-----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, OVWj3t9HilXLDDRr0oN/Rb0tmXnFnYCdPQOj2vbj+GFGOFUtxVWoDg7SXJvcusoy Xozf9rp3rQ841fXeBTlOaQ== 0000085608-98-000011.txt : 19981123 0000085608-98-000011.hdr.sgml : 19981123 ACCESSION NUMBER: 0000085608-98-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19981004 FILED AS OF DATE: 19981116 DATE AS OF CHANGE: 19981120 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MATEC CORP/DE/ CENTRAL INDEX KEY: 0000085608 STANDARD INDUSTRIAL CLASSIFICATION: 3310 IRS NUMBER: 060737363 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-04184 FILM NUMBER: 98753637 BUSINESS ADDRESS: STREET 1: 75 SOUTH ST CITY: HOPKINTON STATE: MA ZIP: 01748 BUSINESS PHONE: 5084359039 MAIL ADDRESS: STREET 1: 75 SOUTH STREET CITY: HOPKINTON STATE: MA ZIP: 01748 FORMER COMPANY: FORMER CONFORMED NAME: RSC INDUSTRIES INC DATE OF NAME CHANGE: 19840515 FORMER COMPANY: FORMER CONFORMED NAME: REEVES INDUSTRIES INC DATE OF NAME CHANGE: 19710520 10-Q 1 FORM 10Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 4, 1998 ----------------------------------------- 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 Number 1-4184 -------------------------------------------------- MATEC Corporation - - ------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Maryland 06-0737363 - - ------------------------------- ------------------------- (State or other jurisdiction of (I.R.S Employer incorporation or organization) Identification Number) 75 South St., Hopkinton, Massachusetts 01748 - - ---------------------------------------- ------------- (Address of principal executive offices) (Zip Code) (508) 435-9039 - - ------------------------------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- As of November 13, 1998, the number of shares outstanding of Registrant's Common Stock, par value $.05 was 2,716,948. -1- MATEC Corporation Index Page ---- PART I. FINANCIAL INFORMATION Consolidated Condensed Balance Sheets - October 4, 1998 and December 31, 1997 ................... 3 Consolidated Statements of Operations - Three Months and Nine Months Ended October 4, 1998 and September 28, 1997 4 Consolidated Condensed Statements of Cash Flows - Nine Months Ended October 4, 1998 and September 28, 1997 5 Consolidated Statements of Comprehensive Income - Three Months and Nine Months ended October 4, 1998 and September 28, 1997 .................................. 6 Notes to Consolidated Condensed Financial Statements ..... 7-9 Management's Discussion and Analysis of Financial Condition and Results of Operations ..................... 10-13 PART II. OTHER INFORMATION Item 6 - Exhibits and Reports on Form 8-K ................ 14 Signatures ..................................................... 15 -2- PART I - FINANCIAL INFORMATION Item 1. Financial Statements MATEC Corporation and Subsidiaries Consolidated Condensed Balance Sheets (In thousands, except share data) (Unaudited) 10/4/98 12/31/97(a) -------- -------- ASSETS Current assets: Cash and cash equivalents ............................ $ 4,478 $ 885 Receivables, less allowances of $69 and $45 .......... 1,495 1,921 Inventories .......................................... 3,062 2,598 Deferred income taxes and other current assets ....... 1,352 873 ------- ------- Total current assets ............................... 10,387 6,277 ------- ------- Property, plant and equipment, at cost ................. 7,599 10,583 Less accumulated depreciation ........................ 5,184 6,806 ------- ------- 2,415 3,777 ------- ------- Marketable equity securities ........................... 3,118 4,658 Net assets of discontinued operations .................. - 7,144 Other assets ........................................... 403 70 ------- ------- $16,323 $21,926 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable ..................................... $ 602 $ 933 Accrued liabilities .................................. 1,130 862 Income taxes ......................................... 878 416 ------- ------- Total current liabilities .......................... 2,610 2,211 ------- ------- Deferred income taxes .................................. 1,452 2,317 Long-term debt ......................................... 1,992 1,989 Stockholders' equity: Preferred stock, $1.00 par value- Authorized 1,000,000 shares; issued none ............ - - Common stock, $.05 par value- Authorized 10,000,000 shares; Issued 2,716,948 and 3,804,195 shares ................................... 136 190 Capital surplus ...................................... 5,513 6,443 Retained earnings .................................... 2,848 11,443 Net unrealized gain on marketable equity securities .. 1,772 2,696 Treasury stock at cost, 0 and 1,070,544 shares ....... - (5,363) ------- ------- Total stockholders' equity ...................... 10,269 15,409 ------- ------- $16,323 $21,926 ======= ======= (a) Restated to reflect discontinued operations. See notes to consolidated condensed financial statements. -3- MATEC Corporation and Subsidiaries Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended 10/4/98 9/28/97(a) 10/4/98 9/28/97(a) ------- ------- -------- -------- Net sales ..................... $ 2,580 $ 3,424 $ 9,476 $ 9,597 Costs and expenses: Cost of sales ................ 2,071 2,549 7,338 7,304 Selling and administrative ... 788 811 2,302 2,231 ------- ------- ------- ------- 2,859 3,360 9,640 9,535 Operating profit (loss) ....... (279) 64 (164) 62 Other income (expense): Interest expense ............. (51) (59) (153) (171) Gain on sale of property, plant and equipment ............... - - 386 - Other, net ................... 60 9 115 12 ------- ------- ------- ------- 9 (50) 348 (159) Earnings (loss) from continuing operations before income taxes (270) 14 184 (97) Income tax (expense) benefit .. 113 (5) (69) 39 ------- ------- ------- ------- Earnings (loss) from continuing operations ................... (157) 9 115 (58) Discontinued operations, net of taxes: Earnings (loss) from operations (5) 177 106 267 Gain on sales ............... 256 - 454 - ------- ------- ------- ------- Net earnings .................. $ 94 $ 186 $ 675 $ 209 ======= ======= ======= ======= Earnings (loss) per share: Basic: Continuing operations ....... $(.06) $ .00 $ .04 $(.02) Discontinued operations: Operations, net of taxes ... .00 .07 .04 .10 Gain on sales, net of taxes .09 .00 .17 .00 ----- ----- ----- ----- $ .03 $ .07 $ .25 $ .08 ===== ===== ===== ===== Diluted: Continuing operations ....... $(.06) $ .00 $ .04 $(.02) Discontinued operations: Operations, net of taxes ... .00 .06 .04 .10 Gain on sales, net of taxes .09 .00 .17 .00 ----- ----- ----- ----- $ .03 $ .06 $ .25 $ .08 ===== ===== ===== ===== Weighted average shares: Basic ....................... 2,717 2,734 2,733 2,738 Diluted ..................... 2,717 2,771 2,734 2,738 Cash dividends per share ...... $ - $ - $1.75 $ - ===== ===== ===== ===== (a) Restated to reflect discontinued operations. See notes to consolidated condensed financial statements. -4- MATEC Corporation and Subsidiaries Consolidated Condensed Statements of Cash Flows (In thousands) (Unaudited) Nine Months Ended 10/4/98 9/28/97(a) -------- -------- Cash flows from operating activities: Net earnings (loss) from continuing operations ... $ 115 $ (58) Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization .................. 424 427 Deferred income taxes .......................... (175) (30) Gain on sale of property, plant and equipment .. (386) - Other .......................................... 3 3 Changes in operating assets and liabilities .... (80) (44) ------- ------- Net cash provided (used) by operating activities (99) 298 - - ---------------------------------------------------------------------- Cash flows from investing activities: Proceeds from sale of property, plant and equipment 1,862 - Capital expenditures ............................. (538) (268) Collection of note receivable .................... 10 - Other, net........................................ (8) (2) ------- ------- Net cash provided (used) by investing activities 1,326 (270) - - ---------------------------------------------------------------------- Cash flows from financing activities: Dividend paid .................................... (4,827) - Net (repayments) under lines of credit ........... - (400) Payments on long-term debt ....................... - (200) Purchases of common stock ........................ (164) (80) Stock options exercised .......................... 101 - ------- ------- Net cash (used) by financing activities ........... (4,890) (680) - - ---------------------------------------------------------------------- Net cash provided by discontinued operations ...... 7,256 630 - - ---------------------------------------------------------------------- Net increase in cash and cash equivalents ......... 3,593 (22) Cash and cash equivalents: Beginning of period .............................. 885 610 ------- ------- End of period .................................... $ 4,478 $ 588 ======= ======= Non-cash investing and financing activities: During 1998, the Company retired all of its treasury stock. The total cost of the treasury shares of $5,527,000 reduced common stock, capital surplus and retained earnings by $56,000, $1,028,000 and $4,443,000, respectively. In connection with the sale of a discontinued operation in 1998, the Company recorded a $456,000 receivable. (a) Restated to reflect discontinued operations. See notes to consolidated condensed financial statements. -5- MATEC Corporation and Subsidiaries Consolidated Statements of Comprehensive Income (In thousands) (Unaudited) Three Months Ended 10/4/98 9/28/97 ------- ------- Net earnings ................................. $ 94 $ 186 Other comprehensive income, net of tax: Unrealized gain (loss) on marketable equity securities, net of tax benefit of $332 in 1998 and tax expense of $155 in 1997 ..................................... (497) 466 ------- ------- Comprehensive income (loss) .................. $ (403) $ 652 ======= ======== Nine Months Ended 10/4/98 9/28/97 ------- ------- Net earnings ................................ $ 675 $ 209 Other comprehensive income, net of tax: Unrealized gain (loss) on marketable equity securities, net of tax benefit of $616 in 1998 and tax expense of $233 in 1997 .................................... (924) 582 ------- ------- Comprehensive income (loss) ................. $ (249) $ 791 ======= ======= See notes to consolidated condensed financial statements. -6- MATEC Corporation and Subsidiaries Notes to Consolidated Condensed Financial Statements 1. Financial Presentation: The interim financial statements are unaudited but, in the opinion of management, reflect all adjustments necessary for fair presentation of results for such periods. The results of operations for any interim period are not necessarily indicative of results for the full year. The accounting policies followed by the Company are set forth in Note 1 to the Company's financial statements in the 1997 MATEC Corporation and Subsidiaries Annual Report which is incorporated by reference in Form 10-K for the year ended December 31, 1997. 2. Description of Business: As described below, the Company has disposed of its Steel Cable and Instruments business segments. As a result, the Company's current remaining business is conducted through its Valpey-Fisher subsidiary. This operation was previously reported in the Electronics business segment. 3. Inventories: Inventories consist of the following (in thousands): 10/4/98 12/31/97 ------- -------- Raw materials ....................... $ 1,607 $ 800 Work in process ..................... 800 1,078 Finished goods ...................... 655 720 ------- ------- $ 3,062 $ 2,598 ======= ======= 4. Discontinued Operations: On April 15, 1998, the Company sold all of the assets of its Bergen Cable Technologies, Inc. ("Bergen") subsidiary. The purchase price received consisted of $7.5 million in cash, a subordinated promissory note in the principal amount of $1,250,000, a 10% stock and membership interest in the acquiring entities, and assumption of certain liabilities including trade payables. The gain on the sale was $198,000 after a tax provision of $132,000. Since the acquiring entity has significant third-party debt compared to its equity and the Company's note is subordinated to the third party debt, the Company will not record any gain realized on the note and stock portions of the sale until cash payments are received by the Company. On August 3, 1998, the Company sold certain assets of its Matec Instruments, Inc. ("MII") and Matec Applied Sciences, Inc. ("MASI") subsidiaries to a newly formed corporation. Ken Bishop, who was President of MII and MASI until August 3, 1998, owns 53% of the newly formed corporation. MII and MASI had comprised the Company's Instruments Segment of business. -7- The purchase price received consisted of approximately $605,000 in cash, a subordinated promissory note in the principal amount of $250,000, a $250,000 noninterest bearing receivable, and the assumption of certain liabilities including trade payables. In addition, the buyer has entered into a 5 year lease agreement with the Company to lease the space that it currently occupies and the buyer also has a 5 year option to purchase the real estate that includes the leased space. The gain on sale was $248,000 after a tax provision of $152,000. As a result of the above, the operating results of Bergen, MII and MASI have been reported as discontinued operations, and previously reported financial statements have been restated to reflect these sales. The operating results of Bergen, MII and MASI are presented in the Consolidated Statements of Operations under the caption "Discontinued operations, net of taxes: Earnings (loss) from operations" and include (in thousands): Three Months Ended Nine Months Ended 10/4/98 9/28/97 10/4/98 9/28/97 ------- ------- ------- ------- Net sales $ 246 $ 4,922 $ 6,994 $13,739 Earnings (loss) before income taxes (13) 296 171 445 Income tax (expense) benefit 8 (119) (65) (178) Net earnings (loss) (5) 177 106 267 At December 31, 1997, the net assets of Bergen, MII and MASI included in the Balance Sheet caption "Net assets of discontinued operations" were (in thousands): Current assets - $6,930; property, plant and equipment, net - $2,539; and current liabilities - $2,325. 5. Stockholders' Equity: On July 2, 1998, the Company reincorporated in Maryland. In connection with the reincorporation, stockholders who owned less than 100 shares of Common Stock on July 2, 1998 ceased to be stockholders and received cash of $4.03 per share ("the Cash Out"). The reincorporation and Cash Out were approved by stockholders at the Company's Special in Lieu of Annual Meeting held on June 18, 1998. As a result of the Cash Out, the Company acquired 35,705 shares of Common Stock at a cost of $143,891. In connection with the reincorporation, the 1,111,947 shares of treasury stock held by the Company on July 2, 1998, which included the 35,705 shares of common stock acquired as a result of the Cash Out, were retired and were reclassified as reductions to common stock issued. The total cost of the treasury shares of $5,526,880 reduced common stock, capital surplus, and retained earnings by $55,597, $1,028,551 and $4,442,732, respectively. -8- 6. New Accounting Standards: The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income" during the first quarter of 1998, as required. SFAS No. 130 establishes standards for reporting and displaying comprehensive income and its components in a set of financial statements. The adoption of SFAS No. 130 had no impact on the Company's net earnings or stockholders' equity. Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources. Presently, the only component of comprehensive income for the Company is unrealized holding gains (losses) on available for sale marketable equity securities. SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information" was issued during 1997. SFAS No. 131 establishes standards for reporting annual and operating segment information and is effective for the Company's 1998 annual financial statements. The Company is evaluating the effect that this new standard will have on disclosures in the Company's financial statements. 7. Subsequent Event: On November 6, 1998, the Company received $400,000 from Colloidal Dynamics Pty. Ltd. ("CD"). $200,000 related to the balance of the purchase price from the sale of the AcoustoSizer product line in May 1997, which had been previously deferred pending collection and $200,000 related to CD purchasing the common stock of CD owned by the Company. As a result of these transactions, the Company will report an after-tax gain of approximately $221,000 in the fourth quarter of 1998. -9- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources - - ------------------------------- Cash and cash equivalents increased $3,593,000 during the nine months ended October 4, 1998. The Company's continuing operations used $3,663,000 of cash as operating and financing activities used $99,000 and $4,890,000 in cash, respectively, while investing activities generated cash of $1,326,000. During this period, discontinued operations generated $7,256,000 of cash. The $99,000 use of cash from continuing operations was mainly due to the $80,000 net increase in working capital. Working capital increases included a $464,000 increase in inventory to support the current sales backlog and delivery requirements and a $331,000 reduction in accounts payable. These cash requirements were partially offset by a decrease in accounts receivable due to the lower shipping levels and an increase in income taxes. During the nine months ended October 4, 1998, the Company received proceeds of $1,862,000 from the sale of its real estate complex located in Delaware. None of the Company's operations were located at this facility. During this period, the Company purchased $538,000 of machinery and equipment. These additions are mainly geared toward adding new and upgrading existing production capabilities and processes. On May 15, 1998, the Company paid a special nonrecurring cash distribution of a $1.75 per share to stockholders of record on May 4, 1998. This special nonrecurring distribution totaled $4,827,000 and represents a substantial portion of the net cash proceeds from the sale of its Bergen Cable subsidiary. During the nine months ended October 4, 1998, the Company purchased $164,000 of treasury shares. The mandatory cash-out of stockholders of record owning less than 100 shares accounted for $144,000 of these treasury shares. Management believes that based on its current working capital, the expected cash flows from operations and its $1,850,000 lines of credit availability, the Company's resources are sufficient to meet its financial needs in 1998 including a remaining capital expenditures budget of approximately $300,000. Results of Operations - - --------------------- Net sales from continuing operations for the quarter and nine months ended October 4, 1998 decreased 25% and 1%, respectively, from the comparable periods in 1997. The sales decreases during both periods are due to lower sales of imported product that is bought and resold. Sales of domestically produced product increased 7% and 33% over the 1997 quarter and nine months ended periods, respectively. The sales decreases of imported product during both periods resulted mainly from a lower backlog at the beginning of each period as compared to 1997 and lower bookings of imported product during both periods in 1998. The sales increases of domestically produced product result from higher backlog and booking levels during both periods. The Company has continued to -10- experience weak bookings during 1998 as compared to 1997 partly due to the slow down in the electronic component industry caused in part by the financial difficulties in the Far East. As a result, the Company's October 4, 1998 backlog is 6%, 35%, and 15% lower than the July 5, 1998, December 31, 1997, and September 28, 1997 levels, respectively. During the quarter ended October 4, 1998, cost of sales as a percentage of sales amounted to 80% versus 74% in 1997. The overall lower margin was mainly do to the unfavorable effect of the fixed overhead over the lower sales volume. During the nine months ended October 4, 1998, the 1998 cost of sales as a percentage of sales amounted to 77% compared to 76% in 1997. The slightly higher percentage resulted from increased personnel and depreciation expenses offset in part by lower material costs due to changes in the sales mix. Total selling and administrative expenses for the quarter ended October 4, 1998 decreased $23,000 (3%) from comparable period in 1997. A $116,000 decrease in administrative expenses was partially offset by a $93,000 increase in selling expense. The decrease in administrative expense is mainly due to the $100,000 of severance expense recorded in 1997 for the Company's former president. The increase in selling expense was attributable mainly to increased personnel costs and advertising expense. During the nine months ended October 4, 1998, selling and administrative expenses increased $71,000 (3%) over the comparable period in 1997. Selling expenses increased $263,000 over 1997 as a result of increased personnel costs and advertising expense. The $192,000 decrease in general and administrative expenses mainly result from lower corporate payroll including severance expense as the Company has not replaced its former president since his resignation as an employee in the third quarter of 1997. During the quarter and nine months ended October 4, 1998, interest expense decreased $8,000 and $18,000, respectively, from the 1997 periods due to lower levels of short-term debt and a lower interest rate on the term debt. In February 1998, the Company sold its real estate complex in Delaware and realized a $386,000 pre-tax gain on the sale. Other income (expense), net includes the following (in thousands): Quarter Ended Nine Months Ended 10/4/98 9/28/97 10/4/98 9/28/97 ------- ------- ------- ------- Dividend income ........... $ 26 $ 16 $ 57 $ 47 Real estate operations .... (7) (3) (34) (40) Interest income ........... 42 - 92 5 Other, net ................ (1) (4) - - ------- ------- ------- ------- $ 60 $ 9 $ 115 $ 12 ======= ======= ======= ======= The increases in interest income result from the higher cash levels generated by the sales of real estate and the discontinued operations. The fluctuations in the real estate operations are mainly due to either increases or decreases in operating expenses. The estimated effective income tax rate for 1998 is 38% compared to 40% in 1997. -11- During the quarter ended October 4, 1998, based on the decreased sales and gross margin, offset in part by a decrease in operating expenses, the Company reported an operating loss of $279,000 compared to an operating profit of $64,000 in 1997. Other income (expense), net amounted to $9,000 of income in 1998 compared to $50,000 of expense in the corresponding 1997 period. As a result, the Company reported a pre-tax loss from continuing operations of $270,000 during the quarter ended October 4, 1998 compared to pre-tax earnings of $14,000 in 1997. Earnings from discontinued operations during 1998, including the gain on sale of $256,000, amounted to $251,000 compared to $177,000 during the comparable 1997 period. In total, the Company reported net earnings of $94,000 during the quarter ended October 4, 1998 versus $186,000 in 1997. Based on the lower sales level and gross margin, and an increase in operating expenses, the Company reported an operating loss of $164,000 during the nine months ended October 4, 1998 compared to an operating profit of $62,000 during the comparable period in 1997. The nine months ended October 4, 1998 includes nonoperating income of $348,000 mainly as a result of the gain on sale of real estate compared to $159,000 of expense in the 1997 period. As a result, during the nine months ended October 4, 1998, the Company reported a pre-tax earnings from continuing operations of $184,000 compared to a loss of $97,000 during the 1997 period. During the nine months ended October 4, 1998, earnings from discontinued operations, including the gains on sale of $454,000, amounted to $560,000 versus $267,000 in 1997. In total, the Company reported net earnings of $675,000 during the nine months ended October 4, 1998 compared to $209,000 in 1997. Year 2000 - - --------- During the early part of 1998, the Company began reviewing its current computer system and software as it related to the "Year 2000" issue. The Company has determined that the cost to modify the current software to be Year 2000 compliant is minor. While completing this review, the Company analyzed the current system's capabilities and limitations as it related to current operations and to future business growth and expansion. As a result of this review, the Company has decided to upgrade its current computer system and install a new computer and software system. The Company has investigated and reviewed various software packages and systems that are the Year 2000 compliant and expects to select a system by the end of 1998. The Company will begin implementation of the new system shortly thereafter. By the end of the 2nd quarter 1999 the Company expects to have installed modules of the new software package equivalent to its present system. The cost of this new system will be included in the capital expenditure budget for 1999. In addition, the Company has and is continuing to request assurances from its major suppliers relating to the Year 2000 compliance issue and has and is responding to Year 2000 inquiries from its major customers. At this time, the Company has not yet assessed the outcome of these inquiries since the responses are not yet completed and are still in progress. -12- Presently, the Company does not have a formalized contingency plan if the above third parties are not Year 2000 compliant and the new computer system and software is not installed and working before 2000. The Company expects that by the end of the 1st quarter of 1999, it will have completed its analysis of third party compliance and that the initial stages of the software installation should be completed. At that time, the Company will determine if a contingency plan is required. -13- PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: 11. Statement re Computation of Per Share Earnings. Filed herein. 27. Financial Data Schedule. Filed for electronic purposes only. (b) Reports on Form 8-K: On July 15, 1998, the Registrant filed a Report on Form 8-K dated July 2, 1998 reporting under Item 5. Other Events. On August 17, 1998, the Registrant filed a Report on Form 8-K dated August 3, 1998 reporting under Item 2. Acquisition or Disposition of Assets and Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. -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. MATEC Corporation ------------------------------------ Date: November 13, 1998 By /s/ Ted Valpey, Jr. --------------------------------- Ted Valpey, Jr. Chairman of the Board and President Date: November 13, 1998 By /s/ Michael J. Kroll --------------------------------- Michael J. Kroll, Vice President and Treasurer -15- EX-11 2 EARNINGS PER SHARE MATEC Corporation and Subsidiaries Exhibit 11 Calculation of Earnings Per Share (amounts in thousands, except per share data) Three Months Ended 10/4/98 9/28/97(A) ------- ------- Net earnings (loss) from continuing operations ... $ (157) $ 9 Discontinued operations: Net earnings (loss) from operations ............ (5) 177 Gain on sale ................................... 256 - ------ ------ Net earnings ..................................... $ 94 $ 186 ====== ====== Calculation of basic earnings per share: - - ---------------------------------------- Weighted-average shares ......................... 2,717 2,734 ===== ===== Basic earnings (loss) per common share: Continuing operations ......................... $ (.06) $ .00 Discontinued operations: Operations .................................. .00 .07 Gain on sale ................................ .09 - ------ ------ $ .03 $ .07 ====== ====== Calculation of diluted earnings per share: - - ------------------------------------------ Weighted average common shares outstanding ...... 2,717 2,734 Increase from assumed exercise of stock options and investment of proceeds in treasury stock, based upon the average market prices (B) (C) ... - 37 ----- ----- Adjusted weighted-average shares ................ 2,717 2,771 ===== ===== Diluted earnings per common share: Continuing operations ......................... $ (.06) $ .00 Discontinued operations: Operations .................................. .00 .06 Gain on sale ................................ .09 - ------ ------ $ .03 $ .06 ====== ====== (A) Restated to reflect discontinued operations. (B) The dilutive effect of stock options and warrants was not considered in 1998 since the Company reported a loss from continuing operations. (C) The dilutive effect of outstanding warrants to purchase 85,000 shares of common stock was not included in the 1997 computation since the exercise price was greater than the average market price of the common shares. -16- MATEC Corporation and Subsidiaries Exhibit 11 Calculation of Earnings Per Share (amounts in thousands, except per share data) Nine Months Ended 10/4/98 9/28/97(A) ------- ------- Net earnings (loss) from continuing operations ... $ 115 $ (58) Discontinued operations: Net earnings from operations ................... 106 267 Gain on sales .................................. 454 - ------ ------ Net earnings ..................................... $ 675 $ 209 ====== ====== Calculation of basic earnings per share: - - ---------------------------------------- Weighted-average shares ......................... 2,733 2,738 ===== ===== Basic earnings (loss) per common share: Continuing operations ......................... $ .04 $ (.02) Discontinued operations: Operations .................................. .04 .10 Gain on sales ............................... .17 - ------ ------ $ .25 $ .08 ====== ====== Calculation of diluted earnings per share: - - ------------------------------------------ Weighted-average shares ......................... 2,733 2,738 Increase from assumed exercise of stock options and investment of proceeds in treasury stock, based upon the average market prices (B) (C) ... 1 - ----- ----- Adjusted weighted-average shares ................ 2,734 2,738 ===== ===== Diluted earnings (loss) per common share: Continuing operations ......................... $ .04 $ (.02) Discontinued operations: Operations .................................. .04 .10 Gain on sales ............................... .17 - ------ ------ $ .25 $ .08 ====== ====== (A) Restated to reflect discontinued operations. (B) The dilutive effect of stock options and warrants was not considered in 1997 since the Company reported a loss from continuing operations. (C) The dilutive effect of outstanding warrants to purchase 85,000 shares of common stock were not included in the 1998 computations since the exercise price was greater than the average market price of the common shares. -17- EX-27 3 FINANCIAL DATA SCHEDULE
5 1000 9-MOS DEC-31-1998 OCT-04-1998 4,478 0 1,564 69 3,062 10,387 7,599 5,184 16,323 2,610 1,992 0 0 136 10,133 16,323 9,476 9,476 7,338 7,338 0 20 153 184 69 115 560 0 0 675 .25 .25
EX-27 4
5 1,000 9-MOS DEC-31-1997 SEP-28-1997 588 0 2,006 47 2,452 5,985 10,530 6,690 20,994 2,350 1,988 0 0 190 14,395 20,994 9,597 9,597 7,304 7,304 0 23 171 (97) (39) (58) 267 0 0 209 .08 .08
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