EXHIBIT 99.4
AVTECH CORPORATION
INDEX TO FINANCIAL STATEMENTS
PAGE
---------
Report of Independent Accountants........................................................................ 1
Balance Sheets as of September 30, 1996 and 1997 and March 31, 1998...................................... 2
Statements of Income for the years ended September 30, 1995, 1996 and 1997, the six months ended March
31, 1997 (unaudited) and the six months ended March 31, 1998........................................... 3
Statements of Stockholders' Equity for the years ended September 30, 1995, 1996 and 1997 and the six
months ended March 31, 1998............................................................................ 4
Statements of Cash Flows for the years ended December 31, 1995, 1996 and 1997, the six months ended March
31, 1997 (unaudited) and the six months ended March 31, 1998........................................... 5
Notes to Financial Statements............................................................................ 6
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Stockholders of
Avtech Corporation
In our opinion, the accompanying balance sheets and the related statements
of income, of stockholders' equity and of cash flows present fairly, in all
material respects, the financial position of Avtech Corporation at September 30,
1996 and 1997 and March 31, 1998, and the results of its operations and its cash
flows for each of the three years in the period ended September 30, 1997 and the
six months ended March 31, 1998, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
PRICEWATERHOUSECOOPERS LLP
Los Angeles, California
June 12, 1998
1
AVTECH CORPORATION
BALANCE SHEETS
(DOLLARS IN THOUSANDS)
SEPTEMBER 30,
-------------------- MARCH 31,
1996 1997 1998
--------- --------- -----------
ASSETS
Current assets
Cash and cash equivalents.......................................................... $ 1,052 $ 4,136 $ 3,260
Accounts receivable, net of allowance for doubtful accounts of $20, $20 and $31 at
September 30, 1996 and 1997 and March 31, 1998, respectively..................... 7,398 4,928 6,648
Inventories........................................................................ 4,233 5,254 5,684
Prepaid expenses and other assets.................................................. 69 183 224
Deferred income taxes.............................................................. -- 247 735
--------- --------- -----------
Total current assets............................................................. 12,752 14,748 16,551
--------- --------- -----------
Property, plant and equipment
Land............................................................................... 431 791 791
Buildings and improvements......................................................... 2,411 4,685 4,967
Machinery and equipment............................................................ 2,764 3,005 3,378
Furniture, computer and other equipment............................................ 3,216 3,426 3,610
--------- --------- -----------
8,822 11,907 12,746
Less: Accumulated depreciation..................................................... (6,523) (7,050) (7,335)
--------- --------- -----------
2,299 4,857 5,411
Other assets
Patents, net of amortization....................................................... 5 4 4
Deferred income taxes.............................................................. -- 629 158
--------- --------- -----------
Total assets..................................................................... $ 15,056 $ 20,238 $ 22,124
--------- --------- -----------
--------- --------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable................................................................... $ 768 $ 1,388 $ 1,614
Accrued expenses................................................................... 2,120 4,043 4,371
Deferred income taxes.............................................................. 389 -- --
--------- --------- -----------
Total current liabilities........................................................ 3,277 5,431 5,985
--------- --------- -----------
Long-term liabilities
Deferred compensation.............................................................. 1,229 1,385 1,463
Other.............................................................................. 438 472 466
--------- --------- -----------
1,667 1,857 1,929
--------- --------- -----------
Commitments and contingencies (Note 8)............................................... -- -- --
--------- --------- -----------
Stockholders' equity
Common stock, no par value, 1,500,000 shares authorized; 323,541, 318,929 and
318,929 shares outstanding at September 30, 1996, 1997 and March 31, 1998,
respectively..................................................................... 237 232 232
Retained earnings.................................................................. 9,875 12,718 13,978
--------- --------- -----------
10,112 12,950 14,210
--------- --------- -----------
$ 15,056 $ 20,238 $ 22,124
--------- --------- -----------
--------- --------- -----------
The accompanying notes are an integral part of these financial statements.
2
AVTECH CORPORATION
STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS)
SIX MONTHS ENDED MARCH
YEAR ENDED SEPTEMBER 30, 31,
------------------------------- ----------------------
1995 1996 1997 1998
--------- --------- --------- 1997 ---------
-----------
(UNAUDITED)
Sales.................................................... $ 21,020 $ 28,797 $ 32,619 $ 15,281 $ 20,391
Cost of sales............................................ 12,333 15,967 20,422 9,243 12,942
--------- --------- --------- ----------- ---------
Gross profit......................................... 8,687 12,830 12,197 6,038 7,449
--------- --------- --------- ----------- ---------
Operating expenses
General and administrative............................. 1,991 1,992 2,758 1,269 1,387
Selling expenses....................................... 1,257 1,559 1,295 574 735
Research, development and engineering.................. 2,853 2,697 2,707 1,390 1,405
Employee stock ownership plan.......................... 1,200 1,000 1,200 600 600
Nonrecurring bonus..................................... -- -- -- -- 1,592
--------- --------- --------- ----------- ---------
7,301 7,248 7,960 3,833 5,719
--------- --------- --------- ----------- ---------
Income from operations................................... 1,386 5,582 4,237 2,205 1,730
--------- --------- --------- ----------- ---------
Other income (expense)
Interest expense....................................... (8) (8) (6) -- --
Gain on disposal of equipment.......................... -- 14 -- -- --
Interest income........................................ 46 30 269 134 128
Rental income, net..................................... -- -- 32 -- 54
--------- --------- --------- ----------- ---------
38 36 295 134 182
--------- --------- --------- ----------- ---------
Income before provision for federal income tax........... 1,424 5,618 4,532 2,339 1,912
Provision for federal income tax......................... 493 1,934 1,518 795 652
--------- --------- --------- ----------- ---------
Net income............................................... $ 931 $ 3,684 $ 3,014 $ 1,544 $ 1,260
--------- --------- --------- ----------- ---------
--------- --------- --------- ----------- ---------
The accompanying notes are an integral part of these financial statements.
3
AVTECH CORPORATION
STATEMENTS OF STOCKHOLDERS' EQUITY
(DOLLARS IN THOUSANDS)
STATED
NUMBER OF VALUE OF
SHARES COMMON RETAINED
OUTSTANDING STOCK EARNINGS
----------- ----------- ---------
Balance at September 30, 1994................................................... 323,541 $ 237 $ 5,260
Net income...................................................................... -- -- 931
----------- ----- ---------
Balance at September 30, 1995................................................... 323,541 237 6,191
Net income...................................................................... -- -- 3,684
----------- ----- ---------
Balance at September 30, 1996................................................... 323,541 237 9,875
Stock redemption................................................................ (4,612) (5) (171)
Net income...................................................................... -- -- 3,014
----------- ----- ---------
Balance at September 30, 1997................................................... 318,929 232 12,718
Net income...................................................................... -- -- 1,260
----------- ----- ---------
Balance at March 31, 1998....................................................... 318,929 $ 232 $ 13,978
----------- ----- ---------
----------- ----- ---------
The accompanying notes are an integral part of these financial statements.
4
AVTECH CORPORATION
STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
SIX MONTHS ENDED MARCH
YEAR ENDED SEPTEMBER 30, 31,
------------------------------- ----------------------
1995 1996 1997 1997 1998
--------- --------- --------- ----------- ---------
(UNAUDITED)
Cash flows from operating activities
Net income.............................................. $ 931 $ 3,684 $ 3,014 $ 1,544 $ 1,260
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation and amortization......................... 587 582 528 268 285
Gain on sale of property and equipment................ -- (14) -- -- --
Deferred income tax provision......................... 54 947 (1,265) (1,825) (17)
Changes in assets and liabilities:
Accounts receivable................................. (1,797) (2,990) 2,470 3,062 (1,720)
Inventories......................................... (1,504) 198 (1,021) (825) (430)
Prepaid and other current assets.................... 63 (20) (114) 17 (41)
Accounts payable.................................... 400 (152) 620 777 226
Accrued expenses.................................... 1,620 (872) 2,153 2,141 422
--------- --------- --------- ----------- ---------
Net cash provided by (used in)
operating activities................................ 354 1,363 6,385 5,159 (15)
--------- --------- --------- ----------- ---------
Cash flows from investing activities
Purchases of property and equipment..................... (735) (509) (3,085) (260) (839)
Proceeds from sale of assets............................ -- 15 -- -- --
--------- --------- --------- ----------- ---------
Net cash used in investing activities................. (735) (494) (3,085) (260) (839)
--------- --------- --------- ----------- ---------
Cash flows from financing activities
Stock redemption........................................ -- -- (176) -- --
Capital lease obligations............................... (36) (36) (40) (20) (22)
--------- --------- --------- ----------- ---------
Net cash used in
financing activities................................ (36) (36) (216) (20) (22)
--------- --------- --------- ----------- ---------
Net (decrease) increase in cash and
equivalents............................................. (417) 833 3,084 4,879 (876)
Cash and equivalents at beginning
of the period........................................... 636 219 1,052 1,052 4,136
--------- --------- --------- ----------- ---------
Cash and equivalents at end of
the period.............................................. $ 219 $ 1,052 $ 4,136 $ 5,931 $ 3,260
--------- --------- --------- ----------- ---------
--------- --------- --------- ----------- ---------
The accompanying notes are an integral part of these financial statements.
5
AVTECH CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF THE COMPANY
Avtech Corporation (the Company) is a custom design and manufacturing firm
established in 1963 to produce high-quality equipment for the aircraft industry.
In 1970, Avtech began to produce engineered products and has since focused its
engineering and product development efforts on responding to specifications from
original equipment aircraft manufacturers (OEMs). The Company's products fall
into five main categories:
1. Aircraft communication control equipment (including audio control units,
multiplexed audio systems and audio amplifiers).
2. Aircraft lighting controls (including ballasts, dimmers and flood lighting).
3. Power systems (including transformer rectifier units, power inverters and
battery chargers).
4. Airborne facsimile terminals (AvFax).
5. Special products (including PDX intercoms, liquid-gauging and fill control,
and frequency units).
FINANCIAL STATEMENT PRESENTATION
The presentation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
At September 30, 1996 and 1997 and March 31, 1998, the Company maintained
$549,000, $119,000 and $868,000 respectively, of its cash and cash equivalents
balances at one bank. At September 30, 1996 and 1997 and March 31, 1998, the
Company maintained $503,000, $4,017,000 and $2,392,000, respectively, in a money
market fund and bankers' acceptances.
RECEIVABLES AND CONCENTRATIONS OF CREDIT RISK
Accounts receivable from trade customers are generally due within thirty
days. The Company performs periodic credit evaluations of its customers'
financial conditions and generally does not require collateral. All of the
Company's sales are to businesses directly associated with the aviation industry
(airlines, aircraft manufacturers, etc.). Approximately 70% of the Company's
sales are to customers based in the United States.
6
AVTECH CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY AND EQUIPMENT
The cost of property, plant and equipment is depreciated over the estimated
useful lives of the related assets. Depreciation is computed using the
straight-line and accelerated methods over the following estimated lives:
YEARS
---------
Buildings............................................................................. 20-39
Building improvements................................................................. 10-39
Machinery and equipment............................................................... 5
Furniture, computer and other equipment............................................... 5-7
Maintenance and repairs are charged to operations when incurred. Additions
and improvements are capitalized. When property, plant and equipment are sold or
otherwise disposed of, the asset account and related accumulated depreciation
account are relieved, and any gain or loss is included in operations.
INVENTORIES
Inventories are stated at the lower of cost (determined by the first-in,
first-out method) or market. Costs of manufactured inventories include all
direct materials, labor and an allocation of overhead. Market represents the
lower of replacement cost or estimated net realizable value.
REVENUE RECOGNITION
Revenues from the sale of manufactured products are recorded when shipped.
Reimbursements for nonrecurring engineering costs, which are expensed as
incurred, are included in revenues at the time a negotiated settlement is
reached with the customer. The Company's nonrecurring engineering revenues for
the years ended September 30, 1995, 1996 and 1997 and the six months ended March
31, 1998 were $1,257,000, $4,042,000, $527,000 and $138,000, respectively.
Included within accounts receivable at September 30, 1996 are $3,384,000 of
unbilled receivables which were collected in fiscal year 1997.
INCOME TAXES
Deferred income taxes are determined using the liability method. A deferred
tax asset or liability is determined based on the difference between the
financial statement and tax basis of assets and liabilities as measured by the
enacted tax rates which will be in effect when these differences reverse.
Deferred tax expense is the result of changes in the asset and/or liability for
deferred taxes.
STOCK OPTION PLAN
As permitted under Statement of Financial Accounting Standards No., 123,
"Accounting for Stock-Based Compensation" (SFAS 123), the Company measures
compensation expense related to the employee stock option plan utilizing the
intrinsic value method as prescribed by Accounting Principles Board No. 25,
"Accounting for Stock Issued to Employees".
7
AVTECH CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ACCRUED WARRANTIES
The Company sells a majority of its products to customers along with various
repair or replacement warranties. The terms of the warranties vary according to
the customer and/or the product involved. The most common warranty period is the
earlier of:
a. 36 months from the date of delivery to the operator, or;
b. 42 months from the date of manufacture
Provisions for estimated future warranty costs are made in the period
corresponding to the sale of the product. Classification between short and
long-term warranty obligations is estimated based on historical trends.
UNAUDITED INTERIM RESULTS
The financial information for the six months ended March 31, 1997 is
unaudited. In the opinion of the Company, the unaudited financial information is
presented on a basis consistent with the audited financial statements and
contains all adjustments, consisting only of normal recurring adjustments,
necessary for a fair statement of the results for such interim period. The
results of operations for the interim periods are not necessarily indicative of
results of operations for the full year.
NOTE 2 - INVENTORIES
Inventories at September 30, 1996 and 1997 and March 31, 1998 consist of the
following (amounts in thousands):
SEPTEMBER 30,
-------------------- MARCH 31,
1996 1997 1998
--------- --------- -----------
Raw materials and components....................................................... $ 2,488 $ 2,617 $ 3,427
Work in process.................................................................... 1,285 2,014 1,754
Finished goods..................................................................... 460 623 503
--------- --------- -----------
$ 4,233 $ 5,254 $ 5,684
--------- --------- -----------
--------- --------- -----------
NOTE 3 - PROPERTY AND EQUIPMENT
The Company owns property located immediately adjacent to its main facility.
The property is not currently used for any rental or productive activity. In
1990, the property was condemned by the local authorities and is considered
unsuitable for habitation in its current state. The current carrying value of
$62,000 represents the original cost of the land and is lower than its estimated
net realizable value.
In 1997, the Company purchased a 20,275 square foot office building and an
adjacent vacant lot for investment purposes. The net book value of the property
was $2,134,000 and $2,098,000 at September 30, 1997 and March 31, 1998,
respectively. The Company leases the office space to tenants under one to three-
8
AVTECH CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3 - PROPERTY AND EQUIPMENT (CONTINUED)
year noncancelable operating leases. At March 31, 1998, the building was fully
occupied. Minimum future rentals to be received on noncancelable leases are as
follows (amounts in thousands):
YEAR ENDING SEPTEMBER 30,
- ------------------------------------------------------------------
1998.............................................................. $ 128
1999.............................................................. $ 20
The Company leases equipment under a five-year lease term. Based on the
provisions of Statement No. 13, issued by the Financial Accounting Standards
Board, these leases meet the criteria of capital leases and, accordingly, have
been recorded as such. These assets are stated on the balance sheet at their
capitalized cost of $194,000. Depreciation of $172,000 has been recognized
through March 31, 1998. The present value of remaining minimum lease payments at
March 31, 1998 was approximately $25,000.
NOTE 4 - ACCRUED EXPENSES
Accrued expenses at September 30, 1996 and 1997 and March 31, 1998 consist
of the following (amounts in thousands):
SEPTEMBER 30,
-------------------- MARCH 31,
1996 1997 1998
--------- --------- -----------
Employee compensation and related taxes............................................ $ 875 $ 2,556 $ 3,531
Employee stock option plan contribution............................................ 1,000 1,200 600
Current portion of warranty reserve................................................ 204 240 240
Other.............................................................................. 41 47 --
--------- --------- -----------
$ 2,120 $ 4,043 $ 4,371
--------- --------- -----------
--------- --------- -----------
NOTE 5 - DEFINED CONTRIBUTION PLANS
The Company sponsors an employee stock ownership plan (ESOP) for the benefit
of employees with twelve or more months of continuous service. Contributions are
made to the plan at the discretion of the Company's Board of Directors. The
Company's contributions for the years ended September 30, 1995, 1996 and 1997
and the six months ended March 31, 1998 were $1,200,000, $1,000,000, $1,200,000
and $600,000, respectively.
The Company also sponsors a cash or deferred compensation (401k) plan for
the benefit of eligible employees. Under the plan, employees may elect to defer
a portion of their compensation (subject to statutory limitations).
Discretionary contributions by the Company may be made when authorized by the
Board of Directors. No such contributions were made during the years ended
September 30, 1995, 1996 and 1997 and the six months ended March 31, 1998.
9
AVTECH CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 6 - FEDERAL INCOME TAXES
The provision (benefit) for federal income taxes is comprised of the
following (amounts in thousands):
YEAR ENDED SEPTEMBER 30,
------------------------------- SIX MONTHS ENDED
1995 1996 1997 MARCH 31, 1998
--------- --------- --------- -------------------
Current............................................................ $ 439 $ 987 $ 2,783 $ 669
Deferred........................................................... 54 947 (1,265) (17)
--------- --------- --------- -----
$ 493 $ 1,934 $ 1,518 $ 652
--------- --------- --------- -----
--------- --------- --------- -----
The provision for federal income tax expense approximates the federal
statutory rate for all periods presented. The Company is not required to pay
state income taxes.
Deferred tax assets and liabilities at September 30, 1996 and 1997 and March
31, 1998 include the following (amounts in thousands):
SEPTEMBER 30,
-------------------- MARCH 31,
1996 1997 1998
--------- --------- -----------
DEFERRED TAX ASSETS
Reserves............................................................................ $ 335 $ 393 $ 382
Compensatory stock options.......................................................... 416 471 498
Capitalized inventories............................................................. 10 12 13
--------- --------- -----
761 876 893
DEFERRED TAX LIABILITIES
Deferred revenue.................................................................... (1,150) -- --
--------- --------- -----
$ (389) $ 876 $ 893
--------- --------- -----
--------- --------- -----
The classification in the balance sheet between current and noncurrent
deferred tax assets is based on the classification of the related asset that
gives rise to the temporary difference. A deferred tax asset that is not related
to an asset is classified according to the expected reversal date of the
temporary difference.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
PURCHASE COMMITMENTS
The Company has commitments based on open purchase orders arising out of its
normal business operations. As of September 30, 1996 and 1997 and March 31,
1998, these commitments were $5,080,000, $6,760,000 and $9,151,000,
respectively.
TERMINATION FOR CONVENIENCE CLAUSES
The Company routinely enters into contractual commitments with customers to
design and manufacture parts. These contracts contain "termination for
convenience" clauses that permit recovery of costs incurred by the Company if
the customer terminates the contract prior to its completion. These recoveries
are included in sales when billed.
10
AVTECH CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 7 - COMMITMENTS AND CONTINGENCIES (CONTINUED)
LEASING ARRANGEMENTS
The Company leases a building under a five-year operating lease. The lease
calls for monthly payments of $5,000 plus utilities, taxes and maintenance and
expires in April 2001. The lessor has the right to terminate the lease at
anytime by giving the Company at least twelve months written notice. The Company
subleases a portion of its facilities under an operating lease that expires
December 1998. The following is net rental expense under operating leases for
the years ended September 30, 1995, 1996 and 1997 and the six months ended March
31, 1998 (amounts in thousands):
SIX
YEAR ENDED SEPTEMBER 30, MONTHS
ENDED
------------------------------- MARCH 31,
1995 1996 1997 1998
--------- --------- --------- -------------
Rent expense.................................................................. $ 60 $ 60 $ 60 $ 30
Less: Sublease rentals........................................................ (7) (11) (10) (5)
--- --- --- ---
$ 53 $ 49 $ 50 $ 25
--- --- --- ---
--- --- --- ---
The following is a schedule by years of the future minimum rentals under
this lease (amounts in thousands):
YEAR ENDING SEPTEMBER 30, LESSEE SUBLEASE NET
- ------------------------------------------------------------------- ----------- ----------- ---------
1998........................................................... $ 60 $ 10 $ 50
1999........................................................... 60 11 49
2000........................................................... 60 11 49
2001........................................................... 60 11 49
----- --- ---------
$ 240 $ 43 $ 197
----- --- ---------
----- --- ---------
NOTE 8 - ECONOMIC DEPENDENCE
A material part of the Company's business is dependent on one customer, the
loss of which could have a material effect on the Company. For the years ended
September 30, 1995, 1996 and 1997 and the six months ended March 31, 1998,
approximately 29.5%, 24%, 46.9% and 41.7%, respectively, of revenues were
attributable to this customer. At September 30, 1996 and 1997 and March 31,
1998, accounts receivable from this customer represented approximately 41.1%,
23.4% and 30%, respectively, of total accounts receivable.
NOTE 9 - STOCK OPTION PLANS
Prior to 1993, the Company implemented a nonqualified compensatory stock
option plan with the President. Under this Plan, options to purchase 90,000
shares of the Company's stock were granted at an option price of $2.70 per
share. These options are currently exercisable by the President.
During the year ended September 30, 1994, the Company and three key
employees entered into employment contracts which voided all prior compensatory
stock option plans other than that of the President's. Under these new
contracts, the Company granted 20,000 shares to each of the three employees at
an exercise price of $15 per share. Fair market value was $28 per share at the
date of the grant. Each
11
AVTECH CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 9 - STOCK OPTION PLANS (CONTINUED)
employee still employed at September 30, 1998, is entitled to exercise his
option to purchase 20,000 fully vested shares. Accordingly, the Company has
expensed $156,000 during each of the years ended September 30, 1995, 1996 and
1997 and $78,000 for the six months ended March 31, 1998. These shares, when
exercised, cannot be sold until September 30, 2003. The Company has the first
right to purchase the shares upon exercise but is not obligated to do so.
The accumulated expense resulting from the difference between the exercise
prices and fair market values at the respective date of grant has been
classified as a long-term liability in deferred compensation.
NOTE 10 - ADDITIONAL CASH FLOW INFORMATION
Supplementary cash flow information for the years ended September 30, 1995,
1996 and 1997 and the six months ended March 31, 1998 is as follows (amounts in
thousands):
YEAR ENDED SEPTEMBER 30, SIX MONTHS ENDED
--------------------------------- MARCH 31,
1995 1996 1997 1998
----- --------- --------- -------------------
Cash paid during the period for:
Capital leases..................................................... $ 36 $ 36 $ 40 $ 22
--- --------- --------- -----
--- --------- --------- -----
Interest........................................................... $ 10 $ 7 $ 5 $ 1
--- --------- --------- -----
--- --------- --------- -----
Income taxes....................................................... $ -- $ 1,449 $ 2,900 $ 693
--- --------- --------- -----
--- --------- --------- -----
NOTE 11 - SUBSEQUENT EVENT
In May 1998, the Company signed a definitive purchase agreement whereby all
of the outstanding shares of the Company would be acquired by DeCrane Aircraft
Holdings, Inc. The transaction is expected to close by June 30, 1998. The effect
of the transaction has not been reflected in the accompanying accounts.
12