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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
For Quarter Ended Commission File Number
March 31, 1997 1-13906
BALLANTYNE OF OMAHA, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 47-0587703
- ------------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4350 McKinley Street, Omaha, Nebraska 68112
-----------------------------------------------------------
(Address of principal executive offices including zip code)
Registrant's telephone number, including area code:
(402) 453-4444
Indicate by check mark whether 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 No X
--- ---
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock as of the latest practicable date:
Class Outstanding as of April 30, 1997
- ------------------ --------------------------------
Common Stock, $.01 8,579,769
par value
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BALLANTYNE OF OMAHA, INC.
INDEX
Page No.
--------
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of
March 31, 1997 and December 31, 1996 2 - 3
Consolidated Statements of Income
for the Three Months
ended March 31, 1997 and 1996 4
Consolidated Statements of Cash Flows
for the Three Months ended
March 31, 1997 and 1996 5 - 6
Notes to Consolidated Financial
Statements 7 - 9
Item 2. Management's Discussion and Analysis
of Results of Operations and
Financial Condition 10 - 12
Part II. Other Information 13
Item 6. Exhibits and Reports on Form 8-K
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BALLANTYNE OF OMAHA, INC.
CONSOLIDATED BALANCE SHEETS
A S S E T S
March 31, December 31,
1997 1996
--------- ------------
(Unaudited)
Current
Cash $ 6,258,708 $ 6,042,593
Accounts receivable (less
allowance of $150,461
at March 31, 1997 and
$143,000 at December 31, 1996) 8,343,123 9,090,616
Inventories 13,670,586 11,901,123
Deferred income taxes 501,025 501,025
Other current assets 32,210 103,702
----------- -----------
Total current assets 28,805,652 27,639,059
Net property, plant and equipment 4,066,012 3,863,809
Goodwill, other intangibles and
other assets, net 940,800 959,352
----------- -----------
$33,812,464 $32,462,220
----------- -----------
See accompanying notes to consolidated financial statements
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BALLANTYNE OF OMAHA, INC.
CONSOLIDATED BALANCE SHEETS
L I A B I L I T I E S
March 31, December 31,
1997 1996
--------- ------------
(Unaudited)
Current
Intercompany payable $ 141,566 $ 93,140
Current installments of long-term debt - 308,107
Accounts payable 5,447,882 5,759,722
Accrued expenses 1,330,141 1,655,883
Income taxes 909,256 79,754
----------- -----------
Total current liabilities 7,828,845 7,896,606
Deferred income taxes 386,472 386,472
Long-term debt, excluding current portion - 150,195
S T O C K H O L D E R S ' E Q U I T Y
Preferred stock, par value
$.01 per share; authorized
1,000,000 shares - -
Common stock, par value
$.01 per share; authorized
10,000,000 shares; 8,569,769
shares outstanding 85,698 85,698
Additional paid-in capital 18,906,556 18,906,556
Retained earnings 6,604,893 5,036,693
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25,597,147 24,028,947
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$33,812,464 $32,462,220
----------- -----------
See accompanying notes to consolidated financial statements
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BALLANTYNE OF OMAHA, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended March 31,
1997 1996
--------- ------------
Net sales $14,724,814 $11,362,637
Cost of sales 10,368,767 8,174,415
----------- -----------
Gross profit 4,356,047 3,188,222
Total operating expense 1,940,768 1,573,680
----------- -----------
Income from operations 2,415,279 1,614,542
Net interest income (expense) 53,180 (186,105)
----------- -----------
Income before income taxes 2,468,459 1,428,437
Income taxes 900,259 566,263
----------- -----------
Net income 1,568,200 862,174
Net income per share 0.17 0.13
----------- -----------
Weighted average shares outstanding 9,340,702 6,880,731
----------- -----------
See accompanying notes to consolidated financial statements
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BALLANTYNE OF OMAHA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended March 31,
1997 1996
--------- ------------
Cash flows from operating
activities:
Net income $ 1,568,200 $ 862,174
Depreciation and amortization 188,172 144,801
Changes in assets and liabilities
Trade receivables 747,493 (1,578,462)
Other current assets 71,492 16,786
Inventories (1,769,463) (1,325,736)
Accounts payable (311,840) 1,632,728
Accrued expenses (325,742) (325,086)
Income taxes 829,502 (345,295)
Other assets (18,623) (18,468)
----------- ------------
Net cash provided by (used in)
operating activities 979,191 (936,558)
----------- ------------
Cash flows from
financing activities:
Change in loan from parent 48,426 (11,532)
Repayment of long-term debt (458,302) (170,413)
Net proceeds from revolving credit facility - 1,289,000
----------- ------------
Net cash provided by (used in)
financing activities (409,876) 1,107,055
----------- ------------
See accompanying notes to consolidated financial statements
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BALLANTYNE OF OMAHA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)
1997 1996
--------- ------------
Cash flows from investing
activities - Capital expenditures $ (353,200) $ (34,596)
----------- -----------
Net increase in cash 216,115 135,901
Cash at beginning of period 6,042,593 204,172
----------- ------------
Cash at end of period 6,258,708 340,073
----------- ------------
Supplemental disclosure of
cash flow information:
Interest payments 11,182 186,105
----------- ------------
Income tax payments (net) 70,757 908,500
----------- ------------
Other noncash activities in 1996 included approximately $194,200 of capital
lease obligations in exchange for equipment.
See accompanying notes to consolidated financial statements
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BALLANTYNE OF OMAHA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 1997
1. The Company
Ballantyne of Omaha Inc. ("Ballantyne" or the "Company") and its
subsidiaries Strong International Inc., Westrex and Flavor-Crisp of
America Inc., design, develop, manufacture and distribute commercial
motion picture projection equipment, follow spotlights and restaurant
equipment. The Company's products are distributed worldwide through a
domestic and international dealer network and are sold to major movie
exhibition companies, sports arenas, auditoriums, amusement parks,
special venues, restaurants, supermarkets and convenience food stores.
A majority (50.4%) of the Company's common stock is owned by Canrad of
Delaware Inc. ("Canrad"), which is an indirect wholly-owned subsidiary
of ARC International Corporation.
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. All significant intercompany balances
and transactions have been eliminated in consolidation. The consolidated
financial statements have been prepared in conformity with generally
accepted accounting principles and include all adjustments which are, in
the opinion of management, necessary for a fair presentation of the
results for the periods presented. All such adjustments are, in the
opinion of management, of a normal, recurring nature. While the Company
believes that the disclosures presented are adequate to make the
information not misleading, it is suggested that these consolidated
financial statements be read in connection with the consolidated financial
statements and related notes included in the Company's latest annual
report on Form 10-K.
2. Inventories
Inventories consist of the following:
March 31, December 31,
1997 1996
--------- ------------
Raw Material $10,220,419 $ 8,888,123
Work-in-process 1,981,160 2,184,945
Finished goods 1,469,007 828,055
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$13,670,586 $11,901,123
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3. Net Income Per Share
Net income per share is based on the weighted average number of common
shares outstanding. The effects of the assumed exercise of outstanding
stock options and warrants have been included in the income per share
calculation for the period that the shares were assumed issued using the
treasury stock method. Weighted average shares outstanding amounted to
9,340,702 for the three months ended March 31, 1997 and 6,880,731 for the
three months ended March 31, 1996. Prior to the IPO, the Company was a
wholly owned subsidiary of Canrad.
4. Stock Dividend
The Company's Board of Directors declared a 3-for-2 stock split of the
Company's common stock on January 29, 1997. The stock split was in the
form of a 50% common stock dividend payable March 5, 1997 to shareholders
of record on February 10, 1997. As a result of the stock split,
Ballantyne's outstanding shares of common stock increased to 8,569,769 at
March 31, 1997.
The Company's Board of Directors declared a 10% stock distribution on
January 23, 1996, which was issued on March 8, 1996, to shareholders of
record on February 9, 1996. This stock distribution resulted in the
issuance of 600,000 shares of common stock. The stock distribution is not
considered a distribution of earnings except to the extent that the Company
has retained earnings, but rather had the effect of increasing the number
of outstanding shares.
Per share data have been restated for these stock transactions as of the
earliest period presented.
5. Related Party Transactions
The Company is a party to a management agreement with Canrad, Inc.
Pursuant to the terms of the agreement, Canrad, Inc. provides certain
services to the Company. Such services include strategic planning,
acquisition assistance, procurement of capital and debt arrangements,
securing health and business insurance coverages, audit and income tax
planning and other matters. Fees charged for these services amounted to
$75,000 for the three month periods ended March 31, 1997 and 1996.
6. Subsequent Acquisition
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On April 30, 1997, the Company purchased certain net assets, primarily
accounts receivable, inventories and fixed assets of Xenotech ("Xenotech")
for a purchase price of approximately $1,000,000. The purchase, which was
effective as of April 1, 1997, was paid for through cash flow from
operations. The purchase price has been assigned to the assets acquired
based upon the fair market value of such assets. No goodwill was recorded
in connection with the acquisition. Xenotech produces, sells and rents a
complete line of stationary searchlights and computer operated lighting
systems for the motion picture production, television, live entertainment,
theme parks and architectural industries.
In addition, the Company entered into a five-year non-compete agreement
with Richard Hart, Xenotech's founder and sole proprietor. The agreement
is for a total of $250,000 payable by Ballantyne in equal installments of
$50,000. The present value of the noncompete payments has been included as
part of the total purchase price.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis relates to the accompanying
unaudited consolidated financial statements and presents a current
assessment of material changes in financial condition and results of
operations. A detailed discussion and analysis for the preceding years
appears in the Registrant's December 31, 1996 Annual Report to
Stockholders.
RESULTS OF OPERATIONS
Consolidated net sales of $14,724,814 for the three month period
ended March 31, 1997 represents an increase of 30% over the respective
prior year period. The following table shows comparative net sales by
industry segment for the Company's operations:
NET SALES (000'S OMITTED)
------------------------------
Three Months Ended
1997 1996
--------- -------
Theatre Products $14,112 $10,883
Restaurant Products 613 480
------- -------
$14,725 $11,363
------- -------
Net sales in the Theatre segment increased approximately $3,229,000
or 30% for the three months ended March 31, 1997 as compared to the
same period of the prior year. The increase is attributable to unit sales
increases of projectors, sound heads, platters and lenses which is
reflective of the continued planned industry-wide expansion of both the
domestic and world-wide theatre markets.
Net sales of Restaurant products increased by approximately $133,000
or 28%. The increase relates mainly to sales of pressure fryers.
Gross profit as a percentage of net sales increased to 30% for the
three months ended March 31, 1997 from 28% for the same three month period
of 1996. The increase is attributable to increase sales volume and
throughput in manufacturing.
Selling, general and administrative expenses increased approximately
$367,000 for
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the three month period ended March 31, 1997 as compared to the same
period of the prior year. As a percentage of net sales, such expenses
decreased to 13% for the quarter from 14% for the same quarter of the
prior year. The additional theatre sales have been generated without a
significant increase in selling costs, travel and the number of
employees.
Interest expense amounted to approximately $11,182 for the three
month period ended March 31, 1997 as compared to $186,100 for the same
three month period of 1996. The decrease in interest expense relates to
repayments of the Company's Industrial Revenue Bonds and having no
borrowings under the Norwest Bank revolving credit facility.
The actual income tax expense amounted to approximately 36% for the
current three month period as compared to a statutory rate of 34%. The
difference relates to the non-deductibility of certain intangible expenses,
principally goodwill, and the effects of state income taxes.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1997, the Company had no outstanding borrowings.
The principal reason for the decrease from December 31, 1996 relates to
the repayments of the Company's Industrial Revenue Bonds and a final
payment of $100,000 pursuant to a non-compete agreement with Optical
Radiation Corporation. At March 31, 1997, $9,500,000 was available for
reborrowing under a revolving credit facility with Norwest Bank. The
revolving credit facility will mature on August 30, 2000.
The Norwest facility agreement contains restrictive covenants which
include among other things, a prohibition on the payment of cash dividends
and requirements relating to current debt, debt service coverage and total
debt to tangible net worth ratios and tangible net worth. At March 31,
1997, the Company was in compliance with these covenants.
The Company's growth has been financed through a combination of cash
provided from operations, proceeds from equity offerings and borrowings
under a revolving credit facility with Norwest Bank. Cash provided from
operations increased approximately $1,900,000 from the same period of the
prior year. The increase relates mainly to higher sales while keeping
operating expenses under control.
The Company expects that it will have capital expenditures of
approximately $1,740,000 in 1997 which include manufacturing equipment
and expansion of its current facility.
The Company anticipates that internally generated funds and borrowings
under its operating facility will be sufficient to meet it's working
capital needs.
The Company does not engage in any currency hedging activities in
connection
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with its foreign operations and sales.
NEW ACCOUNTING PRONOUNCEMENT
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, "Earnings per share" which revises the calculation and
presentation provisions of Accounting Principals Board Opinion 15 and
related interpretations. Statement No. 128 is effective for the Company's
fiscal year ending December 31, 1997. Retroactive application will be
required. The Company believes the adoption statement 128 will not have
a significant effect on its reported earnings per share.
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PART II. Other Information
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
10.3.3 Employment Agreement dated November 20, 1996 between the Company
and Ray F. Boegner
11 Computation of net earnings per share (included in financial
statements)
27 Financial Data Schedule (for SEC information only)
(b) Reports on Form 8-K
No report on Form 8-K was filed during the three months ended March 31,
1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be filed on its behalf by the
undersigned, thereunto duly authorized.
BALLANTYNE OF OMAHA, INC.
Date: May 13, 1997 By: /s/ John Wilmers
-----------------------------------
John Wilmers, President
Chief Executive Officer,
and Director
Date: May 13, 1997 By: /s/ Brad French
-----------------------------------
Brad French, Secretary, Treasurer,
and Chief Financial Officer
<PAGE>
Exhibit 10.3.3.
EMPLOYMENT AGREEMENT
THIS AGREEMENT made on November 20, 1996, by and between Ballantyne of
Omaha, Inc., (Ballantyne), an Omaha corporation with offices at 4350 McKinley
Street, Omaha, Nebraska 68112 (the "Company") and Ray F. Boegner, an
individual residing at 2957 Falconberg, LaVerne, California 91750 (the
"Employee").
W I T N E S S E T H:
WHEREAS, the employee has been a key employee of Ballantyne for many
years, and in connection therewith entered into an employment agreement with
Ballantyne which was dated April 12, 1993.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties intending to be legally bound agree as follows:
1. TERMINATION OF PRIOR EMPLOYMENT AGREEMENT
The employment agreement between Ballantyne and the Employee,
dated April 12, 1993, is hereby terminated and shall be of no force and
effect.
2. EMPLOYMENT. The Company hereby employs the Employee and the
Employee hereby agrees to be employed by the Company upon the terms and
conditions hereinafter set forth. The Employee agrees to serve as Senior Vice
President of Ballantyne of Omaha, Inc.
3. DUTIES AND SERVICES.
(a) The Employee shall perform such services as may be assigned
to the Employee by the Chairman, President, or Board of Directors of
Ballantyne of Omaha, Inc.
(b) The Employee agrees to devote all of the Employee's time and
efforts to the performance of the Employee's duties as an employee of the
Company. The Employee shall not during the term hereof perform any services
for any person, firm or corporation, other than as approved in writing by the
Company. The prohibitions of this section shall apply to indirect activities
of the Employee as well as direct activities, and will accordingly prohibit
activities of persons with whom the Employee is "affiliated," as that term
is defined under the Securities Act of 1933, as amended, and the Rules and
Regulations thereunder.
(c) The Employee shall undertake such travel as may be necessary
or desirable to promote the business and affairs of the Company.
4. TERM.
(a) Except as otherwise hereinafter specifically provided, the
term of this employment agreement shall be for a period of five years from
the date hereof.
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(b) Either party may give notice to the other of its intention
to extend the term of this employment agreement within 120 days of its then
expiration date. In the event no such notice is given, the term described at
subparagraph (a) above shall automatically continue for an additional year,
and this subsection (b) shall be applicable again within such extension.
(c) This Agreement may be terminated by the Company, at any
time, at its discretion, upon the Employee's death, inability to perform or
incapacity (being defined as inability to perform normal activities and
functions for a period of one hundred eighty consecutive days), or for cause.
A termination for cause for purposes of this Agreement shall be that the
Employee (i) acted dishonestly or incompetently or engaged in willful
misconduct in the performance of the Employee's duties, (ii) breached a
fiduciary duty to the Company, (iii) intentionally failed to perform
reasonable assigned duties, (iv) willfully violated any law, rule or
regulation (other than minor traffic violations or similar offenses) or any
final cease and desist order, or (v) breached this Agreement and such breach
is not cured by Employee after ten (10) days written notice.
(d) This Agreement may be terminated by the Employee in the
event the Company breaches this Agreement and such breach is not cured by the
Company after 10 days notice.
(e) In the event the Company shall be sold, whether by a sale of
assets or stock, such sale will automatically trigger a simultaneous renewal
of the term of this Agreement as provided in paragraph 4(a) hereof, with the
first day of such renewal term being the day of closing of the sale, and this
Agreement shall remain in full force and effect.
5. COMPENSATION.
(a) BASIC COMPENSATION. For all of the services to be rendered
by the Employee in any capacity hereunder, the Company shall pay the Employee
salary at the annual rate of ninety-two thousand five hundred dollars.
Effective January 1, 1997 such annual salary will be increased to one hundred
five thousand dollars and the Company shall review such salary annually as of
January 1 during each subsequent year of this Agreement but in no event shall
the basic compensation in each subsequent year be less than the aforesaid
amount. The compensation paid hereunder to the Employee shall be paid in
accordance with the payroll practices conducted by the Company and shall be
subject to the customary withholding taxes and other employment taxes as
required with respect to compensation paid by a corporation to an employee.
(b) The Company agrees to furnish an automobile, selected by the
Company, for the use of the Employee. All expenses for the maintenance,
insurance and upkeep of the automobile shall be borne by the Company.
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6. EXPENSES AND VACATIONS.
(a) The Company shall reimburse the employee for all reasonable
and necessary travel and entertainment expenses incurred by the Employee in
the performance of the Employee's duties hereunder upon submission of
vouchers and receipts evidencing such expenses.
(b) The Employee shall be entitled to vacation during each
twelve months of employment in accordance with applicable Company policy. All
vacations shall be in addition to recognized national holidays. During all
vacations, the Employee's compensation and other benefits as stated herein
shall continue to be paid in full. Such vacations shall be taken only at
times convenient for the Company, as approved by the President.
7. OTHER BENEFITS. In addition to the compensation and to the
rights provided for elsewhere in this agreement, the employee shall be
entitled to participate in each plan of the Company now or hereafter adopted
for the benefit of executive employees of the Company, to the extent
permitted by such plans and by applicable law, including, but not limited to,
(i) profit sharing plan, (ii) medical expense insurance program, (iii)
pension plan, and (iv) incentive compensation plan.
8. DISCLOSURE OF INFORMATION. The Employee acknowledges that the
Company's trade secrets, as they may exist from time to time, including, but
not limited to, the Company's list of customers, processes, ideas, plans,
programs, procedures and know how, are valuable, special and unique assets of
the Company's business, access to and knowledge of which are essential to the
performance of the Employee's duties hereunder. The parties agree that the
Employee will not, during or after the term of the Employee's employment by
the Company, disclose such secrets to any person, firm, corporation,
association or other entity or use such trade secrets for any reason or
purpose whatsoever, nor shall the Employee make use of any such property for
the Employee's own purposes or for the benefit of any person, firm,
corporation or other entity (except the Company) under any circumstances
during or after the term of the Employee's employment. Nothing in this
section shall limit the Employee's right to carry the Employee's accumulated
career knowledge and professional skills to any future employment, subject to
the specific limitations of the foregoing provisions of this section and the
restrictive covenant elsewhere set forth herein.
9. RESTRICTIVE COVENANT. The Employee agrees that at the expiration
of this Agreement or at termination for any reason whatsoever, the Employee
shall not, for a period of three years thereafter, engage in any business, as
principal employee or otherwise, which competes with the Company in the
United States with respect to the manufacture, production, assembling,
distribution, or sale of products which are the same or similar or related to
use or function to those which are manufactured, assembled, sold, or being
developed by the Company at any time during the Employee's employment with
the Company, or directly or indirectly solicit or contact any present or past
(one having active contact within twelve months prior to termination of the
Employee's employment) distributor, dealer, customer, client, employee or
consultant of the Company (or the
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Company's subsidiaries or affiliates). In the event that this agreement is
not renewed and the Employee is terminated, the Employee will be entitled to
one week of severance for each year of employment. In addition all existing
insurance benefits shall remain in force during the severance period. It is
the desire and intent of the parties that the provision of this section shall
be enforced to the fullest extent permissible under the laws and public
policies applied in each jurisdiction in which enforcement is sought.
The parties hereto recognize and agree that in the event of the breach
of any provision of this covenant, there is not a remedy at law adequate to
protect the rights and interest of the Company set forth herein, and the
parties therefor agree that the Company shall have the right to an injunction
enjoining the Employee from violating the provisions of this section. Nothing
herein shall be construed as prohibiting the Company from pursuing any other
remedies available for such breach or threatened breach, including the
recovery of damages from the Employee. In the event that any restriction
contained in this covenant is deemed by any court to be void because it is
for an excessive period of time or restricts the Employee from engaging in a
business competing with the Company in an excessive geographical area, it is
agreed by the parties that said court shall have the right to decrease the
time period or geographical area covered by such restriction to a time period
and/or geographical area which is not excessive.
It is understood and agreed that in the event the Company terminates the
Employee without cause or if the Company breeches this Agreement and does not
cure said breech as provided in paragraph 3(d), the provisions of paragraph 9
are null and void.
10. INVENTIONS AND DISCOVERIES. The Employee hereby sells,
transfers and assigns to the Company or to any person or entity designated by
the Company all of the entire right, title and interest of the Employee in
and to all inventions, ideas, disclosures and improvements, whether patented
or unpatented, and copyrightable material made or conceived by the Employee,
solely or jointly, during the term hereof which relate to the products and
services provided by the Company or which otherwise relate or pertain to the
business, functions or operations of the Company. The Employee agrees to
communicate promptly and to disclose to the Company in such form as the
Employee may be required to do so all information, details and data
pertaining to such inventions, ideas, disclosures and improvements and to
execute and deliver to the Company such formal transfers and assignments and
such other papers and documents as may be required of the Employee to permit
the Company or any person or entity designated by the Company to file and
prosecute the patent applications and, as to copyrightable material, to
obtain copyrights thereof.
11. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by certified mail,
return receipt requested, to the Employee's residence, in the case of the
Employee, or to the Company, at the principal offices of Ballantyne of Omaha,
Inc., attention of the President.
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12. CONSTRUCTION OF AGREEMENT. This Agreement is intended to be
construed and enforced in accordance with the laws of the State of Nebraska
and without regard to or aid of any presumption or other rule requiring
construction against the party drawing or causing this Agreement to be drawn.
13. COMMENCEMENT OF ACTIONS OR PROCEEDINGS. Any action or
proceeding brought by a party hereto against another and arising out of the
Agreement or any breach thereof, may be commenced by the service of process
in the same manner as a notice may be served under this Agreement.
14. NON-WAIVER. No provision of this agreement shall be deemed to
have been waived except if such waiver is contained in a notice given to the
party claiming such waiver has occurred and no such waiver shall be deemed to
be a waiver of any other or further similar or dissimilar obligation or
liability of the party in whose favor the waiver was given.
15. ILLEGALITY. If any provision or provisions hereof (or any part
thereof) or the application thereof to any particular facts or circumstances
shall be illegal and unenforceable by reason of any statute or rule of law,
the remaining provisions (or parts thereof) of this Agreement or the
application of the particular provision or provisions (or parts thereof) to
the other facts or circumstances shall not be affected thereby and shall
remain in full force and effect, it being the intention by this section to
make clear the agreement of the parties that this Agreement shall be enforced
insofar as it may be enforced consistent with law.
16. HEADINGS. The headings of the sections herein are for
convenience only and are not part of this Agreement and shall not affect the
interpretation thereof.
17. ENTIRE AGREEMENT. This Agreement contains the entire agreement
of the parties. All prior agreements or understandings are merged herein. It
may not be changed orally, but only by an agreement in writing signed by the
party against whom enforcement of any waiver, change, modification, extension
or discharge is sought.
18. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon,
and shall inure to the benefit of, the successors and assigns of the Company,
whether by merger, consolidation, sale or lease of assets, or otherwise.
19. DEFINITION AND GENDER. All terms used herein shall have their
defined meaning, unless the context clearly indicates otherwise. Pronouns for
defined terms shall be construed as masculine, feminine, or neuter, or in the
singular or plural, as the sense requires, and to include any and all
successors and substitutions therefor.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date and year first above written.
By: /s/ Ronald H. Echtenkamp
---------------------------------------
Ronald H. Echtenkamp
President and Chief Executive Officer
/s/ Ray F. Boegner
---------------------------------------
Ray F. Boegner
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10Q
DATED MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 6,258,708
<SECURITIES> 0
<RECEIVABLES> 8,493,584
<ALLOWANCES> 150,461
<INVENTORY> 13,670,586
<CURRENT-ASSETS> 28,805,652
<PP&E> 6,830,517
<DEPRECIATION> 2,764,505
<TOTAL-ASSETS> 33,812,464
<CURRENT-LIABILITIES> 7,828,845
<BONDS> 0
0
0
<COMMON> 85,698
<OTHER-SE> 25,511,449
<TOTAL-LIABILITY-AND-EQUITY> 33,812,464
<SALES> 14,724,814
<TOTAL-REVENUES> 14,724,814
<CGS> 10,368,767
<TOTAL-COSTS> 10,368,767
<OTHER-EXPENSES> 1,931,768
<LOSS-PROVISION> 9,000
<INTEREST-EXPENSE> 11,182
<INCOME-PRETAX> 2,468,459
<INCOME-TAX> 900,259
<INCOME-CONTINUING> 1,568,200
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,568,200
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
</TABLE>
