-----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, MUuC5NbXxjvEc7Xxez2/zqv4ENlK2b96obgSNsfaSdpZjQ9AZD6A8DIg3Y0X4Loy cOCBmLMqEnJBAdK1iheCTA== 0000028630-97-000002.txt : 19970222 0000028630-97-000002.hdr.sgml : 19970222 ACCESSION NUMBER: 0000028630-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970214 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIAGNOSTIC RETRIEVAL SYSTEMS INC CENTRAL INDEX KEY: 0000028630 STANDARD INDUSTRIAL CLASSIFICATION: SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812] IRS NUMBER: 132632319 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08533 FILM NUMBER: 97534043 BUSINESS ADDRESS: STREET 1: 3RD FLOOR STREET 2: 5 SYLVAN WAY CITY: PARSIPPANY STATE: NJ ZIP: 07054 BUSINESS PHONE: 201-898-1500 MAIL ADDRESS: STREET 1: 16 THORNTON RD CITY: OAKLAND STATE: NJ ZIP: 07436 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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 December 31, 1996 period ended OR TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition to period from Commission file 1-8533 number DIAGNOSTIC/RETRIEVAL SYSTEMS, INC. (Exact name of registrant as specified in its charter) Delaware 13-2632319 (State or other (I.R.S. jurisdiction of Employer incorporation or Identificati organization) on No.) 5 Sylvan Way, Parsippany, 07054 New Jersey (Address of principal (Zip Code) executive offices) 201-898-1500 (Registrant's telephone number, including area code) None (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 ___ As of February 4, 1997, 5,584,093 shares of the registrant's Common Stock, $.01 par value, were outstanding (exclusive of 420,893 shares held in treasury). DIAGNOSTIC/RETRIEVAL SYSTEMS, INC. AND SUBSIDIARIES INDEX PART 1. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets - December 31, 1996 and 3 March 31, 1996 Condensed Consolidated Statements of Earnings - Three and Nine Months Ended December 31, 4 1996 and 1995 Condensed Consolidated Statements of Cash Flows - Nine Months Ended December 31, 1996 5 and 1995 Notes to Condensed Consolidated Financial 6-7 Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-11 PART 2. OTHER INFORMATION Item 1. Not Applicable Item 2. Not Applicable Item 3. Not Applicable Item 4. Submission of Matters to a Vote of Security 12 Holders Item 5. Not Applicable Item 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13 DIAGNOSTIC/RETRIEVAL SYSTEMS, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Unaudited) December 31, 1996 March 31, 1996 Assets Current Assets: Cash and cash equivalents $ 8,616,000 $ 22,785,000 Accounts receivable 22,224,000 22,942,000 Inventories, net of progress payments 23,297,000 19,449,000 Other current assets 1,918,000 1,464,000 Total current assets 56,055,000 66,640,000 Property, plant and equipment, less accumulated depreciation and amortization of $27,480,000 and $25,744,000 at December 31, 1996 and March 31, 1996, respectively 19,667,000 16,191,000 Intangible assets, less accumulated amortization of $4,555,000 and $4,027,000 at December 31, 1996 and March 31, 1996, respectively 10,173,000 8,498,000 Other assets 6,180,000 5,922,000 $ 92,075,000 $ 97,251,000 Liabilities and Stockholders' Equity Current liabilities $ 23,095,000 $ 32,650,000 Long-term debt, excluding current installments 32,309,000 32,608,000 Deferred income taxes 2,607,000 2,607,000 Other liabilities 2,909,000 2,820,000 Total liabilities 60,920,000 70,685,000 Stockholders' equity: Common Stock, $.01 par value per share Authorized 20,000,000 shares; issued 5,987,986 shares at December 31, 1996 60,000 - Class A Common Stock, $.01 par value per share Authorized 10,000,000 shares; issued 3,739,963 shares at March 31, 1996 - 37,000 Class B Common Stock, $.01 par value per share Authorized 20,000,000 shares; issued 2,223,603 shares at March 31, 1996 - 22,000 Additional paid-in capital 14,159,000 13,639,000 Retained earnings 18,944,000 15,022,000 33,163,000 28,720,000 Treasury Stock, at cost; 420,893 shares of Common Stock at December 31, 1996; 432,639 shares of Class A Common Stock and 65,795 shares of Class B Common Stock at March 31, 1996 (1,619,000) (1,918,000) Unamortized restricted stock compensation (389,000) (236,000) Net stockholders' equity 31,155,000 26,566,000 $ 92,075,000 $ 97,251,000 See accompanying notes to condensed consolidated financial statements. DIAGNOSTIC/RETRIEVAL SYSTEMS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (Unaudited) Three Months Ended December 31, Nine Months Ended December 31, 1996 1995 1996 1995 Revenues $ 38,379,000 $ 25,563,000 $ 99,242,000 $65,628,000 Costs and expenses 35,125,000 23,382,000 90,488,000 60,289,000 Operating income 3,254,000 2,181,000 8,754,000 5,339,000 Interest and related expenses (914,000) (978,000) (2,649,000) 1,675,000) Other, net (36,000) 311,000 324,000 425,000 Earnings before income taxes 2,304,000 1,514,000 6,429,000 4,089,000 Income taxes 898,000 590,000 2,507,000 1,594,000 Net earnings $ 1,406,000 $ 924,000 $ 3,922,000 $ 2,495,000 Earnings per share: Primary $ 0.24 $ 0.16 $ 0.68 $ 0.44 Fully Diluted $ 0.21 $ 0.16 $ 0.59 $ 0.44 Weighted average number of shares outstanding: Primary 5,774,000 5,677,000 5,733,000 5,647,000 Fully Diluted 8,970,000 8,303,000 8,918,000 6,552,000 See accompanying notes to condensed consolidated financial statements.
DIAGNOSTIC/RETRIEVAL SYSTEMS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended December 31, 1996 1995 Cash flows from operating activities Net earnings $ 3,922,000 $ 2,495,000 Adjustments to reconcile net earnings to cash flows from operating activities: Depreciation and amortization 3,560,000 2,226,000 Other, net (24,000) 305,000 Changes in assets and liabilities, net of effects from business combinations: (Increase) decrease in accounts receivable 1,919,000 (2,859,000) (Increase) in inventories (3,748,000) (4,141,000) Decrease in other current assets 283,000 667,000 (Decrease) in accounts payable and other (9,664,000) (2,381,000) Other, net (353,000) 194,000 Net cash used in operating activities (4,105,000) (3,494,000) Cash flows from investing activities Capital expenditures (2,461,000) (3,712,000) Sales of fixed assets 122,000 2,380,000 Payments pursuant to business combinations, net of cash acquired (6,226,000) (4,140,000) Net cash used in investing activities (8,565,000) (5,472,000) Cash flows from financing activities Net proceeds from (repayments of) short-term debt (899,000) 55,000 Payments on long-term debt (651,000) (374,000) Repurchases of convertible subordinated debenture - (2,242,000) Net proceeds from issuance of senior subordinated convertible debentures - 23,360,000 Other, net 51,000 39,000 Net cash provided by (used in) financing activities (1,499,000) 20,838,000 Net increase (decrease) in cash and cash equivalents (14,169,000) 11,872,000 Cash and cash equivalents, beginning of period 22,785,000 11,197,000 Cash and cash equivalents, end of period $ 8,616,000 $23,069,000 See accompanying notes to condensed consolidated financial statements. 1)In the opinion of Management, the accompanying unaudited condensed consolidated financial statements of Diagnostic/Retrieval Systems, Inc. and subsidiaries (the "Company") contain all adjustments (consisting of only normal and recurring adjustments) necessary for the fair presentation of the Company's consolidated financial position as of December 31, 1996, the results of operations for the three and nine months ended December 31, 1996 and 1995 and cash flows for the nine months ended December 31, 1996 and 1995. The results of operations for the nine months ended December 31, 1996 are not necessarily indicative of the results to be expected for the full year. 2)The Company's industrial revenue bonds, due 1998, are supported by an irrevocable, direct-pay letter of credit in an amount equal to the principal balance plus interest thereon for 45 days. At December 31, 1996, the contingent liability of the Company as guarantor under the letter of credit was approximately $1,726,000. The Company has collateralized the letter of credit with accounts receivable and has also agreed to certain financial covenants, including the maintenance of: (i) a certain minimum ratio of consolidated tangible net worth to total debt (the "Debt Ratio"), (ii) a certain minimum quarterly ratio of earnings before interest and taxes to interest, and (iii) a certain minimum balance of billed and unbilled accounts receivable. As a result of the issuance of the Company's 9% Senior Subordinated Convertible Debentures, the Debt Ratio at December 31, 1996 was below the required minimum ratio. The Company has obtained a waiver from the issuing bank, expiring as of January 2, 1998 (the final redemption date), of the required debt ratio and, accordingly, is in compliance with all covenants under the letter of credit. 3)Until March 31, 1996, the Company had three authorized classes of stock: a class consisting of 10,000,000 shares of Class A Common Stock, a class consisting of 20,000,000 shares of Class B Common Stock, and a class consisting of 2,000,000 shares of Preferred Stock (none of which has been issued). The holders of the Class A and Class B Common Stock were entitled to one vote per share and one-tenth vote per share, respectively. On February 7, 1996, the Board of Directors of the Company approved and recommended for submission to the stockholders of the Company by a majority vote the consideration and approval of an Amended and Restated Certificate of Incorporation (the "Restated Certificate"), which amended and restated the Company's certificate to (i) effect a reclassification of each share of Class A Common Stock and each share of Class B Common Stock into one share of Common Stock of the Company, (ii) provide that action by the stockholders may be taken only at a duly called annual or special meeting and not by written consent and (iii) provide that the stockholders of the Company would have the right to make, adopt, alter, amend or repeal the by-laws of the Company only upon the affirmative vote of not less than 66 2/3% of the outstanding capital stock entitled to vote thereon. On March 26, 1996, the stockholders approved the Restated Certificate. The Restated Certificate was filed with the Secretary of State of the State of Delaware and became effective April 1, 1996. Accordingly, the Condensed Consolidated Balance Sheet as of March 31, 1996 presents Class A and Class B Common Stock; the Condensed Consolidated Balance Sheet as of December 31, 1996 presents the new, single class of Common Stock. 4)On June 18, 1996, a second-tier subsidiary of Precision Echo, Inc., a wholly-owned subsidiary of the Company, acquired substantially all the assets of Vikron, Inc. ("Vikron") for approximately $3.7 million. Vikron, located in St. Croix Falls, Wisconsin, manufactures data and recording heads. The acquisition has been accounted for using the purchase method of accounting. Accordingly, Vikron's results of operations from April 1, 1996 (the effective date of the acquisition) have been included in the Company's reported operating results. The excess of cost over the estimated fair value of net assets acquired was approximately $1.6 million and is being amortized on a straight-line basis over 15 years. 5)On October 24, 1996, a second-tier subsidiary of Precision Echo, Inc., a wholly-owned subsidiary of the Company, acquired certain assets of Nortronics Company, Inc. ("Nortronics"), a Minnesota corporation, for approx- imately $2.4 million. Nortronics manufactures magnetic data recording head products. The acquisition has been accounted for using the purchase method of accounting. Accordingly, Nortronics' results of operations from July 1, 1996 (the effective date of the acquisition) have been included in the Company's reported operating results. 6)On October 30, 1996, Pacific Technologies, Inc. ("PTI"), a California corporation, merged with and into a subsidiary of the Company, for stock and cash valued at approximately $0.5 million. Based in San Diego, California, PTI provides systems and software engineering support to the U.S. Navy for the testing of shipboard combat systems. The merger has been accounted for using the purchase method of accounting. Accordingly, PTI's results of operations from July 1, 1996 (the effective date of the merger) have been included in the Company's reported operating results. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations The following table sets forth items in the Condensed Consolidated Statements of Earnings as a percent of revenues and presents the percentage increase or decrease of those items as compared to the prior period. Percent of Revenues Percent of Revenues Three Months Ended Percent Nine Months Ended Percent December 31 Changes December 31 Changes 1996 1995 1996 vs. 1995 1996 1995 1996 vs. 1995 Revenues 100.0 100.0 50.1 100.0 100.0 51.2 Cost and expenses 91.5 91.5 50.2 91.2 91.1 50.1 Operating income 8.5 8.5 49.2 8.8 8.1 64.0 Interest and related expenses (2.4) (3.8) -6.5 (2.7) (2.5) 58.1 Other, net (0.1) 1.2 -111.6 0.3 0.6 -23.8 Earnings before income taxes 6.0 5.9 52.2 6.4 6.2 57.2 Income taxes 2.3 2.3 52.2 2.4 2.4 57.3 Net Earnings 3.7 3.6 52.2 4.0 3.8 57.2
Revenues for the three-month period ended December 31, 1996 increased 50.1% to $38.4 million from $25.6 million for the same three-month period in fiscal 1996. On a year-to-date basis, revenues increased 51.2% to $99.2 million from $65.6 million for the same nine-month period in fiscal 1996. The revenue growth was due primarily to increased shipments associated with the Company's display workstation and electro-optical system product lines, as well as to increases in commercial product sales, which include revenues from businesses acquired within the last year. Operating income for the three-month period ended December 31, 1996 increased 49.2% to $3.3 million from $2.2 million for the same three- month period in fiscal 1996. On a year-to-date basis, operating income increased 64% to $8.8 million from $5.3 million for the same nine-month period in fiscal 1996. Operating income as a percentage of revenue was 8.5% and 8.8% for the three-month and nine-month periods ended December 31, 1996, respectively, as compared with 8.5% and 8.1%, respectively, for the comparable prior year periods. The increase in operating income was due primarily to the overall increase in revenues, together with higher profits generated by certain of the Company's commercial products. Interest and related expenses were $0.9 million and $2.6 million for the three-month and nine-month periods ended December 31, 1996, as compared to $1.0 million and $1.7 million in the prior year. The decrease in the third quarter of fiscal 1997 was due primarily to the redemption of approximately $5.0 million aggregate principal amount of the Company's 8.5% Convertible Subordinated Debentures (the "8.5% Debentures") in the fourth quarter of fiscal 1996. These debentures were redeemed using a portion of the proceeds from the private placement on September 29, 1995, and November 3, 1995, of $25.0 million aggregate principal amount of 9% Senior Subordinated Convertible Debentures due 2003 (the "9% Debentures"). The increase in interest expense for the nine-month period ended December 31, 1996 is due primarily to the overall increase in interest expense associated with the issuance of the 9% Debentures, offset in part by reductions in interest resulting from redemptions of approximately $2.3 million and $5.0 million aggregate principal amount of the Company's 8.5% Debentures in the second and fourth quarters of fiscal 1996, respectively. Other, net was a charge of $36,000 and income of $0.3 million for the three- month and nine-month periods ended December 31, 1996, respectively, as compared to income of $0.3 million and $0.4 million in the comparable periods of fiscal 1996. The decreases were primarily due to an increase in minority interest resulting from higher earnings generated by Laurel Technologies, a partnership in which the Company has an 80% controlling interest. The Company's effective tax rate for the three-month and nine-month periods ended December 31, 1996 and 1995 was 39%. The Company records income tax expense based on an estimated effective income tax rate for the full fiscal year. The effective income tax rate and the components of income tax expense for the fiscal quarter ended December 31, 1996 have not significantly changed from those of the fiscal year ended March 31, 1996. The provision for income taxes includes all estimated income taxes payable to federal and state governments, as applicable. Financial Condition and Liquidity Cash and Cash Flow: Cash and cash equivalents at December 31, 1996 and March 31, 1996 represented approximately 9% and 23%, respectively, of total assets. During the nine-month period ended December 31, 1996, cash decreased by approximately $14.2 million. This decrease resulted from the use of approximately $6.2 million in the Vikron and Nortronics acquisitions, approximately $2.5 million for capital expenditures and approximately $1.6 million for debt repayments. Additionally, approximately $4.1 million was used in support of operations, primarily in settlement of accounts payable balances associated with material procurement in the fourth quarter of fiscal 1996. This material was purchased in anticipation of production activity, primarily for display workstations, scheduled for fiscal 1997. Capital expenditures, excluding assets acquired as a result of business combinations are expected to approximate $3 million for the fiscal year ending March 31, 1997. The majority of these expenditures will be for computer and production-related equipment. Working capital as of December 31, 1996 was $33.0 million, as compared to $34.0 million at March 31, 1996. The decrease was primarily due to the uses of cash for acquisitions and capital expenditures, partially offset by the net effect of lower accounts payable and higher inventory balances. On May 31, 1996, the Company entered into a revolving line of credit loan agreement with Mellon Bank, N.A. ("Mellon Bank") for a three-year $15 million unsecured revolving line of credit (the "line of credit"), available for working capital and letters of credit. As of December 31, 1996, approximately $4.1 million was outstanding against the line of credit. On December 6, 1996, the Company entered into a $5 million secured equipment line of credit/term loan agreement with Mellon Bank (the "equipment facility"). The equipment facility is available for equipment purchases made through June 30, 1999. At December 31, 1996, there were no outstanding borrowings against the equipment facility. The Company believes that its current working capital position and available financing are sufficient to support its current operational needs. Accounts Receivable and Inventories: Accounts receivable decreased by approximately $1.9 million in the nine-month period ended December 31, 1996, net of the effect of assets acquired pursuant to business combinations. The net decrease was due primarily to the collection of an outstanding balance associated with one of the Company's display workstation contracts, billed at the end of the second quarter. Generally, there are no contract provisions for retainage, and all accounts receivable are expected to be collected within one year. Inventories increased by approximately $3.7 million from March 31, 1996, net of the effect of assets acquired pursuant to business combinations. The increase was due primarily to increased material procurement and production activity on certain data recording and commercial products. December 31, March 31, 1996 1996 Quick ratio 1.3 1.4 Current ratio 2.4 2.0 Liabilities-to-equity ratio 2.0 2.7 Long-term debt, excluding current installments, to capitalization 50.9% 55.1%
Backlog: At December 31, 1996, the Company's backlog of orders was approximately $118.6 million as compared to $145.6 million at March 31, 1996. The decrease in backlog was due to the net effect of revenues, partially offset by bookings. New contract awards of approximately $69 million were booked during the nine-month period ended December 31, 1996. Acquisitions and Related Activities On June 18, 1996, a second-tier subsidiary of Precision Echo, Inc., a wholly-owned subsidiary of the Company, acquired substantially all the assets of Vikron, Inc. ("Vikron") for approximately $3.7 million. Vikron, located in St. Croix Falls, Wisconsin, manufactures data and recording heads. The acquisition has been accounted for using the purchase method of accounting. Accordingly, Vikron's results of operations from April 1, 1996 (the effective date of the acquisition) have been included in the Company's reported operating results. The excess of cost over the estimated fair value of net assets acquired was approximately $1.6 million and is being amortized on a straight-line basis over 15 years. On October 24, 1996, a second-tier subsidiary of Precision Echo, Inc., a wholly-owned subsidiary of the Company, acquired certain assets of Nortronics Company, Inc. ("Nortronics"), a Minnesota corporation, for approximately $2.4 million. Nortronics manufactures magnetic data recording head products. The acquisition has been accounted for using the purchase method of accounting. Accordingly, Nortronics' results of operations from July 1, 1996 (the effective date of the acquisition) have been included in the Company's reported operating results. On October 30, 1996, Pacific Technologies, Inc. ("PTI"), a California corporation, merged with and into a subsidiary of the Company, for stock and cash valued at approximately $0.5 million. Based in San Diego, California, PTI provides systems and software engineering support to the U.S. Navy for the testing of shipboard combat systems. The merger has been accounted for using the purchase method of accounting. Accordingly, PTI's results of operations from July 1, 1996 (the effective date of the merger) have been included in the Company's reported operating results. Letter of Credit The Company's industrial revenue bonds, due 1998, are supported by an irrevocable, direct-pay letter of credit in an amount equal to the principal balance plus interest thereon for 45 days. At December 31, 1996, the contingent liability of the Company as guarantor under the letter of credit was approximately $1,726,000. The Company has collateralized the letter of credit with accounts receivable and has also agreed to certain financial covenants, including the maintenance of: (i) a certain minimum ratio of consolidated tangible net worth to total debt (the "Debt Ratio"), (ii) a certain minimum quarterly ratio of earnings before interest and taxes to interest, and (iii) a certain minimum balance of billed and unbilled accounts receivable. As a result of the issuance of the Company's 9% Senior Subordinated Convertible Debentures, the Debt Ratio at December 31, 1996 was below the required minimum ratio. The Company has obtained a waiver from the issuing bank, expiring as of January 2, 1998, (the final redemption date) of the required debt ratio and accordingly is in compliance with all covenants under the letter of credit. PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders None. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 11. Schedule of Computations of Per Share Earnings 27. Financial Data Schedule (b) Reports on Form 8-K None. DIAGNOSTIC/RETRIEVAL SYSTEMS, INC. AND SUBSIDIARIES 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. DIAGNOSTIC/RETRIEVAL SYSTEMS, INC. Registrant Date: February 14, 1997 /s/ Nancy R. Pitek Nancy R. Pitek Vice President, Finance Treasurer and Secretary EX-11 2 DIAGNOSTIC/RETRIEVAL SYSTEMS, INC. EXHIBIT 11 SCHEDULE OF COMPUTATIONS OF PER SHARE EARNINGS Three Months Ended December 31, Nine Months Ended December 31, 1996 1995 1996 1995 PRIMARY Net earnings for primary earnings per share $1,406,000 $ 924,000 $3,922,000 $2,495,000 Weighted average number of shares outstanding (1) 5,538,000 5,497,000 5,507,000 5,473,000 Add - common equivalent shares (determined using the "treasury stock" method) representing shares issuable upon exercise of employee stock options 236,000 180,000 226,000 174,000 Weighted average number of shares used in calculation of primary earnings per share 5,774,000 5,677,000 5,733,000 5,647,000 Primary earnings per share $ 0.24 $ 0.16 $ 0.68 $ 0.44 FULLY DILUTED Net earnings $1,406,000 $ 924,000 $3,922,000 $2,495,000 Add - interest on 8.5% Convertible Subordinated Debentures, net of applicable income taxes (2) 65,000 - 195,000 - Add - interest on 9% Senior Subordinated Convertible Debentures, net of applicable income taxes 351,000 332,000 1,049,000 332,000 Add - amortization of deferred issuance costs relating to 9% Senior Subordinated Convertible Debentures, net of applicable income taxes 36,000 31,000 107,000 31,000 Net earnings for fully diluted earnings per share $1,858,000 $1,287,000 $5,273,000 $2,858,000 Weighted average number of shares used in calculation of primary earnings per share 5,774,000 5,677,000 5,733,000 5,647,000 Add (deduct) incremental shares representing: Shares issuable upon exercise of stock options included in primary earnings per share calculation (236,000) (180,000) (226,000) (174,000) Shares issuable upon exercise of stock options based on period-end market prices 274,000 184,000 253,000 185,000 Shares issuable upon conversion of 8.5% Convertible Subordinated Debentures (2) 333,000 - 333,000 - Shares issuable upon conversion of 9% Senior Subordinated Convertible Debentures 2,825,000 2,622,000 2,825,000 894,000 Weighted average number of shares used in calculation of fully diluted earnings per share 8,970,000 8,303,000 8,918,000 6,552,000 Fully diluted earnings per share $ 0.21 $ 0.16 $ 0.59 $ 0.44 (1) Effective April 1, 1996, Class A and Class B Common Stock were reclassified into a new single class of Common Stock. See Note 3 to Condensed Consolidated Financial Statements. (2) No adjustment made for all prior year periods, as the effect on reported per share earnings was antidilutive.
EX-27 3
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM DIAGNOSTIC/RETRIEVAL SYSTEMS, INC. FORM 10-Q FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS MAR-31-1997 DEC-31-1996 8,616,000 0 22,224,000 0 23,297,000 56,055,000 47,147,000 27,480,000 92,075,000 23,095,000 32,309,000 0 0 60,000 31,095,000 92,075,000 38,379,000 38,379,000 35,125,000 35,125,000 0 0 914,000 2,304,000 898,000 0 0 0 0 1,406,000 0.24 0.21
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