<PAGE> 1
United States
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 Period Ended NOVEMBER 30, 1996
-----------------
or
[ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 For the Transition Period From__________to__________
--------------------
COMMISSION FILE NUMBER 0 -25068.
HASKEL INTERNATIONAL, INC.
--------------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-4107640
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
100 EAST GRAHAM PLACE
BURBANK, CALIFORNIA 91502
(Address of principal executive offices) (Zip Code)
(818) 843 - 4000
----------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
--------------
(Former name, address and former fiscal year, if changed since last report)
Indicated 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 periods 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
Indicated by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by the court. Yes . No .
--- ---
Applicable Only to Corporate Issuers
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
AS OF JANUARY 10, 1997 THE REGISTRANT HAD 4,692,230 SHARES OF CLASS A
COMMON STOCK, AND 40,000 SHARES OF CLASS B COMMON STOCK OUTSTANDING.
<PAGE> 2
INDEX
HASKEL INTERNATIONAL, INC.
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
<S> <C>
Item 1. Financial Statements (Unaudited)
Consolidated balance sheets - November 30, 1996 and
May 31, 1996 ............................................. 3
Consolidated statements of operations - Three months ended
November 30, 1996 and 1995; Six months ended
November 30, 1996 and 1995 ............................... 5
Consolidated statements of cash flows - Six months ended
November 30, 1996 and 1995 ............................... 6
Notes to consolidated financial statements -
November 30, 1996 ......................................... 7
Item 2. Management's discussion and analysis of financial
condition and results of operations ....................... 10
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders ................................................... 13
Item 5. Other Information ............................................ 15
Item 6. Exhibits and Reports on Form 8-K ............................. 16
</TABLE>
2
<PAGE> 3
HASKEL INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
NOVEMBER 30, MAY 31,
1996 1996
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash & cash equivalents $ 7,221,000 $ 8,239,000
Accounts receivable, net 11,168,000 9,581,000
Inventory, net 10,502,000 10,532,000
Prepaid expenses and other current assets 845,000 356,000
Assets held for sale 1,851,000 -
Deferred income taxes 1,260,000 1,260,000
----------- -----------
TOTAL CURRENT ASSETS 32,847,000 29,968,000
PROPERTY, PLANT & EQUIPMENT, Net 5,553,000 5,526,000
PURCHASED TECHNOLOGY, Net - 6,569,000
GOODWILL, Net 388,000 3,248,000
DEFERRED INCOME TAXES 2,193,000
OTHER ASSETS 42,000 49,000
----------- -----------
TOTAL $41,023,000 $45,360,000
=========== ===========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
HASKEL INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
<TABLE>
<CAPTION>
NOVEMBER 30, MAY 31,
1996 1996
------------ ------------
<S> <C> <C>
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 987,000 $ 985,000
Accounts payable 3,281,000 3,510,000
Dividends payable 331,000 331,000
Accrued liabilities 2,746,000 3,089,000
Income taxes payable 447,000 162,000
------------ ------------
TOTAL CURRENT LIABILITIES 7,792,000 8,077,000
LONG-TERM DEBT 1,855,000 2,381,000
DEFERRED INCOME TAXES - 334,000
OTHER ACCRUED LIABILITIES 2,305,000 2,348,000
COMMITMENTS & CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred Stock: 2,000,000 shares authorized;
none issued and outstanding
Common Stock:
Class A, without par value; 20,000,000 shares authorized; 4,692,230 and
4,688,230 issued and outstanding at November 30, 1996 and
May 31, 1996, respectively 13,458,000 13,436,000
Class B, without par value; 40,000 shares
authorized, issued and outstanding at
November 30, 1996 and May 31, 1996 19,000 19,000
Retained Earnings 14,897,000 18,951,000
Cumulative foreign currency translation adjustment 697,000 (186,000)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 29,071,000 32,220,000
------------ ------------
TOTAL $ 41,023,000 $ 45,360,000
============ ============
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
HASKEL INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED NOVEMBER 30, ENDED NOVEMBER 30,
------------------------------ ------------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
SALES $ 13,010,000 $ 9,905,000 $ 25,225,000 $ 19,261,000
COST OF SALES 7,068,000 5,524,000 13,703,000 10,949,000
------------ ------------ ------------ ------------
GROSS PROFIT 5,942,000 4,381,000 11,522,000 8,312,000
EXPENSES:
Selling 2,134,000 1,838,000 3,939,000 3,495,000
General and administrative 1,190,000 1,351,000 3,086,000 2,910,000
Engineering design, research
and development 273,000 201,000 485,000 428,000
------------ ------------ ------------ ------------
Total 3,597,000 3,390,000 7,510,000 6,833,000
------------ ------------ ------------ ------------
OPERATING INCOME 2,345,000 991,000 4,012,000 1,479,000
OTHER INCOME (EXPENSE) 39,000 105,000 98,000 205,000
------------ ------------ ------------ ------------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 2,384,000 1,096,000 4,110,000 1,684,000
PROVISION FOR INCOME TAXES 863,000 411,000 1,567,000 658,000
------------ ------------ ------------ ------------
INCOME FROM CONTINUING OPERATIONS 1,521,000 685,000 2,543,000 1,026,000
DISCONTINUED OPERATIONS:
Income (loss) from operations, less applicable
income taxes (229,000) 223,000 (529,000) 395,000
Estimated loss on disposal of segment (5,406,000) (5,406,000)
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (4,114,000) $ 908,000 $ (3,392,000) $ 1,421,000
============ ============ ============ ============
INCOME (LOSS) PER SHARE:
Continuing operations $0.32 $0.14 $0.53 $0.22
Discontinued operations:
Loss from operations ($0.05) $0.05 ($0.11) $0.08
Estimated loss on disposal ($1.12) - ($1.12) -
------------ ------------ ------------ ------------
Total ($0.85) $0.19 ($0.70) $0.30
============ ============ ============ ============
DIVIDEND PER SHARE $0.07 $0.07 $0.14 $0.14
============ ============ ============ ============
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
HASKEL INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
NOVEMBER 30, NOVEMBER 30,
1996 1995
----------- -----------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by continuing operations $ 1,951,000 $ 715,000
Net cash provided by (used in) discontinued operations (263,000) 605,000
----------- -----------
Net cash provided by operating activities 1,688,000 1,320,000
----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures (990,000) (359,000)
Proceeds from sale of property 68,000 -
Purchase of subsidiary (net of cash and cash equivalents
acquired) (791,000) (159,000)
----------- -----------
Net cash provided by investing
activities (1,713,000) (518,000)
----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Principal payments on long-term debt (524,000) (70,000)
Proceeds from issuance of
common stock 22,000 -
Dividends declared (662,000) (662,000)
----------- -----------
Net cash provided by financing
activities (1,164,000) (732,000)
----------- -----------
EFFECT OF EXCHANGE RATE ON
CASH AND CASH EQUIVALENTS 171,000 (62,000)
----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (1,018,000) 8,000
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 8,239,000 8,806,000
----------- -----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 7,221,000 $ 8,814,000
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASHFLOW INFORMATION :
Cash paid for:
Interest $ 108,000 $ 132,000
=========== ===========
Income taxes $ 1,006,000 $ 627,000
=========== ===========
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES -
On June 3, 1996, the Company's foreign subsidiary, Haskel Energy Systems,
Limited ("HESL"), acquired all of the outstanding stock of Hydraulic
Mobile Equipment Limited ("HME") for $851,000 ($814,000 in cash and
$37,000 in acquisition costs) plus liabilities.
<TABLE>
<S> <C>
Fair value of assets acquired $ 1,067,000
Cash paid (851,000)
-----------
Liabilities assumed $ 216,000
===========
</TABLE>
See notes to consolidated financial statements.
6
<PAGE> 7
PART I. FINANCIAL INFORMATION
HASKEL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (which
comprise only normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the period ended November
30, 1996 are not necessarily indicative of the results that may be expected for
the year ending May 31, 1997. For further information, refer to the consolidated
financial statements and notes thereto for the year ended May 31, 1996.
NOTE B - INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
November 30, May 31,
1996 1996
----------- -----------
<S> <C> <C>
Raw Materials $ 2,585,000 $ 3,335,000
Work in Process 1,669,000 2,032,000
Finished Products 6,248,000 5,165,000
----------- -----------
$10,502,000 $10,532,000
=========== ===========
</TABLE>
NOTE C - ACQUISITIONS
On June 3, 1996, the Company's foreign subsidiary, Haskel Energy Systems, Ltd.,
acquired all of the outstanding stock of Hydraulic Mobile Equipment Limited in
exchange for $814,000 in cash and $37,000 in acquisition costs plus liabilities.
The business is located in Manchester, England.
NOTE D - INSURANCE REIMBURSEMENTS
The general and administrative expenses for the three and six months ended
November 30, 1996 include reimbursements of approximately $676,000 from the
Company's insurance carriers representing the recovery of legal expenses
relating to environmental matters.
7
<PAGE> 8
PART I. FINANCIAL INFORMATION
HASKEL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
NOTE E - DISCONTINUED OPERATIONS
On January 10, 1997, the Company adopted a plan to dispose of its Electronic
Products Group ("EPG"). A formal plan of disposal was approved by the Board of
Directors, and it is anticipated that the disposal will be completed within the
next twelve months.
The estimated loss on disposal of segment included in the statement of
operations for the three and six months ended November 30, 1996 reflects the net
amount of the following components: the write-down of the net assets of the EPG
to the expected market value; disposal costs; anticipated operating income of
the EPG through the expected date of disposal; and an income tax benefit of
$2,414,000 from the reversal of related deferred tax liabilities. The estimated
net realizable value of the EPG has been reclassified on the balance sheet as of
November 30, 1996 as "Assets held for sale."
The plan of disposal of the EPG has been accounted for as a discontinued
operation and, accordingly, its assets (liabilities) have been segregated from
continuing operations in the accompanying consolidated balance sheets, and its
operating results are segregated and reported as discontinued operations in the
accompanying consolidated statements of operations and cash flows.
Information relating to the discontinued operations is as follows:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED NOVEMBER 30, ENDED NOVEMBER 30,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales ................................ $ 831,000 $ 4,896,000 $ 1,904,000 $ 9,945,000
Cost of sales ............................ 391,000 3,130,000 907,000 6,566,000
----------- ----------- ----------- -----------
Gross margin ........................ 440,000 1,766,000 997,000 3,379,000
Operating expenses ....................... 680,000 1,315,000 1,664,000 2,555,000
Nonoperating expenses .................... 35,000 55,000 82,000 114,000
----------- ----------- ----------- -----------
Income before income taxes ............... (275,000) 396,000 (749,000) 710,000
Income tax (benefit) .................... (46,000) 173,000 (220,000) 315,000
----------- ----------- ----------- -----------
Net income (loss) .................. $ (229,000) $ 223,000 $ (529,000) $ 395,000
=========== =========== =========== ===========
</TABLE>
8
<PAGE> 9
PART I. FINANCIAL INFORMATION
HASKEL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
NOTE E - DISCONTINUED OPERATIONS (CONTINUED)
The net assets and liabilities of the discontinued operations included in the
accompanying consolidated balance sheet as of November 30, 1996 are as follows:
<TABLE>
<S> <C>
Current assets:
Cash...................................................... $ 94,000
Accounts receivable ...................................... 462,000
Inventories............................................... 18,000
Prepaid expenses ......................................... 37,000
----------
Total current assets ................................. 611,000
----------
Current liabilities:
Accounts payable ......................................... 93,000
Accrued liabilities ...................................... 102,000
Income taxes payable ..................................... 129,000
----------
Total current liabilities............................. 324,000
----------
Net current assets............................................. $ 287,000
==========
Long term assets:
Property, plant & equipment, net.......................... $ 319,000
Purchased technology, net ................................ 6,305,000
Goodwill, net............................................. 2,760,000
----------
Total long term assets ............................... 9,384,000
----------
Long term liabilities:
Deferred taxes ........................................... 2,414,000
Estimated loss on disposal ............................... 5,406,000
----------
Total long term liabilities .......................... 7,820,000
----------
Net long term assets .......................................... $1,564,000
==========
Total assets held for sale .................................... $1,851,000
==========
</TABLE>
NOTE F - SUBSEQUENT EVENT
On December 4, 1996, the Company acquired certain assets of Hogan Fluid Power,
Inc. for approximately $380,000 in cash and $50,000 in acquisition costs. The
business is located in Houston, Texas.
9
<PAGE> 10
HASKEL INTERNATIONAL, INC.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This Report contains forward-looking statements that involve risks and
uncertainties. The Company's actual results and timing of certain events could
differ materially from those discussed in the forward-looking statements.
Factors that could cause or contribute to such differences include, but are not
limited to, the integration of acquired operations, the sale of the Electronic
Products Group ("EPG"), management of growth and other factors.
DISCONTINUED OPERATIONS
The Company adopted a plan to dispose of its Electronic Products Group ("EPG")
on January 10, 1997, and, as a result, the Company has accounted for the EPG as
a discontinued operation as of November 30, 1996. The estimated loss on disposal
of segment of $5,406,000 included in the statement of operations for the three
and six months ended November 30, 1996 reflects the net amount of the following
components: the write-down of the net assets of the EPG to the expected market
value; disposal costs; anticipated operating income of the EPG through the
expected date of disposal; and an income tax benefit of $2,414,000 from the
reversal of related deferred tax liabilities. The Company recognized a loss from
discontinued operations for the three and six months ended November 30, 1996 of
$229,000 and $529,000, respectively, as compared to income from discontinued
operations of $223,000 and $395,000, respectively, for the comparable periods in
fiscal year 1996. The decrease in income from discontinued operations is the
direct result of declining market conditions in the electronics industry due to
excess supply as well as increased competition within the industry. The loss
from discontinued operations for the six months ended November 30, 1996 includes
approximately $240,000 in restructuring costs incurred in the first quarter of
fiscal year 1997.
RESULTS OF CONTINUING OPERATIONS
Sales for the second quarter ended November 30, 1996 increased $3,105,000, or
31.3%, to $13,010,000, as compared with sales of $9,905,000 for the same period
in the prior year. For the first six months of fiscal year 1997, sales were
$25,225,000, or $5,964,000 (31.0%) higher than the same period in fiscal year
1996. These results reflect operations by the Industrial Products Group ("IPG")
and include increased sales from new and expanded operations principally in its
international markets, particularly in Europe and the Pacific Rim. Sales for the
three and six months ended November 30, 1996, included approximately $970,000
and $1,770,000, respectively, which are attributable to activities of businesses
acquired in Germany and the United Kingdom and the opening of an office in the
Netherlands, none of which were in place during the first half of
10
<PAGE> 11
HASKEL INTERNATIONAL, INC.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
fiscal year 1996. Additionally, approximately $1,200,000 of the sales included
in the three and six months ended November 30, 1996, represents shipments made
on a single order to the automotive safety products sector, which represents new
products not available in early fiscal year 1996.
Gross profit for the second quarter ended November 30, 1996 increased $1,561,000
to $5,942,000, or 45.7 % of sales, as compared with gross profit of $4,381,000,
or 44.2% of sales, for the same period in fiscal year 1996. Gross profit for the
first six months of fiscal year 1997 was $11,522,000 (45.7% of sales) as
compared to $8,312,000 (43.2% of sales) for the comparable period in fiscal year
1996. The gross profit as a percentage of sales increased as the IPG continued
to reduce product costs through improved manufacturing processes and reduced
material costs.
General and administrative expenses for the three and six months ended November
30, 1996 include reimbursements of approximately $676,000 from the Company's
insurance carriers representing the recovery of legal expenses relating to
environmental matters. Excluding these reimbursements, selling, general and
administrative, and engineering ("operating") expenses were $4,273,000 or 32.8%
of sales for the second quarter ended November 30, 1996 as compared to
$3,390,000 or 34.2% of sales for the comparable period in fiscal year 1996. For
the six months ended November 30, 1996, these expenses, excluding the insurance
reimbursements, were $8,186,000 or 32.5% of sales as compared to $6,833,000 or
35.5% of sales for the prior year. Operating expenses for the three and six
months ended November 30, 1996 included approximately $300,000 and $600,000,
respectively, attributable to activities of new businesses acquired and started.
The remaining increase in operating costs is the direct result of increased
expenses to support the Company's growth.
Income from continuing operations for the second quarter ended November 30, 1996
increased $836,000 or 122.0% to $1,521,000 (11.7% of sales) as compared with
$685,000 (6.9% of sales) for the comparable prior period. For the six months
ended November 30, 1996, income from continuing operations increased $1,517,000
(147.9%) to $2,543,000 (10.1% of sales) as compared to $1,026,000 (5.3% of
sales) for the same period in fiscal year 1996. The increase in income from
continuing operations is due to the significant increase in sales levels,
improvement in gross margins, and insurance reimbursements as discussed above.
The increased income from continuing operations as a percentage of sales is a
direct result of the Company's efforts to contain operating expenses while
expanding its operations.
11
<PAGE> 12
HASKEL INTERNATIONAL, INC.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY AND SOURCES OF CAPITAL
For the six months ended November 30, 1996, net cash provided by operating
activities included $1,951,000 from continuing operations as compared to
$715,000 for the same period in the prior year. Net cash of $263,000 was used in
discontinued operations in the first six months of fiscal year 1997 as compared
to net cash provided by discontinued operations of $605,000 in the prior year.
The net cash provided by operating activities as noted above resulted
principally from net income in the period and effects of exchange rate
fluctuations on net assets held in foreign subsidiaries.
During the six months ended November 30, 1996 and 1995, cash used for investing
activities consisted primarily of cash used to acquire a new subsidiary and
capital expenditures. Cash used in financing activities for the six months ended
November 30, 1996 and 1995 consisted principally of payments on long-term debt
and dividends paid to shareholders.
To insure the availability of funds to meet its various needs, the Company has a
comprehensive credit facility with its bank. The credit facility includes a
$5,000,000 revolving line of credit; a $4,000,000 acquisition line of credit
available for use in making acquisitions or capital expenditures; and a
$3,000,000 term loan. At November 30, 1996, the Company had no outstanding
balances under the revolving credit or acquisition lines. As of November 30,
1996, the balance of the term debt was $2,348,000, which bears interest at the
LIBOR rate plus 1-3/4 % (7.125% at November 30, 1996.) This debt is directly
associated with the discontinued operations of the EPG and the Company intends
to use the proceeds from the disposition of this business to reduce the balance
of the debt. As a result of the estimated loss on disposal of the EPG, the
Company may be in violation of the EBITDA debt service covenant under the loan
agreement as of the fiscal year ended May 31, 1997, which is the measurement
date of the compliance with the covenant. However, the Company anticipates that
a waiver of this breach will be granted by the bank.
As of November 30, 1996, the Company had $7,221,000 in cash and cash
equivalents, and had working capital of $25,055,000, with a ratio of current
assets to current liabilities of approximately 4.2 : 1. This compares with cash
and cash equivalents of $8,239,000, and working capital of $21,891,000, with a
ratio of current assets to current liabilities of 3.7 : 1 as of May 31, 1996.
The Company believes it has adequate resources to achieve its operating goals
for at least the next 12 month period.
12
<PAGE> 13
HASKEL INTERNATIONAL, INC.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) On October 21, 1996, the Company held its Annual Meeting
of Shareholders (the "1996 Annual Meeting") for shareholders of record as
of September 1, 1996.
(b) At the 1996 Annual Meeting, holders of the Company's Class
A Common Stock, without par value ("Class A Common Stock"), elected three
Directors and holders of the Company's Class B Common Stock, without par value
("Class B Common Stock"), elected four Directors.
The following individuals were elected by holders of the
Company's Class A Common Stock to serve as Directors of the Company:
Marvin L. Goldberger
R. Malcolm Greaves
Edward Malkowicz
The following individuals were elected by holders of the
Company's Class B Common Stock to serve as Directors of the Company:
Marvin Goodson
Stanley T. Myers
Terrence A. Noonan
John Vinke
(c) Additionally, at the 1996 Annual Meeting, the shareholders
approved the Amendments to the 1995 Formula Stock Option Plan and the
appointment of Deloitte & Touche, LLP, as the Company's independent auditors.
13
<PAGE> 14
HASKEL INTERNATIONAL, INC.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (CONTINUED)
1. ELECTION OF DIRECTORS:
<TABLE>
<CAPTION>
Number of Number of
Number of Shares Shares
Shares For Against Withheld
---------- ------- --------
<S> <C> <C> <C>
Elected by Class A Stock
- ------------------------
Marvin Goldberger 3,778,526 - 12,616
R. Malcolm Greaves 3,778,226 - 12,916
Edward Malkowicz 3,778,526 - 12,616
Non-Votes
and Abstentions 897,088
</TABLE>
<TABLE>
<CAPTION>
Number of Number of
Number of Shares Shares
Shares For Against Withheld
---------- ------- --------
<S> <C> <C> <C>
Elected by Class B Stock
Marvin Goodson 40,000 - -
Stanley T. Meyers 40,000 - -
Terrence A. Noonan 40,000 - -
John Vinke 40,000 - -
Non-Votes
and Abstentions 0
</TABLE>
14
<PAGE> 15
HASKEL INTERNATIONAL, INC.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (CONTINUED)
2. APPROVAL OF AMENDMENTS TO THE 1995 FORMULA STOCK OPTION
PLAN:
<TABLE>
<CAPTION>
Percent of
Shares Shares Voting
------ -------------
<S> <C> <C>
Votes For 3,281,112 68.8
Votes Against 182,277 3.8
Non-Votes and Abstentions 1,304,841 27.4
</TABLE>
3. APPROVAL OF DELOITTE & TOUCHE, LLP AS THE COMPANY'S
INDEPENDENT AUDITORS:
<TABLE>
<CAPTION>
Percent of
Shares Shares Voting
------ -------------
<S> <C> <C>
Votes For 3,792,242 79.5
Votes Against 9,250 .2
Non-Votes and Absentions 966,738 20.3
</TABLE>
ITEM 5. OTHER INFORMATION
On January 10, 1997, the Board of Directors of Haskel International, Inc. (the
"Company") approved management's plan and recommendation that it sell Haskel
Electronic Products, Inc., a wholly-owned subsidiary of the Company, and it's
subsidiaries, which comprises the Company's Electronic Products Group ("EPG")
and constitutes the electronic products distribution segment of the Company.
This segment of the business represented approximately seven percent of the
Company's net sales during the six months ending November 30, 1996.
The Company has engaged an investment banker who has prepared a summary business
valuation of the EPG and will assist in the sale of the business.
15
<PAGE> 16
HASKEL INTERNATIONAL, INC.
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION (CONTINUED)
Pending the sale and effective with the second quarter, the results of the
Company's continuing operations and the discontinued operations of the EPG will
be segregated in the Company's financial statements.
The Company has written down its investment in the EPG to its net realizable
value as of November 30, 1996 resulting in an estimated net loss on the disposal
of the segment of $5,406,000. See Note E to the Consolidated Financial
Statements for the quarter ended November 30, 1996 for information relating to
the discontinued operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K):
11.1 Statement Re: Computation of Earnings Per Share
27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the fiscal quarter covered by
this report on Form 10-Q.
16
<PAGE> 17
HASKEL INTERNATIONAL, INC.
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.
HASKEL INTERNATIONAL, INC.
(REGISTRANT)
DATE 1-13-97 /S/ R. MALCOLM GREAVES
------------------------ -----------------------------------
R. Malcolm Greaves
President & Chief Executive Officer
DATE 1-13-97 /S/ LONNIE SCHNELL
------------------------ -----------------------------------
Lonnie D. Schnell
Chief Financial Officer
17
<PAGE> 1
EXHIBIT 11.1
HASKEL INTERNATIONAL, INC.
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
NOVEMBER 30, NOVEMBER 30,
---------------------------- -----------------------------
1996 1995 1996 1995
------------- ------------- ------------- -------------
PRIMARY & PRIMARY & PRIMARY & PRIMARY &
FULLY DILUTED FULLY DILUTED FULLY DILUTED FULLY DILUTED
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Primary and Fully Diluted Earnings
Income from continuing operations $ 1,521,000 $ 685,000 $ 2,543,000 $ 1,026,000
Income from discontinued operations (229,000) 223,000 (529,000) 395,000
Loss from disposal of segment (5,406,000) - (5,406,000) -
----------- ----------- ----------- -----------
Net income $(4,114,000) $ 908,000 $(3,392,000) $ 1,421,000
=========== =========== =========== ===========
Weighted average number of
shares outstanding . . . . . . . . . 4,732,230 4,728,230 4,731,890 4,728,230
Dilutive effect of stock options
and warrants . . . . . . . . . . . . . . 83,908 0 75,786 0
----------- ----------- ----------- -----------
Number of shares used to
compute primary and fully
diluted earnings per share . . . . 4,816,138 4,728,230 4,807,676 4,728,230
=========== =========== =========== ===========
Primary and Fully Diluted Earnings per Share
Income from continuing operations $ 0.32 $ 0.14 $ 0.53 $ 0.22
Income from discontinued operations $ (0.05) $ 0.05 $ (0.11) $ 0.08
Loss from disposal of segment (1.12) - (1.12) -
----------- ----------- ----------- -----------
Net income $ (0.85) $ 0.19 $ (0.70) $ 0.30
=========== =========== =========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM HASKEL
INTERNATIONAL INC'S CONSOLIDATED BALANCE SHEETS, CONSOLIDATED STATEMENTS OF
INCOME AND CONSOLIDATED STATEMENTS OF CASH FLOWS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-END> NOV-30-1996
<CASH> 7,221
<SECURITIES> 0
<RECEIVABLES> 11,823
<ALLOWANCES> 655
<INVENTORY> 13,865
<CURRENT-ASSETS> 32,847
<PP&E> 10,464
<DEPRECIATION> 4,911
<TOTAL-ASSETS> 41,023
<CURRENT-LIABILITIES> 7,792
<BONDS> 0
0
0
<COMMON> 13,477
<OTHER-SE> 697
<TOTAL-LIABILITY-AND-EQUITY> 41,023
<SALES> 25,225
<TOTAL-REVENUES> 25,225
<CGS> 13,703
<TOTAL-COSTS> 13,703
<OTHER-EXPENSES> 7,510<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 108
<INCOME-PRETAX> 4,110
<INCOME-TAX> 1,567
<INCOME-CONTINUING> 2,543
<DISCONTINUED> (5,935)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,392)
<EPS-PRIMARY> (.70)<F2>
<EPS-DILUTED> (.70)<F2>
<FN>
<F1>Other expenses are comprised of selling, general and administrative,
engineering design, research and development.
<F2>Fully diluted earnings per share is not disclosed in the Company's consolidated
financial statements since the maximum dilutive effect is not material.
</FN>
</TABLE>
