10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 27, 2018

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 0-619

WSI Industries, Inc.

(Exact name of registrant as specified in its charter)

Minnesota	41-0691607
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

213 Chelsea Road, Monticello, Minnesota	55362
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (763) 295-9202

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 such filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “larger accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [  ]	Accelerated filer [  ]
Non-accelerated filer [  ]	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company [  ]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 2,970,283 shares of common stock were outstanding as of June 12, 2018.

WSI INDUSTRIES, INC.

AND SUBSIDIARIES

INDEX

		Page No.
PART I. FINANCIAL INFORMATION:		3
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets May 27, 2018 and August 27, 2017 (Unaudited)	3
	Condensed Consolidated Statements of Income Thirteen and Thirty-Nine weeks ended May 27, 2018 and May 28, 2017 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows Thirty-Nine weeks ended May 27, 2018 and May 28, 2017 (Unaudited)	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9-11
Item 4.	Controls and Procedures	11
PART II. OTHER INFORMATION:		12
Item 1A.	Risk Factors	12
Item 6.	Exhibits	12
	Signatures	13

2

Part 1. Financial Information

Item 1. Financial Statements

WSI INDUSTRIES, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	May 27, 2018		August 27, 2017
Assets
Current Assets:
Cash and cash equivalents	$	4,920,095	$	5,846,933
Accounts receivable		3,790,935		2,739,087
Inventories		3,405,695		3,131,679
Prepaid and other current assets		118,394		78,409
Total Current Assets		12,235,119		11,796,108
Property, Plant and Equipment – Net		10,852,944		10,320,808
Goodwill and other assets, net		2,368,452		2,368,452
Total Assets	$	25,456,515	$	24,485,368
Liabilities and Stockholders’ Equity
Current Liabilities:
Trade accounts payable	$	1,697,170	$	2,058,992
Accrued compensation and employee withholdings		770,119		664,277
Other accrued expenses and deferred revenue		249,440		530,552
Current portion of long-term debt		1,587,100		1,438,057
Total Current Liabilities		4,303,829		4,691,878
Long-term debt, less current portion		6,132,839		5,441,848
Deferred tax liabilities		543,811		915,068
Stockholders’ Equity:
Common stock, par value $.10 a share; authorized 10,000,000 shares; issued and outstanding 2,970,283 and 2,959,940 shares, respectively		297,029		295,994
Capital in excess of par value		4,192,174		4,192,578
Deferred compensation		-		(76,500	)
Retained earnings		9,986,833		9,024,502
Total Stockholders’ Equity		14,476,036		13,436,574
Total Liabilities and Stockholders’ Equity	$	25,456,515	$	24,485,368

See notes to condensed consolidated financial statements.

3

WSI INDUSTRIES, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	13 weeks ended						39 weeks ended
	May 27, 2018			May 28, 2017			May 27, 2018			May 28, 2017
Net sales	$	9,790,735		$	9,593,941		$	25,873,460		$	22,237,468
Cost of products sold		8,340,645			8,563,262			22,645,623			20,692,334
Gross margin		1,450,090			1,030,679			3,227,837			1,545,134
Selling and administrative expense		833,732			1,202,533			2,486,853			2,684,676
Equipment impairment loss		-			147,502			-			147,502
Interest and other income		(8,640	)		(6,870	)		(37,204	)		(10,127	)
Interest expense		80,602			72,510			229,346			206,637
Income (loss) before income taxes		544,396			(384,996	)		548,842			(1,483,554	)
Income tax expense (benefit)		78,257			(165,323	)		(532,257	)		(579,326	)
Net income (loss)	$	466,139		$	(219,673	)	$	1,081,099		$	(904,228	)
Basic earnings (loss) per share	$	.16		$	(.08	)	$	.37		$	(.31	)
Diluted earnings (loss) per share	$	.16		$	(.08	)	$	.36		$	(.31	)
Cash dividend per share	$	.04		$	-		$	.04		$	-
Weighted average number of common shares outstanding, basic		2,969,610			2,923,483			2,956,381			2,920,828
Weighted average number of  common shares outstanding, diluted		3,001,058			2,923,483			2,975,972			2,920,828

See notes to condensed consolidated financial statements.

4

WSI INDUSTRIES, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	39 weeks ended
	May 27, 2018			May 28, 2017
Cash Flows From Operating Activities:
Net income (loss)	$	1,081,099		$	(904,228	)
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation		1,279,937			1,361,510
Amortization		2,950			7,667
Deferred taxes		(532,257	)		(579,326	)
Impairment of property, plant and equipment		-			147,502
Stock option compensation expense		310,191			220,204
Changes in assets and liabilities:
Decrease (increase) in accounts receivable		(1,051,848	)		808,158
Decrease (increase) in inventories		(274,016	)		257,474
Increase in prepaid and other current assets		(39,985	)		(34,197	)
Increase (decrease) in accounts payable and accrued expenses		(537,092	)		1,213,591
Net cash provided by operations		238,979			2,498,355
Cash Flows From Investing Activities:
Purchase of property, plant and equipment		(515,917	)		(785,705	)
Net cash provided by (used in) investing activities		(515,917	)		(785,705	)
Cash Flows From Financing Activities:
Proceeds from issuance of long-term debt		-			3,700,000
Equipment advance payments exchanged with debt		687,245			-
Payments of long-term debt		(1,146,317	)		(4,745,057	)
Restricted cash requirement		-			1,250,000
Payroll withholding taxes in cashless stock option exercise		(72,060	)		(29,759	)
Deferred financing costs		-			(39,336	)
Dividends paid		(118,768	)		-
Net cash provided by (used in) by financing activities		(649,900	)		135,848
Net Increase In Cash And Cash Equivalents		(926,838	)		1,848,498
Cash And Cash Equivalents At Beginning Of Year		5,846,933			3,739,324
Cash And Cash Equivalents At End Of Reporting Period	$	4,920,095		$	5,587,822
Supplemental cash flow information:
Cash paid during the period for:
Interest	$	229,554		$	203,680
Income taxes	$	7,350		$	4,200
Noncash investing and financing activities:
Acquisition of machinery through debt	$	1,983,401		$	-

See notes to condensed consolidated financial statements.

5

WSI INDUSTRIES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:

The condensed consolidated balance sheet as of May 27, 2018, the condensed consolidated statements of income for the thirteen and thirty-nine weeks ended May 27, 2018 and May 28, 2017 and the condensed consolidated statements of cash flows for the thirty-nine weeks then ended, respectively, have been prepared by the Company without audit. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for all periods presented have been made.

The condensed consolidated balance sheet at August 27, 2017 is derived from the audited consolidated balance sheet as of that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. Therefore, these condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended August 27, 2017. The results of operations for interim periods are not necessarily indicative of the operating results for the full year.

2. INVENTORIES

Inventories consist primarily of raw material, work-in-progress (WIP) and finished goods and are valued at the lower of cost or net realizable value:

	May 27, 2018		August 27, 2017
Raw material	$	960,056	$	1,047,931
WIP		1,328,060		1,448,282
Finished goods		1,117,579		635,466
	$	3,405,695	$	3,131,679

3. OTHER ASSETS

Goodwill and other assets consist of costs resulting from business acquisitions which total $2,368,452 at May 27, 2018 (net of accumulated amortization of $344,812 recorded prior to the adoption of ASC 350 Goodwill and Other Intangible Assets).

6

4. INCOME TAXES:

The Company’s effective tax rate for its fiscal third quarter ended May 27, 2018 was 14.4% as compared to a negative (42.9)% for the quarter ended May 28, 2017. The year-to-date effective tax rate was a negative (97.0)% in the current year versus a negative (39.1)% in for the prior year.

On December 22, 2017, H.R.1, known as the “Tax Cuts and Jobs Act,” was signed into law. Among other things, the Tax Cuts and Jobs Act permanently lowers the federal corporate tax rate to 21% from the existing maximum rate of 35%, effective for tax years including or commencing January 1, 2018. As a result of the reduction of the corporate tax rate to 21%, U.S. generally accepted accounting principles require companies to re-value their deferred tax assets and liabilities as of the date of enactment, with resulting tax effects accounted for in the reporting period of enactment which occurred during the Company’s fiscal second quarter ending February 25, 2018. After the revaluation of its net deferred tax liability, the Company recognized an overall income tax benefit of $663,000 during the fiscal quarter ending February 25, 2018, of which most of that amount was attributable to the revaluation.

The Company will continue to evaluate the effects of the new law on its effective tax rate as the law contains provisions for limiting the deductibility of interest expense, imposes limitations on the utilization of operating loss carryforwards, retroactively applies the 100% bonus depreciation deduction under the new tax legislation, which applies to qualified property placed in service after September 27, 2017 as well as the lowering of the corporate tax to 21% for a portion of the Company’s fiscal year.

The Company has also determined that certain of its activities the Company performs qualify for the Research & Development tax credit (R&D credit) as defined by Internal Revenue Code Section 41 which affects the Company’s effective tax rate.

5. EQUIPMENT IMPAIRMENT:

The Company evaluates long-term assets on a periodic basis in compliance with Accounting Standards Codification (“ASC”) 360, Accounting for the Impairment of Long-lived Assets when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets carrying amount. If the undiscounted cash flows are less than the carrying amount, the impairment recognized is measured by the amount the carrying value of the assets exceeds their fair value determined primarily through the present value of estimated future cash flows. During the quarter ended May 28, 2017, the Company determined that one of its pieces of equipment was impaired and recognized an expense of approximately $148,000.

6. CLAIMS AND CONTINGENCIES:

The Company is exposed to a number of asserted and unasserted claims encountered in the ordinary course of business. Although the outcome of any such claim cannot be predicted, management believes that there are no pending legal proceedings or claims against or involving the Company for which the outcome is likely to have a material adverse effect upon its financial position or results of operations.

7

7. EARNINGS PER SHARE:

The following table sets forth the computation of basic and diluted earnings per share:

	Thirteen weeks ended					Thirty-nine weeks ended
	May 27, 2018		May 28, 2017			May 27, 2018		May 28, 2017
Numerator for basic and diluted earnings per share:
Net income (loss)	$	466,139	$	(219,673	)	$	1,081,099	$	(904,228	)
Denominator
Denominator for basic earnings per share – weighted average shares		2,969,610		2,923,483			2,956,381		2,920,828
Effect of dilutive securities:
Employee and non-employee options		31,448		-			19,591		-
Dilutive common shares Denominator for diluted earnings per share		3,001,058		2,923,483			2,975,972		2,920,828
Basic earnings (loss) per share	$	.16	$	(.08	)	$	.37	$	(.31	)
Diluted earnings (loss) per share	$	.16	$	(.08	)	$	.36	$	(.31	)

8. RECENT ACCOUNTING PRONOUNCEMENTS:

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. This guidance defines how companies report revenues from contracts with customers and also requires enhanced disclosures. In July 2015, the Financial Accounting Standards Board voted to defer the effective date by one year, with early adoption on the original effective date permitted. ASU 2014-09 was to be effective for annual reporting periods beginning after December 15, 2016, including interim periods within the annual reporting period. In August 2015, FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date (“ASU 2015-14”). The amendments in ASU 2015-14 defer the effective date of ASU 2014-09 for all entities by one year. The Company is currently evaluating the potential effects of the adoption of this update on the consolidated financial statements.

In March 2016, FASB issued ASU No. 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize the assets and liabilities that arise from most leases. The main difference between previous U.S. GAAP and ASU 2016-02 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. For lessors, the guidance included in ASU 2016-02 modifies the classification criteria and the accounting for sales-type and direct financing leases. ASU 2016-02 provides specific guidance for determining whether a contractual arrangement contains a lease, lease classification by lessees and lessors, initial and subsequent measurement of leases by lessees and lessors, sale and leaseback transactions, transition, and financial statement disclosures. ASU 2016-02 requires entities to use a modified retrospective approach to apply its guidance, and includes a number of optional practical expedients that entities may elect to apply. For public entities, the amendments included in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the potential effects of the adoption of this guidance on the consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting which provides guidance that amends the accounting for stock-based compensation and requires excess tax benefits and deficiencies to be recognized as a component of income tax expense rather than equity. The inclusion of excess tax benefits and deficiencies as a component of income tax expense will increase volatility within our provision for income taxes as the amount of excess tax benefits or deficiencies from stock-based compensation awards depends on our stock price at the date the awards vest. This guidance also requires excess tax benefits and deficiencies to be presented as operating activity in the statement of cash flows and allows an entity to make an accounting policy election to either estimate expected forfeitures or to account for them as they occur. We adopted this guidance during the first quarter of fiscal 2018 and elected to recognize forfeitures as they occur.

8

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND

RESULTS OF OPERATIONS

Critical Accounting Policies and Estimates:

Management’s Discussion and Analysis of Financial Condition and Results of Operations discuss our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities.

We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the result of which forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Results may differ from these estimates due to actual outcomes being different from those on which we based our assumptions. The estimates and judgments utilized are reviewed by management on an ongoing basis and by the audit committee of our board of directors at the end of each quarter prior to the public release of our financial results.

The critical accounting policies and estimates followed in the preparation of the financial information contained in this Quarterly Report on Form 10-Q are the same as those described in the Company’s Annual Report on Form 10-K for the year ended August 27, 2017. Refer to the Annual Report on Form 10-K for detailed information on accounting policies.

Results of Operations:

Net sales were $9,791,000 for the quarter ended May 27, 2018 compared to $9,594,000 in the same period of the prior year, an increase of 2%. Year-to-date sales for the first three quarters of fiscal 2018 were $25,873,000 compared to $22,237,000 in the prior year, an increase of 16%. Sales by product line for the quarter and year-to-date periods are as below:

	Fiscal Third Quarter Thirteen Weeks Ended													Fiscal Third Quarter Year-to-Date Ended
			Percent					Percent								Percent					Percent
	May 27,		of Total			May 28,		of Total			Dollar Percent			May 27,		of Total			May 28,		of Total			Dollar Percent
	2018		Sales			2017		Sales			Change			2018		Sales			2017		Sales			Change
Recreational Vehicles	$	7,366,000		75	%	$	8,229,000		86	%		-10	%	$	20,149,000		78	%	$	19,153,000		86	%		5	%
Energy		1,050,000		11	%		507,000		5	%		107	%		2,313,000		9	%		841,000		4	%		175	%
Aerospace Defense & Other		1,375,000		14	%		858,000		9	%		60	%		3,411,000		13	%		2,243,000		10	%		52	%
Total Sales	$	9,791,000		100	%	$	9,594,000		100	%		2	%	$	25,873,000		100	%	$	22,237,000		100	%		16	%

9

Sales from the Company’s ATV and Motorcycle markets for the fiscal 2018 third quarter were down 10% as compared to the prior year quarter. During the fiscal 2017 third quarter, the Company experienced a one-time sale of remaining product related to its primary customer’s wind down of one of their product lines. Otherwise, overall sales for the Company’s ATV and Motorcycle lines were up 5% as compared to the prior year’s quarter. Excluding the one-time sale, year-to-date sales for the ATV and Motorcycle markets were also up 12% as compared to the prior year.

Sales from the Company’s energy business for the fiscal 2018 third quarter increased by 107% over the prior year’s third quarter. Year-to-date sales as of May 27, 2018 were 175% higher than the same year-to-date period of the prior year. The increases in sales are derived from increased demand from existing as well as new customers in the energy sector.

Sales from the Company’s aerospace, defense and other markets were up 60% in the fiscal 2018 third quarter and the year-to-date period was up 52% as compared to the prior year. The increase in the fiscal 2018 third quarter and year-to-date aerospace and defense sales were derived mostly from new programs and customers as well as increases in demand from existing customers.

Gross margin increased to 14.8% from 10.7% in the quarter ended May 27, 2018 versus the prior year quarter. Year-to-date gross margins increased to 12.5% versus 6.9% in the prior year-to-date period. The increases in gross margins came from both volume efficiencies and operational improvements.

Selling and administrative expense was $834,000 for the quarter ended May 27, 2018 versus $1,203,000 in the prior year quarter. Year-to-date selling and administrative expense was $2,487,000 as compared to $2,685,000 in the prior year-to-date period. The decrease in the quarterly and year-to-date expense was due primarily to increases in compensation costs and stock option expense related to the change in the Company’s executive leadership that occurred during the fiscal 2017 third quarter.

Interest expense in the third quarter of fiscal 2018 was $81,000 as compared to $73,000 in the prior year quarter. Year-to-date interest expense for fiscal 2018 was $229,000 versus $207,000 in the prior year. The higher interest costs are a result of a higher level of long-term debt.

The Company’s effective tax rate for its fiscal third quarter ended May 27, 2018 was 14.4% as compared to a negative (42.9)% for the quarter ended May 28, 2017. The year-to-date effective tax rate was a negative (97.0)% in the current year versus a negative (39.1)% in for the prior year.

On December 22, 2017, H.R.1, known as the “Tax Cuts and Jobs Act,” was signed into law. Among other things, the Tax Cuts and Jobs Act permanently lowers the federal corporate tax rate to 21% from the existing maximum rate of 35%, effective for tax years including or commencing January 1, 2018. As a result of the reduction of the corporate tax rate to 21%, U.S. generally accepted accounting principles require companies to re-value their deferred tax assets and liabilities as of the date of enactment, with resulting tax effects accounted for in the reporting period of enactment which occurred during the Company’s fiscal second quarter ending February 25, 2018. After the revaluation of its net deferred tax liability, the Company recognized an overall income tax benefit of $663,000 during the fiscal quarter ending February 25, 2018, of which most of that amount was attributable to the revaluation.

Liquidity and Capital Resources:

On May 27, 2018 working capital was $7,931,000 as compared to $7,104,000 at August 27, 2017. The ratio of current assets to current liabilities at May 27, 2018 was 2.84 to 1.0 compared to 2.51 to 1.0 at August 27, 2017. The increase in these two ratios came primarily from an increase in accounts receivable and inventories and lower accounts payable partially offset by a lower level of cash and cash equivalents.

10

The Company has a revolving credit agreement with its bank. The revolving credit agreement provides for a maximum loan of $1,500,000 with interest at the thirty day LIBOR rate plus 2.0% with a base rate of 2.75%. The revolver has a maturity date of February 15, 2019. No amounts have been drawn against the revolving line of credit.

It is the Company’s belief that its current cash balance, plus future internally generated funds and its line of credit, will be sufficient to enable the Company to meet its working capital requirements through the next 12 months.

Cautionary Statement:

Statements included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, in future filings by the Company with the Securities and Exchange Commission, in the Company’s press releases and in oral statements made with the approval of an authorized executive officer that are not historical or current facts are “forward-looking statements.” These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. These risks and uncertainties are described in the Company’s Annual Report on Form 10-K for the year ended August 27, 2017, as well as other filings the Company makes with the Securities and Exchange Commission. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made and are not predictions of actual future results. The Company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures.

As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based on that evaluation, the CEO and CFO have concluded that as of May 27, 2018, our disclosure controls and procedures were effective.

(b) Changes in Internal Controls over Financial Reporting.

There have been no changes in internal control over financial reporting that occurred during the fiscal period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

11

PART II. OTHER INFORMATION:

Item 1A. RISK FACTORS

Not Applicable.

Item 6. EXHIBITS

A.        The following exhibits are included herein:

Exhibit 31.1	Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 of the Exchange Act.
Exhibit 31.2	Certification of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 of the Exchange Act.
Exhibit 32	Certificate pursuant to 18 U.S.C. §1350.
101.INS**	XBRL Instance
101.SCH**	XBRL Taxonomy Extension Schema
101.CAL**	XBRL Taxonomy Extension Calculation
101.DEF**	XBRL Taxonomy Extension Definition
101.LAB**	XBRL Taxonomy Extension Labels
101.PRE**	XBRL Taxonomy Extension Presentation

12

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	WSI INDUSTRIES, INC.
Date: June 14, 2018	/s/ Michael J. Pudil
	Michael J. Pudil, President & CEO
Date: June 14, 2018	/s/ Paul D. Sheely
	Paul D. Sheely, Vice President, Finance & CFO

13

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Michael J. Pudil, certify that:

1. I have reviewed this quarterly report on Form 10-Q of WSI Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 14, 2018

/s/ Michael J. Pudil

Michael J. Pudil

President & Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Paul D. Sheely, certify that:

1. I have reviewed this quarterly report on Form 10-Q of WSI Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 14, 2018

/s/ Paul D. Sheely

Paul D. Sheely

Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION

The undersigned certify pursuant to 18 U.S.C. § 1350, that:

(1) The accompanying Quarterly Report on Form 10-Q for the period ended May 27, 2018 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the accompanying Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: June 14, 2018	/s/ Michael J. Pudil
	President & Chief Executive Officer
Date: June 14, 2018	/s/ Paul D. Sheely
	Chief Financial Officer

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Document and Entity Information - shares	9 Months Ended
	May 27, 2018	Jun. 12, 2018
Document And Entity Information
Entity Registrant Name	WSI INDUSTRIES, INC.
Entity Central Index Key	0000104897
Document Type	10-Q
Document Period End Date	May 27, 2018
Amendment Flag	false
Current Fiscal Year End Date	--08-26
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		2,970,283
Trading Symbol	WSCI
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2018

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Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	May 27, 2018	Aug. 27, 2017
Current Assets:
Cash and cash equivalents	$ 4,920,095	$ 5,846,933
Accounts receivable	3,790,935	2,739,087
Inventories	3,405,695	3,131,679
Prepaid and other current assets	118,394	78,409
Total Current Assets	12,235,119	11,796,108
Property, Plant and Equipment – Net	10,852,944	10,320,808
Goodwill and other assets, net	2,368,452	2,368,452
Total Assets	25,456,515	24,485,368
Current Liabilities:
Trade accounts payable	1,697,170	2,058,992
Accrued compensation and employee withholdings	770,119	664,277
Other accrued expenses and deferred revenue	249,440	530,552
Current portion of long-term debt	1,587,100	1,438,057
Total Current Liabilities	4,303,829	4,691,878
Long-term debt, less current portion	6,132,839	5,441,848
Deferred tax liabilities	543,811	915,068
Stockholders’ Equity:
Common stock, par value $.10 a share; authorized 10,000,000 shares; issued and outstanding 2,970,283 and 2,959,940 shares, respectively	297,029	295,994
Capital in excess of par value	4,192,174	4,192,578
Deferred compensation		(76,500)
Retained earnings	9,986,833	9,024,502
Total Stockholders’ Equity	14,476,036	13,436,574
Total Liabilities and Stockholders’ Equity	$ 25,456,515	$ 24,485,368

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	May 27, 2018	Aug. 27, 2017
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.10	$ 0.10
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	2,970,283	2,959,940
Common stock, shares outstanding	2,970,283	2,959,940

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Condensed Consolidated Statements of Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	May 27, 2018	May 28, 2017	May 27, 2018	May 28, 2017
Income Statement [Abstract]
Net sales	$ 9,790,735	$ 9,593,941	$ 25,873,460	$ 22,237,468
Cost of products sold	8,340,645	8,563,262	22,645,623	20,692,334
Gross margin	1,450,090	1,030,679	3,227,837	1,545,134
Selling and administrative expense	833,732	1,202,533	2,486,853	2,684,676
Equipment impairment loss		147,502		147,502
Interest and other income	(8,640)	(6,870)	(37,204)	(10,127)
Interest expense	80,602	72,510	229,346	206,637
Income (loss) before income taxes	544,396	(384,996)	548,842	(1,483,554)
Income tax expense (benefit)	78,257	(165,323)	(532,257)	(579,326)
Net income (loss)	$ 466,139	$ (219,673)	$ 1,081,099	$ (904,228)
Basic earnings (loss) per share	$ 0.16	$ (0.08)	$ 0.37	$ (0.31)
Diluted earnings (loss) per share	0.16	(0.08)	0.36	(0.31)
Cash dividend per share	$ 0.04	$ 0.00	$ 0.04	$ 0.00
Weighted average number of common shares outstanding, basic	2,969,610	2,923,483	2,956,381	2,920,828
Weighted average number of common shares outstanding, diluted	3,001,058	2,923,483	2,975,972	2,920,828

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	May 27, 2018	May 28, 2017
Cash Flows From Operating Activities:
Net income (loss)	$ 1,081,099	$ (904,228)
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation	1,279,937	1,361,510
Amortization	2,950	7,667
Deferred taxes	(532,257)	(579,326)
Impairment of property, plant and equipment		147,502
Stock option compensation expense	310,191	220,204
Changes in assets and liabilities:
Decrease (increase) in accounts receivable	(1,051,848)	808,158
Decrease (increase) in inventories	(274,016)	257,474
Increase in prepaid and other current assets	(39,985)	(34,197)
Increase (decrease) in accounts payable and accrued expenses	(537,092)	1,213,591
Net cash provided by operations	238,979	2,498,355
Cash Flows From Investing Activities:
Purchase of property, plant and equipment	(515,917)	(785,705)
Net cash provided by (used in) investing activities	(515,917)	(785,705)
Cash Flows From Financing Activities:
Proceeds from issuance of long-term debt		3,700,000
Equipment advance payments exchanged with debt	687,245
Payments of long-term debt	(1,146,317)	(4,745,057)
Restricted cash requirement		1,250,000
Payroll withholding taxes in cashless stock option exercise	(72,060)	(29,759)
Deferred financing costs		(39,336)
Dividends paid	(118,768)
Net cash provided by (used in) by financing activities	(649,900)	135,848
Net Increase In Cash And Cash Equivalents	(926,838)	1,848,498
Cash And Cash Equivalents At Beginning Of Year	5,846,933	3,739,324
Cash And Cash Equivalents At End Of Reporting Period	4,920,095	5,587,822
Supplemental cash flow information:
Interest	229,554	203,680
Income taxes	7,350	4,200
Noncash investing and financing activities:
Acquisition of machinery through debt	$ 1,983,401

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Condensed Consolidated Financial Statements

9 Months Ended

May 27, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Consolidated Financial Statements

1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:

The condensed consolidated balance sheet as of May 27, 2018, the condensed consolidated statements of income for the thirteen and thirty-nine weeks ended May 27, 2018 and May 28, 2017 and the condensed consolidated statements of cash flows for the thirty-nine weeks then ended, respectively, have been prepared by the Company without audit. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for all periods presented have been made.

The condensed consolidated balance sheet at August 27, 2017 is derived from the audited consolidated balance sheet as of that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. Therefore, these condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended August 27, 2017. The results of operations for interim periods are not necessarily indicative of the operating results for the full year.

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Inventories

9 Months Ended

May 27, 2018

Inventory Disclosure [Abstract]

Inventories

2. INVENTORIES

Inventories consist primarily of raw material, work-in-progress (WIP) and finished goods and are valued at the lower of cost or net realizable value:

	May 27, 2018		August 27, 2017
Raw material	$	960,056	$	1,047,931
WIP		1,328,060		1,448,282
Finished goods		1,117,579		635,466
	$	3,405,695	$	3,131,679

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Other Assets

9 Months Ended

May 27, 2018

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets

3. OTHER ASSETS

Goodwill and other assets consist of costs resulting from business acquisitions which total $2,368,452 at May 27, 2018 (net of accumulated amortization of $344,812 recorded prior to the adoption of ASC 350 Goodwill and Other Intangible Assets).

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Income Taxes

9 Months Ended

May 27, 2018

Income Tax Disclosure [Abstract]

Income Taxes

4. INCOME TAXES:

The Company’s effective tax rate for its fiscal third quarter ended May 27, 2018 was 14.4% as compared to a negative (42.9)% for the quarter ended May 28, 2017. The year-to-date effective tax rate was a negative (97.0)% in the current year versus a negative (39.1)% in for the prior year.

On December 22, 2017, H.R.1, known as the “Tax Cuts and Jobs Act,” was signed into law. Among other things, the Tax Cuts and Jobs Act permanently lowers the federal corporate tax rate to 21% from the existing maximum rate of 35%, effective for tax years including or commencing January 1, 2018. As a result of the reduction of the corporate tax rate to 21%, U.S. generally accepted accounting principles require companies to re-value their deferred tax assets and liabilities as of the date of enactment, with resulting tax effects accounted for in the reporting period of enactment which occurred during the Company’s fiscal second quarter ending February 25, 2018. After the revaluation of its net deferred tax liability, the Company recognized an overall income tax benefit of $663,000 during the fiscal quarter ending February 25, 2018, of which most of that amount was attributable to the revaluation.

The Company will continue to evaluate the effects of the new law on its effective tax rate as the law contains provisions for limiting the deductibility of interest expense, imposes limitations on the utilization of operating loss carryforwards, retroactively applies the 100% bonus depreciation deduction under the new tax legislation, which applies to qualified property placed in service after September 27, 2017 as well as the lowering of the corporate tax to 21% for a portion of the Company’s fiscal year.

The Company has also determined that certain of its activities the Company performs qualify for the Research & Development tax credit (R&D credit) as defined by Internal Revenue Code Section 41 which affects the Company’s effective tax rate.

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Equipment Impairment

9 Months Ended

May 27, 2018

Property, Plant and Equipment [Abstract]

Equipment Impairment

5. EQUIPMENT IMPAIRMENT:

The Company evaluates long-term assets on a periodic basis in compliance with Accounting Standards Codification (“ASC”) 360, Accounting for the Impairment of Long-lived Assets when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets carrying amount. If the undiscounted cash flows are less than the carrying amount, the impairment recognized is measured by the amount the carrying value of the assets exceeds their fair value determined primarily through the present value of estimated future cash flows. During the quarter ended May 28, 2017, the Company determined that one of its pieces of equipment was impaired and recognized an expense of approximately $148,000.

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Claims and Contingencies

9 Months Ended

May 27, 2018

Commitments and Contingencies Disclosure [Abstract]

Claims and Contingencies

6. CLAIMS AND CONTINGENCIES:

The Company is exposed to a number of asserted and unasserted claims encountered in the ordinary course of business. Although the outcome of any such claim cannot be predicted, management believes that there are no pending legal proceedings or claims against or involving the Company for which the outcome is likely to have a material adverse effect upon its financial position or results of operations.

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Earnings Per Share

9 Months Ended

May 27, 2018

Earnings Per Share [Abstract]

Earnings Per Share

7. EARNINGS PER SHARE:

The following table sets forth the computation of basic and diluted earnings per share:

	Thirteen weeks ended					Thirty-nine weeks ended
	May 27, 2018		May 28, 2017			May 27, 2018		May 28, 2017
Numerator for basic and diluted earnings per share:
Net income (loss)	$	466,139	$	(219,673	)	$	1,081,099	$	(904,228	)
Denominator
Denominator for basic earnings per share – weighted average shares		2,969,610		2,923,483			2,956,381		2,920,828
Effect of dilutive securities:
Employee and non-employee options		31,448		-			19,591		-
Dilutive common shares Denominator for diluted earnings per share		3,001,058		2,923,483			2,975,972		2,920,828
Basic earnings (loss) per share	$	.16	$	(.08	)	$	.37	$	(.31	)
Diluted earnings (loss) per share	$	.16	$	(.08	)	$	.36	$	(.31	)

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Recent Accounting Pronouncements

9 Months Ended

May 27, 2018

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

8. RECENT ACCOUNTING PRONOUNCEMENTS:

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. This guidance defines how companies report revenues from contracts with customers and also requires enhanced disclosures. In July 2015, the Financial Accounting Standards Board voted to defer the effective date by one year, with early adoption on the original effective date permitted. ASU 2014-09 was to be effective for annual reporting periods beginning after December 15, 2016, including interim periods within the annual reporting period. In August 2015, FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date (“ASU 2015-14”). The amendments in ASU 2015-14 defer the effective date of ASU 2014-09 for all entities by one year. The Company is currently evaluating the potential effects of the adoption of this update on the consolidated financial statements.

In March 2016, FASB issued ASU No. 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize the assets and liabilities that arise from most leases. The main difference between previous U.S. GAAP and ASU 2016-02 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. For lessors, the guidance included in ASU 2016-02 modifies the classification criteria and the accounting for sales-type and direct financing leases. ASU 2016-02 provides specific guidance for determining whether a contractual arrangement contains a lease, lease classification by lessees and lessors, initial and subsequent measurement of leases by lessees and lessors, sale and leaseback transactions, transition, and financial statement disclosures. ASU 2016-02 requires entities to use a modified retrospective approach to apply its guidance, and includes a number of optional practical expedients that entities may elect to apply. For public entities, the amendments included in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the potential effects of the adoption of this guidance on the consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting which provides guidance that amends the accounting for stock-based compensation and requires excess tax benefits and deficiencies to be recognized as a component of income tax expense rather than equity. The inclusion of excess tax benefits and deficiencies as a component of income tax expense will increase volatility within our provision for income taxes as the amount of excess tax benefits or deficiencies from stock-based compensation awards depends on our stock price at the date the awards vest. This guidance also requires excess tax benefits and deficiencies to be presented as operating activity in the statement of cash flows and allows an entity to make an accounting policy election to either estimate expected forfeitures or to account for them as they occur. We adopted this guidance during the first quarter of fiscal 2018 and elected to recognize forfeitures as they occur.

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Inventories (Tables)

9 Months Ended

May 27, 2018

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventories consist primarily of raw material, work-in-progress (WIP) and finished goods and are valued at the lower of cost or net realizable value:

	May 27, 2018		August 27, 2017
Raw material	$	960,056	$	1,047,931
WIP		1,328,060		1,448,282
Finished goods		1,117,579		635,466
	$	3,405,695	$	3,131,679

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Earnings Per Share (Tables)

9 Months Ended

May 27, 2018

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table sets forth the computation of basic and diluted earnings per share:

	Thirteen weeks ended					Thirty-nine weeks ended
	May 27, 2018		May 28, 2017			May 27, 2018		May 28, 2017
Numerator for basic and diluted earnings per share:
Net income (loss)	$	466,139	$	(219,673	)	$	1,081,099	$	(904,228	)
Denominator
Denominator for basic earnings per share – weighted average shares		2,969,610		2,923,483			2,956,381		2,920,828
Effect of dilutive securities:
Employee and non-employee options		31,448		-			19,591		-
Dilutive common shares Denominator for diluted earnings per share		3,001,058		2,923,483			2,975,972		2,920,828
Basic earnings (loss) per share	$	.16	$	(.08	)	$	.37	$	(.31	)
Diluted earnings (loss) per share	$	.16	$	(.08	)	$	.36	$	(.31	)

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Inventories - Schedule of Inventory (Details) - USD ($)	May 27, 2018	Aug. 27, 2017
Inventory Disclosure [Abstract]
Raw material	$ 960,056	$ 1,047,931
WIP	1,328,060	1,448,282
Finished goods	1,117,579	635,466
Inventory net	$ 3,405,695	$ 3,131,679

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Other Assets (Details Narrative) - USD ($)	May 27, 2018	Aug. 27, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Goodwill and other assets	$ 2,368,452	$ 2,368,452
Intangible assets, accumulated amortization	$ 344,812

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Income Taxes (Details Narrative) - USD ($)	3 Months Ended			9 Months Ended
	May 27, 2018	Feb. 25, 2018	May 28, 2017	May 27, 2018	May 28, 2017
Percentage of effective income tax rate reconciliation				14.40%	(42.90%)
Year to date effective tax rate				(97.00%)	(39.10%)
Income tax benefit	$ (78,257)	$ 663,000	$ 165,323	$ 532,257	$ 579,326
Bonus depreciation deduction percentage				100.00%
Tax Reform Bill [Member]
Income tax federal corporate tax rate				21.00%
Income tax rate reconciliation description				Tax Cuts and Jobs Act permanently lowers the federal corporate tax rate to 21% from the existing maximum rate of 35%, effective for tax years including or commencing January 1, 2018.

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Equipment Impairment (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	May 27, 2018	May 28, 2017	May 27, 2018	May 28, 2017
Property, Plant and Equipment [Abstract]
Equipment impairment expense		$ 147,502		$ 147,502

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Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($)	3 Months Ended		9 Months Ended
	May 27, 2018	May 28, 2017	May 27, 2018	May 28, 2017
Earnings Per Share [Abstract]
Numerator for basic and diluted earnings per share: Net income (loss)	$ 466,139	$ (219,673)	$ 1,081,099	$ (904,228)
Denominator for basic earnings per share - weighted average shares	2,969,610	2,923,483	2,956,381	2,920,828
Effect of dilutive securities: Employee and non-employee options	31,448		19,591
Dilutive common shares, Denominator for diluted earnings per share	3,001,058	2,923,483	2,975,972	2,920,828
Basic earnings (loss) per share	$ 0.16	$ (0.08)	$ 0.37	$ (0.31)
Diluted earnings (loss) per share	$ 0.16	$ (0.08)	$ 0.36	$ (0.31)