-----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, CanOZFcD7lHfZ98MhWhSWMLMrYLteFJw6sZ+MQ+o3vicRB7D/HOmrrnr000vvbdx 6zbFnOjTI7yxn2iMl5TxCw== 0000719597-98-000002.txt : 19980814 0000719597-98-000002.hdr.sgml : 19980814 ACCESSION NUMBER: 0000719597-98-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRADCO SYSTEMS INC CENTRAL INDEX KEY: 0000719597 STANDARD INDUSTRIAL CLASSIFICATION: OFFICE MACHINES, NEC [3579] IRS NUMBER: 953342977 STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-12829 FILM NUMBER: 98685742 BUSINESS ADDRESS: STREET 1: 3753 HOWARD HUGHES PARKWAY SUITE 200 CITY: LAS VEGAS STATE: NV ZIP: 89109 BUSINESS PHONE: 7028923714 MAIL ADDRESS: STREET 1: 3753 HOWARD HUGHES PKWY CITY: LAS VEGAS STATE: NV ZIP: 89109 10-Q 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 Quarter Ended June 30, 1998 Commission file number 0-12829 GRADCO SYSTEMS, INC. (Exact name of registrant as specified in its charter) Nevada 95-3342977 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3753 Howard Hughes Pkwy, Ste 200, Las Vegas, Nevada 89109 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (702) 892-3714 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 ------- ------- Applicable Only to Corporate Issuers: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Number of Shares Outstanding Class at June 30, 1998 ------------- ---------------------------- Common Stock, without par value 7,909,598 GRADCO SYSTEMS, INC. INDEX Page Number Part I. Financial Information: Consolidated Balance Sheets at June 30, 1998 and March 31, 1998 3 Consolidated Statements of Income for the Three Months Ended June 30, 1998 and June 30, 1997 4 Consolidated Statements of Cash Flows for the Three Months Ended June 30, 1998 and June 30, 1997 5-6 Notes to Unaudited Consolidated Financial Statements 7-10 Management's Discussion and Analysis of Financial Condition and Results of Operations 11-13 Part II. Other Information 14 -2- GRADCO SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands) June 30, March 31, 1998 1998 ------------ ------------ (Unaudited) ASSETS Current assets: Cash and cash equivalents $13,407 $ 8,691 Accounts receivable, net 18,746 29,930 Inventories 2,244 1,608 Deferred income taxes 2,591 552 Other current assets 735 166 ------- ------- Total current assets 37,723 40,947 Furniture, fixtures and equipment, net 1,213 1,290 Excess of cost over acquired net assets 1,223 1,234 Deferred income taxes 1,142 1,571 Other assets 3,313 3,429 ------- ------- $44,614 $48,471 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 8,926 $10,241 Notes payable to suppliers 11,092 9,849 Accrued expenses 892 1,077 Income taxes payable 358 2,527 Current installments of long-term debt 11 13 ------- ------- Total current liabilities 21,279 23,707 Long-term debt, excluding current installments - 2 Non-current liabilities 980 1,024 Excess of fair value of net assets acquired over cost 1,500 1,600 Minority interest 583 665 Shareholders' equity: Common stock, no par value; authorized 30,000,000 shares, 7,909,598 and 7,854,598 shares outstanding June 30, 1998 and March 31, 1998, respectively 45,564 45,325 Accumulated deficit (24,613) (23,972) Currency translation adjustment (679) 120 ------- ------- 20,272 21,473 ------- ------- $44,614 $48,471 ======= ======= See accompanying notes to consolidated financial statements. -3- GRADCO SYSTEMS, INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (Unaudited) Three Months Ended ---------------------- June 30, June 30, 1998 1997 ---------- ---------- Revenues: Net sales $23,132 $39,802 Development engineering services 251 295 Licenses and royalties 569 665 ------- ------- 23,952 40,762 ------- ------- Costs and expenses: Cost of sales 18,385 32,077 Research and development 836 960 Selling, general and administrative 1,954 2,582 Provision for doubtful Mita receivable 5,000 - ------- ------- 26,175 35,619 ------- ------- Income (loss) from operations (2,223) 5,143 Interest expense (1) (1) Interest income 49 36 ------- ------- Earnings (loss) before income taxes and minority interest (2,175) 5,178 Income tax expense (1,474) 2,381 Minority interest (60) 1,023 ------- ------- Net earnings (loss) $ (641) $ 1,774 ======= ======= Basic earnings (loss) per common share $ (0.08) $ .23 ======= ======= Average shares outstanding, basic EPS 7,857 7,799 ======= ======= Diluted earnings (loss) per common share $ (0.08) $ .23 ======= ======= Average shares outstanding, diluted EPS 7,857 7,851 See accompanying notes to consolidated financial statements. -4- GRADCO SYSTEMS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) Three Months Ended ---------------------- June 30, June 30, 1998 1997 -------- -------- Cash flows from operating activities: Net (loss) income $ (641) $ 1,774 ------- ------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 208 268 Amortization (2) 354 Deferred income taxes (1,643) 85 Provision for losses on accounts receivable 5,047 - Stock-based compensation 83 - Minority interest (60) 1,023 Decrease (increase) in accounts receivable 5,543 (13,087) Increase in inventories (643) (144) Increase in prepaid assets (591) (44) Increase in other assets (511) (54) (Decrease) increase in accounts payable (1,117) 1,352 Increase in notes payable to suppliers 1,687 9,530 (Decrease) increase in accrued expenses (169) 148 (Decrease) increase in income taxes payable (2,123) 943 (Decrease) increase in other liabilities (9) 56 ------- ------- Total adjustments 5,700 430 ------- ------- Net cash provided by operations 5,059 2,204 ------- ------- Cash flows from investing activities: Acquisition of property and equipment (155) (116) ------- ------- Net cash used in investing activities (155) (116) ------- ------- -5- CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued) Three Months Ended ---------------------- June 30, June 30, 1998 1997 -------- -------- Cash flows from financing activities: Repayment of notes in excess of three months (4) (3) Proceeds from exercise of stock options 156 - ------- ------- Net cash provided by (used in) financing activities 152 (3) ------- ------- Effect of exchange rate changes on cash (340) 1,123 ------- ------- Net increase in cash and cash equivalents 4,716 3,208 Cash and cash equivalents at beginning of period 8,691 18,335 ------- ------- Cash and cash equivalents at end of period $13,407 $21,543 ======= ======= Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Interest $ 1 $ 1 Income taxes 2,338 1,231 See accompanying notes to consolidated financial statements. -6- GRADCO SYSTEMS, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: INTERIM ACCOUNTING POLICY The accompanying consolidated financial statements include the accounts of Gradco Systems, Inc. and its wholly and majority-owned subsidiaries (the "Company"). All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company's management, the accompanying unaudited statements include all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the financial position of the Company at June 30, 1998 and the results of operations and cash flows for the three months ended June 30, 1998 and 1997. Although the Company believes that the disclosures in these financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Results of operations for interim periods are not necessarily indicative of results of operations to be expected for the full year. Foreign currency translation gains of $426,000 and $167,000 are included in selling, general and administrative expenses for the three months ended June 30, 1998 and 1997, respectively. The financial information included in this quarterly report should be read in conjunction with the consolidated financial statements and related notes thereto in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1998. NOTE 2: INVENTORIES Inventories are summarized as follows: (Dollars in Thousands) June 30, March 31, 1998 1998 --------- --------- Raw materials $ 142 $ 128 Work-in-process 1,669 992 Finished goods 433 488 ------ ------ $2,244 $1,608 ====== ====== NOTE 3: INCOME TAXES The effective consolidated income tax rate used by the Company is based on the estimated annual effective tax rates for the fiscal years in the countries where the Company operates applied to results of the quarter. -7- GRADCO SYSTEMS, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS NOTE 4: NET EARNINGS PER SHARE Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if stock options and other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. For the current quarter, there is no difference in the average shares outstanding between diluted and basic because there was a net loss for the quarter. For all periods presented, the net earnings available to common shareholders is the same for both basic and diluted EPS and is equal to the net earnings or loss stated in the Consolidated Statements of Income. Basic and diluted EPS do not differ materially from earnings per share previously presented. A reconciliation of the average number of outstanding shares used in the computation of basic EPS to that used in the computation of diluted EPS is shown in the following table (in thousands): Three Months Ended ---------------------- June 30, June 30, 1998 1997 -------- -------- Average shares outstanding, basic EPS 7,857 7,799 Effect of dilutive securities: Stock options - 52 ------ ------ Average shares outstanding, diluted EPS 7,857 7,851 ====== ====== NOTE 5: COMPREHENSIVE INCOME Effective in the first quarter of fiscal 1999, the Company adopted Statement of Financial Accounting Standards No. 130 ("SFAS 130"), REPORTING COMPREHENSIVE INCOME. SFAS 130 establishes standards for reporting and displaying of comprehensive income and its components in the Company's consolidated financial statements. Comprehensive income is defined in SFAS 130 as the change in equity (net assets) of a business enterprise during a period from transactions and other events and circumstances from nonowner sources. Total comprehensive income was a loss of $1,056,000 and income of $2,238,000 for the three months ended June 30, 1998 and 1997, respectively. The difference from net income or loss as reported is the tax affected change in the cumulative currency translation adjustment. NOTE 6: NEW ACCOUNTING STANDARDS In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 131, DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION. This statement, which will become effective in fiscal 1999, expands or modifies disclosures and will have no impact on the Company's consolidated financial position, results of operations or cash flows. -8- GRADCO SYSTEMS, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS NOTE 7: COMMITMENTS AND CONTINGENCIES In the following litigation, material claims have been asserted against the Company: HAMMA V. GRADCO SYSTEMS, INC. ET AL., DUBOIS V. GRADCO SYSTEMS, INC. ET AL. In March 1988, the Company and its (now former) president, Keith Stewart, were sued in the U.S. District Court in Connecticut by John C. Hamma and R. Clark DuBois, both of whom are former employees of the Company. The complaints in the two cases, which were consolidated for certain pretrial purposes, primarily allege misrepresentation and fraudulent concealment by Gradco and Mr. Stewart in connection with agreements entered into in 1982 with Mr. Hamma and in 1983 with Mr. DuBois terminating and releasing the Company from royalty obligations under prior royalty agreements. The complaints, which have been amended a number of times, seek unspecified damages and other relief. For each of these cases, the Court bifurcated the liability and damages issues so that an initial trial would determine whether liability exists and, if so, a subsequent trial would determine damages. In March 1992, each plaintiff filed an Application for Prejudgment Remedy against the Company and Gradco (Japan) Ltd. ("GJ") seeking to attach $10,000,000 of assets of each of these two defendants. This Application was dismissed as respects GJ. In November 1992, the Company and the plaintiffs agreed in principle to a Consent Order instead of proceeding with a hearing on the Application. If during the pendency of the lawsuits the Company desires to sell, transfer or take any other action which would affect its ownership of stock in GJ, it has agreed to give 30 days prior notice to the plaintiffs, who will then be permitted, if they so request, to renew the Application within the notice period. Should plaintiffs do so, the Company has agreed to forbear from proceeding with any such transaction for a limited period. The Company would vigorously oppose a renewed Application. Management believes that the Consent Order is in the Company's best interests because it precludes any attachment of the Company's assets until such time as a proposed transaction which would affect its ownership of stock in GJ may arise, and it avoids the legal expense which would have resulted from a current hearing on the Application. In June 1995, a jury found the Company to have liability in the lawsuit filed by John C. Hamma and the Company filed a motion in August 1995 to reverse the verdict. In July 1995, the plaintiffs filed another Application for a Prejudgment Remedy ("July PJR Application") seeking to attach Gradco Systems' assets. The July PJR Application sets forth various theories of damages including a theory calling for treble damages under Connecticut law in the amount of $70,500,000. The July PJR Application asserts that there is probable cause that a verdict in an amount greater than $70,500,000 will be rendered in the damages part of the case after trial on those issues. It is Gradco's belief that damages based on applicable law would result in a significantly smaller damages award even if the motion by Gradco for judgment as a matter of law is denied. The Court has determined that it will rule on the July PJR Application only after ruling on the August 1995 motion for judgment as a matter of law. -9- GRADCO SYSTEMS, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS NOTE 7: COMMITMENTS AND CONTINGENCIES (Continued) In November 1995, the Court ordered the plaintiffs to submit a memorandum regarding the legal theories on which they based their damages claims and for the defendants to respond. This issue is under consideration by the Court. If Gradco's view prevails, the magnitude of damages, even should the August 1995 motion prove unavailing, will be reduced substantially from the amount sought in the July PJR Application. In July 1998, the Court issued a decision on the Company's August 1995 motion, sustaining the jury verdict on all issues other than a RICO claim against Keith Stewart. The Court has not yet ruled on the proper measure of damages, which ruling the Company believes is necessary before discovery and trial on the issue of damages can take place. The Court has also not yet ruled on the July PJR Application. The Court has permitted the Company to file a motion for reconsideration of the Court's decision as it relates to recision of the release agreement executed by Hamma in 1982. The Company expects to file this motion on August 14, 1998. The Company is presently unable to determine the amount of damages which is likely to be awarded, but the amount of damages sought by the plaintiffs, including punitive damages, could only be settled from assets of Gradco Systems, Inc. (which consist primarily of the capital stock of its subsidiaries). An award of damages of the magnitude sought by the plaintiffs could have a material adverse effect on the Company's financial position and might threaten the Company's existence as an ongoing enterprise. Gradco (Japan) Ltd., Gradco (USA) Inc. and Venture Engineering, Inc. are not parties to the lawsuit and any judgment awarded will not affect their operations, since those operations are independent of Gradco Systems, Inc. There are substantial differences between the Hamma and DuBois cases. Although the DuBois case will also be tried before a jury so that there are substantial elements of uncertainty, the Company continues to believe that the DuBois case alone will not have a material adverse effect on its consolidated financial position, or on its results of operations or liquidity. NOTE 8: SUBSEQUENT EVENT On August 10, 1998, the Company learned that Mita Industrial Co. Ltd. ("Mita"), one of GJ's largest customers, had filed a petition in Japan along with five of its affiliates for the Japanese equivalent of a Chapter XI Reorganization. The Company has established an allowance of $5,000,000, representing nearly all of Mita's indebtedness to Gradco as of June 30, 1998. On an after tax and minority interest basis, this charge amounted to $2,529,000 or $.32 per share. -10- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS In addition to historical information, management's discussion and analysis includes certain forward-looking statements, including those related to the Company's growth and strategies, regarding events and financial trends that may affect the Company's future results of operations and financial position. The Company's actual results and financial position could differ materially from those anticipated in the forward-looking statements as a result of competition, general economic and business conditions, changes in technology, fluctuations in the rates of exchange of foreign currency and other risks and uncertainties over which the Company has little or no control. The Company's operations are conducted principally through its wholly-owned subsidiaries Venture Engineering, Inc. ("Venture") and Gradco (USA) Inc. ("GU") and its majority-owned subsidiary Gradco (Japan) Ltd. ("GJ"). Venture performs contract engineering and manufacturing services for OEMs and other customers, primarily for the U.S. market. GJ and GU design, develop, produce (by contract) and market on a worldwide basis, intelligent paper handling devices for office copiers, computer controlled printers and facsimile machines. GJ and GU operate jointly in the development and marketing of products to their customer base, primarily OEMs. Both companies sell into the U.S. domestic and foreign marketplace at similar profit margins, after elimination of intercompany profits. Sales are denominated for the most part in Japanese yen and U.S. dollars, corresponding to the currency charged for the product by the contract manufacturer. Although the gross profit margin percentage is thus protected from foreign currency fluctuations, translation gains and losses can still occur when receivables and payables are denominated in other than the local currency of each company. RESULTS OF OPERATIONS Revenues for the three months ended June 30, 1998 decreased $16,810,000 from the amount in the prior year's first quarter principally from a 42% decrease in net sales, reflecting a 40% reduction in unit sales in the copier market. Unit sales in the first quarter of the prior year were abnormally high because of the introduction of a new product line which resulted in a temporary spike in demand as customers purchased the new products before phasing out the old versions. When compared to the preceding quarter, unit sales were only down 6%. Sales denominated in yen were $1.8 million lower than they would have been had the yen not decreased by 13% against the dollar when compared to the same period in the previous year. Gross margin on net sales increased to 20.5% from 19.4% for the three months ended June 30, 1998 and June 30, 1997, respectively, reflecting improved margins at Venture. Research and development expenses ("R&D") in the current quarter totaled $836,000, 3.5% of revenues, compared to $960,000, 2.4% of revenues, in the prior year's comparable period. -11- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Selling, general and administrative expenses ("SG&A") in the current quarter totaled $1,954,000, 8.2% of revenues, compared to $2,582,000, 6.3% of revenues, in the prior year's comparable period, a decrease of $628,000. Approximately $243,000 of this decrease is due to the favorable translation of SG&A at the Company's Japanese subsidiary ("GJ") caused by the weaker yen and there was an increase of $259,000 in foreign currency translation gains in the current quarter. In addition to the normal SG&A expenses, the Company has taken a $5,000,000 charge in the current quarter due to the bankruptcy petition filed by one of GJ's largest customers. For further information regarding this situation, see Note 8 of Notes to Unaudited Consolidated Financial Statements. As a result of the above factors, earnings before income taxes and minority interest decreased to a loss of $2,175,000 in the current quarter from income of $5,178,000 in the first quarter of fiscal 1998. The effective tax rate increased to 67.8% from 46.0% because there was pre-tax income generated domestically and a pre-tax loss in Japan where the tax rate is considerably higher. Minority interest decreased more than proportionally due to the buyback of GJ shares in the second and third quarters of the prior year which increased the Company's ownership in GJ from 58.6% to 97.3%. FINANCIAL CONDITION Working capital decreased to $16,444,000 at June 30, 1998 from $17,240,000 at March 31, 1998. At June 30, 1998, the Company had $13,407,000 in cash, an increase of $4,716,000 from March 31, 1998, and no long-term debt. $5.1 million of cash was provided by operations. $3.0 million was provided by net earnings before non-cash provisions for depreciation, amortization, deferred taxes, provision for losses on accounts receivable and stock-based compensation. $5.5 million was provided by a decrease in accounts receivable and $1.7 million from an increase in notes payable to suppliers. $1.7 million was used to fund increases in inventories, prepaid expenses and other assets and $3.4 to pay down accounts payable, income taxes payable and accrued expenses. Cash decreased $0.3 million as a result of exchange rate changes. GJ has informal credit facilities with a Japanese bank. There were no borrowings under this facility at June 30, 1998. The Company believes that its cash and credit facilities are adequate for its short and long-term operational needs. At June 30, 1998, there were no material commitments for capital expenditures. further information regarding this litigation, see Note 6 of Notes to Unaudited Consolidated Financial Statements. -12- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS In June 1995, a jury found the Company to have liability in a lawsuit by John C. Hamma, a former employee. In July 1998, in response to a motion filed by the Company in August 1995, the Court sustained the jury verdict on all issues other than a RICO claim against Keith Stewart, which the Court dismissed. A separate proceeding to determine the amount of damages is now required. An award of damages of the magnitude sought by Mr. Hamma could have a material adverse effect on the Company's financial position and might threaten its existence as an ongoing enterprise. The Company believes that as a matter of law the damages claimed by Mr. Hamma are excessive to a substantial extent. For further information regarding this litigation, see Note 7 of Notes to Unaudited Consolidated Financial Statements. The lawsuit by R. Clark DuBois, a former employee, has not yet been tried. Although the case will be tried before a jury, so that there are substantial elements of uncertainty, the Company continues to believe that the DuBois case alone will not have a material adverse effect on its consolidated financial position, or on its results of operations or liquidity. Impact of the Year 2000 The Registrant and its subsidiaries have addressed the impact of the year 2000 on their internal accounting and operating systems and have determined that these systems are Year 2000 compliant as a result of the recent purchases of computer software upgrades. The Registrant is completing an assessment of how its interface with customers and suppliers, through sales and purchase orders might be impacted. This assessment is expected to be completed before the end of the current fiscal year. To date, there do not appear to be any issues which would have a material impact on the Registrant's results of operations, liquidity or capital resources. -13- PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The information regarding the current status of the Hamma and DuBois lawsuits, contained in Note 7 of Notes to Unaudited Consolidated Financial Statements set forth in Part I of this Report, is hereby incorporated by reference in response to this Item 1. ITEM 2. CHANGES IN SECURITIES Not Applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not Applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not Applicable. ITEM 5. OTHER INFORMATION Not Applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. None. (b) Reports on Form 8-K. None. -14- 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. GRADCO SYSTEMS, INC. Registrant By: Date: August 13, 1998 HARLAND L. MISCHLER Harland L. Mischler Executive Vice President, Chief Financial Officer (Principal Financial and Chief Accounting Officer) -15- EX-27 2
5 This schedule contains summary financial information extracted from the 6/30/98 Form 10-Q and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS MAR-31-1999 JUN-30-1998 13,407 0 23,901 5,155 2,244 37,723 6,088 4,875 44,614 21,279 0 0 0 45,564 (25,292) 44,614 23,132 23,952 18,385 21,175 0 5,000 (48) (2,175) (1,474) (641) 0 0 0 (641) (.08) (.08)
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