SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 31, 1995
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 1-9467
DAVIS WATER & WASTE INDUSTRIES, Inc.
(Exact name of registrant as specified in its charter)
Georgia 58-0959907
------------------------ -------------------
(State of incorporation) (I.R.S. Employer
Identification No.)
1820 Metcalf Avenue, Thomasville, Georgia 31792
------------------------------------------------------------
(Address of principal executive offices, including zip code)
(912) 226-5733
----------------------------------------------------
(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 twelve
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No _____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
Class Outstanding at December 8, 1995
----------------------------- -------------------------------
Common Stock, $0.01 Par Value 3,228,594 Shares
Page 1 of 17
Index of Exhibits on Page 16
DAVIS WATER & WASTE INDUSTRIES, Inc.
Quarterly Report on Form 10-Q
For the Quarter Ended October 31, 1995
TABLE OF CONTENTS
-----------------
Item Page
Number PART I -- FINANCIAL INFORMATION Number
------ ------
1 Financial Statements:
Condensed Consolidated Balance
Sheet--October 31, 1995, April 30,
1995 and October 31, 1994 3
Condensed Consolidated Statement of
Operations--Three and Six Months
Ended October 31, 1995 and 1994 5
Condensed Consolidated Statement of
Changes in Stockholders' Equity--
October 31, 1995, April 30, 1995
and October 31, 1994 6
Condensed Consolidated Statement of
Cash Flows--Six Months Ended
October 31, 1995 and 1994 7
Notes to Condensed Consolidated
Financial Statements 8
2 Management's Discussion and
Analysis of Financial Condition and
Results of Operations 9
PART II -- OTHER INFORMATION
6 Exhibits and Reports on Form 8-K 14
SIGNATURES 15
INDEX OF EXHIBITS 16
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
DAVIS WATER & WASTE INDUSTRIES, Inc.
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
(Unaudited)
(in thousands)
October 31, April 30, October 31,
1995 1995 1994
----------- ----------- -----------
Current assets:
Cash $ 3,046 $ 3,746 $ 1,996
Accounts receivable, less allowance for ------- ------- -------
doubtful accounts ($1,199 at October 31,
1995, $1,135 at April 30, 1995 and $1,258
at October 31, 1994) 36,765 39,795 37,554
------- ------- -------
Inventories:
Finished goods and products purchased for
resale 16,087 16,137 16,749
Work-in-progress 2,136 2,073 2,792
Raw material and purchased components 1,287 568 565
------- ------- -------
Total inventories 19,510 18,778 20,106
------- ------- -------
Prepaid expenses 651 631 672
------- ------- -------
Costs and estimated earnings in excess of
billings on uncompleted contracts 1,170 1,097 1,083
------- ------- -------
Deferred income taxes 4,755 5,634 5,200
------- ------- -------
Total current assets 65,897 69,681 66,611
------- ------- -------
Property, plant and equipment 21,164 20,701 21,928
Less-accumulated depreciation (14,920) (14,407) (14,469)
------- ------- -------
6,244 6,294 7,459
------- ------- -------
Other assets 6,054 5,561 4,945
------- ------- -------
$78,195 $81,536 $79,015
======= ======= =======
See accompanying notes to condensed consolidated financial statements.
3
DAVIS WATER & WASTE INDUSTRIES, Inc.
CONDENSED CONSOLIDATED BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
(Unaudited)
(in thousands, except share data)
October 31, April 30, October 31,
1995 1995 1945
----------- ----------- -----------
Current liabilities:
Current portion of long-term debt $ 258 $ 249 $ 173
Accounts payable 18,584 24,158 21,511
Accrued salaries and commissions 4,771 3,735 2,854
Other accrued liabilities 9,527 9,497 10,204
Billings in excess of cost and estimated
earnings on uncompleted contracts 917 1,449 2,020
------- ------- -------
Total current liabilities 34,057 39,088 36,762
------- ------- -------
Long-term debt, less current portion 14,298 14,787 15,503
------- ------- -------
Deferred income taxes 0 265 559
------- ------- -------
Other accrued liabilities 2,209 2,064 2,038
------- ------- -------
Stockholders' equity:
Common stock, $0.01 par value, 50,000,000
shares authorized and 3,265,308 shares
issued 33 33 33
Capital in excess of par value 9,788 9,788 9,788
Retained earnings 18,225 15,705 14,346
------- ------- -------
28,046 25,526 24,167
Treasury stock at cost-34,010 shares at
October 31, 1995, 19,379 shares at April
30, 1995 and 1,682 shares at October 31,
1994 (415) (194) (14)
------- ------- -------
Total stockholders' equity 27,631 25,332 24,153
------- ------- -------
$78,195 $81,536 $79,015
======= ======= =======
See accompanying notes to condensed consolidated financial statements.
4
DAVIS WATER & WASTE INDUSTRIES, Inc.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(in thousands, except share data)
Three Months Ended Six Months Ended
October 31, October 31,
1995 1994 1995 1994
-------- -------- -------- --------
Net sales $58,867 $56,056 $118,550 $106,970
Cost of products sold 48,709 47,302 99,575 90,966
------- ------- -------- --------
Gross profit margin 10,158 8,754 18,975 16,004
Selling, general and administration 6,970 6,307 13,478 12,374
Interest expense 281 354 640 706
Other income, net 61 71 85 121
------- ------- -------- --------
Income before income taxes 2,968 2,164 4,942 3,045
Provision (benefit) for income taxes:
Current 1,176 660 1,770 930
Deferred (24) 205 194 298
------- ------- -------- --------
1,152 865 1,964 1,228
------- ------- -------- --------
Net income $1,816 $1,299 $2,978 $1,817
======= ======= ======== ========
PER SHARE INFORMATION:
Net income per share $0.56 $0.40 $0.92 $0.56
===== ===== ===== =====
Dividends per share $0.00 $0.00 $0.14 $0.00
===== ===== ===== =====
Weighted average shares outstanding 3,230,329 3,262,773 3,236,789 3,261,550
========= ========= ========= =========
The results of operations for the six month periods ended October 31,
1995 and 1994 are not necessarily indicative of the results of
operations on an annual basis. See accompanying notes to condensed
consolidated financial statements.
5
DAVIS WATER & WASTE INDUSTRIES, Inc.
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
(in thousands)
Capital Total
Common excess of Retained Treasury stockholder's
Stock par value earnings stock equity
----------------------------- --------- --------- --------- --------- -----------
Balance, April 30, 1994 $33 $9,788 $12,539 ($51) $22,309
Issuance of common stock in
connection with employee
benefit plans (10) 63 53
Purchase of treasury stock (26) (26)
Net income 1,817 1,817
--------- --------- --------- --------- -----------
Balance, October 31, 1994 33 9,788 14,346 (14) 24,153
Issuance of common stock in
connection with employee
benefit plans (11) 59 48
Purchase of treasury stock (239) (239)
Dividends paid, $.08 per
share (261) (261)
Net income 1,631 1,631
--------- --------- --------- --------- -----------
Balance, April 30, 1995 33 9,788 15,705 (194) 25,332
Issuance of common stock in
connection with employee
benefit plans (4) 53 49
Purchase of treasury stock (274) (274)
Dividends paid, $.14 per
share (454) (454)
Net income 2,978 2,978
--------- --------- --------- --------- -----------
Balance, October 31, 1995 $33 $9,788 $18,225 ($415) $27,631
========= ========= ========= ========= ===========
See accompanying notes to condensed consolidated financial statements.
6
DAVIS WATER & WASTE INDUSTRIES, Inc.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months
Ended October 31,
----------------------
1995 1994
---------- ----------
OPERATING ACTIVITIES
Net income $2,978 $1,817
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 753 1,132
(Decrease) in reserve for Taulman shutdown (1,175) (1,106)
Provision for doubtful accounts 343 275
Loss on sale of property, plant and
equipment 23 0
Deferred income taxes 194 298
Decrease in accounts receivable 2,687 1,329
(Increase) decrease in inventories (732) 420
(Increase) in costs and estimated earnings
in excess of billings (73) (111)
(Increase) decrease in other assets (93) 205
(Decrease) in billings in excess of cost
and estimated earnings (532) (182)
(Decrease) increase in accounts payable and
accrued expenses (3,188) 677
-------- --------
Net cash provided by operating
activities 1,185 4,754
-------- --------
INVESTING ACTIVITIES
Purchase of property, plant and equipment (731) (956)
Proceeds from sale of property, plant and
equipment 5 36
-------- --------
Net cash (used in) investing activities (726) (920)
FINANCING ACTIVITIES
Proceeds from revolving and long-term debt 31,756 28,877
Principal payments made on debt (32,236) (32,841)
Proceeds from sale of stock 49 52
Purchase of treasury stock (274) (26)
Dividends paid (454) 0
-------- --------
Net cash (used in) financing activities (1,159) (3,938)
-------- --------
CASH
(Decrease) in cash during period (700) (104)
Cash and cash equivalents at beginning of 3,746 2,100
period -------- --------
Cash and cash equivalents at end of period $3,046 $1,996
======== ========
See accompanying notes to condensed consolidated financial statements.
7
DAVIS WATER & WASTE INDUSTRIES, Inc.
Notes to Condensed Consolidated Financial Statements
October 31, 1995 (Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited interim condensed consolidated
financial statements reflect all adjustments, consisting only of
normal recurring accruals, which, in the opinion of management,
are necessary to present fairly the Company's financial position
as of October 31, 1995 and 1994, and the results of its
operations and its cash flows for the six month period ended
October 31, 1995 and 1994. The consolidated financial statements
included herein should be read in conjunction with the
consolidated financial statements and notes thereto, the Report
of Independent Accountants and the Statement of Management's
Responsibility for Financial Statements included in the Company's
1995 Annual Report.
NOTE B - ACCOUNTING POLICIES
Reference is made to the accounting policies of the Company
described in the Notes to Consolidated Financial Statements
contained in the Company's 1995 Annual Report. The Company has
consistently followed those policies in preparing this report.
NOTE C - PROVISION FOR TAULMAN SHUTDOWN AND RELATED INTANGIBLE
ASSETS
During the fourth quarter of fiscal 1994, the Company adopted a
plan to shutdown or reorganize the operations of its wholly-owned
subsidiary, The Taulman Company (Taulman). Substantially all of
Taulman's operations are contained within its Turbitrol
Instrumentation and Controls division; these operations will be
shutdown following the completion of its obligations under
current contracts. It is anticipated that Taulman will complete
these contractual obligations in approximately two and one half
years subsequent to the end of fiscal 1994 . Taulman Composting
Systems, an immaterial component of Taulman's operations, now
operates as a part of the Company's Process division. The pre-
tax loss provision for these actions included the write-off of
intangible assets totalling $2,908,000 associated with Taulman
and the accrual of $5,987,000 to provide for anticipated losses
during the shutdown period.
For the second quarters of fiscal 1996 and fiscal 1995, Taulman's
net sales were $2,852,000 and $6,059,000, respectively, while
cost of products sold were $2,923,000 and $5,219,000, respec-
tively. Selling, general and administration expenses for the
second quarters of fiscal 1996 and fiscal 1995 were $1,119,000
and $2,026,000, respectively. Taulman recorded net losses of
$1,430,000 and $1,729,000 for the second quarters of fiscal 1996
and fiscal 1995, respectively. These losses have been recorded
against the reserve established in fiscal 1994 for anticipated
losses during the shutdown period. As such, these losses did not
impact the Company's results of operation for the three and six
months ended October 31, 1995 or 1994.
8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
Overview
The Company reported net income of $1,816,000, or $.56 per share,
during the three month period ended October 31, 1995, compared
with a net income of $1,299,000, or $.40 per share, during the
comparable period of 1994. The Company reported net income of
$2,978,000, or $.92 per share, for the six month period ended
October 31, 1995 compared to $1,817,000, or $.56 per share, for
the six month period ended October 31, 1994. Net sales increased
5.0% to $58,867,000 for the three month period ended October 31,
1995 from $56,056,000 for the three month period ended October
31, 1994 primarily due to improvement in the national economy,
which increased the demand for the Company's products. Management
is cautiously optimistic that sales will continue to increase
during the remainder of fiscal 1996 as compared to fiscal 1995
due to the expected continued improvement in the national
economy.
The results for the three and six months ended October 31, 1995
and 1994 do not include the cost of the Taulman shutdown, which
was reserved during the fiscal year ended April 30, 1994. All
sales and costs associated with completion of Taulman's
contractual obligations are applied against this reserve.
Net sales
Net sales for the three month period ended October 31, 1995
increased 5.0% to $58,867,000 compared to $56,056,000 for the
corresponding period of the prior year. Net sales for the six
month period ended October 31, 1995 increased 10.8% to
$118,550,000 compared to $106,970,000 for the corresponding
period of the prior year. Sales by the Company's distribution
equipment business (Distribution Group) remained relatively
constant during the three month period ended October 31, 1995
compared to the corresponding period of the prior year. For the
six month period ended October 31, 1995, sales by the
Distribution Group increased by 7.0% as compared to the
corresponding period of the prior year. Sales by the Company's
water and wastewater treatment and pumping equipment and process
material and supplies business (Water Treatment Group) increased
by 22.9% from $15,734,000 for the three month period ended
October 31, 1995 as compared to $12,799,000 for the corresponding
period of the prior year. For the six month period ended October
31, 1995, the Water Treatment Group's sales increased by 24.9%
from $28,746,000 compared to $23,012,000 for the corresponding
period of the prior year. Sales of the Distribution Group
represented 75.8% and the Water Treatment Group represented 24.2%
of the Company's total net sales for the six month period ended
October 31, 1995. The increases in net sales of the Company's
products is due to increased activity in the commercial and
residential land development and construction markets as a result
of the improvement in the national economy, which increased the
demand for the Company's products. The increased net sales
reflect a higher volume of products shipped in response to the
increased demand rather than to any significant price increases.
For the remainder of fiscal 1996, management believes that the
Company's overall sales will continue at improved levels over
comparable periods for the prior fiscal year if the economy
continues to improve or remains at its present level.
9
Cost of products sold
The Company's gross profit margin (the difference between net
sales and cost of products sold expressed as a percentage of net
sales) was 17.3% and 15.6% for the three month periods ended
October 31, 1995 and 1994, respectively, and 16.0% and 14.7% for
the six month periods ended October 31, 1995 and 1994,
respectively. The gross profit margin for the Distribution Group
was 13.3% and 11.8% for the three month periods ended October 31,
1995 and 1994, respectively, and 12.5% and 11.6% for the six
month periods ended October 31, 1995 and 1994, respectively. The
gross profit margin for the Water Treatment Group was 28.1% and
28.5% for the three month periods ended October 31, 1995 and
1994, respectively, and 26.9% and 27.1% for the six month periods
ended October 31, 1995 and 1994, respectively. The increase in
the Company's gross profit margin is attributed to the increased
sales volume which enabled the Company to spread its fixed costs
over a larger sales base.
Selling, general and administrative expenses
Selling, general and administrative expenses were 11.8% and 11.2%
of net sales for the three month periods ended October 31, 1995
and 1994, respectively, and 11.4% and 11.6% of net sales for the
six month periods ended October 31, 1995 and 1994, respectively.
The dollar amount of selling, general and administrative expenses
increased by 10.5% and 8.9% in the three and six months of fiscal
1996 as compared to the corresponding period of the prior year,
due primarily to the increased costs associated with the
increased sales such as employee incentive awards. The decrease
in selling, general and administrative expenses as a percentage
of net sales was due to the 10.8% increase in the Company's net
sales.
Interest expense
Interest expense decreased 20.6% for the three month period and
9.4% for the six month period ended October 31, 1995 as compared
to the corresponding periods of the previous fiscal year. This
was due to a decrease of approximately $3,343,000 or 17.0% in
the Company's weighted average borrowings for the six month
period ended October 31, 1995 when compared to the corresponding
period of the prior year. The weighted average borrowing rate
increased by 90 basis points, or 12.2%, for the six month period
ended October 31, 1995 as compared to the corresponding six month
period of fiscal 1995. Management anticipates that interest
expense will decrease during the remainder of fiscal 1996 if the
average borrowings remain at present levels. As a result of the
second amendment to the Sun Bank, National Association ("SBNA")
loan agreement, the Company has the option to change between the
then current prime rate or the then current LIBOR rate plus 200
basis points.
Provision for income tax expense
The effective tax rates for the three and six month periods ended
October 31, 1995 were 38.8% and 39.7%, respectively, and were
40.0% and 40.3% for the three and six month periods ended October
31, 1994, respectively. These rates reflect the Company's
estimated effective rates for the respective fiscal year and do
not include any unusual adjustments or credits.
10
LIQUIDITY AND CAPITAL RESOURCES
The primary sources of liquidity for the Company are funds
generated internally from operations and bank borrowings. Set
forth below is information regarding the sources and amounts of
internally generated funds:
Six Months Ended
October 31,
------------------ Fiscal Year Ended
(in thousands) 1995 1994 April 30, 1995
------------------------------ ------------------- -----------------
Net income .................. $2,978 $1,817 $3,448
Depreciation and amortization 753 1,132 2,110
Deferred taxes............... 194 298 (430)
------ ------ ------
$3,925 $3,247 $5,128
====== ====== ======
When internally generated funds are insufficient to support
operations and capital expenditures, the Company has been able to
borrow funds to meet its needs. At October 31, 1995, the Company
had approximately $17,249,000 available under a $30,000,000 bank
line of credit. These available funds, together with a cash
balance of approximately $3,046,000, placed the Company's
potential cash availability in excess of $20,295,000 at October
31, 1995, which management believes is sufficient to support
operations for the foreseeable future.
During the first quarter of fiscal 1996, the Company and its
primary lender, Sun Bank, National Association (SBNA), amended
the Company's loan agreement to extend the loan maturity through
April 30, 1997, reduce the principal amount that the Company can
borrow to $30,000,000, provide specific guidelines that the
Company must meet to eliminate the security interest that SBNA
has on the Company's accounts receivable and inventory, eliminate
the working capital requirement, and limit the amount of cash
that the Company may spend in connection with acquisitions
without the prior consent of SBNA to $2,500,000 per year during
the term of the loan agreement. The amended loan agreement also
permits the Company to choose between the then current prime rate
or the then current LIBOR rate plus 200 basis points for advances
under the revolving term loan. The Company was in compliance
with the financial covenants of the loan agreement as of October
31, 1995.
The payment of cash dividends is subject to approval by the Board
of Directors and depends on, among other factors, earnings,
capital requirements, and the operating and financial condition
of the Company. The payment of cash dividends also requires the
prior approval of SBNA unless certain financial requirements are
met. During the first quarter of fiscal 1996, the Company's
Board of Directors authorized a cash dividend of $0.14 per share,
which was paid on July 3, 1995 to stockholders of record on June
26, 1995.
The Company's working capital position improved by 4.1% at
October 31, 1995 as compared to April 30, 1995 and by 6.7% as
compared to October 31, 1994. The improvement in the Company's
working capital position at October 31, 1995 as compared to April
30, 1995 was due primarily to an increase in inventories of
$732,000 and a decrease in accounts payable of $5,574,000 which
was offset by a $700,000 decrease in cash and a $3,030,000
decrease in accounts receivable. The primary reasons for the
improvement in the working capital position at October 31, 1995
as compared to October 31, 1994 was due to the increase in
11
cash of $1,050,000 and a decrease of $2,927,000 in accounts
payable, offset by a decrease of $596,000 and $789,000 in
inventories and accounts receivable, respectively. Set forth
below is the Company's working capital position and certain
liquidity comparisons as of the dates indicated:
October 31,
------------------
(in thousands) 1995 1994 April 30, 1995
------------------------------ ------------------ --------------
Working capital............ $31,840 $29,849 $30,593
======= ======= =======
Cash....................... $ 3,046 $ 1,996 $ 3,746
Accounts receivable, net... 36,765 37,554 39,795
Inventories................ 19,510 20,106 18,778
------- ------- -------
59,321 59,656 62,319
Accounts payable........... (18,584) (21,511) (24,158)
Notes payable and current
portion of long-term debt (258) (173) (249)
------- ------- -------
$40,479 $37,972 $37,912
======= ======= =======
The Company's two most significant assets are its accounts
receivable and inventories. The Company measures the
effectiveness of its accounts receivable management program by a
calculation designed to estimate the number of days that it takes
the Company to collect accounts receivable. This calculation
excludes the affect of any retainage. Average days to collect
accounts receivable declined by 6.4 days or 10.8% at October 31,
1995 when compared to October 31, 1994 due to continued
collection efforts by the Company.
The Company measures the effectiveness of its inventory
management program by a calculation using average quarterly
inventory amounts to estimate the number of times inventory turns
on an annual basis. Inventory turns increased by 1.5 turns or
17.2% and 1.0 turns or 10.9% during the six month period ended
October 31, 1995 compared to the corresponding period ended
October 31, 1994 and the fiscal year ended April 30, 1995,
respectively. The increase in inventory turns occurred because
the Company has been able to maintain low levels of inventory
despite the increase in sales. This has been accomplished
through more efficient management of distribution product
inventories. The table below sets forth the results for the
periods shown:
October 31,
---------------- Fiscal Year Ended
1995 1994 April 30, 1994
---------------- -----------------
Average days to collect
accounts receivable...... 53.1 59.5 61.0
Inventory turns............ 10.2 8.7 9.2
12
Average long-term and short term borrowings decreased by
$3,343,000, or 17.0%, and $1,334,000, or 7.6%, during the six
month period ended October 31, 1995 as compared to the six month
period ended October 31, 1994 and the year ended April 30, 1995,
respectively. The Company has increased its efforts to improve
collection of accounts receivable and minimize inventory levels
in an effort to reduce bank debt. This is illustrated by the
lower level of borrowings the Company currently maintains despite
the 10.8% increase in net sales.
Six Months Ended
October 31,
-------------------- Fiscal Year Ended
(Dollars in thousands) 1995 1994 April 30, 1995
------------------------------ -------------------- -----------------
Average long-term debt $15,531 $18,908 $17,146
Weighted average interest rate 8.3% 7.4% 7.9%
Average short-term borrowings $ 810 $ 776 $ 529
Weighted average interest rate 5.8% 5.6 6.7%
13
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibit is filed as part of this report:
Exhibit Description of Exhibit
------- ----------------------
11 Computation of Net Income Per Share
(b) No Current Reports on Form 8-K were filed by the
Company during the quarter ended October 31, 1995.
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.
DAVIS WATER & WASTE INDUSTRIES, Inc.
------------------------------------
(Registrant)
Date: December 13, 1995 /s/ Stan White
____________________________________
Stan White, Secretary-Treasurer
(Duly Authorized Officer and Chief
Financial Officer)
15
DAVIS WATER & WASTE INDUSTRIES, Inc.
INDEX OF EXHIBITS
Exhibit
Table
Item No. Description of Exhibit Page
-------- ---------------------- ----
11 Computation of Net Income Per Share 17
16
EXHIBIT 11
DAVIS WATER & WASTE INDUSTRIES, INC.
COMPUTATION OF NET INCOME PER SHARE
Three Months Ended Six Months Ended
October 31, October 31,
----------------------- ----------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
Net income $1,816,037 $1,299,064 $2,978,335 $1,816,682
========== ========== ========== ==========
Number of shares used in calculation
of per share data:
Weighted average number of common
shares outstanding during the
period 3,229,535 3,262,773 3,235,995 3,261,550
Add common equivalent
shares(determined by the treasury
stock method) composed of shares
issuable upon award of performance
shares or exercise of stock options 794 0 794 0
---------- ---------- ---------- ----------
Weighted average number of shares
used in calculating net income per
share 3,230,329 3,262,773 3,236,789 3,261,550
========== ========== ========== ==========
Net income $0.56 $0.40 $0.92 $0.56
========== ========== ========== ==========
17