FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE FISCAL YEAR ENDED MARCH 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 0-2958.
TSI INCORPORATED
(Exact name of registrant as specified in its charter)
Minnesota 41-0843524
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
500 Cardigan Road, Shoreview, Minnesota 55126
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 483-0900
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
National Association of Securities Dealers
Automated Quotations System (NASDAQ) Common Stock, $10 par value
(Name of each exchange on which registered) (Title of each class)
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 ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Aggregate market value of the voting stock held by non-affiliates of registrant
as of June 1, 1995: $37,174,576.
Number of shares outstanding as of June 1, 1995: 5,218,033 shares of Common
Stock, $.10 par value.
Documents incorporated by reference: See Index of Exhibits, Financial Statement
Schedules and Reports on Form 8-K, located at pages 19 and F-1 of this report.
Total number of pages including cover - 31
PART I
Item 1. BUSINESS
Development of the Business
The Company was founded in 1961 as a manufacturer of scientific measuring
instruments for research applications. In 1968, the Company went public under
the name Thermo-Systems Inc. and later became TSI Incorporated. In recent years,
the Company has applied its research instrumentation technology to industrial
applications in order to address the needs of a variety of market niches.
Products
The Company develops, manufactures and markets measuring instruments for
two types of phenomena. The first involves the measurements of surface motion
and fluid flow characteristics of gases and liquids. The second involves
measuring the presence of and certain characteristics of small particles and/or
gases in fluids or fluid flows, such as those found in air pollution studies,
workplace environments, or clean rooms. The Company's business is characterized
by many "niche" markets, wherein the applications of a few basic measuring
technologies can satisfy the measurement needs in many different industrial and
research situations.
The percentage contribution to net sales for these two classes of products
for the periods indicated was as follows:
Year Ended March 31,
Classes of Products 1995 1994 1993
Flow measuring instruments 61% 64% 64%
Particle & gas measuring instruments 39% 36% 36%
100% 100% 100%
Particle and gas measuring instruments recorded a 21 percent increase in net
sales in fiscal 1995 as compared with fiscal 1994, while net sales of fluid flow
instruments increased 6 percent during the same period. There was a shift in
fiscal 1995 in the percentage of total net sales toward particle measuring
instruments, mainly due to the sale of Portacount fit testers under a U.S. Army
contract.
Flow Measuring Instruments
On May 1, 1995, the Company acquired Alnor Instrument Company, located in
Skokie, Illinois. As part of the Company, Alnor products will fall under the
Flow Measuring Instruments class of products in fiscal 1996 and beyond. These
products will add capability and market share in applications to monitor and
control air flow, pressure and other safety and comfort factors in rooms and
balancing of air flow and temperature between rooms.
The Company's flow measuring instruments utilize several measurement
techniques, including thermal anemometry, laser Doppler velocimetry, particle
image velocimetry and several other techniques used in certain types of
products. Thermal technology has been used in the Company's flow measuring
instruments since its earliest products were developed. A probe containing a
small electrically heated element is exposed to a flow. The cooling effect of
the flow on the element provides a measure of the velocity and/or flow rate in
gas or liquid. The instrument can then portray the flow rate in an analog
display or convert it into a digital signal for further processing by a
computer. The output signal can be used to monitor, analyze or control the flow
or velocity within a flow channel or process. The Company has developed
companion products and software for convenient signal analysis and data
interpretation.
For over 20 years, the Company has been developing and producing various
flow measureing instruments which utilize a laser based technology (using
lasers manufactured by others). These instruments use a laser beam and optical
measurement technique to measure velocity and movement, rather than a probe as
used with the thermal instruments. The laser instruments are used to obtain
measurements in locations where a probe would be destroyed or is undesirable
because it would disturb the flow of the liquid or gas being measured. This
technology has been enhanced in a variety of ways to meet new applications.
Reducing the size, increasing the ruggedness of instruments and allowing for
more than one measurement to be taken at a point in time are some of these
enhancements. Also, the Company has developed and is selling a variety of user-
friendly software packages to expand and enhance the applications of these
instruments. The Company's laser instruments are used in conjunction with
computers (manufactured by others) which compile and interpret the data obtained
by the laser measurement devices.
Through engineering development work, licensing and acquisition of product
lines, the Company has added the capability of providing instruments and
software packages that measure or map flow patterns over an area of flow around
objects, ect., by visual means. This area is referred to as particle-image
velocimetry because the technique is based on the simultaneous tracking of the
movement of numerous particles in the flow stream. Optical techniques are used
to show images of the flow patterns. This area has been emerging as an important
addition to flow measuring and analysis capability which the Company expects to
grow over the next few years.
Another research application of laser based technology has been developed
and added during the last two years, called adaptive phase-Doppler velocimetry.
These instruments add the capability of measuring in two-phase flows where there
are liquid or solid particles or droplets in air (or other gas) as well as
gaseous particles in liquids. Specific applications are for simultaneous flow
and particle size distribution in sprays such as fuel sprays or inhalers.
With the acquisition in 1986 of Handar, in Sunnyvale, California, other
measurement techniques were added to the Company's capabilities, including "cup
and vane" and propeller-type wind speed measuring devices, for measuring the
characteristics of air and air flow.
Applications for flow measuring instruments include measurement and imaging
of velocity and turbulence in wind tunnels, ducts, pipes and in the atmosphere;
measurements of air speed or flow in building spaces for heating,
air-conditioning and ventilation work; measurements and imaging in gas turbine
engines and automotive exhaust gas pulses to improve efficiency or lower
pollution and noise, measurements of speed and length of solid surfaces, such as
steel, aluminum, fibers, paper and other materials; and as a part of closed loop
systems to control the velocity of flow or movement.
In addition to general research applications, several industrially oriented
flow measuring niches have been pursued by the Company over the years using the
Company's basic technologies. These products and niches are changing with time
as continuing product improvements and new applications are found. An outline of
these product lines and niches include the following:
- - Air flow sensors using thermal sensing techniques to monitor and/or control
air flow through laboratory fume hoods. A similar device measures and
controls static pressure in laboratories and other controlled rooms like
hospital isolation rooms by controlling the air flow through the space.
Engineering development work has continued during the past year in order to
improve performance of energy saving and safety enhancement devices for
hospital isolation rooms as well as laboratories.
- - An instrument using laser and optical techniques to measure surface speed
and length of aluminum, steel and similar materials for industrial process
control. This product line is performing well for measurements in rolling
mills and similar metals forming operations. Additional engineering work
has been done during the past year to adapt these instruments to
measurement of speed, length, diameter, etc., of fibers and film in process
applications such as textiles, paper, rubber and optical fibers.
- - Instruments that determine cloud height and visibility in moving air masses
using laser and optical techniques. These products are used for
meteorological applications at airports and other open areas. While these
products have been manufactured and sold for a number of years, additional
engineering work to enhance performance and broaden applicability continued
during fiscal 1995.
- - A new generation data collection platform used to collect and transmit
meteorological and environmental data was introduced during fiscal 1992.
This platform is used in conjunction with the Company's meteorology and
related monitoring systems for environmental measurements. During the past
year additional software capability has been added to enhance performance
and to broaden applications to other than meteorological and hydrological
data collections. Development continues to further enhance performance and
software applicability.
Particle and Gas Measuring Instruments
The Company's particle and gas measuring instruments utilize a number of
different techniques to analyze various characteristics of small particles in
gases and liquids as well as the presence and amount of various gases in air. A
variety of instruments are offered to detect, measure, sample, generate and
count small particles and to detect and measure other gases in air.
With the acquisition of Transducer Research, Incorporated in fiscal 1993,
the Company added to its particle measuring product lines the capability for
detection of gases that are important in measuring indoor air quality and
various toxic or polluting gases in outdoor environments.
In fiscal 1994, the Company's product lines for monitoring contamination
levels in clean rooms were sold to Particle Measuring Systems, Inc. (PMS) of
Boulder, Colorado. The Company is continuing, until December, 1998 or longer,
subject to options, to manufacture some of the products for PMS on an Original
Equipment Manufacturer (OEM) basis.
During fiscal 1994, based on licensed technology, a new analytical
instrument, called a nephelometer, was introduced for measuring the presence of
particles in the atmosphere that affect the penetration of the sun's rays,
related to global warming research.
During fiscal 1995, the Company received contracts to produce its
Aerodynamic Particle Sizer (APS) for the U.S. Army and U.S. Navy to be used as
an early detection device for sensing the presence of bio-hazard material in the
air. These contracts have included funding for development work to further
enhance the capabilities of the APS for these applications.
Applications for particle measuring instruments include a variety of
research and testing instruments designed to measure the size distribution of
extremely small particles; to collect and classify the particles into size
ranges for further analysis; to detect and count particles in a fluid at a given
location; and to generate known, uniform particles in a wide variety of types
and sizes. Gas measuring instruments are designed to detect the presence and
levels of various polluting gases or abnormal levels of gases in air. The
measurements obtained through these processes are then used to monitor
contamination levels; to make measurements in aerosol generation studies; to
measure air pollution levels in buildings or in outside air; to measure the size
distribution of various powders; to measure toxic gases at waste sites; to
measure indoor air quality and to test for leaks in filters and similar media.
Many of the Company's particle and gas measuring instruments are also used in
conjunction with computers (manufactured by others) which compile and interpret
the data obtained. Also, the Company has developed and sells a variety of
user-friendly software packages to expand and enhance the applications of these
instruments.
Like the flow measuring instruments, the Company has expanded on the
general research applications of its particle and gas measuring instruments by
pursuing industrially oriented niches over the past several years. Using the
Company's basic technologies, the product lines have expanded into industrial
niches where new applications are found. An outline of these product lines and
niches include the following:
- - An instrument that uses particle sensing techniques to measure for leaks in
face masks and respirators that result from inadequate fit, called the
PORTACOUNT(R) fit tester. The products are used in industrial hygiene
applications where people may be at risk from exposure to hazardous
environments. This product has been fully development and has been marketed
for about seven years. During fiscal 1993, the product was packaged for
military use by the U.S. Army and U.S. Marines for fit testing of their gas
masks and during fiscal 1994, production of the military version commenced
under a contract that extended through most of fiscal 1995. Additional
contracts are expected from U.S. defense agencies and from other allied
nations. Instruments that determine the efficiencies of filters and filter
media using particle sensing techniques to measure for leaks. This product
line is used for quality control by filter manufacturers and has been
manufactured and marketed for several years. Additional development work
occurred in fiscal 1994 to enhance and broaden the filter product line.
- - With the addition of gas detecting sensors and instruments to this product
classification through the acquisition of Transducer Research Inc. in
fiscal 1993, potential applications have expanded. During fiscal 1995,
instruments were introduced to measure various indoor air quality
parameters including levels of carbon dioxide to indicate the "sick
building syndrome" levels; and early in fiscal 1996 this product line was
expanded to also measure carbon monoxide. Development work is continuing to
add other gas detecting instrument to these product lines.
- - Manufacturing, as an OEM supplier, instruments for monitoring the particle
contamination levels in air and other gases in industrial clean room
applications and residue in ultra-clean water, using particle sensors that
incorporate light scattering optical techniques. These instruments are used
by manufacturers of semiconductor devices, pharmaceutical products and
other products which require very low contamination levels during critical
manufacturing processes. Continued engineering development in fiscal 1995
added to the performance capabilities of these instrument lines.
Raw Materials and Parts
The Company purchases most of its electronic components and materials from
suppliers in the United States and, generally, has not experienced problems with
availability. Some materials such as laser diodes and fibers for fiber optics
are imported. Import restrictions could impair availability of some of these
materials. Engineering design of the Company's products does not require exotic
parts or materials and the selection of readily available materials has been an
important design goal. The Company's vendor certification program, which has
been in operation for several years, has been and is expected to continue being
a positive step toward increased quality and timeliness on incoming parts. The
Company continues to seek and maintain alternative vendors and has generally
been able to locate alternative sources for materials during past periods of
short supply. A severe shortage of electronic parts could impair the Company's
ability to produce certain products but a broad and diversified product line
helps to alleviate this risk.
Customers
The Company sells to a broad range of customers throughout the world. These
customers include many industrial companies, educational institutions, research
organizations and agencies of the United States and foreign governments.
The Company's sales can be divided into market categories based upon
customer classification as follows: (i) environmental instrumentation customers,
(ii) research and analytical instrumentation customers, including universities,
colleges and technical schools as well as governmental and non-governmental
research institutes and (iii) process instrumentation customers. Some
educational and non-governmental research sales are funded in whole or in part
by government.
Sales to defense customers accounted for about 15 percent of total net
sales in fiscal 1995 and 12 percent in fiscal 1994, but have accounted for no
more than 10 percent of total sales for each of the prior eight years. The
increases in fiscal 1995 and fiscal 1994 were mainly due to PortaCount fit
testers under the aforementioned U.S. military contract.
Reduction or changes in federal spending may adversely affect the Company's
governmental and, to some extent, educational sales. United States governmental
sales may be canceled at the government's convenience.
Approximately 69 percent of the Company's sales during fiscal 1995 were to
domestic customers, with the balance to international customers, mainly in
Europe and the Pacific basin. Sales to international customers consist
principally of products manufactured in the United States.
Sales to international customers by classes of products, as a percentage of
the Company's net sales were as follows for the periods indicated.
Year Ended March 31
Classes of Products 1995 1994 1993
Flow measuring instruments 23% 22% 24%
Particle & gas measuring instruments 8% 9% 14%
31% 31% 38%
Overall, the Company's fiscal 1995 international net sales increased about 9
percent compared to fiscal 1994 and sales of both flow measuring and particle
and gas measuring instruments increased at about the same rate. From fiscal 1993
to fiscal 1994, international sales decreased in particle and gas measuring
instruments, mostly in the product line of microcontamination monitoring
instruments for clean rooms that was divested in fiscal 1994. The Company's
export markets improved for most product lines during fiscal 1995, as global
economic conditions improved.
Further segment information about domestic vs foreign operations is
included under Note I of the Notes to Consolidated Financial Statements on page
19 of the Company's 1995 Annual Report to Shareholders (Exhibit 13, page F-8).
The decreases in net sales from fiscal 1993 to 1994 and 1994 to 1995 through
foreign operations do not reflect changes in total foreign sales, but rather a
shift toward more of the foreign sales going through independent distributors.
Refer to page 10 of the Management's Discussion and Analysis of Results of
Operations and Financial Condition for added discussion regarding international
sales.
Marketing
The Company markets its products through Company-employed sales engineers
who operate out of offices located in the United States and international sales
offices located in Europe. In addition, independent sales representatives and
distributors represent the Company in other domestic and international markets.
The Company uses promotional catalogs, technical bulletins, seminars, displays,
trade shows and advertising in trade journals to promote its products. The
Company's sales consist primarily of products listed in its catalogs, although
the Company also sells specialized products designed to meet specific customer
requirements.
The nature of the Company's products requires a marketing approach that is
customer application oriented. Accordingly, sales engineers and independent
representatives are technically competent in a variety of engineering and
scientific disciplines as well as trained in the market niches and product lines
on which they concentrate. The sales force provides the Company with information
for development of new products and identification of new markets. In addition
to direct sales efforts and after-sales servicing, the Company provides its
customers with technical support, advice, training and application information
related to the Company's products.
At March 31, 1995, the Company's backlog of orders was approximately
$11,364,000 compared to $12,514,000 at March 31, 1994 and $6,109,000 at March
31, 1993. The Company estimates that approximately 90% of the 1995 backlog will
be shipped by March 31, 1996.
As of March 31, 1994, about $5 million of the Company's backlog was due to
the aforementioned U.S. Army contract for fit testers, which was shipped prior
to March 31, 1995, so a major part of the backlog decrease from that contract
was replaced during fiscal 1995 by other orders and contracts.
Competition
The Company's products compete with products utilizing different
technologies as well as directly competitive products. For example, the
Company's fluid flow measuring instruments which use thermal measurement
techniques compete with instruments utilizing differential pressure or ultra-
sonic sound wave measurement techniques. New products could be introduced by
competitors that would make existing Company products obsolete. The Company's
ability to compete is dependent upon its ability to develop or license products
in a changing technological environment. The Company's competitive strength
often comes from its ability to fit instruments to new applications on an
ongoing basis such that new applications or market niches replace those where
needs have changed, as well as its ability to grow by adding more niches.
Competitive forces vary in accordance with the various market niches into
which the Company sells products. Competition can best be described by starting
with the two product classes and further categorizing product types in each
class, as shown in the table that follows. In the table, when "significant
market share" is indicated, it is due to the Company's long term presence in a
niche or because the product is so unique that it may, essentially, be the only
product available to make the measurement required, thus creating its own niche
The exact number of international competitors is not always known, particularly
in cases where the Company does not have international experience with that
product type. The Company typically confronts the same group of competitors in
about 20% of its total sales.
COMPETITORS COMPANY'S MARKET SHARE
Major Minor Significant Minor
Product Type Int'l Domestic Int'l Domestic Share Share
Flow Measuring Instruments
Flow Research 1 1 4 2 X
Industrial Flow 3 2 more more X*
than 6 than 6
Lab/Room Air
Flow Control - 3 - 3 X*
Surface Motion 1 - 1 - X
Meteorology/
Environmental
Monitoring 4 3 more more X*
than 6 than 6
Particle & Gas Measuring Instruments
Particle Research 2 2 more more X*
than 6 than 6
Clean Room
Monitoring 3 3 more more X*
than 6 than 6
Respirator
Fit Test 1 - - 2 X
Indoor Air
Quality 2 4 more more X*
than 6 than 6
Filter Testing - 1 2 - X
- ------
*Market share varies considerably by specific product within the product type
Research and Product Development
The Company is engaged in research and development activities principally
for the development of proprietary products. These activities, which occur in
all aspects of the Company's business, generally consist of the development,
design and testing of potential new products with emphasis on applied (as
distinct from basic) research. Approximately 75% of the Company's engineering
and technical staff are engaged in research and development activities on a
full-time basis. The Company also engages in some contract research work for
others that varies from time to time. This type of contract work generally
relates to the development of a future instrument or product enhancements to
better meet market needs and applications. In addition, the Company utilizes
various outside consultants in the research and development area. In fiscal year
1995, the Company spent approximately $7,196,000 (14.7% of net sales) in
research and product development activities, compared to $6,360,000 (14.5% of
net sales) and $5,874,000 (14.4% of net sales) in fiscal 1994 and 1993,
respectively.
Patents and Licenses
One or more aspects of several products currently marketed by the Company
are covered by patents owned by the Company or licensed to the Company by
outside inventors. While the Company believes that patent protection is
important to its business, it does not believe that the expiration or
invalidation of any particular patent would have a materially adverse effect
upon its business. All licenses held with respect to technology used by the
Company are believed to be fully enforceable. The loss of any one of several
licenses held by the Company would probably not have significant adverse effect
upon the Company.
Employees
As of March 31, 1995, the Company had 362 employees. The Company's
employees are not represented by a union, there has never been a work stoppage
due to labor difficulties and the Company considers its relationship with
employees to be satisfactory.
Item 2. PROPERTIES
The Company's general offices and main manufacturing facilities are located
at 500 Cardigan Road, Shoreview, Minnesota 55126. This building contains
approximately 83,000 square feet. The building is basically one story of about
71,000 square feet, with a mezzanine area of about 12,000 square feet, and
primarily of masonry construction. It was constructed for, and has been in use
by the Company since 1976 and is well suited to the Company's operations. This
building was built in two parts, the first being built in 1976 and the second
part in 1980. The Company has been utilizing all of the floor space in this
facility during the past few years, and due to process improvements has been
able to grow without additional space. During fiscal 1995 the Company began a
project to build 58,000 square feet of space as a two story addition, providing
a total of about 140,000 square feet of space at the Shoreview facility. This
project along with improvements in the existing space, will be completed in the
fall of calendar year 1995 at a total project cost of about $3.5 million. The
Company owns additional land at the same location on which to build about 80,000
square feet of additional space in the future as required.
Handar, a subsidiary located in Sunnyvale, California, leases approximately
22,000 square feet of space under a five year lease commenced in January 1994.
This space was modified to suit Handar's operations.
TSI GmbH, a subsidiary located in Aachen, Germany, leases about 10,000
square feet of space which was constructed for TSI GmbH and occupied under a ten
year lease (with options) entered into in 1985.
The Company also leases space for subsidiary operations and several sales
offices.
Item 3. LEGAL PROCEEDINGS
See Notes C and G of the Notes to Consolidated Financial Statements (pages
20 and 22) in the Company's 1995 Annual Report to Shareholders for information
regarding disqualification of The Company's Domestic International Sales
Corporation ("DISC") by the Internal Revenue Service (IRS), and the favorable
settlement of private civil litigation relating to the disqualification of the
DISC during fiscal 1993.
No material legal proceedings were pending or threatened against the
Company or its subsidiaries as of March 31, 1995.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted during the fourth quarter of the year ended March
31, 1995, for a vote by the shareholders.
PART II
Item 5. MARKET FOR REGISTRANTS' COMMON EQUITY & RELATED MATTERS
The information in the sections titled "Stock and Dividend Data" and "Stock
Data" on page 8 of the Company's 1995 Annual Report to Shareholders is
incorporated herein by reference.
Item 6. SELECTED FINANCIAL DATA
The information in the section titled "Eleven-Year Financial Data Summary"
for the year 1991 through 1995 on page 8 of the Company's 1995 Annual Report to
Shareholders is incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
The information in the section titled "Management Discussion and Analysis
of Results of Operations and Financial Condition" on pages 9 through 11 of the
Company's 1995 Annual Report to Shareholders is incorporated herein by
reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements and notes thereto on pages 12 through
20 of the Company's 1995 Annual Report to Shareholders are incorporated herein
by reference.
The following supplemental financial data are included herein and should be
read in conjunction with the consolidated financial statements in the Company's
1995 Annual Report to Shareholders:
Schedule VIII: Valuation and Qualifying Accounts, page F-4.
Schedule X: Supplementary Income Statement Information, page F-5.
Item 9. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) The information concerning the Company's directors set forth
in the Company's Proxy Statement for 1995 Annual Meeting of
Shareholders, dated June 21, 1995, is incorporated by
reference herein.
(b) The executive officers of the Company are:
Position with the Company
Name Age and Business Experience
Leroy M. Fingerson 62 Chairman of the Board of Directors and Chief
Executive Officer. Dr. Fingerson has been Chief
Executive Officer of the Company since 1961 and
Chairman of the Board since 1986.
James E. Doubles 54 President and Chief Operating Officer since 1992 and
a Director. Executive Vice President and Chief
Operating Officer from 1989 to 1992.
Lowell D. Nystrom 59 Vice President, Treasurer and Chief Financial Officer
and a Director. Mr. Nystrom has been Vice President,
Treasurer and Chief Financial Officer of the Company
since 1961.
(c) Section 16(a). See the Company's Proxy Statement for 1995
Annual Meeting of Shareholders, dated June 21, 1995, which
is incorporated herein by reference, referring to the
caption "Compliance with Section 16(a) of the Securities
Exchange Act of 1934".
(d) There are no family relationships between and among
directors or officers.
(e) Business experience of Directors may be found in the
Company's Proxy Statement for 1995 Annual Meeting of
Shareholders, dated June 21, 1995, which is incorporated
herein by reference.
Item 11. EXECUTIVE COMPENSATION
The information required by Item 11 is incorporated herein by reference
from Proxy Statement for 1995 Annual Meeting of Shareholders, dated June 21,
1995, under the caption "Executive Compensation".
Item 12. PRINCIPAL SHAREHOLDERS
The information required by Item 12 is incorporated herein by reference
from the Company's Proxy Statement for 1995 Annual Meeting of Shareholders,
dated June 21, 1995, under the caption "Principal Shareholders".
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K
(a) See accompanying Index to Financial Statements on page F-1.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the fourth quarter of
fiscal 1995.
(c) Exhibits included herein:
Exhibit 3a: Restated Articles of Incorporation as
amended in November, 1984 and October, 1986,
hereby incorporated by reference.
Exhibit 3b. Restated Bylaws adopted June, 1987, hereby
incorporated by reference.
Exhibit 10.a* TSI Incorporated Incentive Stock
Option Plan of 1982, incorporated by
reference from Form S-8, File No. 1-91697,
June 14, 1984.
Exhibit 10.b:* TSI Incorporated Employee Stock
Purchase Plan of 1987, incorporated by
reference from Form S-8, File No. 33-23247,
July 25, 1988.
Exhibit 10.c:* TSI Incorporated Stock Option Plan of
1988, incorporated by reference from Form
S-8, File No. 33-20627, August 22, 1989.
Exhibit 10.d:* TSI Incorporated Stock Option Plan of
1992, incorporated by reference from Form
S-8, File No. 33-66194, July 19, 1993.
Exhibit 10.e:* TSI Incorporated Stock Purchase Plan
of 1994, incorporated by reference from Form
S-8, File No. 33-86468, November 17, 1994.
Exhibit 11: Computation of Per Share Earnings
Exhibit 13: The Company's 1995 Annual Report to
Shareholders for the fiscal year ended March
31, 1995.
Exhibit 21: Subsidiaries of the Company
Exhibit 23: Consent of Independent Auditors
Exhibit 27: Financial Data Schedule for SEC use only.
- -------
* Indicates management contract or compensation plan or arrangement required
to be filed as an exhibit.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Date: June 22, 1995 TSI INCORPORATED
/s/ Leroy M. Fingerson
Leroy M. Fingerson, Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated:
Signature Title Date
/s/ Leroy M. Fingerson Chief Executive Officer and a Director June 22, 1995
Leroy M. Fingerson (Principal Executive Officer)
/s/ Lowell D. Nystrom Vice President, Chief Financial Officer June 22, 1995
Lowell D. Nystrom and a Director (Principal Financial and
Accounting Officer)
/s/ James E. Doubles President, Chief Operating Officer and June 22, 1995
James E. Doubles Director
/s/ John F. Carlson Director June 22, 1995
John F. Carlson
/s/ Frank D. Dorman Director June 22, 1995
Frank D. Dorman
/s/ Kenneth J. Roering Director June 22, 1995
Kenneth J. Roering
/s/ Donald M. Sullivan Director June 22, 1995
Donald M. Sullivan
/s/ Lawrence J. Whalen Director June 22, 1995
Lawrence J. Whalen
TSI INCORPORATED 10-K
TSI INCORPORATED AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
A. STATEMENTS OF REGISTRANT
No separate financial statements of the Registrant are included herein
as the Registrant is primarily an operating company. All subsidiary
companies are wholly owned, and their indebtedness to any person other
than the Registrant or its consolidated subsidiaries is, in the
aggregate, less than 5% of consolidated assets at March 31, 1995. The
financial statements of the Registrant and all subsidiaries are
included in the consolidated financial statements.
B. CONSOLIDATED FINANCIAL STATEMENTS
Reference is made to the consolidated financial statements in the
Company's 1995 Annual Report to Shareholders which are incorporated
herein by reference in accordance with Rule 12b-23 under the Securities
Exchange Act of 1934 and attached hereto.
Annual
Report
Page
Quarterly Financial Information (Unaudited) 12
Consolidated Statements of Earnings for the Years Ended 12
March 31, 1995,1994 and 1993
Consolidated Balance Sheets - March 31, 1995 and 1994 13
Consolidated Statements of Cash Flows for the Years Ended
March 31, 1995, 1994, and 1993. 14
Consolidated Statements of Shareholders' Equity for Years
Ended March 31, 1995, 1994 and 1993. 15
Notes to Consolidated Financial Statements 15
Report of Independent Public Accountants 20
C. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON SCHEDULES
D. CONSOLIDATED SCHEDULES
Schedule Description
VIII Valuation and Qualifying Accounts
X Supplementary Income Statement Information
All schedules except those listed above have been omitted as not required, not
applicable, or the information required therein is contained in the financial
statements or the footnotes thereto.
Independent Auditors' Report
The Board of Directors and Shareholders
TSI Incorporated:
Under date of May 19, 1995, we reported on the consolidated balance sheets of
TSI Incorporated and subsidiaries as of March 31, 1995 and 1994, and the related
consolidated statements of earnings, shareholders' equity and cash flows for
each of the years in the three-year period ended March 31, 1995 as contained in
the 1995 annual report to shareholders. These consolidated financial statements
and our report thereon are incorporated in the annual report on Form 10-K for
the year 1995. In connection with our audits of the aforementioned consolidated
financial statements, we also have audited the related financial statement
schedules as listed in the accompanying index (see Item 8). These financial
statement schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statement schedules
based on our audits.
In our opinion, such financial statement schedules, when considered in relation
to the basic consolidated financial statements taken as a whole, present fairly,
in all material respects, the information set forth therein.
Minneapolis, Minnesota
May 19, 1995
/s/ KPMG Peat Marwick LLP
Schedule VIII: VALUATION AND QUALIFYING ACCOUNTS
TSI INCORPORATED AND SUBSIDIARIES
- -----------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- -----------------------------------------------------------------------------------------------------
Additions
(1) (2) Bad debts
Description Balance Charged to Charged charged Balance of
beginning cost and to other against end of
of Period expenses accounts reserve Period
- ------------------------------------------------------------------------------------------------------
Year ended
March 31, 1995
Deducted from
asset account:
Allowance for
doubtful accounts: $183,000 $27,000 $34,000 $102,000 $142,000
Year ended
March 31, 1994
Deducted from
asset accounts:
Allowance for
doubtful accounts: $133,000 $50,000 - - $183,000
Year ended
March 31, 1993
Deducted from
asset accounts:
Allowance for
doubtful accounts: $109,000 $24,000 $14,000 $ 14,000 $133,000
Schedule X: SUPPLEMENTARY INCOME STATEMENT INFORMATION
TSI INCORPORATED AND SUBSIDIARIES
COL. A COL. B
Charged to Costs and Expenses
Item Year Ended March 31,
1995 1994 1993
Advertising $1,086,000 $897,000 $892,000
Amounts for royalties, amortization on intangible assets, taxes other than
payroll and income, and maintenance and repairs are not presented as such
amounts are less than 1% of net sales.
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
11 Computation of Per Share Earnings
13 Annual Report to Shareholders for the fiscal
year ended March 31, 1995
21 Subsidiaries of the Company
23 Consent of Auditors
27 Financial Data Schedule