UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended September 1, 1996
Commission File No. 0-3362
SI HANDLING SYSTEMS, INC.
- - --------------------------------------------------------------------------------
(Exact Name Of Registrant As Specified In Its Charter)
Pennsylvania 22-1643428
(State Or Other Jurisdiction Of (I.R.S. Employer
Incorporation Or Organization) Identification No.)
600 Kuebler Road, Easton, PA 18040
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: 610-252-7321
Indicate by checkmark 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
Number of shares of common stock, par value $1.00 per share, outstanding as of
September 1, 1996: 2,450,927.
---------
<PAGE>
- 2 -
PART I - FINANCIAL INFORMATION
------------------------------
ITEM 1. FINANCIAL STATEMENTS
- - ------- --------------------
SI HANDLING SYSTEMS, INC.
Balance Sheets
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
September 1, March 3,
Assets 1996 1996
- - ------ ------------ --------
<S> <C> <C>
Current assets:
Cash and cash equivalents, principally
time deposits $ 3,885 1,335
Short-term investments 500 2,414
------- -------
Total cash, cash equivalents, and
short-term investments 4,385 3,749
------- -------
Receivables:
Trade 3,641 2,505
Notes and other receivables 113 528
------- -------
Total receivables 3,754 3,033
------- -------
Costs and estimated earnings in excess
of billings 797 1,803
Inventories:
Raw materials 871 963
Finished goods and work-in-process 932 799
------- -------
Total inventories 1,803 1,762
------- -------
Deferred income tax benefits 214 229
Prepaid expenses and other current assets 148 141
------- -------
Total current assets 11,101 10,717
------- -------
Property, plant and equipment, at cost:
Land 27 27
Buildings and improvements 3,276 3,276
Machinery and equipment 3,494 3,331
------- -------
6,797 6,634
Less: accumulated depreciation 5,620 5,461
------- -------
Net property, plant and equipment 1,177 1,173
------- -------
Deferred income tax benefits 71 71
Investment in joint venture 607 530
Other assets, at cost less accumulated
amortization of $62 in 1997 and $57
in 1996 72 79
------- -------
Total assets $13,028 12,570
======= =======
</TABLE>
See Accompanying Notes To Financial Statements.
<PAGE>
- 3 -
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
- - ------- --------------------
SI HANDLING SYSTEMS, INC.
Balance Sheets
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
September 1, March 3,
Liabilities and Stockholders' Equity 1996 1996
- - ------------------------------------ ------------ --------
<S> <C> <C>
Current liabilities:
Current installments of long-term debt $ 20 20
Accounts payable 1,386 1,542
Customers' deposits and billings in excess
of costs and estimated earnings 1,628 1,112
Accrued salaries, wages, and commissions 659 929
Income taxes payable 279 275
Accrued royalties payable 327 593
Liabilities and deferred credits associated
with the AGV Asset Purchase Agreement 67 80
Accrued other liabilities 827 659
------- -------
Total current liabilities 5,193 5,210
------- -------
Long-term liabilities:
Long-term debt, excluding current installments:
Mortgages payable 38 49
------- -------
Total long-term debt 38 49
------- -------
Deferred compensation 101 101
------- -------
Total long-term liabilities 139 150
------- -------
Commitments and contingencies
Stockholders' equity:
Common stock, $1 par value; authorized
5,000,000 shares; issued 2,450,927 shares
in 1997 and 2,441,341 shares in 1996 2,451 2,441
Additional paid-in capital 3,645 3,613
Retained earnings 1,600 1,156
------- -------
Total stockholders' equity 7,696 7,210
------- -------
Total liabilities and stockholders' equity $13,028 12,570
======= =======
</TABLE>
See accompanying notes to financial statements.
<PAGE>
- 4 -
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
- - ------- --------------------
SI HANDLING SYSTEMS, INC.
Statements of Operations
(In Thousands, Except Share And Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
-------------------- --------------------
September August September August
1, 1996 27, 1995 1, 1996 27, 1995
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Net sales $ 5,422 6,884 11,053 12,981
Cost of sales 3,900 5,253 7,841 9,757
------- ------- ------- -------
Gross profit on sales 1,522 1,631 3,212 3,224
------- ------- ------- -------
Selling, general and
administrative
expenses 1,268 1,274 2,598 2,433
Product development
costs 26 78 106 183
Interest expense 2 4 5 8
Interest income (50) (43) (95) (68)
Equity in income of
joint venture (47) (117) (77) (141)
Other expense
(income), net (37) (57) (101) (98)
------- ------- ------- -------
1,162 1,139 2,436 2,317
------- ------- ------- -------
Earnings before
income taxes 360 492 776 907
Income tax expense 27 71 58 136
------- ------- ------- -------
Net earnings $ 333 421 718 771
======= ======= ======= =======
Net earnings per common
share and common
share equivalent* $ .13 .17 .29 .31
======= ======= ======= =======
Dividends per share** $ -- -- .10 .07
======= ======= ======= =======
<FN>
* On July 18, 1995, the Board of Directors declared a three-for-two stock
split that was distributed on August 11, 1995 to stockholders of record on
July 31, 1995. Earnings per share for all periods presented reflect the
three-for-two stock split and are based on the weighted average number of
shares outstanding and equivalent shares from dilutive stock options, which
were 2,459,000 and 2,479,000, respectively, at September 1, 1996 and August
27, 1995.
** Dividends per share for the six months ended August 27, 1995 were adjusted
for the three-for-two stock split that was distributed on August 11, 1995 to
stockholders of record on July 31, 1995.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
- 5 -
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
- - ------- --------------------
SI HANDLING SYSTEMS, INC.
Statements of Cash Flows
(In Thousands)
<TABLE>
<CAPTION>
Six Months Ended
-------------------------
September August
1, 1996 27, 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 718 771
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation of plant and equipment 159 223
Amortization of intangibles 5 5
Equity in income of joint venture (77) (141)
Change in operating assets and liabilities:
Receivables (721) 2,654
Costs and estimated earnings in
excess of billings 1,006 (713)
Inventories (41) 127
Deferred income tax benefits 15 (80)
Prepaid expenses and other
current assets (7) 187
Other noncurrent assets 2 --
Accounts payable (156) (1,253)
Customers' deposits and billings
in excess of costs and estimated
earnings 516 637
Accrued salaries, wages, and
commissions (270) (5)
Income taxes payable 4 216
Accrued royalties payable (266) (189)
Liabilities and deferred credits
associated with the AGV
Asset Purchase Agreement (13) (124)
Accrued other liabilities 168 208
Deferred compensation -- (5)
------- -------
Net cash provided by operating activities 1,042 2,518
------- -------
Cash flows from investing activities:
Sales of short-term investments 1,914 --
Additions to property, plant and equipment (163) (133)
------- -------
Net cash provided by (used in) investing
activities 1,751 (133)
------- -------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
- 6 -
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
- - ------- --------------------
SI HANDLING SYSTEMS, INC.
Statements of Cash Flows (Continued)
(In Thousands)
<TABLE>
<CAPTION>
Six Months Ended
-------------------------
September August
1, 1996 27, 1995
--------- --------
<S> <C> <C>
Cash flows from financing activities:
Sale of treasury stock in connection with
employee stock option plan -- 23
Sale of common shares in connection
with employee stock option plan 12 --
Repayment of long-term debt, including
current portion (11) (11)
Increase in (repayment of) loan
payable to bank -- (500)
Dividends paid on common stock (244) (164)
Dividends paid to stockholders for
fractional shares in connection
with three-for-two stock split -- (1)
------- -------
Net cash used by financing
activities (243) (653)
------- -------
Increase in cash and cash equivalents 2,550 1,732
Cash and cash equivalents, beginning
of period 1,335 571
------- -------
Cash and cash equivalents, end of
period $ 3,885 2,303
======= =======
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest $ 2 8
======= =======
Income taxes $ 39 --
======= =======
Supplemental disclosure of noncash
financing activities:
Issuance of 10,603 common shares
in exchange for 3,865 common shares
delivered to the Company by officers
in connection with the
employee incentive stock option plan $ 30 --
======= =======
</TABLE>
See accompanying notes to financial statements.
<PAGE>
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ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
- - ------- --------------------
SI HANDLING SYSTEMS, INC.
Notes To Financial Statements
Six Months Ended September 1, 1996 and August 27, 1995
(1) The information contained in this 10-Q report is unaudited and is subject
to year-end adjustments and audit. However, in the opinion of management,
the interim financial statements furnished reflect all adjustments and
accruals which are necessary to a fair statement of results for the interim
periods presented.
SI Handling Systems, Inc. ("SI" or the "Company") and Automated
Prescription Systems, Inc. ("APS") are co-venturers in a joint venture named
SI/BAKER, INC. ("SI/BAKER" or the "joint venture"). The joint venture draws upon
the automated materials handling systems experience of SI and the automated pill
counting and dispensing products of APS to provide automated pharmacy systems.
Each member company contributed $100,000 in capital to fund the joint venture.
The joint venture designs and installs computer controlled, fully
automated, integrated systems for managed care pharmacy operations. The joint
venture's systems are viewed as labor saving devices which address the issues of
improved productivity and cost reduction. Systems can be expanded as customers'
operations grow and they may be integrated with a wide variety of components to
meet specific customer needs.
Schedule A contains the SI/BAKER, INC. financial statements. The
information contained in the SI/BAKER, INC. financial statements is unaudited
and is subject to year-end adjustments and audit. However, in the opinion of
management, the interim financial statements furnished reflect all adjustments
and accruals which are necessary to a fair statement of results for the interim
periods presented.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
- - ------- -----------------------------------------------------------
AND RESULTS OF OPERATIONS
-------------------------
Liquidity and Capital Resources
- - -------------------------------
The Company's cash and cash equivalents increased to $3,885,000 during the
first six months of fiscal 1997 from $1,335,000 at the end of fiscal 1996. The
increase resulted from cash provided by operating activities totaling $1,042,000
and proceeds of $1,914,000 from the sale of short-term investments and $12,000
from the sale of common stock in connection with the employee stock option plan.
Partially offsetting the increase in cash and cash equivalents were repayments
of long-term debt of $11,000, purchases of equipment of $163,000, and the
payment of $244,000 in cash dividends to stockholders. Funds provided by
operating activities during the first six months of fiscal 1996 were $2,518,000.
<PAGE>
- 8 -
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- - ------- -------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
-----------------------------------
SI HANDLING SYSTEMS, INC.
Liquidity and Capital Resources (Continued)
- - -------------------------------
The Company has a $5,000,000 committed revolving credit facility which is
secured by a lien position on accounts receivable, land, and buildings and
contains various restrictive covenants relating to additional indebtedness,
asset acquisitions or dispositions, and maintenance of certain financial ratios.
The Company was in compliance with all covenants during the first six months of
fiscal 1997. The term of the original arrangement was for three years with an
expiration date of July 31, 1996; however, effective March 1, 1996, the
Company's principal bank amended certain covenants to allow the Company greater
operating flexibility and extended the expiration date of the revolving credit
facility. Currently, the committed revolving credit facility has an expiration
date of August 31, 1999. During the first six months of fiscal 1997, the Company
did not have any borrowings under the committed revolving credit facility.
On May 15, 1996, SI/BAKER, INC. ("SI/BAKER") borrowed $2,000,000 from its
principal bank to fund short-term working capital requirements. The Company and
its joint venture partner, Automated Prescription Systems, Inc.("APS"), each
guaranteed fifty percent (50%) of the borrowing. SI/BAKER repaid the $2,000,000
short-term debt on June 4, 1996. Also, on August 15, 1996, SI/BAKER borrowed
$300,000 from its principal bank to fund short-term working capital
requirements. The $300,000 of short-term debt, guaranteed equally by both parent
companies, was repaid on August 26, 1996. The Company and APS may guarantee
future borrowings of its joint venture company if the circumstances surrounding
the borrowing transaction warrant the guarantee.
The Company anticipates that its financial resources consisting of its
current assets, anticipated cash flow, and the available revolving credit
facility will adequately finance its operating requirements in the foreseeable
future.
The Company plans to consider expansion opportunities as they arise,
although ongoing operating results of the Company, the economics of the
expansion, and the circumstances justifying the expansion will be key factors in
determining the amount of resources the Company will devote to further
expansion. At this time, the Company does not have any material capital
commitments.
<PAGE>
- 9 -
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- - ------- -------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
-----------------------------------
SI HANDLING SYSTEMS, INC.
Results of Operations
- - ---------------------
(a) Six Months Ended September 1, 1996 Versus Six Months Ended August 27, 1995
---------------------------------------------------------------------------
The Company's net earnings for the first six months of fiscal 1997 was
$718,000 compared to net earnings of $771,000 for the first six months of fiscal
1996.
Backlog at the end of the second quarter of fiscal 1997 was $8,308,000 with
the majority of the backlog pertaining to Switch-Cart, Cartrac, and
Dispen-SI-matic contracts. Subsequent to the end of the second quarter of fiscal
1997, the Company was the recipient of a $16.9 million prime mechanization
contract with the Defense Logistics Agency for the Army Distribution Depot in
Red River, Texas. This contract, one of the largest in the Company's history,
will take approximately two years to complete.
Net sales of $11,053,000 for the first six months of fiscal 1997 decreased
14.9% compared to net sales of $12,981,000 for the first six months of fiscal
1996. The sales decrease in the first six months of fiscal 1997 is attributed
primarily to a smaller backlog of orders entering fiscal 1997 ($10,488,000
versus a $16,665,000 backlog beginning fiscal 1996). The largest decline
occurred in the Cartrac product line whereby during the first six months of
fiscal 1996 a significant amount of progress relating to two large automotive
contracts, subsequently completed by the end of fiscal 1996, resulted in
substantial revenues. Also, the Company's AGVS and Order Selection Systems
product lines experienced declines in sales for the first six months of fiscal
1997 when compared to the prior year comparable period. The decline in AGVS
sales for the first six months of fiscal 1997 is due to the Company's reduced
emphasis on the AGVS product line, with selling efforts related to the product
currently confined to the parts and service business. Contributing to the lower
beginning backlog, and hence sales in the first half of fiscal 1997, are delays
by prospective customers, particularly those interested in Order Selection
Systems, in signing contracts due to expanding project scope and to merger and
acquisition interference. Partially offsetting the declines mentioned above was
an increase in sales of the Company's Switch-Cart product, principally relating
to performance on contracts received during the fourth quarter of fiscal 1996
and the first quarter of fiscal 1997.
<PAGE>
- 10 -
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- - ------- -------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
-----------------------------------
SI HANDLING SYSTEMS, INC.
Results of Operations
- - ---------------------
(a) Six Months Ended September 1, 1996 Versus Six Months Ended
August 27, 1995 (Continued)
---------------
Gross profit as a percentage of sales was 29.1% for the first six months of
fiscal 1997 compared to 24.8% for the first six months of fiscal 1996. The
increase in the gross profit percentage for the first six months of fiscal 1997
was primarily attributable to the favorable performance on several contracts
initiated in prior fiscal years that were completed during the first six months
of fiscal 1997 as well as to a higher content in contracts currently in progress
of proprietary product wherein margins are higher than contracts containing a
high degree of ancillary products. Also contributing to the lower gross profit
percentage in the fiscal 1996 comparable period were primarily two factors:
difficulties in executing and concluding several AGVS contracts as additional
costs became necessary to meet contractual throughput and durability
requirements and higher costs associated with first-time design inefficiencies
relating to the Company's new small parcel sortation system aimed at
improvements to mail order distribution operations.
Selling, general and administrative expenses of $2,598,000 were higher by
$165,000 in the first six months of fiscal 1997 than in the comparable fiscal
1996 period. The increase in selling, general, and administrative expenses is
due primarily to costs associated with product promotion and sales efforts in
response to increased quoting activities and aimed at expanding the Company's
customer base of business.
Product development costs of $106,000 were lower by $77,000 in the first
six months of fiscal 1997 than in the comparable fiscal 1996 period. Development
programs in the first six months of fiscal 1997 included improvements to the
Sortation and Order Selection product lines, with particular emphasis aimed at
Dispen-SI-matic and Pick-to-Light Systems. Development programs in the first six
months of fiscal 1996 included improvements to the Order Selection and Sortation
product lines, with particular emphasis aimed at Pick-to-Light and Small Parcel
Sortation Systems.
Interest income of $95,000 was higher by $27,000 in the first six months of
fiscal 1997 than in the comparable fiscal 1996 period. The increase in interest
income is primarily attributable to the higher level of funds available for
short-term investments during the first six months of fiscal 1997.
Equity in income of joint venture represented the Company's proportionate
share of its investment in SI/BAKER, INC. which is being accounted for under the
equity method. Despite the growth in SI/BAKER's revenues, the unfavorable
variance for the first six months of fiscal 1997 in the equity in income of
joint venture was attributable to a combination of several factors including
competitively restrained prices which produced a decline in the gross profit
percentage along with increased royalty costs, product development costs, and
selling, general, and administrative
<PAGE>
- 11 -
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- - ------- -------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
-----------------------------------
SI HANDLING SYSTEMS, INC.
Results of Operations
- - ---------------------
(a) Six Months Ended September 1, 1996 Versus Six Months Ended
----------------------------------------------------------
August 27, 1995 (Continued)
---------------
expenses, including accrued legal costs associated with the patent infringement
litigation.
The favorable variance in other expense (income), net, is primarily
attributable to an increase in royalty income related to the SI/BAKER, INC.
joint venture. Partially offsetting the increase was a reduction in purchase
discounts available to the Company due to the lower volume of purchases eligible
for cash discounts in the current period and the write-off of the balance of a
customer receivable due to its filing for bankruptcy protection.
The Company incurred income tax expense of $58,000 during the first six
months of fiscal 1997 compared to income tax expense of $136,000 in the
comparable fiscal 1996 period. Income tax expense for the first six months of
fiscal 1997 and 1996 were less than the statutory rate of 34% due to the
recognition of previously unrecognized deferred tax assets which are anticipated
to be realizable due to the current and projected profitability of the Company.
(b) Three Months Ended September 1, 1996 versus Three Months Ended
----------------------------------------------------------------
August 27, 1995
---------------
Changes in the second quarter of the current fiscal year compared to the
prior year were consistent with those previously noted above for the six
month-period, except for the following areas:
Selling, general, and administrative expenses for the second quarter of
fiscal 1997 decreased slightly from the comparable fiscal 1996 period. The
increase in selling, general, and administrative expenses for the six month
period noted above occurred primarily in the first quarter of fiscal 1997 and
thus second quarter expenses for fiscal 1997 were similar to the comparable
prior year period.
The unfavorable variance in other expense (income), net, is primarily
attributable to a reduction in purchase discounts available to the Company due
to the lower volume of purchases eligible for cash discounts in the current
period and the write-off of the balance of a customer receivable due to its
filing for bankruptcy protection. Partially offsetting the decrease was an
increase in royalty income related to the SI/BAKER, INC. joint venture.
<PAGE>
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SI HANDLING SYSTEMS, INC.
PART II - OTHER INFORMATION
---------------------------
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- - ------- ---------------------------------------------------
The Company's Annual Meeting of Shareholders was held on July 17, 1996 with
the following items being submitted to a vote by shareholders:
1. The election of five directors.
2. The approval of the amendment and restatement of the Company's
Articles.
3. The approval of the amendment and restatement of the Company's
Bylaws.
Details of the proposals noted above were provided to shareholders in the
form of a Notice of Annual Meeting and Proxy Statement dated June 17, 1996 and
mailed on June 21, 1996, with such solicitation being in accordance with
Regulation 14 of the Securities and Exchange Act of 1934.
There was no solicitation in opposition to the management's nominees listed
in the Proxy Statement, and all management's nominees were elected.
Furthermore, Proposal Number 2 for the approval of the amendment and
restatement of the Company's Articles and Proposal Number 3 for the approval of
the amendment and restatement of the Company's Bylaws were duly approved by the
shareholders.
The voting results on the three matters noted above are set forth as
follows:
<TABLE>
<CAPTION>
1. Election of Directors:
Name of Nominee Votes For Votes Withheld Non-Voting
--------------- --------- -------------- ----------
<S> <C> <C> <C>
L. Jack Bradt 2,258,720 5,242 184,734
Edward J. Fahey 2,258,720 5,242 184,734
Elmer D. Gates 2,244,544 19,418 184,734
Michael J. Gausling 2,258,720 5,242 184,734
Leonard S. Yurkovic 2,258,720 5,242 184,734
2. Approval of the amendment and restatement of the Company's Articles:
Votes For Votes Against Abstentions Non-Voting
--------- ------------- ----------- ----------
<S> <C> <C> <C>
1,382,349 355,171 4,885 706,291
3. Approval of the amendment and restatement of the Company's Bylaws:
Votes For Votes Against Abstentions Non-Voting
--------- ------------- ----------- ----------
<S> <C> <C> <C>
1,316,277 440,484 4,885 687,050
</TABLE>
<PAGE>
- 13 -
SI HANDLING SYSTEMS, INC.
PART II - OTHER INFORMATION (CONTINUED)
---------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- - ------- --------------------------------
(a) Exhibit 27 - Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter ended September 1,
1996.
<PAGE>
- 14 -
SI HANDLING SYSTEMS, INC.
SIGNATURE
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.
SI HANDLING SYSTEMS, INC.
Barry V. Mack
Vice President - Finance
Dated: October 15, 1996
---------------------------
<PAGE>
- 15 -
SCHEDULE A
SI/BAKER, INC.
FINANCIAL STATEMENTS
AUGUST 31, 1996
<PAGE>
- 16 -
SI/BAKER, INC.
Balance Sheets
August 31, 1996 and February 29, 1996
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
August February
31, 1996 29, 1996
-------- --------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents, principally
time deposits $2,658 327
Receivables:
Trade 544 523
Other receivables 12 --
------ ------
Total receivables 556 523
------ ------
Costs and estimated earnings in
excess of billings 1,253 3,413
Inventories - purchased parts 121 16
Deferred income tax benefits 161 161
Prepaid income taxes 157 --
Prepaid expenses and other current
assets 124 5
------ ------
Total current assets 5,030 4,445
------ ------
Machinery and equipment, at cost 97 75
Less: accumulated depreciation 32 23
------ ------
Net machinery and equipment 65 52
------ ------
Equipment leased to customer 487 478
Less: accumulated depreciation 66 --
------ ------
Net equipment leased to customer 421 478
------ ------
Total assets $5,516 4,975
====== ======
</TABLE>
<PAGE>
- 17 -
SI/BAKER, INC.
Balance Sheets
August 31, 1996 and February 29, 1996
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
August February
31, 1996 29, 1996
-------- --------
<S> <C> <C>
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable:
Trade 796 798
Affiliated companies 26 1,080
------ ------
Total accounts payable 822 1,878
------ ------
Customers' deposits and billings in
excess of costs and estimated
earnings 2,369 1,007
Accrued salaries, wages, and
commissions 273 272
Income taxes payable -- 194
Accrued royalties payable 138 134
Accrued audit and legal fees 365 271
Accrued other liabilities 328 153
------ ------
Total current liabilities 4,295 3,909
------ ------
Deferred income tax liability 6 6
------ ------
Contingencies
Stockholders' equity:
Common stock, $1 par value; authorized
1,000 shares; issued 200 shares -- --
Additional paid-in capital 200 200
Retained earnings 1,015 860
------ ------
Total stockholders' equity 1,215 1,060
------ ------
Total liabilities and stockholders'
equity $5,516 4,975
====== ======
</TABLE>
<PAGE>
- 18 -
SI/BAKER, INC.
Statements of Operations
Six Months Ended August 31, 1996 and 1995
(In Thousands)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ------------------
August August August August
31, 1996 31, 1995 31, 1996 31, 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $ 3,457 2,268 7,127 4,225
Cost of sales 2,872 1,459 5,841 3,050
------- ------- ------- -------
Gross profit on sales 585 809 1,286 1,175
------- ------- ------- -------
Selling, general and
administrative
expenses 290 258 604 443
Product development
costs 14 55 150 91
Royalty expense, net 126 88 273 166
Interest income (5) (24) (11) (48)
Interest expense 1 -- 8 --
Other expense
(income), net (1) (2) 2 1
------- ------- ------- ------
425 375 1,026 653
------- ------- ------- ------
Earnings before
income taxes 160 434 260 522
Income tax expense 65 201 105 241
------- ------- ------- ------
Net earnings $ 95 233 155 281
======= ======= ======= ======
</TABLE>
<PAGE>
- 19 -
SI/BAKER, INC.
Statements of Cash Flows
Six Months Ended August 31, 1996 and 1995
(In Thousands)
<TABLE>
<CAPTION>
Six Months Ended
----------------------
August August
31, 1996 31, 1995
-------- --------
<S> <C> <C>
Cash flow from operating activities:
Net earnings $ 155 281
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation of machinery and
equipment 75 5
Changes in operating assets and
liabilities:
Trade receivables (33) 485
Costs and estimated earnings
in excess of billings 2,160 28
Inventories - purchased parts (105) --
Prepaid income taxes (157) --
Prepaid expenses and other
current assets (119) (8)
Accounts payable (1,056) (30)
Customers' deposits and
billings in excess of costs
and estimated earnings 1,362 (497)
Accrued salaries, wages, and
commissions 1 5
Income taxes payable (194) 201
Accrued royalties payable 4 (169)
Accrued audit and legal fees 94 6
Accrued other liabilities 175 22
------- -------
Net cash provided by operating activities 2,362 329
------- -------
Cash flows used in investing activities:
Additions to machinery and equipment (22) (5)
Equipment leased to customer (9) --
------- -------
Net cash used by investing activities (31) (5)
------- -------
Increase in cash and cash equivalents 2,331 324
Cash and cash equivalents, beginning of period 327 1,830
------- -------
Cash and cash equivalents, end of period $ 2,658 2,154
======= =======
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes $ 457 40
======= =======
Interest $ 8 --
======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS
SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM FORM 10-Q FOR
THE QUARTER ENDED SEPTEMBER 1,
1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000090045
<NAME> SI HANDLING SYSTEMS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-02-1997
<PERIOD-END> SEP-01-1996
<CASH> 3,885
<SECURITIES> 500
<RECEIVABLES> 3,641
<ALLOWANCES> 0
<INVENTORY> 1,803
<CURRENT-ASSETS> 11,101
<PP&E> 6,797
<DEPRECIATION> 5,620
<TOTAL-ASSETS> 13,028
<CURRENT-LIABILITIES> 5,193
<BONDS> 38
0
0
<COMMON> 2,451
<OTHER-SE> 5,245
<TOTAL-LIABILITY-AND-EQUITY> 13,028
<SALES> 11,053
<TOTAL-REVENUES> 11,053
<CGS> 7,841
<TOTAL-COSTS> 7,841
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5
<INCOME-PRETAX> 776
<INCOME-TAX> 58
<INCOME-CONTINUING> 718
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 718
<EPS-PRIMARY> .29
<EPS-DILUTED> .29
</TABLE>
