-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, f3pQUPKlODdtAoj+5HxPW0fmuiuIRSxE1wXawDpetIy0Nw/edZINWNRiww/x3L9K Qu4HaWlMrQ8Imch1WplH/A== 0000725282-94-000016.txt : 19941121 0000725282-94-000016.hdr.sgml : 19941121 ACCESSION NUMBER: 0000725282-94-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: EXECUTONE INFORMATION SYSTEMS INC CENTRAL INDEX KEY: 0000725282 STANDARD INDUSTRIAL CLASSIFICATION: 7385 IRS NUMBER: 860449210 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11551 FILM NUMBER: 94559008 BUSINESS ADDRESS: STREET 1: 6 THORNDAL CIRCLE CITY: DARIEN STATE: CT ZIP: 06820 BUSINESS PHONE: 2036556500 MAIL ADDRESS: STREET 1: 6 THORNDAL CIRCLE CITY: DARIEN STATE: CT ZIP: 06820 FORMER COMPANY: FORMER CONFORMED NAME: VODAVI TECHNOLOGY CORP DATE OF NAME CHANGE: 19880802 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 0-11551 EXECUTONE Information Systems, Inc. (Exact name of registrant as specified in its charter) Virginia 86-0449210 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 478 Wheelers Farms Road, Milford, Connecticut 06460 (Address of principal executive offices) (Zip Code) (203) 876-7600 (Registrant's telephone number, including area code) N/A (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 The number of shares outstanding of registrant's Common Stock, $.01 par value per share, as of October 31, 1994 was 45,929,911. INDEX EXECUTONE Information Systems, Inc. Page # PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets - September 30, 1994 and December 31, 1993. 3 Consolidated Statements of Operations - Three Months and Nine Months Ended September 30, 1994 and 1993. 4 Consolidated Statements of Cash Flows - Nine Months Ended September 30, 1994 and 1993. 5 Notes to Consolidated Financial Statements. 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II. OTHER INFORMATION 13 SIGNATURES 14 EXHIBIT 11. STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS 15 2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements EXECUTONE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except for share amounts) September 30, December 31, 1994 1993 ASSETS (Unaudited) (Restated) CURRENT ASSETS: Cash and cash equivalents $ 7,430 $ 7,406 Accounts receivable, net of allowance of $1,337 and $1,017 46,647 37,567 Inventories 34,198 29,092 Prepaid expenses and other current assets 6,134 5,789 Net assets of discontinued operation --- 8,538 Total Current Assets 94,409 88,392 PROPERTY AND EQUIPMENT, net 16,266 14,727 INTANGIBLE ASSETS, net 44,006 44,215 DEFERRED TAXES 22,002 25,200 OTHER ASSETS 3,903 2,623 NET ASSETS OF DISCONTINUED OPERATION --- 397 $ 180,586 $ 175,554 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 1,278 $ 2,989 Accounts payable 31,541 29,295 Accrued payroll and related costs 8,316 7,750 Accrued liabilities 9,086 7,057 Accrued restructuring costs 1,485 1,381 Deferred revenue and customer deposits 18,306 17,713 Total Current Liabilities 70,012 66,185 LONG-TERM DEBT 29,856 32,279 LONG-TERM DEFERRED REVENUE 2,134 1,345 TOTAL LIABILITIES 102,002 99,809 STOCKHOLDERS' EQUITY: Common stock: $.01 par value; 60,000,000 shares authorized; 42,901,853 and 41,205,498 issued and outstanding 429 412 Additional paid-in capital 65,856 68,275 Retained earnings 12,299 7,058 Total Stockholders' Equity 78,584 75,745 $ 180,586 $ 175,554 The accompanying notes are an integral part of these consolidated balance sheets. 3
EXECUTONE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except for per share amounts) Three Months Ended Nine Months Ended 9/30/94 9/30/93 9/30/94 9/30/93 REVENUES: (Restated) (Restated) Product $ 36,814 $ 32,353 $102,450 $ 97,747 Base 39,733 35,544 116,016 101,697 76,547 67,897 218,466 199,444 COST OF REVENUES 44,783 40,325 128,951 119,407 Gross Profit 31,764 27,572 89,515 80,037 OPERATING EXPENSES: Research, development and engineering 2,398 1,943 6,899 6,129 Selling, general & administrative 24,834 22,563 71,425 64,658 27,232 24,506 78,324 70,787 OPERATING INCOME 4,532 3,066 11,191 9,250 INTEREST, AMORTIZATION AND OTHER EXPENSES, NET: Cash 351 663 1,349 2,104 Noncash 869 788 2,363 2,244 1,220 1,451 3,712 4,348 INCOME BEFORE INCOME TAXES FROM CONTINUING OPERATIONS 3,312 1,615 7,479 4,902 PROVISION FOR INCOME TAXES: Cash 100 84 300 251 Noncash (utilization of pre-acquisition tax benefits - Note D) 1,226 565 2,693 1,714 1,326 649 2,993 1,965 INCOME FROM CONTINUING OPERATIONS 1,986 966 4,486 2,937 INCOME FROM DISCONTINUED OPERATIONS [NET OF INCOME TAXES OF $161, $102 AND $130, RESPECTIVELY] - 242 153 196 GAIN ON DISPOSAL OF DISCONTINUED OPERATIONS (NET OF INCOME TAXES OF $403) - - 604 - NET INCOME $ 1,986 $ 1,208 $ 5,243 $ 3,133 EARNINGS PER SHARE: INCOME FROM CONTINUING OPERATIONS $ 0.04 $ 0.03 $ 0.09 $ 0.07 DISCONTINUED OPERATIONS 0.00 0.00 0.02 0.00 NET INCOME $ 0.04 $ 0.03 $ 0.11 $ 0.07 WEIGHTED AVG. COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 47,182 48,540 47,495 47,987 The accompanying notes are an integral part of these consolidated statements. 4 EXECUTONE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Nine Months Ended September 30, 1994 1993 (Restated) CASH FLOWS FROM OPERATING ACTIVITIES: Income from continuing operations $ 4,486 $ 2,937 Adjustments to reconcile net income to net cash provided by continuing operations: Depreciation and amortization 5,904 5,935 Noncash expenses, including noncash interest expense, provision for income taxes not currently payable and provision for losses on accounts receivable 3,822 2,475 14,212 11,347 Net change in working capital items (11,066) 1,978 NET CASH PROVIDED BY CONTINUING OPERATIONS 3,146 13,325 Cash Flows from Discontinued Operations (551) (1,151) NET CASH PROVIDED BY OPERATING ACTIVITIES 2,595 12,174 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (3,231) (1,353) Proceeds from sale of VCS 9,700 --- Other (837) (962) NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 5,632 (2,315) CASH FLOWS FROM FINANCING ACTIVITIES: Restructuring cost payments (254) (765) Borrowings (repayments) under revolving credit facility 806 (2,366) Repayment of term note under credit facility (3,750) (937) Repayments of other long-term debt (1,077) (5,428) Repurchase of stock (5,365) (645) Proceeds from issuances of stock 1,437 476 NET CASH USED BY FINANCING ACTIVITIES (8,203) (9,665) INCREASE IN CASH AND CASH EQUIVALENTS 24 194 CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 7,406 7,404 CASH AND CASH EQUIVALENTS - END OF PERIOD $ 7,430 $ 7,598 The accompanying notes are an integral part of these consolidated statements. 5 EXECUTONE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE A - NATURE OF THE BUSINESS EXECUTONE Information Systems, Inc. (the "Company") designs, manufactures, markets, installs, supports and services voice processing systems and provides cost-effective long-distance telephone service. The Company is also a leading supplier of specialized hospital communications equipment. Products are sold under the EXECUTONE, INFOSTAR, IDS, LIFESAVER and INFOSTAR/ILS brand names through a worldwide network of direct sales and service offices and independent distributors. NOTE B - BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments, which include normal recurring adjustments, considered necessary for a fair presentation of the results for the interim periods presented have been included. As of July 1, 1988, an accumulated deficit of approximately $49.7 million was eliminated. NOTE C - SALE OF VODAVI COMMUNICATIONS SYSTEMS DIVISION As of March 31, 1994, the Company sold its Vodavi Communications Systems Division (VCS), which sold telephone equipment to supply houses and dealers under the brand names STARPLUS and INFINITE, for approximately $10.9 million. Proceeds of the sale consisted of approximately $9.7 million in cash and a $1.2 million note, fully secured by a letter of credit and payable in September 1995. The proceeds were received in April 1994 and were used to reduce borrowings under the Company's credit facility. The sale resulted in an after-tax gain of $604,000 (net of income tax provision of $403,000). The results of VCS have been reported separately as a discontinued operation in the Consolidated Statement of Operations. Prior year consolidated financial statements have been restated to present VCS as a discontinued operation. Net revenues of the discontinued operation for the three-month period ended September 30, 1993 were $8.6 million. For the nine-month periods ended September 30, 1994 and 1993, net revenues of the discontinued operation were $8.6 million and $24.1 million, respectively. 6 NOTE D - INCOME TAXES The Company accounts for income taxes in accordance with FAS 109, Accounting for Income Taxes. The deferred tax asset represents the benefits that are more likely than not to be realized from the utilization of pre and post-acquisition tax benefit carryforwards, which include net operating losses, tax credits and the excess of tax bases over the fair value of the net assets at acquisition. For the nine-month periods ended September 30, 1994 and 1993, the Company made cash payments for income taxes of approximately $228,000 and $73,000, respectively. NOTE E - EARNINGS PER SHARE Earnings per share is based on the weighted average number of shares of common stock, convertible preferred stock (which was entirely converted in 1993) and dilutive common stock equivalents (which include stock options and warrants) outstanding during the periods. Common stock equivalents and the convertible debentures which are antidilutive have been excluded from the computations. NOTE F - INVENTORIES Inventories are stated at lower of first-in, first-out ("FIFO") cost or market and consist of the following at September 30, 1994 and December 31, 1993 (amounts in thousands): 9/30/94 12/31/93 Raw Materials $ 3,146 $ 3,363 Finished Goods 31,052 25,729 $34,198 $29,092 NOTE G - OTHER MATTERS For the nine-month periods ended September 30, 1994 and 1993, the Company made cash payments of approximately $2.4 million and $3.1 million, respectively, for interest expense on indebtedness. During the nine-month periods ended September 30, 1994 and 1993, noncash financing activities other than those related to the sale of VCS (See Note C) included capital lease obligations incurred in connection with equipment acquisitions of $686,000 and $1.4 million, respectively, noncash proceeds for issuances of stock from application of credits under an option credit plan of $339,000 and $315,000, respectively, and Common Stock Purchase Warrants exercised through bond conversion of $1.1 million and $571,000, respectively. 7 In September 1994, the Company paid $1.2 million to the former shareholders of Isoetec Texas, Inc. in partial settlement of claims by such shareholders. This payment was an adjustment of the purchase price recorded when the Company acquired Isoetec Texas, Inc. in 1990 and increased intangible assets accordingly. Refer to the consolidated statements of cash flows for information on all cash-related operating, investing and financing activities. 8 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Introduction The Company's revenues are primarily derived from sales of its products and services through a worldwide network of Company- owned direct sales and service offices and independent distributors. The Company's end-user revenues are derived from two primary sources: (1) sales of systems to new customers, which include sales of application-specific software options ("product revenues"), and (2) servicing the end-user base through the upgrade, expansion, enhancement (which includes sales of application-specific software options) and maintenance of previously installed systems, as well as revenues from the INFOSTAR/LD+ program (commonly referred to as "base revenues"). Base revenues usually generate higher operating income margin than initial sales of systems, since the Company's selling expenses for base revenues are lower than those for initial system sales. Sales of the Company's application-specific software options and related services generally produce higher operating income margins than both system sales and base revenues due to the added performance value and relatively low production costs of such proprietary software and services. Results of Operations Total revenues for the three-month and nine-month periods ended September 30, 1994 were 13% and 10% higher, respectively, than the comparable 1993 periods. Product revenues for the three- month period ended September 30, 1994 increased 14% over the corresponding 1993 period primarily due to a volume increase in voice processing products. In addition, sales of videoconferencing products resulted in the first million dollars of revenue for that product line during the quarter. For the nine-month period ended September 30, 1994, product revenues increased 5% from the corresponding 1993 period as a 38% increase in voice processing revenue offset the impact of other product inventory shortages earlier in the year caused by a fire which occurred at the Company's main subcontractor's production facility in China in December 1993 (see page 10). Base revenues for the three-month and nine-month periods ended September 30, 1994 were 12% and 14% higher, respectively, than the comparable 1993 periods. The increase in base revenues was primarily attributable to continuing growth in sales to the Company's existing customer base, including increased sales of systems upgrades, expansions and maintenance as well as volume increases generated by the LD+ program. For the three-month periods ended September 30, 1994 and 1993, gross profit as a percentage of total revenues was 41.5% and 40.6%, respectively. Gross profit as a percentage of total revenues for the nine-month periods ended September 30, 1994 and 1993 was 41.0% and 40.1%, respectively. The increases are due to higher overall volume and a continued mix shift toward the Company's software-oriented, higher-margin products. Voice mail and ACD unit sales increased significantly versus both the comparable 1993 periods, positively impacting base and product gross profit. 9 Operating income as a percentage of total revenues was 5.9% and 4.5% for the three-month periods ended September 30, 1994 and 1993, respectively, and 5.1% and 4.6% for the nine-month periods ended September 30, 1994 and 1993, respectively. Operating income as a percentage of total revenues for both the three-month and nine-month periods increased due to improved gross profit margins. Research, development and engineering expenses increased 12.5% for the nine-month period ended September 30, 1994 compared to the corresponding 1993 period, which reflect the continuing increased investments in engineering for new product development whose positive impact on gross profit is beginning to be realized. SG&A expenditures for the three-month and nine- month periods have increased in total dollars versus the comparable 1993 periods but, as a percentage of sales, have not changed significantly. The dollar increase is largely the result of higher selling expenses, which reflect the impact of higher sales volume and our continued investment in personnel and training resulting from new product development. Interest, amortization and other expenses, net for the three- month and nine-month periods ended September 30, 1994 was lower than the corresponding 1993 periods due, primarily, to lower interest expense for the Company's credit facility resulting from lower borrowing levels and an interest rate reduction on the Company's bank borrowings. For the three-month period ended September 30, 1994, the Company recorded a provision for income taxes of $1.3 million. For the nine-month period ended September 30, 1994, the Company recorded a provision for income taxes of $3.0 million for continuing operations, $102,000 for discontinued operations and $403,000 for the gain on the sale of its VCS division. Of the total provision, $3.2 million was recorded as a reduction of the deferred tax asset to reflect the utilization of tax benefit carry- forwards. As a result of the utilization of these benefits, the Company does not have a significant tax liability for the period. The Company has substantial tax benefit carryforwards which means that minimal taxes will be paid in the near future. In December 1993, a fire occurred at the Company's main subcontractor's production facility in Shinzen, China, causing inventory shortages during the first six months of 1994. The production problems were largely alleviated by the Company's ability to increase its own production and find alternative manufacturing sources. In July 1994, the Company recovered $4 million from its insurance carrier for additional direct costs related to the emergency production situation. The subcontractor's facility has since been rebuilt and the Company does not anticipate any significant additional product costs will be incurred. As of March 31, 1994 the Company sold its Vodavi Communications Systems Division (VCS), which sold telephone equipment to supply houses and dealers under the brand names STARPLUS and INFINITE, for approximately $10.9 million. Proceeds of the sale consisted of approximately $9.7 million in cash and a $1.2 million note, fully secured by a letter of credit and payable in September 1995. The proceeds were received in April 1994 and were used to reduce borrowings under the Company's credit facility. 10 The sale of VCS resulted in an after-tax gain of $604,000 (net of income tax provision of $403,000). The results of VCS have been reported separately as a discontinued operation in the Consolidated Statement of Operations. Prior year consolidated financial statements have been restated to present VCS as a discontinued operation. Net revenues of the discontinued operation for the three-month period ended September 30, 1993 were $8.6 million. For the nine-month periods ended September 30, 1994 and 1993, net revenues of the discontinued operation were $8.6 million and $24.1 million, respectively. In September 1994, the Company paid $1.2 million to the former shareholders of Isoetec Texas, Inc. in partial settlement of claims by such shareholders. This payment was an adjustment of the purchase price recorded when the Company acquired Isoetec Texas, Inc. in 1990 and increased intangible assets accordingly. Liquidity and Capital Resources The Company's liquidity is represented by cash, cash equivalents and cash availability under its existing credit facilities. The Company's liquidity was approximately $26 million and $29 million as of September 30, 1994 and December 31, 1993, respectively. At September 30, 1994 and December 31, 1993, cash and cash equivalents amounted to $7.4 million which represented 8% of current assets. The Company has generated $14.2 million of cash during the nine-month period ended September 30, 1994 and an additional $9.7 million of cash from the sale of VCS. The cash has been used to reduce debt by $4.2 million, repurchase $5.4 million of the Company's common stock, fund $11.1 million of working capital, and purchase $3.2 million of capital assets. For the comparable period in 1993, the Company generated $11.3 million of cash, which was used primarily to reduce debt by $9.5 million and purchase $1.4 million of capital assets. The increase in the funding of working capital is primarily accounts receivable and inventory. The increase in accounts receivable is a result of the 13% revenue increase for the three-month period ended September 30, 1994 as compared to the comparable 1993 period and the increase in days sales outstanding due to increased sales to National Accounts and the Federal government, which generally have a longer collection cycle. Inventory increased due to a continuation of the Company's efforts to rebuild inventory which was depleted during the emergency production situation earlier in 1994. Total debt at September 30, 1994 was $31.1 million, a decrease of $4.2 million from $35.3 million at December 31, 1993. The reduction in debt is due to the application of proceeds from the sale of VCS of $9.7 million, of which $2.2 million was used to reduce the Company's term loan and $7.5 million was used to reduce the Company's revolving credit facility, the exercise of common stock purchase warrants through bond conversions of $1.1 million, and repayments of other long-term debt of $2.6 million. This was partially offset by increased borrowings under the revolving credit facility of $8.3 million. The increased borrowings were used primarily to fund working capital and also included approximately $3.0 million in temporary increases resulting from the purchase of the Company's common stock for the Executive Stock Incentive Plan, which will be repaid by the enrolled executives during the fourth 11 quarter of 1994 and expenditures for the move of the Corporate headquarters to be offset by monies granted by the State of Connecticut, which the Company expects to receive before the end of the year. Other increases to total debt resulted from capital lease agreements for equipment purchases of $0.7 million and an increase to the carrying value of the Company's Convertible Subordinated Debentures of $0.2 million due to accretion. In August 1994, the Company amended its Credit Facility whereby it has the option of denominating a portion of its borrowings in Eurodollars. It also permits the Company to issue a Letter of Credit to support amounts loaned by the Company's banks to the Company's senior management in connection with its Executive Stock Incentive Plan approved by the shareholders in June 1993. This Letter of Credit has a minimal impact on the Company's borrowing capability. As of October 31, 1994, approximately $14.0 million of direct borrowings was available under the Company's credit facility. The Company believes that borrowings available under the credit facility and cash flow from operations will be sufficient to meet working capital and other requirements for the next twelve months. 12 PART II - OTHER INFORMATION Item 1. LEGAL PROCEEDINGS Not applicable. Item 2. CHANGES IN SECURITIES Not applicable. Item 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. Item 5. OTHER INFORMATION Not applicable. Item 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits 11 - Statement Regarding Computation of Per Share Earnings b) Reports on Form 8-K Not applicable. 13 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. EXECUTONE Information Systems, Inc. Dated: November 11, 1994 /s/ Alan Kessman Alan Kessman Chairman, President and Chief Executive Officer Dated: November 11, 1994 /s/ Anthony R. Guarascio Anthony R. Guarascio Vice President Finance and Chief Financial Officer 14
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EXHIBIT 11 EXECUTONE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS Three Months Ended Nine Months Ended 9/30/94 9/30/93 9/30/94 9/30/93 (Restated) (Restated) INCOME FROM CONTINUING OPERATIONS $ 1,986,000 $ 966,000 $ 4,486,000 $ 2,937,000 DISCONTINUED OPERATIONS: INCOME FROM OPERATIONS, NET OF INCOME TAXES --- 242,000 153,000 196,000 GAIN ON DISPOSAL, NET OF INCOME TAXES --- --- 604,000 --- NET INCOME $ 1,986,000 $ 1,208,000 $ 5,243,000 $ 3,133,000 INTEREST EXPENSE ADJUSTMENT 7,000 44,000 20,000 132,000 ADJUSTED NET INCOME $ 1,993,000 $ 1,252,000 $ 5,263,000 $3,265,000 WEIGHTED AVERAGE NUMBER OF COMMON SHARES 43,317,000 32,536,000 43,253,000 31,965,000 OUTSTANDING COMMON STOCK EQUIVALENTS: Add - Net shares assumed to be issued for dilutive stock option and warrants 3,376,000 4,411,000 3,404,000 4,280,000 Add - Shares assumed to be issued on conversion of preferred stock (converted entirely in 1993) and exercise of related warrants 489,000 11,593,000 838,000 11,742,000 TOTAL WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 47,182,000 48,540,000 47,495,000 47,987,000 EARNINGS PER COMMON SHARE: Income From Continuing Operations $ 0.04 $ 0.03 $ 0.09 $ 0.07 Discontinued Operations --- --- 0.02 --- Net Income $ 0.04 $ 0.03 $ 0.11 $ 0.07 15
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5 1000 9-MOS DEC-31-1994 SEP-30-1994 7,430 0 47,984 1,337 34,198 94,409 44,085 27,819 180,586 70,012 29,856 429 0 0 78,155 180,586 218,466 218,466 128,951 128,951 78,324 0 3,712 7,479 2,993 4,486 757 0 0 5,243 0.11 0.11
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