<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 September 30, 1997
or
( ) Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
0-21818
---------------------
(Commission File No.)
DAW TECHNOLOGIES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
UTAH 87-0464280
- --------------------------------- -------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
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 November 10, 1997, the Registrant had 12,419,586 shares of Common
Stock, $0.01 par value outstanding.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Daw Technologies, Inc.
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . 1
Item 1. Financial Statements
Condensed Balance Sheets - September 30, 1997
and December 31, 1996. . . . . . . . . . . . . . . . . . . . . . . . 1
Condensed Statements of Earnings - Three months
and nine months ended September 30, 1997 and 1996. . . . . . . . . . 2
Condensed Statements of Cash Flows - Nine months
ended September 30, 1997 and 1996. . . . . . . . . . . . . . . . . . 3
Notes to Condensed Financial Statements. . . . . . . . . . . . . . . 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations. . . . . . . . . . . . . . . . . . . . . . . . 7
PART II OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . 12
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Daw Technologies, Inc.
CONDENSED BALANCE SHEETS
(Unaudited)
(in thousands, except share data)
Sept. 30, Dec. 31,
1997 1996
-------- -------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 4,326 $ 3,258
Contracts receivable, net 16,700 27,394
Costs and estimated earnings in excess
of billings on contracts in progress 5,610 7,169
Inventories - raw materials 1,324 1,583
Deferred income tax asset 216 318
Other current assets 1,334 1,996
------- -------
Total current assets 29,510 41,718
PROPERTY AND EQUIPMENT, NET
AT COST 6,726 7,693
OTHER ASSETS 311 84
------- -------
$36,547 $49,495
------- -------
------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 8,330 $10,782
Billings in excess of costs and estimated
earnings on contracts in progress 2,839 7,505
Lines of credit 39 5,696
Current portion of long-term obligations 623 623
------- -------
Total current liabilities 11,831 24,606
LONG-TERM OBLIGATIONS, less current portion 1,267 1,730
DEFERRED INCOME TAX LIABILITY 217 221
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
12,419,586 shares at September 30, 1997
and 12,400,543 at December 31, 1996 124 124
Additional paid-in-capital 15,236 15,188
Retained earnings 7,872 7,626
------- -------
Total shareholders' equity 23,232 22,938
------- -------
$36,547 $49,495
------- -------
------- -------
See accompanying notes to condensed financial statements.
1
<PAGE>
Daw Technologies, Inc.
CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(in thousands, except share data)
<TABLE>
Three Months Ended Nine months Ended
September 30, September 30,
--------------------- ---------------------
1997 1996 1997 1996
------- ------- ------- -------
<S> <C> <C> <C> <C>
Contract revenue $11,453 $30,009 $44,711 $80,441
Cost of contracts 9,417 25,847 37,694 70,262
------- ------- ------- -------
Gross profit 2,036 4,162 7,017 10,179
------- ------- ------- -------
Operating expenses
Selling, general and administrative 1,833 2,305 6,027 6,497
Research and development 49 43 197 119
Depreciation and amortization 108 101 322 289
------- ------- ------- -------
1,990 2,449 6,546 6,905
------- ------- ------- -------
Earnings from operations 46 1,713 471 3,274
Other income (expense)
Interest expense (54) (163) (265) (466)
Other income, net 86 45 187 854
------- ------- ------- -------
32 (118) (78) 388
------- ------- ------- -------
Earnings before income taxes 78 1,595 393 3,662
Income taxes 30 580 147 1,376
------- ------- ------- -------
NET EARNINGS $ 48 $ 1,015 $ 246 $ 2,286
------- ------- ------- -------
------- ------- ------- -------
Earnings per share $ 0.00 $ 0.08 $ 0.02 $ 0.18
Weighted average common
shares outstanding 12,419,586 12,350,550 12,409,429 12,339,598
</TABLE>
See accompanying notes to condensed financial statements.
2
<PAGE>
Daw Technologies, Inc.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands, except share data)
Nine months ended
September 30,
--------------------
1997 1996
------- --------
Increase (decrease) in cash and cash equivalents
Cash flows from operating activities
Net earnings $ 246 $ 2,286
Adjustments to reconcile net earnings
to net cash provided by (used in) operating
activities
Depreciation and amortization 1,261 1,186
Provision for losses on contracts receivable 84 228
Deferred taxes 98 -
Changes in assets and liabilities
Contracts receivable 10,610 (12,904)
Costs and estimated earnings in excess
of billings on contracts in progress 1,559 898
Inventories 259 (1,245)
Other current assets 662 (10)
Accounts payable and accrued liabilities (2,062) 1,486
Income taxes payable (390) 919
Billings in excess of costs and estimated
earnings on contracts in progress (4,666) 3,890
Other assets (227) (23)
------- --------
Net cash provided by (used in)
operating activities 7,434 (3,289)
------- --------
Cash flows from investing activities
Payments for purchase of property
and equipment (294) (2,476)
------- --------
(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)
Nine months ended
September 30,
-------------------
1997 1996
------- -------
Cash flows from financing activities
Net change in lines of credit (5,657) 3,485
Payments of long-term debt - (68)
Proceeds from exercise of warrants and options 48 81
Payments of obligations under
capital leases (463) (456)
------- -------
Net cash provided by (used in)
financing activities (6,072) 3,042
------- -------
Net increase (decrease) in cash and cash equivalents 1,068 (2,723)
Cash and cash equivalents at beginning of period 3,258 5,885
------- -------
Cash and cash equivalents at end of period $ 4,326 $ 3,162
------- -------
------- -------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID DURING THE PERIOD FOR
Interest $ 265 $ 466
Income taxes 438 423
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 months and nine
months ended September 30, 1997 and 1996 should be read in conjunction with
the Company's annual report on Form 10-K for the calendar year ended December
31, 1996. The results of operations for the three months and nine months
ended September 30, 1997 may not be indicative of the results that may be
expected for the year ending December 31, 1997.
2. EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard (SFAS) No. 128, "Earnings per
Share". The statement is effective for financial statements for periods
ending after December 15, 1997, and changes the method in which earnings per
share will be determined. Adoption of this statement by the Company has not
had a material impact on earnings per share. Options and warrants to
purchase 743,100 shares of common stock at $2.50 to $3.50 a share were
outstanding during the period ended September 30, 1997. They were not
included in the computation of earnings per share because the option's
exercise prices were greater than the average market price of the common
shares.
3. RECLASSIFICATIONS
Certain reclassifications have been made to the financial statements for
the three months and nine months ended September 30, 1996, to conform to the
1997 presentation.
4. LINES OF CREDIT
At September 30, 1997, the Company had lines of credit totaling $11.5
million, of which $11.4 million was available at the end of the quarter.
Amounts drawn under the lines bear interest at a commercial loan variable
rate index (8.50% at September 30, 1997) and are due no later than June 30,
1998, with options to renew on an annual basis. The lines are collateralized
by contracts receivable and inventories. The Company had borrowings under the
lines of $39,000 and $5.7 million as of September 30, 1997, and December 31,
1996, respectively. The lines of credit agreements contain restrictive
covenants imposing limitations on payments on cash dividends, purchases or
redemptions of capital stock, indebtedness and other matters.
5
<PAGE>
5. RECENTLY ISSUED ACCOUNTING STATEMENTS NOT YET ADOPTED.
COMPREHENSIVE INCOME. In June 1997, the Financial Accounting Standards
Board (FASB) issued Statement of Financial Accounting Standards No. 130 (SFAS
130), "Reporting Comprehensive Income." SFAS 130 requires entities
presenting a complete set of financial statements to include details of
comprehensive income that arise in the reporting period. Comprehensive
income consists of net earnings or loss for the current period and other
comprehensive income, which consists of revenue, expenses, gains, and losses
that bypass the statement of earnings and are reported directly in a separate
component of equity. Other comprehensive income includes, for example,
foreign currency items, minimum pension liability adjustments, and unrealized
gains and losses on certain investment securities. SFAS 130 requires that
components of comprehensive income be reported in a financial statement that
is displayed with the same prominence as other financial statements. This
statement is effective for fiscal years beginning after December 15, 1997,
and requires restatement of prior period financial statements presented for
comparative purposes.
DISCLOSURE OF SEGMENTS. Also in June 1997, the FASB issued Statement of
Financial Accounting Standards No. 131 (SFAS 131), "Disclosures about
Segments of an Enterprise and Related Information." This statement requires
an entity to report financial and descriptive information about their
reportable operating segments. An operating segment is a component of an
entity for which financial information is developed and evaluated by the
entity's chief operating decision maker to assess performance and to make
decisions about resource allocation. Entities are required to report segment
profit or loss, certain specific revenue and expense items and segment assets
based on financial information used internally for evaluating performance and
allocating resources. This statement is effective for fiscal years beginning
after December 15, 1997 and requires restatement of prior period financial
statements presented for comparative purposes.
Management does not believe that the adoption of SFAS 130 and SFAS 131
will have a material effect on the Company's financial statements.
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 has typically had one to five significant customers, each of
which accounted for more than 10% 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 and continues
to be adversely affected by a cyclical downturn that began in 1996.
The current industry downturn has resulted in lower capital spending by
the semiconductor manufacturers during the third and fourth quarters of 1996
and through the first three quarters of 1997. Management believes the
downturn is nearing its end but may continue through the fourth quarter of
1997. However, as a result of the sales bidding process a recovery is
beginning. How quickly any recovery will take place is still subject to
significant uncertainty. The downturn has resulted in fewer contracts
available to bid, a significant increase in price competition on contracts
that were awarded, and reduced margins on such contracts. During the third
quarter of 1997, the Company experienced fewer new contract awards resulting
in a decrease in the Company's backlog from $41.9 million at September 30,
1996 to $15.0 million at September 30, 1997. Although the Company has
experienced an increase in the contract bidding activity during the third
quarter of 1997 compared to each of the last four quarters, management
believes that the above-described events adversely affected its revenues and
profitability in the third quarter of 1997 and anticipates the industry
downturn will continue to adversely affect its revenues and profitability
through the fourth quarter of 1997.
Although there is uncertainty surrounding the timing of a recovery in the
semiconductor industry, management continues to believe that changes taking
place in the industry should result in expanded semiconductor industry
capital expenditures in the long-term. In response to the current downturn,
management has taken steps to reduce the Company's cost structure including a
reduction in the Company's work force of more than thirty percent during
1997. During the remainder of the year, management will monitor the
Company's cost structure and take appropriate actions as considered
necessary, but continue to develop state of the art cleanroom technology and
provide world-class support to the Company's customers.
The Company's contract revenue and operating results fluctuate
substantially from quarter to quarter depending on such factors as 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
7
<PAGE>
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).
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 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.
8
<PAGE>
RESULTS OF OPERATIONS (in thousands, except share data)
<TABLE>
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
-------------------- -------------------
1997 1996 1997 1996
-------- ------- ------- --------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Contract revenue . . . . . . . . . . $ 11,453 $30,009 $44,711 $80,441
Cost of contracts. . . . . . . . . . 9,417 25,847 37,694 70,262
-------- ------- ------- -------
Gross profit . . . . . . . . . . . . 2,036 4,162 7,017 10,179
-------- ------- ------- -------
Selling, general and
administrative expenses. . . . . . 1,833 2,305 6,027 6,497
Research and development . . . . . . 49 43 197 119
Depreciation and amortization. . . . 108 101 322 289
-------- ------- ------- -------
1,990 2,449 6,546 6,905
-------- ------- ------- -------
Earnings from operations . . . . . . 46 1,713 471 3,274
Other income, net. . . . . . . . . . 32 (118) (78) 388
-------- ------- ------- -------
Earnings before income taxes . . . . 78 1,595 393 3,662
Income taxes . . . . . . . . . . . . 30 580 147 1,376
-------- ------- ------- -------
Net earnings . . . . . . . . . . . . $ 48 $ 1,015 $ 246 $ 2,286
-------- ------- ------- -------
-------- ------- ------- -------
Earnings per share . . . . . . . . . $ 0.00 $ 0.08 $ 0.02 $ 0.18
</TABLE>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------ -----------
BALANCE SHEET DATA:
Cash and cash equivalents. . . . . . $ 4,326 $ 3,258
Working capital. . . . . . . . . . . 17,679 17,112
Total assets . . . . . . . . . . . . 36,547 49,495
Total liabilities. . . . . . . . . . 13,315 26,557
Total shareholders equity. . . . . . 23,232 22,938
Contract revenue for the third quarter of 1997 decreased by 61.8% to
$11.5 million compared to $30.0 million for the third quarter of 1996.
Contract revenue for the nine months ended September 30, 1997 decreased by
44.4% to $44.7 million compared to $80.4 million for the nine months ended
September 30, 1996. This decrease is attributed to the downturn in the
semiconductor industry as more fully discussed above. The downturn has
resulted in fewer contracts being worked on during the nine months ended
September 30, 1997 compared with the nine months ended September 30, 1996.
Gross profit for the third quarter of 1997 decreased by 51.1% to $2.0
million from $4.2 million for the third quarter of 1996 and increased as a
percentage of contract revenue to 17.8% for the third quarter of 1997 from
13.9% for the third quarter of 1996. Gross profit for the nine months ended
September 30, 1997 decreased by 31.1% to $7.0 million from $10.2
9
<PAGE>
million for the nine months ended September 30, 1996 and increased as a
percentage of contract revenue to 15.7% for the nine months ended September
30, 1997 from 12.7% for the nine months ended September 30, 1996. The
increase in gross profit as a percentage of revenue was primarily the result
of continual improvement in the Company's manufacturing facility creating
greater efficiencies and less costs to produce product and better project
management resulting in less problems at the construction sites which allows
the Company to install its product with less time and labor expense. In
addition, the Company completed a contract in the Asia/Pacific Rim region
that resulted in numerous one-time project cost savings that allowed the
project to generate a higher than expected gross margin. Due to the current
industry downturn and increased competition, the Company does not expect to
maintain these gross margins through the remainder of 1997.
Selling, general and administrative expenses for the third quarter of
1997 decreased by 20.5% to $1.8 million compared to $2.3 million for the
third quarter of 1996, but increased as a percentage of contract revenue to
16.0% for the third quarter of 1997 from 7.7% for the third quarter of 1996.
The decrease in selling, general and administrative expenses for the third
quarter of 1997 compared to the third quarter of 1996 is the result of
reduced sales and marketing expenses and overall reduced headcount. For the
nine months ended September 30, 1997, selling, general and administrative
expenses decreased by 7.2% to $6.0 million compared to $6.5 million for the
nine months ended September 30, 1996, but increased as a percentage of
contract revenue to 13.5% for the nine months ended September 30, 1997, from
8.1% for the nine months ended September 30, 1996. Selling, general and
administrative expenses decreased during the nine month period ended
September 30, 1997, as a result of a decrease in selling, general, and
administrative headcount noted above and a decrease in sales and marketing
expense during the nine months ended September 30, 1997 compared to the nine
months ended September 30, 1996.
Research and development expense for the third quarter of 1997 increased
14.0% to $49,000 compared to $43,000 for the third quarter of 1996. Research
and development expense for the nine months ended September 30, 1997
increased 65.5% to $197,000 compared to $119,000 for the nine months ended
September 30, 1996. The increase is the result of a more focused effort to
develop innovative products, to be on the cutting edge of the 300 millimeter
manufacturing facility technology and to modify existing products to be less
expensive to produce and easier to install. The Company expects to continue
its focused research and development effort as noted above.
Depreciation and amortization expense for the third quarter of 1997
increased 6.9% to $108,000 compared to $101,000 for the third quarter of
1996. Depreciation and amortization expense for the nine months ended
September 30, 1997 increased 11.4% to $322,000 compared to $289,000 for the
nine months ended September 30, 1996. The majority of the increase is the
result of leasehold improvements made in the second and third quarters of
1996 to expand and remodel the Company's facility.
Interest expense for the third quarter of 1997 decreased 66.9% to $54,000
compared to $163,000 for the third quarter of 1996. Interest expense for the
nine months ended September 30, 1997 decreased 43.1% to $265,000 compared to
$466,000 for the nine months ended September 30, 1996. This decrease is
directly related to decreased borrowings against the Company's credit lines
during the third quarter of 1997 compared to borrowings during the third
quarter of 1996. The lines of credit variable interest rate at the end of
the third quarter of 1997 and 1996 was 8.5%.
10
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Working capital at September 30, 1997 was $17.7 million compared to $17.1
million at December 31, 1996. This includes cash and cash equivalents of
$4.3 million at September 30, 1997 and $3.3 million at December 31, 1996.
The Company's operations generated $7.4 million of cash during the nine
months ended September 30, 1997, compared to $3.3 million of cash used in
operations during the nine months ended September 30, 1996. During the nine
months ended September 30, 1997, the Company experienced a decrease in
receivables and costs and estimated earnings in excess of billings on
contracts in progress, but a decrease in inventories. In addition, the
Company paid down accounts payables, accrued liabilities, and lines of
credit, and experienced a decrease in billings in excess of costs and
estimated earnings on contracts in progress during the nine months ended
September 30, 1997.
At September 30, 1997, the Company had lines of credit totaling $11.5
million, of which $11.4 million was available at the end of the quarter.
Amounts drawn under the lines bear interest at a commercial loan variable
rate index (8.50% at September 30, 1997) and are due no later than June 30,
1998 with options to renew on an annual basis. The lines are collateralized
by contracts receivable and inventories. The Company had borrowings under
the lines of $39,000 and $5.7 million as of September 30, 1997, and December
31, 1996, respectively. The lines of credit agreements contain restrictive
covenants imposing limitations on payments on cash dividends, purchases or
redemptions of capital stock, indebtedness and other matters.
Management believes that existing cash balances, borrowings available
under the lines of credit, and cash generated from operations will be
adequate to meet the Company's anticipated cash requirements through
September 30, 1998. 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.
FACTORS AFFECTING FUTURE RESULTS
The Company's future operations will be impacted by, among other factors,
the length and severity of the current economic downturn in the semiconductor
industry as more fully discussed above. The length and severity of the
current economic downturn in the semiconductor industry remains subject to a
high degree of uncertainty. The Company's operations are also subject to
additional risks and uncertainties that could result in actual operating
results differing materially from anticipated operating results and past
operating results and trends. These risks and uncertainties include pricing
pressures, cancellations of existing contracts, timing of significant
customer orders, increased competition, and changes in semiconductor and
cleanroom technology.
INFORMATION CONTAINED IN THIS REPORT CONTAINS "FORWARD-LOOKING STATEMENTS"
WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995,
WHICH CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS
"MAY," "WILL," "SHOULD," "EXPECT," "ANTICIPATE," "ESTIMATE," OR "CONTINUE,"
OR THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE
TERMINOLOGY. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS AND
UNCERTAINTIES THAT INCLUDE, BUT ARE NOT LIMITED TO, THOSE IDENTIFIED IN THIS
REPORT, DESCRIBED FROM TIME TO TIME IN THE COMPANY'S OTHER SECURITIES AND
EXCHANGE COMMISSION FILINGS, OR DISCUSSED IN THE COMPANY'S PRESS RELEASES.
ACTUAL RESULTS MAY VARY MATERIALLY FROM EXPECTATIONS.
11
<PAGE>
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Regulation S-K
Exhibit No. Description
-------------- -----------------------------------------
27 Financial Data Schedule
--------------
(b) Reports on Form 8-K - There were no reports on Form 8-K filed for
the three months ended September 30, 1997.
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
It's: Chief Operating Officer
and Secretary
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED BALANCE SHEET AS OF SEPTEMBER 30, 1997 AND THE STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 4,326
<SECURITIES> 0
<RECEIVABLES> 17,160
<ALLOWANCES> (460)
<INVENTORY> 1,324
<CURRENT-ASSETS> 29,510
<PP&E> 13,726
<DEPRECIATION> 7,000
<TOTAL-ASSETS> 36,547
<CURRENT-LIABILITIES> 11,831
<BONDS> 0
0
0
<COMMON> 124
<OTHER-SE> 23,108
<TOTAL-LIABILITY-AND-EQUITY> 36,547
<SALES> 44,711
<TOTAL-REVENUES> 44,711
<CGS> 37,694
<TOTAL-COSTS> 44,240
<OTHER-EXPENSES> (187)
<LOSS-PROVISION> 181
<INTEREST-EXPENSE> 265
<INCOME-PRETAX> 393
<INCOME-TAX> 147
<INCOME-CONTINUING> 246
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 246
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
</TABLE>
