<PAGE>
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED
JUNE 30, 1996
-----------------------------
UTILX CORPORATION
COMMISSION FILE NUMBER 0-16821
DELAWARE 91-1171716
(State of Incorporation) (I.R.S. Employer Identification Number)
22404 - 66TH AVENUE SOUTH
P. O. BOX 97009
KENT, WASHINGTON 98064-9709 (206)395-0200
(Address of Principal Executive Offices) (Registrant's Telephone Number)
Indicate by checkmark whether the Registrant has (1) 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 and (2) been subject to such filing requirements for the
past 90 days. Yes X No
--- ---
As of June 30, 1996, 7,186,816 shares of Common Stock were outstanding.
The total number of pages in this Form 10-Q is 13.
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
ITEM PAGE
---- ----
PART I
1. Financial Statements
Consolidated Balance Sheet
June 30, 1996 and March 31, 1996........................ 3
Consolidated Statement of Operations
For the Three Months Ended
June 30, 1996 and 1995.................................. 4
Consolidated Statement of Cash Flows
For the Three Months Ended
June 30, 1996 and 1995.................................. 5
Notes to Consolidated Financial Statements.............. 6
2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................. 8
PART II
1. Legal Proceedings....................................... 11
2. Changes in Securities................................... 12
3. Defaults Upon Senior Securities......................... 12
4. Submission of Matters to a Vote of Security Holders..... 12
5. Other................................................... 12
6. Exhibits................................................ 12
Signatures........................................................... 13
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<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UTILX CORPORATION
CONSOLIDATED BALANCE SHEET
JUNE 30 AND MARCH 31, 1996
(IN THOUSANDS, EXCEPT SHARES)
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
JUNE 30 MARCH 31
------- --------
<S> <C> <C>
Current assets:
Cash and cash equivalents ..................................... $ 1,448 $ 495
Accounts receivable, trade, net ............................... 11,624 10,659
Materials, supplies and inventories ........................... 7,155 8,128
Income taxes receivable ....................................... 1,019
Prepaid expenses and other .................................... 442 216
------- -------
Total current assets ...................................... 20,669 20,517
Equipment and improvements, net ..................................... 9,228 9,113
Other assets, net .................................................. 912 994
------- -------
Total assets ............................................. $30,809 $30,624
------- -------
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable to bank ........................................... $ 1,100 $ 2,500
Accounts payable ............................................... 1,928 1,912
Accrued liabilities ............................................ 3,603 2,756
------- -------
Total current liabilities ................................. 6,631 7,168
------- -------
Commitments and Contingencies
Stockholders' equity:
Common Stock, $0.01 par value
(authorized 25,000,000 shares) ........................... 72 72
Common Stock Warrants .......................................... 936 936
Additional paid-in capital ..................................... 17,399 17,399
Retained earnings .............................................. 6,593 5,940
Unearned compensation .......................................... (58) (76)
Cumulative foreign currency translation adjustment ............ (764) (815)
------- -------
Total stockholders' equity ............................... 24,178 23,456
------- -------
Total liabilities and stockholders' equity .......... $30,809 $30,624
------- -------
------- -------
Common Stock issued and outstanding ............................ 7,186,816 7,184,116
</TABLE>
(See Notes to Consolidated Financial Statements)
-3-
<PAGE>
UTILX CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Revenues .................................................. $15,124 $11,754
Cost of revenues ............................................... 12,244 10,241
-------- --------
Gross profit ............................................... 2,880 1,513
-------- --------
Operating expenses:
Selling, general and administrative ......................... 1,988 2,057
Research and engineering .................................... 192 160
-------- --------
Total operating expenses ............................... 2,180 2,217
-------- --------
Operating income (loss) ........................................... 700 (704)
Other income (expense), net ....................................... (41) 68
-------- --------
Income (loss) before income taxes ................................. 659 (636)
Income tax provision (benefit) .................................... 6 (176)
-------- --------
Net income (loss) ................................................ $ 653 $ (460)
-------- --------
-------- --------
Earnings (loss) per share (Note 2):
Primary ................................................... .09 (.06)
Fully diluted ................................................ .09 (.06)
Weighted average number of shares (Note 2):
Primary ................................................... 7,198 7,185
Fully diluted ................................................ 7,198 7,185
</TABLE>
(See Notes to Consolidated Financial Statements)
-4-
<PAGE>
UTILX CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) ............................................. $ 653 (460)
Adjustments to reconcile to net cash provided
by (used by) operating activities:
Depreciation and amortization .............................. 897 894
Other non-cash (income) expenses, net .................... 7 (41)
Changes in assets and liabilities ......................... 1,714 (1,380)
-------- --------
Total adjustments ......................................... 2,618 (527)
-------- --------
Net cash provided by (used by) operating
activities ............................................. 3,271 (987)
-------- --------
INVESTING ACTIVITIES:
Cost of additions to equipment ................................ (935) (387)
Proceeds from sale of equipment .............................. 5 24
-------- --------
Net cash used by investing activities ..................... (930) (363)
-------- --------
FINANCING ACTIVITIES:
Net borrowings on note payable ................................ (1,400) 1,225
-------- --------
Net cash provided by (used by) financing
activities ............................................... (1,400) 1,225
-------- --------
CUMULATIVE TRANSLATION ADJUSTMENT
OF FOREIGN CURRENCY TRANSACTIONS ............................... 12 (10)
-------- --------
Net increase (decrease) in cash and cash
equivalents .................................................. 953 (135)
-------- --------
CASH AND CASH EQUIVALENTS:
Beginning of period ........................................... 495 840
-------- --------
End of period .................................................. $ 1,448 $ 705
-------- --------
-------- --------
</TABLE>
(See Notes to Consolidated Financial Statements)
-5-
<PAGE>
UTILX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. FINANCIAL STATEMENT PRESENTATION
In the opinion of management of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial position
and operating results for the three-month periods ended June 30, 1996 and 1995.
The statements should be read in conjunction with the March 31, 1996 audited
consolidated financial statements included in the fiscal 1996 Annual Report on
Form 10-K.
2. EARNINGS PER SHARE
Primary earnings per share is computed by dividing net income (loss) by the
weighted average number of shares of Common Stock of UTILX Corporation, $0.01
par value per share (the "Common Stock"), and common stock equivalents
outstanding during the period. Common stock equivalents, when dilutive, include
shares issuable upon exercise of the Company's stock options and certain
warrants. Fully diluted earnings per share is computed based on the weighted
average number of shares of Common Stock and common stock equivalents
outstanding during the period taking into consideration maximum potential
dilution.
3. MATERIALS, SUPPLIES AND INVENTORIES
Materials, supplies and inventories at June 30, 1996 and March 31, 1996 consists
of the following:
(In thousands)
June 30, 1996 March 31, 1996
------------ -------------
------------ -------------
Materials and Supplies $ 4,996 $ 5,233
Work in Process 601 1,077
Finished Goods 2,505 2,753
Less allowance for potentially obsolete or
overstocked inventory (947) (935)
------------ -------------
$ 7,155 $ 8,128
------------ -------------
------------ -------------
4. NOTE PAYABLE TO BANK
The Company has a committed credit facility of $5,000,000 with Seattle-First
National Bank of Washington ("Seafirst"). The agreement is collateralized by
the Company's inventory and accounts receivable. The credit agreement requires
that the Company maintain certain financial covenants, including requirements to
maintain certain levels of tangible net worth, current ratio and debt ratio.
Borrowings bear interest at the Seafirst prime rate, the LIBOR rate plus 1.40%,
or other specified rates, at the Company's option. The Company pays a
commitment fee of up to 0.125% on the unused portion of the facility. This line
of credit currently expires on November 30, 1996. The Company anticipates that
it will be able to negotiate an extension of this line of credit.
5. COMMITMENTS AND CONTINGENCIES
INTERNAL REVENUE SERVICE AUDIT. The Company's Federal income tax returns for
fiscal 1993, 1994 and 1995 are currently under examination by the Internal
Revenue Service. While the ultimate outcome of the examination cannot be
predicted with certainty at this time, it is the opinion of management that the
ultimate disposition of this
-6-
<PAGE>
matter will not have a material adverse effect on the consolidated financial
position, results of operations or liquidity of the Company.
OTHER MATTERS. The Company is involved in matters of litigation, both as
plaintiff and as defendant, all arising in the ordinary course of business. In
August 1995, the Company was named a defendant in litigation filed in the United
States District Court for the Southern District of Texas on behalf of a person
alleging serious personal injury in June 1994, while performing work at a
Company work site. In April 1996, an amended complaint was filed adding as
plaintiffs certain relatives of the injured person. The plaintiffs have alleged
negligence, gross negligence and breach of contract by the Company. The
complaint requests an unspecified amount of damages in excess of $50,000 and
punitive damages plus interest and costs. Prior to the April 1996 amendment,
the Company received a settlement offer near the limits of the Company's
insurance policy. The Company is defending this matter. A co-defendant has
tendered its defense in this litigation to the Company's insurer, which has
accepted the tender under reservation of rights. Management expects that these
matters will not have a materially adverse effect on the consolidated financial
position, results of operation or liquidity of the Company.
-7-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR FIRST QUARTER
OF FISCAL YEAR 1997
COMPARED TO FIRST QUARTER
OF FISCAL YEAR 1996
-----------------------------
REVENUES:
Consolidated revenues increased 29% in the first quarter of fiscal 1997,
compared to the same period in fiscal 1996.
NORTH AMERICAN OPERATIONS. Revenues from FlowMole drilling operations in North
America increased 9% to $9.5 million in the first quarter of fiscal 1997,
compared to $8.7 million in the same period of fiscal 1996. Revenues from
CableCure services in North America increased to $3.6 million in the first
quarter of fiscal 1997, compared to $748,000 in the same period of fiscal 1996.
The increased revenues in FlowMole operations were attributed to increased
demand for FlowMole services and the Company's ability to maintain a higher
level of drilling crews than in the prior year to meet the demand. In fiscal
1996, under a previously commenced program to consolidate crews and improve
training in order to improve average crew performance, the Company reduced its
crew levels during the first quarter. Continued strong demand for CableCure
services, primarily under "Test, Treat or Replace" contracts, contributed to the
increased CableCure revenue levels. Customers choosing Test, Treat or Replace
contracts also contributed to the increased demand for FlowMole services.
INTERNATIONAL OPERATIONS. Revenues from international operations decreased 9%
to $2.1 million in the first quarter of fiscal 1997, compared to $2.3 million in
the same period of fiscal 1996. Revenue from sales of FlowMole drilling systems
declined to $1.0 million compared to $1.7 million in the same period of fiscal
1996. That decrease was partially offset by increased revenues from United
Kingdom drilling operations, European CableCure operations, and spare parts
sales.
GROSS PROFIT
Gross profit increased 90% in the first quarter of fiscal 1997, compared to the
same period in fiscal 1996.
NORTH AMERICAN OPERATIONS. Gross Profit from FlowMole and CableCure operations
increased dramatically due to the higher combined revenue levels generated in
the first quarter of fiscal 1997, compared to the same period of fiscal 1996.
Fixed costs of North American operations, including equipment depreciation,
facilities costs and field administrative salaries, were spread over higher
revenue levels, increasing gross profit as a percentage of revenue.
INTERNATIONAL OPERATIONS. Gross profit from international operations was
improved by the increased revenues from services and spare parts which carry a
higher gross profit, as a percentage of revenue, than sales of equipment.
-8-
<PAGE>
OPERATING EXPENSES AND OTHER INCOME (EXPENSES)
Total operating expenses decreased 2% in the first quarter of fiscal 1997,
compared to the same period of fiscal 1996. Selling, general and administrative
expenses decreased 3%, primarily due to reduced headcount as a result of the
Company's restructuring announced on April 2, 1996. This decrease was partially
offset by higher provisions for profit sharing royalties due under the Company's
exclusive license agreement for the provision of CableCure services. Research
and engineering expenses increased 20% as the Company continued its prototype
testing of its new Series G Drill.
Other income (expense), net, was an expense of $41,000 in the first quarter of
fiscal 1997, compared to income of $68,000 in the same period of the prior year.
In the first quarter of fiscal 1996, the Company recorded a $59,000 gain from
the results of a joint venture which ceased operations in the third quarter of
fiscal 1996. Also, foreign exchange rate fluctuations adversely impacted other
expense during the first quarter of fiscal 1997.
As a result of the foregoing, the Company recorded pretax income of $659,000 in
the first quarter of fiscal 1997, compared to a pretax loss of $636,000 in the
same period of fiscal 1996.
INCOME TAX EXPENSE (BENEFIT)
The Company would normally expect an effective income tax rate of approximately
40% on positive pretax income. This exceeds the federal statutory rate of 34%
due to the impact of state income taxes and nondeductible expenses. The impact
of deductions deferred from prior years and net operating loss carryforwards
eliminated most of the Company's income tax provision in the first quarter of
fiscal 1997, due to the providing of a valuation allowance at the end of fiscal
1996 against the full amount of the Company's net deferred tax assets. The
Company's effective income tax rate in the first quarter of fiscal 1996 was 28%.
NET INCOME (LOSS)
As a result of the foregoing, the Company recorded net income of $653,000 in the
first quarter of fiscal 1997, compared to a net loss of $460,000 in the same
period of fiscal 1996.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1996, the Company had unused sources of liquidity consisting of
$1,448,000 in cash and cash equivalents and an unused balance on its committed
line of credit of $3,900,000. This compares to $495,000 in cash and cash
equivalents and an unused balance on its committed line of credit of $2,500,000
at March 31, 1996. Uses of cash during the first quarter of fiscal 1997
primarily related to capital expenditures of $935,000 for equipment to expand
the Company's capabilities to perform additional auxiliary services, such as
trenching and fusion of gas pipes. The net increase in cash and decrease in the
usage of the line of credit during the first quarter of fiscal 1997 were
primarily due to the impact of positive cash flow from operations, including the
collection of Federal income tax refunds from the Company's tax return for
fiscal 1995. The Company had anticipated the periodic usage of its line of
credit throughout fiscal 1997. The Company anticipates that through cash
generated by operations and the periodic use of its credit facility, it will be
able to meet its cash requirements through at least fiscal 1997. The line of
credit expires on November 30, 1996, and the Company expects to be able to
obtain a renewal of the facility or to be able to obtain a similar credit
facility from another bank.
-9-
<PAGE>
REVIEW AND OUTLOOK
The Company is experiencing strong demand for its FlowMole and CableCure
services in North America, and is recruiting personnel to expand its capacity
for the next two fiscal quarters. The second and third quarters of the
Company's fiscal year have historically generated its peak revenue levels due to
the normal seasonality of work release from utility customers. However, the
Company's revenue levels and the weighted average number of FlowMole systems in
operation on any given day are also affected by factors which include weather,
pricing, competition, customer work release practices, soil and other work
difficulty determinants, and permitting. The Company may choose to increase or
decrease its capacity; however, the current plan is to add crews or equipment
when a high degree of confidence exists in the Company's ability to keep the
added crews busy. In addition, the Company's contracts typically allow for
cancellation by the customers on relatively short notice. Therefore, sudden
changes in demand may have an immediate adverse impact on the Company's revenue
levels. A small number of customers generate the majority of the Company's
North American CableCure revenues, increasing the exposure of the Company to
such short term fluctuations in revenues. See also the discussion under "Risk
Factors," below.
The Company has announced the termination of its in-house assembly of new
FlowMole drilling equipment. No decision has yet been made as to the vendor or
vendors who will perform such assembly services for the Company in the future.
The Company is continuing to sell its remaining inventory of new drilling
equipment; however, the nature and timing of the decision regarding future
equipment purchasing may have an impact on the continuation of revenue from
equipment sales in both the short term and long term. Also, although the
Company expects to maintain or increase its revenues from spare parts sales to
international customers, such customers may in fact respond to the Company's
decision by turning to other suppliers for equipment and spare parts.
This Form 10-Q contains forward looking statements, in addition to those
under the caption "Review and Outlook." Such statements are subject to
substantial risk. Actual results may vary materially due to risks and
uncertainties inherent in the Company's business, including those described
under "Review and Outlook," those described under "Risk Factors," below, and
additional descriptions included in Item 7 of the Company's fiscal 1996 Form
10-K filed with the Securities and Exchange Commission.
RISK FACTORS
COMPETITION. The Company has experienced a long-term trend of declining
prices for guided boring services, particularly for smaller diameter utility
installations, due to competitive pressures and changes in utility bidding
practices. This trend has also caused the Company to lower its prices for
CableCure injection services, which are priced at a discount to replacement
costs, including replacement via guided boring. In addition, the Company's
utility customers are increasing their requests for "turnkey" installation,
replacement and restoration services, requiring their drilling contractors to
take responsibility for switching circuits, terminating circuits, and other
non-incidental tasks. These tasks require additional equipment and labor, and
the cost increases can offset any price increase the Company is able to
negotiate for the expansion of its services. The trend of falling prices for
guided boring services is expected to continue into the future, as more
customers award work based on competitive bidding, more customers require their
drilling contractors to perform additional tasks as part of the drilling
contract, and more conventional contractors acquire drilling capabilities in
order to enter into this segment of the construction industry. This trend will
continue to put downward pressure on the market price for CableCure services.
The Company cannot predict the ultimate duration or the magnitude of these
decreases.
SEASONAL FACTORS. Weather and other seasonal factors may decrease the
Company's revenues and profits in any given period. Adverse weather may
preclude the Company from operating its FlowMole drilling systems or providing
its CableCure services at certain times of the year. In addition, the Company
believes that the regular budgetary cycles of certain of its North American
utility customers tend to concentrate demand for the Company's services during
the third quarter of its fiscal year (the fourth quarter of the calendar year),
although other
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<PAGE>
budgetary factors described below may override this trend in any given quarter.
As a result of these factors, results of operation in any given fiscal quarter
are not necessarily indicative of results in any other fiscal quarter.
UTILITIES' BUDGETARY CONSIDERATIONS. Budgetary considerations arising from
unfavorable regulatory determinations on matters such as rate-setting,
capitalization of services performed by the Company, or siting of power
production facilities, or from reductions in new housing starts, reductions in
electric utility revenues due to mild weather, and general economic downturns,
have affected the ability of some of the Company's utility customers to sustain
their cable replacement or other maintenance programs and, accordingly,
adversely impact the Company's revenues and profits. Although the Company has
broadened its customer base, one customer, Virginia Electric and Power Company,
continues to generate a significant portion of the Company's consolidated
revenues, and a small number of customers generate more than half of its
CableCure revenues. Because cable replacement, restoration and other
maintenance programs are, to a substantial extent, deferrable and the Company's
contracts with its utility customers permit termination of orders on relatively
short notice, postponement or cancellation of such programs by customers can
interject substantial volatility into the Company's revenues and profits.
DOW CORNING CORPORATION. The Company purchases its CableCure fluid
exclusively from Dow Corning Corporation ("Dow Corning"). In May 1995, Dow
Corning filed for protection under Chapter 11. While the Company has been
informed by Dow Corning that it intends to continue the CableCure business,
there can be no assurance that the bankruptcy trustee will not seek to amend or
terminate the CableCure license agreement.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
EMERSON, ET AL. V. UTILX CORPORATION, A.B. CHANCE CO., THE CITY OF BRYAN
AND PAUWELS TRANSFORMERS, INC. In August 1995, the Company was named a
defendant in litigation filed in the United States District Court for the
Southern District of Texas on behalf of a person alleging serious personal
injury in June 1994 while performing work at a Company work site. In April
1996, an amended complaint was filed adding as additional plaintiffs certain
relatives of the injured person. The plaintiffs have alleged negligence, gross
negligence and breach of contract by the Company. The complaint requests an
unspecified amount of damages in excess of $50,000 and punitive damages, plus
interest and costs. Prior to the April 1996 amendment, the Company received a
settlement offer near the limits of the Company's insurance policy. The Company
is defending this matter. The City of Bryan, a co-defendant, has tendered its
defense in this litigation to the Company's insurer, which has accepted the
tender under reservation of rights.
OTHER. The Company is involved in other litigation matters, both as a
plaintiff and as a defendant, arising in the ordinary course of its business.
Management expects that these matters will not have a materially adverse effect
on the consolidated financial position, results of operations or liquidity of
the Company.
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<PAGE>
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) 11.1 Statement Regarding Computation of Per Share Earnings.
27.1 Financial Data Schedule.
(b) Report on Form 8-K. The Company filed a Current Report on Form
8-K ("Form 8-K") dated April 2, 1996, regarding the issuance of a press release
which announced that its Board of Directors had approved a plan to eliminate
in-house manufacturing and to outsource that operation in a strategic
restructuring designed to permit the Company to focus on its core
FlowMole-Registered Trademark- and CableCure-Registered Trademark- services for
the utility industry, including the adoption of a workforce reduction plan. The
Form 8-K did not include financial statements.
-12-
<PAGE>
UTILX CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UTILX CORPORATION
---------------------------------
(Registrant)
Date: August 5, 1996 By: /s/ Craig E. Davies
----------------------------
Craig E. Davies, President
and Chief Executive Officer
Date: August 5, 1996 By: /s/ Larry D. Pihl
----------------------------
Larry D. Pihl, Vice
President/Chief Financial
Officer
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<PAGE>
<PAGE>
EXHIBIT 11.1
UTILX CORPORATION
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
Quarter Ended June 30,
--------------------------------------------------------
1996 1995
Earnings
Earnings Shares (Loss) Shares
----------- ----------- ----------- -----------
(In Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C>
Primary earnings (loss) per common share:
Net earnings (loss) available for common
stock and weighted average common
shares outstanding $ 653 7,185 $ (460) 7,185
Stock options and warrants assumed
exercised - net 13
----------- ----------- ----------- -----------
Total net earnings (loss) and primary
common shares $ 653 7,198 $ (460) 7,185
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Primary earnings (loss) per common share $ .09 $ (.06)
----------- -----------
----------- -----------
Fully diluted earnings (loss) per common
share:
Net earnings (loss) available for common
stock and weighted average common
shares outstanding $ 653 7,185 $ (460) 7,185
Stock options and warrants assumed
exercised -net 13
----------- ----------- ----------- -----------
Total net earnings (loss) and fully diluted
common shares $ 653 7,198 $ (460) 7,185
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Fully diluted earnings (loss) per common
share $ .09 $ (.06)
----------- -----------
----------- -----------
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF UTILX CORPORATION FOR THE THREE MONTHS
ENDED JUNE 30, 1996. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,448
<SECURITIES> 0
<RECEIVABLES> 11,909
<ALLOWANCES> 258
<INVENTORY> 7,155
<CURRENT-ASSETS> 20,669
<PP&E> 29,421
<DEPRECIATION> 20,193
<TOTAL-ASSETS> 30,809
<CURRENT-LIABILITIES> 6,631
<BONDS> 0
0
0
<COMMON> 72
<OTHER-SE> 24,106
<TOTAL-LIABILITY-AND-EQUITY> 30,809
<SALES> 15,124
<TOTAL-REVENUES> 15,124
<CGS> 12,244
<TOTAL-COSTS> 14,424
<OTHER-EXPENSES> 41
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 31
<INCOME-PRETAX> 659
<INCOME-TAX> 6
<INCOME-CONTINUING> 653
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 653
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
