-----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, IQqrb7Z7QugXZe4+s6pWAGj+ECz4xMtREkbeNVJ1FPfNxxch3mgOqrq2JWHNQ41/ fv3NuA0U6Eof9iQmec61Jg== 0001047469-98-029663.txt : 19980807 0001047469-98-029663.hdr.sgml : 19980807 ACCESSION NUMBER: 0001047469-98-029663 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980806 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARMON INDUSTRIES INC CENTRAL INDEX KEY: 0000045635 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 440657800 STATE OF INCORPORATION: MO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-07916 FILM NUMBER: 98678514 BUSINESS ADDRESS: STREET 1: 1300 JEFFERSON CT CITY: BLUE SPRINGS STATE: MO ZIP: 64015 BUSINESS PHONE: 8162293345 MAIL ADDRESS: STREET 1: 1300 JEFFERSON INC CITY: BLUE SPRINGS STATE: MO ZIP: 64015 FORMER COMPANY: FORMER CONFORMED NAME: HARMON ELECTRONICS INC DATE OF NAME CHANGE: 19780823 10-Q 1 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the quarterly period ended: June 30, 1998 Commission File Number: 0-7916 ------------- ------ HARMON INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Missouri 44-0657800 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1300 Jefferson Court, Blue Springs, Missouri 64015 - -------------------------------------------- ----- (Address of principal executive offices) (Zip Code) 816-229-3345 ------------ (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 such filing requirements for the past 90 days. Yes X No --- --- Number of shares of Registrant's common stock outstanding as of June 30, 1998: 10,542,206 - ---------- 1 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The Consolidated Statements of Earnings, Consolidated Balance Sheets, Consolidated Statements of Cash Flows and Consolidated Statements of Stockholders' Equity are unaudited, but reflect, in the opinion of management, all adjustments necessary, all of which are considered normal and recurring, to present fairly the financial position of the Company at June 30, 1998 and December 31, 1997 as well as the results of its operations for the interim periods ended June 30, 1998 and June 30, 1997. The Consolidated Balance Sheet as of December 31, 1997 is derived from the audited Consolidated Balance Sheet as of that date. 2 HARMON INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF EARNINGS FOR PERIODS ENDED JUNE 30, 1998 AND 1997 AMOUNTS IN THOUSANDS (EXCEPT PER SHARE DATA) (UNAUDITED)
Three months ended June 30, Six months ended June 30, --------------------------------- ------------------------------- 1998 1997 1998 1997 ------------- ------------- --------------- --------- Net sales $ 73,705 $ 47,621 $ 134,263 $ 83,609 Cost of sales 55,324 33,607 101,338 59,803 Research and development expenditures 2,376 1,809 4,483 3,411 -------- -------- --------- -------- Gross profit 16,005 12,205 28,442 20,395 Selling, general and administrative expenses 8,426 6,687 15,967 12,535 Amortization of cost in excess of fair value of net assets acquired 217 166 434 326 Equity in net loss of affiliate -- 330 -- 330 Miscellaneous (income) expense-net (27) (49) (18) (72) -------- -------- --------- -------- Operating income 7,389 5,071 12,059 7,276 Interest expense (352) (428) (656) (551) Investment income 75 176 111 313 -------- -------- --------- -------- Earnings before income taxes 7,112 4,819 11,514 7,038 Income tax expense 2,510 1,832 4,100 2,604 -------- -------- --------- -------- Net earnings $ 4,602 $ 2,987 $ 7,414 $ 4,434 -------- -------- --------- -------- -------- -------- --------- -------- Net earnings per common share: Basic $ 0.44 $ 0.29 $ 0.71 $ 0.43 Diluted $ 0.43 $ 0.29 $ 0.70 $ 0.43 Shares used for computation: Basic 10,524 10,301 10,503 10,277 Diluted 10,685 10,335 10,647 10,320
3 HARMON INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS IN THOUSANDS OF DOLLARS
JUNE 30, 1998 DECEMBER 31, (UNAUDITED) 1997 -------------------- ------------------- ASSETS Current assets: Cash and cash equivalents $4,247 $6,748 Trade receivables, less allowance for doubtful accounts of $313 in 1998 and $318 in 1997 44,894 45,001 Costs and estimated earnings in excess of billings on uncompleted contracts 6,284 2,850 Inventories: Work in process 5,761 6,171 Raw materials and supplies 35,091 32,894 -------------------- ------------------- 40,852 39,065 Deferred tax asset 2,215 2,215 Prepaid expenses and other current assets 1,341 473 -------------------- ------------------- Total current assets 99,833 96,352 -------------------- ------------------- Property, plant and equipment, at cost: Land 465 465 Buildings 11,992 11,363 Machinery and equipment 18,032 16,319 Office furniture and equipment 22,111 20,671 Transportation equipment 1,459 1,393 Leasehold improvements 3,512 3,120 -------------------- ------------------- 57,571 53,331 Less accumulated depreciation and amortization 32,339 29,302 -------------------- ------------------- Net property, plant and equipment 25,232 24,029 Deferred tax asset 414 414 Cost in excess of fair value of net assets acquired, net of accumulated amortization of $3,614 in 1998 and $3,180 in 1997 9,490 8,766 Deferred compensation asset 6,776 5,807 Other assets 1,230 401 -------------------- ------------------- $142,975 $135,769 -------------------- ------------------- -------------------- ------------------- JUNE 30, 1998 DECEMBER 31, (UNAUDITED) 1997 -------------------- ------------------ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current debt installments $595 $1,162 Accounts payable 17,833 21,554 Accrued payroll, bonus and employee benefit plan contributions 9,875 11,893 Billings in excess of costs and estimated earnings on uncompleted contracts 8,513 5,677 Federal and state income taxes payable 2,444 566 Other accrued liabilities 4,971 5,177 -------------------- ------------------ Total current liabilities 44,231 46,029 -------------------- ------------------ Deferred compensation liability 5,279 4,522 Long-term debt 15,337 15,456 -------------------- ------------------ Total liabilities 64,847 66,007 Stockholders' equity Common stock of $.25 par value; authorized 50,000,000 shares, issued 10,542,206 in 1998 and 10,437,369 in 1997 2,635 2,609 Additional paid-in capital 25,986 24,514 Foreign currency translation 138 104 Unearned compensation (224) (224) Retained earnings 49,593 42,759 -------------------- ------------------ Total stockholders' equity 78,128 69,762 -------------------- ------------------ $142,975 $135,769 -------------------- ------------------ -------------------- ------------------
4 HARMON INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1997 IN THOUSANDS OF DOLLARS (UNAUDITED)
JUNE 30, JUNE 30, 1998 1997 ---------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 7,414 $ 4,434 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 3,642 2,643 Equity in net loss of affiliate -- 330 (Gain) loss on sale of property, plant and equipment 8 (11) Changes in assets and liabilities: Trade receivables 714 11,514 Inventories (1,786) (6,382) Estimated costs, earnings and billings on contracts (598) (3,171) Prepaid expenses (865) 1,653 Accounts payable (3,721) (5,817) Accrued payroll and benefits (2,018) (4,316) Current income taxes 1,877 (3) Other accrued liabilities (206) (726) Deferred compensation liability 757 161 -------- -------- Total adjustments (2,196) (4,125) -------- -------- Net cash provided by operating activities 5,218 309 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (4,409) (4,482) Proceeds from sale of property, plant and equipment 4 15 Deferred compensation contributions (969) (394) Acquisition of business -- (167) Other investing activities (837) 14 -------- -------- Net cash used in investing activities (6,211) (5,014) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 333 416 Proceeds from issuance of long-term debt -- 15,000 Borrowings under line of credit agreements 43,906 12,905 Repayments under line of credit agreements (43,906) (15,250) Principal payments of long-term debt (1,297) (550) Cash dividends paid (580) (515) -------- -------- Net cash (used in) provided by financing activities (1,544) 12,006 -------- -------- -------- -------- Foreign currency translation adjustment 36 (49) -------- -------- Net increase (decrease) in cash and cash equivalents (2,501) 7,252 -------- -------- Cash and cash equivalents at beginning of period 6,748 -- -------- -------- Cash and cash equivalents at end of period $ 4,247 $ 7,252 -------- -------- -------- -------- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 716 $ 118 Income taxes $ 4,335 $ 2,650 Acquisition of business financed by issuance of common stock $ 1,158 --
5 HARMON INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY IN THOUSANDS OF DOLLARS (UNAUDITED)
Additional Foreign Total Common Paid-in Currency Unearned Retained Stockholders' Comprehensive Stock Capital Translation Compensation Earnings Equity Income ----------------------------------------------------------------------------------- --------- Balance at December 31, 1996 $2,561 $22,340 $203 -- $32,835 $57,939 ----------------------------------------------------------------------------------- Net earnings 1,447 1,447 $1,447 Common stock issued: Stock options and other 12 159 171 Foreign currency translation (107) (107) (107) --------- Comprehensive income $1,340 ----------------------------------------------------------------------------------- ========= Balance at March 31, 1997 2,573 22,499 96 -- 34,282 59,450 ----------------------------------------------------------------------------------- Net earnings 2,987 2,987 $2,987 Cash dividends paid (515) (515) Common stock issued: Stock options and other 5 239 244 Foreign currency translation 58 58 58 --------- Comprehensive income $3,045 ----------------------------------------------------------------------------------- ========= Balance at June 30, 1997 2,578 22,738 154 -- 36,754 62,224 ----------------------------------------------------------------------------------- Net earnings 2,639 2,639 $2,639 Common stock issued: Deferred compensation 5 267 (163) 109 Stock options and other 1 31 32 Foreign currency translation (122) (122) (122) --------- Comprehensive income $2,517 ----------------------------------------------------------------------------------- ========= Balance at September 30, 1997 2,584 23,036 32 (163) 39,393 64,882 ----------------------------------------------------------------------------------- Net earnings 3,888 3,888 $3,888 Cash dividends paid (522) (522) Common stock issued: Acquisition of businesses 23 1,337 1,360 Deferred compensation 1 88 (61) 28 Stock options and other 1 53 54 Foreign currency translation 72 72 72 --------- Comprehensive income $3,960 ----------------------------------------------------------------------------------- ========= Balance at December 31, 1997 2,609 24,514 104 (224) 42,759 69,762 ----------------------------------------------------------------------------------- Net earnings 2,812 2,812 $2,812 Common stock issued: Acquisition of businesses 20 1,138 1,158 Stock options and other 1 36 37 Foreign currency translation 149 149 149 --------- Comprehensive income $2,961 ----------------------------------------------------------------------------------- ========= Balance at March 31, 1998 $2,630 $25,688 $253 ($224) $45,571 $73,918 ----------------------------------------------------------------------------------- ----------------------------------------------------------------------------------- Net earnings 4,602 4,602 $4,602 Cash dividends paid (580) (580) Common stock issued: Deferred compensation 7 7 Stock options and other 5 291 296 Foreign currency translation (115) (115) (115) --------- Comprehensive income $4,487 ----------------------------------------------------------------------------------- ========= Balance at June 30, 1998 $2,635 $25,986 $138 ($224) $49,593 $78,128 ----------------------------------------------------------------------------------- -----------------------------------------------------------------------------------
6 PART I. FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS: THREE MONTHS ENDED JUNE 30, 1998 Net sales for the quarter were $73.7 million, an increase of $26.1 million, or 54.8%, from the second quarter of 1997. The increase in net sales is the result of continued strong demand for the Company's goods and services and substantial shipments on two large projects; one in the freight market and one in the transit market. Gross profit for the quarter increased by 31.1% to $16.0 million in 1998 from $12.2 million in 1997. This increase in gross profit is the result of the sales increase previously discussed. Gross profit margin for the quarter decreased to 21.7% from 25.6% in the prior year quarter. The decline in gross profit margin is primarily the result of an increase in the sales mix toward services, systems and pass-through sales. Research and development expenditures (R&D) for the quarter increased to $2.4 million from $1.8 million in the same quarter one year ago. As a result of the increase in net sales, R&D as a percent of net sales decreased from 3.8% in the second quarter of 1997 to 3.2% in the second quarter of 1998. Selling, general and administrative expenses (SG&A) were $8.4 million during the quarter in 1998 compared with $6.7 million during the prior year quarter. Much of the increase in SG&A was represented by labor and benefit expenses resulting from an increase in full-time employees from the second quarter of 1997 to the second quarter of 1998 of approximately 13%. SG&A as a percent of net sales decreased from 14.0% during the 1997 quarter to 11.4% during the 1998 quarter. Amortization expense increased to $217 thousand from $166 thousand in the same quarter one year ago. This increase is attributable to the increase in goodwill resulting from acquisitions during the twelve months ended June 30, 1998. Net interest expense (interest expense less investment income) for the quarter increased to $277 thousand from $252 thousand for the prior year quarter as a result of higher borrowings in support of increased working capital. The effective tax rate for the quarter decreased to 35.3% in 1998 from 38.0% in 1997. This decrease is due to a reduced effective income tax rate in Missouri resulting from the receipt of tax refunds arising under recent legislation and increased tax benefits from the Company's foreign sales corporation as a result of a larger percentage of foreign sales in the 1998 period compared with the 1997 period. Net income increased 54.1% to $4.6 million from $3.0 million in the prior year quarter. Diluted earnings per common share increased 48.3% to $0.43 from $0.29. 7 Orders for the Company's products and services during the quarter ended June 30, 1998 increased to $62.8 million from $57.5 million during the 1997 quarter. The Company's order backlog was $77.0 million at June 30, 1998, compared with $74.5 million at December 31, 1997 and $78.4 million one year ago. RESULTS OF OPERATIONS: SIX MONTHS ENDED JUNE 30, 1998 Net sales for the six months ended June 30, 1998 were $134.3 million, an increase of $50.7 million, or 60.6%, from the same period in 1997. As discussed above, this increase is the result of continued strong demand for the Company's goods and services and substantial shipments on two large projects. Gross profit for the six month period increased by 39.5% to $28.4 million in 1998 from $20.4 million in 1997. This increase in gross profit is the result of the sales increase previously discussed. Gross profit margin for the period decreased to 21.2% from 24.4% in the prior year period. As discussed above, this decline in gross profit margin is primarily the result of an increase in the sales mix toward services, systems and pass-through sales. R&D for the period increased to $4.5 million from $3.4 million in the same period one year ago. As a result of the increase in net sales, R&D as a percent of net sales decreased from 4.1% in the six months ended June 30, 1997 to 3.3% in the same period of 1998. SG&A increased to $16.0 million during the 1998 period from $12.5 million during the prior year period. Much of the increase in SG&A was represented by labor and benefit expenses resulting from an increase in full-time employees from the first half of 1997 to the first half of 1998. SG&A as a percent of net sales decreased from 15.0% during the 1997 period to 11.9% during the 1998 period. Amortization expense increased to $434 thousand from $326 thousand in the same period one year ago. This increase is attributable to the increase in goodwill resulting from acquisitions during the twelve months ended June 30, 1998. As a result of higher borrowings to support increased working capital, interest expense for the first six months of 1998 increased to $656 thousand from $551 thousand for the prior year period. Investment income decreased from $313 thousand during the 1997 period to $111 thousand during the 1998 period. This decrease is the result of lower cash balances available for investment during the 1998 period compared to the 1997 period during which a $15 million private placement of debt was completed. A substantial portion of the proceeds of the private placement were invested during the first half of 1997 prior to being utilized to finance working capital and capital expenditures later in the year. The effective tax rate for the six months ended June 30, 1998 decreased to 35.6% from 37.0% for the comparable period of 1997. As discussed above, this decrease is due to a reduced effective income tax rate in Missouri resulting from the receipt of tax refunds arising under recent legislation and increased tax benefits from the Company's foreign sales corporation as a result of a larger percentage of foreign sales in the 1998 period compared with the 1997 period. 8 Net income increased 67.2% to $7.4 million from $4.4 million in the prior year period. Diluted earnings per common share increased 62.8% to $0.70 from $0.43. FINANCIAL CONDITION AT JUNE 30, 1998 At June 30, 1998, the Company had $34.4 million in liquidity. This consisted of $4.2 million in cash and cash equivalents plus $30.2 million available under bank lines of credit. The current ratio at June 30, 1998 was 2.26 to 1 compared to 2.09 to 1 at December 31, 1997 and 2.60 to 1 at June 30, 1997. The increase in the current ratio from December 31, 1997 to June 30, 1998 is the result of decreases in accounts payable and accrued payroll and benefits from year-end levels. Cash provided by operating activities for the six months ended June 30, 1998 was $5.2 million compared to $0.3 million for the same period one year ago. The principal reasons for this increase were increased earnings during the 1998 period, smaller inventory growth during the 1998 period and smaller reductions in accounts payable and accrued payroll and benefits during the 1998 period compared with 1997. Effective January 1, 1998, the Company adopted Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income. The adjustment to stockholders' equity as a result of the cumulative foreign currency translation adjustment is included in comprehensive income as presented in the Consolidated Statements of Stockholders' Equity. PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits:
Exhibit Number Exhibit Page(s) ------- ------------------------------------------------------- ------- 3 (i) Restated Articles of Incorporation of the Company dated 11-13 May 19, 1998 3 (ii) Amendment to the Bylaws of the Company, effective May 14 12, 1998 11 Computation of per share earnings 15 27 Financial Data Schedule 16
(b) Reports on Form 8-K: There were no reports on Form 8-K for the quarter ended June 30, 1998. 9 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. HARMON INDUSTRIES, INC. Date: August 4, 1998 /s/Bjorn E. Olsson ------------------ Bjorn E. Olsson, President and Chief Executive Officer Date: August 4, 1998 /s/Charles M. Foudree --------------------- Charles M. Foudree, Executive Vice President-Finance Date: August 4, 1998 /s/Stephen L. Schmitz --------------------- Stephen L. Schmitz, Vice President-Controller 10 EX-3.I 2 EX-3.I ARTICLES OF INCORPORATION Exhibit 3(i) RESTATED ARTICLES OF INCORPORATION OF HARMON INDUSTRIES, INC. The undersigned, for the purpose of adopting Restated Articles of Incorporation under The General Business and Corporation Law of Missouri, Chapter 351 RSMO, hereby adopt the following Restated Articles of Incorporation as the Articles of Incorporation of Harmon Industries, Inc., a Missouri corporation (the "Corporation"), and hereby certify that said Restated Articles of Incorporation correctly set forth without change the corresponding provisions of the Articles of Incorporation as heretofore amended, and that the Restated Articles of Incorporation supersede the original Articles of Incorporation and all amendments thereto. ARTICLE I The name of this Corporation is Harmon Industries, Inc. ARTICLE II The address of the Corporation's registered office in the State of Missouri is 2600 Grand Avenue, Kansas City, Missouri 64108, and the name of its registered agent at that address is James O. Selzer. ARTICLE III The aggregate number of shares of all classes of stock which the Corporation shall have authority to issue is fifty million (50,000,000) shares, all of which will be common stock having a par value of Twenty-Five Cents ($.25) per share. No holder of common stock of the Corporation shall be entitled as of right to subscribe for, purchase, or receive any part of any new or additional issue of stock of any class, whether now or hereafter authorized or of any bonds, debentures, or other securities convertible into stock of any class, and all such additional shares of stock, bonds, debentures, or other securities convertible into stock may be issued and disposed of by the Board of Directors to such person or persons and on such terms and for such consideration (so far as may be permitted by law) as the Board of Directors in its absolute discretion, may deem advisable. ARTICLE IV The number of shares of common stock to be issued before the Corporation shall commence business is Five (5), and the consideration to be paid therefor and the capital with which the Corporation shall commence business is Five Hundred ($500.00) Dollars, all of said Five (5) shares having first been duly subscribed by the incorporators and paid up in cash at the rate of One Hundred ($100.00) Dollars per share, which said sum is in the hands of the subscribers and incorporators. 11 ARTICLE V The names and places of residence of the initial shareholders and the number of shares of stock subscribed by each are as follows:
NAME RESIDENCE NO. OF SHARES Robert C. Harmon Route #1, Grain Valley, MO 3 Robert E. Harmon Route #1, Grain Valley, MO 1 Mildred I. Harmon Route #1, Grain Valley, MO 1
ARTICLE VI The number of Directors to constitute the current Board of Directors of the Corporation is ten. Hereafter, the number of Directors of the Corporation shall be fixed by, or in the manner provided in, its Bylaws; provided, that the Board of Directors shall be no less than seven nor more than twelve. Any changes in the number of Directors shall be reported to the Secretary of State of the State of Missouri within 30 calendar days of such change. ARTICLE VII The duration and number of years the Corporation is to continue shall be perpetual. ARTICLE VIII The Corporation is formed for the following purposes: 1. To design, manufacture, repair, buy, sell, job, distribute and otherwise acquire or dispose of, and to deal in any and all kinds of electronic, electrical or atomic equipment, supplies, parts, appliances, apparatus, or merchandise incident thereto. 2. To engage in any lawful act or activity for which corporations may be organized under The General and Business Corporation Law of Missouri. ARTICLE IX The Board of Directors may repeal or amend the Bylaws of this Corporation and may adopt new or additional Bylaws. 12 The foregoing Restated Articles of Incorporation were adopted by the Board of Directors of the Corporation on May 12, 1998. IN WITNESS WHEREOF, the undersigned Charles M. Foudree, Executive Vice President-Finance of the Corporation, has executed this instrument and James O. Selzer, Assistant Secretary of the Corporation, has affixed its corporate seal hereto and attested said seal on the 19th day of May, 1998. HARMON INDUSTRIES, INC. By: /s/ Charles M. Foudree ----------------------------------- Charles M. Foudree Executive Vice President - Finance By: /s/ James O. Selzer ----------------------------------- James O. Selzer Assistant Secretary 13 EX-3.II 3 EX-3.II AMENDED BYLAWS OF THE COMPANY Exhibit 3 (ii) WHEREAS, the provisions of Section 2, Article III of the Bylaws of the Company currently provide for a Board of Directors consisting of nine directors, plus a variable Board as determined by the Board from time to time; and RESOLVED, that the Board of Directors wishes to increase the size of the Board of Directors through amendment of the Bylaws of the Corporation to a Board consisting of ten members; FURTHER RESOLVED, that, effective May 12, 1998, the provisions of Section 2, Article III of the Bylaws are hereby deleted in their entirety and replaced by the following: SECTION 2. NUMBER, TENURE AND QUALIFICATIONS: The provisions of Article VI of the Corporation's Articles of Incorporation provide for an indefinite number of directors, not less than seven (7) nor more than twelve (12), and require the exact number of directors to be set forth in the Bylaws. It is specified that the Corporation shall have ten (10) directors. Such number may be increased or decreased from time to time within the above-mentioned limits by amendment of these Bylaws. Each director shall hold office for the term for which he is elected or until his successor shall have been duly elected and qualified. 14 EX-11 4 EX-11 COMPUTATION OF PER SHARE EARNINGS Exhibit 11 Harmon Industries, Inc. Form 10-Q Computation of Per Share Earnings (in thousands, except earnings per share)
Three Months ended June 30, ---------------------- 1998 1997 ---- ---- Basic: Net earnings $ 4,602 $ 2,987 ------- ------- ------- ------- Weighted average shares outstanding 10,534 10,301 Shares representing unearned compensation (10) 0 ------- ------- Total 10,524 10,301 ------- ------- ------- ------- Basic earnings per share $ 0.44 $ 0.29 ------- ------- ------- ------- Diluted: Net earnings $ 4,602 $ 2,987 ------- ------- ------- ------- Weighted average shares outstanding 10,534 10,301 Shares representing unearned compensation (10) 0 Equivalent shares under option plans 161 34 ------- ------- Total 10,685 10,335 ------- ------- ------- ------- Diluted earnings per share $ 0.43 $ 0.29 ------- ------- ------- -------
Six Months ended June 30, ---------------------- 1998 1997 ---- ---- Basic: Net earnings $ 7,414 $ 4,434 ------- ------- ------- ------- Weighted average shares outstanding 10,514 10,277 Shares representing unearned compensation (11) 0 ------- ------- Total 10,503 10,277 ------- ------- ------- ------- Basic earnings per share $ 0.71 $ 0.43 ------- ------- ------- ------- Diluted: Net earnings $ 7,414 $ 4,434 ------- ------- ------- ------- Weighted average shares outstanding 10,514 10,277 Shares representing unearned compensation (11) 0 Equivalent shares under option plans 144 43 ------- ------- Total 10,647 10,320 ------- ------- ------- ------- Diluted earnings per share $ 0.70 $ 0.43 ------- ------- ------- -------
15 EX-27 5 EX-27 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF HARMON INDUSTRIES, INC. AT JUNE 30, 1998 AND FOR THE SIX MONTH PERIOD THEN ENDED. 1,000 6-MOS DEC-31-1998 JAN-01-1998 JUN-30-1998 4,247 0 45,207 (313) 40,852 99,833 57,571 (32,339) 142,975 44,231 15,932 0 0 2,635 75,493 142,975 134,263 134,263 105,821 105,821 0 0 656 11,514 4,100 7,414 0 0 0 7,414 0.71 0.70
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