============================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q/A Amendment No. 2 (Mark One) |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 4, 1997 OR |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 0-9919 PSC INC. (Exact name of Registrant as Specified in Its Charter) New York 16-0969362 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 675 Basket Road, Webster, New York 14580 (Address of principal executive offices) (Zip Code) (716) 265-1600 (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 12 months preceding (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 February 2, 1998, there were 11,498,753 shares of common stock outstanding. ============================================================================= Explanatory Note: The undersigned registrant hereby amends Item 1 (Financial Statements) and Item 2 (Management's Discussion and Analysis of Financial Condition and Results of Operations) in their entirety to correct an error in the computation of the loss on the sale of the Company's TxCOM subsidiary during the second quarter of 1997. PSC Inc. AND SUBSIDIARIES INDEX PAGE NUMBER PART I FINANCIAL INFORMATION Item 1 -Financial Statements Consolidated Balance Sheets as of July 4, 1997 (Unaudited) and December 31, 1996...................................3 - 4 Consolidated Statements of Operations and Retained Earnings for the three and six months ended: July 4, 1997 (Unaudited) and June 30, 1996 (Unaudited) ..........................5 - 6 Consolidated Statements of Cash Flows for the six months ended: July 4, 1997 (Unaudited) and June 30, 1996 (Unaudited) ..............................7 Notes to Consolidated Financial Statements (Unaudited) ............................8 - 11 Item 2 -Management's Discussion and Analysis of Financial Condition and Results of Operations .............................12 - 14 PART I - FINANCIAL INFORMATION Item 1: Financial Statements PSC Inc. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (All amounts in thousands) July 4, 1997 December 31, 1996 (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 1,897 $ 10,838 Accounts receivable, net of allowance for doubtful accounts of $1,382 and $1,101, respectively 27,099 29,501 Inventories 18,843 18,306 Prepaid expenses and other 2,045 1,244 ----------- ---------- TOTAL CURRENT ASSETS 49,884 59,889 PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $10,030 and $8,225, respectively 36,599 35,612 DEFERRED TAX ASSETS 24,562 24,773 INTANGIBLE AND OTHER ASSETS, net of accumulated amortization of $9,377 and $6,238 respectively 60,834 63,087 ---------- ---------- TOTAL ASSETS $ 171,879 $183,361 ========== ========= SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS. PSC Inc. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (All amounts in thousands) (Continued) July 4, 1997 December 31, 1996 ------------ ----------------- (Unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Current portion of long-term debt $ 11,088 $ 9,459 Accounts payable 17,097 15,681 Accrued expenses 7,654 11,448 Accrued payroll and related employee benefits 6,274 7,509 Accrued acquisition related restructuring costs 1,672 4,009 ----------- --------- TOTAL CURRENT LIABILITIES 43,785 48,106 LONG-TERM DEBT, less current maturities 111,823 117,994 OTHER LONG-TERM LIABILITIES 3,250 1,960 SHAREHOLDERS' EQUITY Preferred Shares, par value $.01; 10,000 authorized, none issued 0 0 Common shares, par value $.01; 40,000 authorized, 11,196 and 11,161 shares issued and outstanding 112 112 Additional paid-in capital 55,322 54,891 Retained earnings (41,893) (39,432) Cumulative translation adjustment (283) (33) Less treasury stock, 39 shares repurchased, at cost (237) (237) ----------- ---------- TOTAL SHAREHOLDERS' EQUITY 13,021 15,301 --------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $171,879 $183,361 ======== ======== SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS. PSC Inc. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (All amounts in thousands, except per share data) (Unaudited) Three Months Ended July 4, June 30, 1997 1996 ---- ---- NET SALES $ 47,301 $22,052 COST OF SALES 29,388 13,488 -------- --------- Gross profit 17,913 8,564 OPERATING EXPENSES Engineering, research and development 3,447 1,611 Selling, general and administrative 10,464 6,504 Severance and other costs 4,191 0 Amortization of intangibles resulting from business acquisitions 1,672 222 --------- -------- Income/(loss) from operations (1,861) 227 INTEREST AND OTHER INCOME /(EXPENSE): Interest expense (3,384) (12) Interest income 100 125 Other income/(expense) (8) (5) ------------- ----------- (3,292) 108 ---------- --------- Income/(loss) from continuing operations before income tax provision/(benefit) (5,153) 335 Income tax provision/(benefit) (1,907) 124 ------- -------- Income/(loss) from continuing operations (3,246) 211 Discontinued operations: Gain from discontinued operations, net of tax 180 0 Loss on sale of discontinued operations, net of tax (265) 0 ---------- ------------ Total loss from discontinued operations (85) 0 ------------ ------------ Net income/(loss) ($3,331) $ 211 ======== ========= NET INCOME/(LOSS) PER COMMON AND COMMON EQUIVALENT SHARE Continuing operations ($0.29) $ 0.02 Discontinued operations (0.01) 0.00 -------- --------- Net income/(loss) ($0.30) $ 0.02 ======= ======= WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 11,142 10,422 RETAINED EARNINGS/(ACCUMULATED DEFICIT): Retained earnings/(Accumulated deficit) beginning of period ($38,562) $ 7,983 Net income/(loss) (3,331) 211 ----------- ---------- Retained earnings/(Accumulated deficit), end of period ($41,893) $ 8,194 ========= ======== SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS. PSC Inc. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (All amounts in thousands, except per share data) (Unaudited) Six Months Ended July 4, June 30, 1997 1996 ---- ---- NET SALES $101,537 $43,551 COST OF SALES 60,923 25,831 ------- --------- Gross profit 40,614 17,720 OPERATING EXPENSES: Engineering, research and development 6,888 3,391 Selling, general and administrative 23,540 13,027 Severance and other costs 4,191 0 Amortization of intangibles resulting from business acquisitions 3,348 445 --------- -------- Income from operations 2,647 857 INTEREST AND OTHER INCOME /(EXPENSE): Interest expense (6,754) (25) Interest income 251 236 Other income/(expense) 108 (42) --------- ---------- (6,395) 169 --------- --------- Income/(loss) from continuing operations before income tax provision/(benefit) (3,748) 1,026 Income tax provision/(benefit) (1,388) 380 ------- -------- Income/(loss) from continuing operations (2,360) 646 Discontinued operations: Gain from discontinued operations, net of tax 164 0 Loss on sale of discontinued operations, net of tax (265) 0 ----- --------- Total loss from discontinued operations (101) 0 ----------- ----------- Net income/(loss) ($2,461) $ 646 ======== ======== NET INCOME/(LOSS) PER COMMON AND COMMON EQUIVALENT SHARE: Continuing operations ($0.21) $ 0.06 Discontinued operations ( 0.01) 0.00 -------- --------- Net income/(loss) ($0.22) $ 0.06 ======= ======= WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 11,139 10,412 RETAINED EARNINGS/(ACCUMULATED DEFICIT): Retained earnings/(Accumulated deficit) beginning of period ($39,432) $ 7,548 Net income/(loss) (2,461) 646 ----------- ---------- Retained earnings/(Accumulated deficit), end of period ($41,893) $ 8,194 ========= ======== SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS. PSC INC. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (All amounts in thousands) (Unaudited) Six Months Ended July 4, June 30, 1997 1996 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income /(loss) ($2,461) $ 646 Adjustments to reconcile net income/(loss) to net cash provided by (used in) operating activities: Depreciation and amortization 7,112 2,170 Loss on disposition of assets 109 37 Loss on disposition of discontinued operations 265 0 Deferred tax assets 211 128 Decrease (increase) in assets: Accounts receivable 1,290 665 Inventories (539) (1,880) Prepaid expenses and other (357) (2,132) Increase (decrease) in liabilities: Accounts payable 1,564 2,081 Accrued expenses (4,112) (523) Accrued payroll and commissions (1,230) (648) Accrued acquisition related restructuring costs (2,605) (331) --------- ---------- Net cash (used in) provided by operating activities (753) 213 ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures, net (4,693) (967) Additions to intangible and other assets (104) (780) Proceeds from sale of investments 0 4,167 ------------ --------- Net cash (used in) provided by investing activities (4,797) 2,420 ---------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Additions to long-term liabilities 1,938 0 Principal repayments of long-term debt (4,542) (63) Payment of other long-term liabilities (296) 0 Exercise of stock options and sale of common stock 431 627 Tax benefit from exercise or early disposition of certain stock options 0 70 ----------- ----------- Net cash (used in) provided by financing activities (2,469) 634 --------- ---------- FOREIGN CURRENCY TRANSLATION (922) (23) NET INCREASE/(DECREASE) IN CASH _____ ----------- AND CASH EQUIVALENTS (8,941) 3,244 CASH AND CASH EQUIVALENTS: Beginning of period 10,838 5,538 -------- ------- End of period $ 1,897 $ 8,782 ======== ======= SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS. PSC Inc. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED July 4, 1997 and June 30, 1996 (All amounts in thousands, except per share data) (Unaudited) (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying consolidated financial statements have been prepared by the Company without audit. In the opinion of management, these financial statements include all adjustments necessary to present fairly the Company's financial position as of July 4, 1997, the results of operations for the three and six months ended July 4, 1997 and June 30, 1996 and its cash flows for the six months ended July 4, 1997 and June 30, 1996. The results of operations for the three and six months ended July 4, 1997 are not necessarily indicative of the results to be expected for the full year. Certain information and disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The accompanying financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 1996 annual report on Form 10-K. NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE The Company accounts for net income per common and common equivalent share in accordance with the provisions of Accounting Principles Board Opinion No. 15 (APB No. 15). In March 1997, Statement of Financial Accounting Standards No. 128 (SFAS No. 128), "Earnings per Share" was issued. SFAS No. 128 replaces primary Earnings Per Share (EPS) with basic EPS. Basic EPS is computed by dividing reported earnings available to common stockholders by weighted average shares outstanding. No dilution for common share equivalents is included. Fully diluted EPS, now called diluted EPS, is still required. The Company is required to adopt SFAS No. 128 retroactively for periods ending after December 15, 1997. On a pro forma basis, basic EPS and diluted EPS for the three and six months ended July 4, 1997 were ($0.30) and ($0.22), respectively, the same as reported EPS. INVENTORIES Inventories are stated at the lower of cost (first-in, first-out method) or market. Elements of cost include materials, labor and overhead and consist of the following: July 4, 1997 December 31, 1996 ------------ ----------------- Raw materials $12,347 $ 10,688 Work-in-process 3,219 3,547 Finished goods 3,277 4,071 --------- --------- $18,843 $18,306 ======= ======= PSC Inc. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED July 4, 1997 and June 30, 1996 (All amounts in thousands, except per share data) (Unaudited) (2) LONG-TERM DEBT Long-term debt consists of the following: July 4, 1997 December 31, 1996 ------------- ----------------- Senior Term Loan A $51,000 $55,000 Senior Term Loan B 24,500 25,000 Senior revolving credit 12,500 12,500 Subordinated term loan 29,443 29,428 Subordinated promissory note 5,000 5,000 Other 468 525 -------- ----------- 122,911 127,453 Less: current maturities 11,088 9,459 --------- --------- $111,823 $117,994 ======== ======== (3) SHAREHOLDERS' EQUITY During the six month period ended July 4, 1997, employees purchased approximately 67 shares at $5.81 per share under the provisions of the Company's Employee Stock Purchase Plan. Changes in the status of options under the Company's stock option plans are summarized as follows: January 1, 1997 Weighted January 1, 1996 Weighted to Average to Average July 4, 1997 Price Dec. 31, 1996 Price ------------- ----- ------------- ----- Options outstanding at beginning of period 2,818 $8.33 2,138 $8.41 Options granted 369 6.55 953 7.78 Options exercised (7) 6.06 (173) 6.27 Options forfeited/canceled (542) 9.05 (100) 8.06 ------- ----- Options outstanding at end of period 2,638 7.94 2,818 8.33 Number of options at end of period: Exercisable 1,725 1,630 Available for grant 957 784 PSC Inc. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED July 4, 1997 and June 30, 1996 (All amounts in thousands, except per share data) (Unaudited) (4) PRO FORMA RESULTS OF OPERATIONS The following unaudited pro forma condensed results of operations combine the operations of the Company with those of PSC Scanning, Inc. (formerly Spectra-Physics Scanning Systems, Inc.), TxCOM S.A. and related businesses ("Spectra") as adjusted for the acquisition on July 12, 1996 by the Company of certain of the assets and liabilities of Spectra. The pro forma results of operations are presented as if the acquisition was consummated on January 1, 1996. The pro forma information is presented after giving effect to certain adjustments for depreciation, amortization, interest expense and related income tax effects. The pro forma results do not purport to be indicative of the results that actually would have been achieved during the periods indicated and are not intended to be indicative of future results. Pro Forma Three Months Ended Pro Forma Six Months Ended June 30,1996 June 30, 1996 Net sales $51,487 $104,504 Income from operations 3,409 8,976 Income from continuing operations 206 1,818 Net income 206 1,818 Net income per common and common equivalent share: Continuing operations $0.02 $0.16 Discontinued operations 0.00 0.00 -------- ------ Net income $0.02 $0.16 ======= ===== Weighted average shares outstanding 11,424 11,389 (5) DERIVATIVES The Company monitors its exposure to interest rate and foreign currency exchange risk. The Company has limited involvement with derivative financial instruments and does not use them for trading purposes. The Company uses derivative instruments solely to reduce the financial impact of these risks. Interest Rate Risk: The Company has entered into interest rate swap agreements with its senior lending banks in accordance with the terms of the senior loans. The Company uses these interest rate swap agreements to reduce its exposure to variable rates. The differentials to be received or paid under these interest rate swap agreements are recognized as a component of interest expense in the consolidated income statement. Foreign Currency Exchange Rate Risk: The Company enters into forward foreign exchange contracts as a hedge against currency fluctuations relating to net foreign transactions and commitments denominated in foreign currencies. The foreign exchange contracts generally have maturities of approximately 30 days and require the Company to exchange foreign currencies for U.S. dollars at maturity, at rates agreed to at the inception of the contracts. Gains and losses on forward contracts are offset against the foreign exchange gains or losses on the underlying hedged items and are recorded as a component of Selling, general and administrative expenses in the consolidated income statement. Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations General The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements of the Company's December 31, 1996 annual report on Form 10-K. Results of Operations: Three Months ended July 4, 1997 and June 30, 1996 - ------------------------------------------------------------------------- Net Sales. Consolidated net sales during the three months ended July 4, 1997 increased $25.2 million or 115% compared with the same period in 1996. The increase is due to the inclusion of Spectra product sales and increased sales volumes of the Company's QuickScan handheld scanner products. International net sales increased 327% primarily due to the Spectra acquisition and represented approximately 44% of net sales in the second quarter of 1997 versus 22% of net sales in the second quarter of 1996. Gross Profit. Consolidated gross profit during the three months ended July 4, 1997 increased $9.3 million or 109% compared with the same period in 1996. As a percentage of sales, gross profit decreased from 38.8% to 37.9%. The decrease in gross profit percentage is due to a $1.0 million inventory write-off for the discontinuation of certain products to streamline the Company's handheld and fixed position product lines. Excluding the inventory write-off, the 1997 gross margin would have been 40.0%. This increase in gross profit percentage is primarily due to the acquisition of Spectra and a change in the sales mix of the Company's handheld and fixed position scanner products. Engineering, Research and Development. Engineering, Research and Development (ER&D) expenses increased $1.8 million or 114%, as compared to the same period in 1996. As a percentage of sales, ER&D was 7.3% in the second quarter of 1997 and 1996. The dollar increases were primarily due to the inclusion of Spectra. Selling, General and Administrative. Selling, General and Administrative (SG&A) expenses increased $4.0 million or 61%, as compared to the same period in 1996. The increased dollar amount is primarily due to the inclusion of Spectra. As a percentage of sales SG&A was 22.1% in 1997 versus 29.5% in 1996. As a result of the acquisition and integration of Spectra, the Company has reduced its general and administrative expenses as a percentage of sales. In addition, the Company is now operating under the Symbol-Spectra license agreement which has reduced royalty expenses as a percentage of sales. Severance and Other Costs. During the second quarter of 1997, the Company recorded a one-time pretax charge of $4.2 million for severance and other costs. Of the total charge, approximately $2.3 million was associated with the Severance Agreement with the former CEO, $1.2 million was for employee severance and benefit costs for the elimination of approximately 30 positions including several senior executives, and $0.7 million for the centralization of research and development efforts and the relocation of manufacturing of certain product lines between its two manufacturing facilities. Acquisition Related Restructuring and Other Costs. During the 1994 fourth quarter, the Company recorded a one-time pretax restructuring charge of $3.0 million. The charge related to the integration of the Company's existing fixed position scanner product lines with those of LazerData, which was acquired in December 1994. The restructuring program in part, provided for employee severance and benefit costs for the elimination of approximately 12 manufacturing and engineering support positions. As of July 4, 1997, all positions targeted in the restructuring program have been eliminated. The amount of the restructuring accrual at July 4, 1997 was approximately $0.3 million. Restructuring actions will be substantially completed by December 31, 1997. There have been no reallocations or reestimates to date. During the third quarter of 1996, the Company recorded a one-time, pretax charge of $10.0 million for the cost of restructuring its existing operations with those of Spectra which was acquired in July 1996. The restructuring program in part, provided for employee severance and benefit costs for the elimination of certain positions. As of July 4, 1997, all positions targeted in the restructuring program have been eliminated. The amount of the restructuring accrual at July 4, 1997 was approximately $2.2 million. Restructuring actions will be substantially completed by December 31, 1997. There have been no reallocations or reestimates to date. Interest Expense. Interest expense increased $3.4 million versus the comparable period in 1996. The interest expense relates to the debt incurred in connection with the acquisition of Spectra in July 1996. Provision for Income Taxes. The Company recorded a $1.9 million tax benefit in 1997 primarily due to the severance and other costs discussed above. The Company's effective tax rate was 37% in both 1997 and 1996. The Company expects to record income tax expense at or about the combined federal and state statutory tax rate in 1997. Discontinued Operations. During the third quarter of 1996, the Company adopted a plan to dispose of its TxCOM subsidiary. TxCOM was acquired as part of the Spectra acquisition. During the second quarter of 1997, the Company completed the sale of TxCOM for approximately $1.0 million. A loss of approximately $0.3 million, net of tax, was recorded. Results of Operations: Six Months ended July 4, 1997 and June 30, 1996 - ----------------------------------------------------------------------- Net Sales. Consolidated net sales during the six months ended July 4, 1997 increased $58.0 million or 133% compared with the same period in 1996. The increase is due to the inclusion of Spectra product sales and increased sales volumes of the Company's QuickScan handheld scanner products. International net sales increased 362% primarily due to the Spectra acquisition and represented approximately 44% of net sales in the six months of 1997 versus 22% of net sales in the first six months of 1996. Gross Profit. Consolidated gross profit during the six months ended July 4, 1997 increased $22.9 million or 129% compared with the same period in 1996. As a percentage of sales, gross profit decreased from 40.7% to 40.0%. During the second quarter of 1997, the Company took a $1.0 million inventory write-off for the discontinuation of certain products to streamline the Company's handheld and fixed position product lines. Excluding the inventory write-off, the 1997 gross margin would have been 41.0%. This increase in gross profit percentage is primarily due to the acquisition of Spectra and a change in the sales mix of the company's handheld and fixed position scanner products. Engineering, Research and Development. Engineering, Research and Development (ER&D) expenses increased $3.5 million or 103%, as compared to the same period in 1996. As a percentage of sales, ER&D was 6.8% in 1997 versus 7.8% in 1996. The dollar increase is due to the inclusion of Spectra. Selling, General and Administrative. Selling, General and Administrative (SG&A) expenses increased $10.5 million or 81%, as compared to the same period in 1996. The increased dollar amount is primarily due to the inclusion of Spectra. As a percentage of sales SG&A was 23.2% in 1997 versus 29.9% in 1996. As a result of the acquisition and integration of Spectra, the Company has reduced its general and administrative expenses as a percentage of sales. In addition, the Company is now operating under the Symbol-Spectra license agreement which has reduced royalty expenses as a percentage of sales. Interest Expense. Interest expense increased $6.7 million versus the comparable period in 1996. The interest expense relates to the debt incurred in connection with the acquisition of Spectra in July 1996. Provision for Income Taxes. The Company recorded a $1.4 million tax benefit in 1997 primarily due to the severance and other costs discussed above. The Company's effective tax rate was 37% in both 1997 and 1996. The Company expects to record income tax expense at or about the combined federal and state statutory tax rate in 1997. Discontinued Operations. During the third quarter of 1996, the Company adopted a plan to dispose of its TxCOM subsidiary. TxCOM was acquired as part of the Spectra acquisition. During the second quarter of 1997, the Company completed the sale of TxCOM for approximately $1.0 million. A loss of approximately $0.3 million, net of tax, was recorded. Liquidity and Capital Resources: Current assets decreased $10.0 million from December 31, 1996 due to a decrease in cash offset in part by an increase to inventories. Current liabilities decreased $4.3 million primarily due to a reduction in accrued expenses offset in part by an increase in accounts payable. As a result, working capital decreased $5.7 million from December 31, 1996. Property, plant and equipment expenditures totaled $4.7 million for the six months ended July 4, 1997 compared with $1.0 million for the six months ended June 30, 1996. The 1997 expenditures primarily related to manufacturing equipment and new product tooling. The long-term debt to capital percentage was 89.6% at July 4, 1997 versus 88.5% at December 31, 1996. At July 4, 1997, liquidity immediately available to the Company consisted of cash and cash equivalents of $1.9 million. In addition, in connection with the acquisition of Spectra, the Company obtained new credit facilities totaling $130.0 million. The Company has $7.5 million available on these facilities. The Company believes that its cash resources and available credit facilities, in addition to its operating cash flows, are sufficient to meet its requirements for the next twelve months. 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. PSC Inc. DATE: February 5, 1998 By: /s/ Robert C. Strandberg -------------------- Robert C. Strandberg President and Chief Executive Officer DATE: February 5, 1998 By: /s/ William J. Woodard ------------------ William J. Woodard Vice President and Chief Financial Officer DATE: February 5, 1998 By: /s/ Michael J. Stachura ------------------- Michael J. Stachura Vice President of Finance (Principal Accounting Officer)