<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarter Ended June 30, 1997
Commission File Number 0-21626
ELECTROGLAS, INC.
(exact name of registrant as specified in its charter)
DELAWARE 77-0336101
- ------------------------------- ----------------------
(state or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
2901 Coronado Drive
Santa Clara, CA 95054
Telephone: (408) 727-6500
(address of principal executive
offices and telephone number)
Indicate by check mark 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
requirement for the past 90 days.
Yes [X] No [ ]
As of August 1, 1997, 19,301,988 shares of the Registrant's common stock, $0.01
par value, were issued and outstanding.
<PAGE> 2
INDEX
ELECTROGLAS, INC.
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Condensed Financial Statements
Consolidated condensed statements of operations -- Three months
and six months ended June 30, 1997 and June 30, 1996 .................... 3
Consolidated condensed balance sheets -- June 30, 1997
and December 31, 1996 ................................................... 4
Consolidated condensed statements of cash flows -- Six months
ended June 30, 1997 and June 30, 1996 ................................... 5
Notes to consolidated condensed financial statements --
June 30, 1997 ........................................................... 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations ........................... 9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders ..................... 14
Item 6. Exhibits and Reports on Form 8-K ........................................ 14
SIGNATURES ......................................................................... 15
</TABLE>
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<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Condensed Financial Statements
ELECTROGLAS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
--------------------------- ---------------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $ 36,075 $ 48,869 $ 61,626 $100,704
Cost of sales 20,211 23,903 35,878 47,748
-------- -------- -------- --------
Gross profit 15,864 24,966 25,748 52,956
-------- -------- -------- --------
Operating expenses:
Engineering, research and development 5,310 4,862 9,795 9,493
Selling, general and administrative 7,590 7,475 13,925 14,769
In-process research and development 23,500 -- 23,500 --
-------- -------- -------- --------
Total operating expenses 36,400 12,337 47,220 24,262
-------- -------- -------- --------
Operating income (loss) (20,536) 12,629 (21,472) 28,694
Interest income 1,246 1,158 2,468 2,311
Other income (expense), net (54) (13) (300) 36
-------- -------- -------- --------
Income (loss) before income taxes (19,344) 13,774 (19,304) 31,041
Provision for income taxes 1,371 4,821 1,385 10,864
-------- -------- -------- --------
Net income (loss) $(20,715) $ 8,953 $(20,689) $ 20,177
======== ======== ======== ========
Net income (loss) per share $ (1.13) $ 0.50 $ (1.15) $ 1.12
======== ======== ======== ========
Shares used in per share calculations 18,308 18,020 17,934 18,089
======== ======== ======== ========
</TABLE>
See accompanying notes to consolidated condensed financial statements
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<PAGE> 4
ELECTROGLAS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
(Unaudited) (1)
------------ ------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 25,355 $ 11,141
Short-term investments 97,530 117,961
Accounts receivable, net 30,196 16,663
Inventories 24,341 22,578
Prepaid expenses and other current assets 3,029 8,231
Deferred income taxes 7,352 7,017
------------ ------------
Total current assets 187,803 183,591
Deferred income taxes 541 2,669
Equipment and leasehold improvements, net 13,744 10,184
Other assets 10,897 1,422
------------ ------------
Total assets $ 212,985 $ 197,866
============ ============
Liabilities and stockholders' equity
Current liabilities:
Short-term borrowings $ 2,838 $ 1,790
Accounts payable 8,922 4,754
Accrued liabilities 15,537 17,061
Income taxes payable 1,156 610
------------ ------------
Total current liabilities 28,453 24,215
Stockholders' equity:
Preferred stock, $0.01 par value;
authorized 1,000,000; none outstanding -- --
Common stock, $0.01 par value;
authorized 40,000,000; issued and outstanding 19,787,000 at
June 30, 1997 and 18,203,000 at December 31, 1996 198 182
Additional paid in capital 121,704 89,825
Deferred stock compensation (1,130) (1,278)
Retained earnings 73,984 94,673
------------ ------------
194,756 183,402
Less cost of common stock in treasury;
700,000 at June 30, 1997 and 674,000 at December 31, 1996 10,224 9,751
------------ ------------
Total stockholders' equity 184,532 173,651
------------ ------------
Total liabilities and stockholders' equity $ 212,985 $ 197,866
============ ============
</TABLE>
(1) The information in this column was derived from the Company's audited
consolidated financial statements for the year ended December 31, 1996.
See accompanying notes to consolidated condensed financial statements
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<PAGE> 5
ELECTROGLAS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30,
-------------------------
1997 1996
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (20,689) $ 20,177
Changes to income not affecting cash 26,831 1,606
Changes in current assets and current liabilities
net of effects from acquisition (9,163) (9,757)
--------- ---------
Cash provided by (used in) operating activities (3,021) 12,026
Cash flow from investing activities:
Capital expenditures (5,055) (3,846)
Purchases of investments (86,919) (125,781)
Maturities of investments 106,757 124,499
Other assets (139) (133)
Cash acquired in acquisition 973 --
--------- ---------
Cash provided by (used in) investing activities 15,617 (5,261)
Cash flow from financing activities:
Proceeds from short-term borrowings 1,048 423
Payments of short-term borrowings (1,250) --
Sales of common stock, net of issuance costs 2,368 583
Purchases of treasury stock (473) (4,057)
--------- ---------
Cash provided by (used in) financing activities 1,693 (3,051)
Effect of exchange rate changes (75) (25)
--------- ---------
Net increase in cash and cash equivalents 14,214 3,689
Cash and cash equivalents at beginning of period 11,141 6,796
--------- ---------
Cash and cash equivalents at end of period $ 25,355 $ 10,485
========= =========
</TABLE>
See accompanying notes to consolidated condensed financial statements
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<PAGE> 6
ELECTROGLAS, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE: 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements have been
prepared by the Company in accordance with generally accepted accounting
principles for interim financial information and with Rule 10-01 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete consolidated
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for fair presentation have
been included. These consolidated condensed financial statements should be read
in conjunction with the audited consolidated financial statements for the year
ended December 31, 1996, included in the Company's Annual Report on Form 10-K.
Certain reclassifications to the Consolidated Condensed Statement of Cash Flows
for the six months ended June 30, 1996 have been made to conform to the current
year presentation.
Operating results for the six month period ended June 30, 1997 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1997.
The Company's fiscal year end is December 31. The Company's fiscal quarters end
on the Saturday nearest the end of the calendar quarter. For convenience, the
Company has indicated that its quarters end on March 31, June 30 and September
30.
USE OF ESTIMATES - The preparation of the accompanying unaudited consolidated
condensed financial statements requires management to make estimates and
assumptions that affect the amounts reported in the financial statements. Actual
results could differ from those estimates.
NOTE: 2 - INVENTORIES
Inventories comprised the following:
<TABLE>
<CAPTION>
June 30, December 31,
(in thousands) 1997 1996
----------- -----------
<S> <C> <C>
Raw materials $ 9,368 $ 7,671
Work in process 9,184 8,766
Finished goods 5,789 6,141
----------- -----------
$ 24,341 $ 22,578
=========== ===========
</TABLE>
NOTE: 3 - NET INCOME (LOSS) PER SHARE
Net income per share is computed using the weighted average number of common
shares and dilutive common equivalent shares attributable to stock options using
the treasury stock method. As the Company incurred a loss in its most recent
three and six month periods, common share equivalents have been excluded from
the computations for 1997 as they were antidilutive.
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<PAGE> 7
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, "Earnings Per Share," which is required to be adopted on December 31, 1997.
At that time, the Company will be required to change the method currently used
to compute net income per share and to restate all prior periods. Under the new
requirements for calculating net income per share, the dilutive effect of stock
options will be excluded. There will be no impact to income per share for the
three months and six months ended June 30, 1997 and 1996. The impact of
Statement 128 on the calculation of fully diluted net income per share for these
periods is not material.
NOTE: 4 - LEASE AGREEMENT
In March 1997, the Company entered into a five-year operating lease for
approximately 21.5 acres of undeveloped land in San Jose, California. The
monthly payments are based on the London Interbank Offering Rate (LIBOR). At
current interest rates, the annual lease payments represent approximately
$710,000. At the end of the lease, the Company has the option to acquire the
property at its original cost of approximately $12,000,000 and any current rent
due and payable.
The guaranteed residual payment on the lease is approximately $12,000,000. The
lease contains certain restrictive covenants. The Company was in compliance with
these covenants at June 30, 1997. The lease also contains a collateral option,
which would allow the Company to reduce rent expense. The Company has exercised
the collateral option and at June 30, 1997, the Company had pledged cash of
approximately $12,000,000 which is included in cash and cash equivalents, since
the Company can withdraw the cash with ten days notice.
NOTE: 5 - ACQUISITION OF KNIGHTS TECHNOLOGY
On May 19, 1997, the Company acquired Knights Technology, Inc. (Knights), a
developer of yield management software for the semiconductor industry, for the
following amounts (in thousands):
<TABLE>
<S> <C> <C>
Common stock issued, 1,352,205 shares $27,720
Assumption of Knights stock options 2,295
Acquisition costs 1,785
-------
$31,800
=======
</TABLE>
The acquisition was recorded under the purchase method of accounting, and
accordingly, the accompanying financial statements include the operations of
Knights subsequent to the acquisition date. The purchase price was allocated,
based on an independent appraisal obtained by the Company, to the tangible and
intangible assets acquired and liabilities assumed based on their respective
fair values on the date of acquisition as follows (in thousands):
<TABLE>
<S> <C>
Cash $ 973
Other current assets 1,220
Non-current assets 712
Intangibles 7,720
Liabilities (2,325)
In-process research and development 23,500
--------
$ 31,800
========
</TABLE>
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<PAGE> 8
To determine the value of in-process research and development, the Company
considered, among other factors, the stage of development of each project,
expected income, target markets, and associated risks. Associated risks included
inherent difficulties and uncertainties in completing the project and, thereby,
achieving technical feasibility and risks related to the viability of and
potential changes in future target markets. This analysis resulted in a
valuation of $23,500,000 for in-process research and development that had not
reached technical feasibility and did not have alternative future uses.
Therefore, in accordance with generally accepted accounting principles, the
$23,500,000 was expensed.
Intangible assets relate primarily to developed technology and goodwill. To
determine the value of developed technology, the expected future cash flows of
each software product was discounted, taking into account risks related to the
characteristics and applications of each product, existing and future markets,
and assessments of the life cycle stage of each product. This analysis resulted
in a valuation for completed software which had reached technological
feasibility and, therefore, was capitalizable. Intangible assets will be
amortized on a straight-line basis over estimated useful lives ranging from
three to five years.
As part of the Agreement and Plan of Reorganization, 10% of the common stock
included in the consideration was deposited into an escrow account. The escrow
shares are to be distributed to Knights stockholders on May 19, 1998 and are for
the full satisfaction of losses to the Company resulting from misrepresentations
or omissions in the agreement.
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<PAGE> 9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The statements contained in this Form 10-Q that are not purely historical are
forward-looking statements, including statements regarding the Company's
expectations, hopes or intentions regarding the future. Forward-looking
statements include, but are not limited to, statements about gross profits,
current levels of taxable income, liquidity, anticipated cash needs and
availability. All forward-looking statements included in this document are made
as of the date hereof, based on information available to the Company as of the
date hereof, and Electroglas assumes no obligation to update any forward-looking
statement. It is important to note that the Company's actual results could
differ materially from those in such forward-looking statements. You should
consult the risk factors listed from time to time in the Company's Annual Report
on Form 10-K, as well as those disclosed in this discussion and analysis
included under the sections titled "Factors That May Affect Results and
Financial Condition" and "Volatility of Stock Price."
The components of the Company's statements of operations, expressed as a
percentage of net sales, are as follows:
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
------------------ ------------------
1997 1996 1997 1996
----- ----- ----- -----
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 56.0 48.9 58.2 47.4
----- ----- ----- -----
Gross profit 44.0 51.1 41.8 52.6
----- ----- ----- -----
Operating expenses:
Engineering, research and development 14.7 9.9 15.9 9.4
Selling, general and administrative 21.0 15.3 22.6 14.7
In-process research and development 65.2 -- 38.1 --
----- ----- ----- -----
Total operating expenses 100.9 25.2 76.6 24.1
----- ----- ----- -----
Operating income (loss) (56.9) 25.9 (34.8) 28.5
Interest income 3.5 2.3 4.0 2.3
Other income (expense), net (0.2) -- (0.5) --
----- ----- ----- -----
Income (loss) before income taxes (53.6) 28.2 (31.3) 30.8
Provision for income taxes 3.8 9.9 2.3 10.8
----- ----- ----- -----
Net income (loss) (57.4)% 18.3% (33.6)% 20.0%
===== ===== ===== =====
</TABLE>
RESULTS OF OPERATIONS
Net Sales
Net sales for the quarter ended June 30, 1997 were $36,075,000, a 26.2% decline
from net sales of $48,869,000 in the comparable period last year. Net sales for
the first six months of 1997 were $61,626,000, a 38.8% decrease from net sales
of $100,704,000 for the same period last year. The decrease in both periods was
due primarily to lower system unit sales.
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<PAGE> 10
For the quarters ended June 30, 1997 and 1996, net sales comprised of the
Horizon 4000 series (66.5% and 59.8%, respectively), the 2000 series (12.7% and
29.1%, respectively) and aftermarket sales, consisting primarily of service,
spare parts and upgrades (17.3% and 11.1%, respectively). For the current
quarter, Knights software sales added 3.5% since the acquisition in May 1997.
For the six months ended June 30, 1997 and 1996, net sales comprised of the
Horizon 4000 series (66.6% and 60.1%, respectively), the 2000 series (12.5% and
28.0%, respectively) and aftermarket sales (18.8% and 11.9%, respectively). For
the current six months, Knights software sales added 2.1% since the acquisition
in May 1997.
For the quarter ended June 30, 1997, international sales accounted for 37.7% of
net sales as compared to 46.2% for the same period last year. For the first six
months of 1997, international sales accounted for 40.8% of net sales as compared
to 43.7% for the same period last year. The decrease in the percentage of
international sales, for both periods, was due principally to lower European and
Japanese sales experienced in 1997 from 1996. Except for a slight increase in
Asian Pacific sales in the current quarter, the Company experienced sales
declines, in absolute dollars, across the major geographic regions for both
periods.
The semiconductor industry has been experiencing volatility in product demand
and pricing which have caused semiconductor manufacturers to exercise caution in
making capital equipment decisions. As a result of the uncertainties in this
market environment, any rescheduling or cancellations of planned capital
purchases by semiconductor manufacturers will cause the Company's sales to
fluctuate on a quarterly basis.
Gross Profit
Gross profit, as a percentage of sales, was 44.0% for the second quarter of
1997, compared to 51.1% for the second quarter of 1996. For the first six months
of 1997, gross profit was 41.8% compared to 52.6% for the first six months of
1996. The decrease in gross profit for both periods was primarily a result of
lower sales. As production volume decreased, gross profit was negatively
impacted by reduced leveraging of fixed overhead costs. In addition, higher
material costs, as a percentage of sales, associated with the Horizon 4000
series and competitive pricing affected the decline in gross profit.
The Company believes that its gross profit will continue to be affected by a
number of factors, including competitive pressures, changes in demand for
semiconductors, changes in product mix, and excess manufacturing capacity costs.
Engineering, Research and Development
Engineering, research and development expenses were $5,310,000 for the second
quarter of 1997, up 9.2% from $4,862,000 in the comparable quarter of a year
ago. For the first six months of 1997, these expenses were $9,795,000, up 3.2%
from $9,493,000 for the same period last year. The increases for the three and
six months periods were due primarily to the addition of Knights operations and
the amortization of intangibles related to the Knights acquisition.
Engineering, research and development expenses consist primarily of salaries,
project materials, amortization of intangibles related to the Knights
acquisition, and other costs associated with the Company's ongoing efforts in
hardware and software product development and enhancement to meet changing
industry needs.
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<PAGE> 11
Selling, General and Administrative
Selling, general and administrative expenses were $7,590,000 for the second
quarter of 1997, up 1.5% from $7,475,000 in the comparable quarter last year.
Increased marketing support and higher worldwide customer operations expenses in
the second quarter of 1997, coupled with the addition of Knights operations
costs and goodwill amortization related to the Knights acquisition, were offset
by a reduction in the amount of employee incentive compensation recorded in a
less profitable second quarter in 1997 as compared to the same period last year.
For the first six months of 1997, these expenses were $13,925,000, down 5.7%
from $14,769,000 in the comparable period of a year ago. This decrease was
attributable to a larger amount of employee incentive compensation recorded in a
more profitable first half of 1996 as compared to the same period in 1997.
Partially offsetting this reduction was increased marketing support and higher
worldwide customer operations expenses and the added costs from Knights
operations in the first half of 1997, including the amortization of goodwill.
In-Process Research and Development
The charge for in-process research and development of $23,500,000 in the second
quarter of 1997 was attributable to the Company's acquisition of Knights. See
note 5 under "Notes to Consolidated Condensed Financial Statements."
Income Taxes
The Company's estimated effective tax rate for the three months and six months
ended June 30, 1997 was 33% applied to income before taxes, exclusive of the
deductions for acquired in-process research and development, as compared to 35%
used in the comparable periods of 1996. The decrease in the effective tax rate
was primarily attributable to the greater percentage impact of tax-exempt
investment income offset by goodwill amortization and foreign losses not
currently benefited. The charge for the in-process research and development will
be a non-deductible expense for tax purposes.
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<PAGE> 12
FACTORS THAT MAY AFFECT RESULTS AND FINANCIAL CONDITION
The Company's future operating results may be affected by inherent uncertainties
that exist in the worldwide semiconductor equipment industry. Such uncertainties
include, but are not limited to, timely availability and acceptance of new
hardware and software products, capital expenditures of semiconductor
manufacturers, changes in demand for semiconductor products, competitive pricing
pressures, product volume and mix, development of new products, enhancement of
existing products, global economic conditions, availability of needed
components, availability of skilled employees, timing of orders received,
fluctuations in foreign exchange rates, introduction of competitor products
having technological and/or pricing advantages, and integration of the business
of Knights into the Company. In addition, the Company has experienced, and may
in the future experience, significant fluctuations in its quarterly financial
results. Accordingly, recent historical operating results should only be one
source of information when evaluating the future financial performance of the
Company.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash, cash equivalents and short-term investments were
$122,885,000 at June 30, 1997, a decrease of $6,217,000 from December 31, 1996.
For the six months ended June 30, 1997, cash used in operating activities was
$3,021,000. This was due primarily to a net loss of $20,689,000 and a net
increase in current assets and liabilities of $9,163,000, offset by noncash
charges to income of $26,831,000 which included the in-process research and
development write-off of $23,500,000 related to the Knights acquisition.
Accounts receivable increased by $12,790,000 due primarily to a higher level of
shipments during the current quarter, while inventories increased by $1,725,000
to support the Horizon 4090 production ramp up. Other current assets decreased
due to an income tax refund of $4,900,000 received in the first quarter. Accrued
liabilities decreased $4,305,000, offset partially by an increase of $3,805,000
in accounts payable. The changes in accounts receivable, inventories, other
current assets, accrued liabilities, and accounts payable exclude the impact of
the acquisition of Knights.
Cash provided by investing activities was $15,617,000 due primarily from the net
sales of investments of $19,838,000, offset partially by capital expenditures of
$5,055,000 for engineering design and test equipment, manufacturing leasehold
improvements, and enhancement of the Company's information technology
infrastructure. In addition, the Company acquired cash of $973,000 from the
Knights acquisition.
Cash provided by financing activities was $1,693,000. This was due to the sale
of common stock under employee stock plans generating $2,368,000 and additional
short-term borrowings of $1,048,000 by the Company's Japanese subsidiary. These
were partially offset by the repayment of $1,250,000 for a bank loan assumed by
the Company from the Knights acquisition, and the repurchase of an additional
26,000 shares of the Company's common stock at a cost of $473,000 in the first
quarter.
At June 30, 1997, the Company's Japanese subsidiary had lines of credit with
Japanese banks with a total borrowing capacity of approximately $5,100,000
(denominated in Yen). Amounts outstanding under these facilities at June 30,
1997 were $2,838,000. These facilities enable the Company's Japanese subsidiary
to finance its working capital requirements locally.
-12-
<PAGE> 13
In March 1997, the Company entered into an agreement to lease land for a
five-year term with an investment value of $12,000,000, which will result in an
increase in future operating lease commitments. Based on current interest rates,
the annual lease payments will be approximately $710,000.
In May 1997, the Company completed the acquisition of Knights, a developer of
yield management software for the semiconductor industry, by issuing 1,352,205
shares of the Company's common stock to the former shareholders of Knights. In
addition, the options to purchase Knights shares were converted to approximately
138,654 options to purchase the Company's stock. In connection with the
acquisition, the Company recorded a charge of $23,500,000 for in-process
research and development costs.
Historically, the Company has generated cash in an amount sufficient to fund its
operations. The Company believes that cash on hand and cash generated from
operations will be sufficient to meet the Company's working capital and capital
expenditure requirements at least through the next twelve months.
VOLATILITY OF STOCK PRICE
The Company believes that any of the following factors can cause the price of
the Company's Common Stock to fluctuate, perhaps substantially: announcements of
developments related to the Company's business, fluctuations in the Company's
operating results, sales of substantial amounts of securities of the Company in
the marketplace, general conditions in the semiconductor industry or worldwide
economy, a shortfall in revenue or earnings from or changes in analysts'
expectations, announcements of technological innovations or new products or
enhancements by the Company or its competitors, developments in patents or other
intellectual property rights, and changes in the Company's relationships with
certain customers and suppliers. In addition, in recent years, the stock market
in general, and the market for the shares of small capitalization stocks in
particular, including the Company's, have experienced extreme price fluctuations
which have often been unrelated to the operating performance of affected
companies. There can be no assurance that the market price of the Company's
Common Stock will not continue to experience significant fluctuations in the
future, including fluctuations that are unrelated to the Company's performance.
-13-
<PAGE> 14
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders
At the Company's Annual Meeting of Stockholders held on May 20, 1997, the
stockholders:
(1) elected Joseph F. Dox as Class I director. He received 15,180,419
affirmative votes, 646,676 negative votes and no abstentions. The
following directors continued in office after the meeting - Neil R.
Bonke, Roger D. Emerick, Robert J. Frankenberg and Curtis S. Wozniak.
(2) disapproved the Electroglas, Inc. 1997 Stock Incentive Plan with
4,469,843 affirmative votes, 5,980,293 negative votes, 118,346
abstentions and 5,258,613 broker non-votes.
(3) ratified the appointment of Ernst & Young LLP as the Company's
independent auditors for the year ending December 31, 1997, with
15,731,706 affirmative votes, 53,292 negative votes and 42,097
abstentions.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27 Financial Data Schedule
(b) Reports on Form 8-K:
The Company filed a report on Form 8-K on June 2, 1997,
relating to the acquisition of Knights Technology, Inc. The
Company described the acquisition under Item 2 of the report
Acquisition or Disposition of Assets.
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<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ELECTROGLAS, INC.
DATE: August 13, 1997 BY: /s/ Armand J. Stegall
--------------- ---------------------
Armand J. Stegall
Chief Financial Officer
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<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBITS
- ------- --------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENTS OF OPERATIONS, THE CONSOLIDATED BALANCE SHEETS,
AND THE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 25,355
<SECURITIES> 97,530
<RECEIVABLES> 30,677
<ALLOWANCES> 481
<INVENTORY> 24,341
<CURRENT-ASSETS> 187,803
<PP&E> 32,326
<DEPRECIATION> 18,582
<TOTAL-ASSETS> 212,985
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0
0
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<CGS> 35,878
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<INCOME-TAX> 1,385
<INCOME-CONTINUING> (20,689)
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<CHANGES> 0
<NET-INCOME> (20,689)
<EPS-PRIMARY> (1.15)
<EPS-DILUTED> (1.15)
</TABLE>
