SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period September 29, 1996
[ ] Transition Report Pursuant to Section 13
or 15(d) of the Securities Exchange Act of
1934 For the transition period from _____ to _____.
Commission File No. 0-22428
ZYTEC CORPORATION
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1465891
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7575 MARKET PLACE DRIVE, EDEN PRAIRIE, MINNESOTA 55344
(Address of principal executive offices) (Zip Code)
(612) 941-1100
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 November 1, 1996, there were outstanding 9,155,823 shares of the
registrant's common stock, no par value.
ZYTEC CORPORATION
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INDEX
Page No.
--------
PART I. FINANCIAL INFORMATION
<S> <C>
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS:
Balance Sheets as of September 29, 1996 and
December 31, 1995 3
Statements of Operations for the three
months and nine months ended September 29,
1996 and October 1, 1995 4
Statements of Cash Flows for the nine months
ended September 29, 1996 and October 1, 1995 5
Notes to Consolidated Financial Statements 6-8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 9-11
RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 12
SIGNATURES 13
</TABLE>
<TABLE>
<CAPTION>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ZYTEC CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 29, 1996 AND DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT SHARE DATA)
September 29, December 31,
1996 1995
------------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2 $ 2
Accounts receivable 29,399 26,648
Inventories 23,987 24,201
Other current assets 3,082 3,014
-------- --------
Total current assets 56,470 53,865
Property, plant and equipment, net 18,476 11,823
Deferred income taxes 3,263
Other assets 1,106 679
-------- --------
Total assets $ 79,315 $ 66,367
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Debt and capital lease obligations,
current portion $ 8,668 $ 13,942
Accounts payable 11,219 18,487
Accrued expenses 7,961 6,979
-------- --------
Total current liabilities 27,848 39,408
Debt and capital lease obligations,
less current portion 19,284 4,050
Other liabilities 1,686 1,542
-------- --------
Total liabilities 48,818 45,000
-------- --------
Commitments and contingencies
Stockholders' equity:
Common stock, no par value:
25,000,000 shares authorized,
9,145,223 and 8,687,306 shares
outstanding at September 29, 1996 and
December 31, 1995, respectively 12,335 11,799
Retained earnings 18,456 9,685
Foreign currency translation adjustments (294) (117)
-------- --------
Total stockholders' equity 30,497 21,367
-------- --------
Total liabilities and stockholders' equity $ 79,315 $ 66,367
======== ========
</TABLE>
See accompanying notes to unaudited consolidated financial statements
<TABLE>
<CAPTION>
ZYTEC CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS AND THE NINE MONTHS ENDED
SEPTEMBER 29, 1996 AND OCTOBER 1, 1995
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
Three Months Ended Nine Months Ended
------------------ -----------------
September 29, October 1, September 29, October 1,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales $ 53,693 $ 44,589 $ 175,489 $ 118,014
Cost of goods sold 46,098 38,726 151,076 104,130
------------ ------------ ------------ ------------
Gross profit 7,595 5,863 24,413 13,884
------------ ------------ ------------ ------------
Other revenue 319 399 1,075 1,194
------------ ------------ ------------ ------------
Operating expenses:
Selling 801 748 2,535 2,287
General and administrative 1,755 992 5,163 2,912
Research and development 2,145 2,063 7,030 6,381
------------ ------------ ------------ ------------
Total operating expenses 4,701 3,803 14,728 11,580
------------ ------------ ------------ ------------
Operating income 3,213 2,459 10,760 3,498
Other income (expense):
Interest expense (504) (300) (1,456) (747)
Other, net 201 162 (209) 327
------------ ------------ ------------ ------------
Income before income taxes 2,910 2,321 9,095 3,078
Income tax expense 1,136 873 324 1,155
------------ ------------ ------------ ------------
Net income $ 1,774 $ 1,448 $ 8,771 1,923
============ ============ ============ ============
Net income per share:
Primary $ 0.18 $ 0.16 $ 0.87 $ 0.21
============ ============ ============ ============
Fully diluted $ 0.18 $ 0.16 $ 0.87 $ 0.21
============ ============ ============ ============
Common and common equivalent shares
outstanding:
Primary 10,073,468 9,286,742 10,025,901 9,273,946
============ ============ ============ ============
Fully diluted 10,109,944 9,303,444 10,076,975 9,303,558
============ ============ ============ ============
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<TABLE>
<CAPTION>
ZYTEC CORPORATION
CONSOLIDATED STATEMENTS
OF CASH FLOWS (UNAUDITED) FOR
THE NINE MONTHS ENDED SEPTEMBER 29, 1996 AND OCTOBER 1, 1995
(IN THOUSANDS)
September 29, October 1,
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 8,771 $ 1,923
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation and amortization 2,937 1,960
Changes in operating assets and liabilities (8,667) (4,104)
Deferred income taxes (3,312) (8)
Other 113 72
--------- ---------
Net cash used in operating activities (158) (157)
--------- ---------
Cash flows from investing activities:
Additions to property, plant and equipment (2,606) (1,751)
Cash paid for Zytec Hungary Elektronikai Kft. (834)
Increase in other assets (163) (300)
--------- ---------
Net cash used in investing activities (3,603) (2,051)
--------- ---------
Cash flows from financing activities:
Payments of debt and capital lease obligations (7,241) (7,103)
Proceeds from debt and capital lease obligations 6,775 5,023
Payments on revolving credit agreement (124,794) (91,322)
Proceeds from revolving credit agreement 128,887 94,829
Sale of common stock for cash 525 97
Change in bank overdrafts (717) 878
Other 204 --
--------- ---------
Net cash provided by financing activities 3,639 2,402
--------- ---------
Effect of exchange rate changes on cash 122 (194)
--------- ---------
Change in cash and cash equivalents -- --
Cash and cash equivalents, beginning of period 2 2
--------- ---------
Cash and cash equivalents, end of period $ 2 $ 2
========= =========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
ZYTEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation of Interim Consolidated Financial Statements:
The consolidated financial statements as of September 29, 1996 and for the
periods ended September 29, 1996 and October 1, 1995, have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. The consolidated financial statements
reflect all adjustments, consisting of normal recurring adjustments, which
the Company considers necessary for a fair presentation of the results for
the indicated periods. The results of operations for any interim period are
not necessarily indicative of results for the full year. Certain
information and accounting policies and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
such rules and regulations. These consolidated financial statements should
be read in conjunction with the financial statements and notes thereto
included in the Company's latest annual report on Form 10-K.
2. Selected Balance Sheet Data:
<TABLE>
<CAPTION>
(In thousands)
September 29, December 31,
1996 1995
------------- --------------
(Unaudited)
<S> <C> <C>
Inventories
Work in process and finished goods $ 5,677 $ 7,392
Parts and subassemblies 18,310 16,809
-------- --------
$ 23,987 $ 24,201
======== ========
Property, plant and equipment:
Land and land improvements $ 76 $ 76
Building and building improvements 1,828 637
Equipment, furniture and leasehold improvements 21,944 18,493
Equipment, furniture and leasehold improvements
under capital leases 10,476 5,228
-------- --------
34,324 24,434
Less accumulated depreciation (14,514) (12,176)
Less accumulated amortization of equipment and
leasehold improvements under capital leases (2,323) (1,970)
-------- --------
17,487 10,288
Construction in progress and deposits on equipment 989 1,535
-------- --------
$ 18,476 $ 11,823
======== ========
</TABLE>
Accounts payable included bank overdrafts of $532,000 at September 29,
1996 and $1,148,000 at December 31, 1995.
3. Supplemental Cash Flow Data:
The following provides supplemental disclosures of cash flow activities for
the nine months ended September 29, 1996 and October 1, 1995, respectively:
<TABLE>
<CAPTION>
(In thousands)
Increase (Decrease)
In Cash and Cash Equivalents
September 29, October 1,
1996 1995
------- -------
<S> <C> <C>
Changes in operating assets and liabilities:
Accounts receivable $(3,178) $(7,353)
Inventories (86) (4,399)
Other current assets (149) 458
Accounts payable (6,358) 6,450
Accrued expenses 1,104 740
------- -------
$(8,667) $(4,104)
======= =======
Significant noncash investing and financing transactions:
Property and equipment acquired
through capital lease obligations $ 5,342 $ 1,878
Equipment acquired through issuance of debt 1,425 371
</TABLE>
4. Income Taxes:
The effective tax rate for the third quarter of 1996 differs from the
federal statutory tax rate primarily due to state taxes. The 1995 third
quarter and 1995 year-to-date effective tax rates differ from the statutory
rate primarily due to state taxes and the utilization of the Austrian
subsidiary's net operating loss (NOL) carryforwards. The 1996 year-to-date
effective tax rate differs from the statutory rate primarily due to state
taxes and to the recognition of the deferred income tax benefit of the
Austrian NOL carryforwards in the second quarter of 1996.
In May 1996, the Austrian government changed the treatment of NOL
carryforwards by (a) suspending the use of NOLs during the years 1996 and
1997 retroactively to January 1, 1996 and (b) removing the time limitations
on the use of the NOLs. In light of this new statute, and based on its
assessment of the financial results of its Austrian operations, the Company
recognized the deferred income tax benefit related to the Austrian NOL
carryforwards in the second quarter of 1996. This resulted in a $2,626,000
net reduction of income taxes in the second quarter, comprised of a tax
benefit of $3,175,000 relating to recognition of the deferred tax benefit
offset by $549,000 in income tax expense resulting from the retroactive
application of this tax law change to first and second quarter Austrian
operations.
5. Employee Benefit Plans:
In April 1996, the Company's Board of Directors established a
noncontributory profit-sharing plan covering substantially all employees.
The Company may make semiannual contributions to the plan based on profit
performance in relation to goals to be established by the Board of
Directors. The plan was effective July 1, 1996.
In October 1996, the Company's shareholders approved a stock purchase plan
that will allow substantially all employees to purchase, through payroll
deductions, newly issued shares of the Company's common stock. The plan was
effective October 10, 1996.
6. Stockholders' Equity:
In April 1996, the Company's Board of Directors authorized a two-for-one
stock split in the form of a 100 percent stock dividend distributed on June
3, 1996 to shareholders of record on May 20, 1996. All per share and number
of share data have been retroactively restated to reflect the stock split.
In April 1996, the Company's shareholders approved the 1996 Employee
Incentive Stock Option Plan (the 1996 Plan). Under the 1996 Plan, an
aggregate of 2,000,000 shares of common stock was reserved for the granting
of options to employees. Options can be granted under the 1996 Plan until
February 2006.
7. Debt Arrangements:
In May 1996, the Company entered into a revolving credit facility with a
new bank. The agreement provides up to $23 million in borrowings through
May 1999. Credit availability under this facility is subject to a defined
borrowing base that is based on certain percentages of accounts receivable,
inventories and plant and equipment. At the Company's option, advances from
the revolving credit agreement may be made at either a floating rate which
is approximately equal to the bank's prime rate or at a LIBOR rate which is
based on the British Bankers' Association LIBOR setting rate. The Company
must pay a fee of 0.25% on the unused portion of the revolving credit
balance. The agreement requires the Company to maintain certain leverage,
interest coverage, current and funded debt ratios.
In September 1996, Zytec GmbH entered into a loan agreement which provides
borrowings up to $1,304,000. As of September 29, 1996, $817,000 has been
borrowed under the agreement. Interest is payable at a rate of 5.25% on 80%
of the outstanding balance on the loan and at a floating rate based on
market rates for the remainder of the loan. Payments will be made
semi-annually from June 30, 1998 through December 31, 2002. The loan is
guaranteed by the Austrian government. As part of the agreement, the
Company is obligated to make capital contributions to Zytec GmbH up to a
maximum of $2,794,000, if Zytec GmbH's cumulative cash flow, as defined
in the loan agreement, becomes negative.
PART I -- FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
This report contains certain forward-looking statements. For this purpose, any
statements contained herein that are not statements of historical fact may be
deemed to be forward-looking statements. Without limiting the foregoing, words
such as "may," "will," "expect," "believe," "anticipate," "estimate," or
"continue," or the negative or other variations thereof or comparable
terminology, are intended to identify forward-looking statements. These
statements by their nature involve substantial risks and uncertainties, and
actual results may differ materially depending on a variety of factors.
In the third quarter of 1996, the Company's rapid growth experienced earlier in
1996 moderated. Quarterly net sales increased 20 percent, and quarterly net
income increased 23 percent. Year to date sales increased 49 percent from 1995,
and net income increased 220 percent, excluding a one-time tax benefit in the
second quarter. In power conversion operations, US sales from the Minnesota and
Colorado facilities grew slightly more slowly than sales of the Austrian
facility. The service and logistics business in California continued to grow
very rapidly, nearly doubling from 1995. For the Redwood Falls power conversion
facility, this was a quarter of organization and improvements in operating
efficiency as the move of operations into the Redwood Falls expansion was
completed. In California, preparation continued for our move to a third building
at the Lincoln, California facility.
RESULTS OF OPERATIONS
The following table sets forth certain information derived from the Company's
Consolidated Statements of Operations for the three month and nine month periods
ended September 29, 1996 and October 1, 1995, expressed as a percentage of net
sales:
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<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
------------------ -----------------
SEPT. 29, OCT. 1, SEPT. 29, OCT. 1,
1996 1995 1996 1995
------ ----- ------ -----
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of goods sold (85.9) (86.9) (86.1) (88.2)
------ ----- ------ -----
Gross profit 14.1 13.1 13.9 11.8
Other revenue 0.6 0.9 0.6 1.0
Selling, general and administrative (4.7) (3.9) (4.4) (4.4)
Research and development (4.0) (4.6) (4.0) (5.4)
------ ----- ------ -----
Operating income 6.0 5.5 6.1 3.0
Other income (expense):
Interest expense (0.9) (0.7) (0.8) (0.6)
Other, net 0.3 0.4 (0.1) 0.2
------ ----- ------ -----
Income before income taxes 5.4 5.2 5.2 2.6
Income tax expense (2.1) (2.0) (0.2) (1.0)
------ ----- ------ -----
Net income 3.3 % 3.2 % 5.0 % 1.6 %
====== ===== ===== =====
</TABLE>
NET SALES
Net sales increased 20.4 percent to $53,693,000 in the third quarter of 1996,
from $44,589,000 in the third quarter of 1995. In the first nine months of 1996,
sales increased 48.7 percent to $175,489,000 from $118,014,000 in 1995. The
increase in net sales in the third quarter approximated the Company's average
annual growth rate for the last five years, but was lower than it had been in
the first two quarters of the year. This was primarily due to somewhat reduced
customer requirements. Net sales for the California service and logistics
business were up 86.5 percent in the third quarter of 1996 to $5,456,000 and
103.3 percent for the first nine months of 1996 to $15,782,000.
GROSS MARGIN
Consolidated gross margin was 14.1 percent in the third quarter of 1996, up 1.0
percentage points from 13.1 percent in the third quarter of 1995. In the first
nine months of 1996, gross margin was 13.9 percent, which was 2.1 percentage
points up from 11.8 percent in the first nine months of 1995. Gross margin on US
power conversion operations decreased slightly in the third quarter of 1996
compared to the third quarter of 1995 due to normal mix fluctuation partly
offset by improvements in manufacturing operations due to process engineering
and efficiencies realized from balancing manufacturing capacity usage between
the Redwood Falls, Minnesota and Broomfield, Colorado plants. The European power
supply manufacturing operations improved gross margin strongly in the third
quarter of 1996 compared to the third quarter of 1995. This was primarily as a
result of improved material and labor costs and the slow rate of growth of its
manufacturing costs.
OTHER REVENUE
Other revenue, which consists of customer payments to fund development of custom
power supplies, decreased to $319,000 in the third quarter of 1996 from $399,000
in the third quarter of 1995. In the first nine months, funding decreased to
$1,075,000 in 1996 from $1,194,000 in 1995. Other revenue has been, and will
continue to be, affected by the number and timing of development programs, as
well as by variations in levels of funding among programs.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative (SG&A) expenses increased 46.9 percent to
$2,556,000 in the third quarter of 1996 from $1,740,000 in the third quarter of
1995. In the first nine months, SG&A increased 48.1 percent to $7,698,000 from
$5,199,000 in the first nine months of 1995. SG&A expenses were 4.7 and 3.9
percent of sales, respectively, in the third quarter of 1996 and 1995, and 4.4
percent of sales, in the first nine months of both 1996 and 1995. The increases
came in the US, with Austria holding to slow growth in SG&A. In the US, the
Company expanded its administrative function in its California operation at the
beginning of 1996. Expenses associated with these changes, which were necessary
to maintain the California operation's rapid growth rate were the primary cause
for the increase in SG&A.
RESEARCH AND DEVELOPMENT
Research and development (R&D) expenses increased 4.0 percent to $2,145,000 in
the third quarter of 1996 from $2,063,000 in the third quarter of 1995. In the
first nine months, expenses increased 10.2 percent to $7,030,000 in 1996 from
$6,381,000 in 1995. This increase represented a slightly reduced number of
programs in development in 1996, but the spending level of product development
also varies based on the stage of completion of programs. The Company believes
that continued success in reducing the amount of time necessary to put custom
designs into manufacturing will reduce the average development cost per product.
Since 1995, the Company has increased spending on two research programs
substantially. These are its development of distributed power architecture and a
project to use computer simulation in power supply design. In addition, R&D
expenses in 1995 included relocation expenses for new employees.
INTEREST EXPENSE
Interest expense increased to $504,000 in the third quarter of 1996 from
$300,000 in the third quarter of 1995, and in the first nine months, interest
increased to $1,456,000 in 1996 from $747,000 in 1995. This reflects the
Company's increased scale of operations and working capital growth, the purchase
of the Company's former supplier in Tatabanya, Hungary, and spending for capital
equipment in all of the Company's locations.
INCOME TAXES
The Company's consolidated effective tax rate for the third quarter of 1996 was
39.0 percent, an increase of 1.4 percentage points from the third quarter of
1995 effective tax rate of 37.6 percent. In May 1996, the Austrian government
changed the treatment of NOL carryforwards by (a) suspending the use of NOLs
during the years 1996 and 1997 retroactively to January 1, 1996 and (b) removing
the time limitations on the use of the NOLs. In light of this new statute, and
based on its assessment of the financial results of its Austrian operations, the
Company recognized the deferred income tax benefit related to the Austrian NOL
carryforwards in the second quarter of 1996. This resulted in a $2,626,000 net
reduction of income taxes in the second quarter, comprised of a tax benefit of
$3,175,000 relating to recognition of the deferred tax benefit offset by
$549,000 in income tax expense resulting from the retroactive application of
this tax law change to first and second quarter Austrian operations. Because the
tax benefit of the Austrian NOL carryforwards have been recognized, the Company
expects that its future consolidated effective tax rate will stabilize at
approximately 38-40 percent, based on Austria's 34 percent tax rate and US's 40
percent effective tax rate.
LIQUIDITY AND CAPITAL RESOURCES
In the first nine months of 1996, the Company's operating activities used cash
of $158,000. This was made up of a heavy cash use in the first quarter, break
even use in the second quarter and a strong cash generation in the third
quarter. For the first nine months of 1996, net income, depreciation and
amortization, and other non-cash charges provided cash of $8,509,000, and
working capital required $8,667,000. For the comparable period in 1995,
operating activities used $157,000. Net income, depreciation and amortization,
and other non-cash charges provided cash of $3,947,000, and working capital
required $4,104,000.
Cash and cash equivalents were $2,000 as of September 29, 1996. When the Company
is borrowing against its revolving credit facilities, as it was during these
periods, cash balances are minimal.
Working capital was $28,622,000 at September 29, 1996 and $14,457,000 at
December 31, 1995, an increase of 98 percent. This was caused primarily by the
reclassification of $10,000,000 debt from short-term at December 31, 1995 to
long-term at September 29, 1996 as a result of a new credit facility.
Accounts receivable increased $3,178,000 during the first nine months of 1996,
which was in line with sales increases overall, and resulted in average days
sales outstanding of 50.0 days in the third quarter of 1996.
Inventory turnover averaged 8.4 times for the first nine months of 1996, and
showed continuing improvement throughout the year as the new production lines
were brought up to speed in Colorado and Minnesota and surplus quantities caused
by parts shortages and short cycle scheduling were worked out of inventory. The
Company expects that inventory turnover will continue to improve slowly as the
Company improves its processes.
Investing activities required cash of $3,603,000 in the first nine months of
1996, compared with $2,051,000 in the first nine months of 1995. Capital
expenditures, including new capital lease obligations and additional debt, were
$9,373,000 in the first nine months of 1996 compared with $4,000,000 in the
first nine months of 1995. These expenditures in 1996 were concentrated in the
first and second quarters and provided equipment and improvements for the new
facility in Colorado and the expanded facility in Redwood Falls, Minnesota,
normal equipment replacement and improvement in Austria and material handling
and support equipment in the California operation.
Cash provided by financing activities was $3,639,000 for the first nine months
of 1996. Financing activities provided cash of $7,945,000 in the first quarter
and $824,000 in the second quarter due to increased credit usage levels. In the
third quarter, when growth slowed, working capital turnover increased
moderately, which provided cash. In addition, capital expenditures were less
than in the first two quarters. The result was positive cash flow of $5,130,000,
which was used to reduce the revolving credit agreement.
During the second quarter, the Company entered into a credit facility in the US
which provides up to $23,000,000 through May 1999. The Company believes this
financing is adequate to meet the Company's needs in 1996 and 1997. In July
1996, the Company suspended a secondary financing that was to have sold
2,000,000 shares of stock. Subsequently, in September 1996, the Company withdrew
this offering. Additional financing is not essential to carry out current plans;
however, the Company will continue to seek financing if it determines that
market conditions are appropriate.
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit
Number Description
11.1 Computation of Net Income Per Share
27.1 Financial Data Schedule
(b) Reports on Form 8-K:
The Company did not file any current reports on
Form 8-K during the quarter ended September 29, 1996.
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.
ZYTEC CORPORATION
(Registrant)
Date: November 11, 1996 By /s/ John B. Rogers
John B. Rogers
Vice President Finance & Treasurer
(Principal financial and principal
accounting officer)
EXHIBIT 11.1
<TABLE>
<CAPTION>
ZYTEC CORPORATION
COMPUTATION OF NET INCOME PER SHARE
Three Months Ended Nine Months Ended
------------------ -----------------
September 29, October 1, September 29, October 1,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net income $ 1,774,000 $ 1,448,000 $ 8,771,000 $ 1,923,000
Net income per common and common
equivalent share, primary $ 0.18 $ 0.16 $ 0.87 $ 0.21
Net income per common and common
equivalent share, fully diluted $ 0.18 $ 0.16 $ 0.87 $ 0.21
Primary:
Weighted average number of common
shares outstanding 9,102,513 8,581,000 8,935,519 8,531,636
Common equivalent shares:
Dilutive stock options and warrants,
using Modified Treasury Stock
Method 970,955 705,742 1,090,382 742,310
----------- ----------- ----------- -----------
10,073,468 9,286,742 10,025,901 9,273,946
=========== =========== =========== ===========
Fully Diluted:
Weighted average number of common
shares outstanding 9,102,513 8,581,000 8,935,519 8,531,636
Common equivalent shares:
Dilutive stock options and warrants,
using Modified Treasury Stock
Method 1,007,431 722,444 1,141,456 771,922
----------- ----------- ----------- -----------
10,109,944 9,303,444 10,076,975 9,303,558
=========== =========== =========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-29-1996
<CASH> 2
<SECURITIES> 0
<RECEIVABLES> 29,399
<ALLOWANCES> 0
<INVENTORY> 23,987
<CURRENT-ASSETS> 56,470
<PP&E> 35,313
<DEPRECIATION> 16,837
<TOTAL-ASSETS> 79,315
<CURRENT-LIABILITIES> 27,848
<BONDS> 19,284
0
0
<COMMON> 12,335
<OTHER-SE> 18,162
<TOTAL-LIABILITY-AND-EQUITY> 79,315
<SALES> 175,489
<TOTAL-REVENUES> 176,564
<CGS> 151,076
<TOTAL-COSTS> 151,076
<OTHER-EXPENSES> 7,030
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,456
<INCOME-PRETAX> 9,095
<INCOME-TAX> 324
<INCOME-CONTINUING> 8,771
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,771
<EPS-PRIMARY> .87
<EPS-DILUTED> .87
</TABLE>
