-----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, L5BxjInvw0Pg/FkQL4RvhyN9xuo9wQ7XK/Mw+1wuBj9ElSWl/kxfILaTsVYZZRCz mwUWCcyYMtQq0p5f45HevQ== 0000028365-98-000019.txt : 19980817 0000028365-98-000019.hdr.sgml : 19980817 ACCESSION NUMBER: 0000028365-98-000019 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DETECTION SYSTEMS INC CENTRAL INDEX KEY: 0000028365 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 160958589 STATE OF INCORPORATION: NY FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-08125 FILM NUMBER: 98691347 BUSINESS ADDRESS: STREET 1: 130 PERINTON PKWY CITY: FAIRPORT STATE: NY ZIP: 14450 BUSINESS PHONE: 7162234060 MAIL ADDRESS: STREET 1: 130 PERINTON PARKWAY CITY: FAIRPORT STATE: NY ZIP: 14450 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 the quarterly period ended June 30, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to __________ Commission File Number: 0-8125 ---------------------------- DETECTION SYSTEMS, INC. (Exact name of registrant as specified in its charter) State of New York 16-0958589 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 130 Perinton Parkway, Fairport, New York 14450 (Address of principal executive offices) (Zip Code) (716) 223-4060 (Registrant's telephone number, including area 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 the filing requirements for the past 90 days. Yes __X__ No _____ As of August 14, 1998 there were outstanding 6,321,872 shares of the registrant's common stock, par value $.05 per share. PART I FINANCIAL INFORMATION DETECTION SYSTEMS, INC. AND SUBSIDIARIES Consolidated Balance Sheet (in thousands, except per share data) Assets June 30, 1998 March 31, 1998 Current assets: (Unaudited) Cash and cash equivalents $1,846 $3,160 Accounts receivable, less allowance for doubtful accounts ($1,120 and $1,033, respectively) 23,663 23,505 Inventories 40,467 38,154 Other current assets 3,449 3,701 ------ ------ 69,425 68,520 ------ ------ Fixed assets, net 12,077 12,142 Goodwill and other intangibles 10,024 8,907 Other assets 4,665 4,475 ------ ------ $96,191 $94,044 ====== ====== Liabilities Current liabilities: Short term borrowings $ 6,097 $ 4,002 Current portion of long term debt 366 405 Accounts payable 11,069 12,368 Accrued payroll and benefits 1,760 1,636 Other current liabilities 6,105 5,165 ------ ------ 25,397 23,576 Other liabilities 2,601 2,655 Long term debt 15,947 16,549 Shareholders' equity: Common stock, par value $.05 per share; Authorized - 12,000 shares; Issued - 6,550 shares and 6,518 shares, respectively 328 326 Capital in excess of par value 45,080 44,805 Retained earnings 10,808 9,976 ------ ------ 56,216 55,107 Less - Treasury stock, at cost (3,785) (3,785) Notes receivable for stock purchases (26) (14) Cumulative translation adjustment (159) (44) ------ ------ 52,246 51,264 ------ ------ $96,191 $94,044 ====== ====== (See accompanying notes to financial statements) DETECTION SYSTEMS, INC. AND SUBSIDIARIES Consolidated Statement of Operations and Retained Earnings (Unaudited) (in thousands, except per share data) June 30, 1998 June 30, 1997 For the Three Months Ended: (Current Year) (Preceding Year) -------------- --------------- Net sales $33,808 $28,208 Costs and expenses: Production 21,286 17,556 Research and development 2,134 2,085 Marketing, administrative and general 8,628 6,387 ------ ------ Total costs and expenses 32,048 26,028 Operating income 1,760 2,180 Other income (expense) Interest income 54 4 Interest expense (409) (637) Other income (expense) (42) 215 ------ ------ Income before income taxes 1,363 1,762 Provision for income taxes 531 629 ------ ------ Net income 832 1,133 ====== ====== Retained earnings at beginning of period 9,976 8,594 Amortization of redeemable common stock 12 ------ ------ Retained earnings at end of period $10,808 $9,739 ====== ====== Earnings per share Basic $0.13 $0.25 ==== ==== Diluted $0.12 $0.22 ==== ==== (See accompanying notes to financial statements) DETECTION SYSTEMS, INC. AND SUBSIDIARIES Consolidated Statement of Cash Flows (Unaudited) (in thousands of dollars) For the Three Months Ended June 30, 1998 1997 Cash flows from operating activities: ---- ---- Net income $ 833 $1,133 ----- ----- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 924 968 Deferred compensation 457 Stock based compensation 87 Gain on sale of assets (205) Changes in assets and liabilities: Accounts receivable (158) (938) Inventories (2,313) 989 Accounts payable (1,299) 243 Accrued payroll and benefits 124 (109) Other assets & liabilities 533 (1,754) ------ ------ Total adjustments (2,189) (262) ------ ------ Net cash provided by operating activities (1,356) 871 Cash flows from investing activities: Capital expenditures (955) (1,374) Proceeds from sale of assets 124 312 Acquisition of businesses (473) (3,601) ------ ------ Net cash used in investing activities (1,304) (4,663) Cash flows from financing activities: Proceeds from borrowings 2,095 4,441 Principal payments on debt and capital lease obligations (641) (78) Common stock transactions, net 7 106 ----- ------ Net cash provided by financing activities 1,461 4,469 Effect of exchange rates (115) (14) ----- ----- Net increase in cash and cash equivalents (1,314) 663 Cash and cash equivalents at beginning of period 3,160 2,244 ----- ----- Cash and cash equivalents at end of period $1,846 $2,907 ===== ===== Cash paid during the year for: Interest $ 419 $ 412 === === Income taxes $ 313 $ 742 === === (See accompanying notes to financial statements) DETECTION SYSTEMS, INC. AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS THREE-MONTH PERIOD ENDED JUNE 30, 1998 (in thousands, except per share data) (Unaudited) NOTE 1. GENERAL The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC). The interim consolidated financial statements include the consolidated accounts of Detection Systems, Inc. and its majority-owned subsidiaries (collectively, "the Company") with all significant intercompany transactions eliminated. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the financial position, results of operations and cash flows for the interim periods presented have been made. Certain footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such SEC rules and regulations. These financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended March 31, 1998. Cash flow statement - During the first quarter of fiscal 1999, the Company issued 28 shares of common stock in connection with the acquisition of EFSEC. During the first quarter of fiscal 1998, the Company issued 222 and 34 shares of common stock in connection with the acquisitions of DA Systems and Seriee S.A., respectively (see Note 3). NOTE 2. INVENTORIES Major classifications of inventory follow: June 30, 1998 March 31, 1998 ------------- -------------- Component Parts $21,858 $22,061 Work In Process 3,481 1,488 Finished Products 15,128 14,605 ------ ------ $40,467 $38,154 ====== ====== NOTE 3. ACQUISITIONS Fiscal 1999 Acquisitions - In June 1998, the Company acquired all of the outstanding shares of EFSEC AB("EFSEC")for approximately $1,250, comprised of cash and 28 shares of its common stock. EFSEC is a Swedish distributor of electronic security equipment with annual net sales of approximately $3,000 prior to its acquisition. In June 1998, the Company acquired all of the outstanding stock of Alarm Center Kft ("Alarm Center") for $125 in cash. Alarm Center is a Hungarian distributor of electronic security equipment with annual net sales of approximately $500 prior to its acquisition. Fiscal 1998 Acquisitions - In May 1997, the Company acquired all of the outstanding stock of Digital Audio Ltd. ("DA Systems"), in exchange for 222 shares of its common stock. The shares were callable at the Company's option at $17 per share plus interest at 8.25% until June 30, 1998, and could be put to the Company at that price after that date. The Company exercised its call option to repurchase these shares in connection with the issuance of common stock in September 1997. The cost of this acquisition was approximately $4,000. DA Systems is a British manufacturer of security control equipment with annual net sales of approximately $10,800 prior to its acquisition. In June 1997, the Company acquired 99.5% of the outstanding stock of Seriee S.A. ("Seriee") of France, in exchange for 34 shares of its common stock, valued at approximately $600. Seriee is a manufacturer of electronic control and communication equipment and had annual net sales of approximately $6,300, prior to its acquisition. In June 1997, the Company acquired 98.7% of the outstanding stock of Radio-Active Systems N.V.("RAS") of Belgium for approximately $3,600 in cash. RAS has the largest security equipment distribution network in Belgium with annual net sales of approximately $9,900, prior to its acquisition. In November 1997, the Company acquired all of the outstanding stock of Security Supplies NZ Ltd. ("Security Supplies") of New Zealand for approximately $50 in cash. Security Supplies provided the Company with immediate access to an established market base in New Zealand. Security Supplies had annual sales of approximately $800 prior to its acquisition. In January 1998, the Company acquired all of the outstanding stock of Electronics Design & Manufacturing Pty Limited ("EDM") of Australia in exchange for 187 shares of its common stock and $2,800 in cash. EDM is a major Australian manufacturer of security control equipment with annual net sales of approximately $4,600, prior to its acquisition. These transactions have been accounted for as purchases and, accordingly, the results of DA Systems, Seriee, RAS, Security Supplies, EDM, EFSEC and Alarm Center are included in the consolidated financial statements as of the date of acquisition. The financial statements reflect the final allocation of purchase price for each business, except for EDM, EFSEC and Alarm Center, for which the purchase price allocation has not been finalized. Unallocated excess of purchase price over net assets acquired as of June 30, 1998 is $3,200 and is included with goodwill. NOTE 4 - EARNINGS PER SHARE There are no significant reconciling items between net income as presented in the consolidated statement of operations and net income available to common stockholders used in the calculation of earnings per share. Reconciling items between the number of shares used in the calculation of basic and diluted earnings per share relate to deferred compensation plans, options and warrants, as follows: Quarter ended June 30, 1998 1997 ---- ---- Weighted average number of shares outstanding 6,291 4,613 Shares associated with deferred compensation, option and warrant plans 542 588 NOTE 5 - RESTRUCTURING The Company recorded a restructuring charge of approximately $400 during the first quarter of fiscal 1999 for severance costs related to the termination of employees at the Fairport, New York and Southall, England facilities. The charge has been included in the results from continuing operations and had a material impact on operating results in the first quarter of 1999. These manufacturing employees will be terminated during fiscal 1999, thus the accrual has been included in other current liabilities at June 30, 1998. DETECTION SYSTEMS, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview The Company is a leading supplier of equipment to the electronic protection industry. The Company designs, manufactures and markets electronic detection, control and communication equipment for security, fire protection, access control and CCTV applications, offering products primarily for the commercial and mid- to high-end residential portions of the market. From its founding in 1968 until 1995, the Company was primarily a niche provider of intrusion detection devices for the domestic market. In 1995, the Company adopted a strategy designed to substantially expand its product offerings, establish an international sales presence, increase its manufacturing capacity and improve its manufacturing cost structure. The Company has since made nine acquisitions and established a manufacturing facility in China. Significant acquisitions are described in Note 3. The impact on the Company from the implementation of these strategies is demonstrated by an increase in the Company's net sales of 19.9% to $33.8 million in the three months ended June 30, 1998 from $28.2 million in the comparable period in 1997. These acquisitions had a significant impact on the comparative information for the three month periods ending June 30, 1998 and 1997 with respect to results of operations. The Company recognizes net sales upon shipment of products to customers. Production expenses include materials, direct labor and manufacturing overhead as well as an allocated portion of indirect overhead. Outgoing freight, customs and other costs associated with delivery of products to customers are classified under marketing, administrative and general expenses. Research and development expenses include costs associated with salaries and benefits for certain engineering employees, supplies, agency approvals, depreciation and occupancy, as well as charges for independent testing and independent contractors engaged for specific projects. Marketing, administrative and general expenses include costs related to the Company's sales efforts and corporate and general administrative functions, including costs of executive, administrative and sales personnel, marketing/selling supplies, advertising, depreciation and professional fees. Results of Operations The following table sets forth, for the periods indicated, the percentages which certain items of income and expense bear to net sales: Fiscal Year Ended Three Months Ended March 31, June 30, 1998 1997 1998 1997 Net sales 100.0% 100.0% 100.0% 100.0% Costs and expenses: Production 66.4 64.2 63.0 62.2 Research and development 6.8 8.0 6.3 7.4 Marketing, administrative and general 23.2 21.2 25.5 22.6 ---- ---- ---- ---- Operating income 3.6 6.6 5.2 7.8 Other income (expense) Interest income 0.2 0.1 0.1 0.0 Interest expense (1.8) (1.7) (1.2) (2.3) Other income (expense) (0.2) 0.2 (0.1) 0.7 ---- ---- ---- ---- Income before income taxes 1.8 5.2 4.0 6.2 Provision for income taxes 0.7 1.5 1.5 2.2 ---- ---- ---- ---- Net income (loss) 1.1% 3.7% 2.5% 4.0% === ==== ==== ==== Three Months Ended June 30, 1998 Compared to Three Months Ended June 30, 1997 The Company's net sales increased 19.9% to $33.8 million in the first quarter of fiscal 1999 from $28.2 million in the comparable quarter last year. The net sales of acquired businesses accounted for $5.4 million of this increase. The remaining $0.2 million increase represents sales growth from existing operations. The rate of sales growth in the first quarter of fiscal 1999 was adversely impacted by lower sales to one of the Company's major customers and the acquisition of two of the Company's customers by other businesses. Production expenses increased 21.2% to $21.3 million in the first quarter of fiscal 1999 from $17.6 million in the comparable quarter last year. As a percentage of net sales, production expenses remained relatively consistent at 63.0% in the current quarter compared to 62.2% in the comparable quarter last year. The increase in production expenses was primarily due to a corresponding increase in the Company's net sales. Research and development expenses remained consistent at $2.1 million in the first quarter of fiscal 1999 and 1998 periods. As a percentage of net sales, research and development expenses decreased to 6.4% in the current quarter from 7.4% in the comparable quarter last year. The decrease in research and development expenses as a percentage of net sales was primarily due the acquisition of redistributor businesses during fiscal 1998 which have sales but do not incur research and development expenditures. Marketing, administrative and general expenses increased 35.1% to $8.6 million in the first quarter of fiscal 1999 from $6.4 million in the comparable quarter last year. As a percentage of net sales, marketing, administrative and general expenses increased to 25.8% in the current quarter from 22.6% in the comparable quarter last year. The increase in marketing, administrative and general expenses was primarily due to the acquisition of businesses in fiscal 1998. In addition, a charge of approximately $0.4 million was recorded in the first quarter of fiscal 1999 relating to the restructuring of the Company's Fairport, New York and Southall, England manufacturing facilities. This restructuring relates to severance associated with the transfer of manufacturing from those facilities to the Company's China facility. It is expected that these actions will be substantially completed by the end of fiscal 1999. The Company expects to save approximately $2.0 million annually in salaries and benefits as a result of this action. Interest expense decreased to $0.4 million in the first quarter of fiscal 1999 from $0.6 million in the comparable quarter last year. This decrease was primarily due to lower borrowings outstanding. The Company's effective income tax rate for the first quarter of fiscal 1999 was 39.0% compared to 35.7% for the comparable quarter last year. The higher effective rate is associated with the source of the Company's income among domestic and international entities as well as the impact of non-deductible goodwill. Liquidity and Capital Resources The Company considers liquidity to be its ability to meet its long- and short-term cash requirements. Prior to 1996, those requirements were primarily met by cash generated by the Company's operating activities and cash reserves. Since the 1995 implementation of the Company's strategy designed to enhance its product offerings, manufacturing capacity and international operations, particularly its acquisitions and the development of the China facility, the Company has required external sources of financing to satisfy its liquidity needs. Three Months Ended June 30, 1998. During the three months ended June 30, 1998, the Company's operating activities used $1.4 million of operating cash flow. Net income, depreciation and amortization provided $1.8 million, an increase in inventories used, $2.3 million and a decrease in accounts payable used $1.3 million. Other account changes provided $0.4 million of operating cash flow. During the three months ended June 30, 1998, cash used for investing activities was $1.3 million and was utilized for the acquisition of EFSEC and Alarm Center and for capital expenditures. During the three months ended June 30, 1998, cash provided by financing activities was $1.5 million, primarily representing proceeds from borrowings to finance operations and capital expenditures. Capital Resources. On June 30, 1998, the Company had cash balances of $1.8 million. On that date, the Company had a $17.0 million revolving credit facility under which it had borrowed $4.8 million. This credit facility bears interest based on the prime rate or the London Interbank Offered Rate, plus applicable points based on the Company's degree of financial leverage. The agreement matured on July 31, 1998. However, the line was extended through August 31, 1998. The Company is in process of finalizing an extension of the facility through July 2000, and expects this to be completed by August 31, 1998. The Company expects to continue to pursue acquisitions and the development of new products and markets. On-going capital expenditures will include continued investment in facilities and equipment necessary to produce and market its security, fire detection, access control and CCTV products. The Company also plans to continue its efforts to market its products internationally. The Company believes that the combination of its current cash balances, cash flows from operations and existing credit facilities will be sufficient to fund its planned operations during fiscal 1999. However, there can be no assurance that existing cash flow will be sufficient to fund the Company's on-going operations. Year 2000 Issues. The Company has assessed the impact of the year 2000 on its products and information systems and is currently in the process of assessing the impact of the year 2000 on its vendors. The Company believes its products are year 2000 compatible. The Company's domestic business information systems will require upgrades and enhancements to be made year 2000 compliant. These upgrades are currently being performed and are expected to be completed prior to the year 2000. Most of the Company's non-US subsidiaries' information systems will require various degrees of upgrade or replacement to be capable of handling year 2000 issues (excluding the Hong Kong subsidiary, which utilizes the Company's domestic information system). The Company is in the process of finalizing implementation plans for each of its non-US subsidiaries. The Company expects to be capable of handling the year 2000 at all locations without significant interruption to business activity. The estimated remaining costs of year 2000 projects approximate $0.7 million. Management's estimate of the costs and completion dates are dependent on various factors including availability of skilled resources and the ability to locate and modify all relevant software code. For additional information regarding the risks associated with the Company's compliance with Year 2000, see "Risk Factors-Year 2000" in Item 1 of the Company's Form 10-K for the year ended March 31, 1998. Dividend Policy. The Company is dedicated to promoting shareholder value through long term profitability and growth and believes that continued investments in future product development are essential to this goal. For this reason, it has been the Company's policy to not pay cash dividends. Forward-Looking Statements This quarterly report contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended which represent the Company's expectations or beliefs, including, but not limited to, statements concerning industry performance, the Company's operations, performance, financial condition, growth and acquisition strategies, margins and growth in sales of the Company's products. For this purpose, any statements contained in this quarterly report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "plan," "anticipate," "intend," "could," "estimate," "continue," "goal" or "strategy" or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, certain of which are beyond the Company's control, and actual results may differ materially depending on a variety of important factors, including those described previously in the "Risk Factors" section of the Company's 1998 Form 10-K for the year ended March 31, 1998. PART II OTHER INFORMATION Item 6. Exhibits and Reports for Form 8-K. A. Exhibits See Exhibit Index B. Reports on Form 8-K No reports on Form 8-K were filed during the quarter. 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. DETECTION SYSTEMS, INC. Registrant DATE: August 14, 1998 By: /s/ Karl H. Kostusiak Karl H. Kostusiak, President By: /s/ Frank J. Ryan Frank J. Ryan, Vice President, Secretary and Treasurer (Principal Financial Officer) By: /s/ Christopher P. Gerace Christopher P. Gerace Chief Accounting Officer (Principal Accounting Officer) EXHIBIT INDEX Item No. Exhibits Location - ---- -------- -------- 3(a) Detection Systems, Inc. Incorporated by reference to Certificate of Incorporation Exhibit 3(a) of the Company's as amended 1997 Annual Report on Form 10-K 3(b) Detection Systems, Inc. Incorporated by reference to By-Laws as amended Exhibit 3(b) of the Company's 1997 Annual Report on Form 10-K 10(a) Medical reimbursement plan Incorporated by reference to Exhibit 10(b) of the Company's 1997 Annual Report on Form 10-K 10(b) Employee stock purchase plan Incorporated by reference to Exhibit 10 of the Company's 1994 Annual Report on Form 10-K 10(c) Fleet Amended & Restated Incorporated by reference to Credit Facility Agreement Exhibit 10(d) of the Company's dated February 12, 1996 1996 Annual Report on Form 10-K 10(d) Amended and Restated Credit Incorporated by reference to Facility Agreement Exhibit 10(d) of the Company's (Amendment #1) dated May 1997 Annual Report on Form 10-K 31, 1996 10(e) Amended and Restated Credit Incorporated by reference to Facility Agreement Exhibit 10(d) of the Company's (Amendment #2) dated 1997 Annual Report on Form 10-K February 13, 1997 10(f) Deferred Compensation Plan Incorporation by reference to and Deferred Bonus Plan. Exhibit 10(c) to the Company's Quarterly Report on Form 10-Q, for the quarter ended 12/31/97 10(g) 1992 Restated Stock Option Incorporated by reference to Plan Exhibit 22 of the Company's 1995 Annual Report on Form 10-K 10(h) 1997 Stock Option Plan Incorporated by reference to Exhibit 10(o)of the Company's Registration Statement on Form S-2 (No. 333-31951) filed on 7/24/97. 10(i) Executive Officer Cash Bonus Incorporated by reference to Plan Exhibit 10(i) of the Company's 1998 Annual Report on Form 10-K 10(j) Executive employment Incorporated by reference to contract with Karl H. Exhibit 10(j) of the Company's Kostusiak. 1998 Annual Report on Form 10-K 10(k) Executive employment Incorporated by reference to contract with David B. Exhibit 10(b) of the Company's Lederer. Quarterly Report on Form 10-Q for the period ended June 30, 1997. 10(l) Executive employment Incorporated by reference to contract with Lawrence R. Exhibit 10 of the Company's 1995 Tracy. Annual Report on Form 10-K 10(m) Stock Purchase Agreements Incorporated by reference to with Karl H. Kostusiak and Exhibit 10(n) of the Company's David B. Lederer 1997 Annual Report on Form 10-K 11 Statement re: Computation of Included as Exhibit 11 of this Per Share Earnings Quarterly Report on Form 10-K 24 Powers of Attorney Incorporated by reference to Exhibit 24 of the Company's 1998 Annual Report on Form 10-K 27 Financial Data Schedule Included as Exhibit 27 of this Quarterly Report on Form 10-Q EX-11 2 Exhibit 11 DETECTION SYSTEMS, INC. COMPUTATION OF EARNINGS PER SHARE (In thousands, except per share data) Quarter Ended June 30, 1998 1997 ---- ---- Net income $ 832 $1,133 Plus: amortization of redeemable stock 12 ----- ----- Income available to common stockholders 832 1,145 ===== ===== Weighted average number of shares 6,291 4,613 ===== ===== Basic earnings per share $0.13 $0.25 ===== ===== Shares attributable to deferred compensation plans and stock options and warrants 542 588 ==== ==== Diluted earnings per share: $0.12 $0.22 ==== ==== EX-27 3 FDS --
5 3-MOS MAR-31-1999 JUN-30-1998 1,846 0 24,783 (1,120) 40,467 69,425 30,267 (18,190) 96,191 25,397 0 0 0 328 51,198 52,246 33,808 33,808 21,286 32,048 12 0 409 1,363 531 832 0 0 0 832 0.13 0.12
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