<PAGE> 1
U.S. Securities and Exchange Commission
WASHINGTON, D.C. 20549
-------------------
Form 10-Q
-------------------
(Mark One)
[X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1996.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _____________to __________
-------------------
Commission file number: 0-23342
-------------------
ELTRON INTERNATIONAL, INC.
(Exact name of small business issuer as specified in its charter)
California 95-4302537
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
41 Moreland Road
Simi Valley, California 93065
(Address of principal executive offices)
(805) 579-1800
(Issuer's telephone number)
-------------------
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
-- --
-------------------
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes No
-- --
-------------------
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 7,213,662 common shares
as of May 10, 1996.
-------------------
Transitional Small Business Disclosure Format (Check one): Yes ; No X
--- ---
1
<PAGE> 2
ELTRON INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
December, 31 March, 31
1995 1996
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash ...................................................................... $ 729,055 $ 803,525
Short term investments .................................................... 15,552,076 7,652,400
Accounts receivable, net of allowance for doubtful accounts of $367,468 and
$371,136, respectively .................................................. 9,397,603 11,649,490
Inventories ............................................................... 11,506,936 14,607,090
Prepaid expenses and other current assets ................................. 2,186,891 1,649,343
------------ ------------
Total current assets .................................................. 39,372,561 36,361,848
PROPERTY AND EQUIPMENT, net .................................................... 3,769,436 4,955,948
COST IN EXCESS OF NET ASSETS ACQUIRED, net ..................................... 962,305 1,325,230
OTHER ASSETS ................................................................... 668,923 616,226
------------ ------------
$ 44,773,225 $ 43,259,252
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Borrowings under line of credit ........................................... $ 768,000 $ --
Accounts payable .......................................................... 4,091,008 4,920,515
Accounts payable to shareholder ........................................... 1,816,909 317,002
Accrued liabilities ....................................................... 2,011,816 3,037,670
------------ ------------
Total current liabilities ................................................. 8,687,733 8,275,187
LONG TERM OBLIGATION ........................................................... 751,313 821,466
COMMITMENTS
SHAREHOLDERS' EQUITY:
Preferred stock, 10,000,000 shares authorized of which none are outstanding -- --
Common stock, no par value:
Authorized -- 30,000,000 shares
Issued and outstanding -- 6,809,966 and 7,190,162 shares, respectively 23,990,634 23,591,959
Cumulative translation adjustment ......................................... (13,733) (24,524)
Retained earnings ......................................................... 11,357,278 10,595,164
------------ ------------
Total shareholders' equity ............................................ 35,334,179 34,162,599
------------ ------------
$ 44,773,225 $ 43,259,252
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
2
<PAGE> 3
ELTRON INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTH PERIODS ENDED
MARCH 31, 1995 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1996
------------ ------------
<S> <C> <C>
SALES ......................................................... $ 11,774,466 $ 19,019,185
COST OF SALES ................................................. 6,329,907 10,251,541
------------ ------------
Gross profit .............................................. 5,444,559 8,767,644
OPERATING EXPENSES:
Selling, general and administrative ....................... 2,441,760 3,735,668
Research and product development .......................... 531,958 1,237,471
Write off of acquired in process technology and other costs
associated with acquisitions .......................... -- 3,198,555
------------ ------------
INCOME FROM OPERATIONS ........................................ 2,470,841 595,950
OTHER (INCOME) EXPENSE:
Interest, net ............................................. (38,929) (42,631)
------------ ------------
INCOME BEFORE PROVISION FOR INCOME TAXES ...................... 2,509,770 638,581
PROVISION FOR INCOME TAXES .................................... 879,068 1,381,369
------------ ------------
NET INCOME (LOSS) ............................................. $ 1,630,702 $ (742,788)
============ ============
NET INCOME (LOSS) PER COMMON SHARE ............................ $ 0.24 $ (0.10)
============ ============
WEIGHTED NUMBER OF SHARES OUTSTANDING ......................... 6,738,009 7,768,349
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
3
<PAGE> 4
ELTRON INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIODS ENDED
MARCH 31, 1995 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) .................................. $ 1,630,702 $ (742,788)
Adjustments to reconcile net income to cash provided
by operating activities:
Depreciation and amortization ................... 91,247 322,339
Write off of purchased in-process technology .... -- 2,500,000
Changes in assets and liabilities net of
effect from acquisitions:
Accounts receivable, net ..................... (1,693,546) (1,519,831)
Inventories .................................. (427,628) (2,358,203)
Prepaids and other assets .................... (513,112) 739,700
Accounts payable ............................. 244,626 (248,293)
Accounts payable to shareholder .............. (531,037) (1,499,907)
Accrued liabilities .......................... (806,280) 599,969
----------- -----------
Net cash used in operating activities .............. (2,005,028) (2,207,014)
CASH FROM INVESTING ACTIVITIES:
Purchases of property and equipment ................ (234,794) (1,278,469)
Cash paid in connection with acquisition of Privilege -- (3,196,373)
Sale of short term investments, net ................ 1,727,485 7,899,676
----------- -----------
Net cash provided by investing activities .......... 1,492,691 3,424,834
CASH FROM FINANCING ACTIVITIES:
Net borrowings (repayments) of long term debt ...... -- (9,884)
Net borrowings (repayments) under line of credit ... (352,000) (724,000)
Common stock purchased in connection with
merger of RJS .................................... -- (775,581)
Proceeds from sale of stock ........................ 11,047 376,906
----------- -----------
Net cash used in financing activities .............. (340,953) (1,132,559)
EFFECT OF EXCHANGE RATE ON CASH ........................ 35,893 (10,791)
----------- -----------
NET INCREASE (DECREASE) IN CASH ........................ (817,397) 74,470
CASH BALANCE, beginning of period ...................... 1,740,905 729,055
----------- -----------
CASH BALANCE, end of period ............................ $ 923,508 $ 803,525
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
4
<PAGE> 5
ELTRON INTERNATIONAL, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
1. BASIS OF PRESENTATION
The financial statements of Eltron International, Inc. (the "Company")
included herein are unaudited; however, they contain all normal recurring
accruals which, in the opinion of management, are necessary to present fairly
the financial position of the Company at March 31, 1996 and the results of
operations and cash flows for the three month periods ended March 31, 1995 and
March 31, 1996. It should be understood that accounting measurements at interim
dates inherently involve greater reliance on estimates than at year end. The
results of operations for the three month period ended March 31, 1996 are not
necessarily indicative of the results to be expected for future quarters or the
full year.
The accompanying financial statements do not include footnotes and certain
financial presentations normally required under generally accepted accounting
principles and, therefore, should be read in conjunction with the Company's
financial statements for the year ended December 31, 1995 as filed in the
Company's annual report on form 10K.
2. BUSINESS COMBINATIONS
Acquisition of Privilege, S.A.
At January 1, 1996, the Company purchased all of the outstanding capital
stock of Privilege SA ("Privilege"), a French company primarily engaged in the
design, manufacture and distribution of custom color card printers. This
transaction has been accounted for as a purchase for financial reporting
purposes. Acquired in-process technology valued at $2,500,000 was expensed
immediately. The purchase price paid by Eltron was approximately $3.2 million in
cash and the assumption of approximately $1.3 million in trade liabilities and
debt. The assets acquired by Eltron consisted of trade receivables, inventories,
equipment and technology.
The estimated fair values of the assets of Privilege acquired are
summarized as follows:
<TABLE>
<S> <C>
Trade receivables..................................................................... $ 964,000
Inventories........................................................................... 370,000
Equipment and other tangible assets................................................... 328,000
In process research and development projects.......................................... 2,500,000
Cost in excess of net assets acquired................................................. 397,000
------------
Total............................................................... $ 4,559,000
============
</TABLE>
The results of operations relating to Privilege are included with those
of the Company from January 1, 1996. Net revenues generated from Privilege
operations totaled approximately $1,946,000 for the period from January 1, 1996
to March 31, 1996. The cost in excess of the net assets of Privilege acquired is
being amortized on a straight-line basis over a five year period.
5
<PAGE> 6
Merger with RJS, Incorporated
Effective March 1, 1996, the Company acquired RJS, Incorporated ("RJS")
in a business combination accounted for as a pooling of interests. RJS is a
manufacturer of bar code label printers, bar code verifiers and verified
printing systems located in Monrovia, California. In accordance with the terms
of the merger, Eltron paid $776,000 in cash and issued 322,991 shares of its
Common Stock to the shareholders of RJS as consideration for all of the
outstanding capital stock of RJS.
The accompanying financial statements are based on the assumption that the
two companies were combined at the beginning of the year, and all financial
statements for prior periods presented have been restated to give effect to the
combination. Earning per share data reflects the shares issued in the merger for
all periods presented. Prior to February 1996, Eltron and RJS, in the normal
course of business, entered into certain transactions for the purchase and sale
of merchandise. These intercompany transactions have been eliminated in the
accompanying financial statements.
In connection with the merger, RJS changed its fiscal year end from
September 30 to December 31, which conforms to Eltron's year end. During the
three months ended December 31, 1995, RJS reported sales of $3.0 million and a
net loss of $19,000. In order to reflect this change in fiscal year-end,
retained earnings has been decreased by RJS's net loss for the three months
ended December 31, 1995. The consolidated financial statements for all periods
prior to 1996 have not been restated to reflect RJS's change in fiscal year and
include RJS's results of operations on a September 30 fiscal year end basis and
Eltron on a December 31 calendar year basis.
Combined and separate results of Eltron and RJS are as follows:
Unaudited Pro Forma Statements of Income
for Eltron International, Inc. and RJS, Incorporated
(in thousands)
<TABLE>
<CAPTION>
Eltron RJS (a) Adjustments Combined
------ ------- ----------- --------
<S> <C> <C> <C> <C>
Three months ended March 31, 1995:
Sales ......................... $ 8,919 $ 2,855 $ -- $11,774
Income before taxes ........... 2,407 103 18 2,528
Net income .................... 1,513 92 12 1,617
Year ended December 31, 1995:
Sales ......................... $42,362 $12,764 $(154) $54,972
Income before taxes ........... 10,113 647 75 10,835
Net income .................... 6,369 750 47 7,166
Year ended December 31, 1994:
Sales ......................... $17,530 $11,863 $(117) $29,276
Income before taxes ........... 4,535 684 79 5,298
Net income .................... 2,913 710 51 3,674
</TABLE>
- ------------------------
(a) Statements of Operations for the year ended September 30, 1995 have been
included for RJS.
The unaudited pro forma financial statements reflect the following: (i)
Eltron common shares issued and cash paid in connection with the merger; (ii)
the elimination of interest expense and all outstanding borrowings under RJS's
line of credit which was paid in full and terminated subsequent to the Merger;
(iii) the elimination of sales made between Eltron and RJS; (iv) the tax effect
of the foregoing adjustments. Expenses totaling approximately $450,000 related
to the merger have not been included in the unaudited pro forma financial
statements. In the opinion of the Company's management, all adjustments
necessary to present fairly such pro forma financial statements have been made
based on the terms and structure of the Merger. However, the preparation of pro
forma financial information requires many assumptions which may differ from
actual operations. These unaudited pro forma financial statements are not
necessarily indicative of the actual results which the Company would have
reported had the Merger occurred as of January 1, 1994 or 1995, nor do they
purport to indicate the results of future operations.
6
<PAGE> 7
3. INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out) or
market. Inventories consist of the following:
<TABLE>
<CAPTION>
December 31, March 31,
1995 1996
------------ ------------
<S> <C> <C>
Subassemblies and raw materials $ 8,569,233 $ 8,638,403
Work in process ............... 386,519 1,243,822
Finished goods ................ 2,551,184 4,724,865
----------- -----------
$11,506,936 $14,607,090
=========== ===========
</TABLE>
4. RECLASSIFICATIONS
Certain amounts in the prior period financial statements have been
reclassified to conform to the current period's presentation.
7
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Eltron designs, manufactures and markets bar code label printers, software,
and related accessories designed for use in Auto ID systems. The Company also
designs, manufactures and markets thermal printers which allow users to create
photo-realistic full color credit cards and drivers licenses on demand. Eltron
manufactures and distributes a full range of supplies designed for use with its
printers. The Company believes that its success to date has resulted from
Eltron's ability to, at a lower cost, offer high-quality printers and related
products with features comparable to or exceeding those of available competing
products.
The Company currently offers a full range of direct thermal and thermal
transfer bar code printers, color card printers and custom print engines for
applications such as airline ticketing. These printers, together with the
Company's software, printer supplies and accessories, are sold by the Company
through multiple distribution channels that include over 400 value added
resellers, systems integrators, original equipment manufacturers and
distributors located through out the world. Industries for which the Company
believes its printers are particularly well-suited include shipping and package
delivery, retail distribution and point-of-sale, health care, manufacturing,
financial services and governmental licensing. The Company currently focuses its
sales efforts in these markets, although it continues to explore the potential
for new markets.
Eltron is currently seeking to expand its line of quality printers and
related accessories to meet the needs of a broad range of end users and to be
positioned as price and value leaders. Management is engaged in efforts to
accomplish this expansion through both internal development efforts and
strategic acquisitions and alliances. In the first quarter of 1996, the Company
enhanced its market position through the acquisition of Privilege SA
("Privilege") and RJS, Incorporated ("RJS"). Privilege, located in Vardes,
France, is a manufacturer of custom color card printers with 1995 sales in
excess of $3 million. RJS, located in Monrovia, California, is a manufacturer of
high speed thermal bar code printers, bar code verifiers and verified printing
systems with 1995 sales in excess of $12 million.
The acquisition of RJS has been accounted for as a pooling of interests for
financial reporting purposes. The accompanying financial statements are based on
the assumption that the two companies were combined at the beginning of the
year, and all financial statements for prior periods presented have been
restated to give effect to the combination. In connection with the acquisition,
RJS changed its fiscal year end from September 30 to December 31, which conforms
to Eltron's year end. The consolidated financial statements for all periods
prior to 1996 have not been restated to reflect RJS's change in fiscal year, and
include RJS's results of operations on a September 30 fiscal year end basis and
Eltron on a December 31 calendar year basis.
STATEMENTS OF OPERATIONS DATA:
The following table presents certain information derived from the Company's
Statements of Operations for the three month periods ended March 31, 1995 and
1996, expressed as a percentage of sales.
<TABLE>
<CAPTION>
1995 1996
------ ------
<S> <C> <C>
SALES ......................................................... 100.0% 100.0%
COST OF SALES ................................................. 53.8 53.9
----- -----
Gross profit .............................................. 46.2 46.1
OPERATING EXPENSES:
Selling, general and administrative ....................... 20.7 19.6
Research and product development .......................... 4.5 6.5
Write off of acquired in process technology and other costs
associated with acquisitions .......................... -- 16.8
----- -----
INCOME FROM OPERATIONS ........................................ 21.0 3.2
OTHER (INCOME) EXPENSE:
Interest, net ............................................. (0.3) (0.2)
----- -----
INCOME BEFORE PROVISION FOR INCOME TAXES ...................... 21.3 3.4
PROVISION FOR INCOME TAXES .................................... 7.7 7.3
----- -----
NET INCOME (LOSS) ............................................. 13.6% (3.9)%
===== =====
</TABLE>
8
<PAGE> 9
COMPARISON OF THREE MONTHS ENDED MARCH 31, 1995 AND 1996:
Sales:
Sales for the three months ended March 31, 1996 totaled $19.0
million, an increase of $7.2 million or 62% over sales for the same period in
1995 which totaled $11.8 million. This increase in sales can be attributed to
wider market acceptance of the Company's bar code printers, higher than
anticipated demand from the Company's largest customer, United Parcel Service
("UPS") as well as increased supply sales.
Sales for the three months ended March 31, 1996 were also bolstered by the
inclusion of a full quarter's operations for Donner and Privilege, which were
acquired in September 1995 and January 1996, respectively. Donner and Privilege
accounted for $1.0 million and $1.9 million respectively, of sales reported for
the first quarter of 1996 and are not included in results for the first quarter
of 1995.
In both 1995 and 1996 sales of printers were enhanced by increased sales to
UPS, which contributed approximately $3.2 million and $6.1 million to sales in
to the first quarter of 1995 and 1996, respectively. Although the Company had
outstanding orders from UPS in excess of $4.0 million as of March 31, 1996,
there is no obligation on the part of UPS to place any further orders with
Eltron. The Company has derived a significant portion of its revenues from UPS
and may in the future be dependent on UPS, or other significant customers, the
loss of any one of which could materially and adversely affect the Company's
financial position, results of operations and cash flows. No customer other than
UPS contributed greater than 10% of the Company's net sales in the first quarter
of 1995 or 1996.
Gross profit:
Gross profit for the three months ended March 31, 1996 totaled
$8.8 million, an increase of $3.3 million or 61% over gross profit for
the same period in 1995. As a percentage of revenues, gross profit remained
consistent at 46% for the three month periods ended March 31, 1995 and 1996.
Sales to high volume customers or OEMs are typically transacted at a price
which yields a lower than average gross margin, although the incremental selling
costs associated with these transactions are generally less than those
associated with a non-OEM sale. Sales of supplies are typically made at lower
than average gross margins, as a result of general market conditions and the
commodity nature of these products. During the period from September 1995 to
February 1996 the Company completed the acquisition of two companies: Donner and
Privilege. These companies had aggregate 1995 sales of approximately $5 million.
These companies have historically exhibited gross margins which are lower than
Eltron's. Although management is currently seeking to increase the gross margins
of these subsidiaries, there can be no assurance that gross margins similar to
Eltron's will be achieved. As a result, management believes that it is not
reasonable to assume that the 46% gross margin exhibited in the first quarter of
1996 will necessarily be maintained in the future.
Selling, general and administrative expenses:
Selling, general and administrative expenses as a percentage of sales
were 20% and 21% for 1996 and 1995, respectively. Selling, general and
administrative expenses decreased as a percentage of sales in the first
quarter of 1996 when compared to the first quarter of 1995. On an absolute
dollar basis, selling, general and administrative expenses increased
$1.3 million or 53%. $0.6 million of this increase relates to Donner and
Privilege, whose operating results were included in the first quarter of
1996 and are not included in results for the first quarter of 1995.
The Company currently anticipates that selling, general and administrative
expense will increase in future quarters but may decrease as a percentage of
sales. The actual amount spent will depend on a variety of factors, including
the Company's level of operations, and the number of new markets the Company
chooses to enter.
9
<PAGE> 10
Research and development expenses:
Research and development expenses as a percentage of sales were 7% and
5% for 1996 and 1995, respectively. Research and development expenses
increased as a percentage of sales in the first quarter of 1996 when compared
to the first quarter of 1995. This increase related primarily to increased
efforts to develop new products. On an absolute dollar basis, research and
development expenses increased $0.7 million or 132%. $0.1 million of this
increase relates to Privilege, whose operating results were included the first
quarter of 1996 and are not included in results for the first quarter of 1995.
The Company currently anticipates that research and product development
expense will increase in future quarters and may increase as a percentage of
sales. The actual amount spent will depend on a variety of factors, including
the Company's level of operations, and the number of product development
projects that it embarks upon.
Write off of acquired in process technology and other costs associated with
acquisitions. In the first quarter of 1996, in-process technology valued at $2.5
million was purchased in connection with the acquisition of Privilege and
expensed immediately. In addition, costs related to the acquisition of Privilege
and RJS totaling $0.7 million were incurred and expensed during the first
quarter of 1996. These costs are not deductible for income tax purposes.
Provision for income taxes:
The provision for income taxes for the three months ended March 31, 1996
was $1.4 million, or approximately 216% of pretax income, which reflects the
utilization of certain tax credits and current benefit of deferred tax assets
under SFAS 109 which have been substantially offset by purchased in-process
technology and other acquisition related costs totaling $3.2 million which
were expensed in the first quarter of 1996. The tax effect of these
non-deductible expense have been fully reflected in the first quarter of 1996
and will not impact the remaining quarters to be reported for the year. The
Company's provision for income taxes for the first three months of 1995 was
$0.9 million or 36% of pretax income.
LIQUIDITY AND CAPITAL RESOURCES
Historically, Eltron's primary source of liquidity has been cash flow from
operations, supplemented by borrowings under its revolving bank line of credit
and cash provided by public offerings of its common stock which generated $6.1
million and $16.7 million in 1994 and 1995, respectively.
In the three months ended March 31, 1996, operating activities used $2.2
million as compared to $2.0 million used during the same period in 1995. In the
first quarter of 1996, cash was used as a result of increases in accounts
receivable and inventories of $1.5 million and $2.4 million, respectively, which
were offset by cash provided by decreases in prepaid assets and accrued
liabilities which totaled $1.3 million.
In the three months ended March 31, 1996, investing activities provided
cash totaling $3.4 million as compared to $1.5 million during the same period in
1995. During the first quarter of 1996, a cash payment of $3.2 million was made
in connection with the acquisition of Privilege. In addition cash was used to
purchase approximately $1.3 million in equipment. These purchases were offset by
the sale of short term investments which provided $7.9 million.
In the three months ended March 31, 1996, financing activities used cash
totaling $1.1 million. $0.7 million related to the repayment of net borrowings
under bank lines of credit. $0.8 million was used to repurchase common shares in
connection with the merger with RJS. These uses of cash were partially offset by
cash generated by the purchase of common shares under the company's incentive
stock option plans which generated $0.4 million.
On May 5, 1996 the Company's line of credit expired. At March 31, 1996, no
amounts were outstanding under the line of credit. The Company is currently in
negotiation to procure a new bank line of credit.
The Company did not have any significant capital commitments as of March
31, 1996.
10
<PAGE> 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS:
Exhibit 11.1 - Computation of Earnings per Share
Exhibit 27 - Financial Data Schedule
(b) REPORTS ON FORM 8-K:
1. Form 8-K filed February 6, 1996 (Date of event: January 20, 1996)
relating to the acquisition of Privilege S.A.
2. Form 8-K filed February 6, 1996 (Date of event: March 1, 1996) relating
to the merger with RJS, Incorporated, as amended by Form 8-K-A filed
May 14, 1996 (Date of event: March 1, 1996).
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereto duly
authorized.
ELTRON INTERNATIONAL, INC.
Date: 5/14/96 By: /s/ Donald K. Skinner
-------------- ------------------------------------
Donald K. Skinner
President and Chief Executive Officer
Date: 5/14/96 By: /s/ Daniel C. Toomey, Jr.
-------------- ------------------------------------
Daniel C. Toomey, Jr.
Vice President Finance
and Chief Financial Officer
11
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential
Exhibit Numbered
Number Title Page
- ------- ----- ----------
<S> <C> <C> <C>
11.1 -- Computation of Earnings per Share
27. -- Financial Data Schedule
</TABLE>
12
<PAGE> 1
Exhibit 11.1
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
March 31, March 31,
1995 1996
---------- -----------
<S> <C> <C>
Net income (loss) $1,630,702 $ (742,788)
========== ===========
Weighted average shares outstanding 6,093,350 7,161,298
Number of shares calculated using the treasury stock
method in accordance with APB15 644,659 607,051
---------- -----------
Total weighted average shares outstanding 6,738,009 7,768,349
========== ===========
EARNINGS PER SHARE (LOSS) $ 0.24 $ (0.10)
========== ===========
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM THE COMPANY'S
CONSOLIDATED STATEMENTS OF EARNINGS AND CONSOLIDATED BALANCE SHEETS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 804
<SECURITIES> 7,652
<RECEIVABLES> 12,020
<ALLOWANCES> 371
<INVENTORY> 14,607
<CURRENT-ASSETS> 36,362
<PP&E> 6,310
<DEPRECIATION> 1,354
<TOTAL-ASSETS> 43,259
<CURRENT-LIABILITIES> 8,275
<BONDS> 0
0
0
<COMMON> 23,592
<OTHER-SE> 0
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</TABLE>
