<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED AUGUST 2, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-21838
INDUSTRIAL SCIENTIFIC CORPORATION
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-1481281
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1001 Oakdale Road, Oakdale, PA 15071
(Address of principal executive offices) Zip Code
412-788-4353
(Registrant's telephone number, including area code)
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
requirements for the past 90 days. Yes [ X ] No
As of September 15, 1997, there were 3,375,087 shares of Common Stock, par value
$.01 per share of the Registrant's common stock outstanding.
<PAGE>
INDUSTRIAL SCIENTIFIC CORPORATION AND SUBSIDIARIES
INDEX
-----
Page No.
--------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Condensed Consolidated Balance Sheet -
August 2, 1997 and January 25, 1997. 3
Condensed Consolidated Statement of Income -
Three months and Six months ended
August 2, 1997 and July 27, 1996. 4
Condensed Consolidated Statement of Cash Flows -
Six months ended August 2, 1997 and July 27, 1996. 5
Notes to Condensed Consolidated Financial Statements. 6
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition. 8
Item 3. Quantitative and Qualitative Disclosure about
Market Risk sensitive instruments. 11
Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. 12
2
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
INDUSTRIAL SCIENTIFIC CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands, except share data)
<TABLE>
<CAPTION>
August 2, January 25,
1997 1997
---------- -----------
(Unaudited) **
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $6,015 $6,879
Short-term investments 10,800 12,380
---------- -----------
16,815 19,259
Accounts receivable, net 4,392 4,791
Inventories 3,705 3,159
Prepaid expenses and other assets 612 335
Deferred income taxes 612 520
---------- -----------
Total current assets 26,136 28,064
Long-term investments 6,404 1,071
Property, plant, and equipment, at cost 14,408 13,596
Less accumulated depreciation and amortization 6,807 6,218
---------- -----------
7,601 7,378
Land 390 390
Intangible assets, net 267 2,149
Other assets 735 166
---------- -----------
Total assets $41,533 $39,218
========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,318 $1,860
Accrued payroll and related items 1,046 997
Accrued warranty expenses 689 583
Income taxes payable ---- 57
Current portion of term debt 370 370
---------- -----------
Total current liabilities 4,423 3,867
Term debt 3,858 4,142
Deferred income taxes 108 92
---------- -----------
Total liabilities 8,389 8,101
Shareholders' equity:
Preferred stock, without par value; authorized
1,000,000 shares; none issued ---- ----
Common stock, $.01 par value; authorized 15,000,000
shares; issued and outstanding 3,375,087 shares
at 8/2/97 and at 1/25/97 34 34
Additional paid-in capital 5,471 5,471
Retained earnings 28,504 25,791
Treasury stock, 49,300 shares at 8/2/97 and
11,800 shares at 1/25/97, at cost (865) (179)
---------- -----------
Total shareholders' equity 33,144 31,117
---------- -----------
Total liabilities and shareholders' equity $41,533 $39,218
========== ===========
</TABLE>
** - Summarized from audited January 25, 1997 balance sheet.
The accompanying notes are an integral part of the condensed
consolidated financial statements.
3
<PAGE>
INDUSTRIAL SCIENTIFIC CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited, in thousands except share data)
<TABLE>
<CAPTION>
For the three months ended For the six months ended
August 2, July 27, August 2, July 27,
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $9,261 $9,072 $20,213 $18,433
Cost of goods sold 4,259 4,312 9,022 8,598
--------- --------- --------- ---------
Gross profit 5,002 4,760 11,191 9,835
Operating expenses:
Selling 2,025 1,929 4,517 3,751
Research, development and
engineering 711 982 1,488 1,885
Administrative 808 791 1,783 1,570
--------- --------- --------- ---------
Total operating expenses 3,544 3,702 7,788 7,206
--------- --------- --------- ---------
Operating profit 1,458 1,058 3,403 2,629
Interest income 248 199 464 389
Interest expense (46) (54) (85) (101)
Other income (expense) 17 ---- 20 (17)
Gain on sale of Monitor Group 580 ---- 580 ----
--------- --------- --------- ---------
Income before income taxes 2,257 1,203 4,382 2,900
Provision for income taxes 790 408 1,534 985
--------- --------- --------- ---------
Net income $1,467 $795 $2,848 $1,915
========= ========= ========= =========
Net income per common share $0.44 $0.24 $0.85 $0.57
========= ========= ========= =========
Weighted average number of
common and common
equivalent shares outstanding 3,348,000 3,380,000 3,357,000 3,378,000
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
4
<PAGE>
INDUSTRIAL SCIENTIFIC CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in thousands)
<TABLE>
<CAPTION>
For the six months ended
August 2, July 27,
1997 1996
------ ------
<S> <C> <C>
Cash flows from operating activities:
Net income $2,848 $1,915
Depreciation, amortization and other non-cash items 693 982
Gain on sales of Monitor Group (580) ---
Changes in operating assets and liabilities (276) (365)
------ ------
Net cash provided by operating activities 2,685 2,532
Cash flows from investing activities:
Purchase of investments (10,657) (10,530)
Proceeds from maturities of investments 6,902 6,805
Capital expenditures (948) (264)
Purchase of equity investment (241) (267)
Proceeds from sale of Monitor Group 2,500 ---
------ ------
Net cash used in investing activities (2,444) (4,256)
Cash flows from financing activities:
Principal payments on debt (284) (517)
Treasury stock repurchased (686) ---
Dividends paid (135) ---
------ ------
Net cash used in financing activities (1,105) (517)
Net decrease in cash and cash equivalents (864) (2,241)
Cash and cash equivalents at beginning of period 6,879 7,485
------ ------
Cash and cash equivalents at end of period $6,015 $5,244
====== ======
</TABLE>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
5
<PAGE>
INDUSTRIAL SCIENTIFIC CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) Management's Discussion and Analysis of Results of Operations and
Financial Condition which follows these notes contains additional
information on the results of operations and the financial position of
the Company. These comments should be read in conjunction with the
notes.
(2) In the opinion of management, all adjustments, (consisting only of
normal and recurring adjustments), necessary for a fair presentation of
the results of the operations of these interim periods have been
included.
(3) The Company's investments are in investment grade debt securities that
it has the positive intent and ability to hold to maturity and are
carried at amortized cost. These investments in debt securities
exceeded market value by approximately $75,000 and $76,000 at August 2,
1997 and January 25, 1997, respectively.
(4) Inventories consisted of:
<TABLE>
<CAPTION>
August 2, January 25,
1997 1997
(in thousands)
_________ ___________
<S> <C> <C>
At standard costs, which approximate
first-in, first-out cost:
Raw materials $3,019 $2,690
Work in process 571 383
Finished goods 274 245
------ ------
3,864 3,318
Less LIFO reserves 159 159
------ ------
Inventories at LIFO value $3,705 $3,159
====== ======
</TABLE>
continued
6
<PAGE>
(5) The effective tax rate of 35.0% for the six months ended August 2, 1997
is based upon an estimate of the effective rate for the year ended
January 31, 1998. The principal difference between the effective tax
rate and the federal statutory rate is the effect of foreign sales
corporation benefits, research and experimentation credits, and non-
taxable interest benefits, offset by the effect of state and local
income taxes.
(6) Effective January, 1997, the Financial Accounting Standard Board (FASB)
issued Statement of Financial Accounting Standard (SFAS) No. 128,
"Earnings Per Share." The standard is effective for the period ending
after December 15, 1997. SFAS No. 128 specifies the computation,
presentation and disclosure requirements for earnings per share. The
effect of this statement will not be material to the financial
statements. Effective June, 1997, the FASB issued No.131, "Disclosures
about Segments of an Enterprise and Related Information." The standard
is effective for the period ending after December 15, 1997. SFAS No.
131 specifies reporting requirements for operating segments. Management
is currently evaluating the impact of this statement on future
disclosures.
(7) Non-operating income/expense includes a gain on the sale of Monitor
Group. The Company completed the sale of its Monitor Group business
unit to L.B. Foster Company on May 7, 1997 for $2,500,000 resulting in
a gain of approximately $580,000 as of August 2, 1997.
7
<PAGE>
Part 1. FINANCIAL INFORMATION
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following discussion should be read in conjunction with the attached
unaudited condensed consolidated financial statements and notes thereto for the
periods ended August 2, 1997 and July 27, 1996 and with the Company's audited
financial statements and notes thereto for the fiscal year ended January 25,
1997.
Results of Operations
Quarter ended August 2, 1997 Compared to Quarter Ended July 27, 1996
Net sales for the quarter ended August 2, 1997 ("second quarter 1997") were
$9.3 million, an increase of $189,000 or 2.1% compared to net sales of $9.1
million for the quarter ended July 27, 1996 ("second quarter 1996"). Increased
sales in North America resulting from increased marketing efforts and new
products were partially offset by a modest decline in international sales.
Gross profit increased $242,000 or 5.1% to $5.0 million for the second quarter
1997 compared to $4.8 million for the second quarter 1996. Gross profit as a
percent of net sales increased to 54.0% for the second quarter 1997 compared to
52.5% for the second quarter 1996. The second quarter 1996 included a
substantial international order which was at a lower than average gross profit
percent due to competitive price negotiation.
Operating expenses decreased $158,000 or 4.3% to $3.5 million for the second
quarter 1997 compared to $3.7 million for the second quarter 1996. The sale of
Monitor Group in the second quarter 1997 is the primary cause of this decline
since the second quarter 1996 included Monitor Group expenses for the full three
months while the second quarter 1997 included virtually no operating expense
relating to Monitor Group. Excluding Monitor Group, operating expenses
increased 4.1% primarily due to increased product development within portable
and fixed system gas monitoring products and increased sales and marketing
initiatives internationally and in North America.
Interest income increased in the second quarter 1997 due to generally higher
invested cash balances and higher interest rates. Interest expense declined due
to reduced debt balances resulting from principal payments on outstanding loans.
Other income for the second
8
<PAGE>
quarter 1997 primarily consists of equity earnings in Industrial Scientific
Arabia Ltd., a minority owned subsidiary.
Second quarter 1997 included a $580,000 non-operating gain from the sale of
Monitor Group, a developer of portable mass spectrometers which the Company had
acquired in 1995.
The effective tax rate for the second quarter 1997 increased to 35.0% compared
to 33.9% for the second quarter 1996 principally due to reduced research and
experimentation tax credits resulting from the sale of Monitor Group.
Net income for the second quarter 1997 totaled $1.5 million or $0.44 per share
an increase of 84.5% compared to $795,000 or $0.24 per share for the second
quarter 1996.
Results of Operations
Six Months Ended August 2, 1997 Compared to Six Months Ended July 27, 1996
Net sales for the six months ended August 2, 1997 ("first half 1997") totaled
$20.2 million an increase of $1.8 million or 9.7% compared to net sales of $18.4
million for the six months ended July 27, 1996 ("first half 1996"). Increased
sales in North America, resulting from increased sales efforts and new products
were partially offset by a decline in international sales. The first half of
1996 included $2.0 million in sales to the Company's joint venture partner in
Saudi Arabia as part of a long-term exclusive supply agreement.
Gross profit increased $1.4 million or 13.8% to $11.2 million for the first half
1997 compared to $9.8 million for the first half 1996. As a percent of net
sales gross profit increased to 55.4% for the first half 1997 compared to 53.4%
for the first half 1996. The increase in gross profit percent is principally
due to lower than average gross profit earned in the first half 1996 on sales to
the joint venture partner due to competitive price negotiation for this long-
term supply agreement. Increased sales of replacement parts which generally
earn a higher than average gross profit percentage also contributed to the
improved performance.
Operating expenses increased $582,000 or 8.1% to $7.8 million for the first half
1997 compared to $7.2 million for the first half 1996. Selling expense
increased $766,000 or 20.4% due to start-up marketing costs associated with
fixed system products which the Company acquired in October 1996, increased
commission expense resulting from higher sales volume and increased
international sales expense from continuing sales efforts to increase sales
outside North America. Research, development and engineering expense decreased
$397,000 primarily due to the sale of Monitor Group in May of 1997. Excluding
the impact of the sale of Monitor Group, these expenses increased 17.1% due to
increased new product development efforts in both portable and fixed system
products. Administrative expense increased $213,000 or 13.6% primarily due to
increased profit
9
<PAGE>
sharing and incentive compensation resulting from the Company's performance in
the first half 1997.
Interest income increased in the first half 1997 due to higher invested cash
balances and generally higher interest rates. Interest expense decreased due to
lower outstanding loan balances due to continuing principal payments. Other
income consists of the Company's equity earnings in Industrial Scientific Arabia
Ltd., a minority owned subsidiary. The gain on sale is from the sale of Monitor
Group, a developer of portable mass spectrometers which the Company had acquired
in 1995 and sold in May, 1997.
The effective tax rate for the first half 1997 increased to 35.0% compared to
34.0% for the first half 1996 principally due to reduced research and
experimentation tax credits resulting from the sale of Monitor Group.
Net income for the first half 1997 totaled $2.8 million or $0.85 per share, an
increase of 48.8% compared to $1.9 million or $0.57 per share for the first half
1996.
Liquidity and Capital Resources
Cash flow from operations totaled $2.7 million in the first half 1997 compared
to $2.5 million in the first half 1996. Higher net income was partially offset
by decreased non-cash expenses and reduced by the gain on the sale of Monitor
Group.
Capital expenditures totaled $948,000 in the first half 1997 compared to
$264,000 in the first half 1996. Capital expenditures in the first half 1997
principally consisted of production tooling and test equipment relating to new
products, an automated circuit board testing system to reduce costs and increase
quality and a new phone system. In June 1997 the Company completed the
previously announced sale of Monitor Group for $2.5 million in cash, which
resulted in a gain of $580,000. During the first half 1997 the Company used
$686,000 to repurchase shares of stock under the previously announced stock
repurchase plan. The Company paid its first dividend during the first half 1997
which totaled $135,000 and on August 13, 1997 declared a third quarter dividend
of $0.04 which will also total $135,000.
Working capital totaled $21.7 million as of August 2, 1997 compared to $24.2
million as of January 25, 1997, a decrease of $2.5 million, principally
resulting from an increase in long term investments which reduces current assets
and working capital. The Company believes that its cash flow and capital
structure provide adequate flexibility for the growth of its operations and the
funding of capital spending programs.
10
<PAGE>
Part 1. FINANCIAL INFORMATION
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
SENSITIVE INSTRUMENTS
The Company currently does not invest excess funds in derivative financial
instruments or other market risk sensitive instruments for the purpose of
managing its foreign currency exchange rate risk or for any other purpose.
11
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Nothing to report under this item.
ITEM 2. CHANGES IN SECURITIES
Nothing to report under this item.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Nothing to report under this item.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Nothing to report under this item.
ITEM 5. OTHER INFORMATION
Nothing to report under this item.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
27.00 Financial Data Schedule. Filed herewith.
99.01 Press release announcing a dividend of four
cents ($.04) per share dated June 11, 1997. Filed herewith.
99.02 Press release announcing third quarter dividend
of four cents ($.04) per share dated
August 13, 1997. Filed herewith.
99.03 Press release announcing fiscal year 1997
second quarter results dated August 21, 1997. Filed herewith.
(b) Reports on Form 8-K.
None.
12
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Industrial Scientific Corporation
(Registrant)
Date: September 15, 1997
By : /s/ James P. Hart
-----------------------------------------------
James P. Hart
Vice-President and Chief Financial Officer
(Principal Financial Officer and Principal
Accounting Officer and an authorized signatory)
13
<PAGE>
EXHIBIT INDEX
-------------
Sequential Page Number
Exhibit No. or Reference
----------- ------------
27.0 Financial Statement Data. Filed herewith at page 15.
99.01 Press release announcing a dividend
of four cents ($.04) per share dated
June 11, 1997. Filed herewith at page 16.
99.02 Press release announcing third quarter
dividend of four cents ($.04) per share
dated August 13, 1997. Filed herewith at page 17.
99.03 Press release announcing fiscal year
1997 second quarter results dated
August 21, 1997. Filed herewith at page 18.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> JAN-26-1997
<PERIOD-END> AUG-02-1997
<CASH> 6,015,541
<SECURITIES> 11,913,784
<RECEIVABLES> 4,472,633
<ALLOWANCES> 80,669
<INVENTORY> 3,704,730
<CURRENT-ASSETS> 27,220,087
<PP&E> 14,408,663
<DEPRECIATION> 6,807,318
<TOTAL-ASSETS> 41,503,135
<CURRENT-LIABILITIES> 4,392,493
<BONDS> 3,857,820
0
0
<COMMON> 33,751
<OTHER-SE> 33,110,810
<TOTAL-LIABILITY-AND-EQUITY> 41,503,135
<SALES> 9,261,297
<TOTAL-REVENUES> 9,261,297
<CGS> 4,259,095
<TOTAL-COSTS> 7,803,366
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 45,958
<INCOME-PRETAX> 2,257,071
<INCOME-TAX> 790,000
<INCOME-CONTINUING> 1,467,071
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,467,071
<EPS-PRIMARY> .44
<EPS-DILUTED> .44
</TABLE>
<PAGE>
Exhibit 99.1
NEWS RELEASE
INDUSTRIAL SCIENTIC
- --------------------------------------------------------------------------------
CORPORATION 1001 Oakdale Road Phone 412-788-4353
Oakdale, PA 15701-1500 1-800-DETECTS (338-3287)
USA Fax 412-788-8353
Date: June 11, 1997
Release: Immediate
Contact: James P. Hart, Vice President Finance and Chief Financial Officer
INDUSTRIAL SCIENTIFIC CORPORATION ANNOUNCES
A DIVIDEND OF FOUR CENTS ($.04) PER SHARE
PITTSBURGH, PA--Industrial Scientific Corporation (NASDAQ/NM symbol: ISCX)
announced at today's annual meeting that the Board of Directors declared a
first-time dividend, as a public corporation, of Four Cents a share ($.04)
payable on July 1, 1997, to stockholders on record as of June 23, 1997.
Kent D. McElhattan, President and Chief Executive Officer, stated, "We are very
pleased to announce this first-time dividend as a public corporation. The Board
of Directors authorized the dividend because of the continuing strong
performance of the Company during the First Quarter of Fiscal Year 1997. Gross
profit, operating profit, and net income all increased at a higher rate than
sales which is the definition of improved productivity. Sales also increased
17.0% to a record of $10,952,000, during the first quarter ended May 2, 1997."
He also stated during the annual meeting that, "This dividend fulfills requests
from stockholders to pay a modest dividend because many financial advisors will
not recommend securities of a non-dividend paying company to retirees or those
contemplating retirement. Industrial Scientific wants to be an attractive
investment for all individuals. This modest dividend will not detract from our
aggressive product development and acquisition plans such as the recent McNeill
Systems acquisition."
Three new instruments and several fixed systems were presented at the annual
meeting that had been recently introduced at the American Industrial Hygiene
Association show at Dallas, Texas on May 20, 1997, consisting of: (1) T80 Single
Gas Monitor with six interchangeable `smat' sensors, capable of 4,400 hours
continous operation. (2) ATX612 Multi-Gas Aspirated Monitor for continuous
monitoring of up to four gases and datalogging for up to 110 hours of data
storage and industrial hygiene functions. (3) ATX620 Multi-Gas Utility Monitor
with patented Infrared detection for monitoring three levels of combustible gas,
one toxic gas plus oxygen, and datalogging for 60 hours of survey data.
Headquartered in Oakdale, Pennsylvania, Industrial Scientific Corporation
designs, Manufactures, and sells gas monitoring instruments, systems, and other
technical products for the preservation of life and property.
O U R M I S S I O N
Design-Manufacture-Sell: The highest quality products for the preservation of
life and property
Provide: Best customer service available
ISO9001
CERTIFIED
<PAGE>
Exhibit 99.2
NEWS RELEASE
INDUSTRIAL SCIENTIFIC
- --------------------------------------------------------------------------------
CORPORATION 1001 Oakdale Road Phone 412-788-4353
Oakdale, PA 15701-1500 1-800-DETECTS (338-3287)
USA Fax 412-788-8353
Date: August 13, 1997
Release: Immediate
Contact: James P. Hart, Vice President Finance and Chief Financial Officer
412-788-4353
INDUSTRIAL SCIENTIFIC CORPORATION ANNOUNCES
THIRD QUARTER DIVIDEND OF FOUR CENTS ($0.04) PER SHARE
PITTSBURGH, PA--Industrial Scientific Corporation (NASDAQ/NM symbol: ISCX) today
announced that the Board of Directors declared a dividend of Four Cents a share
($.04) payable on September 2, 1997 to stockholders on record as of August 25,
1997.
Headquartered in Oakdale, Pennsylvania, Industrial Scientific Corporation
designs, manufactures and sells gas monitoring instruments, systems and other
technical products for the preservation of life and property.
O U R M I S S I O N
Design-Manufacture-Sell: The highest quality products for the preservation of
life and property
Provide: Best customer service available
ISO9001
CERTIFIED
<PAGE>
Exhibit 99.3
NEWS RELEASE
INDUSTRIAL SCIENTIFIC
- --------------------------------------------------------------------------------
CORPORATION 1001 Oakdale Road Phone 412-788-4353
Oakdale, PA 15701-1500 1-800-DETECTS (338-3287)
USA Fax 412-788-8353
Date: August 21, 1997
Release: Immediately
Contact: James P. Hart, Vice President Finance
Chief Financial Officer 412-490-1843
INDUSTRIAL SCIENTIFIC CORPORATION
ANNOUNCES FISCAL YEAR 1997 SECOND QUARTER RESULTS
PITTSBURGH, PA--August 21, 1997--Industrial Scientific Corporation (NASDAQ/NM)
symbol: ISCX) today reported results for the second quarter ended August 2,
1997.
Net income for the second quarter 1997 was $1,467,000 or $0.44 per share, an
increase of 84.5% compared to $795,000 or $0.24 per share for the second quarter
1996. Second quarter 1997 net income included a gain on the sale of Monitor
Group which totaled $377,000. Excluding this gain, net income for the quarter
increased 37.1% and totaled $1,090,000. Net sales for the second quarter 1997
totaled $9,261,000 up 2.1% from $9,072,000 for the second quarter 1996.
Net income for the six-months ended August 2, 1997 was $2,848,000 or $0.85 per
share, an increase of 48.7% over net income of $1,915,000 or $0.57 per share for
the six-months ended July 27, 1996. Net income excluding the gain on the sale of
Monitor Group increased 29.0% to $2,471,000. Net sales for the six-months ended
August 2, 1997 increased 9.7% to $20,213,000 compared to $18,433,000 for the
six-months ended July 27, 1996.
Kent D. McElhattan, President and CEO, stated, "Financial performance was strong
in the first half of 1997, especially when you consider that the first half of
last year included over two million dollars in sales to our joint venture
partner in Saudi Arabia. Although we anticipate significant future sales, the
first half of 1997 included very little sales to this part of the world. New
product development continues to be our primary growth strategy which resulted
in the first shipments of the T80 Single Gas Monitor during the second quarter.
I anticipate several additional new products such as the ATX612 Multi-Gas
Aspirated Monitor and the ATX620 Multi-Gas Utility Monitor with patented
Infrared Methane detection will begin shipments during the balance of the year
and contribute to positive results. Industrial Scientific paid its first
dividend during the quarter which was another highlight."
Headquartered in Oakdale, Pennsylvania, Industrial Scientific Corporation
designs, manufactures and sells gas monitoring instruments, systems and other
technical products for the preservation of life and property.
O U R M I S S I O N
Design-Manufacture-Sell: The highest quality products for the preservation of
life and property
Provide: Best customer service available
ISO9001
CERTIFIED
<PAGE>
INDUSTRIAL SCIENTIFIC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statement of Income
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
8/02/97 7/27/96 8/02/97 7/27/96
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net sales $9,261 $9,072 $20,213 $18,433
Gross profit 5,002 4,760 11,191 9,835
Operating profit 1,482 1,058 3,403 2,629
Net income 1,467 795 2,848 1,915
Net income per common share $0.44 $0.24 $0.85 $0.57
Weighted average number of
common and common equivalent
Shares outstanding 3,348 3,380 3,357 3,378
</TABLE>
