-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DZrLWaQ0HyNJWJPTATsa3pGRhtLUq9RCxb97MeMLCp+ddOlM6NMU0NPdiafLnDLM tm5C4IhoUtyr7kE9VkdwFw== 0000916641-96-000229.txt : 19960404 0000916641-96-000229.hdr.sgml : 19960404 ACCESSION NUMBER: 0000916641-96-000229 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960403 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIED RESEARCH CORP CENTRAL INDEX KEY: 0000003952 STANDARD INDUSTRIAL CLASSIFICATION: ORDNANCE & ACCESSORIES, (NO VEHICLES/GUIDED MISSILES) [3480] IRS NUMBER: 042281015 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-11376 FILM NUMBER: 96543888 BUSINESS ADDRESS: STREET 1: 8000 TOWERS CRESCENT DR STREET 2: STE 750 CITY: VIENNA STATE: VA ZIP: 22182 BUSINESS PHONE: 7038475268 MAIL ADDRESS: STREET 1: 8000 TOWERS CRESCENT DRIVE STREET 2: STE 750 CITY: VIENNA STATE: VA ZIP: 22182 FORMER COMPANY: FORMER CONFORMED NAME: ALLIED RESEARCH ASSOCIATES INC DATE OF NAME CHANGE: 19880601 10-K/A 1 ALLIED RESEARCH CORPORATION ANNUAL REPORT Trends In Liquidity And Capital Resources Allied experienced liquidity problems during 1990 and the first portion of 1991 due to substantial operating losses experienced during 1988 and 1989 as well as the pledge of cash needed to accommodate the then increasing backlog of orders. The liquidity improved significantly in 1991-1993. The substantial losses incurred in 1994 caused a decline in liquidity which decline continued throughout 1995 due to the more modest losses incurred in 1995. A further decline in liquidity is forecast for 1996 unless MECAR obtains and finances substantial contracts from its principal customer base or other customers. If such contracts are not timely obtained, the continued decline in liquidity will cause Allied to accelerate its ongoing program to reduce operating costs, seek additional capital and/or take other currently unidentified actions to remedy the liquidity deficiency. Liquidity. Allied's liquidity continued to decline in 1995, principally as a result of non-profitable operations at MECAR. Working capital was approximately $13.98 at December 31, 1995, which is a decrease of $2.47 from the December 31, 1994 level. The working capital is required for operations and to support credit facility agreements. Accounts receivable at December 31, 1995 decreased from December 31, 1994 by $.7 due to larger collections at the end of 1995. Costs and accrued earnings on uncompleted contracts decreased by $2.08 from 1994 as a result of lower levels of work in process at 1995 year-end. Inventory increased by $2.01 over 1994, generally as a result of longer production times. Prepaid expenses and deposits decreased $.11 due to a decline in new orders. Current liabilities decreased by $26.07 from 1994 levels as a result of the completion and final delivery of various contracts and an increase in long-term debt. During 1995, 1994 and 1993, Allied funded its operations principally with internally generated cash and back-up credit facilities required for foreign government contracts. Allied and its subsidiaries implemented substantial cost cutting initiatives in 1995. Allied reduced its general and administrative expenditures by 17%; similarly, MECAR reduced its expenditures by 2%. The London office of Limited was closed in late 1994 which resulted in substantial cost savings in 1995. Services projects were wound down throughout 1995 which resulted in a reduction in costs of 45%. Selling and administrative expenses for Allied increased by $.13 in 1995 over 1994 since the 1995 expenses included a full year of such expenses at VSK (as opposed to seven (7) months in 1994) as well as almost eight (8) months of such expenses at IDCS. 17 Research and development costs increased in 1994 over 1993 levels due to additional efforts by MECAR in broadening its product lines. In addition, Services continued to expend funds in its efforts to bring its demilitarization and water purification efforts to market. Interest Income Interest income decreased in 1995 from 1994 due to the utilization of cash for unprofitable operations and reduced cash deposits associated with the Term Loan agreement. Interest income decreased in 1994 from 1993 due to the utilization of cash for unprofitable operations and the acquisition of The VSK Group. Interest Expense Interest expense decreased in 1995 from 1994 as a result of a decrease in outstanding debt and credit facilities fees. Interest expense decreased in 1994 from 1993 as a result of a decrease in outstanding debt and credit facilities fees. Other - Net Allied had a gain in 1995 of $2.0 from other sources, principally consisting of net currency gains occasioned by the weakened U.S. dollar. Allied had a gain in 1994 of $1.3 from other sources, principally consisting of net currency gains occasioned by the weakened U.S. dollar. In 1993, Allied had a net loss of $1.0 including a net currency loss of $1.2. Income Taxes The 1995 effective tax rate was 58.6% primarily due to the losses incurred at MECAR (which can only be carried forward) and foreign tax rate differentials in the U.S. The 1994 effective tax rate was 6.5% due to the losses incurred at MECAR (which can only be carried forward) and in the U.S. Net Earnings (Loss) The Company incurred a $2.01 loss in 1995 compared with a loss of $10.94 in 1994. BRI and The VSK Group operated at a profit in 1995; MECAR and Services operated at a loss. The loss 22 Allied Research Corporation CONSOLIDATED STATEMENTS OF OPERATIONS Year ended December 31,
1995 1994 1993 ----------- ------------- ------------ Revenue (note M) $65,768,907 $ 69,846,845 $147,097,482 Costs and expenses Cost of sales 49,896,794 63,976,951 118,897,942 Selling and administrative 15,758,673 15,631,256 11,655,229 Research and development 2,087,278 1,262,333 841,685 Restructuring charge (note R) - 326,831 2,883,289 ---------- ------------ ----------- 67,742,745 81,197,371 134,278,145 ---------- ------------ ----------- Operating income (loss) (1,973,838) (11,350,526) 12,819,337 Other income (deductions) Interest income 1,770,278 3,539,888 4,327,313 Interest expense (3,034,537) (3,768,788) (4,108,053) Other - net (note O) 1,968,478 1,306,083 (1,003,059) ------------ ------------- ------------- 704,219 1,077,183 (783,799) ------------ ------------- ------------- Earnings (loss) before income taxes (1,269,619) (10,273,343) 12,035,538 Income taxes (notes A and P) 743,652 667,763 4,040,416 ------------ -------------- ------------- NET (LOSS) EARNINGS $ (2,013,271) $ (10,941,106) $ 7,995,122 =========== ============ ============= Earnings (loss) per common share (note S) $( .46) $(2.49) $1.73 ===== ===== ====
The accompanying notes are an integral part of these statements. F-6 -----END PRIVACY-ENHANCED MESSAGE-----