-----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, KkQP1PtDsf7UiXOjBxcvIit9NmtQR9IWuLOvKL2A3hmEnYH5dWUePeXi92Dl3KNW 6NTeximZd5yCbOcHHFlBzg== 0000026987-95-000034.txt : 19951119 0000026987-95-000034.hdr.sgml : 19951119 ACCESSION NUMBER: 0000026987-95-000034 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DDL ELECTRONICS INC CENTRAL INDEX KEY: 0000026987 STANDARD INDUSTRIAL CLASSIFICATION: PRINTED CIRCUIT BOARDS [3672] IRS NUMBER: 330213512 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08101 FILM NUMBER: 95590288 BUSINESS ADDRESS: STREET 1: 7320 SW HUNZIKER ROAD #300 CITY: TIGARD STATE: OR ZIP: 97223-2302 BUSINESS PHONE: 5036201789 MAIL ADDRESS: STREET 1: 7320 SW HUNZIKER ROAD #300 CITY: TIGARD STATE: OR ZIP: 97223-2302 FORMER COMPANY: FORMER CONFORMED NAME: DATA DESIGN LABORATORIES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: DATA DESIGN LABORATORIES DATE OF NAME CHANGE: 19880817 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) /X/ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 1995 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 1-8101 ------------------- DDL Electronics, Inc. ---------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Delaware 33-0213512 ----------------- ------------------- (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 7320 SW Hunziker Road Suite #300, Tigard, Oregon 97223-2302 ------------------------------------------------------- -------------- (Address of Principal Executive Offices) (Zip Code) 503/620-1789 ---------------------------------------------- (Registrant's Telephone Number, Including Area Code) (Former Name - Former Address and Former Fiscal Year, if Changed Since Last Report) 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 registrant had 16,312,349 shares of Common Stock outstanding as of November 6, 1995. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS DDL ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (Unaudited, Except June 30, 1995) September 30, June 30, 1995 1995 ------ ------ ASSETS CURRENT ASSETS Cash and cash equivalents $ 2,464,000 $ 2,917,000 Accounts receivable 5,234,000 3,600,000 Inventories 2,608,000 2,188,000 Prepaid expenses 289,000 171,000 ---------- ---------- Total current assets 10,595,000 8,876,000 ---------- ---------- PROPERTY, EQUIPMENT AND IMPROVEMENTS, AT COST Buildings and improvements 5,196,000 5,217,000 Plant equipment 9,518,000 9,486,000 Office and other equipment 1,324,000 1,268,000 ---------- ---------- 16,038,000 15,971,000 Less: accumulated depreciation and amortization (12,747,000) (12,662,000) ---------- ---------- Property, equipment and improvements, net 3,291,000 3,309,000 OTHER ASSETS Total other assets 404,000 405,000 ---------- ---------- $ 14,290,000 $ 12,590,000 ========== ========== See accompanying Notes to Unaudited Consolidated Financial Statements. DDL ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (Continued) (Unaudited, Except June 30, 1995) September 30, June 30, 1995 1995 ------ ------ LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES Current portion of long-term debt $ 388,000 $ 633,000 Accounts payable 6,046,000 5,283,000 Accrued payroll and employee benefits 427,000 601,000 Other accrued liabilities 2,432,000 2,387,000 ---------- ---------- Total current liabilities 9,293,000 8,904,000 ---------- ---------- LONG-TERM DEBT 7% Convertible Subordinated Debentures, less current portion 621,000 621,000 8-1/2% Convertible Subordinated Debentures 1,580,000 1,580,000 Notes payable, capitalized lease obligations and other long-term debt, less current portion 4,943,000 4,829,000 ---------- ---------- Total long-term debt 7,144,000 7,030,000 ---------- ---------- STOCKHOLDERS' DEFICIT Common stock 163,000 161,000 Additional paid-in capital 21,200,000 20,983,000 Accumulated deficit (22,514,000) (23,598,000) Foreign currency translation adjustment (996,000) (890,000) ---------- ---------- Total stockholders' equity (deficit) (2,147,000) (3,344,000) ---------- ---------- $ 14,290,000 $ 12,590,000 ========== ========== See accompanying Notes to Unaudited Consolidated Financial Statements. DDL ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) Three Months Ended September 30, 1995 1994 ------ ------ SALES $ 6,192,000 $ 8,940,000 COSTS AND EXPENSES Cost of goods sold 5,466,000 8,616,000 Administrative and selling expenses 864,000 1,577,000 Restructuring charges - 1,244,000 ---------- ---------- 6,330,000 11,437,000 ---------- ---------- OPERATING LOSS (138,000) (2,497,000) NONOPERATING INCOME (EXPENSE) Investment income 127,000 22,000 Interest expense (115,000) (340,000) Other income (expense) 100,000 (47,000) ---------- --------- 112,000 (365,000) ---------- --------- LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX BENEFIT (26,000) (2,862,000) BENEFIT FROM INCOME TAXES 1,110,000 - ---------- ---------- NET INCOME (LOSS) $ 1,084,000 $ (2,862,000) ========== ========== EARNINGS (LOSS) PER SHARE Loss before income taxes $0.00 ($0.19) Income tax benefit 0.07 - ----- ----- Net income (loss) $0.07 ($0.19) ===== ===== AVERAGE NUMBER OF PRIMARY COMMON AND COMMON SHARE EQUIVALENTS 16,842,733 15,380,134 ========== ========== See accompanying Notes to Unaudited Consolidated Financial Statements. DDL ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) For the Three Months Ended September 30, 1995 1994 ------ ------ Cash flows from operating activities: Net income (loss) $ 1,084,000 $ (2,862,000) Adjustments to reconcile net loss to net cash used by operating activities Depreciation and amortization 178,000 559,000 Restructuring charge - 1,244,000 Net (increase) decrease in operating working capital (1,528,000) 318,000 Decrease in deposits and other assets - 4,000 Benefit of noncapital grants (16,000) - ---------- ---------- Net cash used by operating activities (282,000) (737,000) ---------- ---------- Cash flows from investing activities: Capital expenditures (127,000) (89,000) Proceeds from disposition of capital assets - 2,000 ---------- ---------- Net cash used by investing activities (127,000) (87,000) ---------- ---------- Cash flows from financing activities: Proceeds from long-term debt 39,000 44,000 Reductions of long-term debt (282,000) (128,000) Proceeds from stock option exercise 219,000 - ---------- ---------- Net cash used by financing activities (24,000) (84,000) Effect of exchange rate changes on cash (20,000) (11,000) ---------- ---------- Increase (decrease) in cash and cash equivalents (453,000) (919,000) Cash and cash equivalents at beginning of period 2,917,000 2,540,000 ---------- ---------- Cash and cash equivalents at end of period $ 2,464,000 $ 1,621,000 ========== ========== See accompanying Notes to Unaudited Consolidated Financial Statements. DDL ELECTRONICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - PRINCIPLES OF CONSOLIDATION In the opinion of the Company's management, the accompanying consolidated finan- cial statements, which have not been audited by independent accountants (except for the balance sheet as of June 30, 1995), reflect all adjustments (consisting of normal recurring accruals) necessary to present fairly the Company's finan- cial position at September 30, 1995 and June 30, 1995, and the results of operations and the cash flows for the three month period ended September 30, 1995 and 1994. The Company uses a 52-53 week fiscal year ending on the Friday closest to June 30. In the accompanying interim consolidated financial statements, the interim period end for both years is shown as September 30 for clarity of presentation. The actual periods ended on September 29, 1995 and September 30, 1994. Certain notes and other information are condensed or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with the Company's 1995 Annual Report to Stockholders as filed with the Securities and Exchange Commission on or about September 30, 1995. NOTE 2 - INVENTORIES Inventories are comprised of the following: September 30 June 30, 1995 1995 Raw materials $2,023,000 $1,634,000 Work in process 748,000 710,000 Less reserves (163,000) (156,000) --------- --------- $2,608,000 $2,188,000 ========= ========= NOTE 3 - FINANCING ARRANGEMENTS Subordinated debt: The Company carries previously issued 7% and 8-1/2% Convertible Subordinated Debentures ("CSDs"). In fiscal 1993, the Company exchanged a portion of the CSDs for stock and warrants. 223,500 warrants remain outstanding and are exercisable at $1.42 per share through the extended due date of December 29, 1995. The Company can accelerate the termination date of the warrants if the closing market price of the common stock for 10 business days within any 20 business day trading period is at least $3.00 per share. The warrants are separately tradable. The Company may effect similar exchanges with holders of the remaining outstanding debentures in the future. NOTE 4 - INFORMATION RELATING TO STATEMENT OF CASH FLOWS "Net cash used by operating activities" includes cash payments for interest as follows: Three months ended September 30, 1995 1994 Interest paid $ 115,000 $ 330,000 "Net change in operating working capital" is comprised of the following: (Changes in operating working capital accounts may not equal differences derived by comparing balance sheet accounts due to fluctuations in the exchange rate between reported balance sheet dates.) Nine months ended March 31, 1995 1994 Increase in accounts receivable $(1,640,000) $ (466,000) (Increase) decrease in inventories (433,000) 547,000 Increase in prepaid expenses (119,000) (117,000) Increase in accounts payable 789,000 522,000 Decrease in accrued payroll and employee benefits (170,000) (167,000) (Increase) decrease in other accrued liabilities 45,000 (1,000) ---------- ---------- Net (increase) decrease in operating working capital $(1,528,000) $ 318,000 =========== ========== Supplemental schedule of noncash investing and financing activities: Nine months ended March 31, 1995 1994 Capital expenditures financed by lease obligations $ 52,000 $ 34,000 7% Convertible Subordinated Debentures converted to equity - 20,000 NOTE 5 - PROFORMA FINANCIAL INFORMATION: The following is the Company's restated pro forma consolidated operating results for the three month period ended September 30, 1994, excluding results of opera- tions for the Company's Aeroscientific Corp. and A.J. Electronics, Inc subsidi- aries and excluding any gain from these subsidiaries' sale of assets as compared with the three-month period ended September 30, 1995: 1995 1994 Sales $ 6,192,000 $ 3,516,000 Total operating costs 6,330,000 4,161,000 Operating income (loss) (138,000) (645,000) Nonoperating Income & expense net 112,000 (179,000) Loss before income taxes (26,000) (824,000) Benefit from income taxes 1,110,000 - ---------- --------- Net Income (loss) $ 1,084,000 $ (824,000) ========== ========= Earnings (loss) per share: Loss before income taxes $0.00 ($0.05) benefit from income taxes 0.07 - ----- ----- $0.07 ($0.05) ===== ===== ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Three Month and Nine Month Periods Ended March 31, 1995, and 1994 Consolidated sales for the quarter ended September 30, 1995 were $6,192,000 com- pared to $8,940,000 for the same period in fiscal 1995, a reduction of $2,748,000. Included in prior year's sales are revenues from the Company's former United States Electronic Contract Manufacturing ("ECM") operation, A.J. Electronics, Inc. ("A.J."), and Printed Circuit Board operation ("PCB") Aeroscientific Corp. ("Aero"). A.J.'s operation was discontinued and ultimately liquidated in fiscal 1995 and Aero's operating facility was sold December 30, 1994. Aero and A.J. represented $5,424,000 of prior years sales. Pro forma operating results excluding A.J. and Aero shows an increase in sales from the Company's remaining operations of $2,676,000. Current fiscal year sales are generated from the Company's Northern Ireland PCB and ECM operations, Irlandus Circuits, Ltd ("Irlandus") and DDL Electronics, Ltd. ("DDL-E"), respectively. Irlandus' sales for the current fiscal year increased by $241,000 to $2,456,000 and DDL-E's sales increased nearly three times prior year's sales, by $2,435,000, to $3,736,000. The company ended fiscal 1995 with the highest backlog ever for its two European subsidiaries. This has translated into higher sales in the first quarter of fiscal 1996. DDL-E, in particular, has seen growth in contracts from existing customers as well as sales to new customers. In the first quarter of fiscal 1995, DDL-E sales to two of its largest customers was substantially reduced as a result of lower demand for each entity's product by its European customers. Sales to these two customers have increased in the second half of fiscal 1995 and continue strong into 1996. DDL-E has added several new significant turnkey customers that have contributed to backlog as well as first quarter sales growth and have reduced the volume of sales on a consignment basis. Consigned business uses more of the ECM's service without requiring the ECM to acquire material for production as in turnkey sales. Fiscal 1996 consolidated gross margin (sales less cost of sales) improved by $402,000 compared with the first quarter of fiscal 1995. More importantly, gross margin percentage improved from 3.6% (1.9% pro forma with Europe only) in fiscal 1995 to 11.7% in fiscal 1996. DDL-E's gross margin improved by $361,000 and gross margin percentage improved from 2.8% to 10.6%. DDL-E's improvement comes from improved efficiencies and volume margin benefits from increased sales. At the same time DDL-E has added new higher margin business while maintaining its business with existing customer. Margins have also improved due to improved materials acquisition pricing and increased productivity. Irlandus' gross margin improved by $298,000 and gross margin percentage improved form 1.5% to 13.4%. Improved margins are due to improved product yields and higher pricing margins on new business. Part of this higher pricing comes from Irlandus' successful efforts to concentrate its marketing on customers wanting prototype or quick turn (ten days of less to produce product) and short lead time production. The quarter's operating loss improved over fiscal 1995's by $2,359,000, from a loss in fiscal 1995 of $2,497,000 to a loss of $138,000 in fiscal 1996. On a consolidated pro forma basis the improvement in the operating loss is only $507,000. A substantial portion of fiscal 1995's operating costs were attribut- able to accrual of restructuring charges associated with the discontinuance and disposal A.J. The restructuring charge of $1,244,000, represented write down of assets to liquidation value, accrual of expected lease termination costs and provision for operating expenses through A.J.'s ultimate and final disposal. The change in nonoperating items from an expense in fiscal 1995 of $365,000 to income of $112,000 in the current fiscal year is derived from $106,000 in inter- est received in conjunction with federal tax refunds for net operating loss carrybacks, $100,000 in other income realized from reduction of previously accrued expenses associated with settlement of litigation with a former land lord and a $225,000 reduction in interest expense due to the Company's payoff or elimination of over $12,000,000 in senior debt during fiscal 1995. Fiscal 1996 consolidated net income after taxes of $1,084,000 or $0.07 per share, improved from fiscal 1995's loss of $2,862,000 or $0.19 per share. The improvement is associated with improved operating margins and income from certain non-operating items as noted above. Additionally, the Company recognized $1,110,000 in net tax benefits associated with application for federal tax refunds as permitted under section 172(f) of the internal revenue code. In total the Company applied for federal tax refunds of $2,175,000, net of costs associated with applying for such refunds. Through October 15, 1995, the company received $1,110,000 of net refunds plus interest for such refunds of $106,000. The timing and certainty of future refunds is unknown, and there is a possibility that the tax returns underlying these refund may be subject to audit by the Internal Revenue Service and a portion of the refunds disallowed. The Company feels that its claim for refund and carry back of net operating losses can be substantiated and is supported in fact in law, and that the Company will ultimately collect and retain a substantial portion of such refunds. Liquidity and Capital Resources For the three months ended September 30, 1995, cash and cash equivalents decreased by 453,000. As illustrated in the Consolidated Statement of Cash Flows, this decrease in cash included the following: 1. $282,000 was used in operating activities, principally from a $1,528,000 increase in working capital at the Company's Northern Ireland operations, partially offset by the Company's profitable operations. 2. Investing activities required $127,000 for purchase of capital equipment. 3. Financing activities used $24,000, representing $282,000 of reductions in debt primarily from settlement of a law suit filed by a former land lord of one of the Company's subsidiaries, net of additions to long- term debt of $39,000 and proceeds from exercise of stock options under the Company's employee and director stock option plans. The Company's primary source of liquidity is its cash balances which amounted to $2,464,000 at September 30, 1995. Components of working capital increased by $1,528,000 during the first quarter. The resulting decrease in cash came principally from $1,640,000 increase in accounts receivable, $433,000 increase in inventory and a $119,000 increase in prepaid expenses, all partially offset by a $664,000 increase in accounts payable and other liabilities. The Company's increase in working capital comes from increases in operating activity at the Company's Northern Ireland subsidiaries. Increased sales volumes have increased the Company's working capital requirements. The Company currently has no working capital lines of credit or other readily available sources for future borrowing. In the past, the Company has success- fully raised capital from private placement of equity instruments. The Company is also in preliminary discussions with a European bank to provide a working capital line of credit for possible use in financing the growth of the Company's Northern Ireland operations. The Company also has outstanding warrants to purchase the Company's common stock. In fiscal 1993 the Company privately negotiated the exchange of a portion of the 7% and 8-1/12% convertible subordinated debentures for common stock and warrants of which 223,500 warrants remain unexercised. In August 1995, the Company's Board approved an extension of the exercise date of these warrants to December 29, 1995 and reduced their exercise price to $1.42 per share. The Company also has outstanding warrants to purchase 100,000 shares of common stock at an exercise price of $1.31 until May 24, 1997. The achievement of continued operating profitability is the most significant internal factor to ensure the Company's long-term viability. No assurance can be given that the Company will maintain operating profitability, or that cash generated from non-operating will be adequate to fund future cash needs. As a necessary step to ensure the Company's increased profitability the Company is actively pursuing possible strategic acquisition candidates that will help ensure growth of the Company in the markets and industries in which it has expertise. PART II OTHER INFORMATION Item 1. LEGAL PROCEEDINGS None. Item 5. OTHER INFORMATION Federal, state, and local provisions relating to the protection of the environment affect the Company's printed circuit board fabrication operations. The Company's printed circuit board plants generate hazardous waste, some of which is treated on site and some of which is removed from the Company's facilities and disposed of elsewhere by arrangement with the owners or operators of disposal sites. The Company's Aeroscientific-Anaheim subsidiary has received notice from the United States Environmental Protection Agency that it is regarded as a potentially responsible party ("PRP") under federal environmental laws in connection with a waste disposal Site known as the "Stringfellow Superfund site" in Riverside County, California, which is presently being considered by governmental authorities for remediation. Aeroscientific has been named as a third party defendant by other PRPs in a case brought by the United States Government concerning this site. Aeroscientific has also been named as a defendant together with a large number of PRPs in a civil action filed by the residents and homeowners adjacent to the Stringfellow site. The information developed during discovery and investigation thus far indicates that Aeroscientific supplied relatively small amounts of waste to the site as compared to the many other defendants. As part of the currently proposed Settlement Agreement, small polluters would pay a fixed amount plus an amount that varies based on volume of material dumped at the site. Under these guidelines, the Company's probable liability will be $120. Final settlement and timing of payment are currently indeterminable, and no assurances can be given that any settlement will be achieved. The Company, however, has accrued a sufficient liability to cover the proposed settlement as of fiscal year end 1995. Any further remedial costs or damage awards in these cases may be significant and management believes that the Company's allocated share of such costs or damages could have a material adverse effect on the Company's business or financial condition. The actions are still in the pre-trial and discovery stages and a prediction of outcome is difficult. There is, as in the case of most environmental litigation, the theoretical possibility of joint and several liability being imposed upon Aeroscientific for damages which may be awarded. Total estimated cleanup costs for the Stringfellow site have been estimated at $600,000. The Company's possible range of liability is indeterminable, and the reliability and precision of estimated cleanup costs are subject to a myriad of factors which are not currently measurable. The Company is aware of certain chemicals that exist in the ground at its pre- viously leased facility at 1240-1244 South Claudina Street, Anaheim, Califor- nia. The Company has notified the appropriate governmental agencies and is proceeding with remediation and investigative studies regarding soil and groundwater contamination. The Company believes that it will be required to implement a continuing remedial program for the site, the cost of which is currently unknown. The installation of water and soil extraction wells was completed in August 1994. A plan for soil remediation was completed about the same time and was submitted to regulatory authorities. The full extent of potential ground water pollution could not be determined given preliminary estimates. The Company retained the services of Harding Lawson and Associates in May of 1995 to begin the vapor extraction of pollutant from the soil and to perform exploratory hydro-punch testing to determine the full extent and cost of the potential ground water contamination. These processes are in their preliminary stages and a complete and accurate estimate of the full and potential costs cannot be determined at this time. The Company believes that the resolution of these matters will require a significant cash outlay. Initial estimates form Harding Lawson indicate that it could cost as much as $3,000,000 to fully clean-up the site and take over ten years to complete. The Company and Aeroscientific Corp. entered into an agreement to share the costs of environmental remediation with the landlord at the Anaheim facility. Under this agreement, the Company is obligated to pay 80% of the site s total remediation costs up to $725,000 (i.e., up to the Company s share of $580,000) with any costs above $725,000 being shared equally between the company and the landlord. To date the Company has paid $274,000 as its share of the remediation costs. The Company has an account for $775,000 associated with this environmental remediation, which represents its estimated share of the future discounted remediation costs. Item 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits: None. b. Reports on Form 8-K: On July 12, 1995, a Form 8-K was filed pursuant to Item 5, Other Events, regard- ing a press release indicating that the Company had retained Fechtor Detwiler as its investment bankers. On July 13, 1995, a Form 8-K was filed pursuant to Item 5, Other Events, regard- ing a press release that indicated the appointment of corporate officers. On August 15, 1995, a Form 8-K was filed pursuant to Item 5, Other Events, re- garding a press release indicating that the Company's Board had approved extend- ing the exercise period for the Company's 1993 Warrants and had decreased the Warrant's exercise price. On August 15, 1995, a Form 8-K was filed pursuant to Item 5, Other Events, re- garding a press release indicating that the Company's European operations experienced strong sales growth in the current quarter. 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. November 10, 1995 /s/ Don A. Raig - ---------------------------- --------------------------- Date Don A. Raig (Chief Operating Officer and duly Authorized Officer) EX-11 2 EXHIBIT 11 DDL ELECTRONICS, INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (Unaudited) Three Months Ended September 30 1995 1994 PRIMARY EARNINGS PER SHARE: Loss from continuing operations $ (26,000) $ (2,862,000) Income taxes 1,110,000 - ---------- ---------- Net income $ 1,084,000 $ 2,862,000 ========== ========== Weighted average number of common shares outstanding 16,200,911 14,474,980 Assumed exercise of stock options net of shares assumed reacquired(1) 641,822 905,154 ---------- ---------- Average common shares and common share equivalents 16,842,733 15,380,134 ========== ========== Primary (loss) per share: Loss before income taxes $0.00 ($0.19) Income tax benefit 0.07 - ----- ----- Net income (loss) $0.07 $0.19 ===== ===== FULLY DILUTED EARNINGS PER SHARE: Loss before income taxes $ (26,000) $(2,862,000) Add back net interest related to convertible subordinated debentures 34,000 34,000 ---------- ---------- Net income (loss) for fully diluted computation 8,000 (2,828,000) Income taxes 1,110,000 - ---------- ---------- Net loss for fully diluted computation $ 1,118,000 $(2,828,000) ========== ========== Weighted average number of common shares outstanding 16,200,911 14,474,980 Assumed exercise of stock options net of shares assumed reacquired under treasury stock method using period end market price, if higher than average market price 689,195 1,077,729 Assumed conversion of convertible subordinated debentures 699,206 449,706 ---------- ---------- Average fully diluted shares(1) 17,589,312 16,002,415 ========== ========== Fully diluted earnings (loss) per share: Net income (loss) per share Income (loss) before income taxes $0.00 $(0.18) Income tax benefit 0.06 - ----- ------ Net income (loss) $0.06 $(0.18) ===== ====== Note: (1) The calculated fully diluted earnings per share are antidilutive for fiscal 1995. EX-27 3
5 UNAUDITED 1,000 3-MOS JUN-30-1996 SEP-30-1995 2464 0 5234 (175) 2608 10595 16038 (12747) 14290 9293 2201 163 0 0 (2310) 14290 6192 6419 (5466) (6330) 0 0 115 (26) 1110 1084 0 0 0 1084 .07 .06
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