-----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, Ki0SYudVUlY7ppVfWv8KE35YXRdhBsn+8hcdKvH0rVKHq3Gux0k2BmEIDXn6c7kl 620g26Z3yDRiUSQgJoC0kQ== 0000027116-97-000001.txt : 19970131 0000027116-97-000001.hdr.sgml : 19970131 ACCESSION NUMBER: 0000027116-97-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970130 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DATRON SYSTEMS INC/DE CENTRAL INDEX KEY: 0000027116 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 952582922 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-07445 FILM NUMBER: 97513933 BUSINESS ADDRESS: STREET 1: 304 ENTERPRISE ST CITY: ESCONDIDO STATE: CA ZIP: 92029 BUSINESS PHONE: 6197473734 10-Q 1 UNITED STATES 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 December 31, 1996 [ ] 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: 0-7445 DATRON SYSTEMS INCORPORATED ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 95-2582922 ------------------------------- ---------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 304 Enterprise Street, Escondido, California 92029-1297 -------------------------------------------- ---------- (Address of principal executive offices) (zip code) (619) 747-3734 ---------------------------------------------------- (Registrant's telephone number, including area code) (Former name, former address and formal 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. [ X ] Yes [ ] No APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15 (d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. [ ] Yes [ ] No APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. As of January 24, 1997, the Registrant had only one class of common stock, par value $0.01, of which there were 2,627,192 shares outstanding. 1 PART I -- FINANCIAL INFORMATION Item 1. Financial Statements.
DATRON SYSTEMS INCORPORATED CONSOLIDATED BALANCE SHEETS (In Thousands) Dec 31, March 31, 1996 1996 -------- -------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $2,568 $1,393 Accounts receivable, net 12,006 15,017 Inventories 15,397 15,808 Deferred income taxes 2,602 2,602 Prepaid expenses and other current assets 413 2,478 -------- -------- Total current assets 32,986 37,298 Property, plant and equipment, net 12,443 13,835 Goodwill, net 5,902 6,056 Investment 1,113 890 Other assets 294 380 -------- -------- Total assets $52,738 $58,459 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $5,718 $8,490 Accrued expenses 3,141 5,405 Customer advances 833 3,693 Income taxes payable 376 240 Current portion of restructuring reserve 968 1,428 -------- -------- Total current liabilities 11,036 19,256 Long-term debt 7,900 5,200 Restructuring reserve 385 1,063 Deferred income taxes 1,069 1,069 -------- -------- Total liabilities 20,390 26,588 -------- -------- Stockholders' equity: Preferred stock -- par value $0.01; authorized 2,000,000 shares, none issued or outstanding --- --- Common stock -- par value $0.01; authorized 10,000,000 shares, 3,063,937 shares issued in December and March 31 31 Additional paid-in capital 10,654 10,568 Retained earnings 24,353 24,149 Treasury stock, at cost; 436,745 and 459,745 shares in December and March, respectively (2,446) (2,633) Stock option plan and stock purchase plan notes receivable (244) (244) -------- -------- Total stockholders' equity 32,348 31,871 -------- -------- Total liabilities and stockholders' equity $52,738 $58,459 ======== ======== See notes to consolidated financial statements.
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DATRON SYSTEMS INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per-share amounts) Three Months Ended Nine Months Ended December 31, December 31, 1996 1995 1996 1995 ------------------ ------------------ Net sales $12,923 $19,339 $40,000 $49,355 Cost of sales 9,311 14,181 29,023 33,907 ------------------ ------------------ Gross profit 3,612 5,158 10,977 15,448 Selling, general and admin. 2,730 3,812 8,452 11,215 Research and development 680 746 1,720 2,445 ------------------ ------------------ Operating income 202 600 805 1,788 Interest expense (159) (68) (456) (104) Interest income 6 6 9 25 Other income (expense) 15 (260) 15 (260) ------------------ ------------------ Income before income taxes 64 278 373 1,449 Income taxes 44 101 169 530 ------------------ ------------------ Net income $20 $177 $204 $919 ================== ================== Net income per share $0.01 $0.07 $0.08 $0.34 ================== ================== Weighted average number of common and common equivalent shares outstanding 2,674 2,679 2,683 2,663 ================== ================== See notes to consolidated financial statements.
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DATRON SYSTEMS INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Nine Months Ended December 31, 1996 1995 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $204 $919 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation and amortization 2,161 2,677 Restructuring (1,138) (260) Changes in operating assets and liabilities: Accounts receivable 3,011 (6,451) Inventories 411 (4,730) Prepaid expenses and other assets 2,107 (359) Accounts payable and accrued expenses (5,036) 2,232 Customer advances (2,860) 711 Income taxes payable 136 (2,046) Other liabilities --- (23) --------- --------- Net cash used in operating activities (1,004) (7,330) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Additions to property, plant and equipment (571) (1,987) Purchase of investment (223) (890) --------- --------- Net cash used in investing activities (794) (2,877) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Increase in long-term debt 2,700 7,400 Stock options exercised 273 242 Purchase of treasury stock --- (51) Payment advanced against stock option plan note receivable --- (80) --------- --------- Net cash provided by financing activities 2,973 7,511 --------- --------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,175 (2,696) Cash and cash equivalents at beginning of period 1,393 3,510 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $2,568 $814 ========= ========= See notes to consolidated financial statements.
4 Datron Systems Incorporated Notes to Consolidated Financial Statements (Unaudited) 1. Basis of Presentation The unaudited consolidated financial statements included herein contain the accounts of Datron Systems Incorporated and its wholly owned subsidiaries (the "Company") and have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. It is suggested that these financial statements be read in connection with the financial statements and notes thereto included in the Company's annual report on Form 10-K for the fiscal year ended March 31, 1996. In the opinion of the Company, the accompanying unaudited financial statements contain all adjustments, consisting only of normal recurring adjustments, unless otherwise stated, which are necessary to present fairly its financial position at December 31, 1996 and the results of its operations and its cash flows for the periods presented. Results of operations for the periods presented herein are not necessarily indicative of what results will be for the entire fiscal year. The balance sheet at March 31, 1996 has been derived from audited financial statements. 2. Income per Share Shares used in computing income per share include the weighted average of common stock outstanding plus equivalent shares issuable under the Company's stock option plans. 3. Accounts Receivable At December 31, 1996 and March 31, 1996, accounts receivable were as follows:
December 31, March 31, 1996 1996 ----------- ----------- Billed $ 7,459,000 $ 6,858,000 Unbilled 4,683,000 8,406,000 Subtotal 12,142,000 15,264,000 Allowance for doubtful accounts (136,000) (247,000) ------------ ----------- Total $ 12,006,000 $15,017,000 ============ ===========
4. Inventories At December 31, 1996 and March 31, 1996, inventories were as follows:
December 31, March 31, 1996 1996 ----------- ----------- Raw materials $ 9,216,000 $ 7,487,000 Work-in-process 3,899,000 5,231,000 Finished goods 2,282,000 3,090,000 ------------ ----------- Total $ 15,397,000 $15,808,000 ============ =========== 5 5. Property, Plant and Equipment At December 31, 1996 and March 31, 1996, property, plant and equipment was as follows:
December 31, March 31, 1996 1996 ---------- ------------ Land and buildings $ 8,496,000 $ 8,479,000 Machinery and equipment 14,312,000 13,658,000 Furniture and office equipment 1,459,000 1,462,000 Leasehold improvements 814,000 910,000 Construction-in-process 46,000 183,000 ---------- ----------- Subtotal 25,127,000 24,692,000 Accumulated depreciation and amortization (12,684,000) (10,857,000) ----------- ----------- Total $12,443,000 $13,835,000 =========== ===========
6. Long-Term Debt On November 25, 1996, the Company extended the maturity date of its revolving line of credit with its bank from December 31, 1997 to June 30, 1998. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Datron Systems Incorporated and its wholly owned subsidiaries (the "Company") reports operations in two business segments: Communication Products and Services, and Antenna and Imaging Systems. The Communication Products and Services business segment designs, manufactures and distributes high frequency and very high frequency radios and accessories for worldwide military and civilian purposes. The Antenna and Imaging Systems business segment designs and manufactures specialized satellite communication systems, subsystems and antennas that are sold worldwide to commercial and governmental customers, including the U.S. Department of Defense. This segment also sells remote sensing satellite earth stations. In fiscal 1996, this segment introduced the Company's first consumer product, the DBS-3000, a mobile satellite television reception system for recreational vehicles and long-haul trucks. This Management's Discussion and Analysis of Financial Condition and Results of Operations contains certain forward-looking statements. Actual results could differ materially. Reference is hereby made to the statement of Investment Considerations contained in Part I, Item 1 of the Company's Form 10-K, which is available from the Company upon request. Results of Operations Net income for the third quarter of fiscal 1997 was $20,000, or $0.01 per share, compared with net income of $177,000, or $0.07 per share, in the third quarter of fiscal 1996. Net sales in the third quarter of fiscal 1997 were $12,923,000, a 33% decrease from third quarter net sales last fiscal year of $19,339,000. The decrease in sales was primarily due to lower sales of radio products. The decrease in net income was primarily due to lower gross profits on the lower radio sales, partially offset by lower operating expenses. Net income for the nine months ended December 31, 1996 was $204,000, or $0.08 per share, compared with net income of $919,000, or $0.34 per share, for the comparable period last fiscal year. Net sales for the nine months were $40,000,000, a 19% decrease from net sales of $49,335,000 for the first nine months last fiscal year. The decrease in sales was primarily due to lower sales of radio products and military antennas, partially offset by sales of 6 new direct broadcast satellite ("DBS") television antenna products and by higher sales of remote sensing systems. The decrease in net income was primarily due to lower gross profits on the lower sales, partially offset by lower operating expenses. Operating results for each business segment were as follows: Communication Products and Services
Net sales $4,689,000 $11,617,000 $14,005,000 $24,621,000 ========== =========== =========== =========== Gross profit $ 926,000 $ 4,069,000 $ 3,704,000 $ 8,227,000 ========== =========== =========== =========== Operating (loss)income $ (353,000) $ 2,267,000 $ 424,000 $ 3,273,000 ========== =========== =========== ===========
Sales of Communication Products and Services in the third quarter and in the first nine months of fiscal 1997 were 60% lower and 43% lower, respectively, than they were in the comparable periods of fiscal 1996. Third quarter fiscal 1996 sales included shipment of an $8.3 million order to a customer in Asia. There was no similar sale in the third quarter of fiscal 1997, nor was there such a sale in the first six months of fiscal 1997. The lack of an order of that size and softness in the worldwide radio market has resulted in lower sales for the first nine months of fiscal 1997 compared with the first nine months of fiscal 1996. Gross profit percentage on sales of Communication Products and Services was 19.7% in the third quarter of fiscal 1997 compared with 35.0% in the third quarter of fiscal 1996. The decrease in the recent quarter was primarily due to higher labor and overhead costs and to production inefficiencies resulting from a lower sales level than in the comparable period last year. Gross profit for the first nine months of fiscal 1997 was 26.4% of sales compared with 33.4% of sales for the first nine months of fiscal 1996 for the same reason. An operating loss of 7.5% of sales of Communication Products and Services was incurred in the third quarter of fiscal 1997 compared with operating income of 19.5% of sales in the third quarter last fiscal year. The loss resulted primarily from lower gross profits, partially offset by lower selling and administrative expenses. Operating income for the first nine months of fiscal 1997 was 3.0% of sales compared with 13.3% of sales for the first nine months of fiscal 1996. The decrease was primarily due to lower gross profits, partially offset by lower selling and administrative expenses. Antenna and Imaging Systems
Three Months Ended Nine Months Ended December 31, December 31, 1996 1995 1996 1995 ---------- ---------- ----------- ----------- Net sales $8,234,000 $7,722,000 $25,995,000 $24,734,000 ========== ========== =========== =========== Gross profit $2,686,000 $1,089,000 $ 7,273,000 $ 7,221,000 ========== ========== =========== =========== Operating income(loss) $ 625,000 ($1,343,000) $ 1,185,000 ($443,000) ========== =========== =========== ==========
Sales of Antenna and Imaging Systems products increased 7% in the third quarter of fiscal 1997 compared with the third quarter of fiscal 1996. The increase was primarily due to higher sales of remote sensing systems, partially offset by lower sales of military antennas. Sales in the first nine months of fiscal 1997 were 5% higher than in the first nine months of fiscal 1996. The increase was primarily due to sales of new DBS antenna products and higher sales of remote sensing systems, partially offset by lower sales of military antennas. 7 Gross profit percentage on sales of Antenna and Imaging Systems products was 32.6% in the third quarter of fiscal 1997 compared with 14.1% in the third quarter of fiscal 1996. The increase was primarily due to a more favorable product mix in the recent quarter and to the absence of a write-off of non recoverable expenses associated with a canceled remote sensing order in the third quarter of fiscal 1996. Gross profit for the first nine months of fiscal 1997 was 28.0% of sales compared with 29.2% of sales for the first nine months of fiscal 1996. The decrease was primarily due to higher materials costs associated with start-up quantities of DBS antenna products. Operating income percentage on sales of Antenna and Imaging Systems products was 7.6% in the third quarter of fiscal 1997 compared with an operating loss percentage of 17.4% of sales in the third quarter last fiscal year. The improvement was primarily due to higher gross profits and lower selling and research and development ("R&D") expenses in the recent quarter. Operating income for the first nine months of fiscal 1997 was 4.6% of sales compared with an operating loss percentage of 1.8% of sales for the first nine months of fiscal 1996. The improvement was primarily due to lower R&D and selling expenses in the first nine months of fiscal 1997. Consolidated expenses were as follows: Selling, general and administrative expenses were $2,730,000 in the third quarter of fiscal 1997, a 28% decrease compared with third quarter of fiscal 1996 expenses of $3,812,000. Selling, general and administrative expenses for the first nine months of fiscal 1997 were $8,452,000, a 25% decrease compared with the first nine months of fiscal 1996 expenses of $11,215,000. Cost reductions related to the Company's fourth quarter of fiscal 1996 consolidation and restructuring as well as spending reductions in the first nine months of fiscal 1997 at both business segments were responsible for most of the decrease. Research and development expenses were $680,000 in the third quarter of fiscal 1997 compared with $746,000 in the third quarter last fiscal year. The 9% decrease was due to lower spending on development programs for mobile DBS antenna products, partially offset by increased spending on development programs for new radio products. R&D expenses in the first nine months of fiscal 1997 were $1,720,000, a 30% decrease compared with the first nine months of fiscal 1996 expenses of $2,445,000 for the same reason. In fiscal 1996, the Company significantly increased R&D spending to develop DBS antenna products. Several of those products are now in production and although development of new DBS products and enhancements to existing products are ongoing, the level of R&D spending in fiscal 1997 is expected to be lower than it was in fiscal 1996. Order backlog at December 31 was as follows:
1996 1995 ----------- ----------- Communication Products and Services $ 2,928,000 $ 5,982,000 Antenna and Imaging Systems 15,451,000 16,116,000 ----------- ----------- Total $18,379,000 $22,098,000 =========== ===========
The 51% decrease in Communication Products and Services backlog at December 31, 1996 was due to continued low order bookings. Although bookings in this business segment showed improvement during the second quarter of fiscal 1997, that improvement did not continue into the third quarter. The Company is developing several new radio products, some of which are undergoing final testing, and believes the introduction of those new products in fiscal 1998 will improve the overall competitiveness of its products, although there can be no assurances that the new products will have that effect. The 4% decrease in Antenna and Imaging Systems backlog at December 31, 1996 was primarily due to completion of several long-term U.S. Department of Defense ("DoD") contracts and to lower order bookings of remote sensing systems. The Company had expected orders for its new DBS antenna products to offset the decline in its DoD business. That has not occurred and the Company has implemented a new dealer training program and is changing its method of distribution to improve sales of those products. However, because of the need to clear the existing distribution pipeline and because of the current winter season, the Company does not expect to see improvement in DBS antenna product sales before spring. Although the Company believes these actions will improve DBS sales, there can be no assurances of that effect. 8 Liquidity and Capital Resources At December 31, 1996, working capital was $21,950,000 compared with $18,042,000 at March 31, 1996, an increase of $3,908,000 or 22%. Major changes affecting working capital during this period were the following: accounts receivable decreased $3,011,000 due to lower sales and faster collections; inventories decreased $411,000 as declines in radio product inventories were partially offset by increases in materials for DBS antenna products; prepaid expenses and other current assets decreased $2,065,000 primarily due to collection of an income tax refund; accounts payable and accrued expenses decreased $5,036,000 due to lower recent purchases of materials and to cost reduction efforts; and customer advances decreased $2,860,000. The Company's cash position at December 31, 1996 was $2,568,000 compared with $1,393,000 at March 31, 1996, an increase of 84%. At December 31, 1996, the Company had borrowed $7,900,000 in term debt from its bank to meet operating cash requirements. These borrowings represented a 52% increase in term debt from the $5,200,000 of borrowings at March 31, 1996. Capital equipment expenditures were $571,000 during the first nine months of fiscal 1997 compared with $1,987,000 in the first nine months last fiscal year. The decrease was primarily due to lower purchases of equipment for the Antenna and Imaging Systems business segment. At December 31, 1996, the Company had a $19,500,000 committed revolving line of credit with its bank, of which up to $12,000,000 may be used for the issuance of letters of credit and up to $10,500,000 may be used for direct working capital advances provided that total credit extended does not exceed $19,500,000. The Company believes that its existing working capital, anticipated future cash flows from operations and available credit with its bank are sufficient to finance presently planned capital and working capital requirements. 9 PART II -- OTHER INFORMATION Item 2. Changes in Securities. Pursuant to a business loan agreement with a bank, the Company must comply with certain financial covenants. The agreement also prohibits the Company from declaration or payment of dividends or other distributions on the Company's stock, except under certain conditions specified in the agreement. The Company is in compliance with both requirements. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits: 10.56 Ninth Amendment to Credit Agreement and Note between the Registrant and Union Bank of California dated as of November 25, 1996. (b) Reports on Form 8-K: No reports on Form 8-K were filed during the quarter. 10 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. DATRON SYSTEMS INCORPORATED Date: January 30, 1997 By: WILLIAM L. STEPHAN Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) EX-10.56 2 NINTH AMENDMENT TO CREDIT AGREEMENT AND NOTE THIS NINTH AMENDMENT TO CREDIT AGREEMENT AND NOTE ("Ninth Amendment"), made and entered into as of the 25th day of November 1996, by and between DATRON SYSTEMS INCORPORATED, a Delaware corporation ("Company"), and UNION BANK OF CALIFORNIA, N.A., a national banking association ("Bank"), W I T N E S S E T H: WHEREAS, on May 11, 1994, the Company and the Bank entered into a certain Credit Agreement and Note (as amended by those certain First, Second, Third, Fourth, Fifth , Sixth, Seventh and Eighth Amendments to Credit Agreement and Note, dated as of October 26, 1994, December 29, 1994, February 28, 1995, March 31, 1995, August 17, 1995, January 3, 1996, January 31, 1996 and May 24, 1996, respectively, the "Credit Agreement") pursuant to which the Bank agreed to extend to the Company and the Company agreed to accept from the Bank certain credit facilities more particularly described therein; and WHEREAS, the Company and the Bank desire to amend the Credit Agreement (i) to extend the Facilities Termination Date through and including June 30, 1998, and (ii) to modify certain of the covenants with which the Company is to comply; NOW, THEREFORE, for and in consideration of the premises hereof, and other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. All capitalized terms used in this Ninth Amendment shall, unless otherwise defined herein or unless the context otherwise requires, have the meanings given thereto in the Credit Agreement. 2. Section 1.01 of the Credit Agreement is amended by deleting therefrom the date "December 31, 1997" where it appears on the fourth line of said section and by substituting in lieu thereof the date "June 30, 1998". 3. Subsection 4.02(i) of the Credit Agreement is amended to read as follows: (i) Tangible Net Worth. The Company will not, as at the end of any fiscal quarter of the Company, permit its consolidated Tangible Net Worth to be less than the sum of (i) Twenty-four Million Two Hundred Fifty Thousand Dollars ($24,250,000.00), (ii) seventy-five percent (75%) of the cumulative consolidated net after tax profits of the Company for all fiscal quarters of the Company ending after March 31, 1996 and on or prior to the date of computation (without reduction, however, for consolidated net after tax losses sustained by the Company for any of such fiscal quarters) and (iii) the aggregate amount of all infusions of equity made on or after April 1, 1996. 4. Subsection 4.02(k) of the Credit Agreement is amended to read as follows: (k) Profitability. The Company will not (i) permit its consolidated net after tax profits to be less than (A) Seven Hundred Thousand Dollars ($700,000.00) for the year-to-date fiscal period of the Company ending December 31, 1996, and (B) One Million Five Hundred Thousand Dollars ($1,500,000.00) for the fiscal year of the Company ending March 31, 1997 or for any subsequent fiscal year of the Company, and (ii) suffer or incur a consolidated net after tax loss for any two (2) consecutive fiscal quarters of the Company. 5. This Ninth Amendment shall become effective on the date on which the Bank shall have received the following: (a) This Ninth Amendment, duly executed by the Company; and (b) Two (2) written consents to entry by the Company into this Ninth Amendment, each in form and substance satisfactory to the Bank and its counsel, one (1) duly executed by each of D/T and DWC. 6. Except as expressly provided herein, the Credit Agreement is unchanged and remains in full force and effect. 7. This Ninth Amendment shall be governed by and construed in accordance with the laws of the State of California. 8. This Ninth Amendment may be executed in any number of identical counterparts, any set of which signed by both parties hereto shall be deemed to constitute a complete, executed original for all purposes. IN WITNESS WHEREOF, the Bank and the Company have caused this Ninth Amendment to be executed as of the day and year first above written. UNION BANK OF CALIFORNIA, DATRON SYSTEMS INCORPORATED N.A. By: RICHARD A. PETRIE By: WILLIAM L. STEPHAN Title: Vice President Title: Vice President and CFO By: JACK LENHOF By: DAVID A. DERBY Title: Vice President Title: President and CEO EX-27 3
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REGISTRANT'S CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS MAR-31-1997 DEC-31-1996 2,568 0 12,142 136 15,397 32,986 25,127 12,684 52,738 11,036 0 0 0 31 32,317 52,738 40,000 40,009 29,023 29,023 10,172 0 456 373 169 204 0 0 0 204 0.08 0.08
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