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 May 31, 1998
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 May 31, 1998: 3,726,300.
---------
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
- ------ --------------------
SI Handling Systems, Inc.
Balance Sheets
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
May March
Assets 31, 1998 1, 1998
- ------ -------- --------
<S> <C> <C>
Current assets:
Cash and cash equivalents, principally
time deposits $ 2,766 752
Short-term investments - -
------ ------
Total cash, cash equivalents, and
short-term investments 2,766 752
------ ------
Receivables:
Trade 6,149 8,830
Notes and other receivables 129 51
------ ------
Total receivables 6,278 8,881
------ ------
Costs and estimated earnings in excess
of billings 4,759 6,774
Inventories:
Raw materials 975 920
Finished goods and work-in-process 1,743 1,578
------ ------
Total inventories 2,718 2,498
------ ------
Deferred income tax benefits 435 435
Prepaid expenses and other current assets 119 162
------ ------
Total current assets 17,075 19,502
------ ------
Property, plant and equipment, at cost:
Land 27 27
Buildings and improvements 3,387 3,387
Machinery and equipment 4,216 4,180
------ ------
7,630 7,594
Less: accumulated depreciation 6,231 6,131
------ ------
Net property, plant and equipment 1,399 1,463
------ ------
Deferred income tax benefits 175 175
Investment in joint venture 1,037 1,027
Other assets, at cost less accumulated
amortization of $80 in 1999 and $78
in 1998 50 52
------ ------
Total assets $19,736 22,219
====== ======
</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>
May March
Liabilities and Stockholders' Equity 31, 1998 1, 1998
- ------------------------------------ -------- --------
<S> <C> <C>
Current liabilities:
Revolving credit loan payable to bank $ - 1,000
Current installments of long-term debt 8 8
Accounts payable 1,872 4,044
Customers' deposits and billings in excess
of costs and estimated earnings 3,715 2,218
Accrued salaries, wages, and commissions 615 1,495
Income taxes payable 380 380
Accrued royalties payable 188 432
Accrued other liabilities 1,239 960
------ ------
Total current liabilities 8,017 10,537
------ ------
Long-term liabilities:
Long-term debt, excluding current installments:
Mortgage payable 25 26
------ ------
Total long-term debt 25 26
Deferred compensation 190 190
------ ------
Total long-term liabilities 215 216
------ ------
Stockholders' equity:
Common stock, $1 par value; authorized
20,000,000 shares; issued 3,726,300
shares in 1999 and 3,711,826 shares
in 1988 3,726 3,712
Additional paid-in capital 2,738 2,645
Retained earnings 5,040 5,109
------ ------
Total stockholders' equity 11,504 11,466
------ ------
Total liabilities and stockholders' equity $19,736 22,219
====== ======
</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
--------------------------
May June
31, 1998 1, 1997
---------- --------
<S> <C> <C>
Net sales $ 8,800 9,542
Cost of sales 6,487 7,322
--------- -------
Gross profit on sales 2,313 2,220
--------- -------
Selling, general and
administrative expenses 1,668 1,487
Product development
costs 119 82
Interest expense 2 2
Interest income (45) (67)
Equity in income
of joint venture (10) (104)
Other income, net (33) (93)
--------- ---------
1,701 1,307
--------- ---------
Earnings before
income taxes 612 913
Income tax expense 235 357
--------- ---------
Net earnings $ 377 556
========= =========
Basic earnings per share* $ .10 .15
========= =========
Diluted earnings per share* $ .10 .15
========= =========
Cash dividends per share** $ .10 .07
========= =========
Average shares outstanding 3,715,445 3,693,740
Dilutive effect of stock options 35,853 51,831
Dilutive effect of phantom stock units 9,499 5,573
--------- ---------
Average shares outstanding assuming dilution 3,760,797 3,751,144
========= =========
<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. Basic 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. Diluted 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 and phantom stock units.
** Dividends per share for the three months ended June 1, 1997 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>
Three Months Ended
------------------------
May June
31, 1998 1, 1997
-------- --------
<S> <S> <C>
Cash flows from operating activities:
Net earnings $ 377 556
Adjustments to reconcile net earnings
to net cash provided (used)
by operating activities:
Depreciation of plant and equipment 100 87
Amortization of intangibles 2 3
Equity in income of joint venture (10) (104)
Change in operating assets and liabilities:
Receivables 2,603 397
Costs and estimated earnings in
excess of billings 2,015 (3,413)
Inventories (220) (111)
Prepaid expenses and other
current assets 43 (35)
Other noncurrent assets - (4)
Accounts payable (2,172) 359
Customers' deposits and billings
in excess of costs and estimated
earnings 1,497 (236)
Accrued salaries, wages, and
commissions (880) (129)
Income taxes payable - 96
Accrued royalties payable (244) (289)
Accrued other liabilities (93) (294)
Deferred compensation - 8
------ ------
Net cash provided (used) by
operating activities 3,018 (3,109)
------ ------
Cash flows from investing activities:
Sales of short-term investments - 3,741
Purchase of short-term investments - (1,472)
Additions to property, plant and equipment (36) (75)
------ ------
Net cash provided (used) by
investing activities (36) 2,194
------ ------
</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>
Three Months Ended
------------------------
May June
31, 1998 1, 1997
-------- --------
<S> <C> <C>
Cash flows from financing activities:
Sale of common shares in connection with
employee incentive stock option plan 33 42
Repayment of long-term debt (1) (4)
Dividends paid on common stock - (247)
Repayment of revolving credit
loan payable to bank (1,000) -
------ ------
Net cash used by financing activities (968) (209)
------ ------
Increase (decrease) in cash and
cash equivalents 2,014 (1,124)
Cash and cash equivalents, beginning
of period 752 1,852
------ ------
Cash and cash equivalents, end of period $ 2,766 728
====== ======
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest $ 3 1
====== ======
Income taxes $ 235 261
====== ======
Supplemental disclosures of noncash
financing activities:
Cash dividends declared in May but
payable in June $ 372 -
====== ======
Issuance of 14,886 common shares in
exchange for 5,978 common shares
delivered to the Company by officers
in connection with the employee
incentive stock option plan $ 74 -
====== ======
Issuance of 8,475 common shares in
exchange for 3,785 common shares
delivered to the Company by officers
in connection with the employee
incentive stock option plan $ - 43
====== ======
</TABLE>
See accompanying notes to financial statements.
- 6 -
<PAGE>
Item 1. Financial Statements (Continued)
- ------ --------------------
SI Handling Systems, Inc.
Notes To Financial Statements
Three Months Ended May 31, 1998 and June 1, 1997
(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 $2,766,000 during the
first three months of fiscal 1999 from $752,000 at the end of fiscal 1998. The
increase resulted from cash provided by operating activities totaling $3,018,000
and proceeds of $33,000 from the sale of common stock in connection with the
employee incentive stock option plan. Partially offsetting the increase in cash
and cash equivalents from these sources were the repayments of long-term debt of
$1,000 and the revolving credit loan payable to bank of $1,000,000, and
purchases of capital equipment of $36,000. Funds used by operating activities
during the first three months of fiscal 1998 were $3,109,000.
- 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 three months
of fiscal 1999. Currently, the committed revolving credit facility has an
expiration date of August 31, 2000. The Company repaid its outstanding debt
under the committed revolving credit facility on March 2,1998, and the Company
did not have any additional borrowings under the committed revolving credit
facility during the first three months of fiscal 1999.
On March 4, 1996, SI/BAKER established a $2,500,000 Line of Credit Facility
(the "Facility") with its principal bank (the "Bank"). 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. During fiscal 1998, the Bank
increased the borrowing availability to $3,000,000 and extended the expiration
date of the Facility. As of May 31, 1998, SI/BAKER's related debt outstanding
under the Facility was $900,000. SI/BAKER intends to satisfy the note and
thereby release the parent company guarantees during the second quarter of
fiscal 1999. 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
- ---------------------
Three Months Ended May 31, 1998 versus Three Months Ended June 1,
- -----------------------------------------------------------------
1997
- ----
The Company's net earnings for the first three months of fiscal 1999 were
$377,000 compared to net earnings of $556,000 for the first three months of
fiscal 1998.
Backlog at the end of the first three months of fiscal 1999 was $25,976,000
with approximately 81% of the backlog pertaining to Switch-Cart and
Dispen-SI-matic contracts. During the first three months of fiscal 1999, the
Company received orders totaling approximately $12,700,000. The largest order
received during the first quarter of fiscal 1999, totaling approximately
$4,500,000, engages the Company to develop an integrated order fulfillment
system to handle foreign currency orders for international travelers. This
project is anticipated to be completed during the second half of fiscal 1999.
Net sales of $8,800,000 for the first three months of fiscal 1999 decreased
7.8% compared to net sales of $9,542,000 for the first three months of fiscal
1998. The sales decrease in the first three months of fiscal 1999 is attributed
primarily to a smaller backlog of orders entering fiscal 1999 ($22,092,000
versus a $31,029,000 backlog beginning fiscal 1998). During the first quarter of
fiscal 1999, Order Selection sales of approximately $2,400,000 declined
approximately $2,900,000 from the prior year comparable period due to delays in
earlier periods by prospective customers in signing contracts often caused by
expanding project scope or contractual negotiations. Partially offsetting the
decline in Order Selection sales during the first quarter of fiscal 1999 was an
increase in sales of approximately $2,200,000 across the Company's other
products lines, with the majority of the increase relating to sales of the
Company's Switch-Cart, Cartrac, and Sortation product lines.
Gross profit as a percentage of sales was 26.3% for the first three months
of fiscal 1999 compared to 23.3% for the first three months of fiscal 1998. The
attainment of the higher gross profit percentage during the first three months
of fiscal 1999 was primarily attributable to the favorable performance on
several contracts, principally for the Company's higher margin proprietary
products, initiated in the prior fiscal year that were nearing completion during
the first three months of fiscal 1999. The lower gross profit percentage during
the first three months of fiscal 1998 was primarily attributable to a higher
content of ancillary products with lower margins than contracts containing a
higher degree of higher margin proprietary products.
Selling, general, and administrative expenses of $1,668,000 were higher by
$181,000 in the first three months of fiscal 1999 than in the comparable fiscal
1998 period. The increase in selling, general, and administrative
- 9 -
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
- ------ -------------------------------------------------
Condition and Results of Operations
-----------------------------------
Results Of Operations
- ---------------------
Three Months Ended May 31, 1998 versus Three Months Ended June 1,
- -----------------------------------------------------------------
1997 (Continued)
- ----
expenses is primarily attributable to costs associated with product promotion
and sales efforts aimed at expanding the Company's customer base of business
consistent with the Company's strategic plan to grow the business as a systems
integrator.
Product development costs of $119,000 were higher by $37,000 in the first
three months of fiscal 1999 than in the comparable fiscal 1998 period.
Development programs in the first three months of fiscal 1999 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 the controls platform for Dispen-SI-matic Systems. Development programs in
the first three months of fiscal 1998 included efforts directed at improvements
across various product lines, and efforts associated with the introduction of
the Henke light-duty overhead transportation product.
Interest income of $45,000 was lower by $22,000 in the first three months
of fiscal 1999 than in the comparable fiscal 1998 period. The decrease in
interest income is primarily attributable to the lower level of funds available
for short-term investments during the first three months of fiscal 1999.
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 unfavorable variance of $94,000 for the first three months of
fiscal 1999 in the equity in income of joint venture was attributable to
SI/BAKER's decline in revenues to approximately $2,100,000 as compared to the
comparable fiscal 1998 period of approximately $4,700,000. The sales decrease in
fiscal 1999 was primarily attributable to a smaller backlog of orders entering
fiscal 1999 versus a larger backlog of orders at the beginning of fiscal 1998.
Fiscal 1998 revenues were favorably impacted by performance on contracts wherein
customer specifications required systems to be commercially operable by the end
of fiscal 1998. Partially offsetting the unfavorable variance were SI/BAKER's
decreases of (1) $105,000 in revenue based royalty costs due to the parent
companies and (2) $57,000 in selling, general, and administrative expenses for
those expenses based on revenue and profit performance.
The unfavorable variance of $60,000 in other income, net, is primarily
attributable to a decrease of $53,000 in royalty income related to the SI/BAKER
joint venture.
The Company incurred income tax expense of $235,000 during the first three
months of fiscal 1999 compared to income tax expense of $357,000 in the
comparable fiscal 1998 period. Income tax expense was generally recorded at
statutory federal and state tax rates expected to apply for each fiscal year.
- 10 -
<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 has assembled a team of internal staff
to oversee the matter and is underway in completing its Year 2000 assessment.
The Company has upgraded its internal business system to address the Year 2000
issue and has initiated discussions with its suppliers, financial institutions,
and other organizations to ensure that those parties have appropriate plans to
remediate Year 2000 issues where their systems impact the Company's operations.
The scheduled completion date for the Company's efforts to address the Year 2000
issue is July 1999. Management presently believes that the Year 2000 issue will
not have a material impact on the Company's earnings or its ability to conduct
its business. However, there can be no assurance that the systems of other
organizations that impact the Company's operations also will be made compliant
or that any such failure in compliance by another company would not have an
adverse effect on the Company's operations.
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," "will continue," "project," and similar expressions that denote
uncertainty, are intended to identify such forward-looking statements. The
Company's actual results, performance, or achievements could differ materially
from the results expressed in, or implied by, such "forward-looking statements":
(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 May 31,
1998.
- 11 -
<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.
/S/ Barry V. Mack
Barry V. Mack
Vice President - Finance
(Principal Financial Officer)
Dated: July 14, 1998
-------------
- 12 -
<PAGE>
Schedule A
SI/BAKER, INC.
Financial Statements
May 31, 1998
- 13 -
<PAGE>
SI/BAKER, INC.
Balance Sheets
May 31, 1998 and February 28, 1998
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
May February
31, 1998 28, 1998
-------- --------
<S> <C> <C>
Assets
- ------
Current assets:
Cash and cash equivalents, principally
time deposits $ 226 388
Receivables:
Trade 1,545 2,881
Other receivables - 51
----- -----
Total receivables 1,545 2,932
----- -----
Costs and estimated earnings in
excess of billings 3,929 3,263
Inventories - 118
Deferred income tax benefits 309 309
Prepaid expenses and other current
assets 181 18
----- -----
Total current assets 6,190 7,028
----- -----
Machinery and equipment, at cost 150 125
Less: accumulated depreciation 72 64
----- -----
Net machinery and equipment 78 61
----- -----
Equipment leased to customer 487 487
Less: accumulated depreciation 279 249
----- -----
Net equipment leased to customer 208 238
----- -----
Deferred income tax benefits 35 35
----- -----
Other assets 86 57
----- -----
Total assets $ 6,597 7,419
===== =====
</TABLE>
- 14 -
<PAGE>
SI/BAKER, INC.
Balance Sheets
May 31, 1998 and February 28, 1998
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
May February
31, 1998 28, 1998
-------- --------
<S> <C> <C>
Liabilities and Stockholders' Equity
- ------------------------------------
Current liabilities:
Note payable to bank $ 900 900
Accounts payable:
Trade 806 930
Affiliated companies 248 97
----- -----
Total accounts payable 1,054 1,027
----- -----
Customers' deposits and billings in
excess of costs and estimated
earnings 1,259 1,740
Accrued salaries, wages, and
commissions 52 413
Income taxes payable - 44
Accrued royalties payable 289 288
Accrued product warranties 823 799
Accrued other liabilities 35 43
----- -----
Total current liabilities 4,412 5,254
----- -----
Deferred compensation 111 111
----- -----
Stockholders' equity:
Common stock, $1 par value; authorized
1,000 shares; issued 200 shares - -
Additional paid-in capital 200 200
Retained earnings 1,874 1,854
----- -----
Total stockholders' equity 2,074 2,054
----- -----
Total liabilities and stockholders'
equity $ 6,597 7,419
===== =====
</TABLE>
- 15 -
<PAGE>
SI/BAKER, INC.
Statements of Operations
Three Months Ended May 31, 1998 and 1997
(In Thousands)
<TABLE>
<CAPTION>
Three Months Ended
------------------------
May May
31, 1998 31, 1997
-------- --------
<S> <C> <C>
Net sales $ 2,074 4,704
Cost of sales 1,743 3,896
----- -----
Gross profit on sales 331 808
----- -----
Selling, general and
administrative
expenses 204 261
Product development
costs - 3
Royalty expense
to parent companies 83 188
Interest income (2) (7)
Interest expense 14 33
Other income, net (2) (20)
----- -----
297 458
----- -----
Earnings before
income taxes 34 350
Income tax expense 14 142
----- -----
Net earnings $ 20 208
===== =====
</TABLE>
- 16 -
<PAGE>
SI/BAKER, INC.
Statements of Cash Flows
Three Months Ended May 31, 1998 and 1997
(In Thousands)
<TABLE>
<CAPTION>
Three Months Ended
------------------------
May May
31, 1998 31, 1997
-------- --------
<S> <C> <C>
Cash flow from operating activities:
Net earnings $ 20 208
Adjustments to reconcile net earnings
to net cash used by
operating activities:
Depreciation of machinery and
equipment and leased equipment 38 35
Changes in operating assets and
liabilities:
Receivables 1,387 (1,749)
Costs and estimated earnings
in excess of billings (666) (1,640)
Inventories 118 (8)
Prepaid expenses and other
current assets (163) (3)
Other assets (29) -
Accounts payable 27 373
Customers' deposits and
billings in excess of costs
and estimated earnings (481) 2,380
Accrued salaries, wages, and
commissions (361) (54)
Income taxes payable (44) 107
Accrued royalties payable 1 17
Accrued product warranties 24 90
Accrued other liabilities (8) 186
----- -----
Net cash used
by operating activities (137) (58)
----- -----
Cash flows used in investing activities:
Additions to machinery and equipment (25) (8)
----- -----
Net cash used by investing activities (25) (8)
----- -----
</TABLE>
- 17 -
<PAGE>
SI/BAKER, INC.
Statements of Cash Flows (Continued)
Three Months Ended May 31, 1998 and 1997
(In Thousands)
<TABLE>
<CAPTION>
Three Months Ended
------------------------
May May
31, 1998 31, 1997
-------- --------
<S> <C> <C>
Decrease in cash and cash equivalents (162) (66)
Cash and cash equivalents,
beginning of period 388 484
----- -----
Cash and cash equivalents, end of period $ 226 418
===== =====
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes $ 207 37
===== =====
Interest $ 20 30
===== =====
</TABLE>
- 18 -
<PAGE>
SI HANDLING SYSTEMS, INC.
FORM 10-Q
EXHIBIT INDEX
-------------
Exhibit No.
- ----------
27 Financial Data Schedule.
- 19 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED
FROM FORM 10-Q FOR THE QUARTER
ENDED MAY 31, 1998 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> 3-MOS
<FISCAL-YEAR-END> FEB-28-1999
<PERIOD-END> MAY-31-1998
<CASH> 2,766
<SECURITIES> 0
<RECEIVABLES> 6,149
<ALLOWANCES> 0
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0
0
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</TABLE>
