<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended April 1, 1995 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 0-17885
B E I E L E C T R O N I C S, I N C.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 71-0455756
(State of incorporation) (I.R.S. Employer Identification No.)
</TABLE>
One Post Street, Suite 2500
San Francisco, California 94104
(Address of principal executive offices)
(415) 956-4477
(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), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock: $.001 Par Value, 6,797,884 shares as of April 25, 1995
Page 1 of 16
<PAGE> 2
BEI ELECTRONICS , INC. AND SUBSIDIARIES
INDEX
<TABLE>
<S> <C> <C>
PART 1. FINANCIAL INFORMATION PAGE
--------------------- ----
Item 1. Financial Statements
Condensed Consolidated Balance Sheets--April 1, 1995 and October 1, 3
1994
Condensed Consolidated Statements of Operations--Quarter and Six Months 4
ended April 1, 1995 and April 2, 1994
Condensed Consolidated Statements of Cash Flows--Six Months ended April 5
1, 1995 and April 2, 1994
Notes to Condensed Consolidated Financial Statements--April 1, 1995 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of 11
Operations
PART II. OTHER INFORMATION
-----------------
Item 4. Submission of Matters to Vote of Security Holders 15
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 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 April 1, 1995.
SIGNATURES 16
----------
</TABLE>
Page 2 of 16
<PAGE> 3
BEI ELECTRONICS, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
April 1, October 1,
1995 1994
(Unaudited) (Note)
(dollars in thousands)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $3,373 $4,197
Trade receivables - net 18,638 18,503
Inventories - net (See Note B) 32,818 33,185
Other current assets 3,714 4,903
-------- --------
Total current assets 58,543 60,788
Property, plant and equipment - net 28,475 29,270
Acquired Technology (See Note D) 8,503 5,621
Goodwill 4,979 5,156
Other assets - net 10,914 11,597
-------- --------
$111,414 $112,432
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Trade accounts payable $5,827 $7,826
Accrued expenses and other liabilities 14,485 11,951
Federal and state income taxes -- --
Current portion of long-term debt 822 822
-------- --------
Total current liabilities 21,134 20,599
Long-term debt, less current portion 30,231 30,421
Deferred income taxes and other liabilities 3,071 3,583
Stockholders' equity less treasury stock 56,978 57,829
-------- --------
$111,414 $112,432
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
Note: The balance sheet at October 1, 1994 has been derived from the audited
consolidated balance sheet at that date.
Page 3 of 16
<PAGE> 4
BEI ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
----------------------- -----------------------
April 1, April 2, April 1, April 2,
1995 1994 1995 1994
(dollars in thousands except per share amounts)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $36,531 $28,288 $73,229 $57,702
Cost of sales 27,841 19,178 54,627 39,605
----------------------------------------------------
8,690 9,110 18,602 18,097
Selling, general and administrative expenses 8,258 9,489 16,925 17,888
Research, development and related expenses 1,046 1,710 2,328 3,322
----------------------------------------------------
Income (loss) from operations (614) (2,089) (651) (3,113)
Interest expense 623 609 1,278 1,162
Other income 630 853 672 905
----------------------------------------------------
Income (loss) before income taxes (607) (1,845) (1,257) (3,370)
Provision (benefit) for income taxes (205) (724) (410) (1,326)
----------------------------------------------------
Net income (loss) ($402) ($1,121) ($847) ($2,044)
====================================================
Earnings (loss) per common share and
common share equivalents ($0.06) ($0.17) ($0.13) ($0.31)
====================================================
Weighted average shares outstanding 6,751 6,643 6,721 6,629
====================================================
Dividends per common share $0.02 $0.02 $0.04 $0.04
====================================================
</TABLE>
See notes to condensed consolidated financial statements.
Page 4 of 16
<PAGE> 5
BEI ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
------------------------------------
April 1, April 2,
1995 1994
(dollars in thousands)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net cash provided (used) by operating activities $1,585 ($3,129)
Cash flows from investing activities:
Purchases of property, plant and equipment (2,140) (7,402)
Decrease(Increase) in other assets (17) (849)
------ ------
Net cash used in investing activities (2,157) (8,251)
Cash flows from financing activities:
Borrowings from line of credit 5,500 --
Payments on line of credit (5,500) --
Proceeds from long term debt -- 12,200
Payments on long term debt (136) (1,176)
Proceeds from issuance of common stock 153 268
Purchase of treasury stock -- (156)
Payment of cash dividends (269) (265)
------ ------
Net cash (used) provided by financing activities (252) 10,871
------ ------
Net decrease in cash and cash equivalents (824) (509)
Cash and cash equivalents at beginning of period 4,197 1,572
------ ------
Cash and cash equivalents at end of period $3,373 $1,063
====== ======
</TABLE>
See notes to condensed consolidated financial statements.
Page 5 of 16
<PAGE> 6
BEI ELECTRONICS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
April 1, 1995
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the interim
periods presented are not necessarily indicative of the results that may be
expected for the year ending September 30, 1995. For further information,
refer to the consolidated financial statements and footnotes thereto in the
Company's annual report on Form 10-K for the year ended October 1, 1994.
NOTE B--INVENTORIES
<TABLE>
<CAPTION>
April 1, October 1,
1995 1994
(dollars in thousands)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Finished products $1,380 $2,515
Work in process 5,031 5,570
Materials 9,762 9,047
Costs incurred under long-term contracts,
including U.S. Government contracts 31,584 36,054
Unapplied progress payments (14,939) (20,001)
------- -------
Net inventories $32,818 $33,185
======= =======
</TABLE>
Page 6 of 16
<PAGE> 7
NOTE C--EARNINGS PER COMMON SHARE AND COMMON SHARE EQUIVALENTS
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
April 1, April 2, April 1, April 2,
1995 1994 1995 1994
(dollars in thousands except per share amounts)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Weighted average shares outstanding 6,751 6,643 6,721 6,629
Net effect of dilutive stock options
based on the treasury stock method -- -- -- --
---------------------------------------------
Total weighted average shares outstanding 6,751 6,643 6,721 6,629
=============================================
Net income (loss) ($402) ($1,121) ($847) ($2,044)
=============================================
Earnings (loss) per common share and common share
equivalents ($0.06) ($0.17) ($0.13) ($0.31)
=============================================
</TABLE>
Earnings per common share and common share equivalents are computed by dividing
net income by the weighted average number of shares of common stock and common
stock equivalents outstanding during the period. Loss per common share is
based on the weighted average number of common shares only, as any assumption
of conversion of options would be antidilutive.
NOTE D--CONTINGENCIES AND LITIGATION
In connection with the acquisition of assets from Systron Donner Corporation
during fiscal 1990, BEI Systron Donner Company assumed an obligation to pay
former shareholders of General Precision Industries (GPI) $4.3 million if
certain levels of confirmed orders and shipments are achieved for products
developed using technology acquired from GPI in 1986 under a license agreement
which expires in 2003. The technology acquired was assigned a value of $ 5.6
million for the purchase price allocation for the acquisition.
In September of 1991, the Licensor of the patent on which the Company's quartz
technology is based advised the Company that royalties in excess of the amounts
previously paid by the Company were due. The amount of royalties involved was
approximately $400,000. The Company advised the Licensor that based on its
understanding of the license agreement no additional amounts were due. The
Licensor alleged that nonpayment of the royalties due would give the Licensor
the right to terminate the license agreement. The parties were unable to
resolve these differences. Accordingly, the Company elected to exercise the
provision of the license agreement which required arbitration of any disputes
between the parties to the agreement.
Page 7 of 16
<PAGE> 8
In June of 1993, the Company and the Licensor filed briefs with the arbitration
Panel. The Licensor alleged in its brief that the amount of royalties,
milestone payments and accrued interest due as of September 30, 1992 was
approximately $10.0 million (including the $4.3 million described above), and
asked the arbitration Panel to rule that the license could be terminated based
on noncompliance by the Company with the terms of the license agreement.
The Company has asked the arbitration Panel to rule that the amounts of the
royalties paid by the Company had been properly determined by the Company, that
the original license agreement should be reformed to reduce the royalties due
on future sales as a result of failure by the Licensor to disclose certain
matters which significantly impacted the Company's timely ability to employ the
licensed patent on production units and that the license was not subject to
termination.
The arbitration process is ongoing. The arbitration Panel bifurcated the
issues in the arbitration, and issued an interim ruling in February 1995. In
that interim ruling, which will become final at the close of the arbitration,
the Panel concluded that the license agreement was not subject to termination,
that non-recurring engineering revenues were not royalty-bearing, and that $1
million of the $4.3 million discussed above is due only if certain conditions
are met in the future. The Panel also concluded that the Company is entitled
to ownership of an accelerometer that the former Shareholders developed.
Payment of the $3.3 million balance will depend on the Panel's ruling on the
Company's request for an equitable offset and on other factors. The second
phase of the arbitration will involve quantification of royalty amounts due, if
any, for unit sales of product using the acquired technology, and will also
involve other matters including the Company's request for an equitable offset
and parties' respective claims for attorneys' fees. Management has vigorously
defended its rights under the license agreement, and while the final outcome of
this matter cannot be determined with certainty, management believes, taking
all factors into account and after consultation with legal counsel, that this
matter will not result in a material adverse impact on the financial position
of the Company.
During a vendor survey conducted by BEI Defense Systems Company in the first
quarter of fiscal 1994, a component used in the HYDRA 70 rocket motor was
identified as being produced by a process that differed from the one that the
vendor had certified. Subsequent to the survey and BEI's evaluation of
alternative acceptable processes, BEI's customer, the U.S. Government, was
notified of the potentially non-conforming material. The customer, as required
by applicable contract provisions, notified Justice Department and Defense
Department investigators. Management also conducted an internal investigation
to determine the facts and appropriateness of follow-up actions. Due to these
investigations, delivery of certain completed rockets motors was delayed
beginning in late December 1993. Subsequently, the customer agreed to accept
the completed but undelivered rocket motors and the Company agreed to replace
the affected parts under warranty. During the fourth quarter of fiscal 1994,
the Company began rework under warranty and substantial deliveries of rocket
motors were completed prior to year end. The Company has provided for the cost
of warranty replacement of the affected parts in all undelivered rocket motors.
For previously delivered rocket motors, the customer is in the process of
conducting extensive tests on the potentially non-conforming part to determine
whether required levels of performance and reliability are achieved by the
affected part. Management believes the final
Page 8 of 16
<PAGE> 9
results of the customer's tests will be a determination that performance and
reliability of the affected part meet applicable requirements. No provision
has been made in the accompanying financial statements for any liability that
may result from an adverse determination with respect to performance and
reliability requirements. The outcome of the Justice Department portion of the
investigation is not presently determinable.
In October 1993, the State of California filed a first amended complaint
against a division of the Company and fifty-two other defendants. The
complaint seeks recovery of response costs incurred by the State at a waste oil
recycling facility in Commerce, California (the"Site"). The State alleges
that, as of October 1993, it had incurred over $2.2 million in response costs
at the Site.
The Company has joined a group of defendants who are potentially parties for
the Site (the "PRP Group"). The PRP Group is proceeding with analysis of past
work performed at the Site and preparing a Remedial Action Plan for the Site.
Currently, the estimated cost of the remedial actions proposed for the Site
range from $500,000 to $1,200,000. The PRP Group is also conducting settlement
negotiations with the State. Since filing its First Amended Complaint, the
State has disclosed that its past costs associated with the Site are
$3,700,000.
The division of the Company against which the claim is asserted was acquired
from Systron Donner Corporation in 1990. In connection with that acquisition,
Systron Donner agreed to indemnify the Company against any claims, damages and
expenses in excess of $100,000 arising in connection with certain environmental
matters. Management believes such indemnification will encompass this claim.
While the outcome of this matter cannot be determined with certainty,
management believes that the ultimate resolution will not have a material
adverse impact on the financial position of the Company.
In October 1993, CooperSurgical, Inc. a subsidiary of the Cooper Companies,
filed a claim for unspecified damages alleging unfair competition due to
actions by BEI Medical Systems and Richard Turner, its president, a former
employee of the Cooper Companies, and others. On May 16, 1994, the Chancery
Division for the Superior Court of New Jersey granted a partial summary
judgment in favor of the plaintiff and issued an injunction against the
defendants restraining them from selling certain products until June 20, 1996.
In September 1994, BEI Medical Systems filed a motion to vacate the May 16,
1994 order. In October 1994, CooperSurgical filed an expert report with the
court alleging $11 million in damages due plus interest. On November 28, 1994,
the Court granted BEI Medical Systems' motion to vacate the May order. As a
result the partial summary judgement has been reversed and the injunction has
been lifted.
Management has vigorously defended its rights in this action and believes after
discussion with legal counsel that the CooperSurgical claims are exaggerated.
Expert witnesses for BEI have prepared a formal response to the CooperSurgical
damage claims which was submitted in February 1995. BEI's experts stated that
if CooperSurgical were entitled to damages, those damages would total less than
$100,000, and would be more than offset by BEI Medical
Page 9 of 16
<PAGE> 10
Systems' counterclaim against CooperSurgical. A pretrial conference is
scheduled for June 1995 at which time counsel anticipates that a trial date may
be set. While the outcome of this matter cannot be determined at this time,
management believes, taking known factors into account and after consultation
with legal counsel, that this matter will not result in a material adverse
impact on the financial position of the Company.
The Company has pending various legal actions arising in the normal course of
business. None of these legal actions are expected to have a material effect
on the Company's operating results or financial condition.
Page 10 of 16
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following table sets forth, for the fiscal periods indicated, the
percentage of net sales represented by certain items in the Company's
Consolidated Statements of Operations.
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
--------------------- ----------------------
April 1, April 2, April 1, April 2,
1995 1994 1995 1994
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 76.2 67.8 74.6 68.6
----- ----- ----- -----
Gross profit 23.8 32.2 25.4 31.4
Operating expenses
Selling, general and administrative
expenses 22.6 33.5 23.1 31.0
Research, development and related
expenses 2.9 6.1 3.2 5.8
----- ----- ----- -----
Income (loss) from operations (1.7) (7.4) (0.9) (5.4)
Interest expense 1.7 2.2 1.7 2.0
Other income 1.7 3.0 0.9 1.6
----- ----- ----- -----
Income (loss) before income taxes (1.7) (6.6) (1.7) (5.8)
Provision for income taxes (credit) (0.6) (2.6) (0.5) (2.3)
----- ----- ----- -----
Net income (loss) (1.1)% (4.0)% (1.2)% (3.5)%
===== ===== ===== =====
</TABLE>
QUARTER ENDED APRIL 1, 1995 AND APRIL 2, 1994
Net sales for the quarter ended April 1, 1995 increased $8.2 million or 29.1%
from the same period in fiscal 1994.
Defense Systems segment net sales increased $6.2 million or 96.7% in the second
quarter of fiscal 1995 compared to the same period in the prior year. The
increase was primarily the result of lower than average shipments caused by
delays in deliveries experienced in the second quarter of 1994, when certain
lines of rocket motors and warheads suffered a shortfall in shipments as a
result of discovery of a potentially non- conforming component during a vendor
survey conducted by BEI Defense Systems Company, and due to certain then -
unresolved upgrading, testing, and requalification issues.
In January 1995, the Company was advised that the U.S. Army's fiscal 1996 to
fiscal 1998 HYDRA 70 Systems procurement had been awarded to a competing
bidder. The award has not yet been finalized due to protests by the Company's
joint bidder, Alliant Techsystems,
Page 11 of 16
<PAGE> 12
and another unsuccessful bidder which are continuing. The HYDRA 70 Systems
contract represented greater than 90 percent of Defense Systems segment
revenue during fiscal 1994 and in the second quarter of fiscal 1995. The
existing HYDRA 70 backlog of approximately $51 million which is scheduled for
shipments into early fiscal 1996 represents a similar portion of the total
Defense Systems backlog.
As the HYDRA 70 Systems contract nears completion in early fiscal 1996,
revenues of the Defense Systems segment can be expected to decline
substantially unless there is a change in the Army's announced plan.
Sensors & Systems segment sales volume increased $1.9 million or 9.5% from the
second quarter of 1994. The higher net sales were due primarily to increases
in several commercial product lines, primarily industrial and automotive
products. Partially offsetting these gains in sales volume were slightly
decreased sales in the government sector, reflecting the continuing impact of
U.S. Government-defense related cutbacks, primarily development programs.
Consolidated cost of sales as a percentage of net sales was greater in the
second quarter of fiscal 1995 versus the comparable period of fiscal 1994.
Defense Systems segment volume was almost double the prior year causing its
high cost of sales percentage to significantly impact the consolidated results.
Additionally, cost of sales as a percentage of net sales in the Sensors and
Systems segment experienced an increase over the prior year due primarily to
increased costs of fixed price development programs in the government sector.
The Company's gross profit margins from sales to the U.S. Government for
military and space products are generally lower than gross profit margins from
sales of commercial and industrial products. The margins on the Defense
Systems segment vary considerably. As a result, profitability from Defense
Systems' revenue has varied significantly depending on the contract mix in any
period. The existing backlog in the Defense Systems segment has gross margins
that are similar to fiscal 1994 gross margins on similar Defense Systems
products. Management is continuing measures to reduce costs for the HYDRA 70
program. Downward pressure on gross profit margins will continue, especially
for military contracts.
Selling, general and administrative expenses as a percentage of net sales
decreased in the second quarter of fiscal 1995 versus the comparable period of
fiscal 1994, due to the increased volume of total net sales as well as reduced
levels of spending in all the segments, primarily Defense Systems segment and
Corporate.
Research, development and related expenses as a percentage of net sales for the
second quarter of fiscal 1995 showed a decrease from the same period in fiscal
1994 due to increased volume of total net sales as well as reduced levels of
spending, primarily in the Sensors and Systems and Defense Systems segments.
Page 12 of 16
<PAGE> 13
SIX MONTHS ENDED APRIL 1, 1995 AND APRIL 2, 1994
Net sales for the first six months of fiscal 1995 increased $15.5 million or
26.9% from the prior year.
Defense Systems segment net sales for the six month period ended April 1, 1995
increased $11.6 million or 79.7% from the first six months of fiscal 1994. The
increase was caused principally by delays in delivery of HYDRA 70 products in
the first quarter of fiscal 1994 resulting from the discovery of a potentially
non-conforming component as discussed above (see Note D to Condensed
Consolidated Financial Statements).
Sensors and Systems segment net sales for the six month period ended April 1,
1995 increased $3.6 million or 9.2% from the first six months of fiscal 1994.
The increased net sales were due primarily to the growth of sales in commercial
product lines, primarily industrial and automotive products. Partially
offsetting these gains in sales volume were decreases in governmental sales,
reflecting spending cutbacks by the federal government.
Consolidated cost of sales as a percentage of net sales increased in the first
six months of fiscal 1995 from the comparable period of fiscal 1994. Defense
Systems segment volume was up more than 75% from the prior year causing its
high cost of sales percentage to significantly impact the consolidated results.
Additionally, cost of sales as a percentage of net sales in the Sensors and
Systems segment experienced an increase over the prior year due primarily to
increased costs of fixed price development programs in the government sector.
Medical Systems segment cost of sales as a percentage of net sales slightly
declined.
Selling, general and administrative expenses as a percentage of net sales
decreased in the first six months of fiscal 1995 versus the comparable period
of fiscal 1994, due primarily to the increased volume of total net sales and
reduced levels of spending in all the segments, primarily Defense Systems
segment, the Medical Systems segment, and Corporate. Spending in the Defense
Systems segment was cut back due to the anticipated decline in future HYDRA 70
systems activity. Medical Systems segment cut back spending due to continuing
delays in new product introductions and to reduce operating losses. Sensors
and Systems segment increased spending minimally at those commercial operations
experiencing volume growth.
Research, development and related expenses for the first six months of fiscal
1995 have decreased as a percentage of net sales from the same period in fiscal
1994 primarily due to the elimination of a separate Corporate Research and
Development function and additional focus of development efforts in the Sensors
and Systems segment, eliminating some programs while increasing emphasis on
automotive sensors.
Interest expense increased slightly from the first six months of fiscal 1994
due mainly to a higher borrowing base resulting from the issuance of $28.0
million of Senior Notes during late fiscal 1993 and early fiscal 1994.
Page 13 of 16
<PAGE> 14
Other income decreased for the six months ended April 1, 1995 versus the
comparable period of fiscal 1994 due primarily to a decrease in royalty income
from a technology licensing agreement.
LIQUIDITY AND CAPITAL RESOURCES
During the first six months of fiscal 1995, total cash provided by operations
was $1.6 million, including the net loss of $0.8 million. Sources of cash from
operations primarily consisted of the positive impact of non-cash charges to
income from depreciation and amortization of $4.0 million. Cash outflows from
operations included a decrease in accruals and other liabilities of $2.2
million.
Cash used for investing activities of $2.2 million consisted primarily of
capital expenditures in the first half of the fiscal year. In management's
opinion, the level of capital expenditures for fiscal 1995 is consistent with
the current volume of business. Cash flows for financing activities included
the short term borrowing and repayment of $5.5 million on the Company's line of
credit. The loss in the fiscal 1995 second quarter required the Company to
obtain a waiver of one bank line covenant prohibiting consecutive quarterly
losses. The Company and the Bank have agreed to renew the bank line effective
June 1, 1995 for one year. The Company had no material capital commitments at
April 1, 1995.
In 1991, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards ("FAS") No. 107 "Disclosures About Fair Value of Financial
Instruments." The Company will be required to adopt FAS 107 in fiscal year
1996. Accordingly, the Company plans to adopt FAS 107 when required, and will
disclose the fair value for all of its financial instruments, if practicable.
Based on the financial condition of the Company at April 1, 1995, management
believes that the existing cash balances, cash generated from operations, and
available lines of credit will be sufficient to meet the Company's planned
needs for the foreseeable future. If the Company requires additional capital,
it anticipates that such capital will be provided by bank or other borrowings,
although there can be no assurances that funds will be available on terms as
favorable as those applicable to the Company's currently outstanding debt.
EFFECTS OF INFLATION
Management believes that, for the periods presented, inflation has not had a
material effect on the Company's operations.
Page 14 of 16
<PAGE> 15
BEI ELECTRONICS, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of Stockholders (the "Meeting") of the Company was held
on February 28, 1995. At the meeting, Charles Crocker, George S. Brown
and Michael P.W. Stone were elected to the Company's Board of Directors
for a three year term expiring at the Company's 1998 Annual Meeting:
In addition, the following directors continued in office as directors of
the Company following the Annual Meeting: C. Joseph Giroir, Jr. and Gary
D. Wrench (until the Company's 1996 Annual Meeting); and Richard M. Brooks,
William G. Howard, Jr., and Peter G. Paraskos (until the Company's 1997
Annual Meeting).
(b) The other matter presented at the meeting and the voting of stockholders
with respect thereto is as follows:
(i) Ratification of Selection of Independent Accountants
The Board of Directors selected Ernst & Young LLP as the Company's
independent public accountants for the fiscal year ending September
30, 1995 and such selection was submitted by the Company's management
for ratification by the stockholders at the Annual Meeting. The
stockholder's ratified the selection of Ernst & Young LLP.
Page 15 of 16
<PAGE> 16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 in the City of San
Francisco, County of San Francisco, State of California, on May 15, 1995.
BEI ELECTRONICS, INC.
By: /s/ Robert R. Corr
------------------------------
Robert R. Corr
Treasurer and Controller
(Principal Accounting Officer)
Page 16 of 16
<PAGE> 17
Exhibit Index
Ex. 27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> APR-01-1995
<EXCHANGE-RATE> 1
<CASH> 3,373
<SECURITIES> 0
<RECEIVABLES> 18,638
<ALLOWANCES> 0
<INVENTORY> 32,818
<CURRENT-ASSETS> 58,543
<PP&E> 28,475
<DEPRECIATION> 0
<TOTAL-ASSETS> 111,414
<CURRENT-LIABILITIES> 21,134
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 56,978
<TOTAL-LIABILITY-AND-EQUITY> 111,114
<SALES> 73,229
<TOTAL-REVENUES> 73,229
<CGS> 54,627
<TOTAL-COSTS> 54,627
<OTHER-EXPENSES> 19,253
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</TABLE>
