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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended DECEMBER 27, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
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Commission file number 0-10734
FERROFLUIDICS CORPORATION
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(Exact name of registrant as specified in its charter)
Massachusetts 02-0275185
------------------------------- -------------------
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization Identification No.)
40 Simon Street,
Nashua, New Hampshire 03061
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(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (603) 883-9800
----------------------------------------------------
(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 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.
(1) Yes [X] No [ ]
(2) Yes [X] No [ ]
Indicate the number of shares outstanding of each of the Registrant's classes of
Common Stock, as of October 31, 1997.
COMMON STOCK, $.004 PAR VALUE PER SHARE 6,189,073
- --------------------------------------- ---------------
(Class) (No. of Shares)
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TABLE OF CONTENTS
Page Nos.
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Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets -
December 27, 1997 and June 28, 1997 3
Consolidated Statements of Operations -
Three Months Ended December 27, 1997 and December 28, 1996 4
Consolidated Statements of Operations -
Six Months Ended December 27, 1997 and December 28, 1996 5
Consolidated Statements of Cash Flows -
Six months Ended December 27, 1997 and December 28, 1996 6
Notes to Consolidated Financial Statements 7 - 8
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Position 9 - 12
Part II. Other Information 12
Signatures 13
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PART I. FINANCIAL INFORMATION
ITEM 1.
FERROFLUIDICS CORPORATION
CONSOLIDATED BALANCE SHEETS
December 27, 1997 and June 28, 1997
ASSETS December 27, 1997 June 28, 1997
- ------ ----------------- -------------
Current Assets: (unaudited) (note)
Cash and cash equivalents $ 1,130,000 $ 883,000
Accounts receivable - trade, less allowance
for doubtful accounts of $222,000 at
December 27, 1997 and $199,000 at June 28, 1997 16,946,000 13,609,000
Inventories 13,941,000 15,263,000
Advances to suppliers 1,283,000 1,341,000
Prepaid and other current assets 705,000 474,000
----------- -----------
Total Current Assets 34,005,000 31,570,000
----------- -----------
Property, plant and equipment, at cost, net
of accumulated depreciation of $11,541,000 at
December 27, 1997 and $10,961,000 at June 28, 1997 9,908,000 8,377,000
Cash value of life insurance 1,832,000 1,751,000
Deferred income taxes, net 1,815,000 1,815,000
Other assets, principally goodwill 1,456,000 1,488,000
----------- -----------
TOTAL ASSETS $49,016,000 $45,001,000
=========== ===========
LIABILITIES
- -----------
Current Liabilities:
Bank notes payable 10,538,000 6,781,000
Accounts payable 4,492,000 5,126,000
Customer deposits 1,390,000 2,426,000
Accrued expenses 4,549,000 3,914,000
----------- -----------
Total Current Liabilities 20,969,000 18,247,000
----------- -----------
Long-term debt obligations 5,000,000 5,000,000
Other liabilities 169,000 173,000
STOCKHOLDERS' EQUITY
- --------------------
Preferred stock, $.001 par value, authorized
100,000 shares, issued and outstanding, none -- --
Common stock, $.004 par value, authorized
12,500,000 shares, issued and outstanding
6,189,073 shares at December 27, 1997 and at
June 28, 1997 25,000 25,000
Additional paid-in capital 36,606,000 36,477,000
Retained deficit (12,703,000) (13,971,000)
Currency translation adjustments (1,050,000) (950,000)
----------- -----------
Total Stockholders' Equity 22,878,000 21,581,000
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $49,016,000 $45,001,000
=========== ===========
Note: The balance sheet at June 28, 1997 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
The accompanying notes are an integral part of the consolidated financial
statements
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FERROFLUIDICS CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS For the Three Months Ended
December 27, 1997 and December 28, 1996
(unaudited)
1997 1996
---- ----
Net sales and revenues $15,435,000 $15,598,000
Cost of goods sold 10,509,000 10,843,000
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4,926,000 4,755,000
Engineering and product development expenses 1,140,000 1,222,000
Selling, general and administrative expense 2,871,000 3,112,000
----------- -----------
Income from operations 915,000 421,000
Interest income 9,000 13,000
Interest (expense) (291,000) (199,000)
Other income (expense) 59,000 (27,000)
----------- -----------
Income before income taxes 692,000 208,000
Provision for income taxes 80,000 24,000
----------- -----------
Net income $ 612,000 $ 184,000
=========== ===========
PER SHARE DATA:
Net income per common share $ 0.10 $ .03
=========== ===========
Net income per common share - assuming dilution $ 0.10 $ .03
=========== ===========
The accompanying notes are an integral part of the consolidated financial
statements.
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FERROFLUIDICS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Six months Ended December 27, 1997 and December 28, 1996
(unaudited)
1997 1996
---- ----
Net sales and revenues $30,765,000 $33,068,000
Cost of goods sold 21,286,000 22,693,000
----------- -----------
9,479,000 10,375,000
Engineering and product development expenses 2,092,000 2,786,000
Selling, general and administrative expense 5,318,000 6,353,000
----------- -----------
Operating income 2,069,000 1,236,000
Interest income 10,000 31,000
Interest (expense) (538,000) (362,000)
Other (expense) (102,000) (14,000)
------------ -----------
Income before income taxes 1,439,000 891,000
Provision for income taxes 171,000 101,000
----------- -----------
Net income $ 1,268,000 $ 790,000
=========== ===========
PER SHARE DATA:
Net income per common share $ .21 $ .13
=========== ===========
Net income per common share - assuming dilution $ .20 $ .13
=========== ===========
The accompanying notes are an integral part of the consolidated financial
statements.
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FERROFLUIDICS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended December 27, 1997 and December 28, 1996
(unaudited)
1997 1996
---- ----
Cash flows from operating activities:
Net income $ 1,268,000 $ 790,000
Adjustments to reconcile net income to net
cash used in operations:
Depreciation and amortization 671,000 868,000
Restricted stock expense 145,000 261,000
Other (143,000) (47,000)
Changes in assets and liabilities:
Accounts receivable (3,403,000) (1,807,000)
Inventories 1,265,000 (283,000)
Prepaid expenses and other current assets (175,000) (224,000)
Accounts payable and accrued expenses 54,000 (3,354,000)
Customer deposits (1,036,000) 347,000
----------- -----------
Net cash used in operating activities (1,354,000) (3,449,000)
----------- -----------
Cash flow from investing activities:
Additions to property, plant, equipment (2,141,000) (473,000)
Proceeds from sale of assets -- 38,000
----------- -----------
Net cash used in investing activities (2,141,000) (435,000)
----------- -----------
Cash flow from financing activities:
Proceeds from issuance of common stock -- 156,000
Short term borrowing, net 3,757,000 3,542,000
----------- -----------
Net cash provided by financing activities 3,757,000 3,698,000
----------- -----------
Effect of currency rate changes on cash (15,000) (26,000)
----------- -----------
Net increase (decrease) in cash 247,000 (212,000)
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Cash and cash equivalents at beginning of period 883,000 1,701,000
----------- -----------
Cash and cash equivalents at end of period $ 1,130,000 $ 1,489,000
=========== ===========
Cash paid for interest and income taxes for the
six months ended December 27, 1997 and
December 28, 1996 is as follows:
1997 1996
---- ----
Interest $ 537,000 $ 294,000
Income taxes $ -- $ 327,000
The accompanying notes are an integral part of the consolidated financial
statements.
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FERROFLUIDICS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. BASIS OF PRESENTATION
The accompanying consolidated financial statements of Ferrofluidics
Corporation and its subsidiaries (the "Company") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and in accordance with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. They do not therefore include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. The results of operations of any interim period are subject to
year-end adjustments, and are not necessarily indicative of the results of
operations for the fiscal year. For further information, refer to the
consolidated financial statements and the footnotes thereto included in the
Company's Annual Report on Form 10-K for the year ended June 28, 1997 ("fiscal
1997").
FOREIGN EXCHANGE CONTRACTS
At December 27, 1997, the Company had outstanding approximately $3.5
million in foreign exchange contracts used to hedge against fluctuations in the
translation of the balance sheets of foreign subsidiaries. These contracts were
marked to market at December 27, 1997. Separately, the Company had outstanding
at December 27, 1997 two additional contracts to sell forward, for periods up to
six months, approximately $1.8 million in anticipated foreign currency receipts
in connection with a contract for the sale of crystal growing systems. No gain
or loss has been recognized on these contracts as of December 27, 1997.
USE OF ESTIMATES
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
B. INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out) or
market. Inventories are comprised of the following elements at December 27, 1997
and June 28, 1997:
December 27, 1997 June 28, 1997
----------------- -------------
Raw materials and purchased parts $9,870,000 8,082,000
Work-in-process 1,583,000 2,962,000
Finished goods 2,488,000 4,219,000
----------- -----------
Total inventories $13,941,000 $15,263,000
=========== ===========
C. INCOME TAXES
FASB Statement No. 109, Accounting for Income Taxes, requires a valuation
allowance against deferred tax assets if it is more likely than not that some or
all of the deferred tax assets will not be realized. Due to the uncertainty
surrounding the Company's ability to realize the benefit of the entire deferred
tax asset, a valuation allowance in the amount of $12,027,000 had been
established at June 28, 1997. Based upon a current assessment of the future
earnings prospects for the Company through the first six months of fiscal 1999,
and the overall uncertainties relating primarily to the outlook for crystal
growing equipment requirements, management has concluded that no further
adjustment to the net deferred tax asset was necessary as of December 27, 1997.
As of December 27, 1997, the Company had remaining net operating loss
carryforwards for Federal income tax purposes of approximately $23,700,000, and
for foreign income tax purposes of approximately $5,073,000, which can
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be used to offset future taxable income. The net operating loss carryforwards
for Federal income tax purposes will expire at various dates through 2010.
Included in the loss carryforward, for income tax purposes, is approximately
$16,800,000 of tax deductions resulting from the excess of the market price over
the exercise price on the date of exercise of the Company's stock purchase
options and warrants which were exercised during 1993 and prior years. The tax
benefit to be realized upon utilization of the $16,800,000 of loss carryforwards
will result in a decrease in current income taxes payable and an increase to
additional paid-in capital.
D. EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings Per Share ("Statement 128"), which is required to be
adopted for financial statements issued for periods ending after December 15,
1997, including interim periods. Accordingly, the Company has adopted Statement
128 as of December 27, 1997 and has changed the method previously used to
compute earnings per share. Under the requirements of Statement 128 for
calculating basic earnings per share, the dilutive effect of stock options,
warrants and other common stock equivalents is excluded. Statement 128 also
requires that fully diluted earnings per share be reported, and that all prior
periods be restated.
The following table sets forth the computation of basic and diluted
earnings per share:
Three months ended Six months ended
-------------------------- --------------------------
12/27/97 12/28/96 12/27/97 12/28/96
--------- --------- --------- ---------
Numerator:
Net Income $612,000 $184,000 $1,268,000 $790,000
Denominator:
Denominator for basic earnings per
share - weighted average shares 6,186,370 6,094,625 6,182,895 6,080,172
Effect of dilutive securities:
Employee stock options -- 2,297 -- 21,518
Non-vested stock 10,116 32,787 11,467 49,142
--------- --------- --------- ---------
Dilutive potential common shares 10,116 35,084 11,467 70,660
Denominator for diluted earnings per
share - adjusted weighted average
shares and assumed conversions 6,196,486 6,129,709 6,194,362 6,150,832
========= ========= ========= =========
Net income per common share $ .10 $ .03 $ .21 $ .13
========= ========= ========= =========
Net income pr common share - assuming dilution $.10 $ .03 $ .20 $ .13
========= ========= ========= =========
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL POSITION
The following discussion provides information to assist in the
understanding of the Company's results of operations and financial condition. It
should be read in conjunction with the consolidated financial statements and
notes thereto that appear elsewhere herein.
RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 27, 1997 AND DECEMBER 28, 1996:
In the quarter ended December 27, 1997, the Company generated net income
of $612,000 or $0.10 per share (basic and diluted), as compared to net income in
the same period of fiscal 1997 of $184,000, or $.03 per share (basic and
diluted). The improvement in net income was due principally to product mix
coupled with the cost reduction program initiated in April 1997.
Net sales and revenues for the quarter ended December 27, 1997 totaled
$15,435,000 as compared to $15,598,000 in the same period of the prior year. A
comparison of the net sales and revenues by major product line is as follows:
Three months ended
--------------------------------------------
DECEMBER 27, 1997 DECEMBER 28, 1996
----------------- -----------------
Crystal growing systems $ 7,754,000 $ 9,556,000
Seals 4,564,000 3,023,000
Fluids 579,000 666,000
Distributed products 2,538,000 2,353,000
----------- -----------
Total net sales and revenues $15,435,000 $15,598,000
=========== ===========
Of the revenues in the second quarter, approximately $840,000, or 5.4%,
represented sales to one affiliated group of companies, as compared to
approximately $8.3 million, or 53% in the same quarter of the previous year.
This decrease was due to the schedule of deliveries for the quarter, and it is
expected that deliveries to that customer will represent a significantly higher
percentage of revenues for the rest of the fiscal year.
Consolidated gross margins for the second quarter of fiscal 1998 amounted
to 31.9% of product sales as compared to 30.5% of product sales in the prior
year's second quarter. The improvement in gross margin for the second quarter of
the current year compared to the same period in the prior year is due
principally to the mix of revenues, as a lower percentage of total revenues
represented crystal growing systems.
Consolidated order bookings for the three months ended December 27, 1997
totaled $12,448,000 as compared to $13,350,000 in the same period of the prior
year. Of the bookings for the second quarter of fiscal 1998, $5,152,000
represent orders relating to crystal growing systems, as compared to $7,904,000
in the same period of fiscal 1997. Bookings for the Company's other proprietary
products of $4,424,000 in the second quarter of fiscal 1998 were up 68% as
compared to $2,629,000 in the second quarter of fiscal 1997. Bookings for the
second quarter for distributed products by AP&T remained relatively level at
$2,872,000 as compared to $2,817,000 in the same quarter of fiscal 1997.
Consolidated backlog at December 27, 1997 was $26,604,000 compared to
$37,483,000 at June 28, 1997. Backlog for the Company's crystal growing systems
at December 27, 1997 totaled $19,116,000 as compared to $30,276,000 at June 28,
1997. Approximately 54% of the Company's backlog of systems is expected to ship
in the current fiscal year. The backlog of orders for components products,
including fluids, declined from $4,787,000 at June 28, 1997 to $4,259,000 at
December 27, 1997 and the backlog for distributed products increased from
$2,420,000 at June 28, 1997 to $3,229,000 at December 27, 1997. Of the order
backlog for components and distributed products at December 27, 1997,
approximately 89% is scheduled to be shipped during the current fiscal year.
Engineering and product development expenditures in the three months ended
December 27, 1997 totaled $1,140,000, a decrease of $82,000, or 7%, compared to
$1,222,000 in the same period last year. As a percentage of revenues, net
engineering and product development expenses decreased from 7.8% in the December
1996 quarter to 7.4% in the December 1997 quarter.
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Selling, general and administrative expenses (SG&A) for the three months
ended December 27, 1997 totaled $2,871,000, a decrease of 7% from the SG&A of
$3,112,000 in the same period of the prior year. The decrease is due primarily
to the reduction in work force in April 1997 as well as a reduction in
restricted stock vesting and legal costs.
Interest expense of $291,000 for the three months ended December 27, 1997
represented an increase of $92,000 over that in the same period in fiscal 1997
due principally to higher borrowings under the Company's credit facility made
available by its bank.
As of December 27, 1997, the Company had remaining net operating loss
carryforwards for Federal income tax purposes of approximately $23,700,000, and
for foreign income tax purposes of approximately $5,073,000, which can be used
to offset future taxable income. The net operating loss carryforwards for
Federal income tax purposes will expire at various dates through 2010. Included
in the loss carryforward, for income tax purposes, is approximately $16,800,000
of tax deductions resulting from the excess of the market price over the
exercise price on the date of exercise of the Company's stock purchase options
and warrants which were exercised during 1993 and prior years. The tax benefit
to be realized upon utilization of the $16,800,000 of loss carryforwards will
result in a decrease in current income taxes payable and an increase to
additional paid-in capital. The tax provision for the three months ended
December 27, 1997 includes a provision for certain state alternative minimum and
foreign income taxes.
SIX MONTHS ENDED DECEMBER 27, 1997 AND DECEMBER 28, 1996:
In the six months ended December 27, 1997, the Company generated net
income of $1,268,000, or $.21 per share ($.20 per share on a diluted basis), as
compared to net income in the same period of fiscal 1997 of $790,000, or $.13
per share (both basic and diluted).
Net sales and revenues for the six months ended December 27, 1997 declined
to $30,765,000 as compared to $33,068,000 in the same period of the prior year.
A product line comparison of the net sales and revenues, for the six months
ended December 27, 1997 and December 28, 1996 is as follows:
1997 1996
---- ----
Crystal growing systems $16,497,000 $21,192,000
Seals 8,762,000 6,073,000
Fluids 1,149,000 1,253,000
Distributed products 4,357,000 4,550,000
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Total net sales and revenues $30,765,000 $33,068,000
=========== ===========
Of the revenues in the first six months of fiscal 1998 and fiscal 1997,
approximately $4.2 million (14%) and $15.9 million (48%), respectively,
represented sales to one affiliated group of companies. Management does not
anticipate that this concentration of revenues with this customer group will
change significantly in the remainder of the current fiscal year.
Consolidated gross margins for the six months ended December 27, 1997
amounted to 30.8% of product sales as compared to 31.4% of product sales in the
same period of the prior year. The decline in gross margin in the current year
is due in part to the inclusion in revenues of a new, next generation crystal
growing system for which the Company experienced a lower gross margin as a
result of one-time engineering and design costs.
Consolidated order bookings for the six months ended December 27, 1997
totaled $19,943,000 as compared to $27,499,000 in the same period of the prior
year. Of the current year's bookings, $5,519,000 represent orders for silicon
crystal growing systems as compared to $16,035,000 in the previous period.
Bookings for the remaining product lines increased 26% from $11,464,000 in the
prior period to $14,424,000 in the first six months of the current year.
The amount of engineering and product development expenses in the second
half of fiscal 1998 do not include $528,000 in engineering and design costs
related to the construction of a 300mm crystal growing system for demonstration
purposes at the Company's Nashua, N.H. manufacturing plant, which have been
included in capital work in progress.
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LIQUIDITY AND CAPITAL RESOURCES
Net working capital at December 27, 1997 was $13,036,000 as compared to
$13,323,000 at June 28, 1997. The current assets of the Company increased during
the first six months, due primarily to the increase in accounts receivable,
offset partially by a reduction in inventory as the Company capitalized to
property, plant and equipment a next generation crystal growing system to be
used for demonstration purposes as well as for the production of 300 millimeter
diameter silicon wafers for sale. Current liabilities, however, increased by a
greater amount than did current assets, as a result of additional short term
borrowings against the Company's revolving line of credit, resulting in the
decrease in net working capital.
During the first quarter of fiscal 1998, the operations of the business
used $1,354,000 of cash, due principally to the increase in current trade
accounts receivable. At December 27, 1997, the Company had outstanding purchase
commitments for material of approximately $12,000,000 representing long lead
items and other component parts for the Company's crystal growing system
business.
Investing activities during the six months ended December 27, 1997 totaled
$2,141,000, of which $341,000 represents acquisitions of general property, plant
and equipment. During this period, the Company also incurred approximately
$1,800,000 (including the engineering costs referred to above) to construct a
300mm crystal growing system which it intends to operate as part of a
demonstration facility in its manufacturing plant for display to prospective
customers as well as for the production and sale of 300 millimeter wafers. This
expenditure has been recorded as capital work in progress. At December 27, 1997,
the Company did not have any material purchase commitments with respect to
property and equipment. Financing activities of the Company during the six
months ended December 27, 1997 were comprised entirely of increases in short
term borrowings of $3,757,000 from its bank credit facilities (described below).
The consolidated results of operations for the six months ended December 27,
1997 includes a non-cash charge of $145,000 for compensation to employees as a
result of restricted stock grants made in prior years. In the same period last
year, a charge of $261,000 was made for the same purpose.
Under an arrangement with its bank, the Company has available to it a
total credit facility of approximately $14,500,000, which includes approximately
$5,400,000 in the form of a stand-by letter of credit for the Company's
$5,000,000 1984 Series Industrial Revenue Bonds, an $8,500,000 revolving
line-of-credit for working capital purposes, and $575,000 representing the
remaining balance of an installment payment note used to finance the expansion
of its in-house machine shop. In addition, in October 1997, the Company entered
into an agreement with its bank under which the bank advanced to the Company
$1,500,000 in the form of a short-term promissory note in order to cover
anticipated short term financing needs. The entire credit facility is
collateralized by substantially all of the assets of the Company. As of December
27, 1997, the entire $8,500,000 was outstanding against the revolving
line-of-credit. The interest rate on the revolving line-of-credit was 9.5% at
December 27, 1997.
With its current banking agreement and the Company's anticipated operating
cash flow, the Company believes it has sufficient working capital resources to
fund its operations through fiscal 1998 and into fiscal 1999. Early in the third
quarter of fiscal 1998, the Company announced that it had withdrawn from the
competition to supply a 300mm crystal growing system to its major customer for
evaluation purposes. This has led to substantially reduced capital expenditure
requirements, and the Company now believes that these requirements can be met
out of current working capital and banking relationships. In addition, the
Company continues to obtain contractual advance payments from customers in its
systems business in order to assist in the financing of that business.
YEAR 2000 ISSUE
The Company has undertaken an assessment of its vulnerability to the
so-called "Year 2000 issue" with respect to its computer systems. The Company
has in recent years relied almost entirely on purchased, off-the-shelf software
packages for both business and engineering purposes, and has not materially
customized these packages for its purposes. These software packages run on a
personal computer based local area network, which was installed in 1993, and
which has been upgraded as needed since then. The assessment was based upon
formal and informal communications with the software vendors, literature
supplied with the software, literature received in connection with maintenance
contracts, and test evaluations of the software.
As a result of the assessment, the Company believes that all of its major
business systems software is year 2000 compliant, and that the year 2000 issue
is not likely to have a material impact on the Company's operations.
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Nevertheless, a project to further verify year 2000 compliance in the Company's
systems has been undertaken and is expected to be completed by the end of fiscal
1998. This project will be completed with the Company's existing resources, and
is not expected to have a material affect on the Company's financial results.
This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. There are certain factors that could cause actual results
to differ materially from those anticipated by the statements made above. These
include, but are not limited to, cancellation of letters of intent, further
rescheduling of existing crystal puller orders, additional crystal puller orders
from existing or new customers, including those mentioned above, lack of new
crystal puller orders from existing or new customers, change in revenues in the
Company's other business, and material changes in the market conditions within
the semiconductor industry. For additional information concerning these and
other important factors which may cause the Company's actual results to differ
materially from expectations and underlying assumptions, please refer to the
reports filed by the Company with the Securities and Exchange Commission.
PART II. OTHER INFORMATION
ITEM B. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
27 - Financial Data Schedule
(b) Reports on Form 8-K:
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
FERROFLUIDICS CORPORATION
-----------------------------------------
(Registrant)
Date: February 9, 1998 By: /s/ Salvatore J. Vinciguerra
-------------------------------------
Salvatore J. Vinciguerra
President and Chief Executive Officer
By: /s/ William B. Ford
-------------------------------------
William B. Ford
Vice President Finance