UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark one)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period DECEMBER 31, 1995
----------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934
For the transition period to
--------- ------------
Commission file number 0-6845
---------------------------
BOWLINE CORPORATION
(Exact name of registrant as specified in charter)
New York 13-1576392
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11 Bala Avenue, Bala Cynwyd, Pennsylvania 19004
(Address of principal executive offices)
(215) 667-7310
(Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding l2 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
At February 13, 1996, there were 1,287,412 shares of the Registrant's
common stock, $.02 par value per share, outstanding.
Page 1 of 7
BOWLINE CORPORATION AND SUBSIDIARY
PART I
Item 1. FINANCIAL STATEMENTS
BOWLINE CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
December 31,
1995 1994
---------- ---------
OPERATING REVENUES $ 150,000 $ 150,125
SELLING AND ADMINISTRATIVE EXPENSE 170,999 157,948
INTEREST INCOME 21,667 17,565
LOSS ON DISPOSAL OF ASSETS - 5,433
------- --------
INCOME (LOSS) BEFORE INCOME TAXES 668 4,309
PROVISION FOR INCOME TAXES 1,189 1,500
------- --------
NET INCOME (LOSS) ($ 521) $ 2,809
======== ========
NET INCOME (LOSS) PER COMMON SHARE - -
========= =======
WEIGHTED AVERAGE NUMBER OF SHARES 1,287,412 1,287,412
========= =========
See Notes to Consolidated Financial Statement
Page 2 of 7
BOWLINE CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
December 31, September 30,
1995 1995
------------ -------------
ASSETS
CURRENT ASSETS:
Cash $ 2,057,270 $1,978,008
Accounts receivable from affiliate 53,000 53,000
Other current assets 7,932 8,238
--------- ---------
Total current assets 2,118,202 2,039,246
PLANT AND EQUIPMENT - net 142,762 161,121
--------- ---------
TOTAL ASSETS $2,260,964 $2,200,367
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 86,596 36,464
Other current liabilities 75,169 64,183
--------- ---------
Total current liabilities 161,765 100,647
--------- --------
STOCKHOLDERS' EQUITY:
Common stock, par value $.02 per share;
authorized 5,000,000 shares; issued
and outstanding 1,287,412 25,748 25,748
Additional paid-in capital 6,975,428 6,975,428
Accumulated deficit (4,901,977) (4,901,456)
---------- -----------
Total stockholders' equity 2,099,199 2,099,720
---------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,260,964 $2,200,367
========== ==========
See notes to consolidated financial statements
Page 3 of 7
BOWLINE CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
Three Months
Ended December 31,
1995 1994
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income/(loss) ($ 521) $ 2,809
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities
Depreciation and amortization 18,359 6,944
Loss on disposal of assets 5,433
(Increase) decrease in
Accounts receivable 306 75,098
Other current assets 157
Increase (decrease) in:
Accounts payable 50,132 ( 785)
Other current liabilities 10,986 9,457
-------- ----------
Total adjustments 79,783 106,304
-------- ----------
Net cash provided by (used in)
operating activities 79,262 109,113
-------- ----------
NET INCREASE (DECREASE) IN CASH 79,262 109,113
CASH, BEGINNING OF PERIOD 1,978,008 1,791,386
--------- ----------
CASH, END OF PERIOD $2,057,270 $1,900,499
========== ==========
See notes to consolidated financial statements
Page 4 of 7
BOWLINE CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Preparation
The accompanying financial statements have been prepared by Bowline Corporation
(the "Company") pursuant to the rules and regulations of the Securities and
Exchange Commission. In the opinion of management, these financial statements
give effect to all normal recurring adjustments necessary to present fairly the
financial position of the Company as of December 31, 1995 and September 30,
1995, and the results of operations and cash flow for the three-month period
ended December 31, 1995 and December 31, 1994.
Certain reclassifications have been made to the prior year's financial
statements to conform to classifications used in the current fiscal year.
The Company's revenue consists solely of providing data processing services to
an affiliate.
Although the Company believes that the disclosures included herein are adequate
to make the information not misleading, certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been omitted. Accordingly,
the accompanying financial statements should be read in conjunction with the
financial statements and the related financial review included in the Company's
latest annual report on Form 10-K for the year ended September 30, 1995.
Note 2. Computation of Net Income per Common Share
Net earning per common share was computed by dividing the net income by the
number of common shares outstanding during each period presented.
Note 3. Income Taxes
Components of the provision for income taxes are as follows:
December 31, December 31
1995 1994
------------ --------
State - current $1,189 $1,500
Federal 0 0
------ ------
Provision for income tax $1,189 $1,500
====== ======
On December 31, 1995, the Company had net operating losses carried forward of
approximately $18,800,000 for federal income tax purposes which expire as
follows: $2,600,000 in 1999, $800,000 in 2000, $2,200,000 in 2001, $12,200,000
in 2002, $200,000 in 2004, and $800,000 in 2005.
On December 31, 1995, the Company had investment tax credits of approximately
$255,000 which expire as follows: $155,000 in 1996, $52,000 in 1997, $44,000 in
1998, $1,000 in 1999 and $3,000 in 2000.
The Company adopted Statement of Financial counting Standard No. 109,
"Accounting for Income Taxes," ("SFAS No. 109") beginning October 1, 1993. No
provision for federal income taxes is recorded due to the existence of net
operating losses carried forward. The Company has no means of realizing value
from any of the above, therefore, a valuation reserve was established in
accordance with SFAS 109 for 100% of the net operating losses and investment tax
credits carried forward. Accordingly, the adoption of SFAS 109 had no effect on
the Company's results of operations.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Three months ended December 31, 1995, compared to three months ended December
31, 1994
Revenues for the three months ended December 31, 1995, were equal to revenues
for the three months ended December 31, 1994. The Company's revenue consists
solely of providing data processing services to an affiliate.
Selling and administrative expenses consist of operating expenses of the data
processing center and corporate expenses. Operating expenses at the data
processing facility, 65% of the costs, increased 8% due to general inflation and
higher franchise taxes. Corporate expenses increased slightly.
Interest income increased by 23.3%, mostly a result of higher interest rates.
Liquidity and Capital Resources
Cash flow for the three months ended December 31, 1995, was positive $79,000.
This was primarily a result of an increase in accounts payable.
The Company's business consists solely of servicing an affiliate. Expenditures
have been reduced through a reduction of personnel and relocating the computer
center to a lower cost facility. No major capital expenditures are planned and
the Company believes its liquidity is adequate to finance its cash requirements.
Page 6 of 7
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.
BOWLINE CORPORATION
________________________________
JAMES BENENSON, JR., CHAIRMAN OF
THE BOARD
DATE: February 13, 1996
--------------------
________________________________
CLIFFORD J. DEMAREST, CHIEF
EXECUTIVE OFFICER AND PRESIDENT
________________________________
MICHAEL BONIELLO, TREASURER,
PRINCIPAL ACCOUNTING AND FINANCIAL
OFFICER
Page 7 of 7