<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
-------------------------------------------
FORM 10-QSB
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- --- ACT OF 1934
For the quarterly period ended June 29, 1997
OR
___ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________ to ____________
COMMISSION FILE NUMBER: 0-21305
ELECTRONIC DESIGNS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 04-3298416
-------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
ONE RESEARCH DRIVE, WESTBOROUGH, MASSACHUSETTS 01581
(Address of Principal Executive Offices) (Zip Code)
(508) 366-5151
(Registrant's Telephone Number, Including Area Code)
----------------------------------------
(Former Name, Former Address and Formal Fiscal Year, if Changed Since Last
Report)
Check whether 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 past 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
--- ---
The number of shares of Registrant's Common Stock outstanding on August 1, 1997
was 7,121,629
Exhibit Index is located on Page 13
Page 1 of 15, including exhibits
<PAGE> 2
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
ELECTRONIC DESIGNS, INC.
<TABLE>
UNAUDITED CONSOLIDATED BALANCE SHEET
<CAPTION>
JUNE 29, SEPTEMBER 30,
1997 1996
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 4,073,000 $ 3,290,000
Accounts receivable, net 7,817,000 6,356,000
Inventories 5,916,000 5,483,000
Assets of discontinued operations 1,656,000 -
Prepaid expenses 101,000 143,000
------------ ------------
Total current assets 19,563,000 15,272,000
Property and equipment, net 2,066,000 3,843,000
Other assets 20,000 87,000
Intangible assets, net 1,512,000 1,861,000
------------ ------------
$ 23,161,000 $ 21,063,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,189,000 $ 828,000
Accounts payable 4,928,000 5,329,000
Accrued expenses and other liabilities 2,069,000 2,690,000
Provision for loss on disposal of discontinued operations 776,000 -
------------ ------------
Total current liabilities 8,962,000 8,847,000
Deferred rent 134,000 130,000
Long-term debt, net of current portion 2,539,000 2,939,000
------------ ------------
Total liabilities 11,635,000 11,916,000
------------ ------------
Shareholders' equity:
Convertible preferred stock; $0.01 par value; 8,000,000 shares
authorized; 0 and 1,823 shares issued and outstanding at
June 29, 1997 and September 30, 1996, respectively - -
Common stock; $0.01 par value; 20,000,000 shares authorized;
7,128,469 and 6,341,896 shares issued and outstanding at
June 29, 1997 and September 30, 1996, respectively 71,000 64,000
Additional paid in capital 26,983,000 26,943,000
Treasury stock; 7,400 shares at cost (27,000) -
Accumulated deficit (15,501,000) (17,860,000)
------------ ------------
Total shareholders' equity 11,526,000 9,147,000
------------ ------------
$ 23,161,000 $ 21,063,000
============ ============
</TABLE>
See accompanying notes to unaudited consolidated financial statements
2
<PAGE> 3
ELECTRONIC DESIGNS, INC.
<TABLE>
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
-------------------------- --------------------------
JUNE 29, JUNE 30, JUNE 29, JUNE 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues $10,422,000 $15,761,000 $31,011,000 $44,294,000
Cost of revenues 6,719,000 11,025,000 18,968,000 31,960,000
----------- ----------- ----------- -----------
Gross profit 3,703,000 4,736,000 12,043,000 12,334,000
----------- ----------- ----------- -----------
Operating expenses:
Research and development 608,000 510,000 1,586,000 1,446,000
Selling, general and administrative 1,648,000 2,238,000 5,562,000 6,412,000
Amortization of intangible assets 117,000 117,000 350,000 353,000
----------- ----------- ----------- -----------
2,373,000 2,865,000 7,498,000 8,211,000
----------- ----------- ----------- -----------
Income from operations 1,330,000 1,871,000 4,545,000 4,123,000
----------- ----------- ----------- -----------
Other income (expense):
Interest income 54,000 - 163,000 47,000
Interest expense (77,000) (206,000) (236,000) (636,000)
----------- ----------- ----------- -----------
(23,000) (206,000) (73,000) (589,000)
----------- ----------- ----------- -----------
Income before income taxes 1,307,000 1,665,000 4,472,000 3,534,000
Provision for income taxes 132,000 269,000 449,000 456,000
----------- ----------- ----------- -----------
Income from continuing operations 1,175,000 1,396,000 4,023,000 3,078,000
Discontinued operations:
Loss from discontinued operations of Diamond Products
Division through May 13, 1997, net of applicable income taxes (189,000) (118,000) (699,000) (1,564,000)
Provision for loss on disposal of Diamond Products Division
including provision for operating losses during the phase-out
period, net of applicable income taxes (965,000) - (965,000) -
----------- ----------- ----------- -----------
Loss from discontinued operations (1,154,000) (118,000) (1,664,000) (1,564,000)
----------- ----------- ----------- -----------
Net income $ 21,000 $ 1,278,000 $ 2,359,000 $ 1,514,000
=========== =========== =========== ===========
Income from continuing operations per share $ 0.14 $ 0.16 $ 0.46 $ 0.46
=========== =========== =========== ===========
Net income per share $ 0.02 $ 0.15 $ 0.29 $ 0.27
=========== =========== =========== ===========
Weighted average common shares and equivalents 9,735,000 9,876,000 9,794,000 8,229,000
========= ========= ========= =========
</TABLE>
See accompanying notes to unaudited consolidated financial statements
3
<PAGE> 4
ELECTRONIC DESIGNS, INC.
<TABLE>
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
<CAPTION>
1997 1996
<S> <C> <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash flows from operating activities:
Net income $ 2,359,000 $ 1,514,000
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Depreciation and amortization 1,324,000 1,187,000
Provision for loss on disposal of discontinued operations 776,000 -
Noncash portion of restructuring expenses - 57,000
Common stock and stock warrants issued in payment of interest
and other expenses 18,000 37,000
Changes in assets and liabilities, net of acquired
amounts:
Increase in accounts receivable (1,461,000) (1,442,000)
(Increase) decrease in inventories (458,000) 1,290,000
Decrease in prepaid expenses 42,000 21,000
Decrease in other assets 33,000 17,000
Decrease in accounts payable (401,000) (262,000)
Decrease in accrued expenses (621,000) (2,446,000)
Increase in deferred rent 4,000 26,000
----------- -----------
Net cash flows provided by (used in) operating activities 1,615,000 (1,000)
----------- -----------
Cash flows from investing activities:
Capital equipment expenditures (795,000) (281,000)
Cash paid for acquisition of Electronic
Designs, Inc., net of cash acquired - (8,088,000)
----------- -----------
Net cash flows used in investing activities (795,000) (8,369,000)
----------- -----------
Cash flows from financing activities:
Sale of common stock, net 29,000 2,221,000
Repurchase of common stock (27,000) -
Proceeds from issuance of long-term debt 1,012,000 5,500,000
Principal repayments on long-term debt (1,051,000) (1,663,000)
Repayment of notes payable to officers - (290,000)
Net borrowings on revolving credit facility - 1,860,000
----------- -----------
Net cash flows provided by (used in) financing activities (37,000) 7,628,000
----------- -----------
Net increase (decrease) in cash and cash equivalents 783,000 (742,000)
Cash and cash equivalents at beginning of period 3,290,000 2,045,000
----------- -----------
Cash and cash equivalents at end of period $ 4,073,000 $ 1,303,000
=========== ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements
4
<PAGE> 5
ELECTRONIC DESIGNS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
In March 1996, Crystallume reincorporated in Delaware and changed its
name to Electronic Designs, Inc. The accompanying unaudited interim consolidated
financial statements reflect the financial position, results of operations and
cash flows of Electronic Designs, Inc. (the "Company") and its wholly-owned
subsidiaries.
In the opinion of management, the financial statements contain all of
the necessary adjustments (all being of a normal and recurring nature) to fairly
present the financial position, results of operations and cash flows of the
Company for the interim periods presented. These statements do not include all
of the information and footnotes required by generally accepted accounting
principles, although the Company believes that the disclosures made are adequate
to make the information presented not misleading. These financial statements
should be read in conjunction with the Company's audited consolidated financial
statements for the two fiscal years in the period ended September 30, 1996
included in the Company's 1996 Annual Report on Form 10-KSB.
The operating results for the interim periods presented are not
necessarily indicative of the results to be expected for the full year.
2. ACQUISITION OF ELECTRONIC DESIGNS, INC.
Effective October 10, 1995, the Company acquired all of the outstanding
stock of Electronic Designs, Inc., a Massachusetts corporation ("EDI-MA"). The
acquisition was recorded in accordance with the purchase method and,
accordingly, the results of operations and cash flows of EDI-MA are included in
the results of operations and cash flows of the Company from the date of
acquisition.
The following pro forma information has been prepared as if the
acquisition of EDI-MA was completed at the beginning of the nine month period
ended June 30, 1996, is presented for illustrative purposes only and is not
necessarily indicative of results of operations which would have actually been
achieved had the acquisition of EDI-MA occurred at that date:
<TABLE>
<S> <C>
Revenues $44,863,000
Income from continuing operations $ 4,031,000
Net income $ 2,467,000
Income per share from continuing operations $ 0.48
Net income per share $ 0.34
</TABLE>
The pro forma data above does not include $1,100,000, relating to the
revaluation of inventories acquired to their estimated fair value, which was
included in cost of revenues in the first quarter of fiscal 1996 as the acquired
inventories were sold. Only those pro forma adjustments which were expected to
have a continuing impact on the results of operations of the combined companies
were included.
5
<PAGE> 6
3. INVENTORIES
Inventories consisted of the following:
<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
1997 1996
<S> <C> <C>
Raw materials $3,478,000 $3,244,000
Work-in-process 1,041,000 1,241,000
Finished goods 1,397,000 998,000
---------- ----------
$5,916,000 $5,483,000
========== ==========
</TABLE>
4. NET INCOME PER SHARE
Net income per share represents earnings per common and common
equivalent share which is determined on the basis of the weighted average number
of shares outstanding during the respective period after giving effect to (i)
all options and warrants using the modified treasury stock method, and (ii) the
conversion of preferred stock using the if-converted method. Primary and fully
diluted earnings per share are the same.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings Per
Share". This Statement establishes and simplifies standards of computing and
presenting earnings per share and replaces primary and fully diluted earnings
per share with basic and diluted earnings per share. SFAS 128 will be effective
for the Company's first quarter of fiscal 1998 and requires the restatement of
all previously reported earnings per share data that are presented. Early
adoption of SFAS 128 is not permitted. Pro forma earnings per share under SFAS
128 would have been as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
-------------------------- ---------------------------
JUNE 29, JUNE 30, JUNE 29, JUNE 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Pro forma basic:
Income per share from continuing operations $ 0.17 $ 0.25 $ 0.58 $ 0.58
========== ========== ========== ==========
Income per share $ 0.00 $ 0.23 $ 0.34 $ 0.28
========== ========== ========== ==========
Weighted average common shares 7,106,000 5,660,000 6,937,000 5,315,000
========== ========== ========== ==========
Pro forma diluted:
Income per share from continuing operations $ 0.16 $ 0.17 $ 0.53 $ 0.41
========== ========== ========== ==========
Income per share $ 0.00 $ 0.16 $ 0.31 $ 0.20
========== ========== ========== ==========
Weighted average common shares and equivalents 7,447,000 8,220,000 7,595,000 7,532,000
========== ========== ========== ==========
</TABLE>
5. SHAREHOLDERS' EQUITY
During the nine month period ended June 29,1997, 729,200 shares of
common stock were issued in conversion of 1,823 shares of preferred stock.
In December 1996, the Company, as part of a service agreement with an
outside firm, issued warrants to purchase 45,000 shares of common stock at an
exercise price of $3.875 per share which vest upon achievement of specified
goals. These warrants expire in December 1999.
On May 12, 1997, the Board of Directors authorized the repurchase of up
to 350,000 shares of the Company's common stock. At June 29, 1997, the Company
had repurchased 7,400 shares for total consideration of $27,000.
6
<PAGE> 7
6. DISCONTINUED OPERATIONS
On May 13, 1997, the Company announced the decision to divest its
Crystallume Diamond Technology Division (the "Division") located in Santa Clara,
California. At June 29, 1997, the assets of the Division, consisting primarily
of fixed assets, have been separately classified on the balance sheet as a
current asset. In addition, the Company has recorded a provision for loss on
disposal of the Division of $965,000, including provision for operating losses
during the phase out period (from May 13, 1997 to the expected date of disposal)
of $409,000. The loss from operations of the Division from May 13, 1997 to June
29, 1997 was $189,000. The Company expects that it will complete the divestiture
in the fourth quarter of fiscal 1997 which is expected to take the form of a
sale of assets. The results of these discontinued operations have been
retroactively separated from the Company's ongoing operations in the
consolidated statement of operations.
7. RECENTLY ENACTED ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive
Income" and SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information." The Company will implement SFAS No. 130 and No. 131 as
required in fiscal 1999 which will require the Company to report and display
certain information related to comprehensive income and operating segments.
7
<PAGE> 8
ITEM 2:
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Form 10-QSB contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The Company's actual results could differ materially from
those set forth in the forward-looking statements. Certain factors that might
cause such a difference are discussed in the section entitled "Certain Factors
Affecting Future Operating Results" beginning on page 10 of this Form 10-QSB.
Since its inception in 1984 through October 10, 1995, Electronic Designs,
Inc. (formerly Crystallume) (the "Company") was primarily engaged in research
and development related to diamond coatings using a process called chemical
vapor deposition ("CVD").
Effective October 10, 1995, the Company acquired all of the outstanding
stock of Electronic Designs, Inc., a Massachusetts corporation ("EDI-MA"), in a
purchase transaction (the "Acquisition"). EDI-MA manufactured high density
memory components used in commercial and military systems, and also designed and
manufactured flat panel display units suitable for avionics and other specialty
applications using active matrix liquid crystal displays. As a result of the
Acquisition, the results of operations and cash flows of EDI-MA are included in
the results of operations and cash flows of the Company from the date of the
Acquisition.
In March 1996, the Company changed its state of incorporation from
California to Delaware and changed its name to Electronic Designs, Inc.
On May 13, 1997, the Company announced the decision to divest its
Crystallume Diamond Technology Division (the "Division") located in Santa Clara,
California. At June 29, 1997, the assets of the Division, consisting primarily
of fixed assets, have been separately classified on the balance sheet as a
current asset. In addition, the Company has recorded a provision for loss on
disposal of the Division of $965,000, including provision for operating losses
during the phase out period (from May 13, 1997 to the expected date of disposal)
of $409,000. The loss from operations of the Division from May 13, 1997 to June
29, 1997 was $189,000. The Company expects that it will complete the divestiture
in the fourth quarter of fiscal 1997 which is expected to take the form of a
sale of assets. The results of these discontinued operations have been
retroactively separated from the Company's ongoing operations in the
consolidated statement of operations.
RESULTS OF OPERATIONS
Revenues:
Revenues decreased 34% to $10,422,000 in the third quarter of fiscal 1997
from $15,761,000 in the same period in fiscal 1996. For the nine month period,
revenues decreased 30% to $31,011,000 in the first nine months of fiscal 1997
from $44,294,000 in the same period in fiscal 1996. These decreases in revenues
were due substantially to declining average selling prices for the Company's
memory products reflecting decreases in the cost of memory chips which are the
primary raw material. The Company passed a substantial part of these cost
savings through to its customers. Partially offsetting the decreases in memory
product sales were increases in display product sales.
The Company derives a substantial portion of its revenues and earnings from
sales to defense contractors and subcontractors of memory products manufactured
in compliance with military specifications. Trends in the defense industry
include reductions in spending from year to year and the movement toward the
purchase of commercial off-the-shelf ("COTS") products rather than those
manufactured in compliance with specified military standards. To date, these
changes have had a limited adverse effect on the Company's results due to
increased demand resulting from upgrading of existing military systems and the
slow rate of adoption of the COTS program.
Gross profit:
Gross profit for the third quarter of fiscal 1997 was $3,703,000 compared to
$4,736,000 in the same period of fiscal 1996. Gross profit for the first nine
months of fiscal 1997 was $12,043,000 compared to $12,334,000 in the same period
of fiscal 1996. Gross profit for the nine month period ended June 30, 1996
included a nonrecurring charge of $1,100,000 related to the revaluation, to
their estimated fair value, of inventories acquired as part of the Acquisition.
8
<PAGE> 9
This amount was charged to cost of revenues in the first quarter of fiscal 1996
as the acquired inventories were sold. Gross profit as a percentage of revenues
("gross margin") increased to 35.5% and 38.8% in the third quarter and nine
months of fiscal 1997, respectively, from 30.0 and 27.8% (or 30.3 % excluding
the effect of the nonrecurring charge of $1,100,000) in the same periods in the
prior year. Gross margin increased as a result of the higher mix of display
products and the benefit of reductions in the Company's purchase prices of
memory devices. As a result of the rapidly declining cost of memory devices, the
Company has been able to increase its gross margins on memory products in the
short term. Due to competitive forces, the Company believes that, as prices
stabilize, gross margins may decline.
The Company purchases its semiconductor components from a small number of
large suppliers, including foreign suppliers who are regularly the target of
threatened or pending trade disputes and sanctions which, if realized, could
affect the ability of the Company to obtain critical raw materials. The Company
has not been materially adversely affected by this situation in the past and
does not anticipate experiencing any material adverse effect in the future. The
Company does not have specific contractual arrangements with its suppliers.
While the Company believes it has good relationships with its vendors, in the
event that product availability becomes more limited in the future, there is no
assurance that these sources of supply will continue under terms that permit the
Company to compete effectively in its targeted markets.
Operating expenses:
Research and development expenses in the third quarter and nine month period
of fiscal 1997 increased 19% and 10% to $608,000 and $1,586,000, respectively,
from $510,000 and $1,446,000 in the respective periods in fiscal 1996 due
primarily to increases in headcount in memory and display product development
efforts.
Selling, general and administrative expenses decreased by $590,000 and
$850,000 or 26% and 13%, in the third quarter and nine months, respectively, in
fiscal 1997 to $1,648,000 and $5,562,000 in the respective periods in fiscal
1997. The majority of these decreases resulted from lower bonuses, commissions
and sales incentives in fiscal 1997 due to the decreases in revenues and from
lower legal and accounting fees.
Other income (expense):
Interest income in the current quarter was $54,000 and $163,000 for the nine
months of fiscal 1997 as compared to zero and $47,000 in the same periods in the
prior year due to higher cash and cash equivalent balances in fiscal 1997.
Interest expense decreased $129,000 and $400,000 in the third quarter and first
nine months of fiscal 1997 to $77,000 and $236,000, respectively, as a result of
repayment of bank loans incurred for the Acquisition.
LIQUIDITY AND CAPITAL RESOURCES
At June 29, 1997, cash and cash equivalents were $4,073,000 representing an
increase of $783,000 from September 30, 1996.
In the first nine months of fiscal 1997, the Company generated $1,615,000 of
cash from operating activities, primarily due to the Company's net income,
depreciation and amortization and non-cash provision for loss on discontinued
operations offset by increases in inventories and accounts receivable and
declines in accounts payable and accrued expenses. This compared to a use of
$1,000 in the same period in fiscal 1996, primarily as a result of an increase
in accounts receivable and decrease in accounts payable and accrued expenses
which offset net income, depreciation and amortization, and a reduction in
inventories. The Company invested $795,000 of cash in capital equipment
expenditures in the first nine months of fiscal 1997. The Company used $37,000
for financing activities in the first nine months of fiscal 1997 as a result of
the regular repayments of its loans and lease facilities offset by the proceeds
from borrowings on its bank facility.
In connection with the Acquisition in October 1995, the Company entered
into, and in October 1996 amended and restated, a Loan and Security Agreement
(the "Agreement") with a bank. Under the terms of the Agreement, the Company is
allowed to borrow (i) up to $3,500,000 in the form of a term loan (ii) up to
$6,000,000 under a revolving credit facility (including up to $5,000,000 for
letters of credit) (the "Revolver") and (iii) up to $1,500,000 in the form of an
equipment loan. At June 29, 1997, $2,990,000 was outstanding under the term loan
and letters of credit in the aggregate amount of $100,000 were outstanding under
the Revolver and $262,000 was outstanding under the equipment loan.
9
<PAGE> 10
Borrowings under the Revolver are limited to a borrowing base which is
calculated on a formula which includes domestic and foreign accounts receivable
and certain inventories, less amounts outstanding under the term loan and
letters of credit. Under the terms of the Agreement, as amended, availability
under the Revolver at June 29, 1997 was limited to $3,473,000. The Company has
received a waiver of default as of June 29, 1997, of a covenant under its Loan
and Security Agreement which requires the Company to maintain specified net
income levels.
The Company anticipates that the combination of its current cash balance,
accounts receivable balance, Revolver, equipment loan facility and its cash flow
from operations will be sufficient to meet the Company's liquidity requirements
for the next 12 months.
CERTAIN FACTORS AFFECTING FUTURE OPERATING RESULTS
This Form 10-QSB contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The Company's actual results could differ materially from
those set forth in the forward-looking statements. Certain factors that might
cause such a difference include the following: the cyclicality of product supply
and demand and pricing in the Company's targeted markets, particularly for its
memory products; the Company's ability to divest its diamond operations for
proceeds sufficient to cover its carrying value, net of reserve; the Company's
ability to develop new products; the rapidity of technological change and highly
competitive nature of the semiconductor packaging industry; competition from
larger companies in the commercial module market; the rapidity of the display
transition from cathode ray tubes ("CRT") to active matrix liquid crystal
displays ("AMLCD"); dependence on contracts with defense related companies for
its memory and display products; the movement toward the purchase of COTS
products rather than those manufactured as compliant to specified military
standards; regulatory, political, economic and currency risks associated with
international sales which accounted for approximately 30% of net sales in
fiscal 1996; risks related to the financial condition and success of the
Company's customers, the Company's customers' products and the general economy;
the likelihood that steep declines in sales, pricing and gross margins of
commercial memory products will occur toward the end of a product's life cycle;
absence of firm contractual relationships with certain key suppliers of
significant raw materials for its memory and display products; the Company's
dependence on key personnel and ability to attract and retain qualified
management, manufacturing, quality assurance, engineering, marketing, sales and
support personnel; and trends in outsourcing.
10
<PAGE> 11
PART II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS:
11 Statement re: computation of per share earnings
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K:
No report on Form 8-K was filed in the three month period ended
June 29, 1997.
11
<PAGE> 12
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.
Electronic Designs, Inc. (Registrant)
--------------------------------------------
Dated: August ,1997
--------------------------------------------
Frank D. Edwards, Senior Vice President
and Chief Financial Officer (Principal
Financial and Accounting Officer and Duly
Authorized Officer)
12
<PAGE> 13
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT TITLE PAGE
- ------- ------------- ----
11 Statement re: computation of per share earnings 14
27 Financial Data Schedule 15
13
<PAGE> 1
EXHIBIT 11 Statement re: computation of per share earnings
<TABLE>
NET INCOME PER SHARE
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
--------------------------- ---------------------------
JUNE 29, JUNE 30, JUNE 29, JUNE 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Income from continuing operations $1,175,000 $1,396,000 $4,023,000 $3,078,000
Adjustments thereto(1) 165,000 214,000 492,000 705,000
---------- ---------- ---------- ----------
Adjusted income from continuing operations $1,340,000 $1,610,000 $4,515,000 $3,783,000
========== ========== ========== ==========
Net income $ 21,000 $1,278,000 $2,359,000 $1,514,000
Adjustments thereto(1) 165,000 214,000 492,000 705,000
---------- ---------- ---------- ----------
Adjusted net income $ 186,000 $1,492,000 $2,851,000 $2,219,000
========== ========== ========== ==========
Weighted average shares outstanding 7,106,000 5,660,000 6,937,000 5,315,000
Adjustments thereto(2) 2,629,000 4,216,000 2,857,000 2,914,000
---------- ---------- ---------- ----------
Shares used in computation 9,735,000 9,876,000 9,794,000 8,229,000
========== ========== ========== ==========
Income from continuing operations per share(3) $ 0.14 $ 0.16 $ 0.46 $ 0.46
========== ========== ========== ==========
Net income per share(3) $ 0.02 $ 0.15 $ 0.29 $ 0.27
========== ========== ========== ==========
</TABLE>
(1) In accordance with the modified treasury stock method, the proceeds
from the exercise of stock options and warrants are first used to buy
back up to 20% of the Company's common stock at the average price for
the period. Any remaining proceeds are used to retire outstanding debt,
which adjusts income for interest assumed to be saved (net of income
tax effect), and, to the extent there are proceeds remaining after the
assumed debt retirement, used to invest in commercial paper, which
further adjusts income for interest assumed to be earned (net of income
tax effect).
(2) Adjusts the weighted average number of shares outstanding for (i) all
stock options and warrants using the modified treasury stock method,
and (ii) the conversion of preferred stock using the if-converted
method.
(3) Primary and fully-diluted earnings per share are the same.
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
BALANCE SHEET AND STATEMENT OF OPERATIONS FOR THE PERIOD ENDING JUNE 29,
1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB
QUARTERLY REPORT FILED PURSUANT TO SECURITIES EXCHANGE ACT OF 1934 FOR THE
PERIOD ENDED JUNE 29, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> JUN-29-1997
<CASH> 4,073,000
<SECURITIES> 0
<RECEIVABLES> 7,817,000
<ALLOWANCES> 0
<INVENTORY> 5,916,000
<CURRENT-ASSETS> 19,563,000
<PP&E> 2,066,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 23,161,000
<CURRENT-LIABILITIES> 2,069,000
<BONDS> 2,539,000
0
0
<COMMON> 71,000
<OTHER-SE> 11,455,000
<TOTAL-LIABILITY-AND-EQUITY> 11,526,000
<SALES> 31,011,000
<TOTAL-REVENUES> 31,011,000
<CGS> 18,968,000
<TOTAL-COSTS> 18,968,000
<OTHER-EXPENSES> 7,498,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 236,000
<INCOME-PRETAX> 4,472,000
<INCOME-TAX> 449,000
<INCOME-CONTINUING> 4,023,000
<DISCONTINUED> (1,664,000)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,359,000
<EPS-PRIMARY> 0.29
<EPS-DILUTED> 0.29
</TABLE>
