UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended September 30, 1997
------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________________
Commission File Number 1-11729
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Liberty Technologies, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its Charter)
Pennsylvania 23-2295708
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
-----------------------------------------------------------
Lee Park
555 North Lane
Conshohocken, PA 19428
610-834-0330
--------------------------------------------------
(Address, including zip code, and telephone number
(including area code)
of registrant's principal executive office)
-----------------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of 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 last 90 days. YES X NO
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the last practicable date.
Class Shares Outstanding at November 13, 1997
------------ ---------------------------------------
Common Stock 5,020,239
<PAGE>
LIBERTY TECHNOLOGIES, INC.
INDEX
PART I FINANCIAL INFORMATION
Page No.
--------
Item 1. Consolidated Financial Statements (unaudited):
Consolidated Statements of Operations
Three months and nine months ended September 30, 1997 and 1996 .. 3
Consolidated Balance Sheets
September 30, 1997 and December 31, 1996 ...................... 4
Consolidated Statements of Cash Flows
Nine months ended September 30, 1997 and 1996 ................. 5
Notes to Consolidated Financial Statements ...................... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations ....................................... 9
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K................................... 14
Signatures......................................................... 15
Exhibit Index ..................................................... 16
Exhibit - Calculation of Earnings Per Share ....................... 17
<PAGE>
PART I. Financial Information
Item 1. Consolidated Financial Statements
LIBERTY TECHNOLOGIES, INC. AND SUBSIDIARIES
- -------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
For the three months For the nine months
ended September 30, ended September 30,
---------------------- ----------------------
1997 1996 1997 1996
------- -------- ------- -------
<S> <C> <C> <C> <C>
Revenues:
Product .................................. $ 2,455 $ 2,231 $10,019 $ 8,175
Service .................................. 1,285 886 5,675 3,468
------- -------- ------- -------
3,740 3,117 15,694 11,643
------- -------- ------- -------
Cost of revenues:
Product .................................. 1,266 1,098 4,081 3,125
Service .................................. 726 734 3,584 2,504
------- -------- ------- -------
1,992 1,832 7,665 5,629
------- -------- ------- -------
Gross profit ....................... 1,748 1,285 8,029 6,014
------- -------- ------- -------
Operating expenses:
Engineering and product development ...... 1,338 1,351 3,623 3,298
Selling, general and administrative ...... 2,043 2,250 6,771 6,114
------- -------- ------- -------
3,381 3,601 10,394 9,412
------- -------- ------- -------
Operating loss ..................... (1,633) (2,316) (2,365) (3,398)
Interest expense, net ....................... (192) (73) (511) (87)
Other income ................................ 3 13 58 13
------- -------- ------- -------
Loss from continuing operations
before taxes and minority interest (1,822) (2,376) (2,818) (3,472)
Income tax benefit .......................... (776) (657) (1,126) (944)
------- -------- ------- -------
Loss from continuing operations
before minority interest ......... (1,046) (1,719) (1,692) (2,528)
Minority interest in income (loss) of joint
venture
14 (83) (91) (16)
------- -------- ------- -------
Loss from continuing operations ............. (1,060) (1,636) (1,601) (2,512)
Income (loss) from discontinued
operations, net of tax ........... (65) (31) 456 819
------- -------- ------- -------
Net loss .................................... $(1,125) $ (1,667) $(1,145) $(1,693)
======= ======== ======= =======
Net income (loss) per share of common stock:
Continuing operations .............. $ (0.21) $ (0.33) $ (0.32) $ (0.50)
Discontinued operations ............ (0.01) -- 0.09 0.16
------- -------- ------- -------
Net loss per share ................. $ (0.22) $ (0.33) $ (0.23 $ (0.34)
======= ======== ======= =======
Shares used in computing net loss per share . 5,010 4,978 5,003 4,969
------- -------- ------- -------
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
LIBERTY TECHNOLOGIES, INC. AND SUBSIDIARIES
- -------------------------------------------
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents .................................. $ 123 $ 58
Accounts receivable, net ................................... 5,178 5,502
Inventories ................................................ 3,471 3,654
Deferred income taxes ...................................... 1,423 312
Prepaid income taxes ....................................... 211 230
Prepaid expenses and other ................................. 806 329
Net assets of discontinued operations ...................... 6,235 6,818
------- -------
Total current assets ................................ 17,447 16,903
Property and equipment, net .................................. 2,086 2,657
Goodwill, net ................................................ 2,136 2,256
Deferred income taxes, net ................................... 85 367
Other assets ................................................. 1,343 1,475
------- -------
$23,097 $23,658
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Line of credit ............................................. $ 6,955 $ 5,725
Current maturities of long-term debt ....................... 45 46
Book overdraft ............................................. 271 472
Accounts payable ........................................... 1,942 2,200
Accrued compensation and benefits .......................... 488 496
Unearned revenue ........................................... 75 12
Income taxes payable ....................................... -- 82
Other accrued expenses ..................................... 313 374
------- -------
Total current liabilities ........................... 10,089 9,407
------- -------
Long-term debt ............................................... 184 217
------- -------
Minority interest ............................................ 6 61
------- -------
Shareholders' equity:
Series A Preferred stock, $.001 par value, 10,000 shares
authorized, none issued .................................. -- --
Common stock, $.01 par value, 10,000,000 shares
authorized, 5,022,987 and 5,018,987 shares issued,
and 5,010,339 and 4,989,915 outstanding .................. 50 50
Additional paid-in capital ................................. 17,206 17,242
Accumulated deficit ........................................ (4,323) (3,178)
Treasury stock at cost ..................................... (65) (149)
Cumulative translation adjustment .......................... (50) 8
------- -------
Total shareholders' equity .......................... 12,818 13,973
------- -------
$23,097 $23,658
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
LIBERTY TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
For the nine months
ended September 30,
-----------------------
1997 1996
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net loss ...................................................... $(1,145) $(1,693)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization ............................. 1,101 1,437
Deferred income taxes ..................................... (829) (640)
Minority interest in income of joint venture .............. (91) (16)
Change in assets and liabilities
(Increase) decrease in:
Accounts receivable ................................... 324 1,072
Inventories ........................................... 18 (1,465)
Prepaid expenses and other ............................ (291) 130
Other assets .......................................... (145) (5)
Increase (decrease) in:
Accounts payable ...................................... (258) 570
Accrued expenses ...................................... (68) (19)
Income taxes payable .................................. (82) (133)
Unearned revenue ...................................... 63 (310)
Change in net assets of discontinued operations ......... 583 --
------- -------
Net cash used in operating activities ............... (820) (1,072)
------- -------
Cash flows from investing activities:
Purchases of property and equipment ............................ (133) (1,196)
Purchases of licenses .......................................... -- (100)
Patent costs ................................................... -- (199)
Other .......................................................... (3) --
------- -------
Net cash used in investing activities ............... (136) (1,495)
------- -------
Cash flows from financing activities:
Payments of long-term debt ..................................... (34) (62)
Net borrowings under line of credit ............................ 1,230 2,465
Decrease in book overdraft ..................................... (201) --
Proceeds from Employee Stock Purchase Plan ..................... 42 53
Exercise of options and warrants ............................... 7 67
Investment from minority shareholder in joint venture .......... 35 85
------- -------
Net cash provided by financing activities ........... 1,079 2,608
------- -------
Effect of foreign exchange rate changes on cash .................. (58) (14)
------- -------
Net increase in cash and cash equivalents ........................ 65 27
Cash and cash equivalents, beginning of year ..................... 58 356
------- -------
Cash and cash equivalents, end of period ......................... $ 123 $ 383
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
Item 1 -- Financial Statements -- Cont'd.
LIBERTY TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The consolidated financial statements as of September 30, 1997 and for the
three and nine month periods ended September 30, 1997 and 1996 are
unaudited and reflect all adjustments (consisting only of normal recurring
adjustments) which are, in the opinion of management, necessary for a fair
presentation of the financial position and operating results for the
interim periods. The Company has reclassified the presentation of certain
prior year information to conform to the current year presentation format.
As indicated in the financial statements contained in the Company's Annual
Report on Form 10-K/A Number 2, the Company has incurred losses during the
last three years. Additionally, for the nine months ended September 30,
1997, the Company incurred a net loss of $1,145,000. During 1996 and 1997,
the Company's primary source of financing had been borrowings under its
line of credit. During 1997, the Company experienced limitations on its
ability to borrow under its line of credit. Additionally, in 1997, the
Company was in violation of certain loan covenants that gave the lenders
the right to accelerate the due date of the loan. These conditions raised
substantial doubt about the Company's ability to continue as a going
concern as reflected in the report of the Company's independent public
accountants on the 1996 financial statements contained in Form 10-K/A
Number 2. Subsequent to the sale of the NDE Business (see Note 2) the
Company paid $6,502,000 against its line of credit, repaying the line in
full. The bank has exercised its right not to make any further advances
under the facility.
The Company believes that its current cash and short-term investment
resources will be sufficient to fund the Company's operations, debt and
lease obligations and expected capital expenditures for the next 24 months.
Additional financing may be required for the Company to consummate any
material business acquisitions, none of which are currently contemplated.
The consolidated financial statements should be read in conjunction with
the consolidated financial statements and notes thereto, together with
management's discussion and analysis of financial condition and results of
operations, contained in the Company's Annual Report on Form 10-K/A, Number
2 for the year ended December 31, 1996. The results of the Company's
operations for any interim period are not necessarily indicative of results
of the Company's operations for any other interim period or for the full
year.
6
<PAGE>
2. Sale of NDE Business
On October 30, 1997, the Company completed the sale of substantially all of
the assets of its nondestructive testing and evaluation services business
(the NDE Business) to a subsidiary of General Electric Company for
$13,600,000 in cash and the assumption of certain associated liabilities
totaling approximately $1,300,000. The purchase price is subject to a
downward adjustment based on specified working capital levels with
$1,485,000 held in escrow for a period of one year from the October 30,
1997 closing date to secure certain indemnification obligations of the
Company to the buyer. The Company used a portion of the proceeds from the
sale to repay its line of credit and intends to use the remaining proceeds
to invest in the existing product business and for other corporate
purposes.
For all periods presented in the accompanying financial statements, the
results of operations of the NDE Business are reported as discontinued
operations. The net assets of the NDE Business are reported as net assets
of discontinued operations at both balance sheet dates presented. The
Company expects to record a pre-tax gain on the sale of the NDE Business of
approximately $6.4 million in the fourth quarter of 1997. Additionally, as
a result of the sale of the NDE Business, the Company will utilize certain
net operating loss carryforwards and tax credits for which a valuation
allowance had previously been recorded. Accordingly, the Company expects to
record an income tax benefit of approximately $889,000 relating to the
reversal of the valuation allowance in the fourth quarter of 1997.
3. Inventories
Inventories are summarized as follows:
September 30, 1997 December 31, 1996
------------------ -----------------
Raw materials $3,019,000 $3,171,000
Finished goods 452,000 483,000
---------- ----------
$3,471,000 $3,654,000
========== ==========
4. Supplemental Cash Flow
Cash paid for income taxes for the nine months ended September 30, 1997 and
1996 was approximately $91,000 and $94,000, respectively. Cash received for
income tax refunds for the nine months ended September 30, 1997 and 1996
was approximately $55,000 and $0, respectively. Cash paid for interest for
the nine months ended September 30, 1997 and 1996 was approximately
$469,000 and $81,000, respectively.
5. New Accounting Pronouncements
Statement of Financial Accounting Standards No. 128 (SFAS 128), "Earnings
per Share," which supersedes Accounting Principles Board Opinion No. 15
(APB 15), "Earnings per Share," was issued in February, 1997. SFAS 128
requires dual presentation of basic and diluted earnings per share (EPS)
for complex capital
7
<PAGE>
structures on the face of the statement of operations. Basic EPS is
computed by dividing income or loss by the weighted-average number of
common shares outstanding for the period. Diluted EPS reflects the
potential dilution from the exercise or conversion of securities into
common stock, such as stock options. SFAS 128 is required to be adopted for
year-end 1997; earlier application is not permitted. Management does not
expect the basic or diluted EPS measured under SFAS 128 to be materially
different than the Company's primary or fully-diluted EPS measured under
APB No. 15. The Company will present both EPS measures on the face of the
statement of operations.
8
<PAGE>
LIBERTY TECHNOLOGIES, INC.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Cautionary Statement
When used in this Quarterly Report on Form 10-Q and in other written or oral
public statements by the Company and Company officers and management, the words
"estimate," "project," "intend," "believe," "anticipate" and similar expressions
are intended to identify forward-looking statements regarding events and
financial trends which may affect the Company's future operating results and
financial position. Such statements are subject to risks and uncertainties that
could cause the Company's actual results and financial position to differ
materially. Such factors include, among others: (i) the Company's ability to
identify appropriate acquisition candidates, complete acquisitions on
satisfactory terms, or successfully integrate acquired business; (ii) the
Company's ability to obtain financing on satisfactory terms and the degree to
which the Company is leveraged, including the extent to which currently
outstanding options are exercised; (iii) the sensitivity of the Company's
business to general economic conditions; (iv) the timely development, production
and acceptance of new products; (v) continued acceptance in the marketplace,
competition and buying patterns of customers; (vi) the timing of orders from,
and shipments to, major customers; (vii) changes in product/service revenue
mix; (viii) the absence of a significant order backlog; (ix) factors associated
with international sales such as the relative strength of the dollar when
compared to the currencies of the countries into which the Company exports
products; (x) the Company's ability to remain in compliance with the numerous
environmental, health and safety requirements to which it is subject; (xi)
changes in accounting principles, policies or guidelines; and (xii) other
economic, competitive, governmental and technological factors affecting the
Company's operations, markets, products, services and prices. Additional factors
are described in the Company's other public reports filed with the Securities
and Exchange Commission. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date made. The
Company undertakes no obligation to publicly release the result of any revisions
of these forward-looking statements to reflect events or circumstances after the
date they are made or to reflect the occurrence of unanticipated events.
Results of Operations
Three and Nine Months Ended September 30, 1997 Compared to Three and Nine Months
Ended September 30, 1996:
Total Revenues. For the three and nine month comparative periods ended September
30, 1996 and 1997, total revenues increased from $3,117,000 to $3,740,000, or
20%, and from $11,643,000 to $15,694,000, or 35%, respectively.
Product revenues increased from $2,231,000 to $2,455,000, or 10%, for the three
months ended September 30, 1996 and 1997, respectively, on higher sales of
condition monitoring
9
<PAGE>
products to domestic power and international industrial customers and on sales
of the Company's motor products, released in the first quarter of 1997. Product
revenues increased from $8,175,000 to $10,019,000, or 23%, for the nine months
ended September 30, 1996 and 1997, respectively, principally on higher sales of
both industrial condition monitoring products and RADView(TM).
Service revenues increased from $792,000 to $1,000,000, or 26%, for the three
months ended September 30, 1996 and 1997, respectively, and from $3,374,000 to
$5,065,000, or 50%, for the nine months ended September 30, 1996 and 1997,
respectively, as a result of stronger nuclear and industrial service revenues.
Revenues from outside funding increased from $94,000 to $285,000, or 203%, for
the three months ended September 30, 1996 and 1997, respectively, and from
$94,000 to $610,000, or 549%, for the nine months ended September 30, 1996 and
1997, respectively, as a result of RADView funding by the US Air Force.
Cost of Revenues. Cost of revenues increased from $1,832,000 to $1,992,000, or
9%, for the three months ended September 30, 1996 and 1997, respectively, and
from $5,629,000 to $7,665,000, or 36%, for the nine months ended September 30,
1996 and 1997, respectively, as a result of higher sales volume. For the three
month comparative period, overall costs of revenues decreased as a percentage of
total revenues from 59% to 53%. For the nine month comparative period, overall
cost of revenues as a percentage of revenues increased from 48% to 49%.
Gross Profit. Gross profit increased from $1,285,000 to $1,748,000 and from
$6,014,000 to $8,029,000 for the three and nine month periods ended September
30, 1996 and 1997, respectively. Funding from outside sources included in gross
profit totals $94,000 and $285,000 for the three months and $94,000 and
$610,000 for the nine months ended September 30, 1996 and 1997, respectively.
For the three month comparative period, gross profit as a percentage of total
revenues increased from 41% to 47%. For the nine month comparative period, gross
profit as a percentage of revenues decreased from 52% to 51%. The Company
expects that gross profit margin will vary from quarter to quarter depending on
the mix and volume of products and services sold.
Operating Expenses. Operating expenses decreased 6%, from $3,601,000 to
$3,381,000 for the three month periods ended September 30, 1996 and 1997 as a
result of lower condition monitoring and corporate expenditures. For the nine
month periods ended September 30, 1996 and 1997 operating expenses increased
10%, from $9,412,000 to $10,394,000, respectively. This increase was partially
attributable to Liberty Maintenance Predictive (LMP), the Company's joint
venture, which was not fully operational in 1996 and which had operating
expenses of $374,000 and $656,000 for the nine months ended September 30, 1996
and 1997, respectively. RADView operating expenses increased from $1,320,000 to
$1,795,000 for the same period. Additionally, there were $203,000 of favorable
restructuring reserve adjustments in 1996, with no such corresponding
adjustments in 1997.
10
<PAGE>
Interest expense, net. Net interest expense increased from $73,000 to $192,000
and from $87,000 to $511,000 for the three and nine months ended September 30,
1996 and 1997, respectively, as a result of higher average borrowings against
the Company's line of credit and an increase in the weighted average interest
rate charged for this facility, from 6.6% in 1996 to 8.7% in 1997.
Income taxes. The effective rate used to record the Company's income tax benefit
increased from 28% to 43% and from 27% to 40% for the three and nine month
periods ended September 30, 1996 and 1997, respectively. The 1996 tax rate
reflected state income tax expense in certain states for certain of the
Company's subsidiaries that offset the federal tax benefit on the Company's
consolidated losses. The 1997 tax rate anticipates taxable income for both state
and federal taxes for the year.
The Company did not record an income tax benefit during the first two quarters
of 1997 due to uncertainties related to the realization of its deferred tax
asset. As a result of the sale of the NDE Business, the Company will be able to
realize an income tax benefit on its 1997 losses and will utilize certain net
operating loss carryforwards and tax credits for which a valuation allowance of
$889,000 had previously been recorded. The Company expects to reverse the
valuation allowance in the fourth quarter of 1997.
Loss from continuing operations. Loss from continuing operations decreased from
$1,636,000, or ($0.33) per share, to $1,060,000, or ($0.21) per share and from
$2,512,000, or ($0.50) per share, to $1,601,000, or ($0.32) per share, for the
three and nine month periods ended September 30, 1996 and 1997, respectively.
For the three month periods, the decrease is attributable to increased gross
profits, lower operating expenses and a higher income tax benefit, partially
offset by higher interest expense. For the nine month periods, the decrease is
attributable to the higher gross profits and income tax benefit, partially
offset by increased operating expenses and interest expense.
Income (loss) from discontinued operations, net of tax. Net loss from
discontinued operations increased from $31,000 to $65,000 for the three months
ended September 30, 1996 and 1997, respectively, and net income from
discontinued operations decreased from $819,000 to $456,000 for the nine months
ended September 30, 1996 and 1997, respectively, primarily as a result of lower
revenues and gross profit margins during the 1997 period versus the comparable
1996 period.
Shares used in computing net loss per share. The number of shares used in
calculating loss per share increased from 4,978,000 to 5,010,000 in the three
month comparative period, and from 4,969,000 to 5,003,000 in the nine month
comparative period. The increase in shares resulted from the exercise of stock
options under the Company's 1988 and 1992 Stock Option Plans and the sale of
stock through the Company's Employee Stock Purchase Plan.
Liquidity and Capital Resources
The Company has financed its working capital requirements and capital
expenditures primarily through borrowings against its revolving credit facility.
11
<PAGE>
At September 30, 1997, the Company had cash and investments aggregating $123,000
compared to $58,000 at December 31, 1996, reflecting the cash provided by
financing activities.
Net cash used in operating activities decreased from $1,072,000 during the first
nine months of 1996 to $820,000 during the first nine months of 1997. The change
was principally attributable to a slight decrease in inventories during the 1997
period as compared to an increase of $1,465,000 during the 1996 period and
decreases in the net assets of discontinued operations. These increases in cash
were partially offset by a smaller decrease in accounts receivable and were
further offset by a decrease in accounts payable during the 1997 period as
compared to an increase in the 1996 period.
Net cash used in investing activities decreased from $1,495,000 in the first
nine months of 1996 to $136,000 in the first nine months of 1997. This decrease
resulted from lower capital additions in 1997 and purchases of licenses and
patent costs in 1996.
Net cash provided by financing activities decreased from $2,608,000 during the
first nine months of 1996 to $1,079,000 in the first nine months of 1997
primarily due to lower increases in borrowings under the Company's bank line of
credit during the 1997 period as compared to the 1996 period.
The Company's primary source of financing in 1996 and 1997 had been borrowings
under its line of credit. During 1997, the Company's outstanding principal
balance under the credit facility has exceeded the line's borrowing base and the
Company was in violation of certain covenants, resulting in the loan being in
default. During the time that the Company was in default, the lenders permitted
the Company to continue to borrow under the credit facility, notwithstanding the
default. On October 30, 1997 the Company paid $6,502,000 against its line of
credit, repaying the line in full. The bank has exercised its right not to make
any further advances under the facility.
Sale of the Nondestructive Testing and Evaluation Services Business
On October 30, 1997 the Company completed the sale of substantially all of the
assets of its nondestructive testing and evaluation services business (the NDE
Business) to a subsidiary of General Electric Company for $13.6 million in cash
and the assumption of certain associated liabilities totaling approximately
$1,300,000. The purchase price is subject to a downward adjustment based on
specified working capital levels with $1,485,000 held in an escrow account for a
period of one year from the October 30, 1997 closing date to secure certain
indemnification obligations of the Company to the buyer.
As a result of the sale of the NDE Business, the Company's revenues, operating
income and cash flow will decrease. However, the cash generated from the sale
has allowed the Company to repay its line of credit and will provide additional
working and investment capital to support general corporate purposes and its
Products Businesses, which consists of the following: (1) performance and
condition monitoring products and service,
12
<PAGE>
including dynamic testing services, (2) RADView(TM) imaging systems and (3)
international business development.
The Company believes that its current cash and short-term investment resources
will be sufficient to fund the Company's operations, debt and lease obligations
and expected capital expenditures for the next 24 months. Additional financing
may be required for the Company to consummate any material business
acquisitions, none of which are currently contemplated.
13
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
1. Exhibit 11 - Earnings per Share Calculation
2. On July 25, 1997 the Company filed a report on Form 8-K related to a
definitive agreement for the sale of certain assets of its
nondestructive evaluation and testing services business, the NDE
Business.
14
<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.
Dated: November 13, 1997
LIBERTY TECHNOLOGIES, INC.
(Registrant)
/s/ R. Nim Evatt
-----------------------------------
R. Nim Evatt, President and
Chief Executive Officer
/s/ Daniel G. Clare
-----------------------------------
Daniel G. Clare, V.P. Finance and
Chief Financial Officer (principal
financial and accounting officer)
15
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit Numbered Page
Number Number
- ------- -------------
11 Calculation of Earnings Per Share 17
16
<PAGE>
Exhibit 11
Liberty Technologies, Inc.
Earnings Per Share Calculation
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------- -----------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Loss from continuing operations $(1,060,000) $(1,636,000) $(1,601,000) $(2,512,000)
Income (loss) from discontinued operations,
net of tax (65,000) (31,000) 456,000 819,000
----------- ----------- ----------- -----------
Net loss $(1,125,000) $(1,667,000) $(1,145,000) $(1,693,000)
=========== =========== =========== ===========
Weighted average shares outstanding, used
in computing earnings (loss) per share 5,010,339 4,978,156 5,003,325 4,968,572
----------- ----------- ----------- -----------
Net income (loss) per share of common stock:
Continuing operations $ (0.21) $ (0.33) $ (0.32) $ (0.50)
Discontinued operations (0.01) -- 0.09 0.16
----------- ----------- ----------- -----------
Loss per share (primary and fully diluted) $ (0.22) $ (0.33) $ (0.23) $ (0.34)
=========== =========== =========== ===========
</TABLE>
17
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from the Consolidated Balance Sheets at
September 30, 1997 and the Consolidated Statement of
Operations for the nine months ended September 30, 1997
and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
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0
0
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