<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
_X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
------------------------------
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 0-3905
---------
TRANSMATION, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
OHIO 16-0874418
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10 Vantage Point Drive, Rochester, NY 14624
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 716-352-7777
------------------------
- -------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report
Indicate by check mark [X] whether the registrant, (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No ___
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Number of Shares Outstanding Date
- ----- ---------------------------- ----
Common 5,717,534 October 31,1997
TOTAL PAGES - 19
<PAGE> 2
Part I
FINANCIAL INFORMATION
---------------------
Item 1. Financial Statements
- -----------------------------
TRANSMATION, INC.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
Sept. 30, March 31,
ASSETS: 1997 1997
------------ ------------
<S> <C> <C>
Current Assets:
Cash $ 227,176 $ 758,215
Accounts Receivable, less allowance
for doubtful accounts of $395,100 at
September 30, 1997, and $436,000 at
March 31, 1997 14,541,104 6,773,669
Inventories 11,392,588 7,790,166
Prepaid Expenses and Deferred Charges 1,844,898 956,235
Deferred Tax Assets 394,402 394,402
------------ ------------
Current Assets 28,400,168 16,672,687
Properties, at cost, less accumulated
Depreciation 7,829,590 2,355,757
Deferred Charges 228,074 118,214
Deferred Income Taxes 226,352 226,352
Other Assets 247,913 537,790
Goodwill, less accum. Amortization of $772,932
at 9/30/97 and $313,600 at 3/31/97 17,551,355 5,947,558
------------ ------------
$ 54,483,452 $ 25,858,358
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities
Notes Payable $ 2,500,000 $ 600,000
Current Portion of Long Term Debt 1,500,000
Accounts Payable 5,839,283 3,596,365
Accrued Payrolls, Commissions & Other 2,999,656 2,008,698
Income Taxes Payable 324,376 689,461
------------ ------------
Current Liabilities 13,163,315 6,894,524
Long-Term Debt 27,537,493 6,000,000
Deferred Compensation 555,741 594,026
------------ ------------
41,256,549 13,488,550
------------ ------------
Commitments and Contingent Liabilities
Stockholders' Equity:
Common Stock, par value $.50 per share -
Authorized - 15,000,000 shares - issued
and outstanding - 5,717,534 at Sept. 30,
1997, and 5,652,824 at March 31, 1997 2,858,767 1,413,206
Capital in Excess of Par Value 2,001,651 3,121,746
Accumulated Translation Adjustment (105,278) (130,532)
Retained Earnings 8,471,763 7,965,388
------------ ------------
13,226,903 12,369,808
------------ ------------
$ 54,483,452 $ 25,858,358
============ ============
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2
<PAGE> 3
TRANSMATION, INC.
CONSOLIDATED STATEMENT OF INCOME
UNAUDITED
<TABLE>
<CAPTION>
7/1 - 7/1 - 4/1 - 4/1 -
9/30/97 9/30/96 9/30/97 9/30/96
-------------------------------- -------------------------------
<S> <C> <C> <C> <C>
Net Sales $19,612,705 $11,211,991 $38,725,787 $22,259,608
-------------------------------- -------------------------------
Costs and Expenses:
Cost of Product Sold 13,380,360 6,804,455 26,456,181 13,537,911
Selling & Admin. Expenses 4,686,378 3,292,452 9,352,112 6,513,580
Research & Develop. Costs 416,958 391,592 816,365 786,990
Interest Expense 703,506 159,775 1,291,804 312,236
-------------------------------- -------------------------------
19,187,202 10,648,274 37,916,462 21,150,717
-------------------------------- -------------------------------
Income Before Taxes 425,503 563,717 809,325 1,108,891
Provision for Income Taxes
State and Federal 160,750 247,935 302,950 489,235
-------------------------------- -------------------------------
Net Income 264,753 315,782 506,375 619,656
Retained Earnings at
Beginning of Period 8,207,010 6,209,526 7,965,388 5,905,652
-------------------------------- -------------------------------
Retained Earnings at
End of Period $8,471,763 $6,525,308 $8,471,763 $6,525,308
================================ ===============================
Net Income Per Share $0.04 $0.06 $0.08 $0.11
================================ ===============================
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE> 4
TRANSMATION, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
UNAUDITED
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------- -----------------------------
7/1/97 - 7/1/96 - 4/1/97 - 4/1/96 -
9/30/97 9/30/96 9/30/97 9/30/96
------------------------- -----------------------------
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities
Net Income $264,753 $315,782 $506,375 $619,656
Items Not Requiring (Providing) Cash
Included in Income
Depreciation and Amortization 710,674 252,778 1,386,479 489,064
Provision for Losses on Accounts Receivable 26,000 44,000 (40,900) 93,000
Other Assets (9,067) 9,294 289,877 9,403
(Increase)Decrease in Accounts Receivable (541,679) 664,701 (881,235) 343,964
Decrease(Increase) in Inventories (7,405) (138,102) (1,009,940) 79,397
(Increase) in Prepaid Expenses &
Deferred Charges (792,952) (587,286) (838,474) (327,083)
(Decrease)Increase in Accounts Payable (619,511) 54,109 (1,543,289) (650,422)
Increase(Decrease) in Accrued Payrolls, Commissions
and Other Liabilities 56,351 36,648 67,013 (276,851)
Increase(Decrease) in Income Taxes Payable 162,404 62,143 (365,085) (19,626)
(Decrease) in Deferred Compensation (19,142) (22,327) (38,285) (45,249)
------------------------- -----------------------------
Net Cash Provided(used) by Operating Activities (769,574) 691,740 (2,467,464) 315,253
------------------------- -----------------------------
Cash Flows from Investing Activities:
Purchase of EIL Instruments, Inc. (22,000,000)
Purchase of Altek Industries Corp 4,405 (6,723,888)
Purchases of Properties (148,401) (109,667) (1,351,788) (170,094)
------------------------- -----------------------------
Net Cash (used in) Investing Activities (148,401) (105,262) (23,351,788) (6,893,982)
------------------------- -----------------------------
Cash Flows from Financing Activities:
Increase in Notes Payable & Current Portion of LTD 699,216 3,400,000 1,700,000
Exercise of Stock Options & Warrants 98,311 111,086 325,466 219,490
Stock Issued - Altek Purchase 612,500
Increase(Decrease) in Long-Term Debt 50,000 (879,349) 21,537,493 2,669,459
Stock Payable - Former Altek Owners 1,225,000
------------------------- -----------------------------
Net Cash Provided by Financing Activities 847,527 (768,263) 25,262,959 6,426,449
------------------------- -----------------------------
Effect of Exchange Rate Changes on Cash 21,959 379 25,254 (16,230)
------------------------- -----------------------------
Net Increase(Decrease) in Cash (48,489) (181,406) (531,039) (168,510)
Cash at Beginning of Period 275,665 216,942 758,215 204,046
------------------------- -----------------------------
Cash at End of Period $227,176 $35,536 $227,176 $35,536
========================= =============================
Cash Paid for Interest and Income Taxes is as follows:
Interest Paid $631,594 $63,679 $775,573 $231,022
Taxes Paid None $164,055 $682,715 $469,245
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE> 5
TRANSMATION, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Number of
Shares of $.50
Par Value Common Stock Capital Accumulated
Common Stock Issued and in Excess of Retained Translation
Outstanding Outstanding Par Value Earnings Adjustment
----------------- ----------------- ------------------ ----------------- ----------------
<S> <C> <C> <C> <C> <C>
Balance, March 31, 1995 2,380,640 $1,190,320 $849,829 $4,670,929 ($109,513)
Issuance of Stock 71,306 35,653 274,754
Currency Translation Activity 15,694
Net Income 1,234,723
----------------- ----------------- ------------------ ----------------- ----------------
Balance, March 31, 1996 2,451,946 1,225,973 1,124,583 5,905,652 (93,819)
Issuance of Stock 374,466 187,233 1,997,163
Currency Translation Activity (36,713)
Net Income 2,059,736
----------------- ----------------- ------------------ ----------------- ----------------
Balance, March 31, 1997 2,826,412 1,413,206 3,121,746 7,965,388 ($130,532)
Issuance of Stock 37,430 18,715 306,751
Two for One Stock Split 2,853,692 1,426,846 (1,426,846)
Currency Translation Activity 25,254
Net Income 506,375
----------------- ----------------- ------------------ ----------------- ----------------
Balance, Sept. 30, 1997 5,717,534 $2,858,767 $2,001,651 $8,471,763 ($105,278)
================= ================= ================== ================= ================
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE> 6
Note 1 - Borrowings
- -------------------
Notes payable consists of amounts payable to the former owners of Altek
Industries Corp. resulting from the purchase of Altek by the Company in April
1996. Interest on this note is payable at the rate of 8%.
The Company has a $32,000,000 Revolving Credit and Term Loan agreement with
banks. At September 30, 1997, $15,000,000 is borrowed under a term loan. The
term loan, dated April 4, 1997, extending through January 1, 2003, amortizes
over 21 consecutive quarterly installments commencing January 1, 1998. Interest
is payable on a formula basis, at the Company's option, at rates above prime or
above LIBOR determined on the basis of Company performance as determined by its
leverage ratio. On September 30, 1997 interest to be paid under the Term Loan
was at 2.50% above LIBOR or 1.00% above the bank's prime lending rate. At
September 30, 1997 $14,037,493 was borrowed under the Revolving Credit portion
of the Company's credit facility. The term of the Revolving Credit facility,
dated April 4, 1997, extends through January 4, 2001. Interest is payable under
the revolving credit facility on a formula basis, at the Company's option, at
rates above prime or above LIBOR determined on their basis of company
performance as determined by its leverage ratio. On September 30, 1997 interest
to be paid under the Revolving Credit Agreement was at 2.25% above LIBOR or .75%
above the bank's prime lending rate.
The Revolving Credit and Term Loan agreement contains, among other provision,
restrictions on capital expenditures, cash catalog expenditures, prohibitions
against dividend payments and fiscal quarterly losses, and a requirement to
maintain adjusted leverage ratios as defined.
Additionally, the Company has pledged its personal property and fixtures,
including inventory and equipment, and its accounts receivable as collateral
security for the loan. Further, the Company has agreed to pay to the lenders a
fee in the amount equal to 1/4% of the unused portion of the total revolving
credit available. The fee is payable quarterly. The Company also agreed to pay a
closing fee in the amount of $80,000 and an agency fee in the amount of $45,000
in conjunction with the Revolving Credit and Term Loan facility.
The Company is in compliance with provisions of its loan agreement or has
received a waiver at September 30, 1997.
6
<PAGE> 7
Note 2 - Inventories
The major classifications of inventory are as follows:
<TABLE>
<CAPTION>
Sept. 30, Sept. 30,
1997 1996
---- ----
<S> <C> <C>
Raw Materials and Purchased Parts $ 1,977,832 $2,172,317
Work in Process 730,161 746,445
Finished Products 9,644,964 4,912,659
------------ ----------
12,352,957 7,832,421
Less Inventory Reserves (960,369) (579,122)
------------ ----------
$ 11,392,588 $7,253,299
============ ==========
</TABLE>
Note 3 - Net Income Per Share
- -----------------------------
The net income per share amounts in 1997 and 1996 were computed by dividing the
net income by the average number of shares actually outstanding plus common
equivalent shares resulting from the assumed conversion of dilutive stock
options and warrants. Common and common equivalent shares averaged 6,261,904 in
1997 and 5,711,794 in 1996.
The Company will adopt provisions of Financial Accounting Standards ("FAS") 128,
"Earnings Per Share" effective for financial statements issued for periods
ending after December 15, 1997; earlier application is not permitted. FAS 128
requires dual presentation of basic and diluted EPS on the face of the income
statement and requires a reconciliation of the numerator and denominator of the
basic EPS computation to the numerator and denominator of the diluted EPS
calculation. Basic EPS excludes the effect of common stock equivalents and is
computed by dividing income available to common shareholders by the weighted
average common shares outstanding for the period. Diluted EPS reflects the
potential dilution that could result if securities or other instruments to issue
common stock were exercised or converted into common stock.
Proforma earnings per share computed in accordance with FAS 128 is presented
below:
<TABLE>
<CAPTION>
For 3 months ended For 6 months ended
-------------------- -------------------
9/30/97 6/30/96 9/30/97 9/30/96
------- ------- ------- -------
<S> <C> <C> <C> <C>
Basic EPS $.05 $.06 $.09 $.11
Diluted EPS $.04 $.06 $.08 $.11
</TABLE>
7
<PAGE> 8
The directors of the Corporation voted a 2 for 1 stock split in the form of a
stock dividend which was paid on July 22, 1997 to shareholders of record July 1,
1997. The above per earnings per share amounts have been adjusted to reflect the
effect of such split.
Item 2.
- -------
Management's Discussion and Analysis of Financial Condition and Results of
- --------------------------------------------------------------------------
Operations
- ----------
On April 4, 1997, Transmation, Inc. acquired certain assets and business of the
former E.I.L. Instruments, Inc. for $22,000,000 cash and the value of certain
defined assumed liabilities. The cash required for the transaction was obtained
from funds available under a $32,000,000 Revolving Credit and Term Loan
Agreement with banks.
Sales increases during the second quarter and first half resulted primarily from
the acquisition of E.I.L. Instruments, Inc. Sales in the Company's Altek
subsidiary were on plan for the quarter and through September 30, 1997. Sales in
the Company's Instrument Division were below plan for the second quarter and the
Company has refocused its sales plan to help correct this problem during the
balance of the current fiscal year.
Financial Condition
- -------------------
The Company's primary sources of liquidity and capital are funds provided
through its borrowing agreement with banks, its profitability and management of
its balance sheet.
The Company's accounts receivable balance increased by $515,700 in the quarter.
Additionally, the Company reduced its balance of accounts payable to vendors by
$619,500, however accrued liabilities increased by $757,500 in the quarter. The
primary source of funds, in addition to the non-cash expenses of depreciation
and amortization, was additional bank borrowings. The Company will strive to
improve its cash flows and reduce bank borrowings from current levels during the
balance of the current fiscal year through increased profitability and relative
reductions in both accounts receivable and inventory balances and by increasing
its trade payables.
Results of Operations
- ---------------------
Comparison of July 1, 1997 - September 30, 1997
- -----------------------------------------------
to
July 1, 1996 - September 30, 1996
---------------------------------
Sales increased to $19,612,705 from $11,211,991, an increase of 75% in the
quarter ended September 30, 1997 compared to September 30, 1996. This increase
resulted from the acquisition of E.I.L. Instruments in April of 1997.
8
<PAGE> 9
Cost of Product Sold in the quarter ended September 30, 1997 totaled 68.2% of
sales compared to 60.7% in the same quarter last year. The increased percentage
in 1997 is the result of proportionately more sales of lower margin distribution
and service business in 1997 than in 1996 and resulted from Transmation's
purchase of E.I.L. Instruments on April 4, 1997.
Interest expense totaled $703,506 in the quarter ended September 30, 1997
compared to $159,775 in the quarter ended September 30, 1996. The increase is
the result of additional borrowings in 1997 used to purchase E.I.L. Instruments.
Selling and administrative expenses increased by 42% in 1997 compared to 1996.
This increase is the result of an increase in the number of sales personnel in
1997 compared to 1996 as the result of the Company's E.I.L. Instruments'
acquisition.
Comparison of April 1, 1997 - September 30, 1997
- ------------------------------------------------
to
April 1, 1996 - September 30, 1996
----------------------------------
Sales increased to $38,725,787 from $22,259,608, an increase of 74% in the six
months ended September 30, 1997 compared to the same period ended September 30,
1996. This increase resulted from the acquisition of E.I.L. Instruments in April
1997.
Cost of Product Sold in the six months ended September 30, 1997 totaled 68.3%
compared to 60.8% in the same period last year. The increased percentage in 1997
is the result of proportionately more sales of lower margin distribution and
service business in 1997 than in 1996 and resulted from Transmation's purchase
of E.I.L. Instruments in April 1997.
Interest expense totaled $1,291,804 for the six months ended September 30, 1997
compared to $312,236 for the same period in 1996. The increase is the result of
additional borrowings in 1997 used to purchase E.I.L. Instruments.
Selling and administrative expenses increased by 43.5% in 1997 compared to 1996.
This increase is the result of an increase in the number of sales personnel in
1997 compared to 1996 as the result of the Company's acquisition of E.I.L.
Instruments.
9
<PAGE> 10
PART II
-------
OTHER INFORMATION
-----------------
Item 4. Submission of Matters to a Vote of Security Holders.
- -------------------------------------------------------------
On August 19, 1997 shareholders of the Company approved the following
proposals at the Company's Annual Meeting:
Proposal 1: To elect Directors to serve until the 2000 Annual Meeting:
<TABLE>
<CAPTION>
Authority
For Withheld
--- --------
<S> <C> <C>
Cornelius J. Murphy 2,615,382 16,029
Dr. Harvey J. Palmer 2,615,582 15,829
Arthur M. Richardson 2,615,442 15,969
</TABLE>
Messrs. Chiarella, Klimasewski, Schulp, Oberlies and Garelick, together
with Mrs. Hessler, also directors, did not stand for re-election to
Transmation's Board of Directors in 1997.
Proposal 2: To approve and ratify the proposed amendment to the
Transmation, Inc. Employees' Stock Purchase Plan, which reduces the
total number of shares available for purchase thereunder from 450,000
to 100,000:
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C>
2,525,072 61,706 5,080
</TABLE>
Proposal 3: To approve and ratify the proposed amendment to the
Transmation, Inc. Amended and Restated 1993 Stock Option Plan, which
increases the total number of shares available for option grants
thereunder from 600,000 to 950,000:
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C>
1,886,673 104,615 5,680
</TABLE>
10
<PAGE> 11
Proposal 4: To approve and ratify the selection of Price Waterhouse LLP
as the Company's independent auditors for the fiscal year ending March
31, 1998.
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C>
2,629,744 532 1,035
</TABLE>
Item 6. Exhibits and Reports on Form 8-K.
- ------------------------------------------
a. See Index to Exhibits.
b. Reports on Form 8-K.
No reports on Form 8-K have been filed during the quarter for which
this report is filed.
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.
TRANSMATION, INC.
Date November 12, 1997 /s/ Robert G. Klimasewski
----------------------- ----------------------------------
Robert G. Klimasewski
President
Date November 12, 1997 /s/ John A. Misiaszek
----------------------- ----------------------------------
John A. Misiaszek
Vice President, Finance
11
<PAGE> 12
INDEX TO EXHIBITS
(2) Plan of acquisition, reorganization, arrangement, liquidation or succession
Not applicable.
(3) Articles of Incorporation and By Laws
(i) The Articles of Incorporation, as amended, are incorporated herein by
reference to Exhibit 4(a) to the Registrant's Registration Statement
on Form S-8 (Registration No. 33-61665) filed on August 8, 1995.
Certificate of Amendment thereto is incorporated herein by reference
to Exhibit I to the Registrant's Form 10-Q for the quarter ended
September 30, 1996.
(ii) By-laws, as amended through August 18, 1987, are incorporated herein
by reference to Exhibit (3) to the Registrant's Form 10-K for the year
ended March 31, 1988.
(4) Instruments defining the rights of security holders, including indentures
(a) Revolving Credit Agreement between the Registrant and Manufacturers
and Traders Trust Company is incorporated herein by reference to
Exhibit 1 to the Registrant's Form 10-Q for the fiscal quarter ended
September 30, 1994. Agreement and Amendment No. 1 thereto is
incorporated herein by reference to Exhibit 4(c) to the Registrant's
Form 10-Q for the fiscal quarter ended September 30, 1995. Agreement
and Amendment No. 2 thereto is incorporated herein by reference to
Exhibit 4(d) to the Registrant's Form 10Q-A for the fiscal quarter
ended December 31, 1995. Agreement and Amendment No. 2 thereto is
incorporated herein by reference to Exhibit 4(e) to the Registrant's
Form 10-Q for the fiscal quarter ended December 31, 1996.
(b) Revolving Credit Agreement dated April 4, 1997 among Transmation, Inc.
and Manufacturer's and Traders Trust Company and State Street Bank and
Trust Company is incorporated herein by reference to Exhibit 4(c) to
the Registrant's Form 8-K dated April 18, 1997.
(10) Material Contracts
The documents listed under (4) are incorporated herein by reference.
(a) Amendment No. 1 to Transmation, Inc. Amended and Restated Directors'
Warrant Plan is incorporated herein by reference to Exhibit II to the
Registrant's Form 10-Q for the quarter ended September 30, 1996.
12
<PAGE> 13
(b) Amendments No. 1 and No. 2 to the Transmation, Inc. Amended and
Restated 1993 Stock Option Plan is incorporated herein by reference
to Exhibits III and IV to the Registrant's Form 10-Q for the quarter
ended September 30, 1996.
(c) Amendment No. 2 to the Transmation, Inc. Employees' Stock Purchase
Plan is incorporated herein by reference to Exhibit V to the
Registrant's Form 10-Q for the quarter ended September 30, 1996.
(d) Stock Purchase Agreement dated March 28, 1996 among the Registrant,
E. Lee Garelick and James N. Wurtz is incorporated herein by
reference to Exhibit 2(a) to the Registrant's Form 8-K dated April 3,
1996.
(e) Asset Purchase Agreement dated April 4, 1997 between Transmation,
Inc. and E.I.L. Instruments, Inc. is incorporated herein by reference
to Exhibit 2(a) to the Registrant's Form 8-K dated April 18, 1997.
(f) Amendment No. 3 to the Transmation, Inc. Directors' Stock Plan is
incorporated herein by reference to Exhibit 10(a) to the Registrant's
Form 10-K for the year ended March 31, 1997.
(g) Amendment No. 1 to Stock Purchase Agreement dated February 5, 1997
among the Registrant, E. Lee Garelick and James N. Wurtz is
incorporated herein by reference to Exhibit 10(b) to the Registrant's
Form 10-K for the year ended March 31, 1997.
(h) Amendment No. 4 to the Transmation, Inc. Directors' Stock Plan is
incorporated herein by reference to Exhibit 10(h) to the Registrant's
Form 10-Q for the quarter ended June 30, 1997.
(i) Amendment No. 2 to the Transmation, Inc. Amended and Restated
Directors' Warrant Plan is incorporated herein by reference to
Exhibit 10(i) to the Registrant's Form 10-Q for the quarter ended
June 30, 1997.
*(j) Amendments No. 3 and No. 4 to the Transmation, Inc. Amended and
Restated 1993 Stock Option Plan are included herein as Exhibit 10(j)
at pages 15 and 16 of this report.
*(k) Amendment No. 3 to the Transmation, Inc. Employees' Stock Purchase
Plan is included herein as Exhibit 10(k) at page 17 of this report.
(11) Statement re Computation of Per Share Earnings Computation can be clearly
determined from Note 3 to the Financial Statements included herein at
Item 1.
13
<PAGE> 14
(15) Letter re unaudited interim financial information
Not applicable.
(18) Letter re change in accounting principles
Not applicable.
(19) Report furnished to security holders
Not applicable.
(22) Published report regarding matters submitted to vote of security holders
Not applicable.
(23) Consents of experts and counsel
Not applicable.
(24) Power of attorney
Not applicable.
*(27) Financial Data Schedule
The Financial Data Schedule is included herein as Exhibit 27.
(99) Additional Exhibits
Not applicable.
- -----------------
* Exhibit filed with this Report
14
<PAGE> 1
EXHIBIT 10(j)
AMENDMENT NO. 3
TO THE
TRANSMATION, INC.
AMENDED AND RESTATED 1993 STOCK OPTION PLAN
EFFECTIVE FEBRUARY 17, 1997
(subject to subsequent ratification by the Shareholders)
WHEREAS, Transmation, Inc., an Ohio corporation (the "Company"), has
established the Transmation, Inc. Amended and Restated 1993 Stock Option Plan,
as heretofore amended (the "Plan"); and
WHEREAS, deeming it appropriate and advisable so to do, and pursuant to
Section 19 of the Plan, the Board of Directors of the Company has authorized,
approved and adopted the further amendment to the Plan set forth herein;
NOW, THEREFORE, the Plan is hereby amended, effective February 17,
1997, as set forth below; provided, however, that if the shareholders of the
Company fail to approve and ratify at the next Annual Meeting of Shareholders
both (i) this Amendment and (ii) Amendment No. 3 to the Transmation, Inc.
Employees' Stock Purchase Plan, then this Amendment shall be null and void and
of no effect:
1. The first sentence of Section "4. NUMBER OF SHARES." of the Plan is
hereby amended to provide in its entirety as follows (with the remainder of said
Section 4 being unchanged and unaffected by this Amendment and continuing in
full force and effect):
"Subject to the provisions of Section 5, the total number of shares of
the Company's common stock, par value $.50 per share (the `Common
Stock'), which may be issued under Options granted pursuant to the Plan
shall not exceed 950,000."
2. Except as amended hereby, the Plan shall remain in full force and effect in
accordance with its terms.
THIS AMENDMENT NO. 3 TO THE TRANSMATION, INC. AMENDED AND RESTATED 1993
STOCK OPTION PLAN WAS AUTHORIZED, APPROVED AND ADOPTED BY THE BOARD OF DIRECTORS
OF THE COMPANY ON FEBRUARY 17, 1997, AND APPROVED AND RATIFIED BY THE
SHAREHOLDERS OF THE COMPANY ON AUGUST 19, 1997.
/s/ JOHN A. MISIASZEK
---------------------------------
JOHN A. MISIASZEK, SECRETARY
15
<PAGE> 2
AMENDMENT NO. 4
TO THE
TRANSMATION, INC.
AMENDED AND RESTATED 1993 STOCK OPTION PLAN
EFFECTIVE JUNE 19, 1997
WHEREAS, Transmation, Inc., an Ohio corporation (the "Company"), has
established the Transmation, Inc. Amended and Restated 1993 Stock Option Plan,
as heretofore amended (the "Plan"); and
WHEREAS, deeming it appropriate and advisable so to do, and pursuant to
Section 19 of the Plan, the Board of Directors of the Company has authorized,
approved and adopted the further amendment to the Plan set forth herein;
NOW, THEREFORE, the Plan is hereby amended, effective June 19, 1997, as
follows:
1. Section 8(b)(iv) of the Plan is hereby renumbered to be
Section 8(B)(V) of the Plan (with the substance of said Section 8(b)(v), as so
renumbered, being unchanged and unaffected by this Amendment and continuing in
full force and effect).
2. A new Section 8(b)(iv) is hereby added to Section "8. TERM OF
OPTIONS; EXERCISABILITY." of the Plan, to provide in its entirety as follows
(with the remainder of said Section 8 being unchanged and unaffected by the
amendment set forth in this Paragraph 2 and continuing in full force and
effect):
"(iv) Each Option, if any, granted during the 1998
calendar year shall vest and become exercisable as follows:
"(A) 25 percent of the Option shall first
become exercisable on the date, if any, after the Grant Date
on which Fair Market Value shall have equaled or exceeded
$20.00 per share for any 20 of 30 consecutive trading days;
"(B) an additional 25 percent of the Option
shall first become exercisable on the date, if any after
January 1, 1999 on which Fair Market Value shall have equaled
or exceeded $24.00 per share for any 20 of 30 consecutive
trading days;
"(C) an additional 25 percent of the Option
shall first become exercisable on the date, if any, after
January 1, 2000 on which Fair Market Value shall have equaled
or exceeded $30.00 per share for any 20 of 30 consecutive
trading days; and
"(D) the balance of the Option shall first
become exercisable on the date, if any, after January 1, 2001
on which Fair Market Value shall have equaled or exceeded
$38.00 per share for any 20 of 30 consecutive trading days."
3. Except as amended hereby, the Plan shall remain in full force
and effect in accordance with its terms.
THIS AMENDMENT NO. 4 TO THE TRANSMATION, INC. AMENDED AND RESTATED 1993 STOCK
OPTION PLAN WAS AUTHORIZED, APPROVED AND ADOPTED BY THE BOARD OF DIRECTORS OF
THE COMPANY ON JUNE 19, 1997.
/s/ JOHN A. MISIASZEK
----------------------------------
JOHN A. MISIASZEK, SECRETARY
16
<PAGE> 1
EXHIBIT 10(k)
AMENDMENT NO. 3
TO THE
TRANSMATION, INC.
EMPLOYEES' STOCK PURCHASE PLAN
EFFECTIVE FEBRUARY 17, 1997
(SUBJECT TO SUBSEQUENT RATIFICATION BY THE SHAREHOLDERS)
WHEREAS, Transmation, Inc., an Ohio corporation (the "Company"), has
established the Transmation, Inc. Employees' Stock Purchase Plan, as heretofore
amended (the "Plan"); and
WHEREAS, deeming it appropriate and advisable so to do, and pursuant to
Section 13 of the Plan, the Board of Directors of the Company has authorized,
approved and adopted the further amendment to the Plan set forth herein;
NOW, THEREFORE, the Plan is hereby amended, effective February 17,
1997, as set forth below; provided, however, that if the shareholders of the
Company fail to approve and ratify at the next Annual Meeting of Shareholders
both (i) this Amendment and (ii) Amendment No. 3 to the Transmation, Inc.
Amended and Restated 1993 Stock Option Plan, then this Amendment shall be null
and void and of no effect:
1. The first sentence of Section "3. SHARES SUBJECT TO THE PLAN" of the
Plan is hereby amended to provide in its entirety as follows (with the remainder
of said Section 3 being unchanged and unaffected by this Amendment and
continuing in full force and effect):
"Subject to the provisions of Section 12, the total number of
shares of Common Stock that may be purchased under the Plan shall not exceed
100,000."
2. Except as amended hereby, the Plan shall remain in full force and
effect in accordance with its terms.
THIS AMENDMENT NO. 3 TO THE TRANSMATION, INC. EMPLOYEES' STOCK PURCHASE PLAN WAS
AUTHORIZED, APPROVED AND ADOPTED BY THE BOARD OF DIRECTORS OF THE COMPANY O
FEBRUARY 17,1997, AND APPROVED AND RATIFIED BY THE SHAREHOLDERS OF THE COMPANY
ON AUGUST 19, 1997.
/s/ JOHN A. MISIASZEK
--------------------------------
JOHN A. MISIASZEK, SECRETARY
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S SEPTEMBER 30, 1997 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> SEP-30-1997
<CASH> 227,176
<SECURITIES> 0
<RECEIVABLES> 14,936,204
<ALLOWANCES> 395,100
<INVENTORY> 11,392,588
<CURRENT-ASSETS> 28,400,168
<PP&E> 12,980,245
<DEPRECIATION> 5,150,655
<TOTAL-ASSETS> 54,483,452
<CURRENT-LIABILITIES> 13,163,315
<BONDS> 27,537,493
0
0
<COMMON> 2,858,767
<OTHER-SE> 10,368,136
<TOTAL-LIABILITY-AND-EQUITY> 54,483,452
<SALES> 28,679,821
<TOTAL-REVENUES> 38,725,787
<CGS> 18,231,077
<TOTAL-COSTS> 26,456,181
<OTHER-EXPENSES> 10,142,477
<LOSS-PROVISION> 26,000
<INTEREST-EXPENSE> 1,291,804
<INCOME-PRETAX> 809,325
<INCOME-TAX> 302,950
<INCOME-CONTINUING> 506,375
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 506,375
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
