FORM 10-Q SECURITIES AND EXCHANGE COMMISSION 	WASHINGTON, D.C. 20549 [ Mark one ] [ X ] Quarterly Report Under Section 13 or 15 (d) 	 of the Securities Exchange Act of 1934 For quarter ended December 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 1-9334 BALDWIN TECHNOLOGY COMPANY, INC. 	(Exact name of registrant as specified in its charter) Delaware 13-3258160 (State or other jurisdiction of		(I.R.S Employer 	 incorporation or organization)		 Identification No.) 65 Rowayton Avenue, Rowayton, Connecticut 06853 (Address of principal executive offices)		 (Zip Code) Registrant's telephone number, including area code: 203-838-7470 (Former name, former address and former fiscal year, if changed since last report.) 	Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or 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 . 	APPLICABLE ONLY TO CORPORATE ISSUERS: 	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 January 31, 1996 	 Class A Common Stock				 		$0.01 par value					16,137,827 	 Class B Common Stock 	 	$0.01 par value					 1,835,883 	Total number of pages in this document 14 	 	BALDWIN TECHNOLOGY COMPANY, INC. 	INDEX 																							Page Part I	Financial Information 		Consolidated Balance Sheet - 	 	 December 31, 1995 and June 30, 1995		 1 		Consolidated Statement of Income - 		 Three months and six months ended 		 December 31, 1995 and 1994				 2 		Consolidated Statement of Changes in 		 Shareholders' Equity - Six months 		 ended December 31, 1995 				 3	 	 		Consolidated Statement of Cash Flows - 		 Six months ended December 31, 1995 and 1994		4-5 		Notes to Consolidated Financial Statements		6-7 		Management's Discussion and Analysis of 		 Financial Condition and Results of 		 Operations							8-13 Part II	Other Information 		Item 4 Submission of Matters to a Vote of 				Security Holders				 13 		Item 6 	Exhibits and Reports on Form 8-K		 13 Signatures									 14 	PART I FINANCIAL INFORMATION 	ITEM 1: FINANCIAL STATEMENTS 	BALDWIN TECHNOLOGY COMPANY, INC. 	CONSOLIDATED BALANCE SHEET 	(in thousands, except share data) 	 December 31, June 30, 1995 1995 	ASSETS	(Unaudited) CURRENT ASSETS: Cash	$ 7,695	$ 12,719 Short-term securities	 272	470 Accounts receivable trade, net of allowance for doubtful accounts of $2,629 ($2,897 at June 30, 1995) 	48,991	46,478 Notes receivable, trade 	12,746	16,916 Inventories	46,524	39,824 Prepaid expenses and other	 8,238	 8,496 Total current assets	 124,466	 124,903 MARKETABLE SECURITIES, at cost: Market $966 ($971 at June 30, 1995)	 820	 971 PROPERTY, PLANT AND EQUIPMENT, at cost: Land and buildings	 7,915	2,348 Machinery and equipment	10,448	8,941 Furniture and fixtures	 6,057	5,855 Leasehold improvements	 1,741	1,734 Capital leases	 7,746	 7,837 	33,907	26,715 Less: Accumulated depreciation and amortization	 20,284	 19,538 Net property, plant and equipment	 13,623	 7,177 PATENTS, TRADEMARKS AND ENGINEERING DRAWINGS at cost, less accumulated amortization of $3,604 ($3,243 at June 30, 1995)	 5,319	5,355 GOODWILL, less accumulated amortization of $10,846 ($9,734 at June 30, 1995)	65,357	61,477 OTHER ASSETS	 9,519	 9,887	 TOTAL ASSETS	$219,104	$209,770 	LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Loans payable	$ 10,553	$ 9,188 Current portion of long-term debt	 487	 160 Accounts payable, trade	16,999	14,895 Notes payable, trade 	9,864	12,637 Accrued salaries, commissions, bonus and profit-sharing	 8,363	9,680 Customer deposits	 6,992	5,410 Accrued and withheld taxes	 2,629	2,321 Income taxes payable	 3,725	4,389 Restructuring reserve	3,000 Other accounts payable and accrued liabilities	 12,676	 12,648 Total current liabilities	 75,288	 71,328	 LONG-TERM LIABILITIES: Long-term debt (Note 4)	36,298	29,868 Other long-term liabilities	 9,694	 9,686 Total long-term liabilities	 45,992	 39,554 Total liabilities	 121,280	 110,882 SHAREHOLDERS' EQUITY: Class A Common Stock, $.01 par, 45,000,000 shares authorized, 16,391,683 shares issued (16,011,586 at June 30, 1995)	164	160 Class B Common Stock, $.01 par, 4,500,000 shares authorized, 2,000,000 shares issued	 20	20 Capital contributed in excess of par value	57,185	54,881 Retained earnings	40,287	41,631 Cumulative translation adjustment	2,565	4,174 Less: Treasury stock, at cost: Class A - 253,856 shares (174,256 at June 30, 1995) Class B - 164,117 shares (164,117 at June 30, 1995) (2,397) (1,978) Total shareholders' equity	 97,824	 98,888 COMMITMENTS	 ------ 	 ------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$219,104	$209,770 	The accompanying notes to consolidated financial statements 	are an integral part of these statements. 	- 1 - 	BALDWIN TECHNOLOGY COMPANY, INC. 	CONSOLIDATED STATEMENT OF INCOME 	(in thousands of dollars except per share data) 	(Unaudited) For the three months For the six months ended December 31, ended December 31, 	 1995 	 1994 		 1995 1994 Net sales	 $65,816	$52,713	 $118,651	$100,352 Cost of goods sold	 44,258	 34,849	 79,946	 66,129 Gross Profit	 21,558	 17,864	 38,705	 34,223 Operating expenses: General and administrative	 7,506	 5,663	 12,966	 11,082 Selling	 6,691	 5,243	 12,077	 10,003 Engineering	 3,580	 2,975	 6,397	 5,691 Research and development	1,748	1,504	2,971	2,843 Restructuring Charge: (Note 3)				 Employee terminations	1,500		1,500	 Dealer terminations	 1,500	 	 1,500	 	 22,525	 15,385	 37,411	 29,619 Operating (loss) income	 (967)	 2,479	 1,294	 4,604 Other (income) expense	 Interest expense	 1,080	 871	 2,018	 1,692 Interest income	 (162)	 (209)	 (249)	 (322) Other income, net	 (112)	 (307)	 (541)	 (560) 	 806	 355	 1,228	 810 (Loss) income before taxes	 (1,773)	 2,124	 66	 3,794 Provision for income taxes	 564	 1,062	 1,410	 1,897 Net (loss) income	$(2,337)	$ 1,062	$ (1,344)	$ 1,897	 Net (loss) income per common and common equivalent share 	$ (0.13)	 $ 0.06	$ (0.07) $ 0.11 Weighted average number of shares outstanding 	 18,132 18,002	 17,981	 17,959 	The accompanying notes to consolidated financial statements 	are an integral part of these statements. 	- 2 - BALDWIN TECHNOLOGY COMPANY INC. CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (in thousands, except share data) (Unaudited) (PART 1 OF 2 PART TABLE) 		 	 Capital Class A Class B Contributed Common Stock Common Stock in Excess 	 Shares 	Amount	 Shares 	Amount of Par Balance at June 30, 1995	 16,011,586	 $160	 2,000,000 $20 $54,881 Net loss for the six months Stock issued in conjunction with the acquisition of Acrotec	 350,000 4			 2,184	 Stock options exercised 30,097		 120 Purchase of treasury stock Translation adjustment 	 	 	 	 	 	 	 	 Balance at December 31, 1995	 16,391,683 $164 2,000,000 $20 $57,185 BALDWIN TECHNOLOGY COMPANY, INC. CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (in thousands, except share data) (Unaudited) (PART 2 OF 2 PART TABLE) Cumulative Treasury Stock Retained Translation -------------- Earnings Adjustment Shares Amount Balance at June 30, 1995 $41,631 $4,174 (338,373 $(1,978) Net loss for the six months (1,344) Stock issued in conjunction with the acquisition of Acrotec Stock options exercised Purchase of treasury stock (79,600) (419) Translation adjustment (1,609) Balance at December 31, 1995 $40,287 $2,565 (417,973) $(2,397) The accompanying notes to consolidated financial statements are an integral part of these statements. 	- 3 - 	BALDWIN TECHNOLOGY COMPANY, INC.CONSOLIDATED STATEMENT OF CASH FLOWS 	Increase (Decrease) in Cash and Cash Equivalents 	(in thousands) 	(Unaudited) 		For the six months 		ended December 31, 1995 1994 Cash Flows from operating activities:	 	 (Loss) income from operations	$(1,344)	$ 1,897 Adjustments to reconcile net income to net cash provided by operating activities - Depreciation and amortization	2,303 	 2,267 Accrued retirement pay	236 	371 Provision for losses on accounts receivable	(41)	 72 Restructuring charge	3,000 Changes in assets and liabilities net of effects from subsidiary purchase - Accounts and notes receivable, net	6,042 	 (8,372) Inventories	(3,370)	(3,134) Prepaid expenses and other	1,152 	518 Customer deposits	(41)	2,053 Accrued compensation	(1,073)	(1,447) Accounts and notes payable, trade	(82)	 (2,094) Income taxes payable	(619)	(1,451) Accrued and withheld taxes	 295 	 (124) Other accounts payable and accrued liabilities	(2,344)	377 Interest payable	 76 	 67 Net cash provided (used) by operating activities	 4,190 	 (9,000) Cash flows from investing activities: Acquisitions of subsidiaries, net of cash acquired	(4,798) Additions of property, net	(5,189)	(723) Additions of patents, trademarks and drawings, net	(171)	(181) Other assets	 (441)	 471 Net cash used by investing activities	(10,599)	 (433) Cash flows from financing activities: Long-term borrowings	10,334 	2,000 Long-term debt repayment	(6,683)	(1,296) Short-term borrowings	3,545 	2,558 Short-term debt repayment	(4,584)	(324) Principal payments under capital lease obligations	(220)	(280) Other long-term liabilities	(474)	27 Treasury stock purchased	(419)	(236) Stock options exercised	 120 	 4 Net cash provided by financing activities	 1,619 	 2,453 Effects of exchange rate changes	 (432)	 86 Net decrease in cash and	 	 cash equivalents	 (5,222)	(6,894) Cash and cash equivalents at beginning of year	 13,189 	 18,534 Cash and cash equivalents at end of period	$ 7,967 	$ 11,640 	The accompanying notes to consolidated financial statements 	are an integral part of these statements. 	- 4 - 	BALDWIN TECHNOLOGY COMPANY, INC. 	CONSOLIDATED STATEMENT OF CASH FLOWS 	(Unaudited) Supplemental disclosures of cash flow information: 	For the six months 	ended December 31, 	 1995 	 1994 (in thousands) Cash paid during the period for: Interest	 $ 1,942	 $ 1,759 Income taxes	 $ 2,074 	 $ 3,401 Supplemental schedule of non-cash investing and financing activities: For the six months ended December 31, 1995: The Company acquired the capital stock of Acrotec AB and subsidiaries (Acrotec) in a purchase transaction for consideration of $7,848,000 ($5,660,000 in cash and 350,000 shares of the Company's Class A Common Stock). The fair value of the acquired assets excluding goodwill was $16,915,000 and the liabilities assumed were $12,539,000. The excess of the purchase price over the net assets acquired of $3,472,000 was recorded as goodwill. A restructuring charge was expensed during the second quarter of the fiscal year in a non-cash transaction of $3,000,000, recorded as a current liability in "Other accounts payable and accrued liabilities". See Note 3 in Notes to Consolidated Financial Statements. The Company entered into capital lease agreements of $49,315 for the six months ended December 31, 1995. For the six months ended December 31, 1994: The Company successfully defended a patent which, under the terms of the patent purchase agreement with the patent's inventor, entitles the Company to indemnification of a portion of the legal fees incurred to defend the patent infringement. Accordingly, the Company reclassified from patents to long term assets $693,000 of legal fees. These previously capitalized patent costs will be realized as royalties become payable to the patent's inventor. At December 31, 1994, other assets included $628,000 of such costs. In accordance with the terms of a note receivable from a former officer, the Company canceled the note in exchange for the collateral which consisted of 25,000 shares of the Company's Class B Common Stock. The balance of the note together with interest receivable was $171,000. Under an incentive compensation agreement with an officer, the Company issued from treasury 40,000 shares of Class A Common Stock for which the accrued compensation was $235,000. The Company entered into capital lease agreements of $47,989 for the six months ended December 31, 1994. Disclosure of accounting policy: For purposes of the statement of cash flows, the Company considers all highly liquid instruments with original maturities of three months or less to be cash equivalents. The accompanying notes to consolidated financial statements are an integral part of these statements. 	- 5 - 	BALDWIN TECHNOLOGY COMPANY, INC. 	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 	(Unaudited) Note 1 - General: 	 	Baldwin Technology Company, Inc. (Baldwin, or the Company) is engaged primarily in the development, manufacture and sale of material handling, accessory, control and pre-press equipment for the printing industry. 	The consolidated financial statements include the accounts of Baldwin and its subsidiaries and reflect all adjustments (consisting of only normal recurring adjustments) which are, in the opinion of management, necessary to present a fair statement of the results for the interim periods. Operating results for the three month and six month periods ended December 31, 1995 are not necessarily indicative of the results that may be expected for the year ending June 30, 1996. 	All significant intercompany transactions have been eliminated in consolidation. Net income per share is based on the weighted average number of common shares and common stock equivalents outstanding during the period. For the three and six month periods ended December 31, 1995 and 1994, net income was divided by the total of the weighted average number of common shares outstanding and common stock equivalents, in order to calculate net income per share. Common stock equivalents for the three month periods ended December 31, 1995 and 1994 consisted of 116,228 shares and 140,252 shares, respectively, for stock options. The weighted average number of common and common equivalent shares outstanding for the three month periods ended December 31, 1995 and 1994 were 18,132,011 and 18,001,699, respectively. Common stock equivalents for the six month periods ended December 31, 1995 and 1994 consisted of 137,277 shares and 122,718 shares, respectively, for stock options. For the six month periods ended December 31, 1995 and 1994 the weighted average number of common and common equivalent shares were 17,980,517 and 17,958,722, respectively. Common stock equivalents calculated for fully diluted earnings per share were not materially different from those calculated for primary. Note 2 - Inventories: 	Inventories consist of the following:- 		 	 December 31, June 30, 	 1995 	 1995 	Raw material	$22,489,000	$17,897,000	 	In process	14,046,000	10,602,000		 	Finished goods	 9,989,000	 11,325,000 		$46,524,000	$39,824,000 	Inventories decreased $559,000 due to translation effects of exchange from June 30, 1995 to December 31, 1995. Inventories acquired in the October 2, 1995 purchase of Acrotec AB and Subsidiaries amounted to $3,889,000 and at December 31, 1995 these inventories were $4,149,000. 	- 6 - Note 3 - Restructuring: A restructuring reserve was charged to income for the quarter ended December 31, 1995 in the amount of $3,000,000. The reserve was established in order to accrue the costs associated with a planned workforce rationalization of the Company's German operations as well as to accrue for dealer claims associated with changes made to the European dealer network and distribution system. At December 31, 1995, no charges had been made against the restructuring reserve and the $3,000,000 reserve was included in "Other accounts payable and accrued liabilities". Note 4 - Debt Refinancing: As of December 31, 1995, the Company refinanced it's $20,000,000 revolving credit agreement (the "Revolver") with NationsBank of North Carolina, as Agent. In connection with the refinancing, certain of the related financial covenants were amended including a covenant regarding the payment of dividends. Future payments of dividends are limited to $5,500,000 plus 50% of the Company's net income after June 30, 1995. Note 5 - Common Stock: 	On November 21, 1995, five (5) eligible non-employee Directors of the Company were automatically granted non-qualified options for a total of 4,490 shares of Class A Common Stock and 510 shares of Class B Common Stock under the Company's 1990 Directors' Stock Option Plan at $5.50 and $6.875, respectively, the fair market values on the date of grant. Restrictions, as described in the Company's 1991 Proxy Statement, are similar to the 1986 Stock Option Plan, as amended and restated (the "1986 Plan"), with the exception of the dates of exercise, vesting and termination. 	On October 30, 1995 the Board of Directors granted non-qualified options to purchase 41,000 shares of the Company's Class A Common Stock to certain executives under the Company's 1986 Plan. The options were granted at the fair market value on the date of grant ($5.63) and are otherwise identical with regard to restrictions on options previously granted. 	- 7 - 	BALDWIN TECHNOLOGY COMPANY, INC. ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 	AND RESULTS OF OPERATIONS The following is management's discussion and analysis of certain significant factors which have affected the Company's financial position and consolidated financial statements. 	Six Months Ended December 31, 1995 vs. Six Months 	Ended December 31, 1994. 	Net sales for the six months ended December 31, 1995 increased by $18,299,000 (18.2%) to $118,651,000 from $100,352,000 for the six months ended December 31, 1994. Currency rate fluctuations attributable to the Company's overseas operations increased net sales by $2,406,000 for the current period and acquisitions added $6,574,000 to sales. Product volume increases were primarily responsible for the remainder of the change. In terms of local currency, sales increased throughout the European Sector. Sales were up 12.9% in Germany, 10.8% in the United Kingdom and 2.8% in Sweden. Local currency Asian Sector sales declined 10.5% in Japan and in- creased in Australia by A$3,174,000 from A$516,000. In the Americas Sector, net sales increased by 11.6%. 	Gross profit for the six month period ended December 31, 1995 was $38,705,000 (32.6% of net sales) as compared to $34,223,000 (34.1% of net sales) for the six month period ended December 31, 1994, an increase of $4,482,000 or 13.1%. Gross profit increased by $767,000 on fluctuations in currency rates, by $2,703,000 due to acquisitions with the remainder due to volume changes, product mix and other factors. Gross profit was lower as a percentage of sales when compared to the prior year due primarily to sales of products that contribute lower gross profits and increased technical service costs in the European and Asia Pacific Sectors. 	Selling, general and administrative expenses were $25,043,000 (21.1% of net sales) for the six month period ended December 31, 1995 as compared to $21,085,000 (21.0% of net sales) for the same period of the prior year, an increase of $3,958,000 or 18.8% in these expenses of which, $541,000 was due to currency rate fluctuations and $1,787,000 was due to acquisitions. Increased expenses related to sales volume, trade shows and personnel were primarily responsible for selling expense increases while general and ad- ministrative increased due primarily to personnel and legal expenses in the current period. Other operating expenses, before restructuring charges (See Note 3, Notes to Consolidated Financial Statements) increased by $834,000 over the same period of the prior year of which $223,000 was due to currency rate fluctuations and $955,000 was due to acquisitions with the remaining decrease primarily related to decreased engineering and contract related research costs. 	 	Interest expense for the six month period ended December 31, 1995 was $2,018,000 as compared to $1,692,000 for the six month period ended December 31, 1994. Currency rate fluctuations increased interest expense by $130,000 and acquisitions added $186,000 for the current period. Interest income was $249,000 and $322,000 for the six month periods ended December 31, 1995 and December 31, 1994, respectively. Currency rate fluctuations increased interest income by $24,000 and acquisitions increased interest in- come by $56,000 for the current period. Other income decreased marginally and included foreign currency transaction (losses) gains of $(8,000) and $57,000 for the six month periods ended December 31, 1995 and 1994, respectively. The effects of currency rate fluctuations decreased other income by $50,000. Acquisitions increased other income by $27,000 with the remainder due to increased royalty income for the current period. 	- 8 - 	The Company's effective tax rate was 46% on income before restructuring charges (See Note 3 - Notes to Consolidated Financial Statements) for the six month period ended December 31, 1995, as compared to 50% for the six month period ended December 31, 1994. Currency rate fluctuations decreased the provision for income taxes by $70,000 for the current period. The difference in effective rates results primarily from increased domestic income. The current period's effective rate reflects the impact of foreign source income which is generally taxed at significantly higher rates than domestic income. No tax benefit was recorded on the $3,000,000 charge for restructuring due to the Company's tax loss carryforward position in Germany. 	Net (loss) for the six month period ended December 31, 1995 was $(1,344,000) versus net income of $1,897,000 for the six month period ended December 31, 1994, or $(0.07) and $0.11 per share, respectively. The net loss due to restructuring charges was $(0.17) per share. Currency rate fluctuations increased the net loss by $83,000 and acquisitions increased the net loss by $173,000 or $(0.01) per share for the current period. Weighted average equivalent shares outstanding during the six month periods ended December 31, 1995 and December 31, 1994 were 17,980,517 and 17,958,722, respectively. 	- 9 - 	Three Months Ended December 31, 1995 vs. Three Months 	Ended December 31, 1994. 	Net sales for the three months ended December 31, 1995 increased by $13,103,000 (24.9%) to $65,816,000 from $52,713,000 for the three months ended December 31, 1994. Currency rate fluctuations attributable to the Company's overseas operations increased net sales by $738,000 while acquisitions added $6,574,000 to net sales for the current period. Product volume increases were primarily responsible for the remainder of the change. In terms of local currency, sales were up 5.3% in Germany, flat in the United Kingdom and up 2.8% in Sweden. Local currency Asian Sector sales decreased 12.2% in Japan. In the Americas Sector, net sales increased 20.4% for the period. 	Gross profit for the three month period ended December 31, 1995 was $21,558,000 (32.8% of net sales) as compared to $17,864,000 (33.9% of net sales) for the three month period ended December 31, 1994, an increase of $3,694,000 or 20.7%. Gross profit increased by $259,000 due to currency rate fluctuations and by $2,703,000 from acquisitions with the remainder due to volume changes, product mix and other factors. Gross profit was lower as a percentage of sales when compared to the prior year due primarily to sales of products that contribute lower gross profits and increased technical service costs in the European and Asia Pacific Sectors. 	Selling, general and administrative expenses were $14,197,000 (21.6% of net sales) for the three month period ended December 31, 1995 as compared to $10,906,000 (20.7% of net sales) for the same period of the prior year, an increase of $3,291,000 or 30.2% in these expenses of which currency rate fluctuations increased these expenses by $237,000 and $1,787,000 was due to acquisitions in the current period. Increased expenses related to sales volume, trade shows and personnel were primarily responsible for selling expense increases while general and administrative increased due primarily to personnel and legal expenses in the current period. Other operating expenses, before restructuring charges (See Note 3 - Notes to Consolidated Financial Statements) increased by $849,000 or 19.0% over the same period of the prior year of which $86,000 was due to currency rate fluctuations and $955,000 was due to acquisitions with the remaining decrease primarily related to decreased engineering expenses. 	 	Interest expense for the three month period ended December 31, 1995 was $1,080,000 as compared to $871,000 for the three month period ended December 31, 1994. Currency rate fluctuations increased interest expense by $62,000 and acquisitions added $186,000 for the current period. Interest income was $162,000 and $209,000 for the three month periods ended December 31, 1995 and December 31, 1994, respectively. Other income decreased primarily due to foreign currency transaction losses of ($158,000) and ($46,000) for the three month periods ended December 31, 1995 and 1994, respectively. Currency rate fluctuations decreased other income by $35,000 and acquisitions increased other income by $27,000 for the period. 	The Company's effective tax rate was 46% on income before restructuring charges (See Note 3 - Notes to Consolidated Financial Statements) for the three month period ended December 31, 1995, as compared to 50% for the three month period ended December 31, 1994. Currency rate fluctuations decreased the provision for income taxes by $73,000 for the current period. The difference in effective rates results primarily from increased domestic income. The current period's effective rate reflects the impact of foreign source income which is generally taxed at significantly higher rates than domestic income. No tax benefit was recorded on the $3,000,000 charge for restructuring due to the Company's tax loss carryforward position in Germany. 	- 10 - 	Net (loss) for the three month period ended December 31, 1995 was $(2,337,000) versus net income of $1,062,000 for the three month period ended December 31, 1994, or $(0.13) and $0.06 per share, respectively. The net loss due to restructuring charges was $(0.17) per share. Currency rate fluctuations increased the net loss by $87,000 and acquisitions increased the net loss by $173,000 or $(0.01) per share for the current period. Weighted average equivalent shares outstanding during the three month periods ended December 31, 1995 and December 31, 1994 were 18,132,011 and 18,001,699, respectively. - - 11 - Liquidity and Capital Resources at December 31, 1995 Liquidity and Working Capital 	The Company's long-term debt includes $25,000,000 of 8.17% senior notes (the "Senior Notes") due October 29, 2000 and a three- year $20,000,000 Revolving Credit Agreement (the "Revolver") with NationsBank of North Carolina, as Agent, which matures in December, 1998 (See Note 4 - Notes to Consolidated Financial Statements). The Senior Notes and the Revolver require the Company to maintain certain financial covenants and have certain restrictions regarding the payment of dividends, limiting them throughout the terms of the Senior Notes to $3,000,000 plus 50% of the Company's net income after June 30, 1993 and to $5,500,000 plus 50% of the Company's net income after June 30, 1995 for the Revolver. In addition, the Company was required to pledge certain of the shares of its domestic subsidiaries as collateral for both the Senior Notes and the Revolver. 	Both the Senior Notes and the Revolver require the Company to maintain a ratio of current assets to current liabilities (as those terms are defined in the agreements) of not less than 1.4 to 1. At December 31, 1995, this ratio was 1.65 to 1. 	Net cash used by investing activities increased by $10,166,000 from $433,000 at December 31, 1994 to $10,599,000 at December 31, 1995 primarily due to the purchase of a previously leased Swedish manufacturing facility for SEK 28,840,000 ($4,335,000) and the purchase of Acrotec AB and Subsidiaries, net of cash acquired, of $4,798,000. Net cash provided by financing activities decreased by $834,000 to $1,619,000 at December 31, 1995 from $2,453,000 at December 31, 1994 primarily due to the difference in debt borrowing and repayment activity. The decrease of short term loans required for working capital was partially offset by increased long-term debt requirements of which SEK 18,400,000 ($2,766,000) relates to financing the above building. 	The Company's working capital decreased from $49,877,000 at December 31, 1994, to $49,178,000 at December 31, 1995, a decrease of $699,000 or 1.4%. Currency rate fluctuations increased working capital by $733,000 and acquisitions, net of cash acquired, added $4,912,000 to the current period's working capital. The remainder of the decrease was due primarily to increases in trade payables and accrued compensation which more than offset inventory increases. The Company's working capital decreased by $4,397,000 or 8.2% from $53,575,000 at June 30, 1995 to $49,178,000 at December 31, 1995. Currency rate fluctuations decreased working capital by $2,412,000 and acquisitions, net of cash acquired, added $4,912,000 to the current period's working capital. Decreases in cash, used for the Acrotec acquisition and the purchase of the Swedish manufacturing facility, and decreases in receivables, net of inventory increases, were more than offset by decreases in other accounts payable and accrued compensation. 	The Company maintains relationships with foreign and domestic banks which have extended credit facilities to the Company totaling $41,329,000, including amounts available under the Revolver. As of December 31, 1995, the Company had outstanding $14,694,000 under these lines of credit, of which $4,141,000 is classified as long-term debt. Total debt levels as reported on the balance sheet at December 31, 1995 are $591,000 lower then they would have been if June 30, 1995 exchange rates had been used and include $3,045,000 of debt of the acquired entities. 	Net capital expenditures made to meet the normal business needs of the Company for the six months ended December 31, 1995 and December 31, 1994, including commitments for capital lease payments, were $1,025,000 and $904,000, respectively. 	The Company believes its cash flow from operations and bank lines of credit are sufficient to finance its working capital and other capital requirements for the near and long-term future. 	- 12 - 	Impact of Inflation 	The Company's results are affected by the impact of inflation on manufacturing and operating costs. Historically, the Company has used selling price adjustments, cost containment programs and improved operating efficiencies to offset the otherwise negative impact of inflation on its operations. 	BALDWIN TECHNOLOGY COMPANY, INC. 	PART II 	OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders 		(a) The Annual Meeting of Stockholders was held on November 16, 1995. 		(c) A brief description of matters voted upon and the results of the voting follows: 		Proposal 1 - To elect two Class II Directors to serve for 			three-year terms and one Class III Director to serve for a one-year term or until their successors are elected and qualify. 	SCHEDULE OF VOTES CAST FOR EACH DIRECTOR Total Vote For 	Total Vote Withheld Each Director		 From Each Director Class A M. Richard Rose			 14,795,034			140,383 Class A & B Gerald A. Nathe			 31,658,794			146,773 Judith G. Hyers		 31,656,684			148,883 Item 6. Exhibits and Reports on Form 8-K 	(b)	Reports on Form 8-K. There were no reports on Form 8-K filed for the three months ended December 31, 1995. 	- 13 - 	SIGNATURES 	Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 				BALDWIN TECHNOLOGY COMPANY, INC. 				BY s\ William J. Lauricella 				 Treasurer and 				 Chief Financial Officer Dated:	February 14, 1996 	- 14 -