SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended January 25,April 26, 1997 Commission File Number 2-37706
Bowles Fluidics Corporation
------------------------------------------------------
(exact name of registrant as specified in its charter)
MARYLAND 52-0741762
- ----------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6625 Dobbin Road, Columbia, Maryland 21045
----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (410) 381-0400
Indicate by check mark whether the registrant has filed all annual, quarterly
and other reports required to be filed with the Commission within the past 90
days and in addition has filed the most recent annual report required to be
filed.
Yes X No
----- -----
Indicate the number of shares outstanding of each issuer's classes of common
stock, as of January 25, 1997.
Class Outstanding at January 25,April 26, 1997
------------------ -----------------------------
Common Stock, $.10 12,640,011 shares
INDEX
BOWLES FLUIDICS CORPORATION
FOR THE THREESIX MONTHS ENDED JANUARY 25,APRIL 26, 1997
Page
PART I. Financial Information Number
Item 1. Financial Statements
Consolidated Statements of Income
For the three months ended January 25, 1997
and January 27, 1996...................................... 3
Consolidated Balance Sheets
January 25, 1997 and October 26, 1996 .................... 4
Consolidated Statements of Cash Flows
For the three months ended January 25, 1997
and January 27, 1996...................................... 5
Notes to Consolidated Financial Statements.................. 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations ........................................... 7
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K .......................... 9
Exhibit 11........................................ 10
Exhibit 20........................................ 12
Page
Number
------
PART I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Income
For the three and six months ended
April 26, 1997 and April 27, 1996 .......................................... 3
Consolidated Balance Sheets
April 26, 1997 and October 26, 1996 ........................................ 4
Consolidated Statements of Cash Flows
For the six months ended
April 26, 1997 and April 27, 1996 .......................................... 5
Notes to Consolidated Financial Statements ................................... 6
Item 2. Management's Discussion and Analysis
of Results of Operations and Financial
Condition ................................................................. 7
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K ............................................ 10
Exhibit 11 ......................................................... 11
Exhibit 20 ......................................................... 13
Form 8-K ........................................................... 15
2
BOWLES FLUIDICS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
For the Three Months Ended
--------------------------
January 25 January 27
1997 1996
----------- -----------
Net sales $ 4,244,123 $ 4,550,061
Cost of sales 3,158,081 3,062,121
----------- -----------
Gross profit 1,086,042 1,487,940
Selling, general and
administrative expenses 840,982 663,375
Research and development costs 274,761 215,474
----------- -----------
Operating income (loss) (29,701) 609,091
Interest expense - (5,954)
Other income, net 17,034 16,448
----------- -----------
Income (loss) before taxes (12,667) 619,585
Provision (benefit) for income taxes (14,832) 226,616
----------- -----------
Net income 2,165 392,969
Preferred stock dividends accrued (18,662) (18,662)
----------- -----------
Income (loss) applicable to
common shareholders $ (16,497) $ 374,307
=========== ===========
Primary earnings per common share $.00 $.03
==== ====
Fully diluted earnings per common share $.00 $.02
==== ====
For the Three Months Ended For the Six Months Ended
----------------------------- ------------------------------
April 26, April 27, April 26, April 27,
1997 1996 1997 1996
----------- ------------ ------------ ------------
Net sales $ 4,983,272 $ 4,687,296 $ 9,227,395 $ 9,237,357
Cost of sales 3,037,098 2,872,639 6,195,179 5,934,760
----------- ----------- ----------- -----------
Gross profit 1,946,174 1,814,657 3,032,216 3,302,597
Selling, general and
administrative expenses 896,487 1,168,405 1,737,469 1,831,780
Research and development costs 256,747 363,532 531,508 579,006
----------- ----------- ----------- -----------
Operating income 792,940 282,720 763,239 891,811
Interest expense - (63) - (6,018)
Other income, net 32,305 21,400 49,339 37,848
----------- ----------- ----------- -----------
Income before taxes 825,245 304,057 812,578 923,641
Provision for income taxes 307,174 106,220 292,342 332,836
----------- ----------- ----------- -----------
Net income 518,071 197,837 520,236 590,805
Preferred stock
dividends accrued (18,662) (18,662) (37,323) (37,324)
----------- ----------- ----------- -----------
Income applicable to
common shareholders $ 499,409 $ 179,175 $ 482,913 $ 553,481
=========== =========== =========== ============
Primary earnings per common share $ .04 $ .01 $ .04 $ .04
=========== =========== =========== ============
Fully diluted earnings per common share $ .03 $ .01 $ .03 $ .04
=========== =========== =========== ============
The accompanying notes are an integral part of these financial statements.
3
BOWLES FLUIDICS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited) (Audited)
January 25, October 26,
1997 1996
-------------- -----------
ASSETS
Current
Cash and cash equivalents $ 1,095,902 $ 1,287,110
Investments 586,171 577,837
Accounts receivable 2,838,557 2,775,658
Inventories 1,472,060 1,986,065
Other current assets 593,003 556,525
----------- -----------
Total current assets 6,585,693 7,183,195
----------- -----------
Property and equipment, net 3,416,335 3,428,765
Other assets 102,693 107,892
----------- -----------
Total assets $10,104,721 $10,719,852
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable - trade $ 858,578 $ 1,104,511
Accrued expenses and other liabilities 1,265,301 1,429,356
------------ -----------
Total current liabilities 2,123,879 2,533,867
Other liabilities 553,286 746,433
----------- -----------
Total liabilities 2,677,165 3,280,300
----------- -----------
Commitments and contingencies
Stockholders' Equity
8% Convertible preferred stock 933,080 933,080
Common stock 1,264,001 1,261,001
Additional paid-in capital 2,728,082 2,726,583
Retained earnings
($2,407,467 deficit eliminated
at 10/29/94) Note 5 2,502,393 2,518,888
----------- -----------
Total stockholders' equity 7,427,556 7,439,552
----------- -----------
Total liabilities and stockholders' equity $10,104,721 $10,719,852
=========== ===========
(Unaudited) (Audited)
April 26, October 26,
1997 1996
--------------- -------------
ASSETS
Current
Cash and cash equivalents $ 1,047,379 $ 1,287,110
Investments available for sale 594,505 577,837
Accounts receivable 3,436,984 2,775,658
Inventories 1,769,122 1,986,065
Other current assets 481,333 556,525
------------- ------------
Total current assets 7,329,323 7,183,195
------------- ------------
Property and equipment, net 3,419,346 3,428,765
Other assets 100,338 107,892
------------- ------------
Total assets $ 10,849,007 $ 10,719,852
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable - trade $ 819,521 $ 1,104,511
Accrued expenses and other liabilities 1,652,510 1,389,356
Income taxes payable 119,872 40,000
------------- ------------
Total current liabilities 2,591,903 2,533,867
Other liabilities $ 330,139 $ 746,433
------------- ------------
Total liabilities $ 2,922,042 $ 3,280,300
------------- ------------
Commitments and contingencies
Stockholders' Equity
8% Convertible preferred stock 933,080 933,080
Common stock 1,264,001 1,261,001
Additional paid-in capital 2,728,082 2,726,583
Retained earnings
($2,407,467 deficit eliminated
at 10/29/94) Note 5 3,001,802 2,518,888
------------- ------------
Total stockholders' equity 7,926,965 7,439,552
------------- ------------
Total liabilities and stockholders' equity $ 10,849,007 $ 10,719,852
============= ============
The accompanying notes are an integral part of these financial statements.
4
BOWLES FLUIDICS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the Three Months Ended
---------------------------
January 25, January 27,
1997 1996
---------- ----------
Cash flows from operating activities:
Net income $ 2,165 $ 392,969
Adjustments to reconcile net income
provided by operating activities:
Depreciation and amortization 213,354 167,179
Loss on sale of assets 2,751 2,073
Accretion of interest on investments (8,334) (10,000)
---------- -----------
209,936 552,221
---------- -----------
Change in operating accounts:
Accounts receivable (62,899) (177,695)
Inventories 514,005 109,474
Other assets (36,477) (60,003)
Accounts payable (245,933) (86,360)
Accrued expenses (108,071) (178,400)
Income taxes payable - 166,894
Other liabilities (193,148) 25,638
---------- -----------
Change in operating accounts (132,523) (200,452)
---------- -----------
Net cash provided by operating activities 77,413 351,769
---------- -----------
Cash flows from investing activities:
Capital expenditures (198,475) (172,368)
Proceeds from sale of equipment - 1,000
---------- -----------
Net cash used by investing activities (198,475) (171,368)
---------- -----------
Cash flows from financing activities:
Principal payment of debt - (11,144)
Preferred stock dividend (74,646) (74,648)
Proceeds from issuance of common stock 4,500 -
---------- -----------
Net cash used by financing activities (70,146) (85,792)
---------- -----------
Net increase (decrease) in cash and cash
equivalents (191,208) 94,609
Cash and cash equivalents
- Beginning of period 1,287,110 676,981
---------- -----------
- End of period $1,095,902 $ 771,590
==========
For the Six Months ended
-----------------------------------------
April 26, April 27,
1997 1996
-------------- ---------------
Cash flows from operating activities:
Net income $ 520,236 $ 590,805
Adjustments to reconcile net income
provided by operating activities:
Depreciation and amortization 448,238 353,866
Deferred income taxes - (162,000)
Loss on disposal of assets 2,450 15,217
Accretion of interest on investments (16,668) (5,329)
------------ -----------
954,256 792,559
------------ -----------
Change in operating accounts:
Accounts receivable (661,326) (172,799)
Inventories 216,942 163,972
Other assets 72,395 (80,651)
Accounts payable (284,990) (303,895)
Accrued expenses and other liabilities (115,818) 414,427
Income taxes payable 79,872 80,114
------------ -----------
Change in operating accounts (692,925) 101,168
------------ -----------
Net cash provided by operating activities 261,331 893,727
------------ -----------
Cash flows from investing activities:
Capital expenditures (431,341) (544,233)
Proceeds from sale of equipment 425 -
Proceeds from sale of investments - 489,058
------------ -----------
Net cash used in investing activities (430,916) (55,175)
------------ -----------
Cash flows from financing activities:
Principal payment of debt - (271,668)
Preferred stock dividend (74,646) (74,648)
Proceeds from issuance of common stock 4,500 -
------------ -----------
Net cash used in financing activities (70,146) (346,316)
------------ -----------
Net increase(decrease) in cash and cash
equivalents (239,731) 492,236
Cash and cash equivalents
- Beginning of period 1,287,110 676,981
------------ -----------
- End of period $ 1,047,379 $ 1,169,217
============ ===========
The accompanying notes are an integral part of these financial statements.
5
BOWLES FLUIDICS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - General
In the opinion of the Company, the accompanying unaudited financial
statements contain all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the financial position as of January
25,April 26,
1997, and the results of operations and cash flows for three and six months
ended January 25,April 26, 1997 and JanuaryApril 27, 1996.
While the Company believes that the disclosures presented are adequate to
make the information not misleading, it is suggested that these financial
statements be read in conjunction with the financial statements and the notes
included in the Company's latest annual report on Form 10-K.
NOTE 2 - Inventories
Inventories are comprised of:
January 25, October 26,
1997 1996
---------- ----------
Raw Material $ 545,487 $ 678,494
Work and tooling in process 316,536 242,369
Finished Goods 610,037 1,065,202
---------- ----------
Total $1,472,060 $1,986,065
========== ==========
April 26, October 26,
1997 1996
------------ -------------
Raw Material $ 617,780 $ 678,494
Work and tooling in process 613,986 242,369
Finished Goods 537,356 1,065,202
----------- -----------
Total $ 1,769,122 $ 1,986,065
=========== ===========
NOTE 3 - Property and Equipment, netand Accumulated Depreciation
Property and Equipment, and Accumulated Depreciation are comprised of:
January 25, October 26,
1997 1996
----------- -----------
Production machinery and equipment $ 4,487,873 $ 4,397,018
Office furniture and equipment 2,062,024 1,992,152
Laboratory and machine shop equipment 1,409,678 1,395,837
Leasehold improvements 807,295 796,928
----------- -----------
Total property and equipment 8,766,870 8,581,935
Less accumulated depreciation (5,350,535) (5,153,170)
----------- -----------
Net property and equipment $ 3,416,335
April 26, October 26,
1997 1996
------------ -------------
Production machinery and equipment $ 4,568,873 $ 4,397,018
Office furniture and equipment 2,242,438 1,992,152
Laboratory and machine shop equipment 1,416,220 1,395,837
Leasehold improvements 768,694 796,928
----------- ------------
Total property and equipment 8,996,225 8,581,935
Less accumulated depreciation (5,576,879) (5,153,170)
----------- ------------
Net property and equipment $ 3,419,346 $ 3,428,765
===========
=========== ============
NOTE 4 - Capital Stock
In January, 1997, an officer of the Company exercised her stock options and
purchased 30,000 shares of common stock at the exercise price of $.15 per share.
NOTE 5 - Quasi reorganization
Effective October 29, 1994, the Board of Directors approved a
quasi-reorganization which had the impact of eliminating the retained earnings
deficit as an adjustment to the additional paid-in capital.
6
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following discussion should be read in conjunction with the attached
financial statements and notes thereto, and with the Company's audited financial
statements and notes thereto for the fiscal year ended October 26, 1996.
RESULTS OF OPERATIONS
First- ---------------------
Second Quarter FY 1997 Compared with FirstSecond Quarter FY 1996
- -----------------------------------------------------------
The Company'sCompany achieved record sales of $4,244,123 in the firstsecond quarter of fiscal year 1997 fell
shortas a
result of strong shipments of windshield washer nozzles. Net income was also
higher in this year's second quarter due to the lack of last year's firstsecond
quarter by 7%, and net income decreasedadditional charge related to $2,165
from $392,969. Technical services sales were halfthe planned termination of the priorCompany's
sales agreement and due to the increased sales of washer nozzles. The
termination of the agreement became effective May 14, 1997.
Net sales in the second quarter of fiscal year 1997 rose to $4,983,272, 6% above
last year's firstsecond quarter and product sales decreased 3%.of $4,687,296. Net income was unfavorably affected
principally by lower profit from product sales as well as by higher engineering
costs and other operating expenses.
Shipments$518,071, 162% or
$320,234 more than last year's second quarter income of $197,837.
Sales of light vehicle windshield washer nozzles and defroster outletsnozzles of $4,061,350 decreased 3% from the FY 1996 first$4,878,833
increased 5% over last year's second quarter sales of $4,171,177. The
decline was more than accounted for by the$4,640,865 despite a drop
in the shipments of defrosters as certain models were discontinued. Sales of washer
nozzles for General Motors vehicles were strong because of this year's higher
production of new car models and the recovery from last year's second quarter
plant shutdowns. Sales of prototype and production tooling of $104,438 for
future product manufacturing increased 125% over last year's second quarter
tooling sales, principally due to the timing of the start-up of various car
model programs.
Gross profit in this year's second quarter was $1,946,174, 7% above last year's
second quarter profit of $1,814,657, principally as a result of the higher
volume of washer nozzle shipments, in spite of greater spending on engineering
and other support activities for the customization of new products, both washer
nozzles and air conditioning outlets.
Selling, general and administrative expenses of $896,487 for the fiscal year
1997 second quarter were 23% lower than those for the prior fiscal year's second
quarter due to the lack of last year's $420,000 additional charge related to the
planned termination of the Company's sales agreement with one of its
manufacturer's representatives. These expenses were also affected by the
addition of sales personnel as well as increased consulting fees related to
long-range planning. Research and development costs at 5.2% of net sales were
$256,747, 29% below last year's second quarter as a special program for the
improvement of windshield washer nozzles was completed during that year.
Operating income increased $510,220 or 180% to $792,940 in this fiscal year's
second quarter compared to $282,720 in last year's comparable period.
Provision for income taxes, both federal and state, was determined based upon an
estimate of the total year's pretax income. The effective tax rates for both
years' second quarters were essentially the same.
7
Six Months Ended April 26, 1997, Compared with Six Months Ended April 27, 1996
- ------------------------------------------------------------------------------
For the first six months of the 1997 fiscal year ended April 26, 1997, net sales
were unchanged, but net income decreased as a result of higher spending for
customization of new products.
Net sales for the first six months of fiscal year 1997 were $9,227,395,
essentially the same as the prior year's first six months. Net income decreased
12% to $520,236 from last year's first six months results of $590,805.
Sales of light vehicle washer and defroster nozzles of $8,940,183 increased 1.5%
in the first six months compared with $8,812,042 in the same period in the prior
year. Higher shipments of washer nozzles for General Motors vehicles were offset
by lower shipments of defroster nozzles. Technical services sales of product
design work and prototypesprototype and production tooling related to future product
manufacturing declined 52%32% to $182,773$287,212 from last year's first quartersix months sales
of $378,884$425,315, principally due to the timing of the start-up of various car model
programs.
Gross profit in the FY 1997 first quarter was $1,086,042, 27% below last year's
first quarter of $1,487,940. Product sales were lower, and the profitabilitysix months of the manufacturing operations1997 fiscal year declined due8% to
lower production levels$3,032,216 from $3,302,597 in the similar 1996 period as a result of plant layoffs carried out to bring inventories in line with shipment levels.
In addition, more funds were spenthigher
spending on engineering and other support activities for the customization of
new products, particularly for the newwindshield washer nozzles and air conditioning outlets.
Selling, general and administrative expenses were 27% higher$1,737,469 in the first six
months of fiscal year 1997, 5% lower than in the similar 1996 period due in part to the
lack of last year's $420,000 additional charge related to the planned
termination of the Company's sales agreement with one of its manufacturer's
representatives. These expenses were also affected by the addition of sales
personnel but principally toas well as increases in professional serviceconsulting fees for operational improvements
and patent costs related to product and operational improvements.long-range planning. Research and development costs increasedat 5.8% of net sales
decreased by 28%8% as moreless spending was incurred for the
developmentbasic fluidic and other new
product research.
Operating income of the new air conditioning outlets and the improvement of the
current windshield washer nozzles.
An operating loss of $29,701$763,239 was realizedearned in this year's first six months compared
with $891,811 in the FY 1997 first quarter compared
to operating income of $609,091 in the prior year's first quarter,similar period last year, a change of
$638,792.
The benefit and the provision14% decline.
Provision for income taxes, both federal and state, have
beenwas determined based upon an
estimate of the total year's pretax income. 7
The effective tax rates for both
years' six months were essentially the same.
FINANCIAL CONDITION
- -------------------
The Company's working capital of $4,461,814$4,737,420 at January 25,April 26, 1997, decreased
$187,514increased $88,092
or 2% from the previous fiscal year end at October 26, 1996. The current ratio
increased fromof 2.83 to 3.10 duringremained the first quarter.same for the two dates. The decrease incurrent working capital was caused bywould
have increased due to higher accounts receivable from increased General Motors
sales and the reductiondecline in finished goods inventories brought about
by the plant layoffs during the first quarter of FY 1997. Accounts payable and
accrued expenses were also reduced during the quarter as the result of the lower
inventory levels andliabilities from payment of certain year-end
accruals. However, current liabilities increased because a significant portion
of last year's accrual related to the termination of the Company's sales
agreement was reclassified from long-term to current liabilities.
8
Cash provided by operating activities was $77,413$261,331 in the first quartersix months of
FYfiscal year 1997 compared with $351,769 provided$893,727 in the FY 1996 first quarter.last fiscal year's similar period.
The principal difference in cash flow was from the lower net incomeinvestment this year.year in trade
accounts receivable due to timing of cash receipts and the accrual last year
related to the termination of the Company's sales agreement.
Capital expenditures were $198,475 compared with $172,368 during last$431,341 in this fiscal year's first quarter.six months,
$112,892 less than the comparable period last year. The Company's management
believes that capital expenditures for the 1997 fiscal year as a whole will be
approximately equal to the prior year.
North American light vehicle production (excluding Mexican output) by the three
major U.S. automotive companies, which generates most of the Company's sales,
decreased 5%increased 7% in the fourthfirst calendar quarter of 19961997 versus the same period in
1995.1996. Production for the firstsecond calendar quarter of 1997 is forecasted by Ward's
Automotive Reports to increase 7% above the priordecrease slightly from last year's firstsecond quarter.
The Company's management believes that the present and planned production
capacity should be satisfactory to meet the anticipated demands referred to
above, as well as near-term new product deliveries. Cash flow from operations as
well as available cash is expected to provide the funds needed for near-term
working capital requirements and capital expenditures.
89
BOWLES FLUIDICS CORPORATION
PART II. OTHER INFORMATION
FOR THE THREESIX MONTHS ENDED JANUARY 25,APRIL 26 1997
Item 6. Exhibits and Reports on Form 8-K
Exhibit Description
------- -----------
(a) Exhibit 11 Calculation of Earnings
Per Common Share
Exhibit 20 Report furnished to Security Holders
(b) Reports on Form 8-K
none
910
BOWLES FLUIDICS CORPORATION - EXHIBIT-EXHIBIT 11
CALCULATION OF EARNINGS PER COMMON SHARE
A. PRIMARY EARNINGS PER COMMON SHARE
For the Three Months Ended
-----------------------------
January 25, January 27,
1997 1996
----------- ------------
Calculation of net income:
Net income per books $ 2,165 $ 392,969
Less: Dividends on convertible
preferred stock 18,662 18,662
----------- -----------
Net income (loss) as adjusted $ (16,497) $ 374,307
=========== ===========
Calculation of outstanding shares:
Weighted average of common
shares outstanding 12,615,011 12,610,011
Add: Assumed exercise of
stock options 50,747 140,364
----------- -----------
Number of common shares
outstanding adjusted 12,665,758 12,714,375
=========== ===========
Primary earnings per common share $ .00 $ .03
=========== ===========
10
For the Three Months Ended For the Six Months Ended
------------------------------ ----------------------------
April 26, April 27, April 26, April 27,
1997 1996 1997 1996
----------- ----------- ----------- -----------
Calculation of net income:
Net income per books $ 518,071 $ 197,837 $ 520,236 $ 590,805
Less: Dividends on convertible
preferred stock 18,662 18,662 37,323 37,324
------------- ------------- ------------ -------------
Net income as adjusted $ 499,409 $ 179,175 $ 482,913 $ 553,481
============= ============= ============= =============
Calculation of outstanding shares:
Weighted average of common
shares outstanding 12,640,011 12,610,011 12,627,511 12,610,011
Add: Assumed exercise of stock
options 45,836 86,726 48,570 114,837
------------- ------------- ------------ -------------
Number of common shares
outstanding adjusted 12,685,847 12,696,737 12,676,081 12,724,848
============= ============= ============= =============
Primary earnings per common share $ .04 $ .01 $ .04 $ .04
============= ============= ============= =============
11
BOWLES FLUIDICS CORPORATION - EXHIBIT 11
CALCULATION OF EARNINGS PER COMMON SHARE (continued)
B. FULLY DILUTED EARNINGS PER COMMON SHARE
For the Three Months Ended For the Six Months Ended
-------------------------------- --------------------------------
April 26, April 27, April 26, April 27,
1997 1996 1997 1996
--------------- -------------- -------------- --------------
Net income per books $ 518,071 $ 197,837 $ 520,236 $ 590,805
------------- ------------ ------------ -------------
Weighted average of common
shares outstanding 12,640,011 12,610,011 12,627,511 12,610,011
Add: Assumed conversion of
preferred stock 3,732,320 3,732,320 3,732,320 3,732,320
Assumed exercise of stock
options 45,836 87,556 48,570 114,837
------------- ------------ ------------ -------------
Number of common shares
outstanding adjusted 16,418,167 16,429,887 16,408,401 16,457,168
============= ============ ============ =============
Fully diluted earnings
per share $ .03 $ .01 $ .03 $ .04
============= ============ ============ =============
12
Exhibit 20
BOWLES FLUIDICS CORPORATION
6625 Dobbin Road, Columbia, Maryland 21045-4707 USA
Phone: 410-381-0400 Fax: 410-381-2718
June 10, 1997
TO THE STOCKHOLDERS OF BOWLES FLUIDICS CORPORATION:
Record sales of windshield washer and defroster nozzles in the Three Months Ended
----------------------------
January 25, January 27,second quarter of
FY 1997 1996
----------- -----------
Net income per books $ 2,165 $ 392,969increased 5% over the same period last year. The adverse sales effect of
discontinuing certain defroster models was more than compensated by the increase
in washer nozzle shipments.
During this quarter our new sales office was opened in Detroit and all planned
positions have been filled. The sales force is devoting their time to both the
washer nozzle and the AC outlet product lines.
Also, in this period, we have successfully completed our first QS-9000
Surveillance Audit and have begun use of our new integrated information system.
We continue to apportion more resources to pursue the AC outlet opportunities as
well as certain household and industrial applications.
Sincerely,
Ronald Stouffer
President
RS:lto
Attachment
13
EXHIBIT 20
BOWLES FLUIDICS CORPORATION
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended Six Months Ended
April 26, 1997 April 27, 1996 April 26, 1997 April 27, 1996
-------------- -------------- -------------- --------------
Net Sales $ 4,983,272 $ 4,687,296 $ 9,227,395 $ 9,237,357
Cost of Sales 3,037,098 2,872,639 6,195,179 5,934,760
Selling, General and Administrative Expenses 896,487 1,168,405 1,737,469 1,831,780
Research and Development Costs 256,747 363,532 531,508 579,006
Interest Expense and Other (Income) and Expense, Net (32,305) (21,337) (49,339) (31,830)
----------- ----------- ----------- -----------
Income before Taxes $ 825,245 $ 304,057 $ 812,578 $ 923,641
Provision (benefit) for Income Taxes 307,174 106,220 292,342 332,836
----------- ----------- ----------- -----------
Net Income $ 518,071 $ 197,837 $ 520,236 $ 590,805
----------- ----------- ----------- -----------
Income (loss) applicable to Common Shareholders $ 499,409 $ 179,175 $ 482,913 $ 553,481
=========== =========== =========== ===========
Net Income per Common Share
Primary $ 0.04 $ 0.01 $ 0.04 $ 0.04
Fully Diluted $ 0.03 $ 0.01 $ 0.03 $ 0.04
- --------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
Unaudited Audited
April 26, 1997 October 26, 1996
-------------- ----------------
Assets
Cash and Cash Equivalents $ 1,047,379 $ 1,287,110
Investments 594,505 577,837
Accounts Receivable 3,436,984 2,775,658
Inventories 1,769,122 1,986,065
Other Current Assets 481,333 556,525
----------- -----------
Total Current Assets 7,329,323 7,183,195
Property, Plant and Equipment, Net 3,419,346 3,428,765
Other Assets 100,338 107,892
----------- -----------
Total Assets $10,849,007 $10,719,852
=========== ===========
Liabilities and Stockholders' Equity
Accounts Payable--Trade $ 819,521 $ 1,104,511
Accrued Expenses and Other Liabilities 1,652,510 1,389,356
Income Taxes Payable 119,872 40,000
Total Current Liabilities 2,591,903 2,533,867
Other Liabilities 330,139 746,433
----------- -----------
Total Liabilities 2,922,042 3,280,300
----------- -----------
8% Convertible Preferred Stock 933,080 933,080
Common Stock 1,264,001 1,261,001
Additional Paid-in Capital 2,728,082 2,726,583
Retained Earnings 3,001,802 2,518,888
----------- -----------
Stockholders' Equity 7,926,965 7,439,552
----------- -----------
Total Liabilities and Stockholders' Equity $10,849,007 $10,719,852
=========== ===========
Weighted average
14
BOWLES FLUIDICS CORPORATION
PART II. OTHER INFORMATION
Item 6. (b) Reports on Form 8-K
March 25, 1997
An Annual Meeting of commonStockholders of Bowles Fluidics Corporation was
held on March 13, 1997.
1. The following Board of Directors was elected:
William Ewing, III
Ronald D. Stouffer
John E. Searle, Jr.
David C. Dressler
2. Also at the meeting of stockholders, Coopers & Lybrand L.L.P. was
appointed as the Corporation's certified public accountants.
3. At a director's meeting immediately following the meeting of
Stockholders, the following officers were elected:
Chairman of the Board William Ewing III
President Ronald D. Stouffer
Vice President, Administration, & Secretary Eleanor M. Kupris
Vice President, Engineering Richard W. Hess
Vice President, Finance David A. Quinn
Vice President, Marketing Eric W. Koehler
Vice President, Quality Assurance Dharaphuram N. Srinath
Vice President, Operations Melvyn J. L. Clough
Corporate Controller Arlene M. Hardy
4. Miss Kupris has exercised an incentive stock option for 30,000
shares outstanding 12,615,011 12,610,011
Add: Assumed conversion of preferredthe Common Stock of the Corporation, par value $.10 at
$.15 per share. Sales of the stock 3,732,320 3,732,320
Assumed exerciseis restricted in accordance with
the terms of stock
options 52,639 104,364
----------- -----------
Numberthe Corporation's Incentive Stock Option Plan.
15
FORM 10-Q
BOWLES FLUIDICS CORPORATION
Pursuant to the requirements of common shares
outstanding adjusted 16,399,970 16,446,695
=========== ===========
Fully diluted earnings
per common share $ .00 .02
=========== ===========
11the Securities Exchange act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BOWLES FLUIDICS CORPORATION
Date_____________________ By________________________
Ronald D. Stouffer
President
Date_____________________ By________________________
David A. Quinn
Vice President-Finance
16