-----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, ETWVfixi0SJZ/eXAv8XjIcqdcUcOJdyGtjSZIzm9RL7ZFFFhXL3yitGwy1gAn4cY UARgGh8SDjGdTZ6JiM4uiQ== 0000892569-97-003384.txt : 19971205 0000892569-97-003384.hdr.sgml : 19971205 ACCESSION NUMBER: 0000892569-97-003384 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971101 FILED AS OF DATE: 19971204 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FURON CO CENTRAL INDEX KEY: 0000037755 STANDARD INDUSTRIAL CLASSIFICATION: GASKETS, PACKAGING AND SEALING DEVICES & RUBBER & PLASTIC HOSE [3050] IRS NUMBER: 951947155 STATE OF INCORPORATION: CA FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-08088 FILM NUMBER: 97732421 BUSINESS ADDRESS: STREET 1: 1199 SOUTH CHILLICOTHE RD CITY: AURORA STATE: OH ZIP: 44202 BUSINESS PHONE: 7148315350 FORMER COMPANY: FORMER CONFORMED NAME: FLUOROCARBON CO DATE OF NAME CHANGE: 19900322 10-Q 1 FORM 10-Q - FOR QUARTER ENDING NOVEMBER 1, 1997 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------------- FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED NOVEMBER 1, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-8088 FURON COMPANY (Exact name of registrant as specified in its charter) California 95-1947155 - ---------------------------- ------------------- (State or other jurisdiction (I.R.S. Employer of incorporation or Identification No.) organization) 29982 Ivy Glenn Drive Laguna Niguel, CA 92677 - --------------------------------------- ----------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (714) 831-5350 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 [ ] Number of shares of common stock outstanding as of December 2, 1997: 9,112,754 (18,225,508 shares after giving effect to the stock split described herein). 1 2 FURON COMPANY INDEX
PART I - FINANCIAL INFORMATION - ------------------------------- PAGE NO. -------- Item 1. Financial Statements Condensed Consolidated Balance Sheets November 1, 1997 and February 1, 1997 3 Condensed Consolidated Statements of Income Three and nine months ended November 1, 1997 and November 2, 1996 5 Condensed Consolidated Statements of Cash Flows Three and nine months ended November 1, 1997 and November 2, 1996 6 Notes to Condensed Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 PART II - OTHER INFORMATION 14 - ---------------------------
2 3 ITEM 1. FINANCIAL STATEMENTS FURON COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
November 1, February 1, In thousands 1997 1997 - ------------------------------------------------------------------------------------------- ASSETS Current assets: Cash and cash equivalents ..................... $ -- $ -- Accounts receivable, less allowance for doubtful accounts of $1,742 at November 1, 1997 and $2,093 at February 1, 1997 ................ 74,670 72,315 Inventories ................................... 57,078 58,611 Deferred income taxes ......................... 10,413 10,411 Prepaid expenses and other current assets ..... 5,320 5,389 --------- --------- Total current assets .................................. 147,481 146,726 Property, plant & equipment, at cost: Land .......................................... 7,080 7,096 Buildings and leasehold improvements .......... 31,558 30,712 Machinery and equipment ....................... 159,857 152,998 --------- --------- 198,495 190,806 Less accumulated depreciation and amortization (87,403) (76,214) --------- --------- Net property, plant and equipment ..................... 111,092 114,592 Intangible assets, at cost less accumulated amortization of $34,007 at November 1, 1997 and $29,971 at February 1, 1997 ....................... 81,792 74,640 Other assets .......................................... 7,612 8,385 --------- --------- TOTAL ASSETS .......................................... $ 347,977 $ 344,343 ========= =========
See accompanying notes. 3 4 FURON COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
November 1, February 1, In thousands, except share data 1997 1997 - ------------------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Cash, less checks outstanding ....................... $ 240 $ 1,665 Accounts payable .................................... 25,058 24,319 Salaries, wages and related benefits payable ........ 17,071 14,141 Current portion of long-term debt ................... 916 1,001 Facility rationalization and severance .............. 7,926 10,369 Other current liabilities ........................... 20,143 16,407 --------- --------- Total current liabilities .................................. 71,354 67,902 Long-term debt ............................................. 158,273 176,983 Other long-term liabilities ................................ 26,306 21,933 Deferred income taxes ...................................... 16,008 16,181 Commitments and contingencies Stockholders' equity: Preferred stock without par value, 2,000,000 shares authorized, none issued or outstanding .............. -- -- Common stock without par value, 15,000,000 shares authorized, 9,055,397 shares issued and outstanding at November 1, 1997 and 9,003,140 at February 1, 1997 39,665 38,787 Foreign currency translation adjustment ............. (1,070) (977) Unearned ESOP shares ................................ (3,316) (3,224) Unearned compensation ............................... (280) (238) Additional pension liability ........................ (1,413) (1,413) Retained earnings ................................... 42,450 28,409 --------- --------- Total stockholders' equity ................................. 76,036 61,344 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................. $ 347,977 $ 344,343 ========= =========
See accompanying notes. 4 5 FURON COMPANY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three months ended Nine months ended ----------------------------------------------------- November 1, November 2, November 1, November 2, In thousands, except per share amounts 1997 1996 1997 1996 - --------------------------------------------------------------------------------------------- Net sales .......................... $ 123,209 $ 96,227 $ 361,554 $ 287,206 Cost of sales ...................... 84,304 70,559 245,848 208,995 --------- --------- --------- --------- Gross profit ....................... 38,905 25,668 115,706 78,211 Selling, general and administrative expenses ........................... 28,898 19,894 85,662 60,239 Other (income), expense ............ (813) (955) (1,622) (2,918) Interest expense ................... 2,842 585 8,796 1,939 --------- --------- --------- --------- Income before income taxes ......... 7,978 6,144 22,870 18,951 Provision for income taxes ......... 2,513 2,089 7,204 6,443 --------- --------- --------- --------- Net income ......................... $ 5,465 $ 4,055 $ 15,666 $ 12,508 ========= ========= ========= ========= Net income per share of common stock $ 0.58 $ 0.44 $ 1.68 $ 1.37 ========= ========= ========= ========= Cash dividends per share ........... $ 0.06 $ 0.06 $ 0.18 $ 0.18 ========= ========= ========= =========
See accompanying notes. 5 6 FURON COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three months ended Nine months ended -------------------------------------------------- November 1, November 2, November 1, November 2, In thousands 1997 1996 1997 1996 - ------------------------------------------------------------------------------------------------------- OPERATING ACTIVITIES Net income ................................... $ 5,465 $ 4,055 $ 15,666 $ 12,508 Adjustments to reconcile net income to cash provided by operating activities: Depreciation .............................. 4,111 3,162 12,412 9,870 Amortization .............................. 1,489 838 4,274 2,483 Provision for losses on accounts receivable ................................ (64) (155) 85 132 Deferred income taxes ..................... 4 (265) (23) (189) Loss on sale of assets .................... 37 -- 45 -- Working capital changes, net of acquisitions and disposals: Accounts receivable ....................... (5,190) (866) (3,044) 1,239 Inventories ............................... (237) 3,740 3,823 619 Accounts payable and accrued liabilities .. 4,026 (2,552) 2,759 (4,202) Income taxes payable ...................... (525) 238 2,262 1,546 Other current assets and liabilities, net ....................................... (43) 1,395 (290) 1,751 Changes in other long-term operating assets and liabilities .................... 130 (352) 862 (1,251) -------- -------- -------- -------- Net cash provided by operating activities ............................ 9,203 9,238 38,831 24,506 INVESTING ACTIVITIES Acquisition of businesses .................... (11,100) -- (11,100) (4,071) Purchases of property, plant and equipment ... (3,156) (3,004) (8,633) (13,856) Proceeds from sale of businesses ............. 395 275 814 1,054 Proceeds from sale of equipment .............. 196 1,542 229 1,592 Proceeds from notes receivable ............... -- 252 -- 257 Increase in notes receivable ................. -- (200) -- (200) -------- -------- -------- -------- Net cash used in investing activities ............................ (13,665) (1,135) (18,690) (15,224) FINANCING ACTIVITIES Proceeds from long-term debt ................. 15,077 -- 19,158 13,000 Principal payments on long-term debt ......... (11,168) (4,135) (37,973) (18,312) Proceeds, net of cancellations, from issuance of common stock ..................... (35) 457 612 1,226 Loan to ESOP ................................. (355) -- (621) (566) Principal payments received from loan to ESOP ......................................... -- -- 529 458 Dividends paid on common stock ............... (541) (538) (1,625) (1,614) -------- -------- -------- -------- Net cash provided by (used in) financing activities .................. 2,978 (4,216) (19,920) (5,808) EFFECT OF EXCHANGE RATE CHANGES ON CASH .......... 1,320 (15) (221) 398 -------- -------- -------- -------- (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS.. (164) 3,872 -- 3,872 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ........................................... 164 -- -- -- -------- -------- -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD ....... $ -- $ 3,872 $ -- $ 3,872 ======== ======== ======== ========
See accompanying notes. 6 7 FURON COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS November 1, 1997 (Unaudited) 1. GENERAL The accompanying unaudited consolidated financial statements have been condensed in certain respects and should, therefore, be read in conjunction with the consolidated financial statements and related notes thereto, contained in the Company's Annual Report to Shareholders on Form 10-K for the fiscal year ended February 1, 1997. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary (consisting only of normal recurring adjustments) to present fairly the financial position of the Company as of November 1, 1997, and the results of operations and cash flows for the three and nine months ended November 1, 1997 and November 2, 1996. Results of the Company's operations for the three and nine months ended November 1, 1997 are not necessarily indicative of the results to be expected for the full year. In February 1997, the Financial Accounting Standards Board issued Statement No. 128, Earnings per Share, which is effective for financial statements for periods ending after December 15, 1997. The Company will be required to change the method currently used to compute earnings per share and to restate all prior periods. Under the new requirements for calculating basic earnings per share, the dilutive effect of stock options will be excluded. The impact is expected to result in an increase in basic earnings per share for the three and nine months ended November 1, 1997 of $.03 and $.07 per share, respectively. The impact is expected to result in an increase in basic earnings per share for the three and nine months ended November 2, 1996 of $.02 and $.04 per share, respectively. The impact of Statement 128 on the calculation of fully diluted earnings per share for these periods is not expected to be material. 2. INVENTORIES Inventories, stated at the lower of cost (first-in, first-out) or market, are summarized as follows:
November 1, February 1, In thousands 1997 1997 ------------------------------------------------------------------------------ Raw materials and purchased parts $26,419 $22,841 Work-in-process 12,580 14,121 Finished goods 18,079 21,649 -------- ------- $57,078 $58,611 ======== =======
7 8 FURON COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS November 1, 1997 (Unaudited) 3. INTANGIBLES Intangible assets, primarily acquired in business combinations, net of accumulated amortization, are summarized as follows:
November 1, February 1, In thousands 1997 1997 ------------------------------------------------------------------------------- Goodwill $52,163 $42,016 Other intangible assets 29,629 32,624 -------- ------- $81,792 $74,640 ======== =======
4. LONG-TERM DEBT Long-term debt is summarized as follows:
November 1, February 1, In thousands 1997 1997 -------------------------------------------------------------------------------- Loans under bank credit agreements due through fiscal year 2000 $151,000 $169,000 Industrial Revenue Bonds 6,175 6,775 Other 2,014 2,209 -------- --------- Total long-term debt 159,189 177,984 Less current portion 916 1,001 -------- --------- Due after one year $158,273 $176,983 ========= ========
Effective March 27, 1997, the Company amended and restated its Credit Agreement to increase the aggregate credit facility from $200.0 million to $250.0 million. For the three and nine months ended November 1, 1997, the weighted average interest rate on the loans under the bank credit agreement was 6.6%. Interest paid for the three and nine months ended November 1, 1997 was $2.7 million and $7.7 million, respectively. Interest paid for the three and nine months ended November 2, 1996 was $0.6 million and $1.9 million, respectively. 8 9 FURON COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS November 1, 1997 (Unaudited) 5. INCOME TAXES The Company's effective tax rate for the three and nine months ended November 1, 1997 was 31.5% as compared with 34.0% for the same periods in the prior year. The lower effective tax rate was primarily due to increases in research and experimental credits and foreign tax credits. Income taxes paid for the three and nine months ended November 1, 1997 were $2.5 million and $4.7 million, respectively. Income taxes paid for the three and nine months ended November 2, 1996 were $1.6 million and $3.2 million, respectively. 6. CONTINGENCIES At November 1, 1997, the Company had approximately $2.2 million of foreign currency hedge contracts outstanding consisting of over-the-counter forward contracts. Net unrealized losses from hedging activities were not material as of November 1, 1997. At November 1, 1997, the Company is obligated under irrevocable letters of credit totaling $8.5 million. The Company is currently involved in various litigation. Management of the Company is of the opinion that the ultimate resolution of such litigation should not have a material adverse effect on the Company's consolidated financial position or results of operations. Compliance with environmental laws and regulations designed to regulate the discharge of materials into the environment or otherwise protect the environment requires continuing management effort and expenditures by the Company. The Company does not believe that the operating costs incurred in the ordinary course of business to satisfy air and other permit requirements, properly dispose of hazardous wastes and otherwise comply with these laws and regulations form or will form a material component of its operating costs or have or will have a material adverse effect on its competitive or consolidated financial positions. 9 10 FURON COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS November 1, 1997 (Unaudited) 6. CONTINGENCIES (CONTINUED) As of November 1, 1997 the Company's reserves for environmental matters totaled approximately $1.7 million. The Company or one or more of its subsidiaries is currently involved in environmental investigation or remediation directly or as an EPA-named potentially responsible party or private cost recovery/contribution action defendant at various sites, including the following "superfund" waste disposal sites: Solvents Recovery Service of New England in Southington, Connecticut; Gallup's Quarry in Plainfield, Connecticut; Davis Liquid Waste and Picillo in Coventry, Rhode Island; Malvern in Malvern, Pennsylvania; and Granville in Granville, Ohio. While neither the timing nor the amount of the ultimate costs associated with these matters can be determined with certainty, based on information currently available to the Company, including investigations to determine the nature of the potential liability, the estimated amount of investigation and remedial costs expected to be incurred and other factors, the Company presently believes that its environmental reserves should be sufficient to cover the Company's aggregate liability for these matters and, accordingly, does not expect them to have a material adverse effect on its consolidated financial position or results of operations. The actual costs to be incurred by the Company at each site will depend on a number of factors, including one or more of the following: the final delineation of contamination; the final determination of the remedial action required; negotiations with governmental agencies with respect to cleanup levels; changes in regulatory requirements; innovations in investigatory and remedial technology; effectiveness of remedial technologies employed; and the ultimate ability to pay of any other responsible parties. 7. SUBSEQUENT EVENT On November 20, 1997, the Company's Board of Directors approved a two-for-one stock split. As a result of this action, shareholders will receive, on or about December 16, 1997, one share of the Company's common stock for each full share of common stock outstanding to holders of record on December 2, 1997. Pro forma earnings per share, giving retroactive effect to the two-for-one split, are $0.29 and $0.84 for the three and nine months ended November 1, 1997, respectively and $0.22 and $0.69 for the three and nine months ended November 2, 1996, respectively. Share and per share information contained elsewhere in this filing have not been adjusted to reflect the impact of the common stock split. 10 11 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Consolidated sales for the three and nine months ended November 1, 1997 rose 28% to $123.2 million and 26% to $361.6 million, respectively, over the same periods of the prior year. Comparing sales for the most recent quarter reflects a 4% increase over the previous quarter ended August 2, 1997. For the quarter and nine months ended November 1, 1997, Medex, having been acquired January 2, 1997, recorded sales of $24.6 and $74.3 million, respectively. For the current quarter, this represents a slight increase over the second quarter at $24.5 million, coming from improved European results. In August, 1997 the Company acquired the product lines of Scientific Device Manufacturer, Inc. (SDM), based in San Rafael, California, and an affiliated company, AS Medical GmbH of Fraureuth, Germany. The combined companies currently have annualized sales of approximately $7 million and will operate as part of Furon's Medex subsidiary, which is headquartered in Columbus, Ohio. SDM and AS Medical manufacture a complete line of sheath introducers, catheters and related products for use in cardiology and anesthesia/intensive care. Exclusive of the Medex acquisition, the Company has benefited from continued strength in specific industrial markets over the prior year. Consistent with last quarter of the current year, sales to the aerospace, heavy duty truck, OEM medical devices, and general industrial markets were particularly strong during the third quarter compared to the same period of the prior year. Partially offsetting this was a shortfall in the chemical processing market that is the result of major offshore exploration projects included in last year's sales that were not repeated this year. Excluding Medex, sales for the three and nine months ended November 1, 1997 for the Company's European operations were down 8% and 9%, respectively, over the same periods of the prior year. However, after removing the unfavorable effect of foreign currency exchange rate changes, sales for the three and nine months ended November 1, 1997 were up 9% and 5%, respectively, over the same periods of the prior year. Gross profit as a percentage of sales for the three and nine months ended November 1, 1997 was up 4.9% and 4.8%, respectively, from the same periods of the prior year to 31.6% and 32.0%, respectively. This continues to be the result of significantly higher margins earned by Medex, which were 44.7% and 44.8% for the three and nine months ended November 1, 1997. Gross profit as a percentage of sales for Medex on the current quarter, increased slightly from 44.6% in the second quarter. This was attributable to reduced material costs from the European operations. Exclusive of Medex, the current quarter benefited from improved yields resulting in reduced material usage and cost containment programs on increasing sales volumes compared to the same period of the prior year. Compared to the second quarter, overall gross margin was lower as a result of higher overhead due to performance based incentive compensation, reduced material yields and a shift in product mix to higher material content products. 11 12 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS (CONTINUED) Selling, general and administrative expenses as a percentage of sales were 23.5% and 23.7% for the three and nine months ended November 1, 1997, up from 20.7% and 21.0%, respectively, for the same periods a year ago. The increase in operating expenses as a percentage of sales from last year is primarily the result of the Medex addition, at 33.0% and 31.4% for the three and nine months ended November 1, 1997. After removing the effect of acquisitions and divestitures, these same operating expenses were 21.0% and 21.6%, for the three and nine months ended November 1, 1997, up slightly from 20.9% and 21.2%, respectively, for the same periods a year ago. The increase in selling, general and administrative expense in terms of dollars from last year was primarily the result of higher performance based incentive compensation, partially offset by lower sales commissions and travel costs. Interest expense for the three and nine months ended November 1, 1997 increased significantly from the same periods of the prior year. This increase is due in full to the debt incurred for the acquisition of Medex. Interest expense for the three months ended November 1, 1997 reflects a 2.2% decrease over the previous quarter ended August 2, 1997 due to the repayment of principal. Pretax results of operations for the three and nine months ended November 1, 1997 improved 29.9% and 20.7%, respectively, compared to the same periods last year. The improvement generally reflected higher sales, improved margins and continued productivity improvements, which were somewhat offset by higher material costs in Europe and higher operating and interest expenses. Net of acquisitions and divestitures, pretax results of operations were up 24.2% and 17.1%, respectively, for the three and nine months ended November 1, 1997. The Company's effective tax rate for the three and nine months ended November 1, 1997 was 31.5%, compared with 34.0% in the same periods last year. The lower effective tax rate was primarily due to increases in research and experimental credits and foreign tax credits. LIQUIDITY AND CAPITAL RESOURCES The Company's financial condition remained strong at November 1, 1997. The ratio of current assets to current liabilities was 2.1 to 1.0, down slightly from the beginning of the year. Net working capital decreased $2.7 million from the beginning of the year to a total of $76.1 million. Cash provided by operations for the three and nine months ended November 1, 1997 was $9.2 million and $38.8 million, respectively, compared with $9.2 million and $24.5 million, respectively, provided in the same periods of the prior year. Investing activities included the acquisition of SDM and AS Medical. Capital expenditures for the nine months ended November 1, 1997 totaled $8.6 million and were primarily for renovating existing facilities, leasehold improvements and replacement of existing equipment. Cash and cash equivalents increased $1.4 million, 12 13 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES (CONTINUED) in addition to a decrease in long-term debt of $18.8 million which was a result of funds generated by operations. The Company's debt to equity ratio is currently 2.1 to 1.0, a decrease from 2.9 to 1.0 at the beginning of the period. The Company continues to believe that it generates sufficient cash flow from its operations to finance near and long-term internal growth, capital expenditures and the principal and interest payments on its loans payable to banks. The Company continually evaluates its employment of capital resources including asset management and other sources of financing. The Company continually reviews possible acquisitions and should the Company make a substantial acquisition, it would require the utilization of the remaining $99.0 million available on its existing credit facility or financing from other sources. CONTINGENCIES For information regarding environmental matters and other contingencies, see note 6 to the Notes to Condensed Consolidated Financial Statements. While the Year 2000 considerations are not expected to materially impact Furon's internal operations, it may have an effect on some of our customers and suppliers, and thus indirectly affect Furon. It is not possible to quantify the aggregate cost to Furon with respect to customers and suppliers with Year 2000 problems, although the Company does not anticipate it will have a material adverse impact on its business. STATEMENT REGARDING FORWARD LOOKING DISCLOSURE Except for the historical information contained in this report, certain matters discussed herein, including (without limitation) in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" (Item 2) in Part I, are forward looking statements. These statements involve risks and uncertainties, including (without limitation) the matters identified in that section and the following: the effect of economic and market conditions and raw material price increases; the impact of costs, insurance recoveries and governmental, judicial and other third party interpretations and determinations in connection with legal and environmental proceedings; potential Year 2000 considerations; and the impact of current or pending legislation and regulation. 13 14 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. Not applicable. ITEM 2. CHANGES IN SECURITIES. Not applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. ITEM 5. OTHER INFORMATION. Not applicable. 14 15 PART II - OTHER INFORMATION (CONTINUED) ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits: 11 Statement re: Computation of Net Income Per Share 27 Financial Data Schedule (b) Reports on Form 8-K: None 15 16 PART II (CONTINUED) 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. FURON COMPANY REGISTRANT ----------------------------------- /S/MONTY A. HOUDESHELL /S/DAVID L. MASCARIN - --------------------------------------- ------------------------------ Monty A. Houdeshell David L. Mascarin Vice President, Chief Financial Officer Controller and Treasurer December 4, 1997 16 EX-11 2 COMPUTATION OF NET INCOME PER SHARE 1 EXHIBIT 11 FURON COMPANY Computation of Net Income Per Share
Three months ended Nine months ended ----------------------------------------------------------- November 1, November 2, November 1, November 2, 1997 1996 1997 1996 - -------------------------------------------------------------------------------------------------------------- PRIMARY NET INCOME PER SHARE Earnings: Net income $ 5,465,000 $ 4,055,000 $15,666,000 $12,508,000 =========== =========== =========== =========== Shares: Weighted average number of common shares outstanding 8,962,353 8,881,450 8,948,367 8,874,382 Shares issuable from assumed exercise of stock options 475,189 257,672 377,716 250,153 ----------- ----------- ----------- ----------- Average shares as adjusted 9,437,542 9,139,122 9,326,083 9,124,535 =========== =========== =========== =========== Primary net income per share $ 0.58 $ 0.44 $ 1.68 $ 1.37 =========== =========== =========== =========== FULLY DILUTED NET INCOME PER SHARE Earnings: Net income $ 5,465,000 $ 4,055,000 $15,666,000 $12,508,000 =========== =========== =========== =========== Shares: Weighted average number of common shares outstanding 8,962,353 8,881,450 8,948,367 8,874,382 Shares issuable from assumed exercise of stock options 485,340 257,711 497,466 250,920 ----------- ----------- ----------- ----------- Average shares as adjusted for full dilution 9,447,693 9,139,161 9,445,833 9,125,302 =========== =========== =========== =========== Fully diluted net income per share $ 0.58 $ 0.44 $ 1.66 $ 1.37 =========== =========== =========== ===========
17 EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S UNAUDITED CONDENSED STATEMENTS OF INCOME, CONDENSED BALANCE SHEETS AND CONDENSED STATEMENTS OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS CONTAINED WITHIN THE COMPANY'S FORM 10-Q FOR THE NINE MONTHS ENDED NOVEMBER 1, 1997. 1,000 U.S. DOLLARS 9-MOS JAN-31-1998 NOV-01-1997 1 0 0 76,412 1,742 57,078 147,481 198,495 87,403 347,977 71,354 6,175 0 0 39,665 36,371 347,977 361,554 361,554 245,848 331,510 (1,622) 85 8,796 22,870 7,204 15,666 0 0 0 15,666 1.68 1.66
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