Exhibit 7
Pro Forma Data Disclosing the Effect of the Reverse Stock Split and Buyback of
Fractional Shares on the Company's Statement of Income, Earnings Per Share
Amounts, and Ratio Of Earnings to Fixed Charges for the Most Recent Fiscal Year
End
BOWLES FLUIDICS CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
For the Year Ended October 25, 1997
--------------------------------------
Reverse Split
& Buyback
Reported Adjustments Pro Forma
--------------------------------------
Net Sales $18,842,673 $18,842,673
Cost of sales 13,065,374 13,065,374
------------- --------------
Gross Profit 5,777,299 5,777,299
Selling, general and
administrative expenses 3,094,769 3,094,769
Research and development
costs 1,005,183 1,005,183
------------- --------------
Operating income 1,677,347 1,677,347
Interest income 117,541 ($12,774) 104,767
Other income (expense),
net 4,555 4,555
--------------------------------------
Income before income taxes 1,799,443 (12,774) 1,786,669
Provision for income taxes 657,420 (4,667) 652,753
--------------------------------------
Net income 1,142,023 (8,107) 1,133,916
Preferred stock dividends
accrued (74,646) 0 (74,646)
--------------------------------------
Income applicable to common
shareholders $1,067,377 ($8,107) $1,059,270
======================================
Primary earnings per share:
Income applicable to
common shareholders $1,067,377 ($8,107) $1,059,270
--------------------------------------
Weighted average of
common shares outstanding 12,633,764 (12,621,324) 12,440
Add: Assumed exercise of
stock options 48,607 (48,558) 49
--------------------------------------
Number of common shares
outstanding adjusted 12,682,371 (12,669,882) 12,489
--------------------------------------
Primary earnings per share $0.08 $84.82
============= ==============
Fully diluted earnings per share:
Net income $1,142,023 ($8,107) $1,133,916
--------------------------------------
Weighted average of common
shares outstanding 12,633,764 (12,621,324) 12,440
Add: Assumed conversion of
preferred stock 3,732,320 (3,728,588) 3,732
Assumed exercise of
stock options 57,636 (57,578) 58
--------------------------------------
Number of common shares
outstanding adjusted 16,423,720 (16,407,490) 16,230
--------------------------------------
Fully diluted earnings per share $0.07 $69.87
============= ==============
Ratio of earnings to fixed
charges N/a N/a
Exhibit 7 - 1
BOWLES FLUIDICS CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
For the Nine Months Ended July
25, 1998
----------------------------------
Reverse Split
& Buyback
Reported Adjustments Pro Forma
----------------------------------
Net Sales $15,105,362 $15,105,362
Cost of sales 11,196,107 11,196,107
----------- -----------
Gross Profit 3,909,255 3,909,255
Selling, general and
administrative expenses 1,993,702 1,993,702
Research and development
costs 582,743 582,743
----------- -----------
Operating income 1,332,810 1,332,810
Interest income 52,022 ($9,580) 42,442
Other income (expense), net 23,749 23,749
----------------------------------
Income before income taxes 1,408,581 ($9,580) 1,399,001
Provision for income taxes 521,631 (3,548) 518,083
----------------------------------
Net income 886,950 (6,032) 880,918
Preferred stock dividends
accrued (55,985) (55,985)
----------------------------------
Income applicable to common
shareholders $830,965 ($6,032) $824,933
==================================
Basic earnings per share:
Income applicable to common
shareholders $830,965 ($6,032) $824,933
Weighted average of common
shares outstanding 12,655,011 (12,642,550) 12,461
Basic earnings per share $0.07 $66.20
=========== ========
Diluted earnings per share:
Net income $886,950 ($6,032) 880,918
----------------------------------
Weighted average of common
shares outstanding 12,655,011 (12,642,550) 12,461
Add: Assumed conversion of
preferred stock 3,732,320 (3,728,588) 3,732
Assumed exercise of
stock options 14,847 (14,832) 15
----------------------------------
Number of common shares
outstanding adjusted 16,402,178 (16,385,970) 16,208
----------------------------------
Diluted earnings per share $0.05 $54.35
=========== ===========
Ratio of earnings to fixed charges N/a N/a
Exhibit 7 - 2
BOWLES FLUIDICS CORPORATION
NOTES TO PRO FORMA FINANCIAL STATEMENTS
Reverse Split and Buyback Adjustments
1. Income Statements: Year Ended October 25, 1997, and Nine Months Ended July
25, 1998
The pro forma income statements reflect the reduction in interest income, net
of income taxes, to give effect to the $242,600 reduction of cash and cash
equivalents to acquire the estimated fractional common shares outstanding
(194.077 shares) after the 1-for-1,000 reverse common stock split at $1,250
per share, as if the reverse split and buyback occurred at October 27, 1996.
The pro forma primary and fully diluted earnings per share reflect the lower
net income and the lower number of common shares outstanding after the
reverse stock split and buyback of fractional common shares at $1,250 per
share.
Exhibit 7 - 3