-----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, ZZaDi+c96q/jDf9ensuYhF2yiy/zI0clqHZMIvMhlc+Aa6SIS21w4Js8cFbLFeA/ bF6dF9vCzGdQaltYiF5h/A== 0000030841-95-000012.txt : 19950804 0000030841-95-000012.hdr.sgml : 19950804 ACCESSION NUMBER: 0000030841-95-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950803 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DYNATECH CORP CENTRAL INDEX KEY: 0000030841 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 042258582 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-07438 FILM NUMBER: 95558689 BUSINESS ADDRESS: STREET 1: 3 NEW ENGLAND EXECUTIVE PARK CITY: BURLINGTON STATE: MA ZIP: 01803-5087 BUSINESS PHONE: 6172726100 MAIL ADDRESS: STREET 1: 3 NEW ENGLAND EXECUTIVE PARK CITY: BURLINGTON STATE: MA ZIP: 01803-5087 10-Q 1 DYNATECH FORM 10-Q JUNE 30, 1995 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1995 Commission file number 0-7438 DYNATECH CORPORATION (Exact name of registrant as specified in its charter) MASSACHUSETTS 04-2258582 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 3 New England Executive Park Burlington, Massachusetts 01803-5087 (Address of principal executive offices)(Zip code) Registrant's telephone number, including area code: (617) 272-6100 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 . At July 14, 1995 there were 17,598,478 shares of common stock of the registrant outstanding. PART I. Financial Information Item 1. Financial Statements
DYNATECH CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In thousands except per share data) (Unaudited) Three Months Ended June 30 1995 1994 ---- ---- Sales ............................................ $ 118,265 $ 117,772 Cost of sales .................................... 54,611 56,724 --------- --------- Gross profit ..................................... 63,654 61,048 Selling, general and administrative expense ...... 39,648 39,134 Product development expense ...................... 14,654 12,796 Amortization of intangibles ...................... 1,796 2,048 --------- --------- Operating income ................................. 7,556 7,070 Interest expense ................................. (549) (1,157) Interest income .................................. 561 236 Other income ..................................... 205 279 --------- --------- Income before income taxes ....................... 7,773 6,428 Provision for income taxes ....................... 3,148 2,768 --------- --------- Net income ....................................... $ 4,625 $ 3,660 ========= ========= Income per common share .......................... $ 0.26 $ 0.20 ========= ========= Weighted average number of common shares ......... 17,594 18,595 ========= ========= See notes to condensed consolidated financial statements.
DYNATECH CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) June 30 March 31 1995 1995 (Unaudited) ASSETS Current assets: Cash and cash equivalents ........................... $ 30,369 $ 27,795 Accounts receivable, net ............................ 73,037 72,152 Inventories: Raw materials .................................. 26,086 26,752 Work in process ................................ 13,331 14,168 Finished goods ................................. 19,846 19,560 --------- --------- 59,263 60,480 Other current assets ................................ 24,267 24,251 --------- --------- Total current assets ........................... 186,936 184,678 Property and equipment, net ............................. 33,599 34,791 Intangible assets, net .................................. 28,008 29,104 Other assets ............................................ 7,454 7,819 --------- --------- $ 255,997 $ 256,392 ========= ========= LIABILITIES Current liabilities: Notes payable and current portion of long-term debt . $ 3,958 $ 4,374 Accounts payable .................................... 17,668 19,651 Streamlining and restructuring accrual .............. 15,933 22,556 Other accrued expenses .............................. 39,002 45,361 Accrued income taxes ................................ 2,619 1,223 --------- --------- Total current liabilities ...................... 79,180 93,165 Long-term debt .......................................... 16,484 7,915 Deferred income taxes ................................... 831 992 Deferred compensation ................................... 278 -- SHAREHOLDERS' EQUITY Common stock ............................................ 3,721 3,721 Additional paid-in capital .............................. 7,549 7,432 Retained earnings ....................................... 156,039 151,414 Cumulative foreign currency adjustments ................. 2,596 2,659 Treasury stock .......................................... (10,681) (10,906) --------- --------- Total shareholders' equity .......................... 159,224 154,320 --------- --------- $ 255,997 $ 256,392 ========= ========= See notes to condensed consolidated financial statements.
DYNATECH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Three Months Ended June 30 1995 1994 ---- ---- Operating activities: Net income .................................................. $ 4,625 $ 3,660 Adjustments for noncash items included in net income: Depreciation ......................................... 3,547 3,617 Amortization of intangibles .......................... 1,796 2,048 Increase in deferred taxes ........................... 822 1,930 Other ................................................ 95 68 Change in operating assets and liabilities, net of effects of business acquisitions and divestitures ............ (17,088) (10,801) -------- -------- Net cash flows provided by (used in) continuing operations (6,203) 522 Net cash flows used in discontinued operations ........... -- (3,121) -------- -------- Net cash flows used in operating activities .............. (6,203) (2,599) -------- -------- Investing activities: Purchases of property and equipment ...................... (3,276) (3,115) Disposals of property and equipment ...................... 20 127 Proceeds from sale of businesses ......................... 1,668 3,010 Other .................................................... 1,173 495 -------- -------- Net cash flows provided by (used in) investing activities (415) 517 -------- -------- Financing activities: Debt borrowings .......................................... 8,588 71 Repayment of debt ........................................ (426) (138) Proceeds from exercise of stock options .................. 170 102 Purchases of treasury stock .............................. -- (63) -------- -------- Net cash flows provided by (used in) financing activities 8,332 (28) -------- -------- Effect of exchange rate on cash ............................. 860 812 -------- -------- Increase (decrease) in cash and cash equivalents ............ 2,574 (1,298) -------- -------- Cash and cash equivalents at beginning of year .............. 27,795 23,101 -------- -------- Cash and cash equivalents at end of period .................. $ 30,369 $ 21,803 ======== ======== Supplemental data: Cash paid during the period for interest ................. $ 486 $ 2,097 Cash paid during the period for income taxes ............. $ 708 $ 785 Tax benefit of disqualifying dispositions of stock options $ 107 -- See notes to condensed consolidated financial statements.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS A. Condensed Consolidated Financial Statements In the opinion of management, the unaudited condensed consolidated balance sheet at June 30, 1995, and the unaudited consolidated statements of income and unaudited consolidated condensed statements of cash flows for the interim periods ended June 30, 1995 and 1994 include all adjustments (including normal recurring adjustments) necessary to present fairly these financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The year-end balance sheet data was derived from audited financial statements, but does not include disclosures required by generally accepted accounting principles. It is suggested that these condensed statements be read in conjunction with the Company's most recent Form 10-K and Annual Report as of March 31, 1995. B. Divestments In June 1995, the Corporation sold two businesses for approximately $2.7 million in cash. The effects of these transactions were reflected in the fiscal 1994 restructuring charge and did not effect fiscal 1996 earnings. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Consolidated sales for the three months ended June 30, 1995 were $118,265,000 compared to $117,772,000 in the prior year's first quarter. Information Support Products segment sales rose 13% for the three months ended in fiscal 1996 reflecting a 20% growth for communication test products and a 30% increase for industrial connectivity products. Sales of medical and diagnostic products in the Diversified Instrumentation segment were flat compared to the prior year quarter. The sale of twelve businesses and product lines during fiscal 1995 and 1996 coupled with sales declines in nonstrategic businesses held for sale resulted in an overall sales reduction of 30% for the Diversified Instrumentation segment. Backlog from ongoing operations was $65.0 million at June 30, 1995 compared with $72.1 million at March 31, 1995, reflecting planned backlog reductions in communications test and medical and diagnostic product lines. Consolidated gross profit was 53.8% for the current quarter compared to 51.8% in the prior year quarter. The increase in rate was primarily driven by operating efficiencies from business restructuring. Information Support Products gross margin increased to 57.0% compared to 55.7% in the prior year quarter, however, medical and diagnostic product margins in the Diversified Instrumentation segment declined to 50.3% compared to 53.2% for the prior year period. Product development expense was 12.4% of consolidated sales for the current quarter compared to 10.9% in the first quarter of the prior year. The increase was attributed to communication test and display businesses. Amortization of intangibles, of which $0.8 million in the first quarter of fiscal 1996 and $1.0 million in the first quarter of the prior year related to product technology and was excluded from cost of sales, declined due to business divestments and discontinuance of product lines. Interest expense declined in the current quarter as compared with the prior year as a result of repayment of loan debt from favorable operating cash flow. Interest income increased due to higher investment rates and earnings on notes acquired in divestment activities. The effective tax rate declined to 40.5% for the current quarter compared to 43.1% in the prior year quarter resulting from lower nondeductible amortization charges. Net income increased 26% to $4,625,000, for the current quarter from $3,660,000, for the first quarter of the prior year, reflecting higher gross margins and lower amortization and interest costs offset partially by higher product development costs. Earnings per share increased 30% compared to the year earlier period. While the Company believes that the outlook for the second quarter of fiscal 1996 is good, no assurance can be given that operating results for the quarter will meet those of the second quarter of fiscal 1995 which produced net income of $.29 per share. Operating results for the second quarter of fiscal 1996 will depend upon, among other things, the incoming order rate during the quarter for the Company's various businesses, product mix, and the continued successful implementation of the Company's reorganization plan. Capital Resources and Liquidity The Company's funded debt was 11% of total capital at June 30, 1995, a slight increase from the lowest year-end level in Company history of 7% at March 31, 1995. The working capital ratio improved to 2.4 to 1 at June 30, 1995 from 2 to 1 at March 31, 1995. Cash outlays for the streamlining and restructuring actions approximated $1.3 million in the first quarter. Dynatech believes it has sufficient resources to finance its cash requirements over the next year including the ongoing streamlining and restructuring actions. The current capital structure provides sufficient financial flexibility to pursue business opportunities. PART I. OTHER INFORMATION Item 6. (a) Exhibits Exhibit 27 Financial Data Schedule PART II. OTHER INFORMATION Item 6. Reports on Form 8-K (b) No current reports on Form 8-K were filed by the Registrant during the quarter ended June 30, 1995. 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. DYNATECH CORPORATION Date August 3, 1995 ROBERT H. HERTZ -------------- ------------------------------------- Chief Financial Officer and Treasurer Date August 3, 1995 JOHN C. MAAG -------------- ------------------------------------- Corporate Controller, Principal Accounting Officer EX-27 2 FDS --
5 0000030841 DYNATECH CORPORATION 1,000 U.S. Dollars 3-MOS MAR-31-1995 APR-01-1995 JUN-30-1995 1.000 30,369 0 73,037 0 59,263 24,267 33,599 0 255,997 79,180 16,484 3,721 0 0 155,503 255,997 118,265 118,265 54,611 54,611 55,893 0 549 7,773 3,148 4,625 0 0 0 4,625 0.26 0.26
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