UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 29, 1996
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 1-4184
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MATEC Corporation
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(Exact name of registrant as specified in its charter)
Delaware 06-0737363
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(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification Number)
75 South St., Hopkinton, Massachusetts 01748
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(Address of principal executive offices) (Zip Code)
(508) 435-9039
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(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
--- ---
As of November 8, 1996, the number of shares outstanding of Registrant's
Common Stock, par value $.05 was 2,774,728.
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<PAGE>
MATEC Corporation
Index
Page
----
PART I. FINANCIAL INFORMATION
Consolidated Condensed Balance Sheets -
September 29, 1996 and December 31, 1995 ................ 3
Consolidated Statements of Operations - Three Months and
Nine Months Ended September 29, 1996 and October 1, 1995 4
Consolidated Condensed Statements of Cash Flows -
Nine Months Ended September 29, 1996 and October 1, 1995 5
Notes to Consolidated Condensed Financial Statements ..... 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations ..................... 7-10
PART II. OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K ................ 11
Signatures ..................................................... 12
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<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
MATEC Corporation and Subsidiaries
Consolidated Condensed Balance Sheets
(In thousands, except share data) (Unaudited)
9/29/96 12/31/95
-------- --------
ASSETS
Current assets:
Cash and cash equivalents ............................ $ 1,072 $ 830
Receivables, net ..................................... 5,290 5,673
Inventories .......................................... 6,386 7,719
Deferred income taxes and other current assets ....... 1,052 1,032
------- -------
Total current assets ............................... 13,800 15,254
------- -------
Property, plant and equipment, at cost ................. 19,054 18,333
Less accumulated depreciation ........................ 12,637 11,638
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6,417 6,695
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Marketable equity securities ........................... 2,102 2,135
Other assets ........................................... 134 141
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$22,453 $24,225
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable ........................................ $ 1,440 $ 2,435
Current portion of long-term debt .................... 200 228
Accounts payable ..................................... 1,913 2,637
Accrued liabilities .................................. 1,188 1,379
Income taxes ......................................... 236 350
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Total current liabilities .......................... 4,977 7,029
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Deferred income taxes .................................. 1,446 1,436
Long-term debt ......................................... 1,983 2,180
Stockholders' equity:
Preferred stock, $1.00 par value-
Authorized 1,000,000 shares; issued none ............ - -
Common stock, $.05 par value-
Authorized 10,000,000 shares; Issued 3,804,195 shares 190 190
Capital surplus ...................................... 6,442 6,397
Retained earnings .................................... 11,472 11,031
Net unrealized gain on marketable equity securities .. 1,162 1,181
Treasury stock at cost, 1,029,467 and 1,029,315 shares (5,219) (5,219)
------- -------
Total stockholders' equity ...................... 14,047 13,580
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$22,453 $24,225
======= =======
See notes to consolidated condensed financial statements.
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MATEC Corporation and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
9/29/96 10/1/95 9/29/96 10/1/95
------- ------- -------- --------
Net sales ..................... $ 6,625 $ 7,118 $ 23,391 $ 20,463
Cost of sales ................. 5,209 5,160 17,444 14,559
------- ------- -------- --------
Gross profit ................ 1,416 1,958 5,947 5,904
Operating expenses:
Selling and administrative .. 1,139 1,645 4,505 5,102
Research and development .... 130 158 440 388
------- ------- -------- --------
1,269 1,803 4,945 5,490
Operating profit .............. 147 155 1,002 414
Other income (expense):
Interest expense ............. (93) (85) (324) (258)
Other, net ................... 22 6 33 (25)
------- ------- -------- --------
(71) (79) (291) (283)
Earnings before income taxes .. 76 76 711 131
Income tax expense ............ 28 27 270 49
------- ------- -------- --------
Net earnings .................. $ 48 $ 49 $ 441 82
======= ======= ======== ========
Earnings per share ............ $ .02 $ .02 $ .16 $ .03
===== ===== ===== =====
Average shares outstanding .... 2,774 2,765 2,768 2,765
===== ===== ===== =====
Cash dividends per share ...... $ - $ - $ - $ -
===== ===== ===== =====
See notes to consolidated condensed financial statements.
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<PAGE>
MATEC Corporation and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended
9/29/96 10/1/95
-------- --------
Cash flows from operating activities:
Net earnings ..................................... $ 441 $ 82
Adjustments to reconcile net earnings to net cash
provided (used) by operating activities:
Non-cash items ................................. 981 941
Changes in operating assets and liabilities .... 730 (1,999)
------- -------
Net cash provided (used) by operating activities 2,152 (976)
- ----------------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures, net ........................ (722) (1,077)
Collection of amount due from sale of
discontinued operations ......................... - 250
Other, net........................................ (10) (18)
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Net cash (used) by investing activities (732) (845)
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Cash flows from financing activities:
Net repayments under lines of credit ............. (995) -
Proceeds from issuance of long-term debt and
warrants ........................................ - 2,000
Payments on long-term debt ....................... (228) (221)
Stock options exercised .......................... 45 -
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Net cash provided (used) by financing activities (1,178) 1,779
- ----------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 242 (42)
Cash and cash equivalents:
Beginning of period .............................. 830 544
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End of period .................................... $ 1,072 $ 502
======= =======
See notes to consolidated condensed financial statements.
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<PAGE>
MATEC Corporation and Subsidiaries
Notes to Consolidated Condensed Financial Statements
1. Financial Presentation:
The interim financial statements are unaudited but, in the opinion of
management, reflect all adjustments necessary for fair presentation of
results for such periods. The results of operations for any interim
period are not necessarily indicative of results for the full year.
The accounting policies followed by the Company are set forth
in Note 1 to the Company's financial statements in the 1995 MATEC
Corporation and Subsidiaries Annual Report which is incorporated by
reference in Form 10-K for the year ended December 31, 1995.
2. Revenue Recognition:
Revenue is generally recognized when products are shipped. Revenue
under long-term contracts is recorded primarily on the percentage of
completion method. Under this approach, sales and gross margin are
recognized as the work is performed, based on the ratio that incurred
costs bear to estimated total completion costs. Provisions for
anticipated losses are made in the period in which they first become
determinable.
3. Receivables:
Receivables consist of the following (in thousands):
9/29/96 12/31/95
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Accounts receivable, less allowance for
doubtful accounts of $219 and $194 ..... $ 4,717 $ 5,673
Costs and estimated earnings in excess of
billings on uncompleted contracts ...... 573 -
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$ 5,290 $ 5,673
======= ========
4. Inventories:
Inventories consist of the following (in thousands):
9/29/96 12/31/95
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Raw materials ....................... $ 2,956 $ 3,415
Work in process ..................... 1,128 925
Finished goods ...................... 2,302 3,379
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$ 6,386 $ 7,719
======= =======
Inventories of $2,559,000 in 1996 and $2,897,000 in 1995 are
determined by the LIFO method.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
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Cash and cash equivalents increased $242,000 during the nine months
ended September 29, 1996. The Company's operations generated $2,152,000
in cash during this period, while investing and financing activities used
cash of $732,000 and $1,178,000, respectively.
The primary sources of cash from operations were net earnings of
$441,000, the net noncash effect of depreciation of $981,000 and $730,000
from the favorable change in operating assets and liabilities. Decreases
in inventory and receivables, offset in part by a reduction in accounts
payable, were the primary reasons for the decrease in net operating
assets. The inventory decrease of $1,333,000 from the December 31, 1995
level is mainly due to the Company's effort to reduce certain inventory
levels and the shorter lead times for certain products. Receivables, net
decreased $383,000 mainly as a result of the lower sales level compared
to the fourth quarter of 1995 and an increase in the allowance for
doubtful accounts. The Company reduced its accounts payable balance by
$723,000 during the nine month period.
The Company's principal investing activity during the nine months
ended September 29, 1996 was the purchase of $722,000 of capital
equipment. Machinery and equipment additions in the steel cable and
electronics segments accounted for the majority of these expenditures.
These additions are geared toward adding new and upgrading existing
production capabilities and processes within both segments.
During the nine months ended September 29, 1996, the Company reduced
its lines of credit borrowings by $995,000 and its long-term debt by
$228,000. At September 29, 1996, the Company's unused portion of its
lines of credit arrangements was $1,410,000.
Management believes that based on its current debt arrangements,
its current working capital, and the expected cash flows from operations
the Company's resources are sufficient to meet its financial needs in
1996 including estimated capital expenditures of $300,000.
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<PAGE>
Results of Operations -- Overview --
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Net sales for the quarter ended September 29, 1996 decreased $493,000
(7%) from 1995, as lower sales in the electronics and instruments
segments were partially offset by higher sales in the steel cable
segment. During the nine months ended September 29, 1996, net sales
increased $2,928,000 (14%), as higher sales in the steel cable and
electronics segments, were partially offset by decreased sales in the
instruments segment.
During both periods the overall gross profit percentage decreased
from 1995 levels mainly as a result of lower margins in the both the
electronics and instruments segments.
Total selling and administrative expenses for the quarter and nine
months ended September 29, 1996 decreased $506,000 (31%) and $597,000
(12%), respectively, from the 1995 comparable periods mainly as a result
of lower selling expenses. During the quarter ended, all segments
reported reductions in selling expenses. During the nine months ended,
lower expenses in the steel cable and instruments segments, partially
offset by higher expenses in the electronics segment, accounted for the
net decrease in selling expense. During the quarter and nine months
ended September 29, 1996, general and administrative expenses decreased
$140,000 and $70,000, respectively. The decreased expenses were mainly
due to the lower Company-wide profit sharing and incentive bonus expense,
and lower expenses in the steel cable segment.
The changes in research and development expenses were due to the
expenses in the instruments segment.
During the quarter and nine months ended September 29, 1996, interest
expense increased $8,000 and $66,000, respectively, over the 1995 periods
due to the higher levels of short and long-term debt.
Other income (expense), net includes the following (in thousands):
Quarter Ended Nine Months Ended
9/29/96 10/1/95 9/29/96 10/1/95
------- ------- ------- -------
Dividend income ........... $ 13 $ - $ 39 $ -
Real estate operations .... (9) 5 (32) (43)
Interest income ........... 17 0 21 13
Other, net ................ 1 1 5 5
------- ------- ------- -------
$ 22 $ 6 $ 33 $ (25)
======= ======= ======= =======
The changes in the results of the real estate operations are mainly
due to the amounts of rental income earned. During the quarter ended
September 29, 1996, interest income is mainly due to interest received on
excise tax refunds.
The estimated effective income tax rate for 1996 is 38% compared to
37% in 1995. The difference in rates is mainly due to the effective
state income tax rate.
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<PAGE>
The Company reported a slight decrease in its operating profit
during the quarter ended September 29, 1996 versus 1995 based on the
lower sales levels and the decreased gross margin, partially offset by
lower operating expenses. As a result of a decrease in the net
nonoperating expenses from the 1995 period, the Company's pre-tax profits
remained flat with 1995 during the quarter ended September 29, 1996.
During the nine months ended September 29, 1996, operating income
amounted to $1,002,000 compared to $414,000 in 1995. The increase over
1995 was mainly due to the increased gross margin and the lower operating
expenses. Nonoperating expenses remained level during both periods. As
a result, net earnings amounted to $441,000 for the nine months ended
September 29, 1996 versus $82,000 in the comparable 1995 period.
Based on the recent weakness in the telecommunications market and the
softness in order input, the Company believes that sales and operating
performance in the electronics segment in the next couple of quarters may
be slightly better than the past quarter, but lower than that experienced
in the past several quarters preceding June 30, 1996.
Business Segment Results
- ------------------------
The following table presents by segment the amounts and percentages
of sales increase (decrease) from the corresponding prior year periods.
Quarter Ended Nine Months Ended
9/29/96 9/29/96
--------------- ----------------
Segment (000's) % (000's) %
- --------------------- ------- --- ------- ---
Electronics ......... $(1,203) (37) $ 1,024 12
Steel Cable ......... 775 33 2,245 32
Instruments ......... (65) (4) (341) (7)
------- -------
Total $ (493) (7) $ 2,928 14
======= =======
The sales fluctuations in the electronics segment were primarily due
to the market conditions and inventory levels of both the OEM and
contract manufacturers in the telecommunications market. During the end
of the second quarter this year, the Company began to see softness in its
order input from customers in the telecommunications industry, one of the
largest current markets for the Company's products. On a year-to-date
basis, sales are up 12% over 1995 mainly as a result of the strong first
quarter sales to customers in the telecommunications market. During the
quarter ended, the overall gross profit percentage decreased about 60%
from 1995 mainly as a result of the effect of allocating the fixed
overhead expenses over the lower sales level and changes in sales mix.
During the nine months ended, the 1996 overall gross profit percentage
declined 11% from 1995 mainly due to sales mix changes with higher sales
levels from the resale of imported products at lower margins. During the
quarter ended, total operating expenses decreased (16%) from 1995 mainly
as a result of lower sales commission and bad debt expense.
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<PAGE>
During the nine months ended September 29, 1996, total operating
expenses increased 16% over 1995. Increased advertising, bad debt and
personnel expenses were the major items causing the higher operating
expenses. As a result of the above, the electronics segment reported a
significant decrease in operating performance compared to the comparable
quarter in 1995. For the nine months ended September 29, 1996, operating
profit of this segment decreased 12% from last year.
The higher sales levels in the steel cable segment were mainly due to
increased sales to the automotive and marine markets. During the quarter
and nine months ended September 29, 1996, the overall gross profit
percentage increased 35% and 23%, respectively, over 1995 mainly as a
result of the favorable effects of spreading the fixed overhead over the
increased sales. Total operating expenses decreased 16% and 22% from
1995 during the quarter and nine months ended 1996 periods, respectively,
mainly as a result of a decrease in legal fees and personnel expenses.
As a result of the increased sales and gross margin coupled with the
decrease in operating expenses, the steel cable segment reported a
$381,000 and $1,047,000 increase in operating profit over 1995 during the
quarter and nine months ended September 29, 1996, respectively.
The lower sales in the instruments segment during the quarter ended
September 29, 1996 were mainly due to lower sales to the NDT/NDE market,
partially offset by slightly higher sales to both the colloidal and
medical research markets. For the nine months ended, the sales decrease
was attributable to lower sales to both the colloidal and medical
research markets as sales to the NDT/NDE markets remained flat with
1995. During both the quarter and nine months ended September 29, 1996,
the overall gross profit percentage decreased 25% from the 1995 periods.
Changes in the sales mix, increased personnel costs and the effects of
spreading the fixed overhead over the lower sales levels were the main
causes of the margin decrease. During the quarter ended, total operating
expenses decreased $245,000 (40%) from 1995 mainly as a result of lower
selling expenses. For the nine months ended, total operating expenses
decreased $472,000 (24%) from 1995 as lower selling expenses were
partially offset by higher research and development costs. The selling
expense decreases were due to lower personnel, travel and advertising
expenses. Increased personnel and operating supplies costs were the
primary reasons for the higher research and development expense. During
the quarter ended September 29, 1996, the instruments segment reported a
$59,000 (60%) increase in operating profit over 1995 as the reduction in
operating expenses more than offset the decline in sales and lower gross
margin. For the nine months ended September 29, 1996, operating profit
decreased $223,000 from 1995, due to the combination of the lower sales
and gross profit percentage, offset in part by lower operating expenses.
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<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
3. (b) Amendment to Article III, Section 1 of the By-Laws
adopted October 29, 1996. Filed herein.
3. (c) By-Laws. Filed herein.
11. Statement re Computation of Per Share Earnings.
Filed herein.
27. Financial Data Schedule. Filed for electronic
purposes only.
(b) Reports on Form 8-K - None
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<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.
MATEC Corporation
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Date: November 8, 1996 By /s/ Robert B. Gill
---------------------------------
Robert B. Gill,
President and Chief Executive
Officer
Date: November 8, 1996 By /s/ Michael J. Kroll
---------------------------------
Michael J. Kroll,
Vice President and Treasurer
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<PAGE>
Exhibit 3.(b)
ARTICLE III
DIRECTORS
Section 1. Number, Qualification and Term. The property and
business of the Corporation shall be managed by its Board of
Directors consisting of not less than Five (5) nor more than Thirteen
(13) persons. The number of directors constituting the entire Board
shall be Eight (8); provided, however, that from time to time, such
number may be decreased to not less than Five (5) or increased to not
more than Thirteen (13) persons by amendment of this section of the
By-laws by a majority of the entire Board of Directors. Directors
need not be stockholders. They shall be elected at the Annual
Meeting of Stockholders and each director shall be elected to serve
until his successor shall be elected and shall qualify.
<PAGE>
Exhibit 3.(c)
MATEC Corporation
By-Laws
ARTICLE I
OFFICES
Section 1. Offices. The Corporation shall maintain a registered
office in Delaware. The Corporation may maintain such other offices
and keep its books, documents and records at such other places both
within and without the State of Delaware as the Board of Directors
may from time to time determine or the business of the Corporation
may require.
ARTICLE II
STOCKHOLDERS
Section 1. Place of Meetings. Meetings of stockholders for all
purposes shall be held at such place within or without the State of
Delaware as shall be determined by the Board of Directors.
Section 2. Annual Meetings. Annual meetings of stockholders shall
be held on the last Wednesday in April, in each year, if not a legal
holiday, and if a legal holiday, then on the next secular day
following, or on such other day as shall be fixed by the Board of
Directors and stated in the notice of the meeting, when stockholders
shall elect by a plurality vote a Board of Directors, and transact
such other business as may properly be brought before the meeting.
The annual meeting shall be held at a time determined by the Board of
Directors and stated in the notice of the meeting.
Section 3. Notice of Annual Meeting. Written or printed notice of
the annual meeting stating the place, date and hour of the meeting
shall be delivered not less than ten nor more than sixty days before
the date of the meeting, by mail, by or at the direction of the chief
executive officer, the Secretary, or the officer or persons calling
the meeting, to each stockholder of record entitled to vote at such
meeting.
Section 4. Special Meetings. Special meetings of the stockholders,
for any purpose or purposes, unless otherwise prescribed by statute
or by the Certificate of Incorporation, may be called by the chief
executive officer or the Board of Directors. The business transacted
at any special meeting of stockholders shall be limited to the
purposes stated in the notice of the meeting.
<PAGE>
Section 5. Notice of Special Meetings. Written or printed notice of
a special meeting stating the place, date and hour of the meeting and
the purpose or purposes for which the meeting is called, shall be
delivered not less than ten nor more than sixty days before the date
of the meeting, by mail, by or at the direction of the chief
executive officer, the Secretary, or the officer or persons calling
the meeting, to each stockholder of record entitled to vote at such
meeting. The notice shall also indicate that it is being issued by,
or at the direction of, the person calling the meeting.
Section 6. Quorum. The holders of a majority of the shares issued
and outstanding and entitled to vote, represented in person or by
proxy, shall constitute a quorum at all meetings of the stockholders
for the transaction of business except as otherwise provided by
statute or by the Certificate of Incorporation. If, however, such
quorum shall not be present or represented at any meeting of the
stockholders, the stockholders present in person or represented by
proxy shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum
shall be present or represented. At such adjourned meeting at which
a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as
originally noticed.
Section 7. Voting. At any meeting of stockholders each outstanding
share having voting power shall be entitled to one vote on each
matter submitted to a vote. A stockholder may vote either in person
or by proxy executed in writing by the stockholder or by his duly
authorized attorney-in-fact. All elections shall be determined by
plurality vote, and except as otherwise provided by statute or in the
Certificate of Incorporation, all other matters shall be determined
by vote of a majority of the shares present or represented at such
meeting and voting on such matters.
Section 8. Inspectors of Election. The Board of Directors in
advance of any meeting of stockholders may appoint one or more
inspectors to act at the meeting or any adjournment thereof. If
inspectors are not so appointed, the person presiding at a meeting of
stockholders may, and, on the request of any stockholder entitled to
vote thereat, shall appoint one or more inspectors. In case any
person appointed as inspector fails to appear or act, the vacancy may
be filled by the Board of Directors in advance of the meeting or at
the meeting by the person presiding thereat. Each inspector, before
entering upon the discharge of his duties shall take and sign an oath
faithfully to execute the duties of inspector at such meeting with
strict impartiality and according to the best of his ability.
Section 9. List of Stockholders. A list of stockholders as of the
record date, certified by the officer of the Corporation responsible
for its preparation or by the transfer agent, shall be produced at
any meeting of stockholders upon the request thereat or prior thereto
of any stockholder. If the right to vote at any meeting is
challenged, the inspectors of election, or person presiding thereat
shall require such list of stockholders to be produced as evidence of
the right of the persons challenged to vote at such meeting, and all
persons who appear from such list to be stockholders entitled to vote
thereat may vote at such meeting.
<PAGE>
ARTICLE III
DIRECTORS
Section 1. Number, Qualification and Term. The property and
business of the Corporation shall be managed by its Board of
Directors consisting of not less than Five (5) nor more than Thirteen
(13) persons. The number of directors constituting the entire Board
shall be Eight (8); provided, however, that from time to time, such
number may be decreased to not less than Five (5) or increased to not
more than Thirteen (13) persons by amendment of this section of the
By-laws by a majority of the entire Board of Directors. Directors
need not be stockholders. They shall be elected at the Annual
Meeting of Stockholders and each director shall be elected to serve
until his successor shall be elected and shall qualify.
Section 2. Removal. Any or all of the directors may be removed for
cause at any time by the vote of the stockholders.
Section 3. Vacancies. Newly created directorships resulting from an
increase in the Board of Directors and all vacancies occurring in the
Board of Directors, except vacancies caused by removal without cause,
may be filled by a majority vote of the directors then in office,
though less than a quorum exists. A director elected to fill a
vacancy shall be elected for the unexpired portion of the term of his
predecessor in office. A director elected to fill a newly created
directorship shall serve until the next succeeding annual meeting of
stockholders and until his successor shall have been elected and
qualified.
Section 4. Additional Powers. In addition to the powers and
authorities by these By-Laws expressly conferred upon it, the Board
of Directors may exercise all such powers of the Corporation and do
all such lawful acts and things as are not by statute or by the
Certificate of Incorporation or by these By-Laws directed or required
to be exercised or done by the stockholders.
ARTICLE IV
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. Place. Meetings of the Board of Directors, regular or
special, may be held either within or without the State of Delaware.
Section 2. First Meeting. The first meeting of each newly elected
Board of Directors shall be held immediately after the annual meeting
of stockholders at the same place as such meeting is held and no
notice of such meeting to the newly elected directors shall be
necessary in order legally to constitute the meeting provided a
quorum shall be present, or it may convene at such place and time as
shall be specified in a notice given as hereinafter provided for
special meetings of the Board of Directors, or as shall be specified
in a duly executed waiver of notice thereof.
Section 3. Regular Meetings. Regular meetings of the Board of
Directors may be held upon such notice, or without notice, and at
such time and at such place as shall from time to time be determined
by the Board.
<PAGE>
Section 4. Special Meetings. Special meetings of the Board of
Directors may be called by the chief executive officer on written
notice to each director, deposited in the United States mail no later
than the third calendar day preceding the meeting date or delivered
by hand or to the telegraph company no later than the first calendar
day preceding the meeting date; special meetings shall be called by
the chief executive officer or Secretary in like manner and on like
notice on the written request of two directors.
Section 5. Quorum. A majority of the entire Board of Directors
shall constitute a quorum for the transaction of business unless a
greater or lesser number is required by law or by the Certificate of
Incorporation. The vote of a majority of the directors present at
any meeting at which a quorum is present shall be the act of the
Board of Directors, unless the vote of a greater number is required
by law or by the Certificate of Incorporation. If a quorum shall not
be present at any meeting of directors, the directors present may
adjourn the meeting from time to time. Notice of any such
adjournment shall be given to any director who was not present at the
time of such adjournment and unless announced at the meeting to the
other directors.
Section 6. Consent in Lieu of Meeting. Any action required or
permitted to be taken by the Board of Directors or any committee
thereof may be taken without a meeting if all members of the Board or
the committee consent in writing to the adoption of a resolution
authorizing the action. The resolution and the written consents
thereto by the members of the Board or committee shall be filed with
the minutes of the proceedings of the Board or committee.
Section 7. Telephone Participation at Meetings. Any one or more of
the Board of Directors or any committee thereof may participate in a
meeting of the Board of Directors or of such committee by means of
conference telephone or similar communications equipment allowing all
persons participating in the meeting to hear each other at the same
time. Participation in a meeting by such means shall constitute
presence in person at a meeting.
ARTICLE V
COMMITTEES
Section 1. Committees. The Board of Directors, by resolution
adopted by a majority of the entire board, may designate, from among
its members, an executive committee and other committees consisting
of three or more directors, which, to the extent provided in the
resolution, shall have all the authority of the Board, except as
otherwise required by law. Vacancies in the membership of such
committees shall be filled by the Board of Directors at a regular or
special meeting. Such committees shall keep regular minutes of its
proceedings and report the same to the Board when required.
Subject to the provisions of these By-Laws, the executive
committee and each other committee shall fix its own rules of
procedure and shall meet as provided by such rules or by resolution
of the Board of Directors and it shall also meet at the call of the
Chairman of the Board or President of the Corporation or any two
members of such committee. A majority of the executive committee and
of each other committee shall constitute a quorum for the transaction
of business and the vote of a majority of the members of such
committee present at any meeting at which there is a quorum shall be
the act of such committee.
<PAGE>
ARTICLE VI
NOTICES
Section 1. Form; Delivery. Whenever, under the provisions of the
statutes or of the Certificate of Incorporation or of these By-Laws,
notice is required to be given to any director or stockholder, such
notice may be given in writing, by mail, addressed to such director or
stockholder, at his address as it appears on the records of the
Corporation, with postage thereon prepaid, and such notice shall be
deemed to be given at the time when the same shall be deposited in the
United States mail. Notice to directors may also be given by
hand delivery, effective upon such delivery, or by telegram which notice
shall be deemed to have been given when delivered to the telegraph
company. Neither the business to be transacted at, nor the purpose of,
any regular or special meeting of the Board of Directors need be
specified in the notice or waiver of notice of such meeting.
Section 2. Waiver of Notice. Whenever any notice is required to be
given under the provisions of any statute or under the provisions of the
Certificate of Incorporation or these By-Laws, a waiver thereof in
writing signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed equivalent to
the giving of such notice. In addition, any stockholder attending a
meeting of stockholders in person or by proxy without protesting prior
to the conclusion of the meeting, the lack of notice thereof to him, and
any director attending a meeting of the Board of Directors without
protesting prior to the meeting or at its commencement such lack of
notice shall be conclusively deemed to have waived notice of such
meeting.
ARTICLE VII
OFFICERS AND AGENTS
Section 1. Officers. The officers of the Corporation shall be chosen
by the Board of Directors and shall be a Chairman of the Board, a
President, a Vice-President, a Secretary and a Treasurer. The Board of
Directors may also choose additional Vice-Presidents, and one or more
Assistant Secretaries and Assistant Treasurers.
Section 2. Election. The Board of Directors at its first meeting after
each annual meeting of stockholders shall choose a Chairman of the
Board, a President, one or more Vice-Presidents, a Secretary and a
Treasurer. Any two or more offices may be held by the same person.
Section 3. Additional Officers and Agents. The Board of Directors may
appoint such other officers and agents as it shall deem necessary who
shall hold their offices for such terms and shall exercise such powers
and perform such duties as shall be determined from time to time by the
Board of Directors.
Section 4. Compensation. The salaries of all officers of the
Corporation shall be fixed by the Board of Directors and the
compensation of employees and agents shall be so fixed or shall be fixed
by officers thereunto duly authorized.
<PAGE>
Section 5. Term of Office; Removal. The officers of the Corporation
shall hold office until their successors are chosen and qualify. Any
officer or agent elected or appointed by the Board of Directors may be
removed at any time with or without cause by the Board. Any vacancy
occurring in any office of the Corporation may be filled by the Board of
Directors.
Section 6. Powers and Duties of the Chairman of the Board. The
Chairman of the Board of Directors shall preside at all meetings of the
Board and all meetings of the stockholders at which he shall be present
and shall have such other powers and duties as may from time to time be
assigned to him by the Board of Directors.
Section 7. Powers and Duties of the President. The President shall be
the Chief Executive Officer of the Corporation, and shall have the
general management and superintendence of the affairs of the
Corporation, subject, however, to the control of the Board of Directors;
and in all cases where, and to the extent that, the duties of the other
officers of the Corporation are not specifically prescribed by By-Laws
or rules or regulations of the Board of Directors, the President may
prescribe such duties. He shall have general and active supervision
over the property, business and affairs of the Corporation and may sign,
execute, and deliver in the name of the Corporation deeds, mortgages,
bonds, contracts, powers of attorney, and other instruments, except in
cases where the signing and execution thereof shall be expressly
delegated by the Board of Directors or these By-Laws to some other
officer or agent of the Corporation or shall be required by law or
otherwise to be signed or executed, and may exercise any and all powers
and perform any and all duties relating to such supervision, or which
are imposed upon him by the By-Laws, or by the Board of Directors.
Subject to such limitations as the Board of Directors may from time to
time prescribe, the Chief Executive Officer shall have power to appoint
and to dismiss all such agents and employees of the Corporation who are
not officers thereof (including any appointed by the Board) as he may
deem proper, and to prescribe their duties, and subject to like
limitations, delegate to other officers of the Corporation any other of
the powers and duties conferred upon him by the By-Laws or by the Board
of Directors.
Section 8. Powers and Duties of the Vice-President. The Vice-President
shall perform the duties as may be prescribed by the Board of Directors
and subject to the chief executive officer.
Section 9. Powers and Duties of the Secretary. The Secretary shall
attend all sessions of the Board and all meetings of the stockholders
and record all votes and the minutes of all proceedings in a book to be
kept for that purpose, and shall perform like duties for any committee
of the Board when required. He shall cause to be given notice of all
meetings of stockholders and directors and shall perform such other
duties as pertain to his office. He shall keep in safe custody the seal
of the Corporation and when authorized by the Board of Directors, affix
it when required to any instrument.
<PAGE>
Section 10. Powers and Duties of the Treasurer. The Treasurer shall
have the custody of all the corporate funds and securities and shall
keep full and accurate accounts of receipts and disbursements in books
belonging to the Corporation and shall deposit all moneys and other
valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors. He
shall disburse the funds of the Corporation as may be ordered by the
Board, taking proper vouchers for such disbursements, and shall render
to the chief executive officer and directors at the regular meetings of
the Board, or whenever they may require it, an account of all his
transactions as treasurer and of the financial condition of the
Corporation.
Section 11. Powers and Duties of Other Officers. All other officers
shall have such duties and exercise such powers as generally pertain to
their respective offices and all officers shall have such other duties
and exercise such other powers as from time to time may be prescribed by
the chief executive officer or the Board of Directors.
ARTICLE VIII
SHARES
Section 1. Form; Signature. The shares of the Corporation shall be
represented by certificates signed by the President or a Vice-President
and the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer of the Corporation and may be sealed with the seal
of the Corporation or a facsimile thereof. The signatures of the
officers of the Corporation upon a certificate may be facsimiles if the
certificate is countersigned by a transfer agent or registered by a
registrar other than the Corporation itself or an employee of the
Corporation. In case any officer who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be
such officer before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer at the date
of issue.
Section 2. Lost Certificates. The Board of Directors may authorize the
officers or agents of the Corporation to issue a new certificate in
place of any certificate theretofore issued by the Corporation alleged
to have been lost or destroyed and as a condition precedent to the
issuance thereof, may prescribe such terms and conditions as it deems
expedient, and may require such indemnities as it deems adequate to
protect the Corporation from any claim that may be made against it with
respect to any such certificate alleged to have been lost or destroyed.
Section 3. Transfer of Shares. Upon surrender to the Corporation or
the transfer agent of the Corporation of a certificate representing
shares duly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer, a new certificate shall be issued
to the person entitled thereto, and the old certificate cancelled and
the transaction recorded upon the books of the Corporation.
<PAGE>
Section 4. Fixing Record Date. For the purpose of determining
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to or
dissent from any proposal without a meeting, or for the purpose of
determining stockholders entitled to receive payment of any dividend
or the allotment of any rights, or for the purpose of any other
action, the Board of Directors may fix, in advance, a date as the
record date for any such determination of stockholders. Such date
shall not be more than sixty nor less than ten days before the date
of any meeting nor more than sixty days prior to any other action.
When a determination of stockholders of record entitled to notice of
or to vote at any meeting of stockholders has been made as provided
in this section, such determination shall apply to any adjournment
thereof, unless the Board fixes a new record date for the adjourned
meeting.
Section 5. Registered Stockholders. The Corporation shall be
entitled to recognize the exclusive right of a person registered on
its books as the owner of shares to receive dividends, and to vote as
such owner, and to hold liable for calls and assessments a person
registered on its books as the owner of shares, and shall not be
bound to recognize any equitable or other claim to or interest in
such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise
provided by the laws of Delaware.
ARTICLE IX
GENERAL PROVISIONS
Section 1. Dividends. Subject to the provisions of law and of the
Certificate of Incorporation relating thereto, dividends may be
declared by the Board of Directors at any regular or special meeting,
pursuant to law. Dividends may be paid in cash, the Corporation's
bonds or its property, including the shares or bonds of other
corporations, subject to any provisions of law and of the Certificate
of Incorporation.
Section 2. Reserves. Before payment of any dividend, there may be
set aside out of any funds of the Corporation available for dividends
such sum or sums as the directors from time to time, in their
absolute discretion, think proper as a reserve fund to meet
contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for such other
purposes as the directors shall think conducive to the interest of
the Corporation, and the directors may modify or abolish any such
reserve in the manner in which it was created.
Section 3. Checks. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time
designate.
Section 4. Fiscal Year. The fiscal year of the Corporation shall
begin on January 1st and end on December 31st of each year, unless
otherwise provided by the Board of Directors.
<PAGE>
Section 5. Seal. The corporate seal shall have inscribed thereon
the name of the Corporation, the year of its organization and the
words "CORPORATE SEAL, DELAWARE". This seal may be used by causing
it or a facsimile thereof to be impressed or affixed or in any manner
reproduced.
ARTICLE X
AMENDMENTS
Section 1. Amendments. These By-Laws may be amended or added to or
any part thereof repealed by the affirmative vote of a majority of
the votes cast by the holders of shares entitled to vote thereon at
any meeting of stockholders, the notice of which meeting includes
notice of the proposed amendment, addition or repeal; or the
affirmative vote of a majority of the directors present at the time
of the vote, if a quorum is present at such time, at any meeting of
the Board of Directors, the notice of which meeting includes notice
of the proposed amendment, addition or repeal, unless all members of
the Board of Directors are present at such meeting or unless such
notice be waived, in a writing, setting forth the proposed amendment,
addition or repeal and signed by the director entitled to such
notice.
<PAGE>
MATEC Corporation Exhibit 11
Calculation of Earnings Per Share
(amounts in thousands, except per share data)
Three Months Ended
9/29/96 10/1/95
------- -------
Net earnings ...................................... $ 48 $ 49
======= ======
Calculation of primary earnings per share:
- ------------------------------------------
Weighted average common shares outstanding ....... 2,774 2,765
Increase from assumed exercise of stock options
and investment of proceeds in treasury stock,
based upon average market prices ................ 60 29
------- ------
Average common stock and common equivalent
shares outstanding (B) .......................... 2,834 2,794
======= ======
Net earnings per common and common equivalent
share (A) ....................................... $ .02 $ .02
======= ======
Calculation of fully diluted earnings per share:
- ------------------------------------------------
Weighted average common shares outstanding ....... 2,774 2,765
Increase from assumed exercise of stock options
and investment of proceeds in treasury stock,
based upon the higher of average or quarter-end
market prices ................................... 60 41
------- ------
Average common stock and common equivalent
shares used to calculate fully diluted earnings
per share (B) ................................... 2,834 2,806
======= ======
Net earnings per common and common equivalent
share assuming full dilution (C) ................ $ .02 $ .02
======= ======
(A) Dilution from stock options is less than 3%, therefore primary
earnings per share is based on the weighted average number of shares
outstanding.
(B) The effect of the outstanding warrants is excluded from the 1996
calculation since the effect of the warrants using the if-converted
method would be antidilutive. The effect of the outstanding warrants
is excluded from 1995 since they do not meet either test of paragraph
37 of APB Opinion No. 15.
(C) Dilution is less than 3%, therefore the primary basis was used for
per share calculations.
-23-
<PAGE>
MATEC Corporation and Subsidiaries Exhibit 11
Calculation of Earnings Per Share
(amounts in thousands, except per share data)
Nine Months Ended
9/29/96 10/1/95
------ -------
Net earnings ...................................... $ 441 $ 82
====== ======
Calculation of primary earnings per share:
- ------------------------------------------
Weighted average common shares outstanding ....... 2,768 2,765
Increase from assumed exercise of stock options
and investment of proceeds in treasury stock,
based upon average market prices ................ 54 29
------ -------
Average common stock and common equivalent
shares outstanding (B) .......................... 2,822 2,794
====== =======
Net earnings per common and common equivalent
share (A) ....................................... $ .16 $ .03
====== =======
Calculation of fully diluted earnings per share:
- ------------------------------------------------
Weighted average common shares outstanding ....... 2,768 2,765
Increase from assumed exercise of stock options
and investment of proceeds in treasury stock,
based upon the higher of average or quarter-end
market prices ................................... 54 33
------ -------
Average common stock and common equivalent
shares used to calculate fully diluted earnings
per share (B) ................................... 2,822 2,798
====== =======
Net earnings per common and common equivalent
share assuming full dilution (C) ................ $ .16 $ .03
====== =======
(A) Dilution from stock options is less than 3%, therefore primary
earnings per share is based on the weighted average number of shares
outstanding.
(B) The effect of the outstanding warrants is excluded from the 1996
calculation since the effect of the warrants using the if-converted
method would be antidilutive. The effect of the outstanding warrants
is excluded from 1995 since they do not meet either test of paragraph
37 of APB Opinion No. 15.
(C) Dilution is less than 3%, therefore the primary basis was used for
per share calculations.
-24-
<PAGE>
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-29-1996
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<PP&E> 19,054
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0
0
<COMMON> 190
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<TOTAL-LIABILITY-AND-EQUITY> 22,453
<SALES> 23,391
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<CGS> 17,444
<TOTAL-COSTS> 17,444
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<INCOME-PRETAX> 711
<INCOME-TAX> 270
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<CHANGES> 0
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</TABLE>