SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Period Ended August 31, 1998 Commission File Number 0-8796
Spectrum Control, Inc.
Exact name of registrant as specified in its charter
Pennsylvania 25-1196447
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
6000 West Ridge Road; Erie, Pennsylvania 16506
(Address) (Zip Code)
Registrant's telephone number, including area code: (814) 835-4000
Not Applicable
Former name, former address and former fiscal year, if changed since
last report
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
the filing requirements for at least the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date.
Number of Shares Outstanding
Class as of September 15, 1998
Common, no par value 10,957,008
<PAGE>
SPECTRUM CONTROL, INC. AND SUBSIDIARIES
INDEX
PART I FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements (Unaudited)
Consolidated Condensed Balance Sheets --
August 31, 1998 and November 30, 1997 3-4
Consolidated Condensed Statements of Income --
Three Months Ended and Nine Months Ended
August 31, 1998 and 1997 5
Consolidated Condensed Statements of Cash Flows --
Three Months Ended and Nine Months Ended
August 31, 1998 and 1997 6
Notes to Consolidated Condensed Financial Statements 7-9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10-16
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 17
Signature 18
<PAGE>
<TABLE>
SPECTRUM CONTROL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
DOLLAR AMOUNTS IN THOUSANDS
(UNAUDITED)
<CAPTION>
August 31, 1998 Nov. 30, 1997
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 3,418 $ 196
Accounts receivable, net of
allowances 8,521 9,997
Inventories
Finished goods 2,767 2,159
Work-in-process 4,941 5,364
Raw materials 4,867 4,587
Total inventories 12,575 12,110
Prepaid expenses and other
current assets 710 534
Total current assets 25,224 22,837
PROPERTY, PLANT AND EQUIPMENT,
at cost less accumulated
depreciation of $20,248
in 1998 and $17,357 in 1997 15,894 15,979
OTHER ASSETS
Intangible assets 506 334
Debt issuance costs 142 165
Deferred income taxes 566 566
Deferred charges 199 175
Total other assets 1,413 1,240
TOTAL ASSETS $42,531 $40,056
<FN>
The accompanying notes are an integral part of the financial
statements.
</TABLE>
<PAGE>
<TABLE>
SPECTRUM CONTROL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
DOLLAR AMOUNTS IN THOUSANDS
(UNAUDITED)
<CAPTION>
August 31, 1998 Nov.30, 1997
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Short-term debt $ -- $ 40
Accounts payable 2,397 3,302
Accrued salaries and wages 1,194 1,311
Accrued interest 48 45
Accrued federal and state
income taxes 145 289
Accrued other expenses 202 226
Current portion of long-term debt 830 743
Total current liabilities 4,816 5,956
LONG-TERM DEBT 2,937 3,330
DEFERRED INCOME TAXES 1,967 1,225
STOCKHOLDERS' EQUITY
Common stock, no par value,
authorized 25,000,000 shares,
issued and outstanding 10,957,008
shares in 1998 and 10,838,345
shares in 1997 14,388 13,977
Retained earnings 18,794 15,864
Foreign currency translation
adjustment (371) (296)
Total stockholders' equity 32,811 29,545
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $42,531 $40,056
<FN>
The accompanying notes are an integral part of the financial
statements.
</TABLE>
<PAGE>
<TABLE>
SPECTRUM CONTROL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
(Dollars in Thousands Except Per Share Data)
Three Months Ended Nine Months Ended
August 31 August 31
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net sales $14,023 $13,969 $43,854 $41,058
Cost of products sold 9,791 9,530 30,462 28,506
Gross margin 4,232 4,439 13,392 12,552
Selling, general and
administrative expense 2,731 2,940 8,615 8,588
Income from operations 1,501 1,499 4,777 3,964
Other income (expense)
Interest expense (54) (109) (165) (363)
Other income and expense,
net 48 80 82 80
(6) (29) (83) (283)
Income before provision
for income taxes 1,495 1,470 4,694 3,681
Provision for
income taxes 580 411 1,764 1,029
Net income $ 915 $ 1,059 $ 2,930 $2,652
Earnings per common share:
Basic $ 0.08 $ 0.10 $ 0.27 $ 0.25
Diluted $ 0.08 $ 0.10 $ 0.27 $ 0.24
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
SPECTRUM CONTROL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
DOLLAR AMOUNTS IN THOUSANDS
(UNAUDITED)
<CAPTION>
Nine Months Ended
August 31
1998 1997
<S> <C> <C>
NET CASH PROVIDED BY
OPERATING ACTIVITIES $6,721 $6,261
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of property, plant and
equipment (2,419) (2,230)
Payment for acquired business (1,159) --
Net cash used in investing
activities (3,578) (2,230)
CASH FLOWS FROM FINANCING
ACTIVITIES
Net repayment of short-term
debt (40) (3,278)
Repayment of long-term debt (306) (510)
Net proceeds from issuance
of common stock 411 197
Net cash provided by (used
in) financing activities 65 (3,591)
Effect Of Exchange Rate
Changes On Cash 14 17
Net Increase In Cash
And Cash Equivalents 3,222 457
Cash And Cash Equivalents,
Beginning Of Period 196 413
Cash And Cash Equivalents,
End Of Period $3,418 $ 870
Cash Paid During The Period For:
Interest $ 161 $ 356
Income taxes 1,101 645
<FN>
The accompanying notes are an integral part of the financial
statements.
</TABLE>
<PAGE>
SPECTRUM CONTROL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
August 31, 1998
The accompanying unaudited consolidated condensed 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 notes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, the accompanying
financial statements include all adjustments which are normal,
recurring and necessary to present fairly the results for the interim
periods. Operating results for interim periods are not necessarily
indicative of the results that may be expected for the year. For
further information, refer to the consolidated financial statements
and notes thereto included in the Spectrum Control, Inc. and
Subsidiaries annual report on Form 10-K for the fiscal year ended
November 30, 1997.
Note 1 - Principles of Consolidation
The consolidated condensed financial statements include the accounts
of Spectrum Control, Inc. and its Subsidiaries (the Company). To
facilitate timely reporting, the fiscal quarters of a foreign
subsidiary are based upon a fiscal year which ends October 31. All
significant intercompany accounts are eliminated upon consolidation.
Note 2 - Foreign Currency Translation
The assets and liabilities of the foreign subsidiary are translated
into U.S. dollars at current exchange rates. Revenue and expense
accounts of these operations are translated at average exchange rates
prevailing during the period. These translation adjustments are
accumulated in a separate component of stockholders' equity. Foreign
currency transaction gains and losses are included in determining net
income for the period in which the exchange rate changes.
Note 3 - Earnings Per Common Share
In the first quarter of fiscal 1998, the Company adopted Statement of
Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS
No. 128"). SFAS No. 128 requires, among other things, dual
presentation of basic and diluted earnings per share on the face of
the income statement. Under the new standard, basic earnings per
share is computed using only the weighted average number of common
shares outstanding during the period, while diluted earnings per
share is computed assuming the conversion of all dilutive common
stock equivalents, such as stock options.
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)
In accordance with SFAS No. 128, prior period per share amounts have
been revised to reflect the new computation and presentation.
<TABLE>
The following table sets forth the computation of basic and diluted earnings
per common share:
<CAPTION>
Three Months Ended Nine Months Ended
August 31 August 31
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Numerator for basic and
diluted earnings per
common share:
Net income $ 915,000 $ 1,059,000 $ 2,930,000 $ 2,652,000
Denominator for basic
earnings per common
share:
Weighted average
shares outstanding 10,951,175 10,806,696 10,902,259 10,785,133
Denominator for diluted
earnings per common
share:
Weighted average
shares outstanding 10,951,175 10,806,696 10,902,259 10,785,133
Effect of dilutive
stock options 87,781 89,299 127,235 68,345
11,038,956 10,895,995 11,029,494 10,853,478
Earnings per common
share
Basic $ 0.08 $ 0.10 $ 0.27 $ 0.25
Diluted $ 0.08 $ 0.10 $ 0.27 $ 0.24
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)
Note 4 - Acquisition
On April 22, 1998, the Company acquired substantially all of the
assets of Republic Electronics Corp., a manufacturer of subminiature
ceramic capacitors used in telecommunications and microwave (high
frequency) applications. The assets acquired included inventories,
equipment, tooling, manufacturing documentation, engineering
drawings, customer information, proprietary technology and know-how.
The aggregate purchase price of the acquired assets amounted to
$1,159,000, excluding possible future contingent payments. The
amount of the contingent payments will be determined based upon the
sales of the acquired product lines during the two years subsequent
to the acquisition date. The aggregate purchase price, which was
funded through available cash reserves, has been allocated to the
acquired assets based upon their respective fair market values. As a
result, intangible assets of $259,000 were recorded and are being
amortized ratably over a period of five years. The amount of
contingent payments, if any, will be allocated to intangible assets
and amortized ratably over the assets remaining life when the
contingent payments are determinable.
The acquisition was accounted for as a purchase and, accordingly, the
results of operations of the acquired business have been included in
the accompanying financial statements since the date of the
acquisition. The results of operations of the acquired business from
April 22, 1998 to August 31, 1998, however, are not material to the
Company's consolidated financial statements.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis may be understood more fully by
reference to the consolidated financial statements, notes to the
consolidated financial statements, and management's discussion and
analysis contained in the Spectrum Control, Inc. and Subsidiaries
annual report on Form 10-K for the fiscal year ended November 30,
1997.
General
Spectrum Control, Inc. and its Subsidiaries (the "Company") design,
manufacture and market a broad line of control products and systems.
The Company was founded in 1968 as a solutions-oriented company,
designing and manufacturing products to suppress or eliminate
electromagnetic interference ("EMI"). The Company has expanded its
core EMI filter technology into a complete line of interconnect
filter products (discrete filters, filtered arrays, and filtered
connectors). In recent years, the Company broadened its focus by
developing new lines of power products (commercial custom assemblies,
military/aerospace multisection assemblies, power entry modules, and
power line filters), microwave products (coaxial ceramic bandpass
filters, duplexers, and dielectric resonators), and specialty ceramic
products. The Company's products are used in virtually all
industries worldwide, including telecommunications, aerospace,
military, medical, computer, and industrial controls.
Forward-Looking Information
Management's Discussion and Analysis of Financial Condition and
Results of Operations includes certain forward-looking statements
which reflect management's current views with respect to future
operating performance, ongoing cash requirements, and the Year 2000
Issue. The words "believe", "expect", "anticipate" and similar
expressions identify forward-looking statements. These forward-
looking statements are subject to certain risks and uncertainties
which could cause actual results to differ materially from historical
results or those anticipated. Factors that could cause or contribute
to such differences include those discussed in "Risk Factors That May
Affect Future Results", as well as those discussed elsewhere herein.
Readers are cautioned not to place undue reliance on these forward-
looking statements.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
Results of Operations
<TABLE>
The following table sets forth certain financial data, as a percentage of
net sales, for the three months ended and nine months ended August 31, 1998
and 1997:
<CAPTION>
Three Months Ended Nine Months Ended
August 31 August 31
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of products sold 69.8 68.2 69.5 69.4
Gross margin 30.2 31.8 30.5 30.6
Selling, general and
administrative expense 19.5 21.1 19.6 20.9
Income from operations 10.7 10.7 10.9 9.7
Other income (expense)
Interest expense (0.4) (0.8) (0.4) (0.9)
Other income and expense, net 0.4 0.6 0.2 0.2
Income before provision
for income taxes 10.7 10.5 10.7 9.0
Provision for income taxes 4.2 2.9 4.0 2.5
Net income 6.5% 7.6% 6.7% 6.5%
</TABLE>
Third Quarter 1998 Versus Third Quarter 1997
Net Sales
Net sales were flat during the period, with consolidated net sales of
$14.0 million in the third quarter of 1998 and 1997. Shipments of
the Company's interconnect filter products decreased by $1.5 million
during the period. The decrease primarily reflects weak overall
market demand in the passive electronic components industry and sharp
inventory reductions by original equipment manufacturers and
distributors. This decrease was substantially offset by increased
shipments of the Company's power products.
Gross Margin
Gross margin was $4.2 million or 30.2% of sales in the third quarter
of 1998, compared to $4.4 million or 31.8% of sales in the third
quarter of 1997. The decrease in gross margin principally reflects
changes in sales mix among the Company's four major product families:
interconnect filter products, power products, microwave products, and
specialty ceramic components.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
Selling, General and Administrative Expense
Selling expense remained constant throughout the period, amounting to
$1.6 million in the third quarter of 1998 and 1997. General and
administrative expense was approximately $1.1 million in 1998, a decrease
of $250,000 from the comparable quarter of 1997. The decrease in general
and administrative expense principally reflects lower personnel costs and
reduced discretionary spending.
Other Income and Expense
Interest expense decreased by $55,000 during the period, from
$109,000 in 1997 to $54,000 in 1998. The decrease in interest
expense primarily reflects reduced bank indebtedness. Average
interest rates remained stable throughout the period.
Nine Months 1998 Versus Nine Months 1997
Net Sales
For the first nine months of fiscal 1998 net sales increased $2.8
million or 6.8%, with net sales of $43.9 million in 1998 and $41.1
million in 1997. The increase in sales primarily reflects additional
shipment volume of the Company's commercial custom assemblies which
consist of telecommunication racks, power supplies, industrial
controls, and other value added assemblies. Overall customer orders
received during the first three quarters of 1998 amounted to $44.8
million, compared to $45.2 million for the same period last year.
Gross Margin
As a percentage of sales, gross margin remained relatively constant
during the period at 30.5% in 1998 and 30.6% in 1997. As a result of
additional sales volume, gross margin increased to $13.4 million for
the first nine months of 1998, compared to $12.6 million for the
comparable period of 1997.
Selling, General and Administrative Expense
As a result of greater sales volume, selling expense increased during
the period. During the first nine months of fiscal 1998, selling
expense amounted to $4.9 million or 11.2% of sales, compared to $4.7
million or 11.5% of sales for the same period last year. General and
administrative expense was approximately $3.7 million in 1998 and
$3.9 million in 1997. As part of management's ongoing efforts to
reduce operating costs, various discretionary spending in 1998 has
been reduced or eliminated.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
Other Income and Expense
With the Company's continued debt reduction, interest expense
decreased by $198,000 during the period. Average interest rates were
stable throughout the period. During the first nine months of fiscal 1998,
the Company recognized $82,000 of other income from certain short-term
investments and patent licensing fees.
Income Taxes
The Company's effective income tax rate was 38.0% in 1998 and 28.0%
in 1997, compared to an applicable statutory income tax rate of
approximately 40.0%. Differences in the effective tax rate and
statutory tax rate primarily reflect decreases in the deferred tax
asset valuation allowance relating to certain net operating loss
carryforwards.
Risk Factors That May Affect Future Results
The Company's results of operations may be affected in the future by
a variety of factors including: competitive pricing pressures, new
product offerings by the Company and it's competitors, new technologies,
product cost changes, changes in the overall economic climate, availability
of raw materials, and product mix. In 1998, management expects
approximately 50.0% of the Company's sales will be to customers in the
telecommunication industry. Accordingly, any significant change in the
telecommunication industry's activity level would have a direct impact on
the Company's performance.
Liquidity, Capital Resources and Financial Condition
The Company has a $6.0 million line of credit with PNC Bank of Erie,
Pennsylvania (the "Bank"). The revolving credit line is
collateralized by substantially all of the Company's tangible and
intangible property, with interest rates on borrowings at or below
the Bank's prevailing prime rate. At August 31, 1998, there were no
borrowings outstanding under this financing arrangement. The current
line of credit agreement expires April 30, 2000.
The Company's wholly-owned foreign subsidiary maintains unsecured
Deutsche Mark lines of credit with several German financial
institutions aggregating $1.7 million (3.0 million DM). At August
31, 1998, there were no outstanding borrowings under these lines of
credit. Future borrowings, if any, under the lines of credit will
bear interest at rates below the prevailing prime rate and will be
payable upon demand.
The Company's liquidity continued to improve during the period. At
August 31, 1998, the Company had net working capital of $20.4
million, compared to $16.9 million at November 30, 1997. The
Company's current ratio also improved during the first nine months of
fiscal 1998, with current assets at 5.24 times current liabilities at
August 31, 1998, compared to 3.83 at November 30, 1997.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
During the first nine months of fiscal 1998, the Company's cash
expenditures for property, plant and equipment amounted to $2.4
million. These capital expenditures primarily related to
manufacturing equipment for the Company's new dielectric resonators
and bandpass filters product offerings and facility expansion at the
Company's Control Products Division. During the first three quarters
of fiscal 1998, the Company also repaid $346,000 of bank indebtedness.
Current financial resources, including working capital and existing
lines of credit, and anticipated funds from operations are expected
to be sufficient to meet cash requirements throughout 1998, including
scheduled long-term debt repayment and planned capital expenditures.
There can be no assurance, however, that unplanned capital replacement
or other future events will not require the Company to seek additional
debt or equity financing and if so required, that it will be available
on terms acceptable to the Company.
In April, 1998, the Company acquired substantially all of the assets
of Republic Electronics Corp., a manufacturer of subminiature ceramic
capacitors used in telecommunications and microwave (high frequency)
applications. The assets acquired included inventories, equipment,
tooling, manufacturing documentation, engineering drawings, customer
information, proprietary technology and know-how. The cash purchase
price of approximately $1.2 million was paid from available cash
resources.
The Company's operating cash flow was strong during the period, with
net cash provided by operations of $6.7 million in 1998 and $6.3
million in 1997. In 1997, the Company substantially completed its
planned reduction of short-term and long-term bank indebtedness. As
a result, the Company's cash position improved significantly during
the first nine months of 1998. At August 31, 1998, the Company held
$3.4 million of cash and cash equivalents, compared to $196,000 at
November 30, 1997.
Impact of Recently Issued Accounting Standards
In June 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 130, "Reporting and
Disclosures about Comprehensive Income" and No. 131, "Disclosures
about Segments of an Enterprise", which are effective for fiscal
years beginning after December 15, 1997. The Company is currently
evaluating the effects of these new standards.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
Impact of Year 2000 Issue
The Year 2000 Issue is the result of computer programs being written
using two digits rather than four to define the applicable year. As
a result, any of the Company's computer programs that have time-
sensitive software may recognize a date using "00" as the year 1900
rather than the year 2000. This could result in a system failure or
miscalculations causing disruptions of operations, including among
other things, a temporary inability to process transactions, prepare
invoices, or engage in similar normal business activities.
The Company has completed an assessment and determined that it will
have to modify or replace portions of its software so that its
computer systems will function properly with respect to dates in the
year 2000 and thereafter. The Company presently believes that with
modifications and replacement of existing software, the Year 2000
Issue can be mitigated. However, if such modifications and
replacements are not made, or are not completed timely, the Year 2000
Issue could have a material impact on the operations of the Company.
The Company's plan to resolve the Year 2000 Issue involves four
phases: assessment, remediation, testing, and implementation. To
date, the Company has fully completed its assessment of all material
systems that could be affected by the Year 2000 Issue. The completed
assessment indicated that most of the Company's significant information
technology systems could be affected. The assessment also indicated that
software used in certain manufacturing equipment (hereafter also referred
to as operating equipment) is also at risk. If not resolved on a timely
basis, these systems could hamper the Company's ability to manufacture
and ship product from which the Company derives a significant portion of
its revenues.
For its information technology exposures, to date, the Company is 80%
complete on the remediation phase for all material systems and
expects to complete software reprogramming and replacement no later
than December, 1998. After completing the reprogramming and
replacement of software, the Company's plans call for testing and
implementing its information technology systems. To date, the
Company has completed 50% of its testing and has implemented 50% of
its remediated systems. Completion of the testing phase is expected
by February, 1999, with all remediated systems fully implemented by
March, 1999.
With respect to operating equipment, the Company is 80% complete in
the remediation phase of the resolution process. Testing of this
equipment is currently 50% complete. Once testing is complete, the
operating equipment will be ready for immediate use. The Company
expects to complete its remediation efforts by December, 1998.
Testing and implementation of affected equipment is expected to be
completed by March, 1999.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
The Company has queried its important suppliers and vendors to assess
their Year 2000 readiness. To date, the Company is not aware of any
problems that would materially impact results of operations,
liquidity, or capital resources. However, the Company has no means
of ensuring that these suppliers and vendors will be Year 2000 ready.
The inability of those parties to complete their Year 2000 resolution
process could materially impact the Company.
The Company will utilize both internal and external resources to
reprogram, or replace, test, and implement the software and operating
equipment for Year 2000 modifications. Management anticipates that
its total year 2000 project costs will not be material.
The Company's plans to complete Year 2000 modifications are based on
management's best estimates, which were derived utilizing numerous
assumptions of future events, including the continued availability of
certain resources and other factors. Estimates on the status of
completion and the expected completion dates are based on hours
expended to date compared to total expected hours. However, there
can be no guarantee that these estimates will be achieved and actual
results could differ materially from those plans. Specific factors
that might cause such material differences include, but are not
limited to, the availability and cost of personnel training in this
area, the ability to locate and correct all relevant computer codes,
and similar uncertainties.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) None
(b) No reports on Form 8-K were filed during the quarter for
which this report is filed.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
SPECTRUM CONTROL, INC.
(Registrant)
Date: September 30, 1998 By: /s/ John P. Freeman
John P. Freeman, Vice President
and Chief Financial Officer
(Principal Accounting and
Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SPECTRUM CONTROL, INC. CONSOLIDATED BALANCE SHEET AT AUGUST 31, 1998
AND CONSOLIDATED STATEMENT OF INCOME FOR THE NINE MONTHS ENDED AUGUST 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO ITS FORM 10-Q FOR
THE QUARTER ENDED AUGUST 31, 1998
</LEGEND>
<CIK> 0000092769
<NAME> SPECTRUM CONTROL, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-END> AUG-31-1998
<CASH> 3,418
<SECURITIES> 0
<RECEIVABLES> 8,946
<ALLOWANCES> 425
<INVENTORY> 12,575
<CURRENT-ASSETS> 25,224
<PP&E> 36,142
<DEPRECIATION> 20,248
<TOTAL-ASSETS> 42,531
<CURRENT-LIABILITIES> 4,816
<BONDS> 2,937
0
0
<COMMON> 14,388
<OTHER-SE> 18,423
<TOTAL-LIABILITY-AND-EQUITY> 42,531
<SALES> 43,854
<TOTAL-REVENUES> 43,854
<CGS> 30,462
<TOTAL-COSTS> 30,462
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 165
<INCOME-PRETAX> 4,694
<INCOME-TAX> 1,764
<INCOME-CONTINUING> 2,930
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,930
<EPS-PRIMARY> 0.27
<EPS-DILUTED> 0.27
</TABLE>
