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 March 31, 1999
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 (I.R.S. Employer
incorporation or organization) Identification No.)
90 Coles Road , 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 May 13, 1999 there were 5,411,797 shares of Common Stock, $.01 par value
per share, outstanding.
<PAGE>
METROLOGIC INSTRUMENTS, INC.
INDEX
Page
No.
Part I - Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
March 31, 1999 and December 31, 1998 3
Condensed Consolidated Statements of Operations -
Three Months Ended March 31, 1999 and March 31, 1998 4
Condensed Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1999 and
March 31, 1998 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Part II - Other Information
Item 1. Legal Proceedings 13
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibit Index 15
Financial Data Schedule 16
<PAGE>
Metrologic Instruments, Inc.
Consolidated Balance Sheets
(amounts in thousands except share data)
March 31,
Assets 1999 1998
-------- --------
Current assets:
Cash and cash equivalents $ 7,939 $ 10,684
Accounts receivable, net of allowance of $407 and
$389 in 1999 and 1998, respectively 15,186 14,542
Inventory 9,481 6,900
Deferred income taxes 1,283 1,308
Other current assets 744 1,073
-------- --------
Total current assets 34,633 34,507
Property, plant and equipment, net 6,765 6,382
Patents and trademarks, net of amortization
of $627 and $604 in 1999 and 1998, respectively 1,875 1,745
Holographic technology, net of amortization of $279
and $250 in 1999 and 1998, respectively 803 832
Advance license fee, net of amortization of $265
and $235 in 1999 and 1998, respectively 1,735 1,765
Security deposits and other assets 1,139 1,065
-------- --------
Total assets $ 46,950 $ 46,296
======== ========
Liabilities and shareholders' equity
Current liabilities:
Current portion of notes payable $ 930 $ 908
Accounts payable 3,983 4,155
Accrued expenses 7,695 7,260
Accrued legal settlement 428 688
-------- --------
Total current liabilities 13,036 13,011
Notes payable, net of current portion 2,598 2,608
Deferred income taxes 621 676
Shareholders' equity:
Preferred stock, $0.01 par value: 500,000 shares
authorized; none issued - -
Common stock, $0.01 par value: 10,000,000 shares
authorized; 5,410,125 and 5,404,512 shares
issued and outstanding in 1999 and 1998,
respectively 54 54
Additional paid-in capital 17,002 16,933
Retained earnings 14,110 13,069
Accumulated other comprehensive income (471) (55)
-------- --------
Total shareholders' equity 30,695 30,001
-------- --------
Total liabilities and shareholders' equity $ 46,950 $ 46,296
======== ========
See accompanying notes.
<PAGE>
Metrologic Instruments, Inc.
Condensed Consolidated Statements of Operations
(amounts in thousands except share and per share data)
Three Months Ended
March 31,
1999 1998
(unaudited)
Sales $ 18,253 $ 15,227
Cost of sales 10,963 9,367
-------- --------
Gross profit 7,290 5,860
Selling, general and administrative expenses 4,588 3,343
Research and development expenses 960 1,114
-------- --------
Operating income 1,742 1,403
Other (expenses) income
Interest income 131 137
Interest expense (57) (38)
Foreign currency transaction (loss) gain (214) 57
Other, net - 34
-------- --------
Total other (expense) income) (140) 190
-------- --------
Income before provision for income taxes 1,602 1,593
Provision for income taxes 561 573
-------- --------
Net income $ 1,041 $ 1,020
======== ========
Basic earnings per share
Weighted average shares outstanding 5,408,560 5,371,626
======== ========
Basic earnings per share $ 0.19 $ 0.19
======== ========
Diluted earnings per share
Weighted average shares outstanding 5,408,560 5,371,626
Net effect of dilutive securities 92,668 169,343
-------- --------
Total shares outstanding used in
computing diluted earnings per share 5,501,228 5,540,969
======== ========
Diluted earnings per share $ 0.19 $ 0.18
======== ========
See accompanying notes.
<PAGE>
Metrologic Instruments, Inc.
Condensed Consolidated Statements of Cash Flows
(amounts in thousands)
Three Months Ended
March 31,
1999 1998
(Unaudited)
Operating activities
Net cash (used in) provided by operating
activities $ (2,061) $ 811
Investing activities
Purchase of property, plant and equipment (742) (920)
Patents and trademarks (153) (66)
Advance license fee - (125)
Other intangibles - (536)
Purchase of Holoscan, Inc. and holographic
technology, net of cash acquired - (19)
------- -------
Net cash used in investing activities (895) (1,666)
Financing activities
Proceeds from exercise of stock options and
employee stock purchase plan 65 85
Proceeds from issuance of notes payable 336 -
Principal payments on notes payable (124) (126)
Capital lease payments (21) (41)
------- -------
Net cash provided by (used in) financing activities 256 (82)
Effect of exchange rates on cash (45) 48
------- -------
Net decrease in cash and cash equivalents (2,745) (889)
Cash and cash equivalents at beginning of period 10,684 13,096
------- -------
Cash and cash equivalents at end of period $ 7,939 $12,207
======== =======
Supplemental Disclosure
Cash paid for interest $ 58 $ 28
Cash paid for income taxes $ 192 $ 29
Tax benefit from stock options $ 4 $ 32
See accompanying notes.
<PAGE>
METROLOGIC INSTRUMENTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands)
(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. The results
of the 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 Quarterly Report on Form 10-Q and the Company's Annual Report
on Form 10-K for the year ended December 31, 1998, including the Consolidated
Financial Statements and the Notes to Consolidated Financial Statements for the
year ended December 31, 1998 contained therein.
3. Inventory
Inventory consists of the following:
March 31, December 31,
1999 1998
Raw materials $ 3,714 $ 3,280
Work-in-process 3,816 2,614
Finished goods 1,951 1,006
------- -------
$ 9,481 $ 6,900
4. Comprehensive Income
The Company's total comprehensive earnings were as follows:
Three Months Ended
March 31,
(Unaudited)
1999 1998
Net earnings $1,041 $1,020
Other comprehensive
losses:
Change in equity due to foreign
currency translation adjustments (416) (100)
------ ------
Comprehensive earnings $ 626 $ 920
<PAGE>
5. Geographical Information
The Company generates its revenue from the sale of laser bar code scanners
primarily to distributors, value-added resellers, original equipment
manufacturers and directly to end users, in locations throughout the world. No
individual customer accounted for 10% or more of revenues in 1998, 1997 or
1996.
The Company has operations in the United States and Germany. Sales were
attributed to geographic areas in the following table based on the location of
the Company's customers.
United States Operations German
North Other Operations Total
America Europe Export Total Europe Consolidated
Three months ended
March 31, 1999:
Sales $ 7,004 $951 $ 2,626 $10,581 $ 7,672 $18,253
Income (loss)
before provision
for income taxes $ 1,753 $ (151) $ 1,602
Identifiable
assets $38,815 - - $38,815 $ 8,135 $46,950
Three months ended
March 31, 1998:
Sales $ 6,076 $215 $ 2,066 $ 8,357 $ 6,870 $15,227
Income (loss)
before provision
for income taxes $ 1,354 $ 239 $ 1,593
Identifiable
assets $39,855 - - $39,855 $ 6,441 $46,296
<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 Quarterly Report on Form 10-Q
and the Consolidated Financial Statements and the Notes to Consolidated
Financial Statements for the year ended December 31, 1998 appearing in the
Company's Annual Report on Form 10-K for the year ended December 31, 1998. The
Condensed Consolidated Financial Statements for the three months ended March
31, 1999 and March 31, 1998 are unaudited.
The Company derives its revenues from sales of its scanners through
distributors, value-added resellers ("VARs") and original equipment
manufacturers ("OEMs") and directly to end-users in the United States and in
over 85 foreign countries.
Three Months Ended March 31, 1999 Compared with Three Months Ended March 31,
1998 (amounts in thousands except per share information)
Sales increased 19.9% to $18,253 in the three months ended March 31,
1999 from $15,227 in the three months ended March 31, 1998, principally as a
result of the continued increase in market acceptance of the Company's
point-of-sale ("POS") products, an increase in sales of the Company's
HoloTrak(R) industrial holographic laser scanners, and increased sales and
marketing efforts. The increase in sales volume in 1999 was offset by lower
average unit selling prices on POS products, compared to the corresponding
period in 1998.
International sales accounted for $11,441 (62.7% of total sales) in
the three months ended March 31, 1999 and $9,151 (60.1% of total sales) in the
three months ended March 31, 1998. One customer accounted for 9.2% and 5.9% of
the Company's revenues in the three months ended March 31, 1999 and 1998,
respectively.
Cost of sales increased 17.0% to $10,963 in the three months ended
March 31, 1999 from $9,367 in the three months ended March 31, 1998, while cost
of sales as a percentage of sales decreased to 60.1% from 61.5%. The decrease
in cost of sales as a percentage of sales was due primarily to increased sales
of the Company's industrial laser scanners which traditionally yield higher
gross profit margins than the Company's POS products, reduced product costs
resulting from engineering enhancements to certain POS products, and
manufacturing efficiencies and operating leverage that result from greater unit
volumes, partially offset by lower average unit selling prices on certain of
the Company's products as noted above.
Selling, general and administrative ("SG&A") expenses increased 37.2%
to $4,588 in the three months ended March 31, 1999 from $3,343 in the three
months ended March 31, 1998 and increased as a percentage of sales to 25.1%
from 22.0%. The increase in SG&A expenses was due primarily to increased
marketing efforts, which include costs associated with the Company's
Concert(TM) program, a business partner program used to market and promote the
Company's products.
Research and development ("R&D") expenses decreased 13.8% to $960 in
the three months ended March 31, 1999 from $1,114 in the three months ended
March 31, 1998, and decreased as a percentage of sales to 5.3% from 7.3%. The
decrease in absolute dollars is a result of higher expenditures in 1998 related
to the development of new POS and industrial products.
Operating income increased 24.2% to $1,742 in the three months ended
March 31, 1999 from $1,403 in the three months ended March 31, 1998, and
operating income as a percentage of sales increased to 9.5% from 9.2%.
Other income/expense reflect net other expense of $140 in the three
months ended March 31, 1999 compared to net other income of $190 in the
corresponding period in 1998. Net other expense for the three months ended
March 31, 1999 reflects foreign currency transaction losses of $214, which were
primarily a result of the increased value of the U.S. dollar relative to the
Brazilian real and the German mark, compared to foreign currency transaction
gains of $57 in the corresponding period in 1998.
<PAGE>
Net income increased 2.1% to $1,041 in the three months ended March
31, 1999 from $1,020 in the three months ended March 31, 1998. Net income
reflects a 35% effective income tax rate for the three months ended March 31,
1999 compared to 36% for the corresponding period in 1998. The reduced
effective income tax rate resulted from the utilization of the Company's
foreign sales corporation which permits the Company to reduce its United States
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 periods 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 (amounts in thousands)
The Company's working capital increased to $21,597 as of March 31,
1999 from $21,496 as of December 31, 1998.
The Company's operating activities used net cash of $2,061 compared
with net cash used of $811 for the three months ended March 31, 1999 and 1998,
respectively. Net cash used by operating activities for the three months ended
March 31, 1999 resulted primarily from increases in accounts receivable and
inventory, offset by net income plus non-cash charges and an increase in
accrued expenses.
The Company's total deferred income tax asset of $1,283 and deferred
tax liability of $665 are based upon cumulative temporary differences as of
March 31, 1999, which provide approximately $1,545 of future net tax deductions
against future taxable income. The deferred tax asset arises primarily from
recording reserves on current assets as expenses for accounting purposes prior
to receiving the related tax benefits. The deferred tax liability arises
primarily from recording the advance license fee pursuant to the December 1996
licensing agreement with Symbol Technologies, Inc. as an expense for tax
purposes and an amortizable asset for book purposes.
The Company is a party to an Amended and Restated Loan and Security
Agreement, as amended, with its primary bank which provides for an unsecured
line of credit in the amount of $7,500. The line of credit requires the Company
to comply with certain financial covenants and other restrictions. As of March
31, 1999, the Company was in compliance with these financial covenants and no
amounts were outstanding under this line of credit. The Amended and Restated
Loan and Security Agreement expires on June 30, 1999. The Company expects to
execute another amendment which will extend the term of this agreement through
June 30, 2000.
The Company also has a 500 German mark unsecured revolving credit
facility with a German bank in the name of its German subsidiary, Metrologic
Instruments GmbH. As of March 31, 1999, no amounts were outstanding under this
revolving credit facility.
In December 1998, the Company entered into an additional line of
credit with its primary bank, denominated in U.S. dollars ("U.S. Dollar Line"),
in an amount not to exceed $1,500, for the purchase of fixed assets. As of
March 31, 1999, approximately $1,100 was available under the U.S. Dollar Line.
The Company is currently making interest-only payments on the U.S. Dollar Line
until December 31, 1999, at which time amounts outstanding will convert to a
term note, payable over a 54-month period.
The Company's current plans for capital expenditures for the next
twelve months potentially include the purchase of (i) additional manufacturing
facilities; (ii) manufacturing automation equipment; (iii) office equipment;
and (iv) enhancements to, and additional information systems. Potential capital
expenditures amount to approximately $8,400. The Company expects to finance
such potential expenditures with a combination of term notes, operating and
capital leases, and mortgages.
The Company's liquidity has been, and may continue to be, adversely
affected by changes in foreign currency exchange rates, particularly the value
of the U.S. dollar relative to the German mark and the Brazilian real. In an
effort to mitigate the financial implications of the volatility in the exchange
rate between the German mark and the U.S. dollar, the Company has selectively
entered into derivative financial instruments to offset its exposure to foreign
currency risks. Derivative financial instruments may include (i) foreign
currency forward exchange contracts with its primary bank for periods not
exceeding six months, which partially hedge sales to the Company's German
subsidiary and (ii) German mark based loans, which act as a partial hedge
against outstanding intercompany receivables and the net assets of its German
subsidiary, which are denominated in German marks. Additionally, the German
subsidiary invoices and receives payment in certain other major European
currencies, which result in an additional mitigating measure that reduces the
Company's exposure to the fluctuation between the German mark and the U.S.
dollar.
<PAGE>
The Company believes that its current cash and cash equivalent
balances, along with cash generated from operations and availability under its
revolving credit facilities, will be adequate to fund the Company's operations
through at least the next twelve months.
Forward Looking Statements; Certain Cautionary Language
Written and oral statements provided by the Company from time to time may
contain certain forward looking information, as that term is defined in the
Private Securities Litigation Reform Act of 1995 (the "Act") and in releases
made by the Securities and Exchange Commission ("SEC"). The cautionary
statements which follow are being made pursuant to the provisions of the Act
and with the intention of obtaining the benefits of the "safe harbor"
provisions of the Act. While the Company believes that the assumptions
underlying such forward looking information are reasonable based on present
conditions, forward looking statements made by the Company involve risks and
uncertainties and are not guarantees of future performance. Actual results may
differ materially from those in the Company's written or oral forward looking
statements as a result of various factors, including but not limited to, the
following:
Reliance on third party resellers, distributors and OEMs which subjects the
Company to risks of business failure, credit and collections exposure, and
other business concentration risks; continued or increased competitive pressure
which could result in reduced selling prices of products or increased sales and
marketing promotion costs; a prolonged disruption of scheduled deliveries from
suppliers when alternative sources of supply are not available to satisfy the
Company's requirements for raw material and components; continued or prolonged
capacity constraints that may hinder the Company's ability to deliver ordered
product to customers; difficulties or delays in the development, production,
testing and marketing of products, including, but not limited to, a failure to
ship new products when anticipated, failure of customers to accept these
products when planned, any defects in products or a failure of manufacturing
efficiencies to develop as planned; the costs of legal proceedings or
assertions by or against the Company relating to intellectual property rights
and licenses, and adoption of new or changes in accounting policies and
practices; occurrences affecting the slope or speed of decline of the life
cycle of the Company's products, or affecting the Company's ability to reduce
product and other costs, and to increase productivity; the impact of unusual
items resulting from the Company's ongoing evaluation of its business
strategies, acquisitions, asset valuations and organizational structures; the
effects of and changes in trade, monetary and fiscal policies, laws and
regulations and other activities of governments, agencies and similar
organizations, including but not limited to trade restrictions or prohibitions,
inflation, monetary fluctuations, import and other charges or taxes,
nationalizations and unstable governments; the future health of the U.S. and
international economies and other economic factors that directly or indirectly
affect the demand for the Company's products; foreign currency exchange rate
fluctuations between the U.S. Dollar and other major currencies including, but
not limited to, the German Mark / Euro, Singapore Dollar, Brazilian Real, and
British Pound can significantly affect the Company's results of operations; the
Company invoices and accepts payment for goods in the aforementioned
currencies, however, the economic slowdown of other foreign nations may also
adversely affect the Company's results of operations; issues that have not been
anticipated in the transition to the new European currency that may cause
prolonged disruption of the Company's business; the inability of parties
external to the Company to provide goods and services in a timely, accurate
manner as a result of Year 2000 processing problems; and increased competition
due to industry consolidation or new entrants into the Company's existing
markets.
All forward-looking statements included herein are based upon information
presently available, and the Company assumes no obligation to update any
forward-looking statements.
Impact of Year 2000
The Year 2000 issue is the result of computer programs using only the last two
digits to indicate the year. If uncorrected, such computer programs will be
unable to interpret dates beyond the year 1999, which could cause computer
system failure or other computer errors disrupting operations. The Company has
been evaluating its year 2000 readiness and taking corrective action where
necessary. The following discussion broadly addresses the Company's efforts to
identify and address the Company's and relevant third parties' Year 2000
problems. The scope of the Year 2000 readiness effort includes (i) information
technology ("IT") such as software and hardware; (ii) non-IT ("Non-IT") systems
or embedded technology such as micro-controllers contained in various
manufacturing and lab equipment, facilities and utilities, and the Company's
products with date-sensitivity; and (iii) readiness of key third parties,
including suppliers and customers.
<PAGE>
It would be impractical for the Company to attempt to address all Year 2000
problems of third parties that have been or may in the future be identified.
Specifically, Year 2000 problems have been or may in the future be identified
with respect to the IT and Non-IT systems of third parties having widespread
national and international interactions with persons and entities generally
(for example, certain IT and Non-IT systems of governmental agencies, utilities
and telecommunications, information and financial networks) that, if
uncorrected, could have a material adverse impact on the Company's business,
financial condition or results of operations. Notwithstanding anything set
forth below, the Company is not in a position to address any such Year 2000
problems. If needed modifications and conversions are not made on a timely
basis, the Year 2000 issue could have a material adverse effect on the
Company's operations.
(i) IT. All of the Company's current IT systems are not Year 2000
compliant. The Company has replaced substantially all of its IT systems with
new, Year 2000 compliant, IT systems for itself and its subsidiaries. The total
cost of the new IT systems is estimated to be approximately $1,500, which
includes external resource costs, a substantial portion of which will be
capitalized. Through March 31, 1999, the Company spent approximately $1,000.
Other application software is currently scheduled for implementation in October
1999, which is prior to any anticipated impact on the Company's operating
systems.
(ii) Non-IT. The Company currently uses standard mass-market vendor supplied
software on its desktop systems and laptops. These standard software
applications limit the number of information technology vendors with which the
Company must work in order to ensure Year 2000 readiness. Many of these vendors
are still implementing their Year 2000 compliance programs. The Company
maintains maintenance contracts with all information technology vendors and
will implement the Year 2000 compliant versions of hardware and/or software as
required when those solutions become available. The Company's hardware for
workstations, servers, and network routers are expected to be Year 2000
compliant by the third quarter of 1999. As of March 31, 1999, approximately 70%
of the Company's hardware and software applications were Year 2000 compliant.
However, no assurance can be provided that all required replacement programs
will be implemented in a timely manner or that the failure to implement such
programs will not have a material adverse effect on the Company's business,
results of operations or financial condition. As of March 31, 1999,
approximately 80% of the Company's facilities and manufacturing system were
Year 2000 compliant.
(iii) Third Parties. The Company is in contact with key suppliers in an effort
to assure no interruption in the relationship between the Company and these
important third parties resulting from the Year 2000 issue. If third parties do
not convert their systems in a timely manner and in a way that is compatible
with the Company's systems, the Year 2000 issue could have a material adverse
effect on the Company's operations. The Company believes that its actions with
respect to key suppliers and customers will minimize these risks. As of March
31, 1999, 80% of the Company's suppliers (constituting all significant vendors)
had responded affirmatively regarding their respective Year 2000 readiness.
However, such response does not assure Year 2000 compliance of the IT and
Non-IT systems used by such suppliers, but instead provides only an indication
of the status of their efforts.
The Company's current estimates of the time and costs necessary to resolve Year
2000 issues are based on the facts and circumstances existing at this time. The
estimates were made using assumptions of future events, including the continued
availability of certain resources, Year 2000 modification plans, implementation
success by key third-parties, and other factors. There can be no assurance that
these estimates will be achieved and actual results could differ materially
from those anticipated.
<PAGE>
The Company currently anticipates that any identified Year 2000 problem
affecting its own systems or that of its significant customers, suppliers,
creditors, financial organizations and utilities providers will be either
corrected by December 31, 1999 or will not have a material adverse affect on
the Company's business, financial condition or results of operations. Moreover,
the Company is working to minimize any disruption to the business of its
vendors and suppliers due to Year 2000 problems that may have a material
adverse affect on the Company's business, financial condition or results of its
operations. However, notwithstanding the Company's efforts to identify and
correct such Year 2000 problems, there can be no assurance that the Company
will be successful in addressing the Year 2000 problems as they pertain to its
products and its internal systems, or that the failure to do so would not have
a material adverse effect on the Company's business, financial condition or
results of operations. In addition, notwithstanding such efforts, there can be
no assurance that the systems of third parties with which the Company interacts
will not suffer from Year 2000 problems, or that such problems will not have a
material adverse effect on the Company's business, financial condition or
results of operations. In particular, Year 2000 problems that have been or may
in the future be identified with respect to the IT and Non-IT systems of third
parties having widespread national and international interactions with persons
and entities generally (for example, certain IT and Non-IT Systems of
governmental agencies, utilities and information and financial networks) could
have a material adverse impact on the Company's business, financial condition
or results of operations.
The Company currently is in the process of reviewing its Year 2000 compliance
plans to determine what contingency plans, if any, are appropriate. The Company
does not currently have any contingency plans. The Company anticipates
completing such review and preparing contingency plans, if appropriate, by
October 1999. There can be no assurance that such measures will prevent the
occurrence of Year 2000 problems, which could have a material adverse effect
upon the Company's business, results of operations or financial condition.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
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
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit Number
27 Financial Data Schedule.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed by the Company during the
quarter ended March 31, 1999.
<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: May 17, 1999 By:/s/ C. Harry Knowles
------------ -----------------------
C. Harry Knowles
Chairman of the Board,
President and Chief Executive Officer
(Principal Executive Officer)
Date: May 17, 1999 By:/s/Thomas E. Mills IV
------------ -------------------------
Thomas E. Mills IV
Executive Vice President,
Chief Operating Officer and Chief
Financial Officer
(Principal Financial Officer)
<PAGE>
EXHIBIT INDEX
Exhibit No. 27
Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
UNAUDITED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31,
1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<RESTATED>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<PERIOD-START> JAN-01-1999 JAN-01-1998
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-END> MAR-31-1999 MAR-31-1998
<CASH> 7,939,000 12,207,000
<SECURITIES> 0 0
<RECEIVABLES> 15,593,000 11,113,000
<ALLOWANCES> 407,000 409,000
<INVENTORY> 9,481,000 6,444,000
<CURRENT-ASSETS> 34,633,000 31,915,000
<PP&E> 12,784,000 10,852,000
<DEPRECIATION> 6,019,000 5,522,000
<TOTAL-ASSETS> 46,950,000 42,207,000
<CURRENT-LIABILITIES> 13,036,000 13,669,000
<BONDS> 0 0
0 0
0 0
<COMMON> 54,000 54,000
<OTHER-SE> 30,641,000 25,885,000
<TOTAL-LIABILITY-AND-EQUITY> 46,950,000 42,207,000
<SALES> 18,253,000 15,227,000
<TOTAL-REVENUES> 18,253,000 15,227,000
<CGS> 10,963,000 9,367,000
<TOTAL-COSTS> 16,511,000 13,824,000
<OTHER-EXPENSES> 83,000 (228,000)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 57,000 38,000
<INCOME-PRETAX> 1,602,000 1,593,000
<INCOME-TAX> 561,000 573,000
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,041,000 1,020,000
<EPS-PRIMARY> .19 .19
<EPS-DILUTED> .19 .18
</TABLE>
