-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VKSsVPDbLUoxll1DPLB11XUG4RxAmsmTKS/eSqx4n/IqFrnmwgB9IaDOgJZoDbtm 8C0YsSEjy+2HMm0si7eb3A== 0000889810-96-000224.txt : 19960906 0000889810-96-000224.hdr.sgml : 19960906 ACCESSION NUMBER: 0000889810-96-000224 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960731 FILED AS OF DATE: 19960904 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL TECHNICAL SYSTEMS INC /DE/ CENTRAL INDEX KEY: 0000110536 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TESTING LABORATORIES [8734] IRS NUMBER: 954134955 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16438 FILM NUMBER: 96625769 BUSINESS ADDRESS: STREET 1: 24007 VENTURA BLVD CITY: CALABASAS STATE: CA ZIP: 91302 BUSINESS PHONE: 8185910776 MAIL ADDRESS: STREET 1: 24007 VENTURA BLVD CITY: CALABASAS STATE: CA ZIP: 91302 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL TECHNICAL SYSTEMS /DE/ DATE OF NAME CHANGE: 19880218 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL TECHNICAL SERVICES INC DATE OF NAME CHANGE: 19810712 FORMER COMPANY: FORMER CONFORMED NAME: LINCOLN FUND INC DATE OF NAME CHANGE: 19760315 10-Q 1 NATIONAL TECHNICAL SYSTEMS, INC. 2ND QRTR ================================================================================ FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------- (mark one) [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended July 31, 1996 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from ________________ to _________________ 0-16438 (Commission File Number) NATIONAL TECHNICAL SYSTEMS, INC. (Exact name of registrant as specified in its charter) Delaware 95-4134955 (State of Incorporation) (IRS Employer Identification number) 24007 Ventura Boulevard, Calabasas, California (Address of registrant's principal executive office) (818) 591-0776 91302 (Registrant's telephone number) (Zip code) 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 of common stock, par value $.01 per share, outstanding as of July 31, 1996 was 6,705,990. ================================================================================ Exhibit Index on Page 15 1 NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES INDEX PART I. FINANCIAL INFORMATION Page No. Financial Statements: Condensed Consolidated Balance Sheets July 31, 1996 and January 31, 1996 3 Condensed Consolidated Statements of Income Six Months Ended July 31, 1996 and 1995 4 Condensed Consolidated Statements of Income Three Months Ended July 31, 1996 and 1995 5 Condensed Consolidated Statements of Cash Flows Six Months Ended July 31, 1996 and 1995 6 Notes to the Condensed Consolidated Financial Statements 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II. OTHER INFORMATION & SIGNATURE 14 Item 4. Submission of Matters to a Vote of Shareholders 14 Item 6. Exhibits and Reports on Form 8-K 14 2 PART I -- FINANCIAL INFORMATION NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (unaudited) July 31, January 31, Assets 1996 1996 ------------ ------------ Current assets: Cash $ 1,632,000 $ 1,949,000 Receivables, less allowance for doubtful accounts of $535,000 at July 31, 1996 and $595,000 at January 31, 1996 12,185,000 10,453,000 Income taxes receivable 0 33,000 Inventories 2,720,000 2,220,000 Deferred income taxes 408,000 435,000 Prepaid expenses 724,000 687,000 ----------- ----------- Total current assets 17,669,000 15,777,000 Property, plant and equipment, at cost 43,185,000 41,955,000 Less: accumulated depreciation 26,265,000 25,398,000 ----------- ----------- Net property, plant and equipment 16,920,000 16,557,000 Intangible assets 450,000 286,000 Property held for sale 544,000 544,000 Other assets 360,000 339,000 ----------- ----------- Total Assets $35,943,000 $33,503,000 =========== =========== Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 3,865,000 $ 3,197,000 Accrued expenses 2,699,000 2,081,000 Current installments of long-term debt 1,816,000 1,747,000 ----------- ----------- Total current liabilities 8,380,000 6,737,000 Long-term debt, excluding current installments 9,226,000 9,090,000 Deferred income taxes 1,951,000 1,662,000 Minority Interest 66,000 75,000 Stockholders' equity: Common stock of $.01 par value. Authorized, 20,000,000; issued and outstanding 6,706,000 as of July 31, 1996 and 6,674,000 as of January 31, 1996 67,000 67,000 Additional paid-in capital 10,549,000 10,513,000 Retained earnings 5,704,000 5,071,000 ----------- ----------- Total stockholders' equity 16,320,000 15,651,000 ----------- ----------- Total Liabilities and Stockholders' Equity $35,943,000 $33,503,000 =========== =========== See accompanying notes to Condensed Consolidated Financial Statements. 3 NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income (unaudited) for Six Months Ended July 31, 1996 and 1995 1996 1995 ----------- ------------ Revenues $ 23,409,000 $ 20,488,000 Cost of sales 17,977,000 15,950,000 ------------ ------------ Gross profit 5,432,000 4,538,000 Selling, general and administrative expense 3,713,000 3,377,000 ------------ ------------ Operating income 1,719,000 1,161,000 Other income (expense): Interest expense, net (517,000) (602,000) Other 26,000 13,000 ------------ ------------ Total other expense (491,000) (589,000) ------------ ------------ Income before income taxes and minority interest 1,228,000 572,000 Income taxes 553,000 258,000 ------------ ------------ Income before minority interest 675,000 314,000 Minority interest (9,000) 12,000 ------------ ------------ Net income $ 684,000 $ 302,000 ============ ============ Primary and fully diluted net income per common share $ 0.10 $ 0.05 ============ ============ Weighted average number of common shares and common stock equivalents outstanding 6,690,000 6,652,000 ============ ============ See accompanying notes to Condensed Consolidated Financial Statements. 4 NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income (unaudited) for Three Months Ended July 31, 1996 and 1995 1996 1995 ----------- ------------ Revenues $ 11,770,000 $ 10,883,000 Cost of sales 9,056,000 8,417,000 ------------ ------------ Gross profit 2,714,000 2,466,000 Selling, general and administrative expense 1,855,000 1,661,000 ------------ ------------ Operating income 859,000 805,000 Other income (expense): Interest expense, net (262,000) (298,000) Other 24,000 35,000 ------------ ------------ Total other expense (238,000) (263,000) ------------ ------------ Income before income taxes and minority interest 621,000 542,000 Income taxes 280,000 244,000 ------------ ------------ Income before minority interest 341,000 298,000 Minority interest (5,000) 10,000 ------------ ------------ Net income $ 346,000 $ 288,000 ============ ============ Primary and fully diluted net income per common share $ 0.05 $ 0.04 ============ ============ Weighted average number of common shares and common stock equivalents outstanding 6,704,000 6,652,000 ============ ============ See accompanying notes to Condensed Consolidated Financial Statements. 5 NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (unaudited) for Six Months Ending July 31, 1996 and 1995 1996 1995 ----------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 684,000 $ 302,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,147,000 1,163,000 Provision for losses on receivables 60,000 44,000 Deferred income taxes 316,000 126,000 Gain on sale of assets 0 (5,000) Net changes in assets and liabilities: Accounts receivable (1,792,000) (1,206,000) Inventories (500,000) (211,000) Prepaid expenses (37,000) (37,000) Other assets (21,000) 32,000 Accounts payable 668,000 110,000 Accrued expenses 613,000 153,000 Income taxes 38,000 (184,000) Distributed earnings of affiliate (51,000) 0 Undistributed earnings of affiliate (9,000) 12,000 ----------- ----------- Net cash provided by operating activities 1,116,000 299,000 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (1,421,000) (779,000) Investment in new subsidiary (253,000) 0 Proceeds on sale of fixed assets 0 5,000 ----------- ----------- Net cash used for investing activities (1,674,000) (774,000) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from long-term debt 1,137,000 213,000 Repayments of current and long-term debt (932,000) (95,000) Cash dividends paid 0 (67,000) Proceeds from stock options exercised 36,000 14,000 ----------- ----------- Net cash provided by financing activities 241,000 65,000 ----------- ----------- Net decrease in cash (317,000) (410,000) Beginning cash balance 1,949,000 1,696,000 ----------- ----------- ENDING CASH BALANCE $ 1,632,000 $ 1,286,000 =========== =========== See accompanying notes to Condensed Consolidated Financial Statements. 6 NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements 1. In accordance with instructions to Form 10-Q the accompanying financial statements and notes have been condensed and, therefore, do not contain all disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the financial statements and notes thereto included in the Registrant's Form 10-K for the year ended January 31, 1996. 2. The statements presented as of and for the six-month and three-month periods ended July 31, 1996 and 1995 are unaudited. In Management's opinion, all adjustments have been made to present fairly the results of such unaudited interim periods. All such adjustments are of a normal recurring nature. 3. While the Registrant's business is not materially seasonal, the quarterly results of operations should not be construed as representing pro rata results of the Registrant's fiscal year. 4. Income taxes for the interim periods are computed using the effective tax rates estimated to be applicable for the full fiscal year. The Registrant expects to pay state and alternative minimum federal income taxes for the fiscal year ended January 31, 1997. 5. Net income per share for the six-month and three-month periods ended July 31, 1996 and 1995 was computed by dividing net income by the weighted average number of common shares outstanding during the periods. Common stock equivalents were excluded because their effect was immaterial or antidilutive. 6. The consolidated financial statements include the accounts of the Registrant and its wholly owned and financially controlled subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. 7. Inventories consist of accumulated costs applicable to uncompleted contracts and are stated at actual cost which is not in excess of estimated net realizable value. 8. Cash paid for interest and taxes for the six months ended July 31, 1996 was $ 559,000 and $ 337,000 respectively. Cash paid for interest and taxes for the six months ended July 31, 1995 was $600,000 and $317,000 respectively. 9. On June 30, 1996, the Registrant declared a five cents per share ($0.05) dividend payable on August 5, 1996 to shareholders of record on July 20, 1996. 10. Minority interest in the Registrant's NQA-USA, Inc. subsidiary is a result of 50% of the stock of NQA-USA, Inc. being issued to National Quality Assurance, Ltd. in December 1995. Profits are shared 65% to NQA-USA, Inc. and 35% to National Quality Assurance, Ltd. 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the consolidated quarterly financial statements and notes thereto. All information is based upon operating results of National Technical Systems, Inc. for the six months ended July 31. (TABULAR HEADER INFORMATION: DOLLARS IN THOUSANDS) RESULTS OF OPERATIONS REVENUES Six months ended July 31 1996 % Change 1995 ========= ========== ========== Technical services $18,306 11.8% $16,369 Environmental services 860 (12.2%) 980 Registration services 1,039 2.1% 1,018 Contract labor services 3,204 51.1% 2,121 --------- ---------- Total net revenue $23,409 14.3% $20,488 ========= ========== For the six months ended July 31, 1996, consolidated revenues increased by $2,921,000 or 14.3% when compared to the same period in 1995. In 1996, the technical services segment revenues increased as a result of increases in its traditional defense and aerospace related business. The Registrant's environmental services segment revenues decreased by $120,000 as a result of increased competition in this line of business. The contract labor segment revenues increased by $1,083,000, reflecting the effect of its expanding staff augmentation business and the success of its strategic alliances. It is anticipated by the Registrant that revenues in the technical services segment and environmental services segment will continue at their current levels through the end of fiscal 1997. In addition, revenues in the registration services segment should continue to increase at a moderate rate for the remainder of fiscal 1997. It is further anticipated that revenues in the contract labor services segment will continue at current levels through the end of the fiscal year. 8 GROSS PROFIT Six months ended July 31 1996 % Change 1995 ========= ========== ========= Technical services $ 4,378 18.9% $ 3,682 % to segment revenue 23.9% 22.5% Environmental services (89) (160.5%) 147 % to segment revenue (10.3%) 15.0% Registration services 394 8.2% 364 % to segment revenue 37.9% 35.8% Contract labor services 749 117.1% 345 % to segment revenue 23.4% 16.3% Total $ 5,432 19.7% $ 4,538 % to total net revenue 23.2% 22.1% Gross profit as a percentage of net revenues increased in the six months ended July 31, 1996 when compared to the same quarter in 1995. This increase was due primarily to higher gross profit on the traditional testing business in the Registrant's technical services segment and higher gross margins on staff augmentation business in the Registrant's contract labor services segment. The Registrant continues to pursue an aggressive cost containment program. Therefore, barring any unforeseen circumstances, gross profits are expected to continue at current levels for the remainder of fiscal 1997. The decrease in gross profit in the environmental services segment resulted from a deterioration of margins due to cost overruns on fixed price contracts. SELLING, GENERAL & ADMINISTRATIVE Six months ended July 31 1996 % Change 1995 ========= =========== ======== Technical services $2,759 10.4% $2,498 % to segment revenue 15.1% 15.3% Environmental services 29 (70.4%) 98 % to segment revenue 3.4% 10.0% Registration services 308 28.3% 240 % to segment revenue 29.6% 23.6% Contract labor services 557 14.1% 488 % to segment revenue 17.4% 23.0% Corporate 60 13.2% 53 Total S G & A $3,713 9.9% $3,377 % to total net revenue 15.9% 16.5% 9 Selling, general and administrative expenses as a percentage of net revenues decreased in the six months ending July 31, 1996 compared to the same period in 1995 as a result of managements cost reduction programs and increased revenues. These reductions were partially offset by increases in the registration services segment which are reflective of the cost of pursuing business in this segment of the Registrant. The Registrant continues to look for ways to reduce costs but remain effective in these areas. INTEREST EXPENSE Net interest expense decreased $85,000 in the six months ending July 31, 1996 when compared to the same period in 1995. This decrease was principally due to decreases in the term loan and line of credit balances. INCOME TAXES The income tax provisional rate for the first six months of 1996 and 1995 reflects a rate in excess of the U.S. federal statutory rate primarily due to the inclusion of state income taxes. The Registrant's provision for the six months ending July 31, 1996 increased over the same period in 1995 due to the higher income before taxes in 1996. Management has determined that it is more likely than not that the deferred tax asset will be realized on the basis of offsetting it against deferred tax liabilities. It is the Registrant's intention to evaluate the realizability of the deferred tax asset quarterly by assessing the need for a valuation account. NET INCOME The increase in net income in the six months ending July 31, 1996 compared to the same period in 1995 was due to increased revenues and higher gross profit margins. The following information is based upon results for National Technical Systems, Inc. for the three months ended July 31. REVENUES Quarter ended July 31 1996 % Change 1995 ========= ========== ========== Technical services $9,294 9.5% $8,491 Environmental services 370 (40.5%) 622 Registration services 497 (10.5%) 555 Contract labor services 1,609 32.4% 1,215 --------- ---------- Total net revenue $11,770 8.2% $10,883 ========= ========== For the three months ended July 31, 1996, consolidated revenues increased by $887,000 or 8.2% when compared to the same period in 1995. In 1996, the technical services segment revenues increased as a result of increases in its traditional defense and aerospace related business. The Registrant's environmental services segment revenues decreased by $252,000 as a result of increased competition in this line of business. Revenues in the registration declined by $58,000 as a result of a major contract which was completed and billed in the second quarter of fiscal 1996 with no comparable contract in the second quarter of fiscal 1997. The contract labor segment revenues increased by $394,000, reflecting the effect of its expanding staff augmentation business and the success of its strategic alliances. 10 It is anticipated by the Registrant that revenues in the technical services segment and environmental services segment will continue at their current levels through the end of fiscal 1997. In addition, revenues in the registration services segment should return to a moderate rate of increase for the remainder of fiscal 1997. It is further anticipated that revenues in the contract labor services segment will continue at current levels through the end of the fiscal year. GROSS PROFIT Quarter ended July 31 1996 % Change 1995 ========= ========== ========= Technical services $2,198 8.8% $2,021 % to segment revenue 23.6% 23.8% Environmental services (87) (240.3%) 62 % to segment revenue (17.5%) 10.0% Registration services 207 (15.9%) 246 % to segment revenue 41.7% 44.3% Contract labor services 396 189.1% 137 % to segment revenue 24.6% 11.3% Total $2,714 10.1% $2,466 % to total net revenue 23.1% 22.7% Gross profit as a percentage of net revenues increased in the quarter ended July 31, 1996 when compared to the same quarter in 1995. This increase was due primarily to higher gross profit on the traditional testing business in the Registrant's technical services segment and higher gross margins on staff augmentation business in the Registrant's contract labor services segment. Gross profits in the Registrant's registration services segment decreased by $39,000 due to lower revenues. The Registrant continues to pursue an aggressive cost containment program. Therefore, barring any unforeseen circumstances, gross profits are expected to continue at current levels for the remainder of fiscal 1997. The decrease in gross profit in the environmental services segment was due to deterioration of margins due to cost overruns on fixed price contracts. SELLING, GENERAL & ADMINISTRATIVE Quarter ended July 31 1996 % Change 1995 ========= =========== ======== Technical services $1,380 (13.0%) $1,222 % to segment revenue 14.8% 14.4% Environmental services 3 269.2% 48 % to segment revenue 0.8% 7.7% Registration services 150 67.7% 104 % to segment revenue 30.2% 18.7% Contract labor services 293 (2.6%) 259 % to segment revenue 18.2% 21.3% Corporate 29 16.7% 28 Total S G & A $1,855 (6.2%) $1,661 % to total net revenue 15.8% 15.3% 11 Selling, general and administrative expenses as a percentage of net revenues decreased in the three months ending July 31, 1996 compared to the same period in 1995 as a result of management's ongoing cost containment efforts. These reductions were offset by increases in the environmental services and registration services segments which are reflective of the cost of pursuing business in these segments of the Registrant. The Registrant continues to look for ways to reduce costs but remain effective in these areas. INTEREST EXPENSE Net interest expense decreased $36,000 in the quarter ending July 31, 1996 when compared to the same period in 1995. This decrease was principally due to decreases in the term loan and line of credit balances. INCOME TAXES The income tax provisional rate for the second quarters of 1996 and 1995 reflects a rate in excess of the U.S. federal statutory rate primarily due to the inclusion of state income taxes. The Registrant's provision for the quarter ending July 31, 1996 was higher than the same period in 1995 due to the increase in income before taxes and minority interest. Management has determined that it is more likely than not that the deferred tax asset will be realized on the basis of offsetting it against deferred tax liabilities. It is the Registrant's intention to evaluate the realizability of the deferred tax asset quarterly by assessing the need for a valuation account. NET INCOME The increase in net income in the quarter ending July 31, 1996 compared to the same period in 1995 was due to increased revenues and higher gross profit margins. BUSINESS ENVIRONMENT During the course of the last fiscal year, the business climate in the aerospace and defense industry, which in the past had shown signs of uncertainty, began to stabilize. In response to this uncertainty the Registrant developed a strategy of growth through diversification and taking advantage of opportunities created by the aerospace and defense industry downsizing. As a part of this strategy, the Registrant consolidated two of its testing facilities and, as a result of this re-allocation of resources, is now positioned to more effectively serve its customers and enhance revenue growth in the technical services segment. The Registrant continues to pursue ISO registration business through its registration services segment and remediaton business through its environmental services segment. Because of the foregoing, as well as other factors affecting the Registrant's operating results, past financial performance should not be considered to be a reliable indicator of future performance and investors should not use historical trends to anticipate results or trends in future periods. 12 LIQUIDITY AND CAPITAL RESOURCES In the six months ended July 31, 1996, cash provided by operations increased by $817,000 when compared to the same period in 1995. Major items contributing to this increase were an increase in net income along with significant increases in accounts payables and accrued expenses partially offset by increases in accounts receivable and inventory balances. Net cash used in investing activities in the six-month period ended July 31, 1996 increased $900,000 when compared to the same period in 1995 due to increased purchases of capital equipment and the purchase of a new subsidiary in the Registrant's registration services segment. The Registrant anticipates that its capital spending in fiscal 1997 for equipment will continue at its current rate for the remainder of the year. The actual level of spending will be dependent on a variety of factors, including general economic conditions, bank covenants and the Registrant's operating requirements. In the six-month period ended July 31, 1996, net cash provided by financing activities consisted of increases in the bank term loans and lines of credit of $1,421,000 and proceeds from the exercise of stock options of $36,000, offset by debt reduction on short term and long term debt of $932,000. In April 1996, the Registrant's revolving lines of credit were extended to August 1997 and increased from an aggregate availability of $5,000,000 to $6,000,000. The Registrant also has a term loan agreement with Bank of America NT & SA and Sanwa Bank California for an aggregate amount of $5,000,000 payable in monthly installments of $83,000 through August 31, 1998 and an additional $1,000,000 loan with Sanwa Bank California entered into in January 1995 with payments of $16,667 through January 31, 2000. Management is not aware of any significant demands for capital funds that may materially affect the short or long-term liquidity in the form of large fixed asset acquisitions, unusual working capital commitments or contingent liabilities. The Registrant's future working capital will be provided from operations, supplemented by its bank credit lines. The Registrant's bank revolving lines of credit, which currently aggregate $6,000,000 for short-term liquidity needs had $1,200,000 available at July 31, 1996. FORWARD-LOOKING INFORMATION Certain statements or assumptions in Management's Discussion and Analysis contain or are based on "forward-looking" information (as defined in the Private Securities Litigation and Reform Act of 1995) that involves risk and uncertainties inherent in the Registrant's business. Actual outcomes are dependent upon the Registrant's successful performance of internal plans, customer changes in short range and long range plans, competition in the Registrant's services areas and pricing, continued acceptance of new services, performance issues with key customers, and general economic risks and uncertainties. 13 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders On June 28, 1996, the Registrant held its annual meeting of stockholders of record as of May 20, 1996, for the purpose of approving a change of the Registrant's state of incorporation from Delaware to California through a merger of the Registrant with and into a newly formed California subsidiary, and the conversion of each outstanding share of Common Stock of the Registrant into a corresponding share of Common Stock of the surviving corporation. Approval of this change would also constitute approval of all of the provisions set forth in the Articles of Incorporation and Bylaws of the California corporation and certain other matters, as described in the Registrant's proxy statement. As of the record date there were 6,702,990 shares outstanding and eligible to vote. The results of the vote of stockholders were as follows; 4,385,401 votes cast for the proposal, which represents approximately 65% of the total shares outstanding; 13,237 votes cast against the proposal; 16,798 abstentions; and 1,599,654 broker non-votes. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 27 - Financial Data Schedule (b) During the quarter ended July 31, 1996 the registrant did not file a current report on Form 8-K SIGNATURE 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. NATIONAL TECHNICAL SYSTEMS, INC. Date: September 4, 1996 By: /s/ Lloyd Blonder -------------------- ------------------------------ Lloyd Blonder Senior Vice President Chief Financial Officer (Signing on behalf of the registrant and as principal financial officer) 14 INDEX TO EXHIBITS Exhibit No. Description Page No. - ------------------------------------------------------------------------- 27 Financial Data Schedule 16 15 EX-27 2
5 1,000 6-MOS JAN-31-1997 JUL-31-1996 1,632 0 12,720 535 2,720 17,669 43,185 26,265 35,943 8,380 0 0 0 0 0 35,943 23,409 23,409 17,977 17,977 3,713 0 517 1,237 553 684 0 0 0 684 0.10 0.10
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