-----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, n4I2SYiHmPxmHFgK1r4N0SyujWBubXBI07YmbsGKC5PA8914zvRdWISzc/KSU927 k+n2j9mhIebQjXK13jlrMg== 0000898430-94-000494.txt : 19940719 0000898430-94-000494.hdr.sgml : 19940719 ACCESSION NUMBER: 0000898430-94-000494 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940529 FILED AS OF DATE: 19940713 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEASUREX CORP /DE/ CENTRAL INDEX KEY: 0000751190 STANDARD INDUSTRIAL CLASSIFICATION: 3823 IRS NUMBER: 941658697 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08770 FILM NUMBER: 94538615 BUSINESS ADDRESS: STREET 1: ONE RESULTS WAY CITY: CUPERTINO STATE: CA ZIP: 95014 BUSINESS PHONE: 4082551500 MAIL ADDRESS: STREET 1: ONE RESULTS WAY CITY: CUPERTINO STATE: CA ZIP: 95014 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) [x] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 29, 1994 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to -------------- --------------------------- Commission File Number 1-8770 M E A S U R E X C O R P O R A T I O N ------------------------------------------------------ (Exact name of Registrant as specified in its charter) Delaware 94-1658697 --------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Results Way, Cupertino, California 95014 ---------------------------------------- ------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (408) 255-1500 Not Applicable - - -------------------------------------------------------------------------------- (Former name, former address & 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 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 the latest practicable date. Common stock outstanding at June 30, 1994 17,932,609(1) (1) Excludes common stock held in treasury. 1 MEASUREX CORPORATION Index Part I. Financial Information Page No. - - ------------------------------ -------- Item 1. Financial Statements Consolidated Statements of Income - Three Months and Six Months ended May 29, 1994 and May 30, 1993 3 Consolidated Balance Sheets - May 29, 1994 and November 28, 1993 4-5 Consolidated Statements of Cash Flows - Six Months ended May 29, 1994 and May 30, 1993 6 Notes to Consolidated Financial Statements 7-11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12-15 Part II. Other Information --------------------------- Item 2. Submission of Matters to a Vote of Security Holders 15 Item 6. Exhibits and Reports on Form 8-K 16 Signatures 17 Exhibits: 11 - Computation of Net Income Per Share 18 2 MEASUREX CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollar amounts in thousands except per share data)
Three Months Ended Six Months Ended -------------------- ---------------------- May 29, May 30, May 29, May 30, 1994 1993 1994 1993 -------- --------- --------- ---------- Revenues: Systems $36,482 $40,623 $ 74,100 $ 78,077 Service and other 26,096 25,518 50,123 49,903 ------- ------- -------- -------- Total revenues 62,578 66,141 124,223 127,980 ------- ------- -------- -------- Operating costs and expenses: Systems 23,264 26,271 47,220 52,140 Service and other 16,333 16,192 31,358 32,153 Product development 4,865 5,469 9,944 9,904 Selling and administrative 15,776 15,991 31,205 30,312 ------- ------- -------- -------- Total operating costs and expenses 60,238 63,923 119,727 124,509 ------- ------- -------- -------- Earnings from operations 2,340 2,218 4,496 3,471 Other income (expense): Interest expense (330) (118) (666) (172) Interest income and other 1,125 1,244 2,671 2,758 ------- ------- -------- -------- Total other income, net 795 1,126 2,005 2,586 ------- ------- -------- -------- Income before income taxes and cumulative effect of accounting change 3,135 3,344 6,501 6,057 Provision for income taxes 1,357 1,170 2,535 2,147 ------- ------- -------- -------- Income before cumulative effect of accounting change 1,778 2,174 3,966 3,910 Cumulative effect of accounting change - - 524 - ------- ------- -------- -------- Net income $ 1,778 $ 2,174 $ 4,490 $ 3,910 ======= ======= ======== ======== Income per share: Income before cumulative effect of accounting change $.10 $.12 $ .22 $ .22 Cumulative effect of accounting - - .03 - change ------- ------- -------- -------- Net income per share $.10 $.12 $ .25 $ .22 ======== ======= ======== ======== Dividends per share $.11 $.11 $ .22 $ .22 ------- ------- -------- -------- Average number of common and common equivalent shares 18,040 18,034 18,095 18,125 ======= ======= ======== =======
3 MEASUREX CORPORATION CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands)
May 29, November 28, ASSETS 1994 1993 - - ------------------------------------------------------------------ (Unaudited) Current assets: Cash and cash equivalents $ 69,777 $ 76,040 Marketable securities and short-term investments 37,047 35,371 Accounts receivable 54,025 55,126 Inventories 35,336 35,697 Prepaid expenses and other 11,231 11,473 -------- -------- Total current assets 207,416 213,707 -------- -------- Contracts receivable 27,964 26,651 Service parts, net 3,508 3,178 Property, plant and equipment, net 51,132 53,161 Other assets 20,916 21,619 -------- -------- Total assets $310,936 $318,316 ======== ========
4 MEASUREX CORPORATION CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands except share and per share data)
May 29, November 28, LIABILITIES AND STOCKHOLDERS' EQUITY 1994 1993 - - --------------------------------------------------------------------------------- (unaudited) Current liabilities: Current portion of long-term debt $ 4,402 $ 4,516 Accounts payable 4,381 6,732 Accrued expenses 60,920 62,594 Income taxes payable 657 2,145 -------- -------- Total current liabilities 70,360 75,987 -------- -------- Long-term debt 14,321 16,783 Deferred income taxes 11,759 13,682 -------- -------- Total liabilities 96,440 106,452 -------- -------- Commitments and Contingencies Stockholders' Equity: Preferred stock, $.01 par value: Authorized: 10,000,000 shares; issued and outstanding: none - - Common stock, $.01 par value: Authorized: 50,000,000 shares; outstanding: 1994 - 19,035,868 shares, 1993 - 19,036,948 shares 190 190 Additional capital 75,344 75,202 Retained earnings 167,023 167,211 Net unrealized losses on marketable securities (198) - Cumulative translation adjustments (4,988) (5,707) Less: Treasury stock, at cost: 1994 - 1,107,288 shares, 1993 - 1,192,726 shares (22,875) (25,032) -------- -------- Total stockholders' equity 214,496 211,864 -------- -------- Total liabilities and stockholders' equity $310,936 $318,316 ======== ========
5 MEASUREX CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollar amounts in thousands)
Six Months Ended --------------------- May 29, May 30, 1994 1993 - - ------------------------------------------------------------------------------------------------------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 4,490 $ 3,910 Non-cash items included in net income: Depreciation and amortization: Service parts 873 892 Property, plant and equipment 4,712 4,689 Capitalized software and goodwill 2,155 1,866 Deferred income taxes (1,923) 173 Translation (gain)loss (585) 2,724 Inventory reserves 645 1,523 Net (increase) decrease in: Accounts and contracts receivable 440 (5,630) Inventories and service parts (1,167) (657) Prepaid and other 482 (1,107) Net increase (decrease) in: Accounts payable and accrued expenses (4,326) (10,882) Income taxes payable (1,478) (689) Other, net 837 349 -------- -------- Net cash provided by (used in) operating activities 5,155 (2,839) -------- -------- CASH FLOWS USED IN INVESTING ACTIVITIES: Purchase of marketable securities and short-term investments (51,928) (42,941) Sale of marketable securities and short- term investments 21,203 29,655 Maturities of short-term investments 29,049 23,977 Acquisition of property, plant and equipment (3,347) (2,869) Acquisition of subsidiary, net of cash acquired - (1,668) Capitalized software (1,591) (1,151) -------- -------- Net cash provided by (used in) investing activities (6,614) 5,003 -------- -------- CASH FLOWS USED IN FINANCING ACTIVITIES: Additions to long-term debt - 21,921 Reductions of long-term debt (2,576) (793) Dividends (3,936) (3,970) Stock issued under stock purchase and stock option plans 1,359 806 Payment for treasury stock - (2,914) -------- -------- Net cash provided by (used in) financing activities (5,153) 15,050 -------- -------- Effect of exchange rate fluctuations on cash and cash equivalents 349 (3,244) -------- -------- Net increase (decrease) in cash and cash equivalents (6,263) 13,970 Cash and cash equivalents at beginning of period 76,040 74,368 -------- -------- Cash and cash equivalents at end of period $ 69,777 $ 88,338 ======== ======== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the year for: Interest $ 666 $ 195 Income taxes $ 4,958 $ 2,524
6 MEASUREX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ------------------------------------------ BASIS OF PRESENTATION The accompanying consolidated financial statements have been prepared in accordance with SEC requirements for interim financial statements. They, therefore, do not include all the disclosures which are presented in the Company's Annual Report on Form 10-K. It is suggested that the financial statements be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company's Annual Report on Form 10-K. The information furnished reflects all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for the fair statement of financial position, results of operations and cash flows for the interim period. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. The results of operations for the periods presented are not necessarily indicative of results to be expected for the full year. CONSOLIDATIONS The consolidated financial statements include the accounts of all subsidiaries after elimination of intercompany balances and transactions. The Company has reclassified the presentation of certain prior year information to conform with the current year presentation format. NET INCOME PER SHARE Net income per share is computed based on the weighted average number of common shares outstanding during the year adjusted to reflect the assumed exercise of outstanding stock options to the extent these had a dilutive effect on the computation. FISCAL YEAR The Company uses a 52-53 week fiscal year. 1994 and 1993 are 52 week fiscal years. FAIR VALUE OF FINANCIAL INSTRUMENTS In the first quarter of 1994, the Company elected to adopt Financial Accounting Statement No. 115 "Accounting for Certain Investments in Debt and Equity Securities". All marketable securities are deemed available for sale and therefore reported at fair value with net unrealized gains and losses reported net of related taxes as a separate component of stockholders' equity. When the decline in market value is considered other than temporary, the loss is charged to income as a write down. The Company believes that the fair value of its long-term debt approximates the carrying value of those obligations as of May 29, 1994. The fair value of the Company's long-term debt is estimated based on interest rates currently available to the Company for debt with similar terms and maturities. 7 MEASUREX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued) (May 29, 1994 - Unaudited) ------------------------------------------------------- ACCOUNTS RECEIVABLE Accounts receivable consist of the following: (In thousands)
May 29, November 28, 1994 1993 ------ ----------- Accounts receivable 50,528 $52,037 Contracts receivable 9,445 8,579 Less: Allowance for noncollection and system returns (5,948) (5,490) ------- ------- $54,025 $55,126 ======= =======
- - ------------------------------------------------------------------------------- CONTRACTS RECEIVABLE Contracts receivable consist of the following: (In thousands)
May 29, November 28, 1994 1993 ------ ----------- Contracts receivable 38,926 $36,887 Less: Allowance for noncollection and system returns (1,517) (1,657) ------- ------- 37,409 35,230 Current portion (9,445) (8,579) ------- ------- 27,964 $26,651 ======= =======
Customer financing for systems is collateralized by security in the related asset. The Company maintains allowances for potential credit losses and such losses have been within management's expectations. Contracts receivable from two major customers amounted to approximately $11.1 million at May 29, 1994. - - -------------------------------------------------------------------------------- INVENTORIES Inventories consist of the following: (In thousands)
May 29, November 28, 1994 1993 ------- ------------ Purchased parts and components $18,316 $18,217 Work in process 10,283 10,733 Finished subassemblies and systems 6,737 6,747 ------- ------- $35,336 $35,697 ======= =======
- - -------------------------------------------------------------------------------- 8 MEASUREX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued) (May 29, 1994 - Unaudited) ------------------------------------------------------- PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are recorded at cost and consist of the following:
(In thousands) May 29, November 28, 1994 1993 -------- ------------ Property, plant and equipment $111,876 $110,005 Less: Accumulated depreciation (60,744) (56,844) -------- -------- $ 51,132 $ 53,161 ======== ========
- - ------------------------------------------------------------------------- OTHER ASSETS Other assets consist of the following:
(In thousands) May 29, November 28, 1994 1993 -------- ------------ Capitalized software, net 7,054 $ 7,246 Goodwill and other 13,862 14,373 -------- ------- $ 20,916 $21,619 ======== =======
- - -------------------------------------------------------------------------------- LONG-TERM DEBT In May 1993, the Company borrowed $20.0 million under a 5.35% five-year unsecured term loan agreement with a bank. Proceeds from the loan were used principally to support the Company's United States equipment lease portfolio and provide a hedge against interest rate fluctuations. Interest is payable quarterly, with principal payable in equal quarterly installments of $1.0 million through June 1998. The loan agreement contains certain restrictive covenants which include the maintenance of minimum consolidated cash balances, minimum tangible net worth, and certain financial ratios. The Company was in compliance with all covenants at May 29, 1994. - - -------------------------------------------------------------------------------- COMMITMENTS AND CONTINGENCIES As of May 29, 1994, the Company had unsecured bank lines of credit agreements of $25.0 million, which provide for domestic and foreign currency borrowings, advances and guarantees, Bankers' Acceptances, and letters of credit. At that date, the Company was contingently liable for approximately $7.2 million relating principally to letters of credit issued. The agreements, which expire during fiscal year 1994, require the Company to adhere to certain covenants regarding working capital, indebtedness, and minimum stockholders' equity. A revolving credit agreement ($20.0 million) provides for variable interest rates based on the London Interbank Offer Rate (LIBOR). Under a multicurrency credit agreement ($5.0 million), the Company may obtain loans at the lending bank's base rate plus 3/8%. The Company is subject to legal proceedings and claims that arise in the normal course of its business. In the opinion of management, these proceedings will not have a material adverse effect on the financial position and results of operations of the Company. 9 MEASUREX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued) (May 29, 1994 - Unaudited) ------------------------------------------------------- INTEREST INCOME AND OTHER Components of Interest Income and other are as follows: (In thousands)
Three Months Ended Six Months Ended ------------------- ------------------ May 29, May 30, May 29, May 30, 1994 1993 1994 1993 -------- -------- -------- ------- Interest income $1,232 $1,406 $2,910 $3,040 Foreign exchange gain (loss) (107) (162) (239) (282) ------ ------ ------ ------ $1,125 $1,244 $2,671 $2,758 ====== ====== ====== ======
- - -------------------------------------------------------------------------------- INCOME TAXES The Company's effective tax rate is based on the estimated income and related tax provision for the entire year. It is the policy of the Company to provide U.S. and foreign income taxes on the portion of the accumulated earnings of the Company's foreign subsidiaries which are intended to be remitted to the parent company within the foreseeable future. Income tax payments of $5.0 million were made during the six months ended May 29, 1994. Effective November 29, 1993, the Company adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). The adoption of SFAS 109 resulted in a cumulative adjustment which increased first quarter 1994 earnings by $0.5 million. After adoption of SFAS 109, the primary components of the Company's deferred tax assets and liabilities as of November 29, 1993, were as follows (in thousands): 10 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, (Continued) (May 29, 1994 - Unaudited) ------------------------------------------------------- Deferred income tax assets: Noncollection and system return reserves $ 2,167 Inventory reserves 4,482 Employee expenses 2,051 Operating expenses not currently deductible 1,184 Other 1,156 Net operating loss and tax credit carryforward 8,432 Valuation allowance for deferred tax assets (7,317) ------- Net deferred tax assets 12,155 ------- Deferred income tax liabilities: Finance leases $ (2,673) Property, plant and equipment (2,478) Capitalized software (2,776) Undistributed earnings of foreign subsidiaries (3,668) Other (1,143) -------- Gross deferred tax liabilities (12,738) -------- Net deferred tax liabilities $ (583) ========
- - -------------------------------------------------------------------------------- 11 MEASUREX CORPORATION Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF - - -------------------------------------------------------------------------- OPERATIONS - - ---------- LIQUIDITY AND CAPITAL RESOURCES - - ------------------------------- With $106.8 million in cash and cash equivalents, marketable securities and short-term investments, Measurex's financial condition remained strong as of May 29, 1994. Net cash provided by operations during the first six months of 1994 was $5.2 million. Net income adjusted for noncash items was $10.4 million, down from $15.8 million in the first half of 1993. Offsetting the cash generated, accounts payable and accrued liabilities decreased $4.3 million primarily due to year-end profit sharing and bonus payments. Net cash used in operations during the first half of 1993 was $2.8 million. Net income adjusted for noncash items was $15.8 million. Offsetting the cash generated, accounts and contracts receivable increased by $5.6 million, and accounts payable and accrued liabilities decreased $10.9 million. Accounts and contracts receivable increased due to higher system shipments into Japan where customers typically pay slower. Profit sharing payments as well as payments made for severance costs led to the decrease in accounts payable and accrued liabilities. Excluding marketable securities and short-term investments, net cash used for investing activities totaled $4.9 million in the first half of 1994 as compared to $5.7 million in the first half of 1993. Investments in property, plant and equipment totaled $3.3 million during 1994, slightly higher than the level in 1993. No major facility expansions occurred in the first half of 1994 or are planned for the remainder of the year. On April 7, 1993, the Company acquired Roibox Oy, a worldwide supplier of web-inspection products for the paper industry, for a cash payment of approximately $2 million. Roibox Oy operates as a separate subsidiary of Measurex, with manufacturing, engineering, product marketing and sales support. The net assets and operating results from this subsidiary are included in the consolidated financial statements from the date of acquisition. During the first half of 1994, cash used for financing activities totaled $5.1 million as compared to $15.1 million received from financing activities in the first half of 1993 primarily due to $20.0 million borrowed by the Company in May 1993 under a 5.35% five year unsecured bank loan. Proceeds from the loan were used to support the Company's United States equipment lease portfolio and provide a hedge against interest rate fluctuations. The Company was in compliance with all loan covenants at May 29, 1994. Cash used to reduce outstanding debt and pay dividends were partially offset by proceeds received from employee stock option and purchase plans in the first half of 1994. As a result of the above operating, investing and financing activities, and giving effect to exchange rate fluctuations, the Company's cash and cash equivalents decreased $6.2 million from $76.0 million at year-end 1993 to $69.8 million at May 29, 1994 while marketable securities and short-term investments increased $1.7 million to $37.0 million. The Company's current ratio (current assets divided by current liabilities) was 2.9 at the end of the first half of 1994 compared to 2.8 at year-end 1993. Total debt was at 9% of stockholders' equity at May 29, 1994 compared to 10% at November 28, 1993. 12 MEASUREX CORPORATION Item 2. LIQUIDITY AND CAPITAL RESOURCES (CONTINUED) - - ------------------------------------------- As of May 29, 1994, the Company's principal sources of liquidity included cash, cash equivalents, marketable securities and short-term investments of $106.8 million and unsecured bank lines of credit of $25 million, of which $7.2 million was committed to letters of credit. The Company believes that its financial resources will provide adequate flexibility to fund the Company's operating needs, capital expenditures and cash dividends during fiscal year 1994. RESULTS OF OPERATIONS - - --------------------- System orders for the second quarter of 1994 were $39 million, down 7 percent from $42 million in 1993's second quarter. Orders in the United States exceeded last year's second quarter, while orders in most other major geographic areas were lower. For the first half of 1994, orders were $70 million versus $76 million in the comparable prior year period reflecting lower orders in the Asian market but higher orders in the United States. System backlog at the end of 1994's second quarter was $85 million. This was down 7 percent from $91 million in the comparable period a year ago. Approximately 90 percent of the $85 million backlog is scheduled to be shipped during the next 12 months. Backlog was lower in most markets except the United States. Systems revenue was $36.5 million in the second quarter of 1994, 10% lower than the prior year's second quarter. Systems revenue of $74.1 million for the first half of 1994 was 5% lower than the first half of 1993. Overall sales continued to be restrained by a depressed market in the paper industry and ongoing price competition. Service and other revenues increased $0.6 million to $26.1 million in the second quarter of 1994 from $25.5 million in the second quarter of 1993. The improvement in revenues was attributable to call-out service billings. Service revenues for the first half of 1994 were about the same as the first half of 1993. Margins on systems revenue were 36% in the second quarter of 1994 as compared to 35% in the second quarter of 1993. System margins for the first half of 1994 were 3% higher than the first half of 1993. The lower system margin in 1993 resulted primarily from the factory startup costs and initial installation costs for the new MXOpen (Trade Mark) product line. Service and other margins were 37% in the second quarter and first half of 1994 slightly higher than the comparable periods of 1993. The improvement in service margins reflected ongoing cost controls and better utilization of field service resources. Product development expense decreased $0.6 million (11%) to $4.9 million in the second quarter of 1994 from $5.5 million in the second quarter of 1993 due to higher software capitalization. Measurex capitalized $0.9 million and $0.3 million of software development costs in the second quarter of 1994 and 1993, respectively. Amortization of capitalized software to system costs totaled $0.9 million in the second quarter of 1994 and 1993. The Company's future results depend, to a considerable extent, on its ability to maintain a competitive advantage in both the products and services it provides. To this end, the Company believes it is critical to continue to make investments in new product development. In June 1994, the Company introduced the MXOpen (Trade Mark) Networked Solutions product line to the Industrial Systems market at the National Plastics Exposition in Chicago, Illinois. 13 MEASUREX CORPORATION Item 2. RESULTS OF OPERATIONS (CONTINUED) - - --------------------------------- Selling and administrative expenses of $15.8 million in the second quarter of 1994 were slightly lower than the same period of a year ago. Selling and administrative expense increased $.9 million (3%) from $30.3 million in the first half of 1993 to $31.2 million in the same period in 1994. This increase in expenditures in 1994 over 1993 was attributable in part to the inclusion of Roibox operations beginning in the second quarter of 1993 and higher profit sharing expenses. The Company plans to continue to tightly control expenditures in all areas to ensure that expenses are in line with projected shipment levels. In the first quarter of 1994, the Company elected to adopt Financial Accounting Statement No. 115 "Accounting for Certain Investments in Debt and Equity Securities". All marketable securities are deemed available for sale and therefore reported at fair value with net unrealized gains and losses reported net of related taxes as a separate component of stockholders' equity. When the decline in market value is considered other than temporary, the loss is charged to income as a write down. The Company's effective tax rate during the second quarter of 1994 was 43%, compared with 35% during the second quarter of 1993. The effective tax rate for the first half of 1994 was 39% versus 35% for the first half of 1993. The increase in the tax rate is due to a change in the geographic mix of earnings. In the first quarter of 1994, the Company adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). The cumulative effect of this change increased net income by $0.5 million, or $0.03 per share. Net income for the second quarter of 1994 was $1.8 million, or $0.10 a share, compared with $2.2 million or $0.12 a share in 1993's second quarter. Income before cumulative effect of accounting change was $3.9 million, or $0.22 per share the first half of 1994 and 1993. Interest income in the second quarter and first half of 1994 was slightly lower than the same periods in 1993. 14 MEASUREX CORPORATION PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS --------------------------------------------------- The Company held its Annual Meeting of Stockholders at its principal executive office, One Results Way, Cupertino, California, at 10:00 a.m. Tuesday, April 19, 1994. The results of voting at said meeting were as follows: MATTER 1: The following individuals were elected to the Company's Board of Directors by a vote of the stockholders:
FOR WITHHOLD ------------ ----------- Paul Bancroft III 15,067,818 55,990 Dwight C. Baum 15,053,695 70,113 John C. Gingerich 15,066,500 57,308
In addition, the term of office as a director continued subsequent to the meeting for the following individuals: David A. Bossen, Chairman of the Board of Directors and Chief Executive Officer, Measurex Corporation Orion L. Hoch Director Jeffery T. Grade Director John W. Larson Director J. W. McKittrick Director Graham Tyson Director
MATTER 2: A proposal to amend the Company's Employee Stock Purchase Plan to increase the number of shares of common stock authorized for issuance thereunder from 1,000,000 to 1,225,000 shares was approved by a vote of the stockholders as follows: FOR AGAINST ABSTAIN ------------ ----------- ------- 13,841,151 1,212,578 70,079 MATTER 3: A proposal to ratify the selection of Coopers & Lybrand, as independent auditors of the Company was approved by a vote of the stockholders as follows: FOR AGAINST ABSTAIN ------------ ----------- ------- 14,700,114 174,952 248,742 15 MEASUREX CORPORATION PART II. OTHER INFORMATION (continued) ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- (a) Exhibits Exhibit 11 - Computation of Net Income Per Share (b) Reports on Form 8-K No report on Form 8-K has been filed during the quarter ended May 29, 1994. 16 MEASUREX CORPORATION 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. Measurex Corporation ---------------------------- (Registrant) Date: July 11, 1994 By: /s/ Carl A. Thomsen -------------------------- Senior Vice President and Chief Financial Officer 17 EXHIBIT 11 MEASUREX CORPORATION COMPUTATION OF NET INCOME PER SHARE (Unaudited) ----------------------------------- (Dollar amounts in thousands except per share data)
Three Months Ended Six Months Ended ---------------------- -------------------- May 29, May 30, May 29, May 30, 1994 1993 1994 1993 - - -------------------------------------------------------------------------------------------------------- Primary: Average shares outstanding 17,918 17,997 17,902 18,017 Net effect of dilutive stock options based on the treasury stock method using average market price 122 37 193 108 ------- ------- ------- ------- Average common and common equivalent shares outstanding 18,040 18,034 18,095 18,125 ======= ======= ======= ======= Income before cumulative effect of accounting change $ 1,778 $ 2,174 $ 3,966 $ 3,910 ======= ======= ======= ======= Net income $ 1,778 $ 2,174 $ 4,490 $ 3,910 ======= ======= ======= ======= Income per share before cumulative effect of accounting change $ .10 $ .12 $ .22 $ . 22 ======= ======= ======= ======= Net income per share $ .10 $ .12 $ .25 $ . 22 ======= ======= ======= ======= Fully diluted: (Note A) Average shares outstanding 17,918 17,997 17,902 18,017 Net effect of dilutive stock options based on the treasury stock method using quarter-end market price or average market price when greater than quarter-end price 122 41 199 117 ------- ------- ------- ------- Average common and common equivalent shares outstanding 18,040 18,038 18,101 18,134 ======= ======= ======= ======= Income before cumulative effect of accounting change $ 1,778 $ 2,174 $ 3,966 $ 3,910 ======= ======= ======= ======= Net income $ 1,778 $ 2,174 $ 4,490 $ 3,910 ======= ======= ======= ======= Income per share before cumulative effect of accounting change $ .10 $ .12 $ .22 $ .22 ======= ======= ======= ======= Net income per share $ .10 $ .12 $ .25 $ .22 ======= ======= ======= =======
- - -------------------------------------------------------------------------------- Note A: Fully diluted earnings per share have been calculated in accordance with Accounting Principles Board Opinion No. 15, "Earnings Per Share". 18 -----END PRIVACY-ENHANCED MESSAGE-----