-----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, WHAFVQy2zIXqlmzgbS4jytm9mpYQTnOyJhzfAQXGRcNeOIkiyHCnb1FJPcvbCaY6 +Cf6cVt9mBGpe/8Y+c2CBw== 0000897101-97-000120.txt : 19970222 0000897101-97-000120.hdr.sgml : 19970222 ACCESSION NUMBER: 0000897101-97-000120 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970212 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: INNOVEX INC CENTRAL INDEX KEY: 0000050601 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS, NEC [3679] IRS NUMBER: 411223933 STATE OF INCORPORATION: MN FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13143 FILM NUMBER: 97527180 BUSINESS ADDRESS: STREET 1: 1313 S FIFTH ST CITY: HOPKINS STATE: MN ZIP: 55343-9904 BUSINESS PHONE: 6129384155 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 [x] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934. For the Period ended December 31, 1996. OR [] Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934. Commission File Number: 0-13143 INNOVEX, INC. (Exact name of registrant as specified in its charter) Minnesota 41-1223933 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1313 South Fifth Street, Hopkins, Minnesota 55343-9904 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (612) 938-4155 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 3, 1997, 14,362,034 shares of the registrant's common stock, $.04 par value per share, were outstanding. Exhibit Index, page 10 PART 1: ITEM 1 FINANCIAL INFORMATION
INNOVEX, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS December 31, September 30, 1996 1996 ----------- ----------- ASSETS (Unaudited) (Audited) Current assets: Cash and cash equivalents $ 4,407,028 $ 5,635,534 Short-term investments 19,540,000 16,140,000 Accounts receivable, less allowance for doubtful accounts of $342,000 and $317,000) 17,714,303 12,034,349 Inventories 6,272,178 5,570,582 Other current assets 2,540,033 2,648,112 ----------- ----------- Total current assets 50,473,542 42,028,577 Property, plant and equipment, net of accumulated depreciation of $9,573,000 and $8,743,000 13,460,795 12,731,980 Intangible assets, net of amortization of $2,468,000 and $2,317,000 2,207,328 2,308,737 Other assets 291,052 1,175,052 ----------- ----------- $66,432,717 $58,244,346 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt $ 96,000 $ 96,000 Accounts payable 5,499,055 3,581,628 Accrued compensation 1,445,027 2,158,834 Income taxes payable 2,342,745 1,809,038 Other accrued liabilities 844,939 841,150 ----------- ----------- Total current liabilities 10,227,766 8,486,650 Long-term debt 1,037,861 1,063,253 Other long-term liabilities 299,252 294,327 Stockholders' equity: Common stock, $.04 par value; 30,000,000 shares authorized, 14,311,434 and 14,221,254 shares issued and outstanding 572,457 284,425 Capital in excess of par value 9,580,603 9,418,376 Retained earnings 44,714,778 38,697,315 ----------- ----------- Total stockholders' equity 54,867,838 48,400,116 ----------- ----------- $66,432,717 $58,244,346 =========== ===========
See accompanying notes.
INNOVEX, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended December 31, 1996 1995 ------------ ------------ Net sales $ 29,311,887 $ 13,111,707 Costs and expenses: Cost of sales 17,204,240 7,595,475 Selling, general and administrative 2,403,125 1,203,795 Engineering 873,928 586,791 Net interest and other (income) expense (224,752) (204,545) ------------ ------------ Income before taxes 9,055,346 3,930,191 Provision for income taxes 2,717,000 1,179,000 ------------ ------------ Net income $ 6,338,346 $ 2,751,191 ============ ============ Primary and fully dilutive net income per share: $ 0.42 $ 0.19 ============ ============ Common and common equivalent shares outstanding: Primary 15,000,557 14,503,914 ============ ============ Assuming full dilution 15,199,535 14,503,914 ============ ============
See accompanying notes.
INNOVEX, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended December 31, 1996 1995 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 6,338,346 $ 2,751,191 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,049,199 808,270 Other non-cash charges (credits) 3,777 514 Changes in operating assets and liabilities: Accounts receivable (5,679,954) (536,917) Inventories (701,596) (244,518) Other current assets 108,079 (230,474) Accounts payable 1,917,427 (14,018) Other liabilities (705,093) (772,230) Income taxes payable 533,707 1,023,764 ----------- ----------- Net cash provided by (used in) operating activities 2,863,892 2,785,582 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (1,680,382) (845,410) Proceeds from sale of investment in limited partnership 884,000 -- Proceeds from sale of assets -- 11,500 Purchase of held-to-maturity securities (7,190,000) (5,075,000) Maturities of held-to-maturity securities 3,790,000 2,100,000 ----------- ----------- Net cash provided by (used in) investing activities (4,196,382) (3,808,910) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on long-term debt (25,392) (26,686) Proceeds from exercise of stock options 450,259 83,004 Dividends paid (320,883) (282,965) ----------- ----------- Net cash provided by (used in) financing activities 103,984 (226,647) Increase (decrease) in cash and cash equivalents (1,228,506) (1,249,975) Cash and cash equivalents at beginning of year 5,635,534 7,384,298 ----------- ----------- Cash and cash equivalents at end of period $ 4,407,028 $ 6,134,323 =========== =========== SUPPLEMENTAL DISCLOSURES: The Company considers all highly liquid investments with a maturity date of three months or less when purchased to be "cash equivalents." Cash paid for interest was $20,000 and $26,000 in 1996 and 1995, respectively. Income tax payments were $876,000 and $155,000 in 1996 and 1995, respectively.
See accompanying notes. INNOVEX INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - ACCOUNTING POLICIES The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions on Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited condensed consolidated financial statements include the accounts of Innovex, Inc. and its subsidiaries (the "Company") after elimination of all significant intercompany transactions and accounts. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of operating results have been made. Operating results for interim periods are not necessarily indicative of results which may be expected for the year as a whole. For further information, refer to the consolidated financial statements and footnotes included in the registrant's annual report on Form 10-K for the year ended September 30, 1996. NOTE 2 - TWO FOR ONE STOCK SPLIT All share and per share information for prior periods has been adjusted to reflect a two for one stock split effective on December 23, 1996. PART I: ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THE COMPANY Innovex, Inc. and its subsidiaries (the Company) operate through four divisions, Precision Products, Litchfield Precision Components, InnoMedica and Iconovex. Each division has its own administrative, engineering, manufacturing and marketing organizations. The largest division, Precision Products, develops, engineers and manufactures specialty precision electromagnetic products for original equipment manufacturers ("OEM's"). Lead wire assemblies for the thin film disk drive market are the Division's primary product. The Litchfield Precision Components Division (LPC) designs and manufactures highly complex flexible circuitry and chemically machined components. Approximately 40% of LPC's sales are medical product applications, 40% are computer and computer peripheral applications with the remaining 20% primarily being communications industry or other applications. The Company also operates two other divisions, Iconovex and InnoMedica. These divisions currently only produce a small portion of the Company's revenue. Iconovex is responsible for the further development and marketing of a document handling software product which was purchased in November 1993. The purchased software prepares indexes and abstracts of documents stored on electronic media. The initial application derived from the purchased software, Indexicon, was designed for use on personal computers and began shipping in fiscal 1994. Another product, AnchorPage, was released in fiscal 1995. AnchorPage enables Internet World Wide Web sites to provide their users access to web site information automatically using conceptual navigational techniques. The Division's newest product, EchoSearch, was released during the fiscal 1996 fourth quarter. EchoSearch, is a desktop based tool for browsers of the World Wide Web which enables users to simultaneously query multiple search engines. The search responses are indexed and abstracted to present the user a condensed view that improves both the speed and accuracy of the search. The Division intends to focus future attention on licensing its technology to OEM software developers. InnoMedica was formed late in fiscal 1993 to further develop the Company's medical business. In line with this strategy, the Company acquired Daig Corporation's pacemaker lead wire and adapter product line in September 1993 and Possis Medical, Inc's pacemaker lead wire product line in March 1994. Revenue generated by this division should continue to increase throughout fiscal 1997 as its customer base expands. RESULTS OF OPERATIONS NET SALES The Company's net sales from operations totaled $29,312,000 for the quarter, up 124% from $13,112,000 reported in fiscal 1996. The increase was due to the continued strong demand for lead wire assemblies caused by increased demand for disk drives and the addition of sales from the May 16, 1996 LPC acquisition. Also contributing to the sales increase was an increasing portion of high end MR lead wire assemblies being included in the product mix, partially as a result of the success of Innovex's new WAT technology. These MR lead wire assemblies have a higher value added content and sell for a higher price than the low end inductive assemblies. The lead wire assembly demand is expected to remain strong throughout the remainder of the fiscal year with an increasing portion of the lead wire sales being the high end MR products. The LPC acquisition should also continue to contribute to an increase in sales for the remainder of the fiscal year. GROSS MARGINS The Company's consolidated gross profit as a percent of sales for the quarter remained relatively stable at 41% as compared to 42% reported for the same period last year. Gross margins for the existing lead wire assembly business should remain relatively stable for the remainder of the fiscal year due to expected continued strong demand. OPERATING EXPENSES Operating expenses were 11.2% of sales for the current quarter, improved from 13.7% in the prior year's first quarter. The decrease in operating expenses as a percent of sales for the current year is primarily due to the increase in sales more than offsetting the increase in total operating expenses. Total operating expenses increased primarily due to the inclusion of operating costs from LPC which was acquired on May 16, 1996 and the adding of infrastructure to handle the higher level of activity. The level of operating expenses is not expected to change significantly as a percent of sales for the remainder of the fiscal year. OPERATING PROFIT Consolidated operating profit of $8,831,000 in the current quarter was up 137% from the $3,726,000 profit for the prior year first quarter. This is primarily the result of the increased sales volume. Operating profit for the remainder of the fiscal year is expected to remain strong due to the continued high demand for thin-film lead wire assemblies and the inclusion of LPC's operating results. Revenues from the Company's Iconovex and InnoMedica Divisions are expected to continue to increase; however, they will remain a small portion of the Company's total sales. Although both divisions are currently generating operating losses, InnoMedica is expected to be operating at a profitable level by the end of the fiscal year. NET INCOME Consolidated net income for the fiscal 1997 first quarter was $6,338,000 or $0.42 per share as compared to $2,751,000 or $0.19 per share for the prior year first quarter. LIQUIDITY AND CAPITAL RESOURCES Cash and short-term investments increased to $23.9 million at December 31, 1996 from $21.8 million at September 30, 1996. This increase was primarily due to income generated from operating activities. Accounts receivable at December 31, 1996 increased by $5,680,000 from September 30, 1996 due to the increased level of sales at the end of the quarter. Inventory increased by $702,000 from September 30, 1996 to support the increased level of activity and the start up of a new sub-contractor in China. Working capital totaled $40.2 million and $33.5 million at December 31, 1996 and September 30, 1996, respectively. The increase is primarily due to the increase in accounts receivable. Since September 30, 1996, the Company has invested over $1.6 million in property, plant and equipment. These additions include equipment to expand and further automate the lead wire assembly production process and computer equipment and software. Management believes that internally generated funds will provide adequate sources of capital for supporting projected growth in fiscal 1997. FORWARD LOOKING STATEMENTS Statements included in this Management's Discussion and Analysis of Financial Condition and Results of Operations, in letters to shareholders, elsewhere in the Company's Form 10-Q and in future filings by the Company with the SEC, except for historical information contained herein and therein, are "foreword looking statements" that involve risks and uncertainties, including the timely availability and acceptance of new products, the impact of competitive products and pricing and a general downturn in the Company's principal market. The Company disclaims any obligation subsequently to revise any foreword looking statements to reflect subsequent events or circumstances or the occurrence of unanticipated events. PART II - OTHER INFORMATION Responses to Items 1 through 5 are omitted since these items are either inapplicable or the response thereto would be negative. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits 3a Restated Articles of Incorporation 11 Computation of Per Share Net Income 27 Financial Data Schedule b) Reports on Form 8-K None. 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. INNOVEX, INC. Registrant Date: February 13, 1997 By \s\ Thomas W. Haley --------------------------- Thomas W. Haley Chief Executive Officer By \s\ Douglas W. Keller --------------------------- Douglas W. Keller Vice President, Finance INDEX TO EXHIBITS Exhibits Page 3a Restated Articles of Incorporation 11-15 11 Computation of Per Share Net Income 16 27 Financial Data Schedule 17 EX-3.A 2 RESTATED ARTICLES OF INCORPORATION EXHIBIT 3A RESTATED ARTICLES OF INCORPORATION OF INNOVEX, INC. Pursuant to the provisions of Chapter 302A of the Minnesota Statutes, known as the Minnesota Business Corporation Act, and amendments thereto, the following Restated Articles of Incorporation are adopted and shall supersede and take the place of the existing Articles of Incorporation and all amendments thereto. ARTICLE I. Name The name of the corporation shall be Innovex, Inc. ARTICLE II. Business Purposes The purpose for which this corporation is organized are as follows: a. General business purposes. b. To do everything necessary, proper, advisable or convenient for the accomplishment of the purposes herein above set forth, and to do all other things incidental thereto or connected therewith, which are not forbidden by the laws under which this corporation is organized, by other laws, or by these Articles of Incorporation. c. To carry out the purposes hereinabove set forth in any state, territory, district or possession of the United States, or in any foreign country to the extent that such purposes are forbidden by law, to limit in any certificate for application to do business, the purposes or purpose which the corporation proposes to carry on therein to such as are not forbidden by law thereof. ARTICLE III. Duration The duration of the corporation shall be perpetual. ARTICLE IV. Registered Office The location and post office address of the registered office of the corporation in the State of Minnesota is 1313 5th Street S., Hopkins, Minnesota 55343. ARTICLE V. Powers of the Corporation This corporation shall have all the powers granted to private corporations organized for profit by said Minnesota Business Corporation Act, and in furtherance and not in limitation of the powers conferred by the laws of the State of Minnesota upon corporations organized for the foregoing purposes, the corporation shall have the power: a. To acquire, hold, mortgage, pledge or dispose of the shares, bonds, securities or other evidences of indebtedness of the United States of America, or of any domestic or foreign corporation, and while the holder of such shares to exercise all the privileges of ownership, including the right to vote thereon, to the same extent as a natural person might or could do, by the president of this corporation or by proxy appointed to him, unless some other person, by resolution of the Board of Directors, shall be appointed to vote such shares. b. To purchase or otherwise acquire on such terms and in such manner as the Bylaws of this corporation from time to time provide, and to own all shares of the capital stock of this corporation, and to reissue the same from time to time. c. When and as authorized by the vote of the holders of not less than a majority of the shares entitled to vote, at a shareholders' meeting called for that purpose, or when authorized upon the written consent of the holders of a majority of such shares, to sell, lease, exchange or otherwise dispose of all, or substantially all of its property and assets including its goodwill, upon such terms and for such consideration which may be money, shares, bonds, or other instruments for the payment of money or other property as the Board of Directors deems expedient or advisable. d. To acquire, hold, lease, encumber, convey or otherwise dispose of, either alone or in conjunction with others, real and personal property within or without the state and to take real and personal property by will or gift. e. To acquire, hold, take over as a going concern and thereafter to carry on, mortgage, sell or otherwise dispose of, either alone or in conjunction with others, the rights, property, shares, bonds, securities and other evidences of indebtedness, including commodities and business of any person, entity, partnership, limited partnership, association or corporation heretofore or hereafter engaged in any business, the purpose of which is similar to the purposes set forth in Article II of these Articles of Incorporation. f. To enter into any lawful arrangement for sharing profits, union of interests, reciprocal association or cooperative association with any corporation, association, partnership, individual or other legal entity, for the carrying on of any business, the purpose of which is similar to the purposes set forth in Article II of these Articles of Incorporation or limited partnership the purposes of which are similar to such person. ARTICLE VI. Mergers and Consolidation Any agreement for the consolidation or merger with one or more foreign or domestic corporations may be authorized by vote of the holders of a majority of the shares entitled to vote. ARTICLE VII. Capital Stock Section 1. The aggregate number of shares which this corporation shall have authority to issue is 30,000,000 shares, par value $0.04 each, which shall be known as "common stock." Section 2. Each of the common shares of this corporation now issued, having a par value of $0.10 per share, shall be equal to and is hereby changed into two and one-half fully paid nonassessable shares of this corporation, having a par value of $0.04 per share, authorized to be issued under the Articles of Incorporation, as hereby amended. Certificates for common shares having a par value of $0.04 per share shall be issued in place and upon surrender of certificates for shares having a par value of $0.10 per share now issued, on the aforesaid basis; provided, however, that upon this amendment to the Articles of Incorporation becoming effective, the holders of said shares now issued shall thereupon cease to be holders of said shares and shall become holders of the herein authorized common shares upon the basis hereinabove specified, whether or not certificates representing said herein authorized common shares are then issued and delivered. Section 3. The powers and duties of the shareholders and the Board of Directors with respect to the common shares shall include: a. The holders of the common stock shall be entitled to receive, when and as declared by the Board of Directors, out of earnings or surplus legally available therefor, dividends, payable either in cash, in property or in shares of the capital stock of the corporation. b. The common stock may be allotted as and when the Board of Directors shall determine, and, under and pursuant to the laws of the State of Minnesota, the Board of Directors shall have the power to fix or alter, from time to time, in respect of shares then unallotted, any and all of the following: The dividend rate; the redemption price; the liquidation price; the conversion rights and the sinking or purchase fund rights of shares of any class, or of any series of any class, or the number of shares constituting any series of any class. The Board of Directors shall also have the power to fix the terms, provisions and conditions of options to purchase or subscribe for shares of any class or classes, including the price and conversion basis thereof, and to authorize the issuance thereof. The Board of Directors shall also have the power to issue shares of stock of the corporation for cash, services, property, securities or assets of other business enterprises, or otherwise, as it may from time to time deem expedient. c. No holder of stock in the corporation shall be entitled to any cumulative voting rights. d. No holder of stock of the corporation shall have any preferential, preemptive or other rights of subscription to any shares of any class of stock of the corporation allotted or sold or to be allotted or sold now or hereafter authorized, or to any obligations convertible into the stock of the corporation of the class, or any right of subscription to any part thereof. ARTICLE VIII. Stated Capital The minimum amount of stated capital with which the corporation will begin business is $1,000.00. ARTICLE IX. Management and Additional Powers Section 1. The management and conduct of the business of the corporation shall be vested in a Board of Directors, which shall consist of such number of directors, not less than the minimum permitted by law, as shall be fixed in the Bylaws, or in the absence of such provision in the Bylaws, as shall be determined by the shareholders at any annual or special meeting thereof. The term of the first Board of Directors, as hereinafter identified, shall extend until the first shareholders' meeting subsequent to incorporation. Section 2. Except as otherwise herein provided, the term of office of each director of the corporation shall be for a period of one (1) year, and until his successor is elected and qualified, unless the director is removed as provided by law. Section 3. At the first shareholders' meeting of the corporation subsequent to incorporation, director or directors shall be elected to serve until the next annual meeting of shareholders and until a successor or successors are elected and qualified. Thereafter, all directors shall be elected for the full term of one (1) year and until their respective successors are elected and qualified, unless removed as provided by law. If a vacancy in the Board of Directors occurs during the term of any director, a successor director to serve during the unexpired portion of said term may be elected by the remaining directors. Section 4. The Board of Directors shall have the authority to accept or reject subscription for capital stock made after incorporation and may grant options to purchase or subscribe for capital stock. The Board of Directors shall from time to time fix and determine the consideration for which the corporation shall issue and sell its capital stock, and also the dividends to be paid by the corporation upon the capital stock. The Board of Directors shall have authority to fix the terms and conditions of rights to convert any securities of this corporation into shares and to authorize the issuance of such conversion rights. Section 5. The Board of Directors shall have the authority to issue bonds, debentures or other securities convertible into capital stock or other securities of any class, or bearer warrants or other evidences of optional rights to purchase and/or subscribe to capital stock or other securities of any class, upon such terms, in such manner, and under such conditions as may be fixed by resolution of the Board prior to the issue thereof. Section 6. The Board of Directors shall have the authority to make and alter the Bylaws, subject to the power of the shareholders to change or repeal the Bylaws. Section 7. A quorum for any meeting of shareholders to transact business of this corporation except as otherwise specifically provided herein or by law shall be the presence in person or by proxy of the holders of a majority of the shares of common stock of the corporation outstanding and of record on the record date set for such meeting. Section 8. No contract or other transaction between the corporation and any person, firm, association or corporation, and no other act of this corporation shall, in the absence of fraud, be invalidated or in any way affected by the fact that any of the directors of the corporation are, directly or indirectly, pecuniarily or otherwise interested in such contract, transaction or other act or related to or interested in such person, firm, association or corporation, as director, stockholder, officer, employee, member or otherwise. Any director of the corporation, individually, or any firm or association of which any director may be a member may be a party to or may be pecuniarily or otherwise interested in any contract or transaction of the corporation, provided that the fact that he individually or such firm or association is so interested shall be disclosed or known to the Board of Directors or a majority of such members thereof as shall be present at any meeting of the Board of Directors, or of any committee of directors having the powers of the full Board, at which action upon any such contract, transaction or other act is taken, and if such fact shall be so disclosed or known, any director of this corporation so related or otherwise interested may be counted in determining the presence of a quorum at any meeting of the Board of Directors of such committee at which action upon any such contract, transaction or act shall be taken and may vote thereat with respect to such action with like force and effect as if he were not so related or interested. Any director of the corporation may vote upon any contract or other transaction between the corporation and any subsidiary or affiliated corporation. Section 9. Officers and directors of this corporation may hold positions as officers and directors of any other corporations in related businesses, and their efforts to advance such corporations will not constitute a breach of fiduciary loyalty to this corporation in the absence of a showing of bad faith. ARTICLE X. Directors Section 1. No director of the corporation shall be personally liable to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the corporation or its shareholders; (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; (iii) under section 302A.559 or 80A.23 of Minnesota Statutes; (iv) for any transaction from which the director derived any improper personal benefit; or (v) for any act or omission occurring prior to the date when this provision becomes effective. Section 2. The provisions of this Article XIII shall not be deemed to limit or preclude indemnification of a director by the corporation for any liability of a director which has not been eliminated by the provisions of this Article XIII. Section 3. If Minnesota Statutes hereafter are amended to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the Minnesota Statutes, as so amended. ARTICLE XI. Amendment Any provisions contained in these Articles of Incorporation may be amended solely by the affirmative vote of the holders of a majority of the stock entitled to vote. EX-11 3 COMPUTATION OF PER SHA80RE NET INCOME EXHIBIT 11 COMPUTATION OF PER SHARE NET INCOME For the Three Months Ended December 31, 1996 1995 ---- ---- Net income for the period used in determining net income per share $ 6,338,346 $ 2,751,191 Weighted average common and common equivalent shares used in determining net income per share: Primary 15,000,557 14,503,914 Assuming full dilution 15,199,535 14,503,914 Primary and fully dilutive net income per share $0.42 $0.19 EX-27 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S FINANCIAL STATEMENTS INCLUDED IN THE 10-Q FOR THE QUARTER ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS SEP-30-1996 DEC-31-1996 4,407 19,540 18,056 342 6,272 50,474 23,034 9,573 66,433 10,228 1,038 0 0 572 54,317 66,433 29,312 29,312 17,204 17,204 0 0 25 9,055 2,717 6,338 0 0 0 6,338 .42 .42
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