UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 1998
Commission File No. 0-21816
PML, INC.
(Name of small business issuer in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
93-1116123
(I.R.S. Employer Identification Number)
27120 SW 95TH Avenue
Wilsonville, Oregon 97070
(Address of principal executive offices, including zip code)
(503) 570-2500
(Issuer's telephone number)
Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act during the past
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 October 15, 1998 there were 1,780,441 shares of Common Stock with $0.01
par value outstanding, and 211,551 Class B Common Shares with $0.01 par value
outstanding.
<PAGE>
PML, INC.
Index
Part I. Financial Information
Item 1. Financial Statements 2
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statements of Stockholders' Equity 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussions and Analysis of
Financial Condition and Results of Operations 9
Part II. Other Information
Item 1. Legal Proceedings 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 13
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
----------------
PML, INC.
For the First Quarter Ended
August 31, 1998
- 2 -
<PAGE>
PML, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Unaudited
August 31, May 31,
1998 1998
------------ ------------
<S> <C> <C> <C> <C> <C>
Assets
Current Assets:
Cash $ 152,033 $ 163,505
Trade accounts receivable, less allowance for doubtful 2,119,433 2,145,257
accounts of $31,141 and $30,000
Inventories 2,085,750 1,916,818
Deferred income taxes 270,763 276,604
Prepaid expenses and other current assets 97,947 113,931
------------ ------------
Total Current Assets 4,725,926 4,616,115
Property, plant and equipment - net 1,713,677 1,754,993
Intangible assets - net 13,413 20,928
Other assets 125,098 126,453
------------ ------------
Total Assets $ 6,578,114 $ 6,518,489
============ ============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 2,039,926 $ 1,505,707
Accrued salaries and wages 197,416 256,027
Accounts payable - related parties 3,377 -
Other accrued liabilities 283,033 321,415
Notes payable - related parties 247,551 247,551
Bank line of credit 1,687,508 1,987,548
Current portion capital lease obligations 81,302 90,731
Current portion of borrowings - related parties 70,353 73,507
Current portion of borrowings 247,582 248,018
------------ ------------
Total Current Liabilities 4,858,048 4,730,504
------------ ------------
Capital lease obligations, less current portion 106,601 122,197
Borrowings - related parties, less current portion 104,580 115,197
Borrowings, less current portion 551,574 599,978
------------ ------------
Total Borrowings. less current portion 762,755 837,372
Commitments and contingencies - -
------------ ------------
Stockholders' Equity
Preferred stock, $.01 par value; authorized 25,000 shares,
no shares issued or outstanding - -
Class A convertible preferred stock, stated and liquidation
value $100 per share; authorized 7,500 shares, issued and
outstanding 4,950 shares, including accreted dividends 703,537 691,060
Common stock, $.01 par value; authorized 2,500,000 shares,
issued and outstanding 1,780,441 and 1,780,441 shares respect 17,804 17,804
Class B common stock, $.01 par value; authorized 250,000 shares,
issued and outstanding 211,551 shares. 2,116 2,116
Class D common stock, $.01 par value, authorized 100 shares,
no shares issued or outstanding. - -
Additional Paid In Capital 146,540 146,540
Retained Earnings 87,314 93,093
Total Stockholders' Equity 957,311 950,613
------------ ------------
Total Liabilities and Stockholders' Equity $ 6,578,114 $ 6,518,489
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
PML, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For The Three Months Ended
August 31,
1998 1997
------------ ------------
Net sales $ 3,597,242 $ 3,430,884
Cost of goods sold 2,142,917 2,072,826
------------ ------------
Gross profit 1,454,325 1,358,058
Operating expenses 1,285,197 1,214,550
------------ ------------
Operating income 169,128 143,508
Other expense:
Interest expense 85,473 79,418
Other 69,747 5,452
------------ ------------
Total other expense 155,220 84,870
------------ ------------
Income before income taxes 13,908 58,638
Income tax expense 7,210 25,930
------------ ------------
Net income $ 6,698 $ 32,708
============ ============
Basic income per share $ 0.00 $ 0.01
============ ============
Diluted income per share $ 0.00 $ 0.01
============ ============
The accompanying notes are an integral part of these statements.
4
<PAGE>
PML, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Class A
Convertible Common
Preferred Shares Shares Shares Additional Earnings
---------------- ------------------ ------------------ Paid-in (Accumulated
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT Capital Deficit) Total
------ --------- --------- -------- -------- -------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, May 31, 1996 4,950 $ 592,974 1,776,816 $ 17,768 211,551 $ 2,116 $ 144,701 $ (517,122) $ 240,437
Preferred Stock dividends accreted 48,587 - - - (48,587) -
Net income - - - - 669,371 669,371
----- --------- --------- -------- -------- -------- ---------- ----------- ----------
Balance, May 31, 1997 4,950 $ 641,561 1,776,816 $ 17,768 211,551 $ 2,116 $ 144,701 $ 103,662 $ 909,808
===== ========= ========= ======== ======== ======== ========== ========== ==========
Balance, May 31, 1997 4,950 $ 641,561 1,776,816 $ 17,768 211,551 $ 2,116 $ 144,701 $ 103,662 $ 909,808
Preferred Stock dividends accreted 49,499 - - - (49,499) -
Common Stock returned and canceled - (125) (1) - 1 - -
Stock options exercised - 3,750 37 - 1,838 - 1,875
Net income - - - - 38,930 38,930
----- --------- --------- -------- -------- -------- ---------- ----------- ----------
Balance, May 31, 1998 4,950 $ 691,060 1,780,441 $ 17,804 211,551 $ 2,116 $ 146,540 $ 93,093 $ 950,613
===== ========= ========= ======== ======== ======== ========== ========== ==========
Balance, May 31, 1998 4,950 $ 691,060 1,780,441 $ 17,804 211,551 $ 2,116 $ 146,540 $ 93,093 $ 950,613
Preferred Stock dividends accreted 12,477 (12,477) -
Net income - 6,698 6,698
----- --------- --------- -------- -------- -------- ---------- ----------- ----------
Balance, August 31, 1998 4,950 $ 703,537 1,780,441 $ 17,804 211,551 $ 2,116 $ 146,540 $ 87,314 $ 957,311
===== ========= ========= ======== ======== ======== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
PML, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For The Three Months Ended
August 31,
1998 1997
------------ ------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 6,698 $ 32,708
Adjustments to reconcile net income to
net cash provided by (used in) operating activities:
Depreciation and amortization 105,334 82,530
(Gain) on sale of equipment - (8,509)
Changes in:
Accounts receivable 25,824 (82,620)
Inventories (168,932) (34,139)
Deferred income taxes 5,841 -
Other assets 23,825 17,597
Accounts payable and accrued liabilities 452,215 (327,155)
------------ ------------
Total adjustments 444,107 (352,296)
------------ ------------
Net cash provided by (used in) operating activities 450,805 (319,588)
Cash Flows from Investing Activities:
Proceeds from sale of assets - 11,277
Purchase of property, plant and equipment (62,989) (164,378)
------------ ------------
Net cash used in investing activities (62,989) (153,101)
Cash Flows from Financing Activities:
Net proceeds of bank credit line (300,040) 548,693
Proceeds from issuance of notes payable - related parties - -
Repayment of notes payable - related parties - -
Proceeds from issuance of capital lease obligations - -
Repayment of capital lease obligations (25,025) (11,073)
Proceeds from issuance of long-term debt - -
Repayment of long-term debt (74,223) (52,637)
Proceeds from issuance of common stock - -
------------ ------------
Net cash (used in) provided by financing activities (399,288) 484,983
------------ ------------
(Decrease) increase in cash (11,472) 12,294
Cash at beginning of period 163,505 74,410
------------ ------------
Cash at end of period $ 152,033 $ 86,704
============ ============
Supplemental Disclosures:
Interest paid $ 100,337 $ 61,014
Income tax paid 1,970 -
Non Cash Items:
Preferred stock dividends accreted 12,477 12,476
Accounts payable exchanged for long-term debt 11,612 -
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Financial Statements
The accompanying unaudited consolidated financial statements include the
accounts of PML, Inc. and its wholly-owned subsidiary, PML Microbiologicals,
Inc. The Company produces and sells diagnostic microbiology products to
customers in the microbiology testing industry, principally hospital and
healthcare-related laboratories, throughout the United States and Canada. In
addition, the Company has developed a line of sterility testing products for the
pharmaceutical and biotechnology industries. This new product offering will be
expanded to include general microbiology media and Quality Control
microorganisms.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission (the "Commission"). While these financial
statements reflect all necessary, normal and recurring adjustments in the
opinion of management required to present fairly, in all material respects, the
financial position, results of operations and cash flows of the Company and its
subsidiary at August 31, 1998, and for the period then ended, they do not
include all information and notes required by generally accepted accounting
principles for complete financial statements. Further information is contained
in the annual financial statements of the Company and notes thereto, for the
year ended May 31, 1998, contained in the Company's Form 10-KSB, filed with the
Commission pursuant to the Securities Exchange Act of 1934. Operating results
for the three month period ended August 31, 1998 are not necessarily indicative
of the results that may be expected for the full year.
Reclassifications - Certain reclassifications have been made to the fiscal
1998 financial statements to conform to the fiscal 1999 presentation. Such
reclassifications did not have any effect on the net income or stockholders'
equity reported in fiscal 1998.
Note 2. Net Earnings Per Share
During the quarter ended February 28, 1998 the Company adopted Statement of
Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS 128). As
required by SFAS 128, the Company has applied the provisions of SFAS 128 to the
current and all prior periods shown for purposes of computing earnings per share
(EPS). The effect of equity instruments is excluded whenever the impact on
earnings per share would be anti-dilutive.
- 7 -
<PAGE>
<TABLE>
<CAPTION>
Information Needed to Calculate Basic Earnings Per Share
For The Three Months Ended
August 31,
1998 1997
----------- -----------
<S> <C> <C>
Numerator
- ---------
Net income $ 6,698 $ 32,708
Preferred stock dividends accreted (12,477) (12,476)
----------- -----------
Net (loss) income after accretion of dividends $ (5,779) $ 20,232
=========== ===========
Denominator
- -----------
Average number of common shares outstanding 1,780,441 1,776,816
Average number of Class B common stock outstanding 211,551 211,551
----------- -----------
Average shares used in basic EPS calculation 1,991,992 1,988,367
=========== ===========
Basic (loss) income per share $ 0.00 $ 0.01
Information Needed to Calculate Diluted Earnings Per Share
For The Three Months Ended
August 31,
1998 1997
----------- -----------
Numerator
Basic income ` $ (5,779) $ 20,232
----------- -----------
Add back preferred stock dividends accreted* - 12,476
----------- -----------
Diluted (loss) income after add back of accreted dividends $ (5,779) $ 32,708
Denominator
Average number of common shares outstanding 1,780,441 1,776,816
Average number of Class B common stock outstanding 211,551 211,551
Effect of common stock equivalents* - 187,524
Effect of preferred convertible stock* - 176,786
----------- -----------
Average shares used in diluted EPS calculation 1,991,992 2,352,677
=========== ===========
Diluted (loss) income per share $ 0.00 $ 0.01
</TABLE>
* To the extent that the effect of preferred stock dividends accreted, common
stock equivalents, and the preferred convertible stock are anti-dilutive, they
are not included in the diluted earnings per share calculation. For the three
months ended August 31, 1998, amounts excluded were $12,477 of accreted
dividends, 185,808 shares of common stock equivalents and 176,786 shares of
preferred convertible stock.
- 8 -
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Forward Looking Statements
Management's Discussion and Analysis of Financial Condition and Results of
Operations contains certain forward looking statements that involve a number of
risks and uncertainties. For example, the Company has stated its belief that
sales of industrial products should continue to increase in the current year and
that reductions in cost of goods sold should continue from last year's
consolidation of three Oregon facilities into one new modern building. Future
demand for the Company's products, including its industrial products, is
inherently subject to supply and demand conditions, and to the unpredictable
decisions of other market participants. There can be no assurance that sales
will increase generally or within any specified product line or that the
Company's margins will stabilize or improve. Other elements that could cause
results to differ materially include competitive pressures and factors listed
from time to time in the Company's reports to the Securities and Exchange
Commission, including, but not limited to, this report on Form 10-QSB.
Year 2000 Issue
The Company recognizes the importance to its operations and reporting systems
of Year 2000 issues and is addressing this issue to ensure that the reliability
of its operations as well as the availability and integrity of its financial
systems will not be adversely impacted by Year 2000 computer technology software
failures. In that regard the Company is attempting to identify all internal
information technology ("IT") and non-IT systems which may be affected by the
Year 2000 issues as well as trying to assess third party IT and non-IT that the
Company relies upon and the third parties' Year 2000 readiness.
Between September 1996 and March 31, 1998 the Company evaluated, selected, and
appointed a task team to upgrade and install a completely new MIS system which
the vendor represents to be fully Year 2000 compliant. This system is now
operational in all but one of the Company's locations and is expected to be
fully operational throughout the Company by May 31, 1999. This new IT software
package controls major operational systems including purchasing, scheduling,
inventory control, sales and distribution as well as providing the Company's new
financial systems. The financial impact for the new MIS system was about
$350,000 for capital and $70,000 for excess labor and other expenses in fiscal
1998. Additional expenses for this MIS system are expected to be minimal in
fiscal 1999.
The Company is currently developing a plan to identify Year 2000 readiness
issues pertaining to internal and external communications systems and desk top
systems as well as developing a questionnaire to aid in assessing Year 2000
readiness of its third party providers including those third parties who provide
financial, payroll, communications and component services to the Company. This
plan is expected to be ready by December 1998 and the Company expects to
substantially complete its evaluations of these remaining Year 2000 issues by
the end of its fiscal 1999 year. The financial impact of future required system
improvements is not anticipated to be material. The Company will also be working
on contingency plans for material IT and third party providers that the Company
relies upon, but at this time it is too soon for the Company to determine if
these contingency plans will be needed.
The above statements contain certain risks and uncertainties. Although the
Company is continuing to thoroughly examine its Year 2000 readiness, there is no
assurance that it can identify all Year 2000 issues. These risks and
uncertainties could include the risk of unidentified bugs in the source code of
packaged or custom software, misrepresentations by third party vendors,
unidentified dependency upon a system that is not Year 2000 ready, unidentified
non-IT systems, or misdiagnosed Year 2000 readiness in current systems.
- 9 -
<PAGE>
Results of Operations
Three Months Ended August 31, 1998 Compared to August 31, 1997
Net sales for the three months ended August 31, 1998 increased approximately
4.8% to $3,597,242 from $3,430,884 during the same period a year ago. The
increase in sales was due to across the board increases in the industrial
microbiology market and the clinical market, and from increased sales of
speciality products. The sales increase would have been 8.2% higher than last
year but was unfavorably reduced more than $115,000 by a 7.6% reduction in the
Company's average Canadian dollar exchange rate which impacts nearly 39% of
total Company sales. However, the Company's management is very encouraged with
the favorable increase in total sales showing that the net sales erosion of the
past few years is continuing to improve.
During the three months ended August 31, 1998 as compared to the same period
in the prior year, cost of goods sold (COGS) improved to 59.6% from 60.4% of net
sales. This decrease reflects the benefits from improved operating efficiencies
resulting from the completion of last year's consolidation project of three
Oregon facilities into one modern Oregon facility, and increased sales of higher
margin industrial products. Selling, general and administrative expense was
35.7% of sales in the first three months of this year compared to 35.4% in the
same period last year. This slight increase reflects a wage increase granted
June 1, 1998. Other expense consists mainly of interest expense and Canadian
currency exchange loss. In the first three months of fiscal 1998 the Company
experienced a Canadian exchange loss of more than $70,000 compared to a Canadian
exchange loss of less than $12,000 in the same three month period of fiscal
1997. Exchange gains or losses cannot be forecasted with any degree of accuracy.
The Company recorded net income of $6,698 for the first three months compared
to net income of $32,708 during the same period a year ago. This reduction in
net income was due primarily to the higher Canadian exchange loss previously
discussed. Both the basic and diluted net income per share was $0.00 for the
first three months of fiscal 1998 as compared to net income of $0.01 per share
for both basic and fully diluted net income for the first three months of fiscal
1997.
The following table presents the percentage relationship that certain items in
the Company's Consolidated Statements of Operations bear to net sales for the
periods indicated.
Percent of Sales
Three Months Ended August 31,
-----------------------------
1998 1997
---- ----
Net Sales 100.0% 100.0%
Cost of Goods Sold 59.6 60.4
----- -----
Gross Profit 40.4 39.6
Selling, general and administrative expenses 35.7 35.4
----- -----
Operating Income 4.7 4.2
Other Expense 4.3 2.5
----- -----
Income before income taxes 0.4 1.7
Income tax expense 0.2 0.8
----- -----
Net Income 0.1% 0.9%
===== =====
- 10 -
<PAGE>
Liquidity and Capital Resources
The Company has financed its operations over the years principally through
funds generated from operations and bank and stockholder loans. At August 31,
1998 the Company had negative working capital of $132,122 compared with negative
working capital of $114,389 at May 31, 1998. The ratio of current assets to
current liabilities was 0.97 at August 31, 1998 compared to 0.98 at May 31,
1998. Quick liquidity (current assets less inventories to current liabilities)
was .54 at August 31, 1998 and .57 at May 31, 1998. The twelve month average
collection period for trade receivables was 52.3 days at August 31, 1998
compared with 52.1 days at May 31, 1998. This slight increase reflects both
seasonality and slower collection of payments on accounts receivable accounts
balances from east coast clinical customers.
Net cash provided by operating activities was $450,805 in the first three
months of fiscal 1999 compared with net cash used in operations $319,588 in the
same period a year ago. Approximately $452,215 of the cash provided in fiscal
1999 was due to an increase in accounts payable and accrued liabilities which
provided the cash necessary for the more than $168,000 planned increase of
inventories to support the projected higher level of sales. Approximately
$300,000 of the cash was used to repay part of the Company's bank credit line.
The Company anticipates that the need to increase inventory will diminish over
the next few years thereby reducing negative operating cash flow and improving
the Company's ability to repay debt. Net cash used in investing activities was
$62,989 in the first three months of fiscal 1999, compared with $153,101 used by
the Company in investing activities in the same period of fiscal 1998. These
expenditures were mainly for purchases of equipment for the new manufacturing
facility in Wilsonville. Financing activities used cash of $399,288 in the first
three months of fiscal 1999 as the net result of repayments on the bank credit
line, repayments on capital lease obligations, and repayments the repayment of
long term debt. This compares to cash provided of $484,983 from financing
activities in the same period of fiscal 1998.
Due to a September 16, 1996 increase in the interest rate charged by our
former lender, the Company negotiated a larger and more favorable four year
financing agreement with another lender effective December 1, 1996. The new
financing agreement includes interest at prime plus 2.0% (10.5% at August 31,
1998) (which will decrease each year if certain financial ratios are met) and
also allows the Company to borrow against both equipment and inventory as well
as accounts receivable. Proceeds from the new financing agreement were used to
pay off all outstanding debt from the prior lender and will provide additional
funds for growth. The Company believes the improvement in available cash
financing will allow it to achieve significant manufacturing cost efficiencies
and much needed improvements in MIS systems which were not possible under its
previous loan agreement. Management expects any investments made in these areas
will payback in one to two years.
As part of the financing agreement, the Company obtained a new bank line of
credit that has a current maturity date of November 30, 2000. Although the due
date for the facility is November 30, 2000, the borrowings are classified as
current as the Company initiates repayments and borrowings on a regular (near
daily) basis throughout the year This new line of credit is secured by
substantially all of the assets of the Company. The available amount under the
line of credit is based upon 80% to 85% of the eligible accounts receivable and
30% to 40% of eligible inventory at the end of each reporting period, not to
exceed $2.5 million. The Company also borrowed $400,000 on December 1, 1996,
under a new four year term loan secured by eligible operating equipment. The
rate of interest charged on the line is prime plus 2.0% and will decrease each
year if the Company meets certain financial ratios. This loan will be repaid
primarily out of the Company's future receivable collections.
- 11 -
<PAGE>
The Company's borrowing structure at August 31, 1998 was as follows:
<TABLE>
<CAPTION>
Third Party Long Term Borrowings:
Long-Term Current-Portion
----------- ---------------
<S> <C> <C>
Revolving credit line at prime plus 2.0% (10.5% at August 31,
1998) due November 30, 2000 $ - $ 1,687,508
Note payable at 12%, due April 2000 60,589 17,498
Note payable at prime plus 2.0% (10.5% at August 31, 1998)
due November 30, 2000 133,312 100,008
Capital Lease Obligations, due now through July 1999 106,601 81,302
Note payable at 6%, due May 2005 60,000 10,000
Trade A/P converted to notes payable at 6%, due February 2001 297,673 120,076
---------- -------------
Total third party long term borrowings$ 658,175 $ 2,016,392
Related Party Long Term Borrowings:
Ethel Wildt Note payable at prime plus 1% (9.5% at August 31,
1998) due November 1998 $ - $ 3,229
Ron Torland Note payable at 10% due January 1998 - 10,000
Ron Torland Note payable at prime plus 1% (9.5% at August 31,
1998) due December 1999 35,820 11,679
Mary Brown 8% Note due May 2000 21,630 25,737
Trade A/P converted to notes payable at 6% due February 2001 47,130 19,708
---------- -------------
Total related party long term borrowings $ 104,580 $ 70,353
---------- -------------
Related Party Notes Payable:
Demand Notes $ - $ 247,551
---------- -------------
Total long term borrowings and notes payable $ 762,755 $ 2,334,296
========== =============
</TABLE>
II. OTHER INFORMATION
Item 1. Legal Proceedings
There are no material or substantive claims pending or threatened against the
Company. The Company is, however, currently engaged in discussions with one
purchaser concerning product quality and has notified its product liability
insurance carrier or these discussions.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the
quarter ended August 31,1998. The Company will hold its annual meeting at its
Wilsonville, Oregon facility on December 3, 1998.
- 12 -
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
No 8-K filings were made during the quarter ended August 31, 1998.
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.
PML, INC.
(Registrant)
Date: October 20, 1998 By: /s/ Kenneth L. Minton
---------------- -------------------------------------
Kenneth L. Minton
President and Chief Executive Officer
- 13 -
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1999
<PERIOD-END> AUG-31-1998
<CASH> 152,033
<SECURITIES> 0
<RECEIVABLES> 2,150,574
<ALLOWANCES> 31,141
<INVENTORY> 2,085,750
<CURRENT-ASSETS> 4,725,926
<PP&E> 4,560,165
<DEPRECIATION> 2,846,488
<TOTAL-ASSETS> 6,578,114
<CURRENT-LIABILITIES> 4,858,048
<BONDS> 762,755
0
703,537
<COMMON> 19,920
<OTHER-SE> 233,854
<TOTAL-LIABILITY-AND-EQUITY> 6,578,114
<SALES> 3,597,242
<TOTAL-REVENUES> 3,597,242
<CGS> 2,142,917
<TOTAL-COSTS> 2,142,917
<OTHER-EXPENSES> 1,341,405
<LOSS-PROVISION> 13,539
<INTEREST-EXPENSE> 85,473
<INCOME-PRETAX> 13,908
<INCOME-TAX> 7,210
<INCOME-CONTINUING> 6,698
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,698
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
