<PAGE>
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
----------
FORM 8-K/A
AMENDMENT NO. 1
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: March 7, 1996
(Date of Earliest Event Reported)
PERCON INCORPORATED
(Exact name of small business issuer as specified in its charter)
WASHINGTON 0-26462 91-1486560
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
1720 WILLOW CREEK CIRCLE, SUITE 530, EUGENE, OREGON 97402-9171
(Address of principal executive offices) (Zip Code)
(541) 344-1189
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
<PAGE>
PERCON INCORPORATED
FORM 8-K/A
AMENDEMENT NO. 1
TABLE OF CONTENTS
PAGE
----
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired 2-15
(b) Unaudited Pro Forma Financial Statements:
Basis of Consolidated Statements 16
Consolidated Statement of Income for the Three
Months Ended March 31, 1996 17
Consolidated Statement of Income for the Year
Ended December 31, 1995 18
Notes to Unaudited Pro Forma Consolidated
Financial Statements 19
Signature 20
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
The audited financial statements of STI S.A. for the years ended
December 31, 1995 and 1994 are included in this Current Report, Form 8-K/A.
<PAGE>
[COOPERS & LYBRAND AUDIT LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Percon Incorporated
Eugene, Oregon
We have audited the accompanying balance sheets of S.T.I. S.A. as of
December 31, 1995 and 1994, and the related statements of income, changes in
shareholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with United States generally
accepted auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of S.T.I. S.A. as of
December 31, 1995 and 1994 and the result of its operations and its cash flows
for the years then ended in conformity with generally accepted United States
accounting principles.
/s/ Coopers & Lybrand
Paris, France Coopers & Lybrand
March 8, 1996
<PAGE>
S.T.I. S.A.
BALANCE SHEETS
(IN U.S. DOLLARS)
ASSETS
December 31, December 31,
1995 1994
------------ ------------
Current assets:
Cash 119525 294348
Accounts receivable, net 1737422 1323573
Inventories 1156912 620533
Prepaid expenses and other 99129 122129
Deferred income tax assets 1332 -
--------- ---------
Total current assets 3114320 2360583
Deposits 29228 26685
Property and equipment, net 1700788 1588676
Intangible assets, net 8641 631
--------- ---------
4852977 3976575
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank overdraft - 30078
Short-term borrowings 159223 -
Current portion of long-term debt 89514 201806
Accounts payable, trade 935411 851678
Income taxes payable 75453 17107
Accrued expenses 321186 248111
Provision for excess future lease costs 43595 91297
Deferred income tax liabilities - 13166
--------- ---------
Total current liabilities 1624382 1453243
Long-term debt, less current portion 1127770 1119664
Deferred income tax liabilities 112434 95576
Deferred employee benefits 12179 7137
--------- ---------
2876765 2675620
--------- ---------
Shareholders' equity:
Common stock, par value FF 500 per share,
4,000 shares issued and outstanding 346418 346418
Retained earnings 1408057 851769
Cumulative foreign currency translation
adjustment 221737 102768
--------- ---------
1976212 1300955
--------- ---------
4852977 3976575
--------- ---------
--------- ---------
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
S.T.I. S.A.
STATEMENTS OF INCOME
(IN U.S. DOLLARS)
Year Ended December 31,
-------------------------
1995 1994
---- ----
Net sales 6594028 5097613
Cost of goods sold 3607359 2746751
--------- ---------
Gross profit 2986669 2350862
Operating expenses:
Selling and marketing 711290 441798
General and administrative 598665 448856
Research and product development 654415 428366
--------- ---------
Operating income 1022299 1031842
Interest income (expense), net (128356) 2342
Foreign currency exchange losses, net (16076) (26493)
Provision for excess future lease costs - (88436)
Sub-lease rental income 50996 3630
Government grants 42281 11797
Other income 7109 -
--------- ---------
Net income before income taxes 978253 934682
Provision for income taxes 197676 252121
--------- ---------
Net income 780577 682561
--------- ---------
--------- ---------
Net income per share 195 171
--------- ---------
--------- ---------
Weighted average shares outstanding 4000 4000
--------- ---------
--------- ---------
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
S.T.I. S.A.
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(IN U.S. DOLLARS)
<TABLE>
<CAPTION>
Common stock
-------------------- Retained Translation
Shares Amount Earnings Adjustment Total
------ ------ -------- ----------- -----
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1994 4000 346418 350706 9258 706382
Net income 682561 682561
Dividends (181498) (181498)
Translation adjustment 93510 93510
----- ------- ---------- ------- ----------
Balance, Dec. 31, 1994 4000 346418 851769 102768 1300955
Net income 780577 780577
Dividends (224289) (224289)
Translation adjustment 118969 118969
----- ------- ---------- ------- ----------
Balance, Dec. 31, 1995 4000 346418 1408057 221737 1976212
----- ------- ---------- ------- ----------
----- ------- ---------- ------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
S.T.I. S.A.
STATEMENTS OF CASH FLOWS
(IN U.S. DOLLARS)
Year Ended December 31,
--------------------------
1995 1994
----------- -----------
Cash flows from operating activities:
Net income 780577 682561
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 173907 60920
(Utilization of) provision for excess
future lease costs (55113) 88436
Deferred income taxes (7050) 145744
Deferred employee benefits 4376 3893
Change in assets and liabilities:
(Increase) decrease in:
Accounts receivable (295508) (349138)
Inventories (477519) (129535)
Prepaid expenses and other 33316 (65384)
Deposits (213) (5481)
Increase (decrease) in:
Accounts payable 9384 267792
Income taxes payable 56294 (18786)
Accrued expenses 50935 68589
--------- -----------
Net cash provided by operating
activities 273386 749611
--------- -----------
Cash flows from investing activities:
Property and equipment purchases (142697) (1477084)
Purchase of intangibles (12948) (1180)
--------- -----------
Net cash used in investing
activities (155645) (1478264)
--------- -----------
Cash flows from financing activities:
Increase (decrease) in bank overdrafts (32378) 17235
Short-term borrowings 157652 -
Proceeds from issuance of long-term debt - 1175736
Repayment of long-term debt (217237) -
Distributions to shareholders (224289) (181498)
--------- -----------
Net cash provided (used) in
financing activities (316252) 1011473
--------- -----------
Effect of exchange rate changes on cash 23688 9388
--------- -----------
Net increase (decrease) in cash (174823) 292208
Cash at beginning of period 294348 2140
--------- -----------
Cash at end of period 119525 294348
--------- -----------
--------- -----------
Supplemental disclosure:
Interest paid 138447 6632
--------- -----------
--------- -----------
Income taxes paid 148431 125163
--------- -----------
--------- -----------
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
S.T.I. S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
(IN U.S. DOLLARS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION: S.T.I. develops, manufactures and markets bar code reading
products, including fixed station decoders for the automatic identification and
data collection market. The Company also distributes bar code input devices
manufactured by others for use with the Company's fixed station decoders.
MANAGEMENT ESTIMATES: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
SALES AND CONCENTRATION OF CREDIT RISK: Financial instruments which
potentially subject the Company to concentrations of credit risk consist
principally of accounts receivable from customers, primarily located in France,
Europe and the United States.
The Company considered current and historical loss experience and general
economic conditions in determining the allowance for uncollectible accounts
receivable of $ 30 505 and $ 28 712 as of December 31, 1995 and 1994,
respectively. Ultimate losses may vary from the current estimates, and any
adjustments are reported in earnings in the periods in which they become known.
No one distributor accounted for more than 7% of net sales for 1995 or
1994.
INVENTORIES: Inventories are stated at the lower of cost or market, with
cost determined by the most recent purchase price, which approximates the first-
in, first-out method.
BUILDING ON LAND OWNED BY OTHERS: The building purchased in December 1994
is stated at cost. Ownership of the building passes to the land owner at the end
of the lease term. The cost of the building is depreciated on the straight-line
method over the 16-year term of the land lease.
EQUIPMENT AND LEASEHOLD IMPROVEMENTS: Equipment and leasehold improvements
are stated at cost. Expenditures for repairs and maintenance are charged to
expense as incurred. The cost of equipment is depreciated on the straight-line
method over its estimated useful lives (generally four to five years). The cost
of leasehold improvements is amortized over the term of the related
lease. Gains or losses realized on assets retired or disposed of are included in
current income.
INTANGIBLE ASSETS: Intangibles assets, consisting primarily of software and
licenses, are stated at cost. The cost of intangible assets is amortized on a
straight-line method over its estimated useful lives (generally one to three
years).
6
<PAGE>
S.T.I. S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
(IN U.S. DOLLARS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) :
FOREIGN CURRENCY TRANSLATION: Assets and liabilities were translated at the
rate of exchange in effect as of the balance sheet date. Income and expenses
are translated at the average rate of exchange prevailing during the year.
Common stock and retained earnings are stated at historical amounts.
REVENUE RECOGNITION: Revenue from product sales to customers is recognized
upon shipment. All products have a warranty for one or five years from date of
sale covering product defects.
RESEARCH AND DEVELOPMENT: Research and development costs are charged to
expense as incurred.
2. INVENTORIES:
Inventories consist of the following:
December 31, December 31,
1995 1994
------------ ------------
Finished goods 645370 346773
Materials 511542 273760
------------ ------------
1156912 620533
------------ ------------
------------ ------------
3. PROPERTY AND EQUIPMENT, NET:Property and Equipment net:
Property and equipment consist of the following:
December 31, December 31,
1995 1994
------------ ------------
Building on land owned by others 1528281 1405721
Equipment 569292 419574
Leasehold improvements 48131 15774
------------ ------------
2145704 1841069
Less accumulated depreciation (444916) (252394)
------------ ------------
1700788 1588676
------------ ------------
------------ ------------
The building on land owned by others was purchased in December 1994. Under
terms of the lease agreement for the underlying land, the Company pays lease
payments of FF 96 000 ($ 19 556) per year, the Company does not have an option
to purchase the land or extend the lease, and ownership of the building will
pass to the land owner at the end of the lease term on December 31, 2010.
Accordingly, the cost of the building is being amortized over the 16-year term
of the lease.
7
<PAGE>
S.T.I. S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
(IN U.S. DOLLARS)
4. INTANGIBLE ASSETS, NET:
Intangible assets consist of the following:
December 31, December 31,
1995 1994
------------ ------------
Software 23917 9971
Licenses 754 693
------------ ------------
24671 10664
Less accumulated amortization (16030) (10033)
------------ ------------
8641 631
------------ ------------
------------ ------------
5. ACCRUED EXPENSES:
Accrued expenses consist of the following:
December 31, December 31,
1995 1994
------------ ------------
Accrued payroll and payroll
related liabilities 234077 203658
Accrued taxes other than income 65921 29829
Other liabilities 21188 14624
------------ ------------
321186 248111
------------ ------------
------------ ------------
6. BANK OVERDRAFT AND SHORT-TERM BORROWINGS:
The Company has overdraft and line of credit facilities with a bank for up
to FF 300 000 ($ 61 112) at the bank's current overdraft interest rate. At
December 31, 1994, $ 30 078 was outstanding under these facilities at an
interest rate of 9.95%. No amount was outstanding at December 31, 1995.
The Company can also discount up to FF 1 000 000 ($ 203 707) of unmatured
commercial bills of exchange (drafts) at another bank. The short-term borrowing
received from the bank is collateralized by the unmatured bills of exchange,
which are physically held by the bank until maturity. At December 31, 1995,
$159 223 of unmatured bills of exchange included in Accounts receivable were
discounted at an interest rate of 9.54%. These bills matured and the short-term
borrowing was repaid on January 10, 1996. No bills of exchange were discounted
at December 31, 1994.
8
<PAGE>
S.T.I. S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
(IN U.S. DOLLARS)
7. LONG-TERM DEBT:
December 31, December 31,
1995 1994
------------ ------------
Bank loan, monthly repayments of
FF 82 840 ($ 16 875) including
interest at 9.6%, maturing
December 2004 1217284 1194491
Note payable - 126979
------------ ------------
1217284 1321470
Less current portion (89514) (201806)
------------ ------------
1127770 1119664
------------ ------------
------------ ------------
The bank loan was contracted in December 1994 for the purchase of the
building on leased land and has a term of 10 years. The original principal sum
of FF 6 375 000 and interest at 9.6% per annum are due in 120 monthly payments
of FF 82 840 from January 1995 to December 2004. The loan is collateralized by a
preferential lien on the building purchased which has a net cost of FF 6 997 453
($ 1 425 433) at December 31, 1995.
The note payable represents funds advanced by the Company's export credit
insurer. These advances were non-interest bearing until July 1, 1995 at which
time, following a decision by the Company to no longer work with the insurer,
the advances bore interest at 8.25% per annum. The advances were fully
reimbursed by the Company in 10 monthly installments from March 1995 to December
1995.
Maturities of long-term debt principal payments in each year
subsequent to December 31, 1995 are:
1996 89514
1997 98495
1998 108378
1999 119253
2000 131219
Balance due in installments through 2004 670425
---------
1217284
---------
---------
9
<PAGE>
S.T.I. S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
(IN U.S. DOLLARS)
8. OPERATING LEASES:
The Company leases its facility in Bougival and the land beneath its
building in La Celle Saint Cloud under noncancelable operating leases expiring
in January 1997 and December 2010, respectively. The Company also leases certain
office equipment under noncancelable operating leases expiring through 1997.
Rent expense was $ 145 258 and $ 166 600 for the years ended December 31, 1995
and 1994, respectively. In 1995, the Company sub-leased a portion of the
Bougival facility under three noncancelable operating leases two of which expire
in December 1996 and one in January 1997. Rent revenue from these leases was $
41 201 for the year ended December 31, 1995. Future minimum payments required
under operating leases having initial or remaining noncancelable lease terms in
excess of one year as of December 31, 1995 are as follows:
Year ending December 31,
1996 178509
1997 31350
1998 19556
1999 19556
2000 19556
2001 to 2010 195559
--------
464086
--------
Less sub-lease income (57823)
--------
Total minimum lease payments 406263
--------
--------
The Company also sub-leases a portion of its La Celle Saint Cloud building
under a noncancelable operating lease expiring in June 1996. Rent revenue from
this lease was $ 50 997 and $ 3 630 for the years ended December 31, 1995 and
1994, respectively. Future rental revenue under this lease will amount to
$ 18146 for the year ending December 31, 1996.
9. PROVISION FOR EXCESS FUTURE LEASE COSTS:
In late 1994, the Company moved all operations other than a portion of its
production department from the facility leased in Bougival to the building on
leased land in La Celle Saint Cloud. The Company was able to sub-lease the
unused portion of the Bougival facility in early 1995 at a rate of rent lower
than the Company's minimum future lease payments due on the sub-leased premises.
Accordingly, at December 31, 1994, the Company recorded a provision of $ 91 297
which represents the net shortfall between future minimum lease payments due and
future sub-lease revenue to be received for the remaining term of the lease.
10
<PAGE>
S.T.I. S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
(IN U.S. DOLLARS)
10. EMPLOYEE DEFINED BENEFIT PLAN:
The Company has a defined benefit plan covering all employees at
retirement. The plan provides for payment of a lump sum retirement benefit. All
employees are 100% vested upon retirement, however, if an employee leaves the
Company prior to retirement age the benefit lapses. The discount rate and the
rate of increase in future compensation levels used in determining the actuarial
present value of projected benefit obligations were 8 and 4 percent,
respectively for 1995 and 6 and 4 percent for 1994, respectively. No plan assets
are held by the Company for future payments. The Company maintains a book
reserve for the benefit obligation.
The Company adopted Statement of Financial Accounting Standards (SFAS) No.
87 as of January 1, 1994. A portion of the actuarially determined projected
benefit obligation at the adoption date was charged directly to equity based on
the ratio of the number of years elapsed between the effective date of SFAS 87,
1989, and the adoption date, 1994. The remaining service period of employees
expected to receive benefits was estimated at the adoption date.
The funding status of the defined benefit plan for the Company was as
follows:
<TABLE>
<CAPTION>
1995 1994
-------- -------
<S> <C> <C>
Projected benefit obligation for services rendered to date (16558) (9034)
Plan assets at market value - -
-------- -------
Projected benefit obligation in excess of plan assets (16558) (9034)
Unrecognized transition obligation 7593 7608
Unrecognized (gain) from favorable experience differences (3214) (5711)
-------- -------
(12179) (7137)
-------- -------
-------- -------
The net benefit plan costs (credits) in 1995 and 1994 are comprised of:
1995 1994
-------- -------
Service cost 3210 2630
Interest cost on projected benefit obligations 778 659
Net amortization and deferral 671 604
Unrecognized (gain) from favorable experience differences (283) -
-------- -------
Net periodic pension expense 4376 3893
-------- -------
-------- -------
</TABLE>
11
<PAGE>
S.T.I. S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
(IN U.S. DOLLARS)
11. INCOME TAXES:
The provision for income taxes, as determined by Statement of Financial
Accounting Standards (SFAS) No. 109, consists of the following:
1995 1994
-------- -------
Current 204726 106377
Deferred (7050) 145744
-------- -------
Income tax expense 197676 252121
-------- -------
-------- -------
Deferred tax assets (liabilities) were reflected in the balance sheets at
December 31 as follows:
1995 1994
--------- ---------
Net current assets 1332 -
Net current liabilities - (13166)
Net noncurrent liabilities (112434) (95576)
Valuation allowance for deferred tax assets - -
--------- ---------
(111102) (108742)
--------- ---------
--------- ---------
The temporary differences between the financial reporting basis and the tax
basis of the Company's assets and liabilities giving rise to deferred tax assets
and liabilities reflected in the balance sheet at December 31 were as follows:
1995 1994
--------- ---------
Capitalized building acquisition costs expensed for tax (104655) (93345)
Straight-line versus accelerated depreciation (12245) (4609)
Research and development costs capitalized for tax - 15459
Accrued provisions not currently deductible for tax 1332 1761
Employee benefit plan not currently deductible for tax 4466 2379
Provision for excess lease costs not currently deductible - (30387)
--------- ---------
(111102) (108742)
--------- ---------
--------- ---------
A reconciliation between the Company's effective tax rate and the French
statutory rates is as follows:
1995 1994
--------- ---------
Statutory tax rate 36.67% 33.33%
Effect of research and development tax credit (18.12%) (7.35%)
Permanent differences, mainly nondeductible penalties 0.46% 0.29%
Effect of change in tax rate on deferred tax balances 1.20% -
--------- ---------
Effective tax rate 20.21% 26.97%
--------- ---------
--------- ---------
12
<PAGE>
S.T.I. S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
(IN U.S. DOLLARS)
12. PURCHASE COMMITMENT:
The Company has entered into a 5-year purchase agreement expiring December
31, 1997 with the supplier of the principal component of its products. At
December 31, 1995, the Company was committed to make FF 1 504 500 ($ 306 478) of
purchases before the expiration of the agreement.
13. SUBSEQUENT EVENT:
On March 7, 1996, all outstanding shares of the Company were acquired by
Percon Incorporated of Eugene, Oregon (U.S.A.),
13
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS, CONTINUED
(b) UNAUDITED PRO FORMA FINANCIAL INFORMATION.
BASIS OF CONSOLIDATED STATEMENTS
On March 7, 1996 Percon Incorporated (the "Company") acquired all of the stock
of STI S.A. The pro forma consolidated financial statements give effect, on a
purchase accounting basis, to the acquisition of STI S.A. by the Company.
Additionally, the statements assume that the acquisition occurred at the
beginning of the earliest period presented.
The financial statements of the Company and of STI S.A. for the years ended
December 31, 1995 and 1994 have been audited.
The unaudited pro forma consolidated financial statements should be read in
conjunction with the following:
- Financial statements and notes thereto of the Company filed with the
Securities and Exchange Commission in its annual report on Form 10-KSB
for the year ended December 31, 1995.
- Financial statements and notes thereto of STI S.A.. which are included
in Item 7(a) of this Current Report on Form 8-K/A.
- Financial statements and notes thereto of the Company filed with the
Securities and Exchange Commission in its quarterly report on Form 10-
QSB for the three months ended March 31, 1996.
The unaudited pro forma consolidated statements of income are not necessarily
indicative of the results that actually would have occurred if the acquisition
had been in effect since the assumed date, nor are they necessarily indicative
of future consolidated financial results.
<PAGE>
PERCON INCORPORATED and SUBSIDIARIES
Unaudited Pro Forma Consolidated Statement of Income
For the Three Months Ended March 31, 1996
<TABLE>
<CAPTION>
Historical Pro Forma
------------------------- --------------------------
Percon (1) STI S.A.(2) Adjustments Consolidated
---------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
(In thousands, except per share data)
Net sales $ 4,326 $ 1,152 $ 5,478
Cost of goods sold 2,164 651 $ 8(A) 2,823
--------- --------- ------- ---------
Gross profit 2,162 501 (8) 2,655
Operating Expenses:
Selling, marketing and customer service 686 135 821
General and administrative 408 115 13(B) 536
Research and product development 339 121 460
Acquired in-process research and product
development 2,091 2,091
--------- --------- ------- ---------
Operating income (loss) (1,362) 130 (21) (1,253)
Interest income (expense), net 37 (18) (48)(C) (29)
Foreign currency exchange losses, net (5) (5)
Provision for excess future lease costs (9) (9)
Sub-lease rental income 17 17
Other income (expense), net 3 3
--------- --------- ------- ---------
Income (loss) before taxes (1,322) 115 (69) (1,276)
Provision for income taxes 282 26 308
--------- --------- ------- ---------
Net income (loss) $ (1,604) $ 89 $ (69) $ (1,584)(3)
--------- --------- ------- ---------
--------- --------- ------- ---------
Net income per share $ (0.39) $ 0.02 $ (0.38)(3)
--------- --------- ---------
--------- --------- ---------
Weighted average shares outstanding 4,134 4,134 4,134
--------- --------- ---------
--------- --------- ---------
</TABLE>
(1) - Includes the operations of STI S.A. from March 7, 1996, the date of
acquisition.
(2) - Represents the results of operations of STI S.A. from January 1, 1996
through March 7, 1996, the data of acquisition.
(3) - Includes a one-time charge of $2,091,000 for the portion of the purchase
price allocated to STI in-process research and product development expense.
Without this charge, pro forma net income and pro forma net income per share for
the three months ended March 31, 1996 would have been $507,000 and $.12,
respectively.
See accompanying notes to unaudited pro forma consolidated financial statements.
<PAGE>
PERCON INCORPORATED and SUBSIDIARIES
Unaudited Pro Forma Consolidated Statement of Income
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
Historical Pro Forma
------------------------- --------------------------
Percon STI S.A. Adjustments Consolidated
------ -------- ----------- ------------
<S> <C> <C> <C> <C>
(In thousands, except per share data)
Net sales $ 12,664 $ 6,594 $ 19,258
Cost of goods sold 6,195 3,607 $ 47(A) 9,849
---------- --------- ---------- -----------
Gross profit 6,469 2,987 (47) 9,409
Operating Expenses:
Selling, marketing and customer service 2,207 711 2,918
General and administrative 1,265 599 75(B) 1,939
Research and product development 735 655 1,390
---------- --------- ---------- -----------
Operating income (loss) 2,262 1,022 (122) 3,162
Interest income (expense), net 94 (128) (113)(C) (147)
Foreign currency exchange losses, net (16) (16)
Sub-lease rental income 51 51
Government grants 42 42
Other income (expense) (2) 7 5
---------- --------- ---------- -----------
Income before taxes $ 2,354 $ 978 $ (235) $ 3,097
---------- --------- ---------- -----------
---------- --------- ---------- -----------
Pro Forma Data (2) (Unaudited):
Income before income tax provision $ 2,354 $ 978 $ (235) $ 3,097
Provision for income taxes 859 197 1,056
---------- --------- ---------- -----------
Net income $ 1,495 $ 781 $ (235) $ 2,041 (1)
---------- --------- ---------- -----------
---------- --------- ---------- -----------
Net income per share $ 0.46 $ 0.24 $ 0.63 (1)
---------- --------- -----------
---------- --------- -----------
Weighted average shares outstanding 3,216 3,216 3,216
---------- --------- -----------
---------- --------- -----------
</TABLE>
(1) - Excludes a one-time charge of $2,091,000 for the portion of the purchase
price allocated to STI in-process research and product development expense.
With this charge, pro forma net loss and pro forma net loss per share for 1995
would have been $50,000 and $.02, respectively.
(2) - As if the Company had been a C corporation for the period.
See accompanying notes to unaudited pro forma consolidated financial statements.
<PAGE>
PERCON INCORPORATED
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The following is a summary of adjustments reflected in the Unaudited Pro Forma
Consolidated Financial Statements:
(A) To amortize purchased technology acquired over nineteen months.
(B) To amortize purchased goodwill over seven years.
(C) To reduce interest earned on cash and investments utilized to purchase
STI S.A.
<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PERCON INCORPORATED
by: /s/ G. Scott Purcell
----------------------
G. Scott Purcell
Chief Financial Officer
(Principal Financial and Accounting Officer)
Dated: May 20, 1996
