UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 1998 Commission File Number 1-7233 STANDEX INTERNATIONAL CORPORATION (Exact name of Registrant as specified in its Charter) DELAWARE 31-0596149 (State of incorporation) (I.R.S. Employer Identification No.) 6 MANOR PARKWAY, SALEM, NEW HAMPSHIRE 03079 (Address of principal executive office) (Zip Code) (603) 893-9701 (Registrant's telephone number, including area code) SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE SECURITIES EXCHANGE ACT OF 1934: Title of Each Class Name of Each Exchange on Which Registered Common Stock, Par Value $1.50 Per Share New York Stock Exchange 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. YES X NO Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant at the close of business on July 31, 1998 was approximately $341,124,000. Registrant's closing price as reported on the New York Stock Exchange for July 31, 1998 was $28.00 per share. The number of shares of Registrant's Common Stock outstanding on September 9, 1998 was 13,042,305. Portions of the 1998 Annual Report to Stockholders of Registrant are incorporated in Parts I, II and IV of this report. Portions of the Proxy Statement and Proxy Supplement of Registrant dated September 18, 1998 are incorporated in Part III of this report. PART I ITEM 1. BUSINESS Standex1 is a diversified manufacturing and marketing company with operations in three product segments: Food Service, Industrial and Consumer. Standex was incorporated in 1975 and is the successor of a corporation organized in 1955. 1 References in this Annual Report on Form 10-K to "Standex" or the "Company" shall mean Standex International Corporation and its subsidiaries. The business of the Company is carried on within the three segments by a number of operating units, each with its own organization. The management of each operating unit has responsibility for product development, manufacturing, marketing and for achieving a return on investment in accordance with the standards established by Standex. Overall supervision, coordination and financial control are maintained by the executive staff from its corporate headquarters located at 6 Manor Parkway, Salem, New Hampshire. As of June 30, 1998, the Company had approximately 5,500 employees. The principal products produced and services rendered by each of the segments of Standex are incorporated herein by reference to pages 4 through 15 of the Annual Report to Stockholders for the fiscal year ended June 30, 1998 (the "1998 Annual Report"). Sales are made both directly to customers and by or through manufacturers representatives, dealers and distributors. The major markets for the Company's products and services are as follows: Food Service Products . Master-Bilt(R) refrigerated cabinets, cases, display units, modular structures, coolers and freezers; Barbecue King(R) and BKI(R) commercial cook and hold units, rotisseries, pressure fryers, ovens and baking equipment; and Federal Industries bakery and deli heated and refrigerated display cases for hospitals, schools, fast food industry, restaurants, hotels, clubs, supermarkets, bakeries, convenience stores and delicatessens. . USECO food service equipment and patient feeding systems for hospitals, schools, nursing homes, correctional facilities and restaurants. . Procon(R) rotary vane pumps for the carbonated beverage industry (including espresso coffee machine markets), water purification industry and coolant recirculation systems. Industrial Products . Wire-O(R) machinery and complete binding system for printers, publishers and binders of checkbooks, calendars, diaries, appointment books, cookbooks, catalogs and manuals. . Jarvis, Can-Am Casters and WheelsTM and PEMCO(R) casters and wheels and industrial hardware for general industry, hospitals, supermarkets, hotels and restaurants. . Roehlen(R) embossing rolls, texturizing systems, machines and plates; Mold- Tech(R) mold engraving; Keller-Dorian print rolls and calendering equipment; Mullen(R) Burst Testers; Perkins converting and finishing machinery and systems for general industry (e.g., automotive, plastics, textiles, paper, building products, synthetic materials, OEMs, converting, textile and paper industry, computer, housewares and construction industries). . Spincraft(R) power metal spinning, custom formed components for aircraft engines, space launch vehicles, gas turbines, nuclear reactors, military ordnance, commercial satellites and similar products for OEMs, U.S. Government, energy, aircraft, aerospace and commercial satellite industry and commercial industries. . Custom Hoists single and double acting telescopic and piston rod hydraulic cylinders for dump trucks and trailers used in the construction and waste hauling industries. . Standex Electronics reed switches, electrical connectors, sensors, toroids and relays, fixed and variable inductors and electronic assemblies, fluid sensors and tunable inductors for telecommunications, consumer electronics, automotive, security systems, communications equipment, computers, air conditioning and refrigeration industries. Consumer Products . Standard Publishing(R) commercial printing for general commerce and industry. Publishing and marketing of religious periodicals, curricula, Sunday school literature, children's books and supplies for Sunday schools, churches, vacation Bible schools and Christian bookstores. . Berean(R) Christian Stores a chain of 23 Berean(R) Christian bookstores which serve as distribution centers and retail outlets for religious books and merchandise. . Snappy(R), ACME and ALCO metal ducting and fittings for heating, ventilating and air conditioning distributors throughout the continental United States. . Frank Lewis(R) Grapefruit Club gift packages, Red CooperR fresh grapefruit, Harry's Crestview Groves(R) grapefruit packages, grapefruit juice, grapefruit sections, onions, melons and roses; Salsa Express(R) salsas and other related food products; The Vidalia(R)2 Onion Store Vidalia(R)2 onions for mail order consumer direct sales. . Williams chiropractic and traction tables and electrotherapy and ultrasound equipment (Zenith(R), CombiTM and Intertron(R) brands) for chiropractors and physical therapists. . National Metal fabricated metal products including Christmas tree stands, specialty hardware and metal furniture for the food service industry, retail stores, office furniture markets, stationary supply houses and other industries. Financial information on each of the product groups of Standex as well as financial information of non-U.S. operations is incorporated by reference to 2 A registered trademark of the Georgia Department of Agriculture the note to the consolidated financial statements entitled Industry Segment Information on page 24 of the 1998 Annual Report. Raw Materials Raw materials and components necessary for the fabrication of products and the rendering of services for the Company are generally available from numerous sources. The Company does not foresee any unavailability of materials or components which would have any material adverse effect on its overall business, or any of its business segments, in the near term. Patents and Trademarks The Company owns or is licensed under a number of patents and trademarks in each of its product groups. However, the loss of any single patent or trademark would not, in the opinion of the Company, materially affect any segment or the overall business. <TABLE> Backlog <CAPTION> Backlog orders believed to be firm at June 30, 1998 and 1997 are as follows (in thousands): 1998 1997 <S> <C> <C> Food Service ................. $22,242 $21,886 Industrial ................... 68,726 48,064 Consumer ..................... 11,352 11,650 Total................... $102,320 $81,600 All but approximately $17,024,000 of the 1998 backlog, and $3,209,000 of the 1997 backlog, was expected to be realized as sales in the following fiscal year. </TABLE> Competition Standex manufactures and markets products many of which have achieved a unique or leadership position in their market. However, the Company encounters competition in varying degrees in all product groups and for each product line. Competitors include domestic and foreign producers of the same and similar products. The principal methods of competition are price, delivery schedule, quality of services, product performance and other terms and conditions of sale. During fiscal 1998, the Company invested $19,849,000 in new plant and equipment in order to upgrade facilities to become more competitive in all segments. International Operations Substantially all international operations of the Company are related to domestic operations and are included in the Food Service and Industrial business segments. International operations are conducted at 33 plants, principally in Western Europe. The industry segment information regarding non- U.S. operations on page 24 of the 1998 Annual Report is incorporated herein by reference. Research and Development Due to the nature of the manufacturing operations of Standex and the types of products manufactured, expenditures for research and development are not material to any segment. Environmental and Other Matters To the best of its knowledge, the Company believes that it is presently in substantial compliance with all existing applicable environmental laws and does not anticipate that such compliance will have a material effect on its future capital expenditures, earnings or competitive position. ITEM 2. PROPERTIES At June 30, 1998, Standex operated a total of 92 principal plants and warehouses located through the United States, Western Europe, Canada, Australia, Singapore and Mexico. The Company owned 51 of the facilities and the balance were leased. In addition, the Company operated 23 retail stores in various sections of the United States, of which all were leased. The approximate building space utilized by each product group of Standex at June 30, 1998 is as follows (in thousands): Area in Square Feet Owned Leased Food Service ....................... 679 394 Industrial ......................... 1,051 396 Consumer ........................... 1,511 491 General Corporate................... 29 - Total......................... 3,270 1,281 In general, the buildings are in good condition, are considered to be adequate for the uses to which they are being put and are in regular use. The Company utilizes machinery and equipment which is necessary to conduct its operations. Substantially all of such machinery and equipment is owned by Standex. ITEM 3. LEGAL PROCEEDINGS There are no material pending legal proceedings. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to stockholders during the fourth quarter of the fiscal year. EXECUTIVE OFFICERS OF STANDEX Name Age Principal Occupation During the Past Five Years Thomas L. King 68 Chairman of the Board of the Company since January 1992; President of the Company from August 1984 to July 1994; and Chief Executive Officer of the Company from July 1985 to June 1995. Edward J. Trainor 58 Chief Executive Officer of the Company since July 1995; President of the Company since July 1994; Chief Operating Officer of the Company from July 1994 to June 1995; Vice President of the Company from July 1992 to July 1994; and President of the Standex Institutional Products Group of the Company from February 1987 to July 1994. David R. Crichton 60 Executive Vice President/Operations of the Company since June 1989. Thomas H. DeWitt 56 Executive Vice President/Administration of the Company from January 1987 to December 1997; and General Counsel of the Company from October 1985 to December 1997. Lindsay M. Sedwick 63 Senior Vice President of Finance/CFO of the Company from January 1996 to June 1998; Vice President of the Company from January 1990 to January 1996; and Treasurer of the Company from January 1986 to June 1998. Edward F. Paquette 62 Vice President/CFO of the Company since July 1998; Assistant to the President/CEO of the Company from September 1997 to June 1998 and prior thereto Partner of Deloitte & Touche LLP. Robert R. Kettinger 56 Corporate Controller of the Company since July 1991. Deborah A. Rosen 43 General Counsel of the Company since January 1998; Secretary of the Company since October 1997; Assistant General Counsel and Assistant Secretary of the Company from January 1997 to December 1997 and prior thereto Senior Corporate Attorney and Assistant Secretary of the Company. Richard H. Booth 51 Corporate Counsel of the Company from June 1992 to December 1997 and Secretary of the Company from July 1992 to October 1997. The executive officers are elected each year by the Board of Directors to serve for one-year terms of office. There are no family relationships between any of the directors or executive officers of the Company. PART II ITEM 5. MARKET FOR STANDEX COMMON STOCK AND RELATED STOCKHOLDER MATTERS The principal market in which the Common Stock of Standex is traded is the New York Stock Exchange. The high and low sales prices for the Common Stock on the New York Stock Exchange and the dividends paid per Common Share for each quarter in the last two fiscal years are incorporated by reference to page 18 of the 1998 Annual Report. The approximate number of stockholders of record on September 9, 1998 was 3,500. ITEM 6. SELECTED FINANCIAL DATA Selected financial data for the five years ended June 30, 1998 is incorporated by reference to the table entitled "Five-Year Financial Review" on page 18 of the 1998 Annual Report. This summary should be read in conjunction with the consolidated financial statements and related notes included in the 1998 Annual Report on pages 19 through 27. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's discussion and analysis of financial condition and results of operations of the Company is incorporated by reference to pages 16 and 17 of the 1998 Annual Report. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to a number of market risks, primarily the effects of changes in foreign currency exchange rates and interest rates. Investments in foreign subsidiaries and branches, and their resultant operations, denominated in foreign currencies, create exposures to changes in exchange rates. The Company's use of its bank credit agreements creates an exposure to changes in interest rates. The effect of changes in exchange rates and interest rates on the Company's earnings has been relatively insignificant compared to other factors that also affect earnings, such as business unit sales and operating margins. For more information on these market risks and financial exposures, see the Notes to Consolidated Financial Statements on pages 22 to 27 of the 1998 Annual Report. The Company does not hold or issue financial instruments for trading, profit or speculative purposes. Based on historical foreign currency rate movements and the fair value of market-rate sensitive instruments at year-end, the Company does not believe that near term changes in foreign currency or interest rates will have a material impact on its future earnings, fair values or cash flows. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this item is incorporated by reference to pages 18 through 28 of the 1998 Annual Report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF STANDEX Certain information concerning the directors of the Company is incorporated by reference to pages 2 through 5 and pages 14 and 19 of the Proxy Statement of the Company, dated September 18, 1998 (the "1998 Proxy Statement"). Certain information concerning the executive officers of the Company is set forth in Part I under the caption "Executive Officers of Standex." ITEM 11. EXECUTIVE COMPENSATION Information regarding executive compensation is incorporated by reference to pages 9 through 14 of the 1998 Proxy Statement and pages 1 through 3 of the 1998 Proxy Supplement. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The stock ownership of each person known to Standex to be the beneficial owner of more than 5% of its Common Stock and the stock ownership of all directors and executive officers of Standex as a group are incorporated by reference to pages 3 through 5 of the 1998 Proxy Statement. The beneficial ownership of Standex Common Stock of all directors and executive officers of the Company is incorporated by reference to pages 3 through 5 of the 1998 Proxy Statement. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Information regarding certain relationships and related transactions is incorporated by reference to page 14 of the 1998 Proxy Statement. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) Financial Statements and Schedule (i) The financial statements listed in the accompanying index to financial Statements and Schedules are incorporated by reference into this Item 14. (ii) The financial statement schedule listed in the accompanying index to the Consolidated Financial Statements and Schedule is filed as part of this Annual Report on Consolidated Form 10-K. (b) Reports on Form 8-K Standex filed no reports on Form 8-K with the Securities and Exchange Commission during the last quarter of the fiscal year ended June 30, 1998. (c) Exhibits 3. (i) Restated Certificate of Incorporation of Standex, dated October 16, 1986, is incorporated by reference to the exhibits to the Quarterly Report of Standex on Form 10-Q for the fiscal quarter ended December 31, 1986. (ii) By-Laws of Standex, as amended, and restated on July 27, 1994 are incorporated by reference to the exhibits to the Annual Report of Standex on Form 10-K for the fiscal year ended June 30, 1994 (the "1994 10-K"). 4. (a) Agreement of the Company, dated September 15, 1981, to furnish a copy of any instrument with respect to certain other long-term debt to the Securities and Exchange Commission upon its request is incorporated by reference to the exhibits to the Annual Report of Standex on Form 10-K for the fiscal year ended June 30, 1981. (b) Shareholder Rights Plan and Trust Indenture of the Company is incorporated by reference to Amendment No. 1 to Form 8A filed with the Securities and Exchange Commission on May 16, 1989 and the Form 8A filed with the Securities and Exchange Commission on February 3, 1989. 10. (a) Employment Agreement, dated July 1, 1988, between the Company and Thomas L. King is incorporated by reference to the exhibits to the Annual Report of Standex on Form 10-K for the fiscal year ended June 30, 1988 (the "1988 10-K") and Agreement to Amend Employment Agreement dated September 18, 1989 is incorporated by reference to the exhibits to the Annual Report of Standex on Form 10-K for the fiscal year ended June 30, 1990. (c) Exhibits (Continued) (b) Employment Agreement - 1993 Amendment dated July 28, 1993 between the Company and Thomas L. King is incorporated by reference to the exhibits to the Annual Report of Standex on Form 10-K for the fiscal year ended June 30, 1993 ("1993 10-K"). (c) Employment Agreement dated January 29, 1993, between the Company and Thomas H. DeWitt is incorporated by reference to the exhibits to the 1993 10-K. (d) Employment Agreement dated February 1, 1998, between the Company and David R. Crichton is incorporated by reference to the exhibits to the Quarterly Report of Standex on Form 10-Q for the fiscal quarter ended March 31, 1998. (e) Employment Agreement dated January 29, 1993, between the Company and Lindsay M. Sedwick is incorporated by reference to the exhibits to the 1993 10-K. (f) Employment Agreement dated January 29, 1993, between the Company and Edward J. Trainor is incorporated by reference to the exhibits to the 1993 10-K. (g) Employment Agreement dated September 20, 1997 between the Company and Edward F. Paquette is incorporated by reference to the exhibits to the Quarterly Report of Standex on Form 10-Q for the quarter ended September 30, 1997. (h) Standex International Corporation Profit Improvement Participation Shares Plan as amended and restated on April 26, 1995 is incorporated by reference to the exhibits to the Annual Report of Standex on Form 10-K for the fiscal year ended June 30, 1995 ("1995 10-K"). (i) Standex International Corporation Stock Option Loan Plan, effective January 1, 1985, as amended and restated on January 26, 1994, is incorporated by reference to the exhibits to the 1994 10-K. (j) Standex International Corporation Executive Security Program, as amended and restated on July 27, 1994, and as further amended and restated on October 29, 1996 is incorporated by reference to the exhibits to the Quarterly Report of Standex on Form 10-Q for the fiscal quarter ended December 31, 1996 (the "December 31, 1996 10-Q). (k) Standex International Corporation 1985 Stock Option Plan effective July 31, 1985, as amended on October 30, 1990, is incorporated by reference to the exhibits to the Annual Report of Standex on Form 10-K for the fiscal year ended June 30, 1991. (c) Exhibits (Continued) (l) Standex International Corporation Executive Life Insurance Plan effective April 27, 1994 and amended on April 24, 1996 and as further amended and restated on October 29, 1996 is incorporated by reference to the exhibits to the December 31, 1996 10-Q. (m) Standex International Corporation 1994 Stock Option Plan effective July 27, 1994 is incorporated by reference to the exhibits to the 1994 10-K. (n) Standex International Corporation Supplemental Retirement Plan adopted April 26, 1995 and amended on July 26, 1995 is incorporated by reference to the exhibits to the 1995 10-K. 13. The Annual Report to Stockholders of the Company for the fiscal year ended June 30, 1998 (except for the pages and information thereof expressly incorporated by reference in this Form 10-K, the Annual Report to Shareholders is provided solely for the information of the Securities and Exchange Commission and is not deemed "filed" as part of this Form 10-K). 21. Subsidiaries of Standex. 23. Independent Auditors' Consent. 24. Powers of Attorney of William L. Brown, David R. Crichton, Samuel S. Dennis, 3d, William R. Fenoglio, Daniel B. Hogan, Thomas L. King, C. Kevin Landry, H. Nicholas Muller, III, Ph.D. and Sol Sackel. 27. Financial Data Schedule. (d) Schedule The schedule listed in the accompanying Index to Financial Statements and Schedule is filed as part of this Annual Report on Form 10-K. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Standex International Corporation has duly caused this annual report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, on September 23, 1998. STANDEX INTERNATIONAL CORPORATION (Registrant) By: /s/ Edward J. Trainor Edward J. Trainor, President/ Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Standex International Corporation and in the capacities indicated on September 23, 1998: Signature Title /s/ Edward J. Trainor President/Chief Executive Officer Edward J. Trainor /s/ Edward F. Paquette Vice President/Chief Financial Officer Edward F. Paquette /s/ Robert R. Kettinger Corporate Controller (Chief Accounting Robert R. Kettinger Officer) Edward J. Trainor, pursuant to powers of attorney which are being filed with this Annual Report on Form 10-K, has signed below on September 14, 1998 as attorney-in-fact for the following directors of the Registrant: William L. Brown Daniel B. Hogan David R. Crichton Thomas L. King Samuel S. Dennis, 3d C. Kevin Landry William R. Fenoglio H. Nicholas Muller, III, Ph.D. Sol Sackel /s/ Edward J. Trainor Edward J. Trainor INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE Page No. in Annual Report ("AR") Financial Statements Statements of Consolidated Income for the Years Ended June 30, 1998, 1997 and 1996........... AR 19 Consolidated Balance Sheets at June 30, 1998 and 1997 AR 20 Statements of Consolidated Stockholders' Equity for the Years Ended June 30, 1998, 1997 and 1996....... AR 19 Statements of Consolidated Cash Flows for the Years Ended June 30, 1998, 1997 and 1996....... AR 21 Notes to Consolidated Financial Statements. .......... AR 22 - 27 Independent Auditors' Report relating to the Consolidated Financial Statements and Notes thereto AR 28 Schedule Schedule VIII Valuation and Qualifying Accounts Independent Auditors' Report relating to Schedule VIII Schedules (consolidated) not listed above are omitted because of the absence of conditions under which they are required or because the required information is included in the financial statements submitted. INDEX TO ITEMS INCORPORATED BY REFERENCE Page No. in Annual Report ("AR"), Proxy Statement ("P") or Proxy Supplement ("PS") PART I Item 1 Business..................................... AR 4 - 15 Industry Segment Information................. AR 24 INDEX TO ITEMS INCORPORATED BY REFERENCE Page No. in Annual Report ("AR"), Proxy Statement ("P") or Proxy Supplement ("PS") PART II Item 5 Market for Standex Common Stock and Related Stockholder Matters....................... AR 18 Item 6 Selected Financial Data...................... AR 18 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations....... AR 16 - 17 Item 8 Financial Statements and Supplementary Data........ AR 18 - 28 PART III Item 10 Directors and Executive Officers of Standex.. P 2 - 5; 14 and 19 Item 11 Executive Compensation....................... P 9 _ 14; PS 1 - 3 Item 12 Security Ownership of Certain Beneficial Owners and Management................................ P 3 - 5 Item 13 Certain Relationships and Related Transactions..... P 14 INDEPENDENT AUDITORS' REPORT To the Board of Directors and Stockholders of STANDEX INTERNATIONAL CORPORATION We have audited the consolidated financial statements of Standex International Corporation and subsidiaries as of June 30, 1998 and 1997, and for each of the three years in the period ended June 30, 1998, and have issued our report thereon dated August 20, 1998; such financial statements and report are included in your 1998 Annual Report to Stockholders and are incorporated herein by reference. Our audits also included the financial statement schedule of Standex International Corporation and subsidiaries, listed in Item 14 (a)(ii). This financial statement schedule is the responsibility of the Corporation's management. Our responsibility is to express an opinion based on our audits. In our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. /s/ DELOITTE & TOUCHE LLP DELOITTE & TOUCHE LLP Boston, Massachusetts August 20, 1998 <TABLE> Schedule VIII STANDEX INTERNATIONAL CORPORATION AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS For the Years Ended June 30, 1998, 1997 and 1996 <CAPTION> Column A Column B Column C Column D Column E Balance at Additions Beginning Charged to Costs Charged to Balance at Description of Year and Expenses Other Accounts Deductions End of Year Allowances deducted from assets to which they apply--for doubtful accounts receivable: <S> <C> <C> <C> <C> June 30, 1998 $2,535,535 $2,587,540 $(1,572,390)(1) $3,550,685 June 30, 1997 $2,666,005 $2,276,847 $(2,407,317)(1) $2,535,535 June 30, 1996 $2,853,681 $1,105,008 $(1,292,684)(1) $2,666,005 (1) Accounts written off--net of recoveries. </TABLE> INDEX TO EXHIBITS PAGE 13. The Annual Report to Stockholders of the Company for the fiscal year ended June 30, 1997 (except for the pages and information thereof expressly incorporated by reference in this Form 10-K, the Annual Report to Shareholders is provided solely for the information of the Securities and Exchange Commission and is not deemed "filed" as part of this Form 10-K)................................. 21. Subsidiaries of Registrant ..................... 23. Independent Auditors' Consent .................. 24. Powers of Attorney of William L. Brown, David R. Crichton, Samuel S. Dennis, 3rd, William R. Fenoglio, Daniel B. Hogan, Thomas L. King, C. Kevin Landry, H. Nicholas Muller, III, Ph.D. and Sol Sackel... 27. Financial Data Schedule.........................