0000354827-95-000020.txt : 19950810 0000354827-95-000020.hdr.sgml : 19950810 ACCESSION NUMBER: 0000354827-95-000020 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950809 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DATA MEASUREMENT CORP CENTRAL INDEX KEY: 0000354827 STANDARD INDUSTRIAL CLASSIFICATION: MEASURING & CONTROLLING DEVICES, NEC [3829] IRS NUMBER: 060774266 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-15011 FILM NUMBER: 95559989 BUSINESS ADDRESS: STREET 1: 15884 GAITHER DR CITY: GAITHERSBURG STATE: MD ZIP: 20877 BUSINESS PHONE: 3019482450 MAIL ADDRESS: STREET 2: 15884 GAITHER DR CITY: GAITHERSBURG STATE: MD ZIP: 20877 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter ended June 30, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from to Commission File Number 0-15011 Data Measurement Corporation (Exact name of registrant as specified in its charter) Delaware 06-0774266 (State or other jurisdiction of (I.R.S. Employer Identification) incorporation or organization.) 15884 Gaither Drive, Gaithersburg, Maryland 20877 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (301) 948-2450 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 The number of shares outstanding of the registrant's common stock par value $.01 per share, as of June 30, 1995 was 1,361,187. PART I. FINANCIAL INFORMATION Item 1. Financial Statements DATA MEASUREMENT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended June 30 Six Months Ended June 30 1995 1994 1995 1994 Sales.........................$ 8,522,309 $6,149,173 $15,022,520 $11,427,285 Costs and expenses: Cost of sales............... 6,153,824 4,710,919 10,734,735 8,762,452 Selling, general & admin.... 1,511,342 1,120,154 2,868,997 2,065,876 Interest expense............ 174,950 106,106 273,844 201,595 Loss (gain) on foreign exch. (40,848) (10,499) (49,166) 8,713 Costs and expenses............ 7,799,268 5,926,680 13,828,410 11,038,636 Income before provision for income taxes............ 723,041 222,493 1,194,110 388,649 Provision for income taxes: Current..................... 160,444 1,540 209,679 11,426 Deferred.................... 53,280 26,205 113,977 73,546 Net income.................... $509,317 $194,748 $870,454 $303,677 Net Income per Share....... -Primary $0.35 $0.15 $0.61 $0.23 -Fully Diluted $0.32 $0.14 $0.54 $0.22
See accompanying notes to consolidated financial statements. DATA MEASUREMENT CORPORATION CONSOLIDATED BALANCE SHEETS
June 30, December 31, 1995 1994 (Unaudited) ASSETS Current Assets Cash and cash equivalents........ $ 994,348 $ 685,384 Accounts Receivable: Trade, less allowance for doubtful accounts of $154,000 in 1995 & $180,000 in 1994... 6,100,872 5,238,586 Unbilled accounts receivable... 1,088,674 1,544,737 Retainages..................... 1,954,193 1,521,516 Total Accounts Receivable..... 9,143,739 8,304,839 Inventories: Work-in-process................ 4,248,287 2,514,722 Material and parts............. 7,143,184 6,695,087 Total inventories............ 11,391,471 9,209,809 Deferred income taxes............ 188,266 188,266 Other............................ 406,505 316,743 Total current assets......... 22,124,329 18,705,041 Property & equipment, at cost: Land............................. 39,863 39,163 Building......................... 502,781 493,952 Machinery and equipment.......... 1,797,000 1,763,373 Demonstration equipment.......... 1,298,684 1,048,997 Office furniture................. 892,618 803,945 Leasehold improvements........... 215,999 204,644 Total property and equipment. 4,746,945 4,354,074 Less accumulated depreciation and amortization............... 3,573,690 3,410,849 Net property & equipment..... 1,173,255 943,225 Patents and licenses at cost, less amortization of $128,441 in 1995 and $102,635 in 1994............. 52,546 53,551 Other, including goodwill.......... 386,896 388,954 TOTAL ASSETS $23,737,026 $20,090,771
See accompanying notes to consolidated financial statements. DATA MEASUREMENT CORPORATION CONSOLIDATED BALANCE SHEETS
June 30, December 31, 1995 1994 (Unaudited) LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities: Notes payable to bank............ $ 1,696,880 $ 706,108 Accounts payable................. 2,603,299 2,347,210 Advance payments on contracts.... 2,168,193 1,453,509 Accrued compensation............. 931,350 683,753 Accrued warranty expense......... 455,838 354,096 Accrued commission expense....... 687,240 566,311 Accrued interest expense......... 53,001 37,427 Other accrued liabilities........ 608,654 497,265 Current income taxes............. 191,560 197,498 Current portion of long term debt 593,052 569,999 Total current liabilities...... 9,989,067 7,413,176 Deferred income taxes.............. 178,573 65,824 Long term debt..................... 3,327,935 3,568,533 Stockholders' equity: Common stock, $.01 par value..... 13,612 13,313 Additional paid in capital....... 5,524,495 5,417,248 Retained earnings................ 4,928,514 4,058,060 Currency translation adjustments. (208,370) (428,583) Treasury stock, 3,000 shares, at cost........................ (16,800) (16,800) Total stockholders' equity..... 10,241,451 9,043,238 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $23,737,026 $20,090,771
See accompanying notes to consolidated financial statements. DATA MEASUREMENT CORPORATION STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended June 30 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income............................ $ 870,454 $ 303,700 Adjustments to reconcile net earnings to net cash used in operations: Depreciation...................... 156,137 263,254 Amortization...................... 16,719 14,221 Changes in assets and liabilities: Accounts receivable............... (1,965,903) (1,817,684) Inventories....................... (2,111,608) (187,703) Other current assets.............. (48,053) 27,079 Patents and licenses.............. (6,094) (19,337) Accounts payable.................. 238,701 701,157 Advance payments on contracts..... 1,879,817 389,329 Accrued compensation.............. 271,330 69,431 Other accrued liabilities......... 281,838 (142,766) Current income taxes.............. (14,514) 10,036 Deferred income taxes............. 112,713 72,759 Net cash provided by (or used in) operating activities: (318,463) (316,524) CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property and equipment... (371,799) (101,686) Disposal of property and equipment...... 0 0 Net cash provided by (or used in) investing activities: (371,799) (101,686) CASH FLOWS FROM FINANCING ACTIVITIES: Increase (repayment) of long term debt.. (187,562) (2,935) Increase (decrease) in notes payable.. 976,436 348,718 Proceeds from sale of common stock.... 82,546 0 Net cash provided by (or used in) financing activities: 871,420 345,783 EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS: 127,806 28,391 NET INCREASE/(DECREASE) IN CASH: 308,964 (44,036) CASH, Beginning of period 685,384 738,696 CASH, End of period $ 994,348 $ 694,660 Supplemental cash flow information: Interest paid......................... $ 183,270 $ 174,097 Income taxes paid..................... $ 215,617 $ 1,540 Capitalization of test equipment...... $ 243,984 - Capitalized equipment leases.......... - $ 73,030 Conversion of Subordinated Debenture.. $ 25,000 $ 30,000
See accompanying notes to consolidated financial statements. DATA MEASUREMENT CORPORATION NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (1) BASIS OF PRESENTATION The consolidated unaudited financial statements contained herein have been prepared from the books and records of the Company. In the opinion of management, all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year. The Company has 4,000,000 authorized shares of $.01 par value common stock of which there were 1,364,187 shares issued and 1,361,187 shares outstanding and 1,310,818 shares issued and 1,307,818 shares outstanding as of June 30, 1995 and 1994, respectively. (2) NET INCOME PER SHARE CALCULATION Primary income per share is based on the weighted average number of common shares outstanding including common stock equivalents from dilutive stock options and warrants. Common equivalent shares were computed using the treasury stock method. The Company's convertible subordinated debentures are not common stock equivalents. However, stock options having an exercise price below the average market price of common stock during the period are common stock equivalents and are assumed to have been exercised. Additionally, the method assumes that the exercise proceeds are used by the Company to repurchase common shares at the average market price. Under this method, the average shares used in calculating primary earnings per share are 1,459,707 and 1,435,354 for the three and six month periods ending June 30, 1995. Fully diluted earnings per share have also been calculated using the treasury stock method; in addition, however, the conversion of the convertible subordinated debentures issued by the Company is also assumed. Average shares used in calculating fully diluted earnings per share, therefore, are 1,658,093 and 1,652,898 for the three and six month periods ending June 30, 1995. Item 2. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Material Changes in Financial Condition: During the second quarter of 1995, the Company financed its operations from internally generated cash flow and by use of its working capital facility. During the quarter, the Company renewed its working capital facility in the United States and the United Kingdom and increased those lines by $1,000,000. At June 30, 1995, the Company had approximately $720,000 of unused credit facilities available. The Company expects that the funds provided by its operations and by its current working capital facilities will enable it to finance its future operations. Material Changes in Results of Operations: Sales for the three and six month periods ending June 30, 1995 were $8,522,309 and $15,022,520 as compared to $6,149,173 and $11,427,285 in 1994, respectively. These increases of 38.6% and 31.5% reflect increases in order input which began late in 1994. Order backlog increased from $14,406,000 at December 31, 1994 to $19,073,000 at March 31, 1995 and stood at $19,172,000 on June 30, 1995. The increases in bookings came from all parts of the world. Gross Margins were $2,368,485 or 27.8% of sales for the second quarter of 1995 compared with $1,438,254 or 23.4% of sales for the same period in 1994. First half gross margins were $4,287,785 or 28.5% of sales in 1995 as compared to $2,664,833 or 23.3% of sales for the same period in 1994. Shipments in 1995 reflect better selling prices that the Company has been able to negotiate during the cyclic upswing in order input. Spare parts sales, which were strong during the first half of 1995, amounted to $3,212,000 -- an increase of 37.7% over the prior year. Selling, general and administrative expenses were $1,511,342 or 17.7% of sales for the second quarter of 1995, as compared to $1,120,154 or 18.2% of sales in the same period in 1994. The absolute increase was the result of commission payments paid in connection with foreign orders. In the first half of 1995, SG&A expenses were 19.1% of sales as compared to 18.1% during the first half of 1994. Interest Expense was $174,950 or 2.1% of sales in the quarter ended June 30, 1995 as compared to $106,106 or 1.7% of sales for the same period in 1994. In the 1995 period, the Company recognized $75,000 of interest expense as result of an adjustment to the fair value of the convertible subordinated debenture issued to the Federal Deposit Insurance Corporation in connection with a debt restructuring which was concluded in October 1994. The change in year to date interest expense also resulted from the same transaction. The Company recorded a gain on foreign exchange of $40,848 or 0.5% of sales for the second quarter of 1995 as compared to a gain of $10,499 or 0.2% of sales for the same period in 1994. The gains in foreign exchange resulted from the weakening of the U.S. Dollar versus major European currencies. The Company's effective tax rate was 27.1% for the first half of 1995 as compared to 21.9% for the same period in 1994. In both 1995 and 1994, the Company was able to utilize tax credits from certain foreign operations to reduce its effective tax rate. PART II. OTHER INFORMATION Item 1. LEGAL PROCEEDINGS Not applicable. Item 2. CHANGES IN SECURITIES Not applicable. Item 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The shareholders of the Company elected the slate of eight Directors nominated by the Board at the Company's annual meeting which was held on May 4, 1995. Item 5. OTHER INFORMATION Not applicable. Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit Index Exhibit # Description (3)(i) Restated Certificate of Incorporation Filed with this report at page 10 (b) Reports on Form 8-K No reports on Form 8-K have been filed during the second quarter of 1995. 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. DATA MEASUREMENT CORPORATION (Registrant) Dated: August 2, 1995 /s/ Frederick S. Rolandi By: ------------------------ Frederick S. Rolandi Vice President and Chief Financial Officer /s/ Dominique Gignoux By: ------------------------ D. Gignoux President and Chief Executive Officer RESTATED CERTIFICATE OF INCORPORATION OF DATA MEASUREMENT CORPORATION 1. The name of the corporation is: DATA MEASUREMENT CORPORATION 2. The address of its registered office in the State of Delaware is No. 100 West Tenth Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. 3. The nature of the business or purposes to be conducted or promoted is: To engage in research, development, production, manufacturing, and marketing of industrial process control products using nuclear, X-ray, infrared, optical and other techniques for continuous non-contact measurements and all allied fields. To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. To manufacture, purchase or otherwise acquire, invest in, own, mortgage, pledge, sell, assign and transfer or otherwise dispose of, trade, deal in and deal with goods, wares and merchandise and personal property of every class and description. To acquire, and pay for in cash, stock or bonds of this corporation or otherwise, the good will, rights, assets and property, and to undertake or assume the whole or any part of the obligations or liabilities of any person, firm, association or corporation. To acquire, hold, use, sell, assign, lease, grant licenses in respect of, mortgage or otherwise dispose of letters patent of the United States or any foreign country, patent rights, licenses and privileges, inventions, improvements and processes, copyrights, trade-marks and trade names, relating to or useful in connection with any business of this corporation. To acquire by purchase, subscription or otherwise, and to receive, hold, own, guarantee, sell, assign, exchange, transfer, mortgage, pledge or otherwise dispose of or deal in and with any of the shares of the capital stock, or any voting trust certificates in respect of the shares of capital stock, scrip, warrants, rights, bonds, debentures, notes, trust receipts, and other securities obligations, choses in action and evidences of indebtedness or interest issued or created by any corporations, joint stock companies, syndicates, associations, firms, trusts or persons, public or private, or by the government of the United States of America, or by any foreign government, or by any state, territory, province, municipality or other political subdivision or by any governmental agency, and as owner thereof to possess and exercise all the rights, powers and privileges of ownership, including the right to execute consents and vote thereon, and to do any and all acts and things necessary or advisable for the preservation, protection, improvement and enhancement in value thereof. To borrow or raise money for any of the purposes of the corporation and, from time to time without limit as to amount, to draw, make, accept, endorse, execute and issue promissory notes, drafts, bills of exchange, warrants bonds, debentures and other negotiable or non-negotiable instruments and evidences of indebtedness, and to secure the payment of any thereof and of the interest thereon by mortgage upon or pledge, conveyance or assignment in trust of the whole or any part of the property of the corporation, whether at the time owned or thereafter acquired, and to sell, pledge or otherwise dispose of such bonds or other obligations of the corporation for its corporate purposes. To purchase, receive, take by grant, gift, devise, bequest or otherwise, lease, or otherwise acquire, own, hold, improve, employ, use and otherwise deal in and with real or personal property, or any interest therein, wherever situated, and to sell, convey, lease, exchange, transfer or otherwise dispose of, or mortgage or pledge, all or any of the corporation's property and assets, or any interest therein, wherever situated. In general, to possess and exercise all the powers and privileges granted by the General Corporation Law of Delaware or by any other law of Delaware or by this certificate of incorporation together with any powers incidental thereto, so far as such powers and privileges are necessary or convenient to the conduct, promotion or attainment of the business or purposes of the corporation. The business and purposes specified in the foregoing clauses shall, except where otherwise expressed, be in nowise limited or restricted by reference to, or inference from, the terms of any other clause in this certificate of incorporation, but the business and purposes specified in each of the foregoing clauses of this article shall be regarded as independent business and purposes. 4. The total number of shares of stock which the corporation shall have authority to issue is Four Million (4,000,000), and the par value of each of such shares is One Cent ($.01) amounting in the aggregate to Forty Thousand Dollars ($40,000.00). 5A. The name and mailing address of each incorporator is as follows: NAME MAILING ADDRESS K. L. Husfelt 100 West Tenth Street Wilmington, Delaware 19801 B. A. Schuman 100 West Tenth Street Wilmington, Delaware 19801 E. L. Kinsler 100 West Tenth Street Wilmington, Delaware 19801 5B. The name and mailing address of each person, who is to serve as a director until the first annual meeting of the stockholders or until a successor is elected and qualified, is as follows: NAME MAILING ADDRESS Dominique Gignoux 5404 Albemarle Street Bethesda, Maryland 20016 Russell Murray 10601 Graeloch Road Laurel, Maryland 20810 R. B. Edlow 5903 Anniston Road Bethesda, Maryland 20034 6. The corporation is to have perpetual existence. 7. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized: To make, alter or repeal the by-laws of the corporation. To authorize and cause to be executed mortgages and liens upon the real and personal property of the corporation. To set apart out of any of the funds of the corporation available for dividends a reserve or reserves for any proper purpose and to abolish any such reserve in the manner in which it was created. By a majority of the whole board, to designate one or more committees, each committee to consist of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. The by-laws may provide that in the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the board of directors, or in the by-laws of the corporation, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the certificate of incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the by-laws of the corporation; and, unless the resolution or by-laws expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. When and as authorized by the stockholders in accordance with statute, to sell, lease or exchange all or substantially all of the property and assets of the corporation, including its good will and its corporate franchises, upon such terms and conditions and for such consideration, which may consist in whole or in part of money or property including shares of stock in, and/or other securities of, directors shall deem expedient and for the best interest of the corporation. 8. (a) No contract or transaction between a corporation and one or more of its directors or officers, or between a corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the board or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if: (1) The material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the board of directors or the committee, and the board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (2) The material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the shareholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the shareholders; or (3) The contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified, by the board of directors, a committee thereof, or the shareholders. (b) Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee which authorizes the contract or transaction. 9. The corporation shall indemnify its officers, directors, employees and agents to the extent permitted by the General Corporation Law of Delaware. 10. Meetings of stockholders may be held within or without the State of Delaware, as the by-laws may provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation. Elections of directors need not be by written ballot unless the by-laws of the corporation shall so provide. Whenever a compromise or arrangement is proposed between this corporation and its creditors or any class of them and/or between this corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this corporation under the provisions of section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this corporation under the provisions of section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this corporation, as the case may be, and also on this corporation. 11. The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. WE, THE UNDERSIGNED, being each of the incorporators herein before named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is our act and deed and the facts herein stated are true, and accordingly have hereunto set our hands this 29th day of June 1981. K. L. Husfelt K. L. Husfelt B. A. Schuman B. A. Schuman E. L. Kinsler E. L. Kinsler EX-27 2 ART.5 FDS FOR 2ND QUARTER 10-Q
5 1000 3-MOS DEC-31-1995 JUN-30-1995 994 0 6255 154 11391 22124 4747 3574 23737 9989 1138 5521 0 0 4928 23737 8522 8522 6154 6154 1470 0 175 723 214 509 0 0 0 509 0.35 0.32