<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarterly period
ended June 30, 1996
or
( ) Transition report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934.
DAW TECHNOLOGIES, INC.
---------------------------------
(Exact name of registrant as specified in its charter)
UTAH 0-21818 87-0464280
- ---------------------------- --------------------- -------------------
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation Identification No.)
or organization)
2700 SOUTH 900 WEST
SALT LAKE CITY, UTAH 84119
----------------------------------
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (801) 977-3100
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 August 12, 1996, the Registrant had 12,356,654 shares of Common
Stock, $0.01 par value outstanding.
<PAGE>
DAW TECHNOLOGIES, INC.
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . 1
Item 1. Condensed Balance Sheets - June 30, 1996 and
December 31, 1995. . . . . . . . . . . . . . . . . . . . . . . . 1
Condensed Statements of Earnings - Three months and
six months ended June 30, 1996 and 1995. . . . . . . . . . . . . 2
Condensed Statements of Cash Flows - Six months ended
June 30, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . 3
Notes to Condensed Financial Statements - June 30,
1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . . . . 7
PART II OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . 11
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . 11
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
DAW TECHNOLOGIES, INC.
CONDENSED BALANCE SHEETS
(Unaudited)
(in thousands, except share data)
<TABLE>
June 30, December 31,
1996 1995
-------- ------------
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 3,176 $ 5,885
Contracts receivable, net 23,010 14,714
Costs and estimated earnings in excess of billings
on contracts in progress 10,940 10,930
Inventories - raw materials 3,018 1,478
Other current assets 1,081 545
-------- --------
Total current assets 41,225 33,552
PROPERTY AND EQUIPMENT, NET 7,524 6,438
OTHER ASSETS 105 82
-------- --------
$ 48,854 $ 40,072
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 14,817 $ 12,272
Billings in excess of costs and estimated
earnings on contracts in progress 4,450 3,699
Line of credit 6,035 1,500
Current portion of long-term obligations 579 650
-------- --------
Total current liabilities 25,881 18,121
LONG TERM OBLIGATIONS, less current portion 2,107 2,390
DEFERRED INCOME TAX LIABILITY 142 152
COMMITMENTS AND CONTINGENCIES - -
SHAREHOLDERS' EQUITY
Preferred stock, authorized 10,000,000 shares of
$.01 par value; none issued and outstanding - -
Common stock, authorized 50,000,000 shares of $.01 par value;
issued and outstanding 12,342,254 shares at June 30, 1996
and 12,330,254 shares at December 31, 1995 123 123
Additional paid-in-capital 15,014 14,970
Retained earnings 5,587 4,316
-------- --------
Total shareholders' equity 20,724 19,409
-------- --------
$ 48,854 $ 40,072
-------- --------
-------- --------
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
DAW TECHNOLOGIES, INC.
CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(in thousands, except share data)
<TABLE>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Contract revenue $ 27,049 $ 13,948 $ 50,432 $ 30,751
Cost of contracts 23,807 14,539 43,849 28,468
---------- ---------- ---------- ---------
Gross profit (loss) 3,242 (591) 6,583 2,283
---------- ---------- ---------- ---------
Selling, general and administrative
expenses 2,576 1,782 4,835 3,196
Depreciation and amortization 91 95 187 174
---------- ---------- ---------- ---------
Operating expenses 2,667 1,877 5,022 3,370
---------- ---------- ---------- ---------
Earnings (loss) from operations 575 (2,468) 1,561 (1,087)
Other income (expense)
Interest expense (181) (9) (303) (22)
Other income 678 154 809 220
---------- ---------- ---------- ---------
497 145 506 198
---------- ---------- ---------- ---------
Earnings (loss) before income taxes 1,072 (2,323) 2,067 (889)
Income (taxes) benefit (418) 883 (796) 338
---------- ---------- ---------- ---------
NET EARNINGS (LOSS) $ 654 $ (1,440) $ 1,271 $ (551)
---------- ---------- ---------- ---------
---------- ---------- ---------- ---------
Net earnings (loss) per share
Primary $ 0.05 $ (0.12) $ 0.10 $ (0.05)
Fully diluted $ 0.05 $ (0.12) $ 0.10 $ (0.05)
Weighted average common and
dilutive common equivalent
shares outstanding
Primary 12,337,870 12,065,254 12,334,104 11,905,588
Fully diluted 12,337,870 12,065,254 12,334,104 11,905,588
</TABLE>
See accompanying notes to condensed financial statements.
2
<PAGE>
DAW TECHNOLOGIES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands, except share data)
Six Months Ended
June 30,
----------------
1996 1995
---- ----
Increase (decrease) in cash
Cash flows from operating activities
Net earnings (loss) $ 1,271 $ (551)
Adjustments to reconcile net earnings (loss)
to net cash provided by (used in) operating
activities
Depreciation and amortization 779 348
Provision for losses on contracts receivable 83 -
Changes in assets and liabilities
Contracts and other receivables (9,032) (689)
Costs and estimated earnings in excess
of billings on contracts in progress (10) (322)
Inventories (1,540) (745)
Prepaid expenses and other
current assets 119 59
Accounts payable, other liabilities
and accrued expenses 2,014 1,683
Income taxes payable 519 (358)
Billings in excess of costs and estimated
earnings on contracts in progress 751 1,061
Other assets (23) (11)
-------- -------
Net cash provided by (used in)
operating activities (5,069) 475
-------- -------
Cash flows from investing activities
Payments for purchase of property
and equipment (1,865) (1,232)
-------- -------
Net cash used in investing activities (1,865) (1,232)
-------- -------
(continued)
See accompanying notes to condensed financial statements.
3
<PAGE>
DAW TECHNOLOGIES, INC.
CONDENSED STATEMENTS OF CASH FLOWS - CONTINUED
(Unaudited)
(in thousands, except share data)
Six Months Ended
June 30,
----------------
1996 1995
---- ----
Cash flows from financing activities
Net change in line of credit 4,535 -
Payments of long-term debt (46) (35)
Proceeds from exercise of warrants and options 44 2,211
Payments of obligations under
capital leases (308) (76)
------- -------
Net cash provided by
financing activities 4,225 2,100
------- -------
Net increase (decrease) in cash and
cash equivalents (2,709) 1,343
Cash and cash equivalents at beginning of period 5,885 2,711
------- -------
Cash and cash equivalents at end of period $ 3,176 $ 4,054
------- -------
------- -------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID DURING THE PERIOD FOR
Interest $ 303 $ 22
Income taxes 200 100
See accompanying notes to condensed financial statements.
4
<PAGE>
DAW TECHNOLOGIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except share data)
1. INTERIM CONDENSED FINANCIAL STATEMENTS
The accompanying unaudited, condensed financial statements
have been prepared by Daw Technologies, Inc. (the "Company" or
"Daw") in accordance with generally accepted accounting
principles for interim financial reporting and the instructions
to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly,
certain information and footnote disclosures normally included in
financial statements prepared under generally accepted accounting
principles have been condensed or omitted pursuant to such
regulations. In the opinion of management, all adjustments
considered necessary for a fair presentation of the Company's
financial position, results of operations and cash flows have
been included. All such adjustments are of a normal recurring
nature. This report on Form 10-Q for the three and six months
ended June 30, 1996 should be read in conjunction with the
Company's annual report on Form 10-K for the calendar year ended
December 31, 1995. The results of operations for the three and
six months ended June 30, 1996 may not be indicative of the
results that may be expected for the year ending December 31,
1996.
2. LINE OF CREDIT
On January 2, 1996 the Company replaced its former
revolving line of credit with a new line of credit with a bank
for $8,000. The interest rate is computed at the bank's variable
index rate (8.50% at inception; 8.25% at June 30, 1996). The
Company had borrowings of $6,035 and $1,500 as of June 30, 1996,
and December 31, 1995, respectively. The line is collateralized
by certain receivables and inventories.
3. STOCK PURCHASE PLAN
During the six months ended June 30, 1996, the Board of
Directors and the shareholders approved the Company's 1996
Employee Stock Purchase Plan ("Purchase Plan"). The Purchase
Plan provides for a series of six-month offerings on May 1 and
November 1 of each calendar year during the term of the Purchase
Plan. The first six-month offering commenced on May 1, 1996 and
the last six-month offering will commence on November 1, 2000.
An eligible employee may elect to participate in an offering
under the Purchase Plan by authorizing the Company to make
payroll deductions during the offering period. The maximum
number of shares of common stock which may be issued under the
Purchase Plan is 750,000. The price per share to be paid by the
participant under the Purchase Plan shall be the lessor of 85%
of the fair market value of the common stock on the applicable
offering commencement date or 85% of the fair market value of the
common stock on the applicable offering termination date. No
employee is permitted to purchase in excess of $25,000 of common
stock per calendar year under the Purchase Plan.
(continued)
5
<PAGE>
4. AMENDMENT TO STOCK OPTION PLAN
During the six months ended June 30, 1996, the Board of
Directors and shareholders approved an amendment to the 1993
Stock Option Plan ("Option Plan"). The amendment eliminates the
250,000 share annual limitation, increases the maximum number of
shares available for issuance under the Option Plan to 1,250,000
and limits the number of shares for which options may be granted
to an employee in a single calendar year to 100,000.
6
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
General
The following discussion should be read in conjunction with
the financial statements and notes thereto included elsewhere
herein. All data in the tables are in thousands, except for
percentages and per-share data.
The Company is an integrated systems solution provider of
cleanrooms and cleanroom component systems for the semiconductor
industry. In recent years, the Company typically has had one to
five significant customers, each of which accounted for more than
ten percent of the Company's annual revenues; these customers do
not necessarily remain significant in subsequent years. The
semiconductor industry has been historically cyclical in nature.
During the first and second quarters of 1996, there have been
certain events that indicate the industry is currently in a
cyclical downturn. Such a downturn could result in reduced
capital spending by semiconductor companies and the cancellation,
reduction or delay of certain contracts already awarded to the
Company, which could have a material adverse effect on the
Company's operations. The Company has experienced one contract
reduction during the first quarter of 1996 and a contract delay
during the second quarter of 1996. These contract changes have
not had a material impact on the Company's financial condition
for the six months ended June 30, 1996. However, in the event
the Company experiences additional contract reductions or delays,
these events could materially adversely affect the Company's
financial statements for the remainder of 1996. Management does
not believe, based on its backlog of $78.0 million at June 30,
1996 and the contract bidding activity in process, that the
industry downturn will be long-term. There can be no assurance,
however, that the Company's operations will not be materially
adversely affected if the downturn continues longer than
management's current expectation.
The Company's contract revenue and operating results
fluctuate substantially from quarter to quarter depending on the
timing of significant customer orders, the timing of revenue and
cost recognition, variations in contract mix, changes in customer
buying patterns, fluctuations in the semiconductor equipment
market, utilization of capacity, manufacturing productivity and
efficiency, availability of key components, and trends in the
economies of the geographical regions in which the Company
operates.
The Company uses the percentage-of-completion method of
accounting for its contracts. The Company recognizes revenue in
proportion to the costs incurred to date in relation to the total
anticipated costs. Revenue recognized may not be the same as
progress billings to the customer. Underbillings are reflected
in an asset account (costs and estimated earnings in excess of
billings on contracts in progress), and overbillings are
reflected in a liability account (billings in excess of costs and
estimated earnings on contracts in progress). Engineering and
development costs for new products to be supplied for identified
projects are considered a cost of that project.
The Company generates revenue in three geographic regions:
North America, Asia/Pacific Rim, and Europe. Contracts in the
Asia/Pacific Rim region are generally denominated in United
States dollars. Although risk of fluctuations in currency value
does
7
<PAGE>
not affect such dollar-denominated contracts, changes in the
relative value of the dollar could make the Company less
competitive in this region. Contracts to be performed in Europe
may be denominated in local currency, and the Company bears the
risk of changes in the relative value of the dollar and the local
currencies. The Company has in the past and may in the future
attempt to hedge against currency fluctuations on contracts
denominated in local currencies. There can be no assurance,
however, that such hedging will fully insulate the Company from
fluctuations or will not expose the Company to additional risks
of loss.
The Company's business and operations have not been
materially affected by inflation during the periods for which
financial information is presented.
RESULTS OF OPERATIONS (in thousands, except share data)
<TABLE>
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
-------------------- ------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Contract revenue ..................... $ 27,049 $ 13,948 $ 50,432 $ 30,751
Cost of contracts 23,807 14,539 43,849 28,468
-------- -------- -------- --------
Gross profit (loss) 3,242 (591) 6,583 2,283
-------- -------- -------- --------
Selling, general and
administrative expenses 2,576 1,782 4,835 3,196
Depreciation and
amortization 91 95 187 174
-------- -------- -------- --------
2,667 1,877 5,022 3,370
-------- -------- -------- --------
Earnings (loss) from operations ...... 575 (2,468) 1,561 (1,087)
Other income, net .................... 497 145 506 198
-------- -------- -------- --------
Earnings (loss) before income taxes... 1,072 (2,323) 2,067 (889)
Income (taxes) benefit ............... (418) 883 (796) 338
-------- -------- -------- --------
Net earnings (loss) .................. $ 654 $ (1,440) $ 1,271 $ (551)
-------- -------- -------- --------
-------- -------- -------- --------
Net earnings (loss) per share
Primary .......................... $ 0.05 $ (0.12) $ 0.10 $ (0.05)
Fully diluted .................... $ 0.05 $ (0.12) $ 0.10 $ (0.05)
</TABLE>
JUNE 30, DECEMBER 31,
1996 1995
-------- ------------
BALANCE SHEET DATA:
Cash and cash equivalents ....... $ 3,176 $ 5,885
Working capital ................. 15,344 15,431
Total assets .................... 48,854 40,072
Total liabilities ............... 28,130 20,663
Total shareholders equity ....... 20,724 19,409
8
<PAGE>
Contract revenue for the second quarter of 1996 increased by
93.9% to $27.0 million compared to $13.9 million for the second
quarter of 1995. Contract revenue for the six months ended June
30, 1996 increased by 64.0% to $50.4 million compared to $30.8
million for the six months ended June 30, 1995. This increase is
attributed to an increase in the number of contracts in process
during the first and second quarters of 1996 and an increase in
the average size of the contracts. The Company's ability to
increase the number and size of its contracts has been enhanced
by an increase in the manufacturing capacity of the Company's
facilities which has resulted in a higher production of cleanroom
component parts during the first and second quarters of 1996
compared to the first and second quarters of 1995.
Gross profit for the second quarter of 1996 increased by
649% to $3.2 million from ($591,000) for the second quarter of
1995 and increased as a percentage of contract revenue to 12.0%
for the second quarter of 1996 from (4.2%) for the second quarter
of 1995. Gross profit for the six months ended June 30, 1996
increased by 188.3% to $6.6 million from $2.3 million for the
for the six months ended June 30, 1995 and increased as a
percentage of contract revenue to 13.1% for the six months ended
June 30, 1996 from 7.4% for the six months ended June 30, 1995.
Gross profit for the three and six months ended June 30, 1995 was
negatively impacted by a product failure at a single contract
site during the second quarter of 1995. This event in addition
to significant manufacturing inefficiencies which resulted in
contract cost overruns during the second quarter of 1995,
contributed to a substantially lower gross profit for the three
and six months ended June 30, 1995, compared to the same periods
during 1996. Margins during the second quarter of 1996 were
impacted by costs associated with establishing a viable presence
in the Asia/Pacific market and a contract in the European region
where cost overruns have exceeded expectations. Consistent with
the Company's strategy of establishing a presence and gaining
market share in the Asia/Pacific region, which management
believes is important to the Company's continued growth, the
Company has responded to difficult competitive conditions in the
region by accepting and completing contracts on terms that would
otherwise not be acceptable. Management believes that
competitive conditions in the Asia/Pacific region will continue
throughout 1996 having an impact on the Company's gross margins
for the third and fourth quarters of 1996.
Selling, general and administrative expenses for the second
quarter of 1996 increased by 44.6% to $2.6 million compared to
$1.8 million for the second quarter of 1995, but decreased as a
percentage of contract revenue to 9.9% for the second quarter of
1996 from 12.8% for the second quarter of 1995. Selling, general
and administrative expenses for the six months ended June 30,
1996 increased by 51.3% to $4.8 million compared to $3.2 million
for the six months ended June 30, 1995, but decreased as a
percentage of contract revenue to 9.6% for the six months ended
June 30, 1996 from 10.4% for the six months ended June 30, 1995.
The increase in actual selling, general and administrative
expenses is related to greater selling and marketing activities
required to improve the number and size of contracts awarded
during the first and second quarters of 1996 as compared to the
same periods in 1995. The Company also increased its general and
administrative headcount to meet the requirements of the
increased sales volume.
Other income for the second quarter of 1996 increased to
$497,000 compared to $145,000 for the second quarter of 1995.
Other income for the six months ended June 30, 1996 increased to
$506,000 compared to $198,000 for the six months ended June 30,
1995.
9
<PAGE>
This increase is the result of a settlement of litigation
filed by the Company against a vendor seeking reimbursement of
costs related to the product failure reported in the second
quarter of 1995. Other income was offset by an increase in
interest expense directly related to the increased borrowings
against the Company's credit line during the six months ended
June 30, 1996.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at June 30, 1996 was $15.3 million compared
to $15.4 at December 31, 1995. This includes cash and cash
equivalents of $3.2 million at June 30, 1996 and $5.9 million at
December 31, 1995, respectively.The Company's operations used
$502,000 of cash during the second quarter of 1996, compared to
$1.1 million of cash used by operations during the second quarter
of 1995. During the second quarter of 1996, the Company
experienced an increase in contracts receivable, costs and
estimated earnings in excess of billings on contracts in progress,
and inventories as a result of growth in the size and number of
contracts.
At December 31, 1995, the Company had lines of credit
totaling $6.0 million. During the first quarter of 1996, the
Company negotiated a new line of credit totaling $8.0 million
which replaced the two previous lines. Amounts drawn under the
new line bear interest at a commercial loan variable rate index
(8.5% as of date of the agreement) and are due no later than June
30, 1996 with options to renew the agreement on an annual basis.
Subsequent to June 30, 1996, the Company renewed this line of
credit through June 30, 1997. The line is secured by all
domestic accounts receivable and inventory. At June 30, 1996,
the Company had $6.0 million outstanding against the line of
credit.
Management believes that existing cash balances, borrowings
available under the line of credit, and cash generated from
operations will be adequate to meet the Company's anticipated cash
requirements through December 31, 1996. However, in the event the
Company experiences adverse operating performance or
above-anticipated capital expenditure requirements, additional
financing may be required. There can be no assurance that such
additional financing, if required, would be available on favorable
terms if at all.
This quarterly report on Form 10-Q may be deemed to contain
certain forward-looking statements. These statements are subject
to known and unknown risks and uncertainties, including decreases
in capital expenditures by semiconductor manufacturers,
cancellation or delays in existing contracts, increased
competition in the industry and such other risks as are identified
and discussed herein and in the Company's filings with the
Security and Exchange Commission. These known and unknown risks
and uncertainties could cause the Company's actual results in
future periods to be materially different from any future
performance suggested herein.
10
<PAGE>
PART II - OTHER INFORMATION
Item 4: Submission of Matters to a Vote of Security Holders
The registrant held its Annual Meeting of Shareholders on May 22,
1996. The shareholders elected the following Board of Directors
to serve for one year:
Name Shares Voted For
---- ----------------
Ronald W. Daw 11,517,508
Charles L. Bates, Jr. 11,520,708
Russell W. Weiss 11,521,208
Robert G. Chamberlain 11,522,158
Sterling D. Sessions 11,520,708
The shareholders ratified the adoption of the Daw Technologies,
Inc.'s 1996 Employee Stock Purchase Plan by a vote of 7,256,841
for, 1,809,991 against and 2,911,406 abstained or were broker
non-votes.
The shareholders ratified the amendments to the Daw Technologies,
Inc.'s 1993 Stock Option Plan by a vote of 6,855,978 for,
2,318,804 against and 2,803,456 abstained or were broker non-
votes.
The shareholders also ratified the appointment of Grant Thornton
LLP as independent auditors for fiscal year 1996 by a vote of
11,886,406 for, 62,205 against and 29,627 abstained.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
REGULATION S-K
EXHIBIT NO. DESCRIPTION
-------------- -----------
10.1 Amendment to 1993 Stock Option Plan
11.1 and 11.2 Earnings Per Share Calculation
27 Financial Data Schedule
---------------
(b) Reports on Form 8-K - There were no reports on Form 8-K
filed for the three months ended June 30, 1996.
11
<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.
DAW TECHNOLOGIES, INC.
(Registrant)
By: /s/ David R. Grow
-------------------------------------
David R. Grow
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
12
<PAGE>
Exhibit 10.1
Amendment 1
DAW TECHNOLOGIES, INC.
1993 STOCK OPTION PLAN
THIS AMENDMENT NO. 1 (the "Amendment"), is executed effective as of April 22,
1996 by Daw Technologies, Inc., a Utah corporation (the "Company").
RECITALS
WHEREAS, the Company has previously adopted the Daw Technologies, Inc. 1993
Stock Option Plan (the "Plan") on November 19, 1993;
WHEREAS, the Board of Directors has adopted an amendment to the Plan to increase
the number of shares available for issuance under the Plan, to eliminate the
annual limitation on the number of shares for which options may be granted, to
limit the number of awards to any single employee in any calendar year, and to
extend the term of the Plan an additional year;
WHEREAS, the Company now desires to document such amendment.
NOW THEREFORE, upon these premises, the Plan is hereby modified, altered and
amended in the following respects only, subject to the conditions set forth in
Sections 2 and 3 below:
1. AMENDMENT.
a. Section 1.4 (a) is hereby amended to read in its entirety as
follows:
"(a) NUMBER OF SHARES. The maximum number of shares of Common Stock
that may be issued pursuant to options granted to Eligible Employees under
this Plan is 1,075,000 shares, and the maximum number of shares of Common
Stock that may be issued under the provisions of Article V shall not exceed
175,000 shares, for an aggregate total of 1,250,000 shares of Common Stock
that may be issued under this Plan subject to adjustments contemplated by
Section 3.2. Notwithstanding the foregoing, the maximum number of shares
for which Options may be granted to a single Eligible Employee in a single
calendar year shall be 100,000, subject to adjustments contemplated by
Section 3.2."
b. Section 3.9 is hereby amended to read in its entirety as follows:
"3.9 TERM OF PLAN
No Option shall be granted more than five years after the effective
date of this Plan (the "termination date"). Unless otherwise expressly
provided in this Plan or in an applicable Option Agreement, any Option
heretofore granted may extend beyond such date, and all authority of the
Committee with respect to Options
<PAGE>
hereunder shall continue during any suspension of this Plan and in
respect of outstanding Options on such termination date."
2. EFFECTIVENESS. This Amendment shall become effective as of April 22,
1996 subject to receipt of shareholder approval within 12 months of
such effective date.
3. RATIFICATION. In all respects, other than as specifically set forth in
Section 1 above, the Plan shall remain unaffected by this Amendment, the
Plan shall continue in full force and effect, subject to the terms and
conditions thereof, and in the event of any conflict, inconsistency, or
incongruity between the provisions of this Amendment and any provisions of
the Plan, the provisions of this Amendment shall in all respects govern
and control.
IN WITNESS WHEREOF, the Company has duly executed this Amendment effective
as of the date first set forth above.
DAW TECHNOLOGIES, INC.,
a Utah corporation
By: /s/ DAVID R. GROW
-----------------------------------
Its: Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
<PAGE>
Exhibit 11.1
Daw Technologies, Inc.
EARNINGS PER SHARE CALCULATION
Three Months ended June 30,
<TABLE>
1996 1995
-------------------------- --------------------------
Primary Fully Diluted Primary Fully Diluted
------- ------------- ------- -------------
<S> <C> <C> <C> <C>
Average number of common shares
outstanding during the period
Common shares outstanding
during the entire period 12,330,254 12,330,254 11,779,254 11,779,254
Weighted average common shares
issued during the period 7,616 7,616 286,000 286,000
----------- ----------- ----------- -----------
Weighted average number of
common shares outstanding 12,337,870 12,337,870 12,065,254 12,065,254
Dilutive effect of common stock
equivalents under stock warrants
and options* - - - -
----------- ----------- ----------- -----------
Weighted average common and
dilutive common equivalent
shares outstanding 12,337,870 12,337,870 12,065,254 12,065,254
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Net earnings (loss) applicable to
common stock $ 654,000 $ 654,000 $(1,440,000) $ (1,440,000)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Net earnings (loss) per common and
dilutive common equivalent
shares outstanding $ 0.05 $ 0.05 $ (0.12) $ (0.12)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
*Not included in this earnings per share calculation, since the
total dilutive effect of all common stock equivalents calculated under
the Treasury Stock Method is less than 3% for the three months ended
June 30, 1996 and 1995.
<PAGE>
Exhibit 11.2
Daw Technologies, Inc.
EARNINGS PER SHARE CALCULATION
Six Months ended June 30,
<TABLE>
1996 1995
-------------------------- --------------------------
Primary Fully Diluted Primary Fully Diluted
------- ------------- ------- -------------
<S> <C> <C> <C> <C>
Average number of common shares
outstanding during the period
Common shares outstanding
during the entire period 12,330,254 12,330,254 11,741,254 11,741,254
Weighted average common shares
issued during the period 3,850 3,850 164,334 164,334
----------- ---------- ----------- ------------
Weighted average number of
common shares outstanding 12,334,104 12,334,104 11,905,588 11,905,588
Dilutive effect of common stock
equivalents under stock
warrants and options* - - - -
----------- ---------- ----------- ------------
Weighted average common and
dilutive common equivalent
shares outstanding 12,334,104 12,334,104 11,905,588 11,905,588
----------- ---------- ----------- ------------
----------- ---------- ----------- ------------
Net earnings (loss) applicable to
common stock $ 1,271,000 $ 1,271,000 $ (551,000) $ (551,000)
----------- ---------- ----------- ------------
----------- ---------- ----------- ------------
Net earnings (loss) per common
and dilutive common equivalent
shares outstanding $ 0.10 $ 0.10 $ (0.05) $ (0.05)
----------- ---------- ----------- ------------
----------- ---------- ----------- ------------
*Not included in this earnings per share calculation, since the total
dilutive effect of all common stock equivalents calculated under
the Treasury Stock Method is less than 3% for the six months ended
June 30, 1996 and 1995.
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF JUNE 30, 1996, AND THE STATEMENT OF EARNINGS FOR THE SIX MONTHS
ENDED JUNE 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 3,176
<SECURITIES> 0
<RECEIVABLES> 23,233
<ALLOWANCES> (223)
<INVENTORY> 3,018
<CURRENT-ASSETS> 41,225
<PP&E> 12,411
<DEPRECIATION> (4,887)
<TOTAL-ASSETS> 48,854
<CURRENT-LIABILITIES> 25,881
<BONDS> 0
0
0
<COMMON> 123
<OTHER-SE> 20,601
<TOTAL-LIABILITY-AND-EQUITY> 48,854
<SALES> 50,432
<TOTAL-REVENUES> 50,432
<CGS> 43,849
<TOTAL-COSTS> 48,788
<OTHER-EXPENSES> (809)
<LOSS-PROVISION> 83
<INTEREST-EXPENSE> 303
<INCOME-PRETAX> 2,067
<INCOME-TAX> 796
<INCOME-CONTINUING> 1,271
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,271
<EPS-PRIMARY> 0.10
<EPS-DILUTED> 0.10
</TABLE>
