest growing part of the Company's business.
Life-support products sold in the U.S. market will likely represent a smaller
share of the Company's business in the future; a trend that does help lower the
Company's U.S. regulatory and health care reform risks. At the same time, the
Company will consider utilizing more fully its direct hospital sales and service
organizations in the U.S., Canada, France, Germany, Italy and the United Kingdom
to handle complementary products from other companies.
6
<PAGE>
In late January 1994, the Company finalized the previously announced
acquisition of SEFAM S.A., the leading European supplier of diagnostic and
therapeutic sleep disorder products, and its 80% owned Lit Dupont S.A.
subsidiary, which manufactures wheelchair products. Over the past five
years, the Company's home care business, which reached nearly $110 million in
revenues in FY 1994 has achieved a compound annual revenue growth rate of
over 22% worldwide - 31% internationally. The Company believes that the
acquisition of SEFAM will help such growth trends continue.
GROSS PROFIT
Gross profit percentage for Q1 1995 decreased 2.1% from Q1 1994. Gross
profit was adversely affected by the exiting of the U.S. portable ventilator
market (exclusive of service, parts and accessories) as well as the sale of a
significant portion of the Company's home care services business in south
Florida. These effects were partially offset by the purchase of SEFAM and
Lit DuPont as well as the results of restructuring actions taken late in FY
1994.
<TABLE>
<CAPTION>
PERCENT
Q1 1995 Q1 1994 CHANGE
--------- --------- ---------
<S> <C> <C> <C>
Gross Profit $33,791 $33,218 1.7%
Gross Profit Percentage 42.0% 44.1% (2.1%)
</TABLE>
SELLING AND ADMINISTRATIVE EXPENSES
Selling and administrative expenses for Q1 1995 increased 2.0% from Q1 1994.
This increase is due primarily to the acquisition of SEFAM S.A. and its 80%
owned Lit Dupont S.A. subsidiary, partially offset by the results of
restructuring actions taken in late FY 1994.
<TABLE>
<CAPTION>
PERCENT
Q1 1995 Q1 1994 CHANGE
--------- --------- ---------
<S> <C> <C> <C>
Selling and Administrative Expenses $23,918 $23,438 2.0%
</TABLE>
RESEARCH AND DEVELOPMENT EXPENSES
Research and development expenses for Q1 1995 decreased 26.5% from Q1 1994.
The decrease resulted primarily from the elimination of the intra-arterial
blood gas monitoring product line. Research and development continues across
all remaining product lines.
<TABLE>
<CAPTION>
PERCENT
Q1 1995 Q1 1994 CHANGE
--------- --------- ---------
<S> <C> <C> <C>
Research and Development Expenses $ 4,815 $ 6,549 (26.5%)
</TABLE>
7
<PAGE>
RESTRUCTURING CHARGES
A number of market and regulatory developments converged to make FY 1994 a
particularly challenging one for the Company as a whole. As a result, the
Company took a number of major actions in FY 1994 to reposition itself for the
future including:
restructured the hospital ventilator portion of its business;
consolidated its aviation business to three facilities from four;
planned the closing of its Boulder, Colorado facility and the transfer of
the manufacture of the portable ventilators made there to its ISO
(International Standards Organization) 9002-certified facility in the
Republic of Ireland;
planned the shutdown and is offering for sale the FOxS operation.
As of April 30, 1994, approximately $8.6 million remained in accrued liabilities
representing expected severance, cancellation penalties, remaining facility
lease payments, and other costs necessary to complete the restructuring plan in
an orderly and effective manner. This amount is expected to be disbursed
primarily over the next two quarters of FY 1995. It is not expected that this
will require significant borrowing. After the third quarter, the Company should
begin to see the real cash flow benefit of the restructuring plan, which is
progressing as expected.
PROVISION FOR INCOME TAXES
The Q1 1995 tax rate of 20.0% decreased from the Q1 1994 tax rate of 22.2% due
to a greater proportion of total income being taxed at the lower international
rate of 10%, which is the primary cause of the effective rate being less than
the U.S. statutory rate of 35%. In addition, there was less U.S. income in Q1
1995 than in Q1 1994, which contributed to a lower effective rate.
The Company has a tax valuation allowance of $15.7 million as required by SFAS
No. 109. The realization of this deferred tax benefit depends on the Company's
ability to generate sufficient taxable income in the future (approximately $20
million). Approximately 80% of the Company's total temporary differences are
expected to reverse in the next two years. As a result of the restructuring
taken during FY 1994, the Company believes it is well positioned to take
advantage of this tax benefit in the future.
If the Company is unable to generate sufficient taxable income in the future,
increases in the valuation allowance will be required through a charge to
expense. However, if the Company achieves sufficient profitability to use all of
the deferred tax benefit, the valuation allowance will be reduced through a
credit to expense.
8
<PAGE>
FINANCIAL CONDITION
WORKING CAPITAL
The ratio of current assets to current liabilities is 1.7 at April 30, 1994, up
from 1.6 at January 31, 1994. Working capital increased, from $51.9 million to
$54.4 million. The primary reason for the increase was an approximate $4.9
million decrease in other accrued expenses; primarily accrued restructuring
expenses that were paid in Q1 1995.
LIQUIDITY AND CAPITAL RESOURCES
Net cash and cash equivalents provided by operating activities decreased from
April 30, 1993 due to several factors. Accrued restructuring expenses were
reduced by $3.3 million according to the restructuring plan discussed earlier.
There was a deferred compensation payout of $1.7 million during Q1 1995 for
which there was no comparable event in Q1 1994. These decreases were offset
somewhat by a tightening of controls over inventory. In addition, the timing of
sales in Q4 1993 was such that a large portion of the associated accounts
receivable was collected in Q1 1994. The timing of sales in Q4 1994 was
approximately the same as Q4 1993, however, the decrease in receivables in Q1
1995 was offset by higher international sales which have a longer recovery
period. The stabilization in the growth of these assets has eliminated the large
use of cash related to these assets.
Net cash and cash equivalents used in investing activities have decreased when
compared to Q1 1994. This decrease is due primarily to the acquisition of Hoyer
Medizintechnik, $6.6 million was paid in Q1 1994 and a final payment of $2
million was paid in Q1 1995.
Net cash and cash equivalents provided by financing activities have decreased
when compared to Q1 1994. Short-term borrowing increased $2.6 million in Q1 1994
versus $.8 million in Q1 1995.
Long-term debt, excluding current maturities represents 28.0% of total capital
(long-term debt plus stockholder's equity) at April 30, 1994, and 26.4% at
January 31, 1994. At April 30, 1994, the Company had $35 million of unsecured
bank lines-of-credit available, $28.4 million of which was used.
HEALTH CARE REFORM
In the United States, President Clinton has made clear his determination to
reform this country's health care system. The two basic forces leading to reform
are the desire to: (1) provide basic financial access (insurance coverage) to
health care for all citizens, over 35 million of whom have only limited, if any,
financial access today; and (2) contain health care expenditures, which now
represent 14% of the economy and represent a sizable contributor to chronic
federal and some state government deficits. The first desire, taken alone, would
expand the health care system. The second desire, taken alone, would restrain
the expansion of the health care system. What the balance will be between these
two opposing desires remains to be seen. Clearly, it has proven
9
<PAGE>
easier over the years to expand financial access to health care than it has to
contain health care spending. The Company would not be surprised if the same
holds true in the future. In any event, the Company is devoted to developing
respiratory products that make such significant contributions that they will
continue to be necessary, not discretionary, parts of all developed health care
systems.
10
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits
Exhibits required by Item 601 of Regulation S-K are
listed in the Exhibit Index which is incorporated
herein by reference.
b. Reports on Form 8-K
A Current Report on Form 8-K dated February 3, 1994 with respect to
Item 2 relating to the acquisition of SEFAM S.A. was filed with the
Securities and Exchange Commission ("SEC") by the Company. An
amendment to that Current Report on Form 8-K/A dated March 31, 1994
was also filed with the SEC by the Company reporting that the
financial statements required by Item 7(a) and (b) of Form 8-K were
not required for the acquisition of SEFAM S.A. and would not be filed
by the Company.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
PURITAN-BENNETT CORPORATION
---------------------------
Registrant
Date: June 13, 1994 /s/ LEE A. ROBBINS
--------------------------------------------------
Lee A. Robbins, Vice President, Controller-Chief
Financial Officer
12
<PAGE>
EXHIBIT INDEX
Exhibits filed with Securities and Exchange Commission:
(Number and description of exhibit) Page
----
(11) Statement re: Computation of Per Share Earnings 14
----
(19) Puritan-Bennett Corporation First Quarter 15
----
Report, 1995
13
<PAGE>
EXHIBIT 11
STATEMENT REGARDING COMPUTATION
OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
QUARTER ENDING
APRIL 30
------------------------
1994 1993
------------------------
<S> <C> <C>
PRIMARY
Weighted average shares outstanding at 12,432,109 11,932,615
end of period
Assuming exercise of options reduced
by the number of shares which could
have been purchased with the proceeds
from exercise 56,340 41,058
----------- ----------
Shares outstanding for computation of
per share earnings 12,488,449 11,973,673
=========== ==========
Net income $3,724,000 ($906,000)
=========== ==========
Primary earnings per share $0.30 ($0.08)
=========== ==========
FULLY DILUTED
Weighted average shares outstanding at 12,432,109 11,932,615
end of period
Assuming exercise of options reduced
by the number of shares which could
have been purchased with the
proceeds from exercise 66,766 41,058
----------- ----------
Shares outstanding for computation of
per share earnings 12,498,875 11,973,673
=========== ==========
Net income $3,724,000 ($906,000)
=========== ==========
Fully diluted earnings per share $0.30 ($0.08)
=========== ==========
REPORTED EARNINGS PER SHARE $0.30 ($0.08)
=========== ==========
The company does not meet the 3% dilution test contained in Accounting
Principles Board Opinion #15, therefore disclosure of diluted earnings per share
on the face of the income statements is not required.
</TABLE>
<PAGE>
EXHIBIT 19
LETTER TO OUR STOCKHOLDERS
Puritan-Bennett Corporation reported earnings of $3,724,000 or $.30 per share
on revenues of $80,408,000 and orders of $80,113,000 for the first quarter ended
April 30, 1994.
Orders and revenues were up 13% and 7%, respectively, from last year's first
quarter orders of $71,040,000 and revenues of $75,391,000. The revenue and
earnings growth were achieved essentially without depleting the substantial
backlog growth that resulted from the record orders we received during last
year's fourth quarter.
While still very early, we are cautiously optimistic that the second quarter
will show further improvement. During much of the first quarter, the cash flow
of a number of our U.S. home care provider customers was adversely affected by
slower Medicare claims processing associated with consolidating the number of
third-party payors and the implementation of new electronic claims processing
systems. In response, home care providers were reluctant and, in some cases,
unable to maintain their normal equipment inventory levels, even though we
believe their underlying demand for equipment remained strong. In April steps
were taken to accelerate payments to home care providers during this period of
transition. Concurrently, we experienced a substantial increase over February
and March levels in home care orders from U.S. customers. Even with this
temporary impediment, our worldwide home care business experienced order and
revenue growth of 13% and 10%, respectively, compared to the first quarter of
last year.
As expected, U.S. demand for the 7200/(R)/ Series ventilator has stabilized
generally around last year's levels and international demand has continued
growing. The level of interest in our CliniVision/(R)/ respiratory care
management information system continues to be high.
Our aviation business is experiencing growth in orders and revenues, up 45%
and 12%, respectively, from first quarter levels last year. This increase is due
in large part, although not entirely, to our new ACCTV/(TM)/ operation.
/s/ Burton A. Dole, Jr.
----------------------------
Burton A. Dole Jr.
Chairman, President and
May 16, 1994 Chief Executive Officer
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS (UNAUDITED)
Dollars in thousands, except per share data
<TABLE>
<CAPTION>
THREE MONTHS ENDED
APRIL 30
------------------------
1994 1993
========================
<S> <C> <C>
Net Sales $ 80,408 $ 75,391
Cost of Goods Sold 46,617 42,173
----------- -----------
Gross Profit 33,791 33,218
Selling and Administrative Expense 23,918 23,438
Research and Development Expense 4,815 6,549
----------- -----------
Operating Profit 5,058 3,231
Other Expense, net 404 853
----------- -----------
Income Before Income Taxes 4,654 2,378
Provision for Income Taxes 930 529
----------- -----------
Net Income Before Cumulative Effect 3,724 1,849
Cumulative Effect of a Change in Accounting
for Income Taxes - 2,755
----------- -----------
Net Income (Loss) $ 3,724 $ (906)
=========== ===========
Weighted Average Number of Shares Outstanding 12,432,109 11,932,615
Net Income Before Cumulative Effect Per Share $ .30 $ .15
Cumulative Effect of Change in Accounting for
Income Taxes Per Share - (.23)
----------- -----------
Net Income (Loss) Per Share $ .30 $ (.08)
=========== ===========
Dividends Declared Per Share $ .03 $ .03
=========== ===========
</TABLE>
<PAGE>
CONDENSED CONSOLIDATED
BALANCE SHEETS (UNAUDITED)
Dollars in thousands
<TABLE>
<CAPTION>
April 30 January 31
ASSETS 1994 1994
---------------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 646 $ 713
Trade notes and accounts receivable, net 69,572 70,137
Inventories:
Finished goods 15,899 16,163
Work in process 4,738 4,437
Raw materials and supplies 32,633 30,894
-------- --------
53,270 51,494
Less excess of FIFO cost over LIFO cost (4,181) (4,024)
-------- --------
49,089 47,470
Prepaid expenses and other 3,149 5,567
Deferred income tax benefits 10,760 10,760
-------- --------
Total current assets 133,216 134,647
Plant and Equipment 165,239 158,961
Less accumulated depreciation and amortization 70,364 70,068
-------- --------
94,875 88,893
Other Assets, net 32,020 33,054
-------- --------
Total Assets $260,111 $256,594
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 28,544 $ 27,791
Trade accounts payable 13,382 13,937
Employee compensation, payroll taxes and withholdings 7,279 8,015
Accrued self-insurance expenses 1,168 1,299
Other accrued expenses 16,270 21,140
Dividends payable 374 359
Income taxes payable 5,149 3,678
Current maturities of long-term debt 6,660 6,546
-------- --------
Total current liabilities 78,826 82,765
Long-Term Debt, less current maturities 43,358 38,656
Deferred Compensation and Pensions 16,413 17,444
Deferred Income Taxes 55 55
Deferred Revenue 10,098 9,962
Stockholders' Equity:
Common stock, par value $1.00 per share -
Authorized 30,000,000 shares; issued and
outstanding, 12,468,493 shares in April
and 12,427,653 shares in January 12,468 12,428
Additional paid-in capital 35,960 34,794
Retained earnings 64,610 61,736
Deferred stock awards (1,627) (602)
Treasury stock (50) (644)
-------- --------
Total Stockholders' Equity 111,361 107,712
-------- --------
Total Liabilities and Stockholders' Equity $260,111 $256,594
======== ========
</TABLE>
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS (UNAUDITED)
Dollars in thousands
<TABLE>
<CAPTION>
THREE MONTHS ENDED
APRIL 30
------------------
CASH FLOWS FROM OPERATING ACTIVITIES 1994 1993
==================
<S> <C> <C>
Net income (loss) $ 3,724 $ (906)
Adjustments to reconcile net income to net cash and
cash equivalents provided by operating activities:
Depreciation and amortization 3,567 3,529
Cumulative effect of change in accounting principles - 2,755
Restructuring charges (3,307) -
Deferred compensation and pensions (1,031) 486
Provision for losses on accounts receivable 43 49
Asset dispositions, net (462) (34)
Shares issued to employee benefit plans 710 985
Change in operating assets and liabilities:
Trade notes and accounts receivable 522 4,037
Inventories (1,619) (3,576)
Prepaid expenses 1,937 33
Other assets 704 281
Trade accounts payable and accrued expenses (985) (805)
Federal and state income taxes payable/receivable 1,471 1,119
Deferred revenue 136 454
------- --------
Net Cash and Cash Equivalents Provided by
Operating Activities 5,410 8,407
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of capital assets 2,073 422
Capital expenditures (5,868) (3,819)
Purchases of intangible assets (32) (69)
Acquisitions, net of cash acquired (2,000) (6,624)
------- --------
Net Cash and Cash Equivalents Used in
Investing Activities (5,827) (10,090)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of notes payable 753 2,589
Payments on long-term debt (46) -
Dividends paid to stockholders (372) (357)
Stock options exercised 15 46
Stock repurchased - (189)
------- --------
Net Cash and Cash Equivalents Provided by
Financing Activities 350 2,089
------- --------
Net Increase (Decrease) in Cash and Cash Equivalents (67) 406
Cash and Cash Equivalents at the Beginning of the Year 713 403
------- --------
Cash and Cash Equivalents at the End of the Period $ 646 $ 809
======= ========
</TABLE>
<PAGE>
INCOMING ORDERS, NET SALES ($ MILLIONS) AND
NET INCOME (LOSS) PER SHARE
<TABLE>
<CAPTION>
FY 1994 FY 1995
------------------------------------- -------
Apr. 30 July 31 Oct. 31 Jan. 31 Apr. 30
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
MEDICAL -- Orders $65.4 $75.6 $69.9 $ 85.0 $71.9
Net Sales 69.4 71.9 69.6 75.0 73.7
AERO -- Orders 5.6 7.0 5.1 10.4 8.2
Net Sales 6.0 6.0 5.7 5.7 6.7
TOTAL -- Orders $71.0 $82.6 $75.0 $ 95.4 $80.1
Net Sales 75.4 77.9 75.3 80.7 80.4
BACKLOG INCREASE (DECREASE) $(4.4) $ 4.7 $(0.3) $ 14.7 $(0.3)
===============================================================================================
NET INCOME (LOSS) BEFORE CUMULATIVE
EFFECT PER SHARE $ .15 $(.41) $ .06 $(2.46) $ .30
CUMULATIVE EFFECT OF ACCOUNTING
CHANGES PER SHARE (.23) - - (.01) -
----- ----- ----- ------ -----
NET INCOME (LOSS) PER SHARE $(.08) $(.41) $ .06 $(2.47) $ .30
===== ===== ===== ====== =====
</TABLE>
