Exhibit 20
BOWLES FLUIDICS CORPORATION
6625 Dobbin Road, Columbia, Maryland 21045-4707 USA
Phone: 410-381-0400 Fax: 410-381-2718
June 9, 1998
TO THE STOCKHOLDERS OF BOWLES FLUIDICS CORPORATION:
Two factors allowed total sales to reach a new high:
o Increase in tooling billing.
o Increased market penetration for our automotive products in North
America.
Our continuous planned efforts devoted to new product development, particularly
the air outlets, have negatively affected our profit as could be expected.
During this quarter we have reorganized our product development activity
following team concepts in order to promote faster and more complete information
flow among the functional groups. We are seeking cost reduction by revamping our
manufacturing process to be cellular and have three products planned for its
use.
Sincerely,
Ronald Stouffer
President
RS:lto
Attachment
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EXHIBIT 20
BOWLES FLUIDICS CORPORATION
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CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Six Months Ended
April 25, April 26, April 25, April 26,
1998 1997 1998 1997
----------- ----------- ----------- -----------
Net Sales $ 5,669,190 $ 4,983,272 $10,472,861 $ 9,227,395
Cost of Sales 4,011,008 3,037,098 7,306,394 6,195,179
Selling, General and Administrative Expenses 708,367 896,487 1,329,115 1,737,469
Research and Development Costs 196,597 256,747 377,563 531,508
Interest Income and Other Income and (Expense), Net 22,716 32,305 55,215 49,339
----------- ----------- ----------- -----------
Income before Taxes $ 775,934 $ 825,245 $ 1,515,004 $ 812,578
Provision for Income Taxes 289,172 307,174 560,390 292,342
----------- ----------- ----------- -----------
Net Income $ 486,762 $ 518,071 $ 954,614 $ 520,236
----------- ----------- ----------- -----------
Income applicable to Common Shareholders $ 468,100 $ 499,409 $ 917,291 $ 482,913
=========== =========== =========== ===========
Net Income per Share
Basic $ 0.04 $ 0.04 $ 0.07 $ 0.04
Diluted $ 0.03 $ 0.03 $ 0.06 $ 0.03
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CONSOLIDATED BALANCE SHEETS
Unaudited Audited
April 25, 1998 October 25,1997
-------------- ---------------
ASSETS
Cash and Cash Equivalents $ 41,736 $ 755,525
Investments 495,968 1,563,121
Accounts Receivable 3,749,214 3,112,063
Inventories 3,076,403 2,130,615
Other Current Assets 432,116 634,037
----------- -----------
Total Current Assets 7,795,437 8,195,361
Property, Plant and Equipment, Net 4,196,946 3,494,335
Other Assets 92,323 95,005
----------- -----------
Total Assets $12,084,706 $11,784,701
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable--Trade $ 1,035,950 $ 1,122,437
Accrued Expenses and Other Liabilities 1,079,561 1,609,807
Income Taxes Payable 58,078 48,162
----------- -----------
Total Current Liabilities 2,173,589 2,780,406
Other Liabilities 480,612 492,866
----------- -----------
Total Liabilities 2,654,201 3,273,272
----------- -----------
8% Convertible Preferred Stock 933,080 933,080
Common Stock 1,264,001 1,264,001
Additional Paid-in Capital 2,728,083 2,728,083
Retained Earnings 4,505,341 3,586,265
----------- -----------
Stockholders' Equity 9,430,505 8,511,429
----------- -----------
Total Liabilities and Stockholders'
Equity $12,084,706 $11,784,701
=========== ===========
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BOWLES FLUIDICS CORPORATION
PART II. OTHER INFORMATION
Item 6. (b) Reports on Form 8-K
April 21, 1998
An Annual Meeting of Stockholders of Bowles Fluidics Corporation was held
on March 12, 1998.
1. The following Board of Directors was elected:
William Ewing III
Ronald D. Stouffer
John E. Searle, Jr.
David C. Dressler
Eric W. Koehler
2. Also at the meeting of stockholders, Coopers & Lybrand L.L.P. was appointed
as the Corporation's certified public accountants.
3. At a directors' meeting immediately following the meeting of stockholders,
the following officers were elected:
Chairman of the Board William Ewing III
President Ronald D. Stouffer
Executive Vice President Eric W. Koehler
Vice President, Administration, & Secretary Eleanor M. Kupris
Vice President, Engineering Richard W. Hess
Vice President, Finance David A. Quinn
Vice President, Quality Assurance Dharapuram N. Srinath
Vice President, Operations Melvyn J.L. Clough
Corporate Controller Arlene M. Hardy
4. In the category of Other Events, it is wished to report an error in the
Proxy Statement issued in conjunction with the Annual Meeting of
Stockholders held on March 12, 1998.
The Proxy Statement failed to report three Trusts as the following holders
of at least 5% of the Company's stock.
Jessie E. Phillips
Common Shares 1,181,324 9.4%
Preferred Shares 232,985 25.0%
Grace Ewing Huffman
Common Shares 1,181,324 9.4%
Preferred Shares 232,985 25.0%
Estate of Maria Taylor Ewing
Common Shares 3,831,014 30.4%
Preferred Shares 382,554 40.9%
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FORM 10-Q
BOWLES FLUIDICS CORPORATION
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.
BOWLES FLUIDICS CORPORATION
Date ___________________ By ___________________________
Ronald D. Stouffer
President
Date ___________________ By ___________________________
David A. Quinn
Vice President-Finance
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