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 MARCH 31,1995
-------------
0-6944
(Commission File Number)
RESEARCH INDUSTRIES CORPORATION
(Exact name of registrant as specified in its charter)
UTAH 87-0277827
(State of Incorporation) (IRS Employer
Identification number)
6864 SOUTH 300 WEST, SALT LAKE CITY, UTAH 84047
(Address of registrant's principal executive office)
801-562-0200
(Registrant's telephone number)
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), (2) has been subject to such filing requirements
for the past 90 days. (1) Yes X No (2) Yes X No
----- --- ----- -----
The number of shares of common stock outstanding as of March 31, 1995 was
9,311,494.
<PAGE>
RESEARCH INDUSTRIES CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
Page
----
PART I FINANCIAL INFORMATION
ITEM 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of March 31, 1995 and June 30, 1994 3
Consolidated Statements of Income and Retained Earnings for the
Three Month Periods Ended March 31, 1995 and 1994 4
Consolidated Statements of Income and Retained Earnings for the
Nine Month Periods Ended March 31, 1995 and 1994 5
Consolidated Statements of Cash Flows for the Nine Month
Periods Ended March 31, 1995 and 1994 6
Notes to Consolidated Financial Statements 7
ITEM 2. Management's Discussion and Analysis 8
PART II OTHER INFORMATION 12
Signature 13
<PAGE>
<TABLE>
RESEARCH INDUSTRIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
MARCH 31, June 30,
1995 1994
<S> (UNAUDITED)
ASSETS <C> <C>
CURRENT ASSETS
Cash and equivalents $2,173,486 $2,794,092
Short-term investments 2,787,927 1,154,613
Accounts receivable 5,215,607 5,776,555
Current portion of notes receivable 3,202,548 2,099,606
Inventories 7,495,968 4,576,621
Prepaid expenses 418,259 336,932
Deferred tax asset 363,500 366,500
TOTAL CURRENT ASSETS 21,657,295 17,104,919
LAND HELD FOR RESALE 2,472,527 3,492,616
PROPERTY AND EQUIPMENT 7,478,949 5,002,017
LONG-TERM INVESTMENTS 3,135,194 5,966,567
NOTES RECEIVABLE, less current portion 5,838,728 5,531,073
PATENTS AND LICENSES 2,675,205 1,502,460
$43,257,898 $38,599,652
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 1,135,456 $ 2,005,372
Income taxes payable 232,738 643,223
Accrued payroll, commissions and royalties 524,294 410,620
Other accrued expenses 228,402 129,564
Current portion of long-term debt 99,996 99,996
TOTAL CURRENT LIABILITIES 2,220,886 3,288,775
LONG-TERM DEBT, less current portion 197,429 272,426
DEFERRED INCOME TAXES 453,000 571,000
SHAREHOLDERS' EQUITY
Common Stock, par value $.50 per share;
authorized
20,000,000 shares, issued 9,311,494 shares
in March
and 9,206,683 shares in June 4,710,526 4,668,842
Additional paid-in capital 8,365,686 7,733,119
Retained earnings 28,249,937 23,176,599
Treasury stock, at cost (939,566) (1,111,109)
40,386,583 34,467,451
$43,257,898 $38,599,652
</TABLE>
<PAGE>
<TABLE>
RESEARCH INDUSTRIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (UNAUDITED)
<CAPTION>
Three Months Ended March 31,
1995 1994
<S> <C> <C>
REVENUES
Health care $ 7,701,955 $5,695,070
Real estate 2,100,772 2,826,459
9,802,727 8,521,529
COSTS AND EXPENSES
Cost of health care sales 3,065,744 2,269,655
Real estate transaction costs 1,774,851 2,562,850
Selling, general and administrative 1,786,077 1,341,040
Research and development 297,627 192,649
6,924,299 6,366,194
OPERATING INCOME 2,878,428 2,155,335
OTHER INCOME (EXPENSE)
Interest expense (20,695) (7,884)
Interest income and other 120,615 123,828
99,920 115,944
INCOME BEFORE INCOME TAXES 2,978,348 2,271,279
INCOME TAX EXPENSE 1,065,000 789,000
NET INCOME 1,913,348 1,482,279
Retained earnings at beginning of period 26,336,589 19,872,440
RETAINED EARNINGS AT END OF PERIOD $28,249,937 $21,354,719
EARNINGS PER SHARE $ .21 $ .16
WEIGHTED AVERAGE SHARES OUTSTANDING 9,271,000 9,267,000
</TABLE>
<PAGE>
<TABLE>
RESEARCH INDUSTRIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (UNAUDITED)
<CAPTION>
Nine Months Ended March 31,
1995 1994
<S> <C> <C>
REVENUES
Health care $20,233,700 $15,644,104
Real estate 4,216,786 4,298,503
24,450,486 19,942,607
COSTS AND EXPENSES
Cost of health care sales 8,013,828 6,286,582
Real estate transaction costs 3,012,874 3,427,273
Selling, general and administrative 5,008,223 3,996,547
Research and development 833,725 613,885
16,868,650 14,324,287
OPERATING INCOME 7,581,836 5,618,320
OTHER INCOME (EXPENSE)
Interest expense (48,965) (26,774)
Interest income and other 385,467 384,212
336,502 357,438
INCOME BEFORE INCOME TAXES 7,918,338 5,975,758
INCOME TAX EXPENSE 2,845,000 2,034,000
NET INCOME 5,073,338 3,941,758
Retained earnings at beginning of period 23,176,599 17,412,961
RETAINED EARNINGS AT END OF PERIOD $28,249,937 $21,354,719
EARNINGS PER SHARE $ .55 $ .43
WEIGHTED AVERAGE SHARES OUTSTANDING 9,212,000 9,267,000
</TABLE>
<PAGE>
<TABLE>
RESEARCH INDUSTRIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<CAPTION>
Nine Months Ended March 31,
1995 1994
<S> <C> <C>
OPERATING ACTIVITIES
Net income $5,073,338 $3,941,758
Adjustments to reconcile net income to net
cash
provided by operating activities:
Depreciation and amortization 725,807 544,743
Deferred income taxes (115,000) (318,500)
Income tax benefit from exercise of
non-qualified stock options 263,003 46,772
Gain on property exchange (361,227)
Changes in operating assets and
liabilities:
Accounts receivable 560,948 (278,817)
Notes receivable (2,232,092) (3,517,118)
Inventories (2,919,347) (453,632)
Land held for resale 1,782,089 2,494,522
Other assets (1,403,576) (287,859)
Current liabilities (1,067,889) 3,390
NET CASH PROVIDED BY OPERATING ACTIVITIES 667,281 1,814,032
INVESTING ACTIVITIES
Net change in investments 1,198,059 (860,005)
Issuance of investment notes receivable (795,000)
Repayment of investment notes receivable 59,495 39,431
Purchase of property and equipment (3,053,235) (1,526,531)
NET CASH USED IN INVESTING ACTIVITIES (1,795,681) (3,142,105)
FINANCING ACTIVITIES
Proceeds from long-term debt 261,707
Repayment of long-term debt (74,997) (339,287)
Purchase of treasury stock (338,140) (87,506)
Reissuance of treasury stock 509,683
Proceeds from the sale of Common Stock 411,248 98,903
NET CASH PROVIDED BY (USED IN) FINANCING 507,794 (66,183)
ACTIVITIES
DECREASE IN CASH AND EQUIVALENTS (620,606) (1,394,256)
Cash and Equivalents at Beginning of Period 2,794,092 3,807,035
CASH AND EQUIVALENTS AT END OF PERIOD $2,173,486 $2,412,779
</TABLE>
<PAGE>RESEARCH INDUSTRIES CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
The consolidated financial statements of Research Industries Corporation and its
subsidiaries as of March 31, 1995, and for the three and nine month periods
then ended, were prepared without audit pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been omitted pursuant to such
rules and regulations. In the opinion of management, all necessary adjustments
(which are of a normal recurring nature) have been made to the financial
statements to present fairly its financial position, results of operations and
cash flows. The results of operations for the periods presented are not
necessarily indicative of the results for the respective complete years. The
Company has an audited annual report for the three years ended June 30, 1994.
It is suggested that the attached financial statements be read in conjunction
with the annual report and the financial statements and notes contained therein.
INVENTORIES
MARCH 31, June 30,
1995 1994
Raw materials $3,312,252 $2,026,662
Work-in-process 655,996 505,100
Finished goods 3,527,720 2,044,859
$7,495,968 $4,576,621
EARNINGS PER SHARE
Earnings per share of Common Stock are computed on the basis of the weighted
average shares outstanding plus any common stock equivalents which would arise
from the exercise of stock options when material.
STATEMENTS OF CASH FLOWS
Interest paid was approximately $49,000 in fiscal 1995 and $27,000 in fiscal
1994. Income taxes paid were $3,166,000 and $1,905,000 for the first nine
months of fiscal 1995 and 1994, respectively. In March 1995, the Company
foreclosed on and resold a piece of property (at a profit) in the Salt Lake
International Center. The value of this noncash transaction was approximately
$762,000.
CONTINGENCIES
The Company is a party to certain legal actions which have arisen in the
ordinary course of business. After consultation with legal counsel, management
is of the opinion that there are no pending or threatened legal matters which
will have a material effect on the consolidated financial position of the
Company.
<PAGE>MANAGEMENT'S DISCUSSION AND ANALYSIS
CONSOLIDATED OPERATING HIGHLIGHTS
Research Industries Corporation's earnings were $1,913,348 for the third
quarter of fiscal 1995, a 29% increase over net income of $1,482,279 recorded in
the same quarter of the prior year. Earnings per share were $.21 and $.16 for
these two periods, respectively. Total revenues increased from $8,521,529 in
the third quarter of fiscal 1994 to $9,802,727 in the same quarter of fiscal
1995, which represents a growth rate of 15%. The total growth rate is comprised
of a 35% increase in health care revenues and a 26% decrease in real estate
revenues over the comparable period in 1994.
Earnings were $5,073,338 for the first nine months of fiscal 1995, compared
to $3,941,758 for the same nine months of fiscal 1994 which represents a 29%
increase. Earnings per share were $.55 and $.43 for these two periods,
respectively. Total revenues increased from $19,942,607 in the first nine
months of fiscal 1994 to $24,450,486 in the same quarter of fiscal 1995, which
represents a growth rate of 23%. This growth rate reflects an increase of 29%
in health care revenues and a 2% decrease in real estate revenues. Information
related to these changes is discussed under the separate sections below.
Selling, general and administrative expenses (SG&A) for the third quarter of
fiscal 1995 were 23% of health care revenues compared to 24% in 1994. SG&A for
the first nine months of fiscal 1995 were 25% of health care revenues compared
to 26% in 1994. SG&A is compared only against health care revenues since there
are substantially no such costs charged against real estate operations and the
nature of real estate sales can result in unusual fluctuations in ratios that
are difficult to understand if SG&A is compared against total revenue. Total
SG&A growth rates are lower than the health care sales growth rates for the
quarter and the nine month periods ending March 31, 1995. SG&A increases
primarily reflect the continued growth of selling-related costs as sales
increase and amortization costs resulting from recent product and technology
acquisitions. Other than direct selling expenses and amortization costs, growth
rates for other SG&A costs have been substantially lower than sales growth.
Interest income was substantially unchanged for the first nine months of 1995
compared with 1994, reflecting the use of cash for several significant product
and technology acquisitions and a manufacturing capability expansion. Interest
expense has increased as the Company has borrowed against a line of credit at
certain times during the year.
The effective federal and state income tax rate has increased from 35% in
the third quarter and 34% in the first nine months of 1994 to 36% for the same
respective periods in 1995. The increase has occurred as the tax-free interest
and the benefits of the Company's Foreign Sales Corporation have become a
smaller percentage of pretax income and the fact that the Company anticipates
reaching a higher federal income tax bracket prior to the end of the year.
HEALTH CARE OPERATIONS
Current Quarter: Net health care sales were $7,701,955 in the third quarter of
- - - - ---------------
1995 compared to $5,695,070 in the same quarter of 1994, which represents a 35%
increase. Medical device and solution sales increased by 45%, proprietary
pharmaceuticals by 9% and sterile solution product sales by 5% for the quarter.
The growth in medical device and solution revenues reflects an increase in
domestic and international open-heart surgeries as well as market share gains
for bypass circuitry cannulae, balloon cardioplegia delivery catheters, cardiac-
assist devices and its new vascular products. The growth in proprietary
pharmaceuticals resulted from more units sold. The Company is pleased to see
continued improvement in the sale of these mature products. Sterile solutions
sales are directly attributable to OEM customer orders which have been higher
during the current year, enhanced by the addition of new OEM products. The
third quarter growth percentage was lower than those experienced earlier in the
year as sales in the third quarter of 1994 were much higher than the prior
quarters of that year. The Company has new products in various stages of
development and approval which it believes will contribute to sales in
the future. Management also believes that it will continue to experience growth
in the sales of its existing cardiovascular surgical products.
During the quarter, and in March particularly, international sales were
unusually strong. The Company believes this unusual demand was the result of
foreign distributors increasing purchases to take advantage of the recent
decline in the value of the dollar against several major foreign currencies.
Since competition in the foreign markets requires higher distributor discounts,
the Company experienced some unfavorable impact in the third quarter in average
selling prices and gross margins.
The Company recently announced the creation of a new Vascular Surgery
Products Division with the launch of its initial vascular surgery product,
IschemiaAlertO, an ischemic limb (oxygen-starved) disposable blood flow sensor
and bedside monitor. The Company sold its first units of this product during
the quarter. It also acquired a small company, Imodex Medical Devices, Inc.
which sells vascular shunts. Sales of these vascular products were included in
the third quarter results as well. The Company anticipates the further
development and/or acquisition of other vascular products in this division.
Although the Company does not have foreign operations, it does sell worldwide
to specialized cardiovascular distributors and other customers in foreign
markets. Foreign sales increased by 53% in the third quarter over the same
quarter of the prior year and 44% for the nine month period as compared to the
prior year. These sales represented 28% of sales in the third quarter of 1995
compared to 25% in 1994.
Gross margins were consistent with the third quarter of 1994 at 60%. Gross
margins dipped slightly from 61% in the second quarter of 1995 as a result of
unusually strong foreign sales in the third quarter. Foreign sales carry lower
gross margins due to distributor price discounting in these markets. As foreign
buyers increased purchases to take advantage of the devalued dollar, the Company
realized lower gross margins on its combined base products sold. The impact of
increased foreign sales was mostly offset by the benefits of manufacturing cost
improvements implemented during the quarter.
SG&A costs are discussed in the consolidated operating highlights since
direct SG&A costs related to real estate have become insignificant which makes
the allocation of corporate SG&A costs between health care and real estate
rather arbitrary, impractical and difficult for investors to understand.
Management believes the comparison of total SG&A costs provides the investor
with a better understanding of its efforts to control costs and yet provide the
Company with the necessary infrastructure to continue its growth.
The Company continues to invest resources in research and product development
to introduce new products. Royalty costs, which in many respects represent the
cost of acquired research and development technologies, are recorded as a
component of cost of sales. All R&D expenses relate to the health care segment.
These expenditures increased from $192,649 in the third quarter of 1994 to
$297,627 in the third quarter of fiscal 1995. This increase relates to work on
several new products; however, the primary increase reflects the Company's
preparations for European clinical trials of its Heparin Removal Device and
Autologous Fibrin Delivery Kit. During the year the Company was awarded a
$500,000 grant from the National Institutes of Health. Revenue from the grant
will be recognized as the expenses are incurred and the monies become payable.`
Nine Month Periods: Net health care sales were $20,233,700 for the first nine
- - - - ------------------
months of 1995 compared to $15,644,104 in the same period of 1994, which
represents an increase of 29%. Medical device and solution sales increased by
32%, proprietary pharmaceuticals by 15% and sterile solution product sales by
31% for the nine month period. See quarterly analysis of changes.
Gross margins remained constant at 60% for the two comparative period based
on the items discussed in the quarterly analysis.
For a discussion of SG&A expenses, see consolidated operating highlights and
the quarterly results.
Research and development expenditures increased from $613,885 in the first
nine months of 1994 to $833,725 for the same period in fiscal 1995. The factors
related to the change in expenditures are discussed under the quarterly
information.
REAL ESTATE OPERATIONS
The Company has a real estate portfolio remaining from its earlier years of
operations. In past years this portfolio was used to help finance the Company's
start-up of health care operations. The Company continues to divest these
assets as reasonable offers are received.
Real estate sales in the third quarter and the first nine months of 1995
include the sale of industrial land, interest on real estate contracts and
revenue from the sale of the Company's interests in other real estate projects.
Gross margins were 16% and 29% for the third quarter and nine month periods
in 1995 compared to 9% and 20% for the same periods in 1994. The gross margins
are reflective of the Company's cost basis in the specific properties sold and
the related selling prices. The gross margins, therefore, may vary
significantly between specific pieces of property sold. During the most recent
quarter, the Company foreclosed on the holder of a note for property previously
sold. The property was resold to another buyer in the same quarter at an
additional profit.
<PAGE>FINANCIAL CONDITION
The Company's balance sheet continued to improve during the third quarter of
fiscal 1995. The following key measurements are indicative of the excellent
liquidity and strong financial position of the Company:
MAR 31, June 30,
(In thousands except ratios) 1995 1994
Cash and investments $8,097 $9,915
Working capital 19,437 13,816
Shareholders' equity 40,387 34,467
Current ratio 10:1 5:1
Cash and investments decreased from June 30, 1994 as a result of the
Company's acquisition of certain product technologies, payments for certain
short-term obligations existing at year end, the costs associated with its
current manufacturing cost reduction and capability expansion, and increases in
notes receivable and inventories to accommodate expanding sales. Although cash
equivalents have decreased, the Company has access to significant cash reserves
as a result of its investment portfolio which has maturities of three years or
less and which can be liquidated at any time if required and its short-term
notes receivable. Short-term notes receivable represent amounts to be received
within the coming year and increased to approximately $3.2 million at March 31,
1995 from $2.1 million at June 30, 1994. Internally generated funds have been
sufficient and are expected to continue to meet requirements for working capital
and capital expenditures in the future.
Accounts receivable decreased by approximately $561,000 or 10% from June 30,
1994. June was a record sales month which resulted in a higher receivable
balance. The decrease reflects payments of the higher receivables generated
from the record sales in June.
Inventories increased by approximately $2,916,000 or 64% from June 30, 1994.
This increase is comprised of higher inventory levels in all components. New
products including IschemiaAlertO and DuroFlo IIO coated catheters accounted for
much of the increase in finished goods. Raw materials increased as a result of
new products and to provide the needed raw materials to support greater
production levels required by higher sales levels. In addition, some of the
increase represents normal replacement of inventories deleted by the record June
sales.
The Company is just completing a $2 million manufacturing facility remodeling
which not only updates its processes for certain currently manufactured products
but also provides additional manufacturing capabilities for products not now
produced in-house.
Prepaid expenses increased due to a payment of insurance premiums for the
current fiscal year, deposits made in connection with pending land transactions
and from the prepayment of inventory to be purchased in connection with a
license and distribution agreement for a proprietary blood flow monitoring
system which includes a monitor, disposable ultrasonic doppler sensor and
patient securing device.
Accounts payable decreased as the result of the payment of certain
liabilities existing at year end related to the purchase of treasury stock and
for commission rights purchased from CAPS.
During the first three months of 1995, the Company repurchased 40,000 shares
of its Common Stock under the terms of a stock repurchase program announced in
the prior year. The Company has repurchased a total of 171,000 shares to date
of the total approved number of 200,000 shares at an average cost of $8.47. The
Company has also reissued some shares for employee stock option exercise and
stock purchase programs.
Patents and licenses have increased since June 30, 1994 primarily as a result
of the acquisition of technologies and licenses related to two major products.
First, on October 4, 1994, the Company entered into a license and distribution
agreement with Zertl Medical, Inc. for an FDA-approved proprietary blood flow
monitoring system which includes a monitor, disposable ultrasonic doppler sensor
and patient securing device. Under terms of an amended agreement, the Company
is obligated to pay future minimum license fees of $1,430,600 and $4,000,000 for
the purchase of monitors and disposable device inventories. These purchases and
payments will be required over a minimum of two years. Second, on September 30,
1994, the Company entered into a licensing agreement to manufacture and sell
certain proprietary vascular catheters. The total cost for this technology was
$420,000.
Effective January 1, 1995 the Company acquired Imodex Medical Devices, Inc.
The combination was accounted for as a pooling-of-interests transaction.
Because the amounts of the transaction are not material, the prior results have
not been restated to reflect the operations of the combined entity. The Company
issued 26,700 shares for distribution to Imodex shareholders.
There have been no other significant changes in capitalization or financial
status during the quarter that are not reflected in the financial statements.
REGULATORY AND COMPETITIVE ENVIRONMENT
Products manufactured or sold by the Company in the United States are subject
to regulation by the Food and Drug Administration ("FDA"), as well as by other
federal and state agencies. The FDA's approval process for new drugs and
devices is complex and often requires long-term and sustained investment with no
reliable basis for predicting the FDA's eventual decision regarding market
approval, nor how long the approval process may continue. The FDA has the power
to seize drugs or devices which it considers to be adulterated or misbranded or
to require the manufacturer to remove them from the market and the power to
publicize relevant facts. Recently, the FDA has taken aggressive steps to
increase its corporate monitoring and enforcement functions.
Historically, competition in the health care industry has been characterized
by the search for technological and therapeutic innovations in the treatment,
diagnosis and prevention of disease. The Company believes that it has benefited
from the technological advantages of certain of its products. While competitors
will continue to introduce new products in competition with those sold by the
Company, the Company believes that its research and development efforts will
permit it to remain competitive in the product areas where it now competes;
however, all medical technologies are subject to the unanticipated risk of
technological or scientific progress which may subject the Company's products,
both those already manufactured and those in development, to the risk of
technological obsolescence. The general competitive environment has been
significantly impacted by the ongoing political dialogue regarding the cost and
structure of the U.S. health care delivery system, which will probably result in
some opportunities and some challenges for various sectors of the health care
marketplace.
<PAGE>
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Incorporated by reference from "Notes to Consolidated Financial
Statements--Contingencies" on page 8 herein.
ITEM 2. CHANGES IN THE RIGHTS OF THE COMPANY'S SECURITY HOLDERS
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) Listing of Exhibits
Exhibit 11--Statement Re: Computation of Per Share Earnings
(b) Reports on Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RESEARCH INDUSTRIES CORPORATION
/s/ Gary L. Crocker May 10, 1995
---------------------------- ------------
Gary L. Crocker, President and Date
Chief Executive Officer
/s/ Mark W. Winn May 10, 1995
---------------------------- ------------
Mark W. Winn, Vice President and Date
Chief Financial Officer
/s/ V. Kelly Randall May 10, 1995
---------------------------- ------------
V. Kelly Randall, Secretary, Date
Treasurer and Corporate Controller
EXHIBIT 11
RESEARCH INDUSTRIES CORPORATION AND SUBSIDIARIES
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
Nine Months Ended March 31,
1995 1994
PRIMARY
Average shares outstanding 9,212,000 9,267,000
Net effect of dilutive stock options
based on treasury * *
stock method using average market
price
Total 9,212,000 9,267,000
Net income $5,073,338 $3,941,758
Earning per share $.55 $.43
FULLY DILUTED
Average shares outstanding 9,212,000 9,267,000
Net effect of dilutive stock options
based on the treasury
stock method using period-end market * *
price
Total 9,212,000 9,267,000
Net income $5,073,338 $3,941,758
Earnings per share $.55 $.43
* Effect of common stock equivalents was not material and therefore not
included.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Research
Industries Corporation Third Quarter 10-Q and is qualified in its entirety by
reference to such 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> MAR-31-1995
<CASH> 2,173,486
<SECURITIES> 2,787,927
<RECEIVABLES> 5,477,607
<ALLOWANCES> (262,000)
<INVENTORY> 3,202,548
<CURRENT-ASSETS> 21,657,295
<PP&E> 10,233,452
<DEPRECIATION> (2,754,503)
<TOTAL-ASSETS> 43,257,898
<CURRENT-LIABILITIES> 2,220,886
<BONDS> 0
<COMMON> 4,710,526
0
0
<OTHER-SE> 35,676,057
<TOTAL-LIABILITY-AND-EQUITY> 43,257,898
<SALES> 24,450,486
<TOTAL-REVENUES> 24,450,486
<CGS> 11,026,702
<TOTAL-COSTS> 16,868,650
<OTHER-EXPENSES> (355,467)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 48,965
<INCOME-PRETAX> 7,918,338
<INCOME-TAX> 2,845,000
<INCOME-CONTINUING> 5,073,338
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,073,338
<EPS-PRIMARY> .55
<EPS-DILUTED> .55
</TABLE>
