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 29, 1996
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 0-24172
Metrologic Instruments, Inc.
(Exact name of registrant as specified in its charter)
New Jersey 22-1866172
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Coles Road at Route 42, Blackwood, New Jersey 08012
(Address of principal executive offices) (Zip Code)
(609) 228-8100
(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 .
As of October 31, 1996 there were 5,269,322 shares of Common Stock, $.01 par
value per share, outstanding.
<PAGE>
METROLOGIC INSTRUMENTS, INC.
INDEX
Part I - Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
September 29, 1996 and December 31, 1995 3
Condensed Consolidated Statements of Operations -
Three and Nine Months Ended September 29, 1996 and
September 30, 1995 4
Condensed Consolidated Statements of Cash Flows -
Nine Months Ended September 29, 1996 and
September 30, 1995 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Part II - Other Information
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 14
Item 3. Defaults upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security
Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 15
Exhibit Index
Statement Regarding Computation of Per Share
Earnings.
Financial Data Schedule
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
METROLOGIC INSTRUMENTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands except share data)
September 29, December 31,
1996 1995
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 9,397 $12,065
Accounts receivable, net of allowance of
$550 and $224 in 1996 and 1995, respectively 7,766 6,924
Inventory 6,528 3,456
Deferred income taxes 1,569 1,314
Other current assets 410 506
Total current assets 25,670 24,265
Property, plant and equipment, net 4,614 3,880
Patents and trademarks, net of amortization of
$251 and $356 in 1996 and 1995, respectively 999 878
Holographic technology, net of amortization of
$47 and $0 in 1996 and 1995, respectively 762 468
Security deposits and other assets 548 459
Deferred income taxes 1,330 1,451
Total assets $33,923 $31,401
Liabilities and stockholders' equity Current liabilities:
Line of credit $ - $ 175
Current portion of notes payable 396 390
Accounts payable 3,242 2,301
Accrued expenses 6,616 6,067
Accrued legal settlement 548 599
Total current liabilities 10,802 9,532
Notes payable, net of current portion 557 817
Due to former officer, net of current portion - 84
Deferred income taxes 29 42
Accrued legal settlement 2,719 3,000
Stockholders' equity Preferred stock, $.01 par value:
authorized shares - 500,000
issued shares - none - -
Common stock, $.01 par value:
authorized shares - 10,000,000
issued and outstanding shares - 5,253,608
in 1996 and 5,249,150 in 1995 53 52
Additional paid-in capital 14,857 14,807
Retained earnings 4,536 2,621
Deferred compensation (19) (37)
Translation adjustment 389 483
Total stockholders' equity 19,816 17,926
Total liabilities and stockholders' equity $33,923 $31,401
See accompanying notes.
<PAGE>
METROLOGIC INSTRUMENTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands except share and per share data)
Three Months Ended Nine Months Ended
Sept. 29, Sept. 30, Sept. 29, Sept. 30,
1996 1995 1996 1995
(Unaudited) (Unaudited)
Sales $11,525 $9,716 $33,624 $30,369
Cost of sales 7,032 5,908 20,457 17,493
Gross profit 4,493 3,808 13,167 12,876
Selling, general and administrative
expenses 2,502 2,646 7,791 7,755
Research and development
expenses 808 725 2,379 2,173
Operating income 1,183 437 2,997 2,948
Other income (expense)
Interest expense (29) (61) (85) (121)
Interest income 94 114 321 337
Other income (expense) (55) - (133) 26
10 53 103 242
Income before provision for
income taxes 1,193 490 3,100 3,190
Provision for income taxes 453 191 1,185 1,272
Net income $ 740 $ 299 $ 1,915 $ 1,918
Net income per share $ 0.14 $0.06 $ 0.36 $ 0.36
Weighted average number of
shares used in computing net
income per share 5,285,097 5,250,531 5,271,470 5,287,566
See accompanying notes.
<PAGE>
METROLOGIC INSTRUMENTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
Nine Months Ended
Sept. 29 Sept. 30
1996 1995
(Unaudited)
Net cash (used in) provided by operating activities $ (236) $ 1,465
Investing activities:
Purchase of Holoscan, Inc. and holographic
technology, net of cash acquired (521) (332)
Purchase of equipment and building improvements (1,235) (1,145)
Expenditures on patents and trademarks (172) (264)
Net cash used in investing activities (1,928) (1,741)
Financing activities:
Net proceeds from employee stock purchase plan
and exercise of stock options 42 208
Payments on line of credit (170) -
Payments of amounts due to former officer (150) (150)
Principal payments of notes payable (134) -
Capital lease payments (120) (89)
Net cash used in financial activities (532) (31)
Effect of exchange rate changes on cash 28 (337)
Net decrease in cash (2,668) (644)
Cash and cash equivalents
at beginning of period 12,065 11,925
Cash and cash equivalents
at end of period $ 9,397 $11,281
Supplemental disclosure of cash flow information:
Cash paid for interest $ 56 $ 38
Cash paid for income taxes $ 1,947 $ 1,487
Capital lease obligations incurred $ - $ 531
See accompanying notes.
<PAGE>
METROLOGIC INSTRUMENTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands except share and per share data)
(Unaudited)
1. Business
Metrologic Instruments, Inc. and its wholly owned subsidiaries (the
"Company") design, manufacture and market bar code scanning equipment
incorporating laser and holographic technology. These scanners rapidly,
accurately and efficiently read and decode all widely used bar codes and provide
an efficient means for data capture and automated data entry into computerized
systems.
2. Accounting Policies
Interim Financial Information
The accompanying unaudited Condensed Consolidated Financial Statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and 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
solely of normal recurring adjustments) necessary for a fair presentation of the
Condensed Consolidated Financial Statements have been included. Results of
interim periods are not necessarily indicative of the results to be obtained for
a full fiscal year. The Condensed Consolidated Financial Statements and these
Notes should be read in conjunction with Management's Discussion and Analysis of
Financial Condition and Results of Operations contained in this Form 10-Q and
the Company's Annual Report on Form 10-K for the year ended December 31, 1995,
including the Consolidated Financial Statements and the Notes thereto for the
year ended December 31, 1995.
3. Inventory
Inventory consists of the following:
September 29, December 31,
1996 1995
Raw materials $2,932 $1,698
Work-in-process 2,329 1,311
Finished goods 1,267 447
$6,528 $3,456
4. Net Income Per Share
Net income per share is calculated based on net income and the weighted
average number of common shares and common share equivalents outstanding during
the three and nine months ended September 29, 1996 and September 30, 1995.
5. Commitments and Contingencies
The Company files domestic and foreign patent applications to protect
its technological position and new product development. From time to time, the
Company receives legal challenges to the validity of its patents or allegations
that its products infringe the patents or other intellectual property of others.
The Company is a party to a legal action alleging that the Company's
prior version of one of its scanners infringed a patent held by another company.
The Company has filed a counterclaim for a declaratory judgment asserting that
the plaintiff's patent is invalid, and management believes that this action will
not result in any material damages.
Since 1995, the Company and a competitor have been negotiating an
extensive cross-licensing of patents for which the Company and the competitor
may pay royalties to each other under certain circumstances. There can be no
assurance that these negotiations will result in the execution of a definitive
agreement by the Company and the competitor, or that patent litigation between
the Company and the competitor will not result if the current negotiations are
unsuccessful.
<PAGE>
6. Notes Payable
The Company has an unsecured revolving demand loan with a commercial
bank which allows for maximum borrowings of $5,000. The demand loan, which
expires on June 30, 1997, bears interest at the bank's prime rate, which was
8.25% at September 29, 1996. The demand loan agreement requires the Company to
comply with certain financial covenants and other restrictions. As of October
31, 1996, the Company was in compliance with such covenants and no amounts were
outstanding under this revolving demand loan.
On January 31, 1996, the Company paid a note payable which related to a
patent litigation settlement entered into in December 1993. The note
represented the excess of the minimum obligation pursuant to the related patent
litigation settlement for the year ended December 31, 1993. (See Item 2.
"Management's Discussion and Analysis of Financial Condition and Results of
Operations.")
7. Acquisition of Holoscan, Inc. including Holographic Technology
The Company exercised its option to purchase all of the outstanding
shares of common stock of Holoscan, Inc. ("Holoscan") on March 1, 1996 for $521,
net of cash acquired. The Company purchased a 51% interest in Holoscan in 1995
in the form of non-voting, convertible preferred stock for $360. Concurrent with
the exercise of the above option, the Company converted its non-voting,
convertible preferred stock of Holoscan to an equal number of shares of Holoscan
common stock and now owns 100% of the outstanding capital stock of Holoscan.
The Company has consolidated the assets and liabilities at September
29, 1996 and results of operations and cash flows of Holoscan for the period
March 1, 1996 to September 29, 1996. The amount by which the consideration paid
by the Company for the acquisition of Holoscan's convertible preferred stock,
the conversion of the preferred stock to common stock and the purchase of all
outstanding common stock exceeded Holoscan's identifiable assets less
liabilities was recorded as holographic technology and is being amortized over
ten years. For the period March 1, 1996 through September 29, 1996, $47 was
recorded as amortization of the holographic technology.
Pursuant to an option agreement entered into in March 1995 among the
Company, Holoscan and the holders of all of Holoscan's outstanding common stock
and options and warrants to purchase common stock (collectively, the "Holders"),
the Company agreed to pay to each Holder, through 1998, a payment based on the
Company's sales of certain holographic laser scanners. As of September 29, 1996,
an aggregate of $4 had been paid to the Holders. Such payments in future periods
will be considered additions to holographic technology and will be amortized
over the remainder of the ten year period.
(The remainder of this page is intentionally left blank.)
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion of the Company's results of operations and
liquidity and capital resources should be read in conjunction with the unaudited
Condensed Consolidated Financial Statements of the Company and the related Notes
thereto appearing elsewhere in this Form 10-Q, the Consolidated Financial
Statements and the Notes thereto for the year ended December 31, 1995 appearing
in the Company's Form 10-K for the year ended December 31, 1995 and the Forms
10-Q for the three months ended March 31, 1996 and June 30, 1996. The Condensed
Consolidated Financial Statements for the three and nine months ended September
29, 1996 and September 30, 1995 are unaudited.
The Company derives its revenues from sales of its scanners through
distributors, value-added resellers ("VARs"), original equipment manufacturers
("OEMs") and directly to end-users in the United States and in over 80 foreign
countries. Since 1991, the Company has experienced growth in revenues with a
significant percentage of its revenues derived from international sales.
Results of Operations
Three Months Ended September 29, 1996 Compared with Three Months Ended
September 30, 1995
Sales increased 18.6% to $11,525,000 in the three months ended
September 29, 1996 from $9,716,000 in the three months ended September 30, 1995,
principally as a result of an increase in market acceptance of the Company's
hand-held and fixed projection scanners. International sales accounted for
$7,062,000 (61.3% of total sales) in the three months ended September 29, 1996
and $4,860,000 (50.0% of total sales) in the three months ended September 30,
1995. The increase in the percentage of international sales to total sales in
the three months ended September 29, 1996 compared with the corresponding period
in 1995 is primarily due to the Company's increased sales and marketing efforts
abroad and the completion of shipments to a U.S. customer during the second
quarter of 1996. Shipments to such U.S. customer had accounted for approximately
13% of total sales for the three months ended September 30, 1995.
One customer accounted for approximately 6.6% of total sales for the
three months ended September 29, 1996. During the same period, no other customer
accounted for more than 5% of the Company's sales.
Cost of sales increased 19.0% from $5,908,000 in the three months ended
September 30, 1995 to $7,032,000 in the three months ended September 29, 1996.
Cost of sales as a percentage of sales increased to 61.0% from 60.8% for the
same period a year ago. These increases were due primarily to reductions in the
average selling prices of certain of the Company's products.
Selling, general and administrative expenses decreased 5.4% to
$2,502,000 in the three months ended September 29, 1996 from $2,646,000 in the
three months ended September 30, 1995 and decreased as a percentage of sales
from 27.2% to 21.7%. These decreases were due to higher legal costs incurred in
the three months ended September 30, 1995 compared to the corresponding period
in 1996.
<PAGE>
Research and development expenses increased 11.4% from $725,000 in the
three months ended September 30, 1995 to $808,000 in the three months ended
September 29, 1996, but decreased as a percentage of sales from 7.5% to 7.0% for
the three months ended September 30, 1995 and September 29, 1996, respectively.
The increase in research and development expenses was due to salaries for
additional research and development personnel hired in 1996, partially offset by
the completion as of March 31, 1996 of expenditures associated with the initial
development of holographic technology.
Operating income increased 170.7% to $1,183,000 in the three months
ended September 29, 1996 from $437,000 in the three months ended September 30,
1995, and operating income as a percentage of sales increased to 10.3% in the
three months ended September 29, 1996 from 4.5% in the three months ended
September 30, 1995.
Other income decreased to $10,000 in the three months ended September
29, 1996 from $53,000 in the three months ended September 30, 1995. Other income
for the three months ended September 29, 1996 and September 30, 1995 consisted
of interest income of $94,000 and $114,000, respectively, offset by aggregate
amounts of $84,000 and $61,000, respectively, which include interest expense in
both periods and foreign currency transaction losses incurred by the Company's
German subsidiary in the three months ended September 29, 1996.
Net income increased 147.5% to $740,000 in the three months ended
September 29, 1996 from $299,000 in the three months ended September 30, 1995.
Net income reflects a 38.0% effective income tax rate in the third quarter of
1996 compared with 39.0% in the third quarter of 1995. The reduced effective
income tax rate resulted primarily from increased tax benefits arising from the
existence of the Company's foreign sales corporation which, in accordance with
the United States Internal Revenue Code permits the Company to reduce its U.S.
federal income tax liability on profits from sales to foreign customers.
Nine Months Ended September 29, 1996 Compared with Nine Months Ended September
30, 1995.
Sales increased 10.7% to $33,624,000 in the first nine months of 1996
from $30,369,000 in the first nine months of 1995 principally as a result of an
increase in market acceptance of the Company's hand-held and fixed projection
scanners and increased marketing and sales efforts. International sales
accounted for $20,447,000 (60.8% of total sales) for the first nine months of
1996 and $16,764,000 (55.2% of total sales) for the first nine months of 1995.
One customer accounted for approximately 6.1% of total sales in the
first nine months of 1996. Two other customers accounted for approximately 5.6%
and 5.4%, respectively of total sales in the first nine months of 1996. No other
customer accounted for more than 5.0% of total sales for the first nine months
of 1996.
Cost of sales increased 16.9% to $20,457,000 in the first nine months
of 1996 from $17,493,000 in the first nine months of 1995. Cost of sales as a
percentage of sales increased to 60.8% from 57.6%. These increases were due
primarily to reductions in the average selling prices of certain of the
Company's products.
<PAGE>
Selling, general, and administrative expenses increased 0.5% to
$7,791,000 in the first nine months of 1996 from $7,755,000 in the first nine
months of 1995 and decreased as a percentage of sales from 25.5% to 23.2%.
Research and development expenses increased 9.5% to $2,379,000 in the
first nine months of 1996 from $2,173,000 in the first nine months of 1995 but
decreased as a percentage of sales from 7.2% to 7.1% for the nine months ended
September 30, 1995 and September 29, 1996, respectively. The increase was due
primarily to salaries for additional research and development personnel hired
during the nine months ended September 29, 1996, which were partially offset by
the completion as of March 31, 1996 of expenditures associated with the initial
development of holographic technology.
Operating income increased 1.7% to $2,997,000 in the first nine months
of 1996 from $2,948,000 in the first nine months of 1995. Operating income as a
percentage of sales decreased to 8.9% in the first nine months of 1996 from 9.7%
in the first nine months of 1995.
Other income decreased to $103,000 in the first nine months of 1996
from $242,000 in the first nine months of 1995. Other income for the nine months
ended September 29, 1996 and September 30, 1995 consisted of interest income of
$321,000 and $337,000, respectively, offset by aggregate amounts of $218,000 and
$95,000, respectively, which includes interest expense and foreign currency
transaction losses and gains incurred by the Company's German subsidiary.
Net income decreased to $1,915,000 in the first nine months of 1996
from $1,918,000 in the first nine months of 1995. Net income reflects a 38.0%
effective income tax rate in the nine months ended September 29, 1996 compared
with 40.0% in the corresponding period in 1995. The reduced effective income tax
rate resulted primarily from increased tax benefits arising from the existence
of the Company's foreign sales corporation which, in accordance with The United
States Internal Revenue Code, permits the Company to reduce its U.S. federal
income tax liability on profits from sales to foreign customers.
Inflation and Seasonality
Inflation and seasonality have not had a material impact on the
Company's results of operations. There can be no assurance, however, that the
Company's sales in future years will not be impacted by fluctuations in seasonal
demand from European customers in its third quarter or from reduced production
days in its fourth quarter.
Liquidity and Capital Resources
As of September 29, 1996 and December 31, 1995, the Company's working
capital was approximately $14,868,000 and $14,733,000, respectively.
During the nine months ended September 29, 1996, the Company used net
cash of $236,000 compared with funds provided of $1,465,000 in operating
activities for the nine months ended September 30, 1995. The cash used in
operating activities in the nine months ended September 29, 1996 primarily
resulted from an increase in inventory and accounts receivable which was
partially financed by an increase in accounts payable and accrued expenses.
The Company's primary uses of cash have been for operating expenses,
research and development expenses, capital expenditures, investments in patents
and trademarks and the acquisition of Holoscan including its holographic
technology.
<PAGE>
Pursuant to the settlement of a patent lawsuit in December 1993, the
Company is required to pay amounts based on gross sales commencing in 1993 for a
12 year period with an aggregate maximum of $7,500,000 and an aggregate minimum
of $4,450,000, which minimum amount was charged to net income in 1993. Annual
minimum payment obligations are $375,000. In addition to such minimum
obligations for 1996, the Company incurred approximately $334,000 pursuant to
the settlement agreement during the nine months ended September 29, 1996. On
January 31, 1996, the Company paid a note payable relating to the patent
litigation settlement which represented the excess of the minimum obligation for
the year ended December 31, 1993.
The Company's total deferred income tax asset (current and long-term)
of approximately $2,899,000 is based upon cumulative temporary differences as of
September 29, 1996, which provide approximately $6,743,000 of future income tax
deductions against future taxable income. The temporary differences arise
primarily from recording the patent lawsuit settlement as an expense for
accounting purposes prior to receiving the related tax benefit.
The Company has an unsecured revolving demand loan with PNC Bank, NA
which allows for maximum borrowings of $5,000,000. The demand loan requires the
Company to comply with certain financial covenants and other restrictions. As of
October 31, 1996, the Company was in compliance with the financial covenants and
no amounts were outstanding under this facility.
The Company also has a 500,000 deutsche mark (approximately $328,000
as of September 29, 1996) unsecured revolving credit facility with
Bayerische Hypotheken-Und Wechsel-Bank in the name of its German subsidiary,
Metrologic Instruments GmbH. As of October 31, 1996, approximately
$152,000 ($0 at September 29, 1996) was outstanding under this revolving
credit facility.
The Company's current plans for additional capital expenditures in the
1996 fiscal year include manufacturing automation equipment and office equipment
in the aggregate amount of approximately $500,000.
The Company may be subject to losses as a result of foreign currency
transactions. Accordingly, the Company's liquidity could be adversely affected
by changes in foreign currency exchange rates.
On March 1, 1996, the Company exercised its option under its March
1995 Option Agreement (as defined herein) with Holoscan to acquire the
outstanding equity securities of Holoscan and made payments aggregating
approximately $521,000. (See also Part II, Item 5. "Other Information.")
The Company believes that its current cash and cash equivalents, along
with cash generated from operations and its revolving credit facilities, will be
adequate to fund the Company's operations through at least the next 12 months.
<PAGE>
The discussion in this Form 10-Q includes forward-looking statements
based on current management expectations. Factors which would cause the results
to differ from these expectations include the following: general economic
conditions; competitive factors and pricing pressures; technological changes in
the scanner industry; availability of patent protection for the Company's
holographic scanners and other products; possible patent litigation between the
Company and a competitor if the current negotiations are unsuccessful (see
Condensed Consolidated Financial Statements Note 5); and market acceptance of
the Company's new products.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On July 7, 1992, PSC, Inc. ("PSC"), a competitor of the Company, filed
a lawsuit in the United States District Court for the Western District of New
York (the "Court") against the Company, alleging that the Company's prior
version of its MS900 series of hand-held scanners infringed a PSC patent. The
complaint seeks an injunction and damages in an unstated amount. The Company
filed a counterclaim for a declaratory judgment asserting that the PSC patent is
invalid and that the Company's prior version of its MS900 series of hand-held
scanners did not infringe such patent. On October 13, 1995, the Court
interpreted the claims of the PSC patent in a patent infringement lawsuit filed
by PSC against another competitor. Based upon that interpretation, it is the
Company's belief that the MS900 series scanners do not infringe the subject
patent. Accordingly, on October 20, 1995, Metrologic filed a motion seeking
summary judgment of non-infringement. In response, the Court stayed this action,
including the motion for summary judgment, pending the outcome of the appeal
filed by PSC in the other patent infringement lawsuit. The Company redesigned
its MS900 series of hand-held scanners in 1993 in an effort to avoid any
interruption of sales which would result from the possibility of the entry of an
injunction and to minimize any damage award that PSC might receive. While the
Company believes that PSC will not prevail on this infringement claim with
respect to the redesigned MS900 series of hand-held scanners, there can be no
assurance that PSC will not prevail. While the amount of any potential damage
award is presently unknown, the Company believes that an adverse decision in
this action would not have a material adverse effect on the Company. However,
patent damage awards are unpredictable and there can be no certainty with
respect to the size of any such award.
<PAGE>
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
In March 1995, the Company, Holoscan and the Holders entered into a
stock purchase agreement (the "Stock Purchase Agreement") and an option
agreement (the "Option Agreement"). Pursuant to the terms of the Stock Purchase
Agreement, the Company purchased, for $360,000, shares of Holoscan's convertible
preferred stock. The Company elected to convert these shares of convertible
preferred stock into shares of common stock on March 1, 1996, resulting in the
Company's ownership of 51% of Holoscan's outstanding common stock. Pursuant to
the Option Agreement, the Holders granted the Company an option to acquire from
each Holder the equity securities of Holoscan owned by such Holder. On March 1,
1996, the Company exercised its option under the Option Agreement and acquired
the remaining 49% of the outstanding Holoscan common stock and other outstanding
equity securities of Holoscan from the Holders. As a result, Holoscan is a
wholly-owned subsidiary of the Company. In addition, the Company agreed to pay
to each Holder, through 1998, a payment based on the Company's sales of certain
holographic laser scanners. As of September 29, 1996, the Company has paid an
aggregate of $4,000 to the Holders pursuant to the Option Agreement. (See also
Part I, Item 2. - "Management's Discussion and Analysis of Financial Condition
and Results of Operations").
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit Number
11 Statement Regarding Computation of Per
Share Earnings.
27 Financial Data Schedule.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended
September 29, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed by the undersigned thereunto
duly authorized.
METROLOGIC INSTRUMENTS, INC.
Date: November 13, 1996 By:/s/ C. Harry Knowles
C. Harry Knowles
Chairman of the Board,
President and Chief Executive Officer
Date: November 13, 1996 By:/s/Thomas E. Mills IV
Thomas E. Mills IV
Vice President Finance &
Chief Financial Officer
(Principal Financial Officer)
<PAGE>
EXHIBIT INDEX
Exhibit No.
11 Statement Regarding Computation of Per Share Earnings
27 Financial Data Schedule
Three Months Ended Nine Months Ended
Sept. 29, Sept. 30, Sept. 29, Sept. 30,
1996 1995 1996 1995
(Unaudited) (Unaudited)
Primary
Average shares outstanding 5,253 5,243 5,251 5,235
Net effect of dilutive stock options-
based on the treasury stock method
using average market price 27 - 15 44
Net effect of dilutive restricted
stock grants 5 8 5 9
Total 5,285 5,251 5,271 5,288
Net income $ 740 $ 299 $ 1,915 $ 1,918
Per share earnings $ 0.14 $ 0.06 $ 0.36 $ 0.36
The computation of per share earnings on a fully diluted basis does not
materially differ from the amounts calculated on a primary basis.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
UNAUDITED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 29, 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<PERIOD-START> JAN-01-1996
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-29-1996
<CASH> 9,397,000
<SECURITIES> 0
<RECEIVABLES> 8,316,000
<ALLOWANCES> 550,000
<INVENTORY> 6,528,000
<CURRENT-ASSETS> 25,670,000
<PP&E> 4,614,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 33,923,000
<CURRENT-LIABILITIES> 10,802,000
<BONDS> 0
0
0
<COMMON> 53,000
<OTHER-SE> 19,763,000
<TOTAL-LIABILITY-AND-EQUITY> 33,923,000
<SALES> 33,624,000
<TOTAL-REVENUES> 33,624,000
<CGS> 20,457,000
<TOTAL-COSTS> 30,627,000
<OTHER-EXPENSES> (103,000)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 85,000
<INCOME-PRETAX> 3,100,000
<INCOME-TAX> 1,185,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,915,000
<EPS-PRIMARY> .36
<EPS-DILUTED> .36
</TABLE>
