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 November 30, 1997
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
November 30, 1997: 3,711,826.
---------
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements
- ------ --------------------
SI Handling Systems, Inc.
Balance Sheets
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
November March
Assets 30, 1997 2, 1997
- ------ --------- --------
<S> <C> <C>
Current assets:
Cash and cash equivalents, principally
time deposits $ 2,659 1,852
Short-term investments -- 3,741
------ ------
Total cash, cash equivalents, and
short-term investments 2,659 5,593
------ ------
Receivables:
Trade 3,146 3,900
Notes and other receivables 156 719
------ ------
Total receivables 3,302 4,619
------ ------
Costs and estimated earnings in excess
of billings 7,462 1,640
Inventories:
Raw materials 825 814
Finished goods and work-in-process 1,551 1,151
------ ------
Total inventories 2,376 1,965
------ ------
Deferred income tax benefits 372 372
Prepaid expenses and other current assets 308 173
------ ------
Total current assets 16,479 14,362
------ ------
Property, plant and equipment, at cost:
Land 27 27
Buildings and improvements 3,358 3,358
Machinery and equipment 4,166 3,717
------ ------
7,551 7,102
Less: accumulated depreciation 6,060 5,801
------ ------
Net property, plant and equipment 1,491 1,301
------ ------
Deferred income tax benefits 214 214
Investment in joint venture 920 606
Other assets, at cost less accumulated
amortization of $75 in 1998 and $67
in 1997 60 64
------ ------
Total assets $ 19,164 16,547
====== ======
</TABLE>
See accompanying notes to financial statements
- 2 -
<PAGE>
Item 1. Financial Statements (Continued)
- ------ --------------------
SI Handling Systems, Inc.
Balance Sheets
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
November March
Liabilities and Stockholders' Equity 30, 1997 2, 1997
- ------------------------------------ --------- --------
<S> <C> <C>
Current liabilities:
Current installments of long-term debt $ 12 12
Accounts payable 3,351 2,056
Customers' deposits and billings in excess
of costs and estimated earnings 1,885 2,752
Accrued salaries, wages, and commissions 1,192 778
Income taxes payable 633 442
Accrued royalties payable 322 427
Accrued other liabilities 847 870
------ ------
Total current liabilities 8,242 7,337
------ ------
Long-term liabilities:
Long-term debt, excluding current installments:
Mortgages payable 25 35
------ ------
Total long-term debt 25 35
Deferred compensation 160 132
------ ------
Total long-term liabilities 185 167
------ ------
Stockholders' equity:
Common stock, $1 par value; authorized
20,000,000 shares; issued 3,711,826
shares in 1998 and 2,460,306 shares
in 1997 3,712 2,460
Additional paid-in capital 2,645 3,752
Retained earnings 4,380 2,831
------ ------
Total stockholders' equity 10,737 9,043
------ ------
Total liabilities and stockholders' equity $ 19,164 16,547
====== ======
</TABLE>
See accompanying notes to financial statements.
- 3 -
<PAGE>
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 Nine Months Ended
November December November December
30, 1997 1, 1996 30, 1997 1, 1996
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Net sales $ 12,422 4,929 32,371 15,982
Cost of sales 9,665 3,430 25,134 11,271
------ ------ ------ ------
Gross profit on sales 2,757 1,499 7,237 4,711
------ ------ ------ ------
Selling, general and
administrative
expenses 1,684 1,226 4,756 3,824
Product development
costs 53 59 161 165
Interest expense 3 1 8 6
Interest income (23) (80) (115) (175)
Equity in (income) loss
of joint venture (33) 69 (314) (8)
Other income, net (80) (75) (358) (176)
------ ------ ------ ------
1,604 1,200 4,138 3,636
------ ------ ------ ------
Earnings before
income taxes 1,153 299 3,099 1,075
Income tax expense 454 26 1,215 84
------ ------ ------ ------
Net earnings $ 699 273 1,884 991
====== ====== ====== ======
Net earnings per common
share and common
share equivalents* $ .19 .07 .50 .27
====== ====== ====== ======
Dividends per share** $ - - .07 .07
====== ====== ====== ======
<FN>
* On October 14, 1997, the Board of Directors declared a three-for-two stock
split that was distributed on November 10, 1997 to shareholders of record on
October 27, 1997. Net 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 3,754,000 and 3,688,000, respectively, at November 30, 1997 and
December 1, 1996.
** Dividends per share for all periods presented were adjusted for the
three-for-two stock split that was distributed on November 10, 1997 to
shareholders of record on October 27, 1997.
</FN>
</TABLE>
See accompanying notes to financial statements.
- 4 -
<PAGE>
Item 1. Financial Statements (Continued)
- ------ --------------------
SI Handling Systems, Inc.
Statements of Cash Flows
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
Nine Months Ended
---------------------
November December
30, 1997 1, 1996
--------- --------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 1,884 991
Adjustments to reconcile net earnings
to net cash provided (used)
by operating activities:
Depreciation of plant and equipment 259 238
Amortization of intangibles 8 8
Equity in income of joint venture (314) (8)
Change in operating assets and liabilities:
Receivables 1,317 568
Costs and estimated earnings in
excess of billings (5,822) 80
Inventories (411) (110)
Deferred income tax benefits - (185)
Prepaid expenses and other
current assets (135) (52)
Other noncurrent assets (4) 3
Accounts payable 1,295 (399)
Customers' deposits and billings
in excess of costs and estimated
earnings (867) 1,432
Accrued salaries, wages, and
commissions 414 (217)
Income taxes payable 191 274
Accrued royalties payable (105) (250)
Accrued other liabilities (23) 56
Deferred compensation 28 10
------ ------
Net cash provided (used) by
operating activities (2,285) 2,439
------ ------
Cash flows from investing activities:
Sales of short-term investments 5,213 2,414
Purchase of short-term investments (1,472) (4,290)
Additions to property, plant and equipment (449) (250)
------ ------
Net cash provided (used) by
investing activities 3,292 (2,126)
------ ------
</TABLE>
See accompanying notes to financial statements.
- 5 -
<PAGE>
Item 1. Financial Statements (Continued)
- ------ --------------------
SI Handling Systems, Inc.
Statements of Cash Flows (Continued)
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
Nine Months Ended
---------------------
November December
30, 1997 1, 1996
--------- --------
<S> <C> <C>
Cash flows from financing activities:
Sale of common shares in connection
with employee incentive stock
option plan 59 12
Repayment of long-term debt (10) (17)
Dividends paid on common stock (247) (244)
Dividends paid to shareholders for
fractional shares in connection with
three-for-two split (2) -
------ ------
Net cash used by financing
activities (200) (249)
------ ------
Increase in cash and cash equivalents 807 64
Cash and cash equivalents, beginning
of period 1,852 1,335
------ ------
Cash and cash equivalents, end of period $ 2,659 1,399
====== ======
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 4 2
====== ======
Income taxes $ 1,024 (5)
====== ======
Supplemental disclosures of noncash
financing activities:
Issuance of 12,150 common shares in
exchange for 5,376 common shares
delivered to the Company by officers
in connection with the employee
incentive stock option plan $ 88 -
====== ======
Issuance of 27,431 common shares in
exchange for 12,814 common shares
delivered to the Company by officers
in connection with the employee
incentive stock option plan $ - 135
====== ======
</TABLE>
See accompanying notes to financial statements.
- 6 -
<PAGE>
Item 1. Financial Statements (Continued)
- ------ --------------------
SI Handling Systems, Inc.
Notes To Financial Statements
Nine Months Ended November 30, 1997 and December 1, 1996
(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 $2,659,000 during the
first nine months of fiscal 1998 from $1,852,000 at the end of fiscal 1997. The
increase resulted from proceeds of $3,741,000 from net sales of short-term
investments and proceeds of $59,000 from the sale of common stock in connection
with the employee incentive stock option plan. Offsetting the increase in cash
and cash equivalents from these sources were cash used by operating activities
totaling $2,285,000, repayments of long-term debt of $10,000, purchases of
capital equipment of $449,000, and the payment of $247,000 in cash dividends to
shareholders. Funds provided by operating activities during the first nine
months of fiscal 1997 were $2,439,000.
- 7 -
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
- ------ -------------------------------------------------
Condition and Results of Operations
-----------------------------------
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 nine months of
fiscal 1998. Currently, the committed revolving credit facility has an
expiration date of August 31, 2000. During the first nine months of fiscal 1998,
the Company did not have any borrowings under the committed revolving credit
facility.
On March 4, 1996, SI/BAKER established a Line of Credit Facility (the
"Facility") with its principal bank (the "Bank"). Effective December 1, 1997,
the Bank modified the Facility by increasing the borrowing capacity to
$3,000,000 and extending the expiration date. Under terms of the Facility,
SI/BAKER's parent companies, SI Handling Systems, Inc. and Automated
Prescriptions Systems, Inc., have each provided a limited guarantee and surety
in an amount not to exceed $1,000,000 for a combined guarantee of $2,000,000 to
the Bank for the payment and performance of the related note, including any
further renewals or modifications of the Facility. As of November 30, 1997,
SI/BAKER's related debt outstanding under the Facility was $2,000,000. SI/BAKER
intends to satisfy the note and thereby release the parent company guarantees
during the first half of calendar year 1998. Currently, the Facility has an
expiration date of August 31, 1998.
On October 14, 1997, the Board of Directors of the Company declared a
three-for-two stock split that was distributed on November 10, 1997 to the
shareholders of record on October 27, 1997. The purpose of the stock split was
to increase the number of outstanding shares and broaden ownership and
availability of the Company's common stock.
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.
- 8 -
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
- ------ -------------------------------------------------
Condition and Results of Operations
-----------------------------------
Results Of Operations
- ---------------------
(a) Nine Months Ended November 30, 1997 versus Nine Months Ended December 1,
---------------------------------------------------------------------------
1996
----
The Company's net earnings for the first nine months of fiscal 1998 were
$1,884,000 compared to net earnings of $991,000 for the first nine months of
fiscal 1997. Backlog at the end of the first nine months of fiscal 1998 was
$25,073,000
with approximately 95% of the backlog pertaining to Switch-Cart, Cartrac, and
Dispen-SI-matic contracts. During the first nine months of fiscal 1998, the
Company was the recipient of orders totaling approximately $26.4 million with
the largest single order taken by the Company's Production & Assembly Systems
Business Unit. The Defense Logistics Agency of the United States government
exercised an option for a $6.6 million addition to the prime mechanization
contract it awarded the Company in September 1996. The contract options were
exercised to expand the scope of the material handling and storage system at the
Distribution Operations Center of the Defense Distribution Depot located in Red
River, Texas. The contract, which is expected to be completed during the second
half of fiscal 1999, is the largest in the Company's history and totals
approximately $23.2 million.
Net sales of $32,371,000 for the first nine months of fiscal 1998 increased
102.5% compared to net sales of $15,982,000 for the first nine months of fiscal
1997. The sales increase in the first nine months of fiscal 1998 is attributed
primarily to a larger backlog of orders entering fiscal 1998 ($31,029,000 versus
a $10,488,000 backlog beginning fiscal 1997). The largest increases in sales
occurred in the Switch-Cart and Order Selection product lines. Switch-Cart sales
rose approximately $8.2 million to $12.3 million, while Order Selection sales
rose $8.1 million to $10.8 million. The increase in the Switch-Cart product line
was primarily attributable to progress made on the contract with the Defense
Logistics Agency of the United States government. The increase experienced in
the Company's Order Selection product line during the first nine months of
fiscal 1998 was primarily attributable to progress relating to several large
contracts received prior to the start of fiscal 1998, with approximately 60% of
the current fiscal year Order Selection revenues attributable to such contracts.
Contributing to the lower backlog at the beginning of fiscal 1997, and hence
sales in the first nine months of fiscal 1997, were 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 occurring in a targeted market.
- 9 -
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
- ------ -------------------------------------------------
Condition and Results of Operations
-----------------------------------
Results Of Operations
- ---------------------
(a) Nine Months Ended November 30, 1997 Versus Nine Months Ended December 1,
---------------------------------------------------------------------------
1996 (Continued)
----
Gross profit as a percentage of sales was 22.4% for the first nine months
of fiscal 1998 compared to 29.5% for the first nine months of fiscal 1997. The
decrease in the gross profit percentage for the first nine months of fiscal 1998
was primarily attributable to a higher content in contracts currently in
progress of ancillary products with lower margins than contracts containing a
high degree of proprietary products. The attainment of the elevated gross profit
percentage during the first nine 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 nine months of fiscal
1997 as well as to a higher content in contracts then in progress of proprietary
product.
Selling, general, and administrative expenses of $4,756,000 were higher by
$932,000 in the first nine months of fiscal 1998 than in the comparable fiscal
1997 period. The increase in selling, general, and administrative expenses is
attributable to (1) increases of approximately $750,000 for those expenses based
on revenue and profit performance, including salary rate adjustments,
commissions, and costs related to the Company's incentive-based compensation
plan which provides for gain sharing as a means of promoting performance
excellence and (2) increases of approximately $125,000 in consulting and
shareholder relations expenditures associated with increasing the visibility of
the Company and exploring business opportunities and strategic alliances.
Product development costs for the first nine months of fiscal 1998 were
relatively the same as such costs for the comparable fiscal 1997 period.
Development programs in the first nine months of fiscal 1998 included efforts
directed at improvements across various product lines, and to efforts associated
with the introduction of the Henke light-duty overhead transportation product,
for which the Company is in the process of becoming an exclusive North American
distributor. Development programs in the first nine months of fiscal 1997
included enhancements to the Company's product controls and features and
improvements to the Sortation and Order Selection product lines, with particular
emphasis aimed at Dispen-SI-matic and Pick-to-Light Systems.
Interest income of $115,000 was lower by $60,000 in the first nine months
of fiscal 1998 than in the comparable fiscal 1997 period. The decrease in
interest income is primarily attributable to the lower level of funds available
for short-term investments during the first nine months of fiscal 1998, with the
majority of the decline experienced during the third quarter of fiscal 1998.
- 10 -
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
- ------ -------------------------------------------------
Condition and Results of Operations
-----------------------------------
Results Of Operations
- ---------------------
(a) Nine Months Ended November 30, 1997 versus Nine Months Ended December 1,
---------------------------------------------------------------------------
1996 (Continued)
----
Equity in income of joint venture represented the Company's proportionate
share of its investment in SI/BAKER which is being accounted for under the
equity method. The favorable variance of $306,000 for the first nine months of
fiscal 1998 in the equity in income of joint venture was attributable to
SI/BAKER's growth in revenues to $17.3 million, as compared to the comparable
fiscal 1997 period of $11.5 million, as well as to reductions of (1) $221,000 in
product development costs and (2) $93,000 in selling, general, and
administrative expenses. The substantial increase in revenues is primarily
attributable to SI/BAKER's larger backlog of orders entering fiscal 1998 and
customer requirements for job completion during the early part of the third
quarter of fiscal 1998. SI/BAKER's fiscal 1997 comparable period product
development costs were associated with the BK2000 automated pharmacy system
product line, while selling, general, and administrative expenses were impacted
unfavorably by legal costs associated with the since settled patent infringement
litigation. Partially offsetting the favorable variance were increases of (1)
$231,000 in revenue based royalty costs due to the parent companies and (2)
$84,000 in interest expense related to bank borrowings to fund short-term
working capital requirements. The favorable variance of $182,000 in other
income, net, is primarily attributable to an increase of $115,000 in royalty
income related to the SI/BAKER joint venture.
The Company incurred income tax expense of $1,215,000 during the first nine
months of fiscal 1998 compared to income tax expense of $84,000 in the
comparable fiscal 1997 period. Income tax expense for the first nine months of
fiscal 1998 was recorded at the statutory federal and state tax rates expected
to apply for the current fiscal year. Income tax expense for the first nine
months of fiscal 1997 was less than statutory rates 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 November 30, 1997 versus Three Months Ended December 1,
--------------------------------------------------------------------------
1996
----
Changes in the third quarter of the current fiscal year compared to the
prior year were consistent with those previously noted above for the nine
month-period, with the exception of the following area:
The increase in other income, net for the nine month period noted above
occurred primarily in the first half of fiscal 1998, while third quarter other
income, net for fiscal 1998 increased slightly from the comparable prior year
period.
- 11 -
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
- ------ -------------------------------------------------
Condition and Results of Operations
-----------------------------------
Year 2000
- ---------
The Year 2000 issue relates to the inability of computer systems,
microprocessors, and other electronic devices to deal appropriately with dates
on or after January 1, 2000. The Company is in the process of assessing its
compliance with the Year 2000 issue; however, management has not assessed the
Year 2000 compliance expense and related potential effect on the Company's
earnings.
Cautionary Statement
- --------------------
Certain statements contained herein are not based on historical fact and
are "forward-looking statements" (within the meaning of the Private Securities
Litigation Reform Act of 1995). Among other things, they regard the Company's
earnings, liquidity, financial condition, and certain operational matters. Words
or phrases denoting the anticipated results of future events, such as
"anticipate," "believe," "estimate," "expect," "may," "will likely," "are
expected to," "continues," "projects," and similar expressions that denote
uncertainty, are intended to identify such forward-looking statements. Actual
results may differ materially: (1) as a result of risks and uncertainties
identified in connection with those forward-looking statements, including those
factors identified herein, and in the Company's other publicly filed reports;
(2) as a result of factors over which the Company has no control, including the
strength of domestic and foreign economies, sales growth competition, and
certain cost increases; or (3) if the factors on which the Company's conclusions
are based do not conform to the Company's expectations.
PART II - OTHER INFORMATION
---------------------------
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 November 30,
1997.
- 12 -
<PAGE>
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: January 14, 1998
----------------
- 13 -
<PAGE>
Schedule A
----------
SI/BAKER, INC.
Financial Statements
November 30, 1997
- 14 -
<PAGE>
SI/BAKER, INC.
Balance Sheets
November 30, 1997 and February 28, 1997
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
November February
30, 1997 28, 1997
--------- --------
<S> <C> <C>
Assets
- ------
Current assets:
Cash and cash equivalents, principally
time deposits $ 597 484
Receivables:
Trade 3,487 1,618
Other receivables -- 122
------ ------
Total receivables 3,487 1,740
------ ------
Costs and estimated earnings in
excess of billings 3,454 4,111
Inventories -- 36
Deferred income tax benefits 367 367
Prepaid expenses and other current
assets 82 87
------ ------
Total current assets 7,987 6,825
------ ------
Machinery and equipment, at cost 125 106
Less: accumulated depreciation 58 41
------ ------
Net machinery and equipment 67 65
------ ------
Equipment leased to customer 487 487
Less: accumulated depreciation 218 127
------ ------
Net equipment leased to customer 269 360
------ ------
Deferred income tax benefits 6 6
------ ------
Total assets $ 8,329 7,256
====== ======
</TABLE>
- 15 -
<PAGE>
SI/BAKER, INC.
Balance Sheets
November 30, 1997 and February 28, 1997
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
November February
30, 1997 28, 1997
--------- --------
<S> <C> <C>
Liabilities and Stockholders' Equity
- ------------------------------------
Current liabilities:
Note payable to bank $ 2,000 1,750
Accounts payable:
Trade 1,758 1,920
Affiliated companies 250 356
------ ------
Total accounts payable 2,008 2,276
------ ------
Customers' deposits and billings in
excess of costs and estimated
earnings 953 779
Accrued salaries, wages, and
commissions 323 307
Income taxes payable 80 -
Accrued royalties payable 342 319
Accrued product warranties 728 463
Accrued other liabilities 55 151
------ ------
Total current liabilities 6,489 6,045
------ ------
Stockholders' equity:
Common stock, $1 par value; authorized
1,000 shares; issued 200 shares - -
Additional paid-in capital 200 200
Retained earnings 1,640 1,011
------ ------
Total stockholders' equity 1,840 1,211
------ ------
Total liabilities and stockholders'
equity $ 8,329 7,256
====== ======
</TABLE>
- 16 -
<PAGE>
SI/BAKER, INC.
Statements of Operations
Nine Months Ended November 30, 1997 and 1996
(In Thousands)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
-------------------- --------------------
November November November November
30, 1997 30, 1996 30, 1997 30, 1996
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Net sales $ 4,530 4,353 17,253 11,480
Cost of sales 4,036 4,147 14,750 9,988
------ ------ ------ ------
Gross profit on sales 494 206 2,503 1,492
------ ------ ------ ------
Selling, general and
administrative
expenses 204 219 730 823
Product development
costs - 74 3 224
Royalty expense
to parent companies 179 186 690 459
Interest income (6) (24) (21) (35)
Interest expense 33 1 93 9
Other income, net (25) (15) (51) (13)
------ ------ ------- ------
385 441 1,444 1,467
------ ------ ------- ------
Earnings (loss) before
income taxes 109 (235) 1,059 25
Income tax expense
(benefit) 43 (96) 430 9
------ ------ ------ ------
Net earnings (loss) $ 66 (139) 629 16
====== ====== ====== ======
</TABLE>
- 17 -
<PAGE>
SI/BAKER, INC.
Statements of Cash Flows
Nine Months Ended November 30, 1997 and 1996
(In Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
---------------------
November November
30, 1997 30, 1996
--------- --------
<S> <C> <C>
Cash flow from operating activities:
Net earnings $ 629 16
Adjustments to reconcile net earnings
to net cash provided (used) by
operating activities:
Depreciation of machinery and
equipment and leased equipment 108 111
Changes in operating assets and
liabilities:
Receivables (1,747) (1,177)
Costs and estimated earnings
in excess of billings 657 1,622
Inventories 36 (54)
Prepaid income taxes - (336)
Prepaid expenses and other
current assets 5 (99)
Accounts payable (268) (637)
Customers' deposits and
billings in excess of costs
and estimated earnings 174 766
Accrued salaries, wages, and
commissions 16 (113)
Income taxes payable 80 (194)
Accrued royalties payable 23 399
Accrued product warranties 265 218
Accrued other liabilities (96) 51
------ ------
Net cash provided (used)
by operating activities (118) 573
------ ------
Cash flows used in investing activities:
Additions to machinery and equipment (19) (25)
Equipment leased to customer - (9)
------ ------
Net cash used by investing activities (19) (34)
------ ------
Cash flows provided by financing activities:
Increase in note payable to bank 250 -
------ ------
</TABLE>
- 18 -
<PAGE>
SI/BAKER, INC.
Statements of Cash Flows (Continued)
Nine Months Ended November 30, 1997 and 1996
(In Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
---------------------
November November
30, 1997 30, 1996
--------- --------
<S> <C> <C>
Increase in cash and cash equivalents 113 539
Cash and cash equivalents,
beginning of period 484 327
------ ------
Cash and cash equivalents, end of period $ 597 866
====== ======
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes $ 350 539
====== ======
Interest $ 88 9
====== ======
</TABLE>
- 19 -
<PAGE>
SI HANDLING SYSTEMS, INC.
FORM 10-Q
EXHIBIT INDEX
-------------
Exhibit No.
- ----------
27 Financial Data Schedule.
- 20 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS
SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM FORM 10-Q FOR
THE QUARTER ENDED NOVEMBER
30, 1997 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> 9-MOS
<FISCAL-YEAR-END> MAR-01-1998
<PERIOD-END> NOV-30-1997
<CASH> 2,659
<SECURITIES> 0
<RECEIVABLES> 3,146
<ALLOWANCES> 0
<INVENTORY> 2,376
<CURRENT-ASSETS> 16,479
<PP&E> 7,551
<DEPRECIATION> 6,060
<TOTAL-ASSETS> 19,164
<CURRENT-LIABILITIES> 8,242
<BONDS> 25
0
0
<COMMON> 3,712
<OTHER-SE> 7,025
<TOTAL-LIABILITY-AND-EQUITY> 19,164
<SALES> 32,371
<TOTAL-REVENUES> 32,371
<CGS> 25,134
<TOTAL-COSTS> 25,134
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8
<INCOME-PRETAX> 3,099
<INCOME-TAX> 1,215
<INCOME-CONTINUING> 1,884
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,884
<EPS-PRIMARY> .50
<EPS-DILUTED> .50
</TABLE>
