-----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, OY3PQ2g3mP4mEh8q4me44Nvp81RAmavA8sZvOI4yDA+udzuaHb1LAydGNnOdKJGV QXcRq5uMlvXTSKS2xo3DzQ== 0000950124-98-000658.txt : 19980212 0000950124-98-000658.hdr.sgml : 19980212 ACCESSION NUMBER: 0000950124-98-000658 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971228 FILED AS OF DATE: 19980211 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: LABARGE INC CENTRAL INDEX KEY: 0000057139 STANDARD INDUSTRIAL CLASSIFICATION: SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812] IRS NUMBER: 730574586 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-05761 FILM NUMBER: 98532735 BUSINESS ADDRESS: STREET 1: 1300 NATIONAL HIGHWAY CITY: THOMASVILLE STATE: NC ZIP: 27360 BUSINESS PHONE: 9104764777 MAIL ADDRESS: STREET 1: PO BOX 14499 CITY: ST LOUIS STATE: MO ZIP: 63178-4499 FORMER COMPANY: FORMER CONFORMED NAME: DORSETT ELECTRONICS INC DATE OF NAME CHANGE: 19690406 10-Q 1 10-Q DATED 12-28-97 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended December 28, 1997 Commission file number: 1-5761 - ------------------------------------------------------------------------------- LaBarge, Inc. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 73-0574586 - ------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) P.O. Box 14499, St. Louis, Missouri 63178 - ------------------------------------------------------------------------------- (Address) (Zip Code) (314) 997-0800 - ------------------------------------------------------------------------------- (Registrant's telephone number, including Area Code) - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . Indicate the number of shares outstanding of each of the Issuer's classes of common stock as of December 28, 1997. 15,646,330 common stock. 2 LABARGE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (dollars in thousands except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 28, DECEMBER 29, DECEMBER 28, DECEMBER 29, 1997 1996 1997 1996 - ------------------------------------------------------------------------------------------------------------------------------------ NET SALES $ 22,203 $ 24,102 $ 43,696 $ 46,026 - ------------------------------------------------------------------------------------------------------------------------------------ COSTS AND EXPENSES: Cost of sales 17,002 19,086 33,807 36,254 Selling and administrative expenses 3,418 3,069 6,400 5,928 - ------------------------------------------------------------------------------------------------------------------------------------ 20,420 22,155 40,207 42,182 - ------------------------------------------------------------------------------------------------------------------------------------ EARNINGS FROM OPERATIONS 1,783 1,947 3,489 3,844 - ------------------------------------------------------------------------------------------------------------------------------------ Interest expense 196 300 326 588 Equity in loss of joint venture -- (6) (94) (139) Minority interest loss 60 -- 60 -- Other income (expense), net (3) 12 21 32 - ------------------------------------------------------------------------------------------------------------------------------------ EARNINGS BEFORE INCOME TAXES 1,644 1,653 3,150 3,149 INCOME TAX EXPENSE 612 106 1,168 202 - ------------------------------------------------------------------------------------------------------------------------------------ NET EARNINGS $ 1,032 $ 1,547 $ 1,982 $ 2,947 ==================================================================================================================================== BASIC NET EARNINGS PER COMMON SHARE $ .07 $ .10 $ .13 $ .19 AVERAGE COMMON SHARES OUTSTANDING 15,657 15,622 15,658 15,613 ==================================================================================================================================== DILUTED NET EARNINGS PER COMMON SHARE $ .07 $ .10 $ .13 $ .19 AVERAGE COMMON SHARES OUTSTANDING 15,781 15,796 15,787 15,788 ====================================================================================================================================
See accompanying notes to consolidated financial statements. -2- 3 LABARGE, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (dollars in thousands)
DECEMBER 28, June 29, 1997 1997 - ------------------------------------------------------------------------------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 849 $ 1,467 Accounts receivable, net 14,644 13,384 Inventories 20,100 14,264 Prepaid expenses 741 735 Deferred tax assets, net 3,452 4,426 - ------------------------------------------------------------------------------------- TOTAL CURRENT ASSETS 39,786 34,276 ===================================================================================== PROPERTY, PLANT AND EQUIPMENT, NET 4,679 4,090 INVESTMENT IN JOINT VENTURE -- 161 OTHER ASSETS, NET 7,128 4,932 - ------------------------------------------------------------------------------------- $ 51,593 $ 43,459 ===================================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Short-term borrowings $ 7,575 $ -- Current maturities of long-term debt 1,032 1,032 Trade accounts payable 5,819 5,532 Accrued liabilities 5,107 6,251 - ------------------------------------------------------------------------------------- TOTAL CURRENT LIABILITIES 19,533 12,815 - ------------------------------------------------------------------------------------- LONG-TERM DEBT 4,585 5,101 - ------------------------------------------------------------------------------------- STOCKHOLDERS' EQUITY: Common stock, $.01 par value. Authorized 40,000,000 shares; issued 15,646,330 shares at December 28, 1997 and 15,658,230 shares at June 29, 1997 156 156 Additional paid-in capital 13,468 13,468 Retained earnings 13,901 11,919 Less stock in treasury, 11,950 shares at December 28, 1997 and -0- shares at June 29, 1997 (50) -- - ------------------------------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY 27,475 25,543 - ------------------------------------------------------------------------------------- $ 51,593 $ 43,459 =====================================================================================
See accompanying notes to consolidated financial statements. -3- 4 LABARGE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (dollars in thousands)
SIX MONTHS ENDED DECEMBER 28, DECEMBER 29, 1997 1996 - ------------------------------------------------------------------------------------------------------------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 1,982 $ 2,947 Adjustments to reconcile net cash provided (used) by operating activities: Undistributed loss in equity of joint venture - 139 Depreciation and amortization 546 484 Minority interest in consolidated subsidiary 60 - Changes in operating assets and liabilities, net of acquisition of business: Accounts and notes receivable, net (734) 1,131 Inventories (5,805) (2,150) Prepaid expenses 60 4 Deferred taxes 974 - Trade accounts payable 70 (2,694) Accrued liabilities (1,237) 303 - ------------------------------------------------------------------------------------------------------------------ NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (4,084) 164 - ------------------------------------------------------------------------------------------------------------------ CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property, plant and equipment (920) (526) Additions to other assets (2,289) (129) Acquisition of majority business interest 166 - - ------------------------------------------------------------------------------------------------------------------ NET CASH USED BY INVESTING ACTIVITIES (3,043) (655) - ------------------------------------------------------------------------------------------------------------------ CASH FLOWS FROM FINANCING ACTIVITIES: Repayments of long-term debt (516) (169) Exercise of stock warrants and options - 26 Purchase of common stock to treasury (50) (1) Net change in short-term borrowings 7,075 2,250 - ------------------------------------------------------------------------------------------------------------------ NET CASH PROVIDED BY FINANCING ACTIVITIES 6,509 2,106 - ------------------------------------------------------------------------------------------------------------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (618) 1,615 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,467 935 - ------------------------------------------------------------------------------------------------------------------ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 849 $ 2,550 - ------------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements. -4- 5 LABARGE, INC. FORM 10-Q NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. CONSOLIDATED FINANCIAL STATEMENTS - BASIS OF PREPARATION The consolidated balance sheets at December 28, 1997 and June 29, 1997, the related consolidated statements of operations for the three and six months ended December 28, 1997 and December 29, 1996 and the consolidated statements of cash flows for the six months ended December 28, 1997 and December 29, 1996 have been prepared by LaBarge, Inc. (the "Company") without audit. In the opinion of management, adjustments, all of a normal and recurring nature, necessary to present fairly the financial position and the results of operations and cash flows for the aforementioned periods, have been made. Certain information and footnote disclosures normally included in consolidated financial statements prepared in conformity with generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended June 29, 1997. During the second quarter of fiscal 1998, the Company increased its ownership of LaBarge Clayco Wireless L.L.C. to fifty-one percent. Beginning with the second quarter, LaBarge, Inc. Is consolidating 100% of the results of this unit into its financial statement and deducting the minority interest share as a one-line entry before arriving at pretax profits. Sales by and assets of this subsidiary were less than 3% of total sales and assets for the quarter. 2. ACCOUNTS RECEIVABLE Accounts receivable consist of the following: (dollars in thousands)
DECEMBER 28, June 29, 1997 1997 - -------------------------------------------------------------------------------- Billed shipments, net of progress payments $14,778 $13,421 - -------------------------------------------------------------------------------- Less allowance for doubtful accounts 151 148 - -------------------------------------------------------------------------------- Trade receivables - net 14,627 13,273 Other current receivables 17 111 - -------------------------------------------------------------------------------- $14,644 $13,384 ================================================================================
Progress payments are payments from customers in accordance with contractual terms for contract costs incurred to date. Such payments are credited to the customer at the time of shipment. Other current receivables are amounts due from employees for travel advances and other miscellaneous sources. -5- 6 3. INVENTORIES Inventories consist of the following: (dollars in thousands)
DECEMBER 28, June 29, 1997 1997 - -------------------------------------------------------------------------------- Raw materials $16,336 $10,546 Work in process 4,772 4,015 - -------------------------------------------------------------------------------- 21,108 14,561 Less progress payments 1,008 297 - -------------------------------------------------------------------------------- $20,100 $14,264 ================================================================================
In accordance with contractual agreements, the government has a security interest in inventories related to contracts for which progress payments have been received. 4. OTHER ASSETS, NET During the quarter, the Company made a $500,000 investment equating to an ownership position of approximately 10% in Open Cellular Systems, Inc. of St. Louis. Open Cellular Systems provides wireless communication solutions, using shared access networks, to the general industrial and utility markets. The capabilities of Open Cellular closely align with LaBarge's and management believes this alliance may provide future opportunities for the Company. The Company accounts for this investment at cost. During the six months, the Company invested an additional $2.0 million in TRANSMEDICA International, Inc. ("TRANSMEDICA") formerly Venisect, Inc. Payment for this investment included an exchange of approximately $1.2 million of current accounts receivable and $800,000 cash. The amount of the receivable, $1.2 million, was included in other assets, net at June 29, 1997. With this investments the Company owns approximately 9.5% of TRANSMEDICA's common stock. -6- 7 5. SHORT AND LONG-TERM OBLIGATIONS Short-term borrowings, long-term debt and the current maturities of long-term debt consist of the following: (dollars in thousands)
DECEMBER 28, June 29, 1997 1997 - -------------------------------------------------------------------------------- SHORT-TERM BORROWINGS: Revolving credit agreement: Balance at period-end $7,575 $ - Interest rate at period-end 7.09% 6.88% Average amount of short-term borrowings outstanding during period $3,101 $1,484 Average interest rate for period 7.08% 7.47% Maximum short-term borrowings at any month-end $7,575 $3,060 ================================================================================ LONG-TERM DEBT: Senior lender: Revolving credit agreement $2,000 $2,000 Term loan 3,500 4,000 Industrial revenue bond due semiannually through 2001, interest at 5% 97 110 Other 20 23 - -------------------------------------------------------------------------------- 5,617 6,133 Less current maturities 1,032 1,032 - -------------------------------------------------------------------------------- Total long-term debt, less current maturities $4,585 $5,101 ================================================================================
The average interest rate was computed by dividing the sum of daily interest costs by the sum of the daily borrowings for the respective periods. 6. INCOME TAXES Beginning with the current fiscal year, the Company is reporting net earnings on a fully taxed basis at a rate of approximately 37% . This is the result of the revaluation at year end fiscal 1997 of the Company's deferred tax assets, including its tax loss carryforwards. Thus, net earnings for the quarter ending December 28, 1997 were $1.0 million or $.07 per share compared with $1.5 million or $.10 per share for quarter ended December 29, 1996. Second quarter 1996 net earnings assuming a 37% tax rate would have been $1.0 million or $.07 per share. At June 29, 1997, the Company had net operating loss carryforwards for federal income tax purposes of $8.0 million which are available to offset future federal taxable income through 2004. In addition, the Company has alternative minimum tax credit carryforwards and investment tax credits of approximately $584,000 which are available to reduce future regular federal income taxes. -7- 8 7. CASH FLOWS Total cash payments for interest for the three and six months ended December 28, 1997 were $106,000 and $199,000 compared to $290,000 and $476,000 for the three and six months ended December 29, 1996. 8. EARNINGS PER COMMON SHARE In 1997, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards ("SFAS") No. 128, Earnings per share. SFAS No. 128 replaced the previously reported primary and fully diluted earnings per share with basic and diluted earnings per share. Unlike primary earnings per share, basic earnings per share excludes any dilutive effects of options, warrants, and convertible securities. Diluted earnings per share is very similar to the previously reported fully diluted earnings per share. All earnings per share amounts for all periods presented have been restated to conform to the SFAS No. 128 requirements.
THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 28, December 29, DECEMBER 28, December 29, 1997 1996 1997 1996 - -------------------------------------------------------------------------------------------------------- NUMERATOR: Net income $ 1,032 $ 1,547 $ 1,982 $ 2,947 - -------------------------------------------------------------------------------------------------------- DENOMINATOR: Denominator for basic earnings per share-- weighted-average shares 15,657 15,622 15,658 15,613 Effect of dilutive securities-- Employee stock options 124 174 130 175 - -------------------------------------------------------------------------------------------------------- Potential common shares Denominator for diluted earnings per share-- adjusted weighted-average shares and assumed conversions 15,781 15,796 15,787 15,788 ======================================================================================================== BASIC EARNINGS PER COMMON SHARE $ .07 $ .10 $ .13 $ .19 ======================================================================================================== DILUTED EARNINGS PER COMMON SHARE $ .07 $ .10 $ .13 $ .19 ========================================================================================================
-8- 9 LABARGE, INC. FORM 10-Q MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Statements contained herein which are not historical facts are forward looking statements that involve risks and uncertainties. Future events and the Company's actual results could differ materially from those contemplated by those forward looking statements. For a summary of important factors which could cause the Company's actual results to differ materially from those projected in, or inferred by, the forward looking statements, see the Company's Form 10-K for the fiscal year ended June 29, 1997, which is on file with the Securities and Exchange Commission and available to stockholders from the Company. LaBarge, Inc. designs, engineers and manufactures sophisticated electronic assemblies and complex interconnect systems on a custom basis for its customers. As such, the Company relies heavily on establishing new and maintaining existing relationships with its customers. The customers are primarily in the commercial aerospace, defense, geophysical, medical and wireless telecommunications markets. The Company employs approximately 805 people. The Company's backlog of firm, unshipped orders at December 28, 1997 was approximately $73.3 million compared to $58.8 million at December 29, 1996. The backlog at December 28, 1997 consisted of approximately $52.2 million for various defense customers, and approximately $21.1 million for commercial electronics customers. Approximately $5.1 million of the total backlog is not scheduled to ship within the next 12 months pursuant to the shipment schedules outlined by our customers. For the six months ended December 28, 1997, approximately 52.6% of the Company's sales were to customers in the defense industry and 47.4% were to customers in commercial markets including aerospace (9.1%), geophysical (25.4%) and other (12.9%). Two customers account for in excess of 40% of total sales for the six months: one in the aerospace/defense market at 25.9% of total sales; one in the geophysical market at 15.8% of total sales. The Company has designed and developed the Laser Lancet(R), a small medical laser, for TRANSMEDICA under a licensing agreement from TRANSMEDICA. On April 16, 1997, TRANSMEDICA received clearance from the U.S. Food and Drug Administration (FDA) to market and manufacture the device for the purpose of perforating the skin to collect capillary blood for clinical testing. TRANSMEDICA retains responsibility for sales and marketing of the Laser Lancet. It is still too early to predict the extent to which the Laser Lancet may contribute to LaBarge's revenues and earnings. In the first quarter, the Company increased its investment in TRANSMEDICA by investing $2.0 million by exchanging approximately $1.2 million of receivables and payment of $800,000 cash. The -9- 10 Company now owns approximately 9.5% of TRANSMEDICA's common stock. On January 2, 1998, the Company purchased the building in which its corporate headquarters reside in St. Louis, Missouri, through a wholly-owned subsidiary, LaBarge Properties, Inc. The purchase price was $6.2 million and was financed through a bank. -10- 11 LABARGE, INC. FORM 10-Q MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS SIX MONTHS ENDED DECEMBER 28, 1997 COMPARED TO SIX MONTHS ENDED DECEMBER 29, 1996 Net sales for the six months ended December 28, 1997 were $43.7 million compared to $46.0 million for the six months ended December 29, 1996, a decrease of approximately $2.3 million or 5.1%. The decrease is attributed to the reduction in sales to one telecommunications customer who represented approximately $7.7 million in sales in the six months ended December 29, 1996 and only $780,000 in the six months ended December 28, 1997. This customer discontinued sales of the product line for which LaBarge was producing. Gross profit for the six months ended December 28, 1997 was $9.9 million, 22.6% of sales, compared to $9.8 million, 21.2% of sales, for the six months ended December 29, 1996. The increase in gross margins is attributable to a more profitable product mix. Selling and administrative expenses for the six months ended December 28, 1997 were $6.4 million, 14.6% of sales, compared to $5.9 million, 12.9% of sales, for the six months ended December 29, 1996. The increase in expense is due to additional personnel and associated travel. The Company's backlog has grown $14.5 million or 24.7% from December 29, 1996 to December 28, 1997. Earnings from operations were $3.5 million, 8.0% of sales, for the six months ended December 28, 1997, compared to $3.8 million, 8.4% of sales, for the six months ended December 29, 1996. Interest expense for the six months ended December 28, 1997 was $326,000, compared to $588,000 for the six months ended December 29, 1996. Redemption of the 12% Subordinated Notes in February 1997 and reduced interest rates under the current loan agreement continue to result in lower interest costs. Equity in loss of joint venture for the six months ended December 28, 1997 was $94,000 compared to $139,000 for the six months ended December 29, 1996 and represents the Company's share of losses incurred by LaBarge Clayco Wireless L.L.C. (the "subsidiary"). On September 29, 1997, the Company purchased controlling interest in the subsidiary by increasing its ownership to fifty-one percent. Consequently, the Company began consolidating the results of operations of the subsidiary. The minority interest in loss represents the allocation of 49% of the subsidiary's loss to the minority owners. Income tax expense for the six months ended December 28, 1997 and December 29, 1996, was $1.2 million and $202,000, respectively, an increase of $966,000. The higher tax expense is due to the revaluation at June 29, 1997, of the Company's deferred tax assets, including its loss carryforwards, -11- 12 which resulted in the use of a combined tax rate of approximately 37% for the current six months versus approximately 6% for the six months ended December 28, 1997. The Company has significant net operating loss carryforwards which offset most of its income tax liabilities. The loss carryforwards are part of the company's deferred tax assets included in the balance sheet. As of December 28, 1997 deferred tax assets were $3.5 million, compared to $4.4 million as of June 29, 1997. Net earnings for the six months ended December 28, 1997 were $2.0 million, compared to $2.9 million for the six months ended December 29, 1996. Earnings per common share were $.13 for the six months ended December 28, 1997 and $.19 for the six months ended December 29, 1996. If earnings had been fully taxed for the six months ended December 29, 1996, they would have been $.13 per share. RESULTS OF OPERATIONS THREE MONTHS ENDED DECEMBER 28, 1997 COMPARED TO THREE MONTHS ENDED DECEMBER 29, 1996 Net sales for the three months ended December 28, 1997 were $22.2 million compared to $24.1 million for the three months ended December 29, 1996. This is a decrease of approximately $1.9 million. The decrease is attributable to the reduction in sales to one telecommunications customer due to a redesign of its product offering for which we manufactured various assemblies. Gross profit for the three months ended December 28, 1997 was $5.2 million, 23.4% of sales, compared to $5.0 million, 20.8% of sales, for the three months ended December 29, 1996. The increase in gross margin is attributable to a more profitable product mix. Selling and administrative expenses for the three months ended December 28, 1997 were $3.4 million or 15.4% of sales, compared to $3.1 million or 12.7% of sales for the three months ended December 29, 1996. The increase in expense is due primarily to additional personnel in our continued effort to increase sales. Interest expense for the three months ended December 28, 1997 was $196,000 compared to $300,000 for the three months ended December 29, 1996. The Company has significant net operating loss carryforwards which offset most of its income tax liability. Income tax expense for the three months ended December 28, 1997 was $612,000 compared to $106,000 for the three months ended December 29, 1996. This increase is due to the revaluation at June 29, 1997, of the Company's deferred tax assets, including its loss carryforwards, which resulted in the use of a combined tax rate of 37% for the current quarter versus 6% for the quarter ended December 29, 1996. Earnings per common share were $.07 for the three months ended December 28, 1997, and $.10 for the three months ended December 29, 1996. If earnings had been fully taxed for the three months ended December 29, 1996, they would have been $.07 per common share. -12- 13 FINANCIAL CONDITION & LIQUIDITY Accounts receivable at December 28, 1997 was $14.6 million compared to $13.4 million at June 29, 1997; an increase of $1.2 million. Inventories at December 28, 1997 and June 29, 1997 were $20.1 million and $14.3 million, respectively. This increase of $5.8 million is attributable to new job start-ups in support of the higher backlog of orders that cause inventories to be received faster than initial shipments are made to the customer. To finance these operating activities, the Company borrowed additional funds totaling $4.1 million during the quarter ended December 28, 1997. Also during the six months ended December 28, 1997, the Company purchased $920,000 in property, plant and equipment. During the first six months of the current fiscal year, the Company invested an additional $2.0 million in TRANSMEDICA International, Inc. ("TRANSMEDICA") formerly Venisect, Inc. Payment for this investment included an exchange of approximately $1.2 million of current accounts receivable and $800,000 cash. The amount of the receivable, $1.2 million, was included in other assets, net on June 29, 1997. With this investment, the Company owns approximately 9.5% of TRANSMEDICA's common stock. During the quarter, the Company made a $500,000 investment equating to an ownership position of approximately 10% in Open Cellular Systems, Inc. of St. Louis. Open Cellular Systems provides wireless communication solutions, using shared access networks, to the general industrial and utility markets. The capabilities of Open Cellular closely align with LaBarge's and management believes this alliance may provide future opportunities for the Company. The Company accounts for this investment at cost. For the six months ended December 28, 1997, the Company made repayments of long-term debt of $516,000. The Company used approximately $618,000 of its available cash and borrowed an additional $7.1 million during the six months to fund the above expenditures. -13- 14 PART II EXHIBIT 3.1(A) - Certificate of Amendment to LaBarge's Certificate of Incorporation increasing the number of authorized common shares from 20.0 million shares to 40.0 million shares. -14- 15 SIGNATURE ----------------- 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. LABARGE, INC. ------------------------------ (Registrant) Date 2/11/98 ------------ s/William J. Maender/s ------------------------------- William J. Maender Vice President - Finance, Treasurer and Secretary -15- EX-3.1(A) 2 EX-3.1(A) 1 EXHIBIT 3.1(a) PAGE 1 OF 3 STATE OF DELAWARE OFFICE OF THE SECRETARY OF STATE -------------------------------- I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF "LABARGE, INC.", FILED IN THIS OFFICE ON THE THIRTEENTH DAY OF NOVEMBER, A.D. 1997, AT 10 O'CLOCK A.M. A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING. Edward J. Freel [SEAL] ----------------------------------- Edward J. Freel, Secretary of State 0672724 8100 AUTHENTICATION: 8757031 971386654 DATE: 11-14-97 2 CERTIFICATE OF AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION OF LaBARGE, INC. LaBarge, Inc., a corporation organized and exisiting under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: FIRST: That at a meeting of the Board of Directors of LaBarge, Inc. held on August 12, 1997 resolutions were duly adopted setting forth a proposed amendment to the Restated Certificate of Incorporation of said corporation, declaring said amendment to be advisable and calling a meeting of the Stockholders of said corporation for consideration thereof. The resolution setting forth the proposed amended is as follows: RESOLVED, that the Restated Certificate of Incorporation of this corporation be amended by changing Article FOURTH thereof so that, as amended said Article shall be and read as follows: "FOURTH: The total number of shares of common stock which the corporation shall have authority to issue is 40,000,000. The par value of each of such shares of common stock is 1 cent. The total number of shares of preferred stock which the corporation shall have authority to issue is 2,000,000 shares. The par value of each such share of preferred stock is $1.00 per share. The preferred stock may be issued from time to time, in one or more series, with such designations, preferences and relative, participating, optional or other rights, qualifications, limitations or restrictions thereof as shall be stated and expressed in the resolution or resolutions providing for the issue of such series adopted by the Board of Directors from time to time, pursuant to the authority hereby given. A copy of such resolution or resolutions shall be set forth in a certificate made, executed, acknowledged, filed and recorded in the manner required by the laws of the State of Delaware in order to make the same effective. Each series shall consist of such number of shares as shall be stated and expressed in such resolution or resolutions providing for the issuance of the stock of such series. All shares of any one series of preferred stock shall be alike in every particular." 3 SECOND: That thereafter, pursuant to resolution of its Board of Directors, the annual meeting of the stockholders of said corporation was duly called and held on October 21, 1997, upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of shares as required by statute were voted in favor of the amendment. THIRD: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, said LaBarge, Inc. has caused this certificate to be signed by William J. Maender, its Vice-President, this 7th day of November, 1997. LaBARGE, INC. By: /s/ William J. Maender ---------------------------- William J. Maender Vice-President -2- EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS JUN-28-1998 DEC-28-1997 849 0 14,644 151 20,100 39,786 4,679 10,069 51,593 19,553 0 0 0 156 27,319 51,593 43,696 43,696 33,807 40,207 47 (60) 326 3,150 1,168 1,982 0 0 0 1,982 .13 .13
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