<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 October 4, 1998
-----------------------------------------
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 1-4184
--------------------------------------------------
MATEC Corporation
- - -------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 06-0737363
- - ------------------------------- -------------------------
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification Number)
75 South St., Hopkinton, Massachusetts 01748
- - ---------------------------------------- -------------
(Address of principal executive offices) (Zip Code)
(508) 435-9039
- - -------------------------------------------------------------------------
(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 13, 1998, the number of shares outstanding of Registrant's
Common Stock, par value $.05 was 2,716,948.
-1-
<PAGE>
<PAGE>
MATEC Corporation
Index
Page
----
PART I. FINANCIAL INFORMATION
Consolidated Condensed Balance Sheets -
October 4, 1998 and December 31, 1997 ................... 3
Consolidated Statements of Operations - Three Months and
Nine Months Ended October 4, 1998 and September 28, 1997 4
Consolidated Condensed Statements of Cash Flows -
Nine Months Ended October 4, 1998 and September 28, 1997 5
Consolidated Statements of Comprehensive Income -
Three Months and Nine Months ended October 4, 1998
and September 28, 1997 .................................. 6
Notes to Consolidated Condensed Financial Statements ..... 7-9
Management's Discussion and Analysis of Financial
Condition and Results of Operations ..................... 10-13
PART II. OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K ................ 14
Signatures ..................................................... 15
-2-
<PAGE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
MATEC Corporation and Subsidiaries
Consolidated Condensed Balance Sheets
(In thousands, except share data) (Unaudited)
10/4/98 12/31/97(a)
-------- --------
ASSETS
Current assets:
Cash and cash equivalents ............................ $ 4,478 $ 885
Receivables, less allowances of $69 and $45 .......... 1,495 1,921
Inventories .......................................... 3,062 2,598
Deferred income taxes and other current assets ....... 1,352 873
------- -------
Total current assets ............................... 10,387 6,277
------- -------
Property, plant and equipment, at cost ................. 7,599 10,583
Less accumulated depreciation ........................ 5,184 6,806
------- -------
2,415 3,777
------- -------
Marketable equity securities ........................... 3,118 4,658
Net assets of discontinued operations .................. - 7,144
Other assets ........................................... 403 70
------- -------
$16,323 $21,926
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ..................................... $ 602 $ 933
Accrued liabilities .................................. 1,130 862
Income taxes ......................................... 878 416
------- -------
Total current liabilities .......................... 2,610 2,211
------- -------
Deferred income taxes .................................. 1,452 2,317
Long-term debt ......................................... 1,992 1,989
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 2,716,948 and
3,804,195 shares ................................... 136 190
Capital surplus ...................................... 5,513 6,443
Retained earnings .................................... 2,848 11,443
Net unrealized gain on marketable equity securities .. 1,772 2,696
Treasury stock at cost, 0 and 1,070,544 shares ....... - (5,363)
------- -------
Total stockholders' equity ...................... 10,269 15,409
------- -------
$16,323 $21,926
======= =======
(a) Restated to reflect discontinued operations.
See notes to consolidated condensed financial statements.
-3-
<PAGE>
<PAGE>
MATEC Corporation and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data) (Unaudited)
Three Months Ended Nine Months Ended
10/4/98 9/28/97(a) 10/4/98 9/28/97(a)
------- ------- -------- --------
Net sales ..................... $ 2,580 $ 3,424 $ 9,476 $ 9,597
Costs and expenses:
Cost of sales ................ 2,071 2,549 7,338 7,304
Selling and administrative ... 788 811 2,302 2,231
------- ------- ------- -------
2,859 3,360 9,640 9,535
Operating profit (loss) ....... (279) 64 (164) 62
Other income (expense):
Interest expense ............. (51) (59) (153) (171)
Gain on sale of property, plant
and equipment ............... - - 386 -
Other, net ................... 60 9 115 12
------- ------- ------- -------
9 (50) 348 (159)
Earnings (loss) from continuing
operations before income taxes (270) 14 184 (97)
Income tax (expense) benefit .. 113 (5) (69) 39
------- ------- ------- -------
Earnings (loss) from continuing
operations ................... (157) 9 115 (58)
Discontinued operations, net of
taxes:
Earnings (loss) from operations (5) 177 106 267
Gain on sales ............... 256 - 454 -
------- ------- ------- -------
Net earnings .................. $ 94 $ 186 $ 675 $ 209
======= ======= ======= =======
Earnings (loss) per share:
Basic:
Continuing operations ....... $(.06) $ .00 $ .04 $(.02)
Discontinued operations:
Operations, net of taxes ... .00 .07 .04 .10
Gain on sales, net of taxes .09 .00 .17 .00
----- ----- ----- -----
$ .03 $ .07 $ .25 $ .08
===== ===== ===== =====
Diluted:
Continuing operations ....... $(.06) $ .00 $ .04 $(.02)
Discontinued operations:
Operations, net of taxes ... .00 .06 .04 .10
Gain on sales, net of taxes .09 .00 .17 .00
----- ----- ----- -----
$ .03 $ .06 $ .25 $ .08
===== ===== ===== =====
Weighted average shares:
Basic ....................... 2,717 2,734 2,733 2,738
Diluted ..................... 2,717 2,771 2,734 2,738
Cash dividends per share ...... $ - $ - $1.75 $ -
===== ===== ===== =====
(a) Restated to reflect discontinued operations.
See notes to consolidated condensed financial statements.
-4-
<PAGE>
<PAGE>
MATEC Corporation and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended
10/4/98 9/28/97(a)
-------- --------
Cash flows from operating activities:
Net earnings (loss) from continuing operations ... $ 115 $ (58)
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization .................. 424 427
Deferred income taxes .......................... (175) (30)
Gain on sale of property, plant and equipment .. (386) -
Other .......................................... 3 3
Changes in operating assets and liabilities .... (80) (44)
------- -------
Net cash provided (used) by operating activities (99) 298
- - ----------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment 1,862 -
Capital expenditures ............................. (538) (268)
Collection of note receivable .................... 10 -
Other, net........................................ (8) (2)
------- -------
Net cash provided (used) by investing activities 1,326 (270)
- - ----------------------------------------------------------------------
Cash flows from financing activities:
Dividend paid .................................... (4,827) -
Net (repayments) under lines of credit ........... - (400)
Payments on long-term debt ....................... - (200)
Purchases of common stock ........................ (164) (80)
Stock options exercised .......................... 101 -
------- -------
Net cash (used) by financing activities ........... (4,890) (680)
- - ----------------------------------------------------------------------
Net cash provided by discontinued operations ...... 7,256 630
- - ----------------------------------------------------------------------
Net increase in cash and cash equivalents ......... 3,593 (22)
Cash and cash equivalents:
Beginning of period .............................. 885 610
------- -------
End of period .................................... $ 4,478 $ 588
======= =======
Non-cash investing and financing activities:
During 1998, the Company retired all of its treasury stock. The
total cost of the treasury shares of $5,527,000 reduced common stock,
capital surplus and retained earnings by $56,000, $1,028,000 and
$4,443,000, respectively.
In connection with the sale of a discontinued operation in 1998, the
Company recorded a $456,000 receivable.
(a) Restated to reflect discontinued operations.
See notes to consolidated condensed financial statements.
-5-
<PAGE>
<PAGE>
MATEC Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income
(In thousands)
(Unaudited)
Three Months Ended
10/4/98 9/28/97
------- -------
Net earnings ................................. $ 94 $ 186
Other comprehensive income, net of tax:
Unrealized gain (loss) on marketable
equity securities, net of tax benefit
of $332 in 1998 and tax expense of $155
in 1997 ..................................... (497) 466
------- -------
Comprehensive income (loss) .................. $ (403) $ 652
======= ========
Nine Months Ended
10/4/98 9/28/97
------- -------
Net earnings ................................ $ 675 $ 209
Other comprehensive income, net of tax:
Unrealized gain (loss) on marketable
equity securities, net of tax benefit
of $616 in 1998 and tax expense of $233
in 1997 .................................... (924) 582
------- -------
Comprehensive income (loss) ................. $ (249) $ 791
======= =======
See notes to consolidated condensed financial statements.
-6-
<PAGE>
<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 1997 MATEC
Corporation and Subsidiaries Annual Report which is incorporated by
reference in Form 10-K for the year ended December 31, 1997.
2. Description of Business:
As described below, the Company has disposed of its Steel Cable and
Instruments business segments. As a result, the Company's current
remaining business is conducted through its Valpey-Fisher subsidiary.
This operation was previously reported in the Electronics business
segment.
3. Inventories:
Inventories consist of the following (in thousands):
10/4/98 12/31/97
------- --------
Raw materials ....................... $ 1,607 $ 800
Work in process ..................... 800 1,078
Finished goods ...................... 655 720
------- -------
$ 3,062 $ 2,598
======= =======
4. Discontinued Operations:
On April 15, 1998, the Company sold all of the assets of its Bergen
Cable Technologies, Inc. ("Bergen") subsidiary. The purchase price
received consisted of $7.5 million in cash, a subordinated promissory
note in the principal amount of $1,250,000, a 10% stock and membership
interest in the acquiring entities, and assumption of certain liabilities
including trade payables. The gain on the sale was $198,000 after a tax
provision of $132,000.
Since the acquiring entity has significant third-party debt compared
to its equity and the Company's note is subordinated to the third party
debt, the Company will not record any gain realized on the note and stock
portions of the sale until cash payments are received by the Company.
On August 3, 1998, the Company sold certain assets of its Matec
Instruments, Inc. ("MII") and Matec Applied Sciences, Inc. ("MASI")
subsidiaries to a newly formed corporation. Ken Bishop, who was
President of MII and MASI until August 3, 1998, owns 53% of the newly
formed corporation. MII and MASI had comprised the Company's Instruments
Segment of business.
-7-
<PAGE>
<PAGE>
The purchase price received consisted of approximately $605,000 in
cash, a subordinated promissory note in the principal amount of $250,000,
a $250,000 noninterest bearing receivable, and the assumption of certain
liabilities including trade payables. In addition, the buyer has entered
into a 5 year lease agreement with the Company to lease the space that it
currently occupies and the buyer also has a 5 year option to purchase the
real estate that includes the leased space. The gain on sale was
$248,000 after a tax provision of $152,000.
As a result of the above, the operating results of Bergen, MII and
MASI have been reported as discontinued operations, and previously
reported financial statements have been restated to reflect these sales.
The operating results of Bergen, MII and MASI are presented in the
Consolidated Statements of Operations under the caption "Discontinued
operations, net of taxes: Earnings (loss) from operations" and include
(in thousands):
Three Months Ended Nine Months Ended
10/4/98 9/28/97 10/4/98 9/28/97
------- ------- ------- -------
Net sales $ 246 $ 4,922 $ 6,994 $13,739
Earnings (loss) before
income taxes (13) 296 171 445
Income tax (expense) benefit 8 (119) (65) (178)
Net earnings (loss) (5) 177 106 267
At December 31, 1997, the net assets of Bergen, MII and MASI included
in the Balance Sheet caption "Net assets of discontinued operations" were
(in thousands): Current assets - $6,930; property, plant and equipment,
net - $2,539; and current liabilities - $2,325.
5. Stockholders' Equity:
On July 2, 1998, the Company reincorporated in Maryland. In
connection with the reincorporation, stockholders who owned less than 100
shares of Common Stock on July 2, 1998 ceased to be stockholders and
received cash of $4.03 per share ("the Cash Out"). The reincorporation
and Cash Out were approved by stockholders at the Company's Special in
Lieu of Annual Meeting held on June 18, 1998.
As a result of the Cash Out, the Company acquired 35,705 shares of
Common Stock at a cost of $143,891. In connection with the
reincorporation, the 1,111,947 shares of treasury stock held by the
Company on July 2, 1998, which included the 35,705 shares of common stock
acquired as a result of the Cash Out, were retired and were reclassified
as reductions to common stock issued. The total cost of the treasury
shares of $5,526,880 reduced common stock, capital surplus, and retained
earnings by $55,597, $1,028,551 and $4,442,732, respectively.
-8-
<PAGE>
<PAGE>
6. New Accounting Standards:
The Company adopted Statement of Financial Accounting Standards
("SFAS") No. 130, "Reporting Comprehensive Income" during the first
quarter of 1998, as required. SFAS No. 130 establishes standards for
reporting and displaying comprehensive income and its components in a set
of financial statements. The adoption of SFAS No. 130 had no impact on
the Company's net earnings or stockholders' equity.
Comprehensive income is defined as the change in equity of a
business enterprise during a period from transactions and other events
and circumstances from nonowner sources. Presently, the only component
of comprehensive income for the Company is unrealized holding gains
(losses) on available for sale marketable equity securities.
SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information" was issued during 1997. SFAS No. 131 establishes
standards for reporting annual and operating segment information and is
effective for the Company's 1998 annual financial statements. The
Company is evaluating the effect that this new standard will have on
disclosures in the Company's financial statements.
7. Subsequent Event:
On November 6, 1998, the Company received $400,000 from Colloidal
Dynamics Pty. Ltd. ("CD"). $200,000 related to the balance of the
purchase price from the sale of the AcoustoSizer product line in May
1997, which had been previously deferred pending collection and $200,000
related to CD purchasing the common stock of CD owned by the Company. As
a result of these transactions, the Company will report an after-tax gain
of approximately $221,000 in the fourth quarter of 1998.
-9-
<PAGE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
- - -------------------------------
Cash and cash equivalents increased $3,593,000 during the nine
months ended October 4, 1998. The Company's continuing operations used
$3,663,000 of cash as operating and financing activities used $99,000 and
$4,890,000 in cash, respectively, while investing activities generated
cash of $1,326,000. During this period, discontinued operations
generated $7,256,000 of cash.
The $99,000 use of cash from continuing operations was mainly due to
the $80,000 net increase in working capital. Working capital increases
included a $464,000 increase in inventory to support the current sales
backlog and delivery requirements and a $331,000 reduction in accounts
payable. These cash requirements were partially offset by a decrease in
accounts receivable due to the lower shipping levels and an increase in
income taxes.
During the nine months ended October 4, 1998, the Company received
proceeds of $1,862,000 from the sale of its real estate complex located
in Delaware. None of the Company's operations were located at this
facility. During this period, the Company purchased $538,000 of
machinery and equipment. These additions are mainly geared toward adding
new and upgrading existing production capabilities and processes.
On May 15, 1998, the Company paid a special nonrecurring cash
distribution of a $1.75 per share to stockholders of record on May 4,
1998. This special nonrecurring distribution totaled $4,827,000 and
represents a substantial portion of the net cash proceeds from the sale
of its Bergen Cable subsidiary. During the nine months ended October 4,
1998, the Company purchased $164,000 of treasury shares. The mandatory
cash-out of stockholders of record owning less than 100 shares accounted
for $144,000 of these treasury shares.
Management believes that based on its current working capital, the
expected cash flows from operations and its $1,850,000 lines of credit
availability, the Company's resources are sufficient to meet its
financial needs in 1998 including a remaining capital expenditures budget
of approximately $300,000.
Results of Operations
- - ---------------------
Net sales from continuing operations for the quarter and nine months
ended October 4, 1998 decreased 25% and 1%, respectively, from the
comparable periods in 1997. The sales decreases during both periods are
due to lower sales of imported product that is bought and resold. Sales
of domestically produced product increased 7% and 33% over the 1997
quarter and nine months ended periods, respectively. The sales decreases
of imported product during both periods resulted mainly from a lower
backlog at the beginning of each period as compared to 1997 and lower
bookings of imported product during both periods in 1998. The sales
increases of domestically produced product result from higher backlog and
booking levels during both periods. The Company has continued to
-10-
<PAGE>
<PAGE>
experience weak bookings during 1998 as compared to 1997 partly due to
the slow down in the electronic component industry caused in part by the
financial difficulties in the Far East. As a result, the Company's
October 4, 1998 backlog is 6%, 35%, and 15% lower than the July 5, 1998,
December 31, 1997, and September 28, 1997 levels, respectively.
During the quarter ended October 4, 1998, cost of sales as a
percentage of sales amounted to 80% versus 74% in 1997. The overall
lower margin was mainly do to the unfavorable effect of the fixed
overhead over the lower sales volume. During the nine months ended
October 4, 1998, the 1998 cost of sales as a percentage of sales amounted
to 77% compared to 76% in 1997. The slightly higher percentage resulted
from increased personnel and depreciation expenses offset in part by
lower material costs due to changes in the sales mix.
Total selling and administrative expenses for the quarter ended
October 4, 1998 decreased $23,000 (3%) from comparable period in 1997.
A $116,000 decrease in administrative expenses was partially offset by a
$93,000 increase in selling expense. The decrease in administrative
expense is mainly due to the $100,000 of severance expense recorded in
1997 for the Company's former president. The increase in selling expense
was attributable mainly to increased personnel costs and advertising
expense. During the nine months ended October 4, 1998, selling and
administrative expenses increased $71,000 (3%) over the comparable period
in 1997. Selling expenses increased $263,000 over 1997 as a result of
increased personnel costs and advertising expense. The $192,000 decrease
in general and administrative expenses mainly result from lower corporate
payroll including severance expense as the Company has not replaced its
former president since his resignation as an employee in the third
quarter of 1997.
During the quarter and nine months ended October 4, 1998, interest
expense decreased $8,000 and $18,000, respectively, from the 1997 periods
due to lower levels of short-term debt and a lower interest rate on the
term debt. In February 1998, the Company sold its real estate complex in
Delaware and realized a $386,000 pre-tax gain on the sale.
Other income (expense), net includes the following (in thousands):
Quarter Ended Nine Months Ended
10/4/98 9/28/97 10/4/98 9/28/97
------- ------- ------- -------
Dividend income ........... $ 26 $ 16 $ 57 $ 47
Real estate operations .... (7) (3) (34) (40)
Interest income ........... 42 - 92 5
Other, net ................ (1) (4) - -
------- ------- ------- -------
$ 60 $ 9 $ 115 $ 12
======= ======= ======= =======
The increases in interest income result from the higher cash levels
generated by the sales of real estate and the discontinued operations.
The fluctuations in the real estate operations are mainly due to either
increases or decreases in operating expenses.
The estimated effective income tax rate for 1998 is 38% compared to
40% in 1997.
-11-
<PAGE>
<PAGE>
During the quarter ended October 4, 1998, based on the decreased
sales and gross margin, offset in part by a decrease in operating
expenses, the Company reported an operating loss of $279,000 compared to
an operating profit of $64,000 in 1997. Other income (expense), net
amounted to $9,000 of income in 1998 compared to $50,000 of expense in
the corresponding 1997 period. As a result, the Company reported a
pre-tax loss from continuing operations of $270,000 during the quarter
ended October 4, 1998 compared to pre-tax earnings of $14,000 in 1997.
Earnings from discontinued operations during 1998, including the gain on
sale of $256,000, amounted to $251,000 compared to $177,000 during the
comparable 1997 period. In total, the Company reported net earnings of
$94,000 during the quarter ended October 4, 1998 versus $186,000 in 1997.
Based on the lower sales level and gross margin, and an increase in
operating expenses, the Company reported an operating loss of $164,000
during the nine months ended October 4, 1998 compared to an operating
profit of $62,000 during the comparable period in 1997. The nine months
ended October 4, 1998 includes nonoperating income of $348,000 mainly as
a result of the gain on sale of real estate compared to $159,000 of
expense in the 1997 period. As a result, during the nine months ended
October 4, 1998, the Company reported a pre-tax earnings from continuing
operations of $184,000 compared to a loss of $97,000 during the 1997
period. During the nine months ended October 4, 1998, earnings from
discontinued operations, including the gains on sale of $454,000,
amounted to $560,000 versus $267,000 in 1997. In total, the Company
reported net earnings of $675,000 during the nine months ended October 4,
1998 compared to $209,000 in 1997.
Year 2000
- - ---------
During the early part of 1998, the Company began reviewing its
current computer system and software as it related to the "Year 2000"
issue. The Company has determined that the cost to modify the current
software to be Year 2000 compliant is minor. While completing this
review, the Company analyzed the current system's capabilities and
limitations as it related to current operations and to future business
growth and expansion. As a result of this review, the Company has
decided to upgrade its current computer system and install a new computer
and software system. The Company has investigated and reviewed various
software packages and systems that are the Year 2000 compliant and
expects to select a system by the end of 1998. The Company will begin
implementation of the new system shortly thereafter. By the end of the
2nd quarter 1999 the Company expects to have installed modules of the new
software package equivalent to its present system. The cost of this new
system will be included in the capital expenditure budget for 1999.
In addition, the Company has and is continuing to request assurances
from its major suppliers relating to the Year 2000 compliance issue and
has and is responding to Year 2000 inquiries from its major customers.
At this time, the Company has not yet assessed the outcome of these
inquiries since the responses are not yet completed and are still in
progress.
-12-
<PAGE>
<PAGE>
Presently, the Company does not have a formalized contingency plan if
the above third parties are not Year 2000 compliant and the new computer
system and software is not installed and working before 2000. The
Company expects that by the end of the 1st quarter of 1999, it will have
completed its analysis of third party compliance and that the initial
stages of the software installation should be completed. At that time,
the Company will determine if a contingency plan is required.
-13-
<PAGE>
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
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:
On July 15, 1998, the Registrant filed a Report on Form
8-K dated July 2, 1998 reporting under Item 5. Other
Events.
On August 17, 1998, the Registrant filed a Report on Form
8-K dated August 3, 1998 reporting under Item 2.
Acquisition or Disposition of Assets and Item 7. Financial
Statements, Pro Forma Financial Information and Exhibits.
-14-
<PAGE>
<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
------------------------------------
Date: November 13, 1998 By /s/ Ted Valpey, Jr.
---------------------------------
Ted Valpey, Jr.
Chairman of the Board and
President
Date: November 13, 1998 By /s/ Michael J. Kroll
---------------------------------
Michael J. Kroll,
Vice President and Treasurer
-15-
<PAGE>
<PAGE>
MATEC Corporation and Subsidiaries Exhibit 11
Calculation of Earnings Per Share
(amounts in thousands, except per share data)
Three Months Ended
10/4/98 9/28/97(A)
------- -------
Net earnings (loss) from continuing operations ... $ (157) $ 9
Discontinued operations:
Net earnings (loss) from operations ............ (5) 177
Gain on sale ................................... 256 -
------ ------
Net earnings ..................................... $ 94 $ 186
====== ======
Calculation of basic earnings per share:
- - ----------------------------------------
Weighted-average shares ......................... 2,717 2,734
===== =====
Basic earnings (loss) per common share:
Continuing operations ......................... $ (.06) $ .00
Discontinued operations:
Operations .................................. .00 .07
Gain on sale ................................ .09 -
------ ------
$ .03 $ .07
====== ======
Calculation of diluted earnings per share:
- - ------------------------------------------
Weighted average common shares outstanding ...... 2,717 2,734
Increase from assumed exercise of stock options
and investment of proceeds in treasury stock,
based upon the average market prices (B) (C) ... - 37
----- -----
Adjusted weighted-average shares ................ 2,717 2,771
===== =====
Diluted earnings per common share:
Continuing operations ......................... $ (.06) $ .00
Discontinued operations:
Operations .................................. .00 .06
Gain on sale ................................ .09 -
------ ------
$ .03 $ .06
====== ======
(A) Restated to reflect discontinued operations.
(B) The dilutive effect of stock options and warrants was not considered
in 1998 since the Company reported a loss from continuing operations.
(C) The dilutive effect of outstanding warrants to purchase 85,000 shares
of common stock was not included in the 1997 computation since the
exercise price was greater than the average market price of the common
shares.
-16-
<PAGE>
<PAGE>
MATEC Corporation and Subsidiaries Exhibit 11
Calculation of Earnings Per Share
(amounts in thousands, except per share data)
Nine Months Ended
10/4/98 9/28/97(A)
------- -------
Net earnings (loss) from continuing operations ... $ 115 $ (58)
Discontinued operations:
Net earnings from operations ................... 106 267
Gain on sales .................................. 454 -
------ ------
Net earnings ..................................... $ 675 $ 209
====== ======
Calculation of basic earnings per share:
- - ----------------------------------------
Weighted-average shares ......................... 2,733 2,738
===== =====
Basic earnings (loss) per common share:
Continuing operations ......................... $ .04 $ (.02)
Discontinued operations:
Operations .................................. .04 .10
Gain on sales ............................... .17 -
------ ------
$ .25 $ .08
====== ======
Calculation of diluted earnings per share:
- - ------------------------------------------
Weighted-average shares ......................... 2,733 2,738
Increase from assumed exercise of stock options
and investment of proceeds in treasury stock,
based upon the average market prices (B) (C) ... 1 -
----- -----
Adjusted weighted-average shares ................ 2,734 2,738
===== =====
Diluted earnings (loss) per common share:
Continuing operations ......................... $ .04 $ (.02)
Discontinued operations:
Operations .................................. .04 .10
Gain on sales ............................... .17 -
------ ------
$ .25 $ .08
====== ======
(A) Restated to reflect discontinued operations.
(B) The dilutive effect of stock options and warrants was not considered
in 1997 since the Company reported a loss from continuing operations.
(C) The dilutive effect of outstanding warrants to purchase 85,000 shares
of common stock were not included in the 1998 computations since the
exercise price was greater than the average market price of the common
shares.
-17-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> OCT-04-1998
<CASH> 4,478
<SECURITIES> 0
<RECEIVABLES> 1,564
<ALLOWANCES> 69
<INVENTORY> 3,062
<CURRENT-ASSETS> 10,387
<PP&E> 7,599
<DEPRECIATION> 5,184
<TOTAL-ASSETS> 16,323
<CURRENT-LIABILITIES> 2,610
<BONDS> 1,992
0
0
<COMMON> 136
<OTHER-SE> 10,133
<TOTAL-LIABILITY-AND-EQUITY> 16,323
<SALES> 9,476
<TOTAL-REVENUES> 9,476
<CGS> 7,338
<TOTAL-COSTS> 7,338
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 20
<INTEREST-EXPENSE> 153
<INCOME-PRETAX> 184
<INCOME-TAX> 69
<INCOME-CONTINUING> 115
<DISCONTINUED> 560
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 675
<EPS-PRIMARY> .25
<EPS-DILUTED> .25
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-28-1997
<CASH> 588
<SECURITIES> 0
<RECEIVABLES> 2,006
<ALLOWANCES> 47
<INVENTORY> 2,452
<CURRENT-ASSETS> 5,985
<PP&E> 10,530
<DEPRECIATION> 6,690
<TOTAL-ASSETS> 20,994
<CURRENT-LIABILITIES> 2,350
<BONDS> 1,988
0
0
<COMMON> 190
<OTHER-SE> 14,395
<TOTAL-LIABILITY-AND-EQUITY> 20,994
<SALES> 9,597
<TOTAL-REVENUES> 9,597
<CGS> 7,304
<TOTAL-COSTS> 7,304
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 23
<INTEREST-EXPENSE> 171
<INCOME-PRETAX> (97)
<INCOME-TAX> (39)
<INCOME-CONTINUING> (58)
<DISCONTINUED> 267
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 209
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
