-----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, Q2obncMl97lvFs9qDxBXMvodP/GT9exEoxrlT+Y4FiRNMrRfHnfKuWwCbeSWbAzJ /sJ8+07HU6sl8SnnGhBw/w== 0000950005-99-000349.txt : 19990414 0000950005-99-000349.hdr.sgml : 19990414 ACCESSION NUMBER: 0000950005-99-000349 CONFORMED SUBMISSION TYPE: DEFA14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19990413 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WATKINS JOHNSON CO CENTRAL INDEX KEY: 0000105006 STANDARD INDUSTRIAL CLASSIFICATION: SPECIAL INDUSTRY MACHINERY, NEC [3559] IRS NUMBER: 941402710 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEFA14A SEC ACT: SEC FILE NUMBER: 001-05631 FILM NUMBER: 99592931 BUSINESS ADDRESS: STREET 1: 3333 HILLVIEW AVE CITY: PALO ALTO STATE: CA ZIP: 94304-1223 BUSINESS PHONE: 4154934141 MAIL ADDRESS: STREET 1: 3333 HILLVIEW AVENUE CITY: PALO ALTO STATE: CA ZIP: 94304-1223 DEFA14A 1 FORM DEFA14A SCHEDULE 14A INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Definitive Proxy Statement [X] Definitive Additional Materials [ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) Watkins-Johnson Company ------------------------------------------------------ (Name of Registrant as Specified In Its Charter) -------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed: Information Contact: Frank E. Emery Watkins-Johnson 650-813-2752 Judy Brennan Sard Verbinnen 212-687-8080 FOR RELEASE AT 8:00 a.m. EASTERN TIME APRIL 13, 1999 WATKINS-JOHNSON REPORTS FIRST-QUARTER 1999 RESULTS --------------------------------------------------------- Wireless Communications Continues Strong Sales Growth; Semiconductor Equipment Group Continues to Rebound --------------------------------------------- Progress on Sale of W-J Businesses to Maximize Shareholder Returns PALO ALTO, Calif., April 13, 1999 -- Watkins-Johnson Company (NYSE: WJ), a high technology company in wireless communications and semiconductor equipment, today reported sales for the first quarter ending March 26, 1999, of $65.2 million, compared with $68.7 million for the year-ago period. Net income was $2.9 million, or 43 cents per diluted share, compared to $9.7 million, or $1.15 per diluted share in the first quarter of 1998. The first-quarter 1998 results include a pre-tax gain of about $15 million for the sale of 15 acres of undeveloped land in San Jose, Calif. Firm backlog on March 26, 1999 stood at $98.3 million, compared to the March 27, 1998 backlog of $82.2 million. "On March 1, we announced our intention to pursue the sale of the company. After conducting a wide-ranging strategic review with our investment advisors, CIBC Oppenheimer Corp., we concluded that selling the company in its entirety or as separate businesses would create the most value for shareholders," said W. Keith Kennedy, president and chief executive officer of Watkins-Johnson Company. Kennedy continued: "We are pleased to report W-J's second consecutive quarter of increasing sales and profits, and a healthy increase in our backlog. Our Wireless -more- Watkins-Johnson Company, page 2 Communications segment continues to enjoy orders growth, and our Semiconductor Equipment segment is beginning to rebound." "We are also pleased with the progress we've made toward the sale. On March 31, we announced the completion of the sale of the Semiconductor Equipment Group's high-density plasma chemical vapor deposition intellectual property assets and associated hardware to Applied Materials. This sale will result in a second quarter 1999 pre-tax gain of $9 million in income. We also entered into a non-binding letter of intent with Silicon Valley Group to sell the balance of the Semiconductor Equipment Group." W-J's Wireless Communications segment, comprising the Wireless Products and Telecommunications Groups, had sales of $34.7 million, a 16% increase over sales of $30 million for the year-ago period. The Wireless Products Group received $24 million in commercial orders, well over its plan. The Telecommunications Group received $17 million in orders for its communications surveillance equipment, including a $7 million award from Wright Patterson Air Force Base. The Semiconductor Equipment segment had sales of $30.5 million, down 21% from the first-quarter 1998 sales of $38.7 million, but up 26% from the 1998 fourth-quarter sales of $24.2 million. First-quarter 1999 orders for semiconductor equipment totaled $43 million, which included orders from two major integrated circuit manufacturers in Korea and from a key semiconductor foundry in Taiwan. Many of the orders were for the recently introduced WJ-1500; a continuous process atmospheric pressure chemical vapor deposition system developed for the 0.18-micron geometry semiconductor devices now entering production. Watkins-Johnson Company specializes in two high-technology business areas. WJ's wireless-communications units produce radio-frequency components, subassemblies and equipment for fixed and mobile networks worldwide. The company's Semiconductor Equipment Group produces atmospheric pressure chemical vapor deposition systems for high-volume integrated-circuit manufacturing. For more information, visit http://www.wj.com. -more- Watkins-Johnson Company, page 3 This news release, other than the historical information, contains forward-looking statements that involve risks and uncertainties, which include the risks of executing and closing a definitive agreement to sell the Semiconductor Equipment Group's business, of the consummation of the sale of the company or its component businesses, and the other risks detailed in the company's SEC reports, including the report on Form 10-K for the year ended December 31, 1998. Actual results may vary materially. Summary of Results First Quarter Ending March 1999 1998 - -------------------------- ---------- ---------- (Dollars in thousands except per-share amounts) Revenue $ 65,181 $ 68,722 Net income 2,853 9,701 Basic per-share amounts: Basic net income per share $ 0.44 $ 1.17 Basic shares outstanding 6,558,000 8,262,000 Diluted per-share amounts: Diluted net income per share $ 0.43 $ 1.15 Diluted shares outstanding 6,645,000 8,416,000 # # # Detailed Results Follow Watkins-Johnson's consolidated statements of operations and consolidated balance sheets appear on the following pages. -more- Watkins-Johnson Company, page 4 WATKINS-JOHNSON COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS* For the periods ended March 26, 1999 and March 27, 1998
Three Months Ended - ----------------------------------------------------------------------------------------------------------------------------------- (Dollars in thousands, except per share amounts) 1999 1998 - ----------------------------------------------------------------------------------------------------------------------------------- Sales: Wireless communications $ 34,663 $ 30,006 Semiconductor equipment 30,518 38,716 - ----------------------------------------------------------------------------------------------------------------------------------- 65,181 68,722 - ----------------------------------------------------------------------------------------------------------------------------------- Costs and expenses: Cost of goods sold 42,298 42,546 Selling and administrative 10,247 15,821 Research and development 9,131 13,208 - ----------------------------------------------------------------------------------------------------------------------------------- 61,676 71,575 - ----------------------------------------------------------------------------------------------------------------------------------- Income (loss) from operations 3,505 (2,853) Other income (expense)-net 457 1,929 Gain on real property 14,783 - ----------------------------------------------------------------------------------------------------------------------------------- Income before federal, state and foreign income taxes 3,962 13,859 Income tax expense (1,109) (4,158) - ----------------------------------------------------------------------------------------------------------------------------------- Net income $ 2,853 $ 9,701 =================================================================================================================================== Per share amounts: Basic net income per share $ 0.44 $ 1.17 Basic average common shares 6,558,000 8,262,000 Diluted net income per share $ 0.43 $ 1.15 Diluted average common shares 6,645,000 8,416,000 *Unaudited
-more- Watkins-Johnson Company, page 5 WATKINS-JOHNSON COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of March 26, 1999 and December 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------------- (Dollars in thousands) 1999* 1998 - ----------------------------------------------------------------------------------------------------------------------------------- ASSETS Current assets: Cash and equivalents $ 15,395 $ 19,271 Short-term investments 40,014 45,353 Receivables 47,562 31,942 Inventories: Finished goods 2,923 2,960 Work in process 8,917 11,954 Raw materials and parts 7,919 8,456 Deferred income taxes 31,557 32,288 Other 17,713 19,872 - ----------------------------------------------------------------------------------------------------------------------------------- Total current assets 172,000 172,096 - ----------------------------------------------------------------------------------------------------------------------------------- Property, plant, and equipment 140,849 140,224 Accumulated depreciation and amortization (79,157) (77,585) - ----------------------------------------------------------------------------------------------------------------------------------- Property, plant, and equipment--net 61,692 62,639 - ----------------------------------------------------------------------------------------------------------------------------------- Other assets 10,714 10,743 - ----------------------------------------------------------------------------------------------------------------------------------- $ 244,406 $ 245,478 =================================================================================================================================== LIABILITIES AND SHAREOWNERS' EQUITY Current liabilities: Payables $ 16,200 $ 15,704 Accrued liabilities 62,283 65,374 - ----------------------------------------------------------------------------------------------------------------------------------- Total current liabilities 78,483 81,078 - ----------------------------------------------------------------------------------------------------------------------------------- Long-term obligations 31,901 32,701 - ----------------------------------------------------------------------------------------------------------------------------------- Shareowners' equity: Common stock 34,702 34,454 Retained earnings 101,138 99,073 Accumulated other comprehensive income (loss) (1,818) (1,828) - ----------------------------------------------------------------------------------------------------------------------------------- Total shareowners' equity 134,022 131,699 - ----------------------------------------------------------------------------------------------------------------------------------- $ 244,406 $ 245,478 =================================================================================================================================== *Unaudited
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