-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, UTYemeX7h9zHaqrqFoTIYG6xgyUSgYjb+LF5jx30wDLkB/ZzRW5R6QAj5PKVj/zn 9guW+N8SHUGAOBmDAQZvCw== 0000008919-94-000006.txt : 19940518 0000008919-94-000006.hdr.sgml : 19940518 ACCESSION NUMBER: 0000008919-94-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940402 FILED AS OF DATE: 19940516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AYDIN CORP CENTRAL INDEX KEY: 0000008919 STANDARD INDUSTRIAL CLASSIFICATION: 3663 IRS NUMBER: 231686808 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07203 FILM NUMBER: 94528742 BUSINESS ADDRESS: STREET 1: 700 DRESHER RD CITY: HORSHAM STATE: PA ZIP: 19044 BUSINESS PHONE: 2156577510 10-Q 1 AYDIN CORPORATION Telephone 700 Dresher Road (215) 657-7510 P.O. Box 349 FAX Horsham, PA 19044 (215) 657-3830 U.S.A. Telex 685 1211 AYDIN UW May 16, 1994 (VIA EDGAR) SECURITIES & EXCHANGE COMMISSION Judiciary Plaza 450 Fifth Street, N.W. Washington, D.C. 20549-1004 Attn: Filing Desk, Stop 1-4 RE: Form 10-Q First Quarter, 1994 File No. 1-7203 Gentlemen: We are enclosing for filing Aydin Corporation's Form 10-Q for the First Quarter ending April 2, 1994. Very truly yours, /s/ Robert A. Clancy Robert A. Clancy Secretary and Corporate Counsel RAC:cak Enclosures cc: John W. Kauffman, Esq. James W. Kay, Peat Marwick SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 2, 1994 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to __________ Commission file number 1-7203 AYDIN CORPORATION ________________________________________________________________________ (Exact name of registrant as specified in its charter) DELAWARE 23-1686808 ________________________________________________________________________ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 700 DRESHER ROAD, HORSHAM, PA 19044 ________________________________________________________________________ (Address of principle executive offices) (Zip Code) (215) 657-7510 ________________________________________________________________________ (Registrant's telephone number, including area code) ________________________________________________________________________ (Former name, former address and former fiscal year, if changed since last report) 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 the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Shares of common stock, $1.00 par value, outstanding as of May 13, 1994. ______4,982,529______ AYDIN CORPORATION PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Incorporated herein by reference are the Condensed Consolidated Financial Statements of Aydin Corporation and the related Notes to Financial Statements as set forth on pages 2 through 5 of the "1994 First Quarter Report" to Stockholders. These condensed consolidated financial statements for the three month period ended April 2, 1994 have been subjected to a limited review by KPMG Peat Marwick, the Registrant's independent accountants, whose report, set forth on page 6 of the "1994 First Quarter Report" to Stockholders, is incorporated herein by reference. Earnings per share are based on the weighted average number of common shares outstanding plus shares issuable upon the assumed exercise of dilutive common stock options. The number of shares used in the computation of earnings per share for the three months ended April 2, 1994 and April 3, 1993 were 5,007,342 and 5,022,912, respectively. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (1) Material Changes in Financial Condition (4/02/94 versus 12/31/93) Accounts receivable decreased by $10.4 million mainly because of cash collected on an unusually large shipment on a U.S. Government contract and an excess of collections versus billings rendered on a large contract with the Government of Turkey. Accrued liabilities declined by $2.5 million primarily because of $2 million of payments made in connection with the terms of a settlement made with the Department of Justice on the AN/GRC-222 microwave radio contract with the U.S. Army (see Note K of the 12/31/93 Annual Report). Short-term bank debt decreased by $6.5 million because of the above mentioned receivable collections partially offset by the decline in accrued liabilities. Of the total of $23.9 million of cash and short-term investments at April 2, 1994, approximately $17.8 million represents interest bearing collateral required to be maintained against letters of credit for the Turkish contract. The Company at April 2, 1994 had short-term borrowing arrangements available of $19 million, of which $15 million was used. These borrowing arrangements may be reduced if the Company has to increase performance guarantees it issues in foreign countries. Based on the present backlog and projected cash flows, the Company anticipates financing its capital needs from internal sources and from short-term borrowings in the foreseeable future. (2) Material Changes in Operations (First Quarter 1994 versus 1993) Net sales declined by $8.0 million (21%) because of the increasingly competitive U.S. Government defense business and delays in booking new foreign business. Cost of sales as a percentage of sales increased to 74.1% from 71.2% as a result of the more competitive U.S. Government defense business environment and a more favorable sales mix in 1993. Selling, general and administrative expenses declined by $1.4 million (21%) because of cost reductions necessitated by the decreases in sales and backlog and as a result of net foreign currency translation gains of $495 thousand related to the Turkish subsidiary. Research and development expenses decreased by $558 thousand (34%) because of a slow down or completion during 1994 of several Company- funded new product development projects. The income tax provision as a percentage of pretax income decreased to 25.1% from 37.5% because the 1994 foreign currency translation gains referred to above are not subject to tax. PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS (a) The Registrant held its Annual Meeting of Stockholders on April 29, 1994. (b) Proxies for the meeting were solicited pursuant to Regulation 14A. There was no solicitation in opposition to management's nominees for directors as listed in the Proxy Statement. All such nominees were elected. (c) The matters voted upon and the results of the voting were as follows: (1) Election of Directors
For Withheld Broker Non-Votes F.G. Allen 3,714,669 24,693 None N.A. Gokcen 3,714,119 25,243 None A. Hakimoglu 3,715,804 23,558 None H.D. Train II 3,711,492 27,870 None
(2) Approval of the 1994 Incentive Stock Option Plan
For Against Abstain Broker Non-Votes 3,527,675 190,070 21,617 None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) The following is a list of Exhibits filed as part of this report: Exhibit 2 - None Exhibit 4 - None Exhibit 10 - None Exhibit 11 - None Exhibit 15 - Letter re unaudited interim financial information Exhibit 18 - None Exhibit 19 - "1994 FIRST QUARTER REPORT" to Stockholders Exhibit 22 - None Exhibit 23 - None Exhibit 24 - None Exhibit 27 - None (b) Reports on Form 8-K A report on Form 8-K, dated January 5, 1994, was filed by the Registrant on January 13, 1994, covering Item 5 (Other Events). SIGNATURES 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. AYDIN CORPORATION DATE May 16, 1994 /s/ Herbert Welber HERBERT WELBER, CONTROLLER DATE May 16, 1994 /s/ Robert A. Clancy ROBERT A. CLANCY, SECRETARY AYDIN CORPORATION FORM 10-Q QUARTERLY REPORT EXHIBIT INDEX N0. DESCRIPTION OF EXHIBIT 15 Letter re unaudited interim financial information 19 1994 First Quarter Report to Stockholders Exhibit 15 KPMG Peat Marwick Certified Public Accountants 1600 Market Street Telephone 215 299 3100 Telefax 215 299 3150 Philadelphia, PA 19103-7279 Telex 4973852 Aydin Corporation Horsham, Pennsylvania Gentlemen: RE: Registration Statements No's 33-53549; 33-34863; 33-22016; 33-14284; 2-97645; 2-93603; 2-77623; 2-64093 With respect to the subject Registration Statements, we acknowledge awareness of the incorporation by reference therein of our report dated April 29, 1994 related to our review of interim financial information. Pursuant to Rule 436(c) under the Securities Act of 1933, such report is not considered a part of a Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of the act. Very truly yours, /s/ KPMG Peat Marwick Philadelphia, Pennsylvania May 13, 1994 Exhibit 19 Dear Stockholder: Aydin's sales for the 1994 first quarter were $29,445,000, representing a decline of 21% from the first quarter sales of $37,434,000 last year. Net income was $1,027,000, a 28% decrease from the $1,436,000 in net income from the 1993 first quarter. Earnings per share were $.21, as compared to $.29 per share earned in the same period last year. During the quarter, the backlog decreased to $149,000,000 as compared to $155,000,000 as of the end of 1993. Management is pursuing the strategy of aggressively bidding U.S. Government and export programs, as in the past. A major effort is underway also to develop products to augment the industrial business, particularly in the digital wireless communications and computer equipment areas, for telecommunications applications. The Company plans to utilize its experience in microwave and TDMA (Time Division Multiple Access), which increases channel capacity in a given frequency band, to develop digital cellular products and systems. Also, the Company is developing a microcell, which provides cost effective communications to inaccessible areas. To accelerate this activity, Aydin has added to its staff a number of experienced wireless engineers. Expansion of its network access products for voice, data and video applications in public networks is also the Company's plan. The Company is working to strengthen its sales and marketing force and has hired Mr. Manfred Hirt for Corporate Marketing and Dr. Robert Hoe as Sales and Marketing Manager for the Company's West Coast Division. In addition, several international Sales Engineers have been appointed, including one of Russian origin. These should enable and/or enhance contacts in China, Russia, and the Far East and significantly improve international sales. /s/ Ayhan Hakimoglu Ayhan Hakimoglu President April 29, 1994 (page 1) AYDIN CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME ($000 omitted except for per share amounts)
Three Months Ended April 2, 1994 April 3, 1993 (Unaudited) (Unaudited) NET SALES $29,445 $37,434 COST AND EXPENSES Cost of sales 21,812 26,642 Selling, general and administrative 5,209 6,597 Research and development 1,072 1,630 Interest expense (income), net (19) 103 _______ ______ Total 28,074 34,972 _______ ______ INCOME BEFORE INCOMES TAXES AND MINORITY INTEREST 1,371 2,462 INCOME TAXES 344 923 _______ ______ INCOME BEFORE MINORITY INTEREST 1,027 1,539 LESS MINORITY INTEREST - 0 - 103 _______ ______ NET INCOME $ 1,027 $1,436 _______ ______ _______ ______ EARNINGS PER SHARE $ .21 $ .29 _______ ______ _______ ______
(page 2) AYDIN CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ($000 Omitted) ASSETS
April 2, 1994 Dec. 31, 1993 (Unaudited) CURRENT ASSETS: Cash, including cash equivalents- 1994, $9,869; 1993, $10,908 $ 11,536 $ 11,822 Short-term investments 12,345 13,058 Accounts receivable 23,120 33,525 Unbilled revenue, after progress billings 69,760 66,559 Inventories: Raw materials 7,903 8,549 Work-in-process 6,014 6,036 Finished product 2,984 3,012 Prepaid expenses 2,069 1,470 ________ ________ Total current assets 135,731 144,031 PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation: 1994, $54,441; 1993, $53,623 24,693 25,182 OTHER ASSETS 501 508 ________ ________ TOTAL ASSETS $160,925 $169,721 ________ ________ ________ ________ __________________________________________________________________ NOTE TO FINANCIAL STATEMENTS: Interim financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the periods. The 1993 balance sheet has been derived from the audited financial statements contained in the 1993 Annual Report to Stockholders. These interim financial statements conform with the requirements for interim financial statements and consequently do not include all the disclosures normally required by generally accepted accounting principles. Disclosures are updated where appropriate. There are no changes in contingency disclosures. Pretax income for the first quarter of 1994 includes foreign currency translation gains of $495,000 relating to the Turkish subsidiary.
(page 3) AYDIN CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ($000 Omitted) LIABILITIES AND STOCKHOLDERS' EQUITY
April 2, 1994 Dec. 31, 1993 (Unaudited) CURRENT LIABILITIES: Current maturities of long-term debt $ 398 $ 397 Short-term bank debt 15,025 21,525 Accounts payable 20,559 21,731 Accrued liabilities 12,774 15,295 Advanced payments and contract billings in excess of recognized revenue 2,557 1,563 Accrued and deferred income taxes 6,789 7,014 ________ _______ Total current liabilities 58,102 67,525 LONG-TERM DEBT, less current maturities 1,798 1,902 DEFERRED INCOME TAXES 6,078 6,230 MINORITY INTEREST 0 105 STOCKHOLDERS' EQUITY: Common stock, par value $1- authorized 7,500,000 shares: issued 1994, 4,982,304 shares; 1993, 4,981,273 shares 4,982 4,981 Additional paid-in capital 707 697 Retained earnings 89,933 88,906 Foreign currency translation effects (675) (625) ________ _______ Stockholders' equity 94,947 93,959 ________ _______ TOTAL LIABILITIES AND EQUITY $160,925 $169,721 ________ _______ ________ _______
(page 4) AYDIN CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ($000 omitted)
Three Months Ended April 2, 1994 April 3, 1993 (Unaudited) (Unaudited) OPERATING ACTIVITIES Net Income $ 1,027 $ 1,436 Items not affecting cash: Depreciation and amortization 845 1,314 Deferred income taxes (100) 168 Minority Interest 0 103 Other (50) 35 Changes in certain working capital items: Accounts receivable 10,405 11,335 Unbilled revenue (3,201) (14,617) Advance payments and contract billings in excess of recognized revenue 994 660 Inventories 696 (108) Prepaid expenses (599) 244 Accounts payable and accrued liabilities (3,693) (321) Accrued income taxes (277) 520 ________ _________ Cash Provided By Operating Activities 6,047 769 INVESTING ACTIVITIES Net property, plant and equipment additions (349) (625) Short-term investments 713 (3,373) ________ _________ Cash Provided (Used) By Investing Activities 364 (3,998) FINANCING ACTIVITIES Principal payments on long-term debt (103) (98) Net repayments of short-term borrowings (6,500) (2,300) Minority investment in consolidated subsidiary (105) (189) Proceeds from exercise of stock options 11 182 ________ _________ Cash Used By Financing Activities (6,697) (2,405) ________ _________ DECREASE IN CASH AND CASH EQUIVALENTS (286) (5,634) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 11,822 17,086 ________ _________ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 11,536 $ 11,452 ________ _________ ________ _________
(page 5) INDEPENDENT ACCOUNTANTS' REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION Board of Directors and Stockholders Aydin Corporation We have reviewed the condensed consolidated balance sheet of Aydin Corporation and subsidiaries as of April 2, 1994, and the related condensed consolidated statements of income and cash flows for the three-month periods ended April 2, 1994 and April 3, 1993. These condensed consolidated financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Aydin Corporation and subsidiaries as of December 31, 1993 and the related consolidated statements of operations and cash flows for the year then ended (not presented herein); and in our report dated February 25, 1994 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1993 is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. /s/ KPMG Peat Marwick Philadelphia, Pennsylvania April 29, 1994 ________________________________________________________________ A copy of Aydin Corporation's Form 10-Q may be obtained without charge, upon written request sent to Aydin Corporation (page 6) -----END PRIVACY-ENHANCED MESSAGE-----