EX-99.3 6 0006.txt UNAUDITED FINANCIAL STATEMENTS OF WWG Exhibit 99.3 WAVETEK WANDEL GOLTERMANN, INC. CONSOLIDATED BALANCE SHEETS (Dollars and Shares In Thousands, Except Per Share Data)
March 31, September 30, 2000 1999 ----------- ------------- (unaudited) (note) ASSETS Current assets: Cash and cash equivalents ......................... $ 17,974 $ 17,089 Accounts receivable (less allowance for doubtful accounts of $4,071 at March 31, 2000 (unaudited) and $4,608 at September 30, 1999) ................ 92,113 102,532 Inventories ....................................... 71,506 62,515 Deferred income taxes ............................. 6,467 8,922 Other current assets .............................. 13,997 13,636 -------- -------- Total current assets ............................ 202,057 204,694 Property, plant and equipment, net .................. 53,066 60,575 Intangible assets, net .............................. 136,903 162,482 Other non-current assets ............................ 5,457 6,982 -------- -------- Total assets .................................... $397,483 $434,733 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable to banks ............................ $ 9,094 $ 17,510 Current portion of long-term obligations .......... 5,079 6,202 Current portion of long-term obligations to related parties .......................................... 9,582 10,721 Trade payables .................................... 34,307 31,549 Accrued compensation .............................. 22,811 26,626 Income taxes payable .............................. 4,105 4,250 Other current liabilities ......................... 42,283 38,838 -------- -------- Total current liabilities ....................... 127,261 135,696 Long-term obligations, net of current portion ..... 199,942 228,083 Pension liabilities ............................... 33,455 35,671 Deferred income taxes ............................. 4,418 7,957 Other non-current liabilities ..................... 7,582 9,389 -------- -------- Total liabilities ............................... 372,658 416,796 -------- -------- Commitments and contingencies Stockholders' equity: Common stock, par value $.01, 50,000 shares authorized, 13,320 shares at March 31, 2000 and 13,202 shares at September 30, 1999 issued and outstanding ...................................... 133 132 Additional paid-in capital ........................ 73,222 72,948 Accumulated deficit ............................... (59,387) (65,641) Other comprehensive income ........................ 10,857 10,498 -------- -------- Total stockholders' equity ...................... 24,825 17,937 -------- -------- Total liabilities and stockholders' equity ...... $397,483 $434,733 ======== ========
--------------------- Note: The balance sheet at September 30, 1999 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The Accompanying Notes to Consolidated Financial Statements are an Integral Part of these Balance Sheets. F-37 WAVETEK WANDEL GOLTERMANN, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars and Shares in Thousands, Except Per Share Data) (Unaudited)
Three Months Six Months Ended March 31, Ended March 31, ------------------ ------------------ 2000 1999 2000 1999 -------- -------- -------- -------- Net sales ............................. $127,155 $114,466 $262,731 $240,931 Cost of goods sold .................... 50,434 47,927 103,428 102,562 -------- -------- -------- -------- Gross margin .......................... 76,721 66,539 159,303 138,369 Operating expenses: Marketing and selling ............... 35,974 34,915 73,042 70,437 Research and development ............ 18,454 18,771 36,231 36,615 General and administrative .......... 10,634 11,538 21,270 23,626 Amortization of intangible assets ... 4,049 4,874 8,488 9,690 Provisions for restructuring operations and other non-recurring charges ............................ 1,652 -- 2,020 -------- -------- -------- -------- Total operating expenses .......... 70,763 70,098 141,051 140,368 -------- -------- -------- -------- Operating income (loss) ............... 5,958 (3,559) 18,252 (1,999) Other (income) expense, net: Interest income ..................... (307) (242) (567) (475) Interest expense .................... 4,606 5,244 9,968 10,435 Other, net .......................... (3,834) 370 (2,522) 131 -------- -------- -------- -------- Other (income) expense, net ....... 465 5,372 6,879 10,091 -------- -------- -------- -------- Income (loss) before provision (benefit) for income taxes............ 5,493 (8,931) 11,373 (12,090) Provision (benefit) for income taxes .. 2,471 (5,716) 5,119 (7,738) -------- -------- -------- -------- Net income (loss) ..................... $ 3,022 $ (3,215) $ 6,254 $ (4,352) ======== ======== ======== ======== Basic net income (loss) per share ..... $ .23 $ (0.24) $ .47 $ (0.33) ======== ======== ======== ======== Weighted average number of shares outstanding-basic .................... 13,313 13,202 13,288 13,202 ======== ======== ======== ======== Diluted net income (loss) per share ... $ .22 $ (0.24) $ .46 $ (0.33) ======== ======== ======== ======== Weighted average number of shares outstanding--diluted ................. 13,653 13,202 13,567 13,202 ======== ======== ======== ========
The Accompanying Notes to Consolidated Financial Statements are an Integral Part of these Statements of Operations. F-38 WAVETEK WANDEL GOLTERMANN, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) (Unaudited)
Six Months Ended March 31, ------------------ 2000 1999 -------- -------- OPERATING ACTIVITIES: Net income (loss) ........................................ $ 6,254 $ (4,352) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization expense .................. 14,428 17,308 Restructuring and other non-recurring charges .......... 2,020 -- Deferred income taxes .................................. (1,082) (7,984) Changes in operating assets and liabilities: Accounts receivable .................................. 10,462 1,989 Inventories .......................................... (8,958) 5,558 Other current assets ................................. 488 6 Accounts payable and accrued expenses ................ (1,425) (16,267) Income taxes payable, net ............................ (144) 14 Pension liabilities .................................. (2,200) 2,033 Gain on sale of assets ............................... (3,229) -- Other, net ........................................... 1,890 1,278 -------- -------- Net cash provided by (used in) operating activities ...... 18,504 (417) INVESTING ACTIVITIES: Purchase of property, plant and equipment ................ (6,365) (7,642) Exercise of stock options ................................ 275 -- Proceeds from sale of assets ............................. 29,400 -- -------- -------- Net cash provided (used in) by investing activities ...... 23,310 (7,642) FINANCING ACTIVITIES: Proceeds from long-term obligations ...................... 107,477 139,059 Principal payments on long-term obligations .............. (147,407) (145,702) Other, net ............................................... -- (672) -------- -------- Net cash used in financing activities .................... (39,930) (7,315) Effect of exchange rate changes on cash and cash equivalents ............................................. (999) (3,047) -------- -------- Increase (decrease) in cash and cash equivalents ......... 885 (18,421) Cash and cash equivalents at beginning of period ......... 17,089 35,544 -------- -------- Cash and cash equivalents at end of period ............... $ 17,974 $ 17,123 ======== ======== SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION: Cash paid for interest ................................... $ 10,406 $ 9,067 ======== ======== Cash paid for income taxes ............................... $ 3,223 $ 3,653 ======== ========
The Accompanying Notes to Consolidated Financial Statements are an Integral Part of these Statements of Cash Flows. F-39 WAVETEK WANDEL GOLTERMANN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. ORGANIZATION AND BASIS OF PRESENTATION Wavetek Wandel Goltermann, Inc., (the "Company") is a leading global designer, manufacturer, and marketer of a broad range of communications test instruments used to develop, manufacture, install, and maintain communications networks and equipment. The Company conducts its communications test business, which addresses most sectors of the communications test market, in four product areas: (1) telecom networks (traditional voice/data transmissions and new multi-service networks), (2) enterprise networks (local and wide-area network infrastructures), (3) multimedia (cable television and digital video broadcast), and (4) wireless (mobile telephony and data). These products provide comprehensive testing solutions to a wide range of end users. The Company's high-end instruments are used during the product development phase to stress test product functionality and performance. Other products are used during the production process to verify conformance to manufacturing specifications, while the Company's enhanced portable field service tools enable field technicians to quickly install, repair and maintain complex network infrastructures, as well as validate service levels. The Company also provides distributed remote test systems to many of its service provider customers, which allow such customers to more efficiently utilize their network engineers to monitor and test service levels. In addition, the Company provides repair, upgrade, and calibration services, as well as value-added professional services such as consulting and training on a worldwide basis. The consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The consolidated balance sheet as of September 30, 1999 has been taken from the audited financial statements as of that date. Certain information and note 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, although the Company believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's latest annual report on Form 10-K for the fiscal year ended September 30, 1999. The consolidated financial statements included herein reflect all adjustments (none of which are other than normal recurring accruals) which are, in the opinion of management, necessary for a fair presentation of the information included. All significant intercompany accounts and transactions have been eliminated in consolidation. Interim results are not necessarily indicative of results to be expected for the full year. For comparative purposes, certain amounts have been reclassified to conform with the fiscal 2000 presentation. 2. NET INCOME (LOSS) PER SHARE The Company computes earnings per share in accordance with Statement of Financial Accounting Standards ("SFAS") No. 128, EARNINGS PER SHARE ("SFAS 128"). Basic net income (loss) per share is based only on average common shares outstanding and excludes the dilutive effects of the Company's outstanding stock options. Diluted net income (loss) per share includes the dilutive effect of the Company's outstanding stock options. The Company has a simple capital structure and, accordingly, the only difference in the Company's computations of basic and diluted net income (loss) per share is the dilutive effect of outstanding stock options. For the three and six months ended March 31, 1999, the effect of outstanding stock options would have been anti-dilutive and, therefore, was not considered in the computation of diluted loss per share for such periods. All net income (loss) per share amounts for all periods have been presented in accordance with the requirements of SFAS 128. F-40 WAVETEK WANDEL GOLTERMANN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (Unaudited) 3. FINANCIAL STATEMENT DETAILS Inventories consist of the following:
March 31, September 30, 2000 1999 --------- ------------- (dollars in thousands) Materials ......................................... $17,919 $13,997 Work-in-progress .................................. 14,718 18,172 Finished goods .................................... 38,869 30,346 ------- ------- $71,506 $62,515 ======= =======
4. OTHER COMPREHENSIVE INCOME (LOSS) On October 1, 1998, the Company adopted SFAS No. 130, Reporting Comprehensive Income, which established standards for reporting and displaying comprehensive income (loss) and its components in a financial statement that is displayed with the same prominence as other financial statements. Comprehensive income (loss) includes net income (loss) and other comprehensive income (loss). The Company's current and accumulated other comprehensive income (loss) as of and for the three and six month periods ended March 31, 2000 and 1999 is comprised solely of foreign currency translation adjustments. Comprehensive income (loss) is as follows:
Three Months Ended Six Months Ended March 31, March 31, ------------------- ---------------- 2000 1999 2000 1999 --------- --------- ---------------- (dollars in thousands) Net income (loss) ................ $ 3,022 $(3,215) $ 6,254 $(4,352) Foreign currency translation adjustments...................... (764) (345) 360 (671) -------- --------- ------- -------- Comprehensive income (loss) ...... $ 2,258 $(3,560) $ 6,614 $(5,023) ======== ========= ======= ========
5. SEGMENT INFORMATION Based on its organizational structure prior to January 2000, the Company previously operated in two reportable segments: communications test and other test products. The Company's communications test business includes telecom networks, enterprise networks, multimedia, wireless and the service business. In the second quarter of 2000, the Company divested itself of its other test products business, which included test tools, precision measurement instruments, and electromagnetic measurement instruments. The Company's chief operating decision makers utilize revenue and operating income (loss) information, as defined below, in assessing performance and making overall operating decisions and resource allocations. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. F-41 WAVETEK WANDEL GOLTERMANN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (Unaudited) Information about the Company's operating segments for the three months ended March 31, 2000 and 1999 is as follows (in thousands):
Communications Other Test Corporate/ Test Products Other Total -------------- ---------- ---------- -------- Revenues: 2000 ..................... $124,592 $ 2,563 $ -- $127,155 1999 ..................... 106,825 7,641 -- 114,466 Operating income (loss): 2000(1) .................. 10,764 333 562 11,659 1999(1) .................. 2,846 204 (1,735) 1,315 Information about the Company's operating segments for the six months ended March 31, 2000 and 1999 is as follows (in thousands): Communications Other Test Corporate/ Test Products Other Total -------------- ---------- ---------- -------- Revenues: 2000 ..................... $250,564 $12,167 $ -- $262,731 1999 ..................... 226,090 14,841 -- 240,931 Operating income (loss): 2000 (1) ................. 28,423 287 51 28,760 1999(1) .................. 14,176 937 (7,422) 7,691 Information about the Company's operating segments as of March 31, 2000 and September 30, 1999 is as follows (in thousands): Communications Other Test Corporate/ Test Products Other(2) Total -------------- ---------- ---------- -------- Total Assets: March 31, 2000 ........... $117,619 $ 3,934 $275,931 $397,483 September 30, 1999 ....... 129,426 6,749 298,558 434,733
--------------------- Notes: (1) Operating income (loss) on reportable segments is defined by management as operating income (loss), including intersegment profits, and excluding amortization of intangible assets and restructuring and other non-recurring charges. (2) Corporate/Other assets include purchased intangible assets and investments in subsidiaries at March 31, 2000 and September 30, 1999 totaling $203,433 and $237,499, respectively. 6. SALE OF PRECISION MEASUREMENT AND TEST TOOLS DIVISIONS In January 2000, the Company completed the sale of its precision measurement and test tools divisions to Fluke Electronics Corporation, a subsidiary of Danaher Corporation. It was determined that these businesses were not a strategic fit with the Company's core communications test business. Sales for the three months ended December 31, 1999 amounted to $8.8 million and fiscal year 1999 sales totaled $25.8 million. There were no significant gains or losses realized on the sale of these two divisions. F-42 WAVETEK WANDEL GOLTERMANN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (Unaudited) 7. SALE OF SAFETY TEST SOLUTION BUSINESS In February 2000, the Company completed the sale of its safety test solution business to L-3 Communications Corporation. It was determined that this business was not a strategic fit with the Company's core communications test business. Sales for the three months ended December 31, 1999 amounted to $.8 million and fiscal year 1999 sales totaled $4.4 million. Sales from January 1, 2000 to the closing date of the sale were immaterial. The gain realized on the sale was approximately $3.2 million. 8. MERGER WITH DYNATECH CORPORATION On February 14, 2000, the Company, Dynatech corporation, a Delaware corporation ("Dynatech"), and DWW Acquisition Corporation, a Delaware corporation and indirect subsidiary of Dynatech ("Mergerco"), entered into an Agreement and Plan of Merger pursuant to which Mergerco would merge with the Company, with the Company as the surviving corporation. The merger is subject to customary closing conditions, including obtaining applicable competition law approvals. In the merger, at the election of holders of the Company's common stock, such holders will be entitled to receive with respect to each share of common stock of the Company (i) $25.00 or (ii) 4.49 shares of common stock of Dynatech. The aggregate transaction value is approximately $600 million, which includes approximately $224 million of the Company's indebtedness. The merger will constitute a change in control with respect to the Company's 10.125% Senior Subordinated Notes due June 14, 2007. As a result, the Company will be obligated to send to the holders of the notes within ten days following the closing of the merger an offer to purchase the notes at 101% of their principal amount. Such offer must specify a day not less than 30 and not more than 60 days from the date the Company's notice mailed on which the Company will purchase all notes tendered to the Company. On March 14, 2000, the Company launched a tender offer to repurchase all of the outstanding notes. The tender offer for the notes is conditioned upon the closing of the merger. In connection with the merger, Dynatech intends to enter into a new multi- currency senior credit facility with a syndicate of banks for an aggregate principal amount of approximately $860 million including revolver and term loans, and to sell newly-issued common stock to Clayton, Dubilier & Rice Fund V Limited Partnership ("Fund V"), Dynatech's controlling stockholder, and Clayton Dublier & Rice Fund VI Limited Partnership ("Fund VI"), an affiliate of Dynatech's controlling stockholder, at a price per share of $4.00. In addition, Dynatech expects to make a rights offering to the Company's other stockholders to purchase newly issued shares at the same price per share offered to Fund V and Fund VI. The Company anticipates the customary closing conditions, including obtaining applicable competition law approvals will be finalized by late May 2000 and the Company estimates that the closing of the merger will occur shortly thereafter. Peter Wagner, the Company's Chief Executive Officer, has indicated that he will remain with the Company through the closing of the Merger with Dynatech. However, Mr. Wagner has accepted employment with another company as of June 1, 2000. In the event that the Merger is not consummated by such time, the Company will appoint an interim Chief Executive Officer or make other interim arrangements. 9. SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL DATA The Company's payment obligations under its 10.125% Senior Subordinated Notes are guaranteed by all of the Company's current and future domestic subsidiaries (collectively, the "Subsidiary Guarantors"). WGTI, F-43 WAVETEK WANDEL GOLTERMANN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (Unaudited) Wandel & Goltermann ATE Systems, Inc., and Wavetek U.S. Inc. and its subsidiary, Digital Transport Systems, Inc. are shown as Subsidiary Guarantors for all periods presented. Such guarantees are full and unconditional and joint and several. Separate financial statements of the Subsidiary Guarantors are not presented because the Company's management has deemed that they would not be material to investors. The following supplemental condensed consolidating financial data sets forth, on an unconsolidated basis, balance sheets, statements of operations, and statements of cash flows data for (i) the Company (Wavetek Wandel Goltermann, Inc., formerly Wavetek Corporation, the issuer of the Notes), (ii) the current Subsidiary Guarantors, and (iii) the Company's foreign subsidiaries (the "Foreign Subsidiaries"). The supplemental financial data reflects the investments of the Company in the Subsidiary Guarantors and the Foreign Subsidiaries using the equity method of accounting. F-44 WAVETEK WANDEL GOLTERMANN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (Unaudited) CONSOLIDATING BALANCE SHEETS As of March 31, 2000 (Dollars and Shares in Thousands)
Wavetek Wandel Goltermann Subsidiary Foreign Inc. Guarantors Subsidiaries Eliminations Consolidated -------------- ---------- ------------ ------------ ------------ ASSETS Current assets: Cash and cash equivalents.......... $ 663 $ 4,424 $ 12,887 $ -- $ 17,974 Accounts receivable (less allowance for doubtful accounts of $4,071).............. 44,998 62,503 79,405 (94,793) 92,113 Inventories........... -- 19,161 57,564 (5,219) 71,506 Deferred income taxes................ 2,912 3,932 (876) 499 6,467 Other current assets.. 57 1,009 12,931 -- 13,997 -------- -------- -------- ---------- --------- Total current assets.... 48,630 91,029 161,911 (99,513) 202,057 Property, plant and equipment, net......... 1,322 7,266 44,478 -- 53,066 Intangible assets, net.. 5,922 100,875 30,106 -- 136,903 Investment in subsidiaries........... 166,712 -- -- (166,712) -- Other non-current assets................. 3 (434) 2,618 3,270 5,457 -------- -------- -------- ---------- --------- Total assets........ $222,589 $198,736 $239,113 $ (262,955) $ 397,483 ======== ======== ======== ========== ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable......... $ -- $ -- $ 9,094 $ -- $ 9,094 Current portion of long-term obligations ..................... -- 633 4,446 -- 5,079 Current portion of long-term obligations to related parties .. -- -- 9,582 -- 9,582 Trade payables........ 31,105 28,127 62,870 (87,795) 34,307 Accrued compensation.. 1,195 4,551 17,065 -- 22,811 Income taxes payable.. (21,650) 21,419 4,336 -- 4,105 Other current liabilities.......... 3,814 8,122 32,667 (2,320) 42,283 -------- -------- -------- ---------- --------- Total current liabilities............ 14,464 62,852 140,060 (90,115) 127,261 Long-term obligations, net of current portion................ 172,565 1,626 29,323 (3,572) 199,942 Pension liabilities..... -- 203 33,252 -- 33,455 Deferred income taxes... (519) 22,662 (15,696) (2,029) 4,418 Other non-current liabilities............ -- 2,140 5,442 -- 7,582 -------- -------- -------- ---------- --------- Total liabilities 186,510 89,483 192,381 (95,716) 372,658 -------- -------- -------- ---------- --------- Commitments and contingencies Stockholders' equity: Common stock.......... 133 -- (1,466) 1,466 133 Additional paid-in capital.............. 73,222 171,122 85,506 (256,628) 73,222 Accumulated deficit... (59,386) (61,841) (33,946) 95,786 (59,387) Other comprehensive income (loss)........ 22,110 (28) (3,362) (7,863) 10,857 -------- -------- -------- ---------- --------- Total stockholders' equity............. 36,079 109,253 46,732 (167,239) 24,825 -------- -------- -------- ---------- --------- Total liabilities and stockholders' equity............. $222,589 $198,736 $239,113 $ (262,955) $ 397,483 ======== ======== ======== ========== =========
F-45 WAVETEK WANDEL GOLTERMANN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (Unaudited) CONSOLIDATING BALANCE SHEETS As of September 30, 1999 (Dollars in Thousands)
Wavetek Wandel Subsidiary Foreign Goltermann, Inc. Guarantors Subsidiaries Eliminations Consolidated ---------------- ---------- ------------ ------------ ------------ ASSETS Current assets: Cash and cash equivalents.......... $ 11 $ 4,578 $ 12,500 $ -- $ 17,089 Accounts receivable (less allowance for doubtful accounts of $4,608).............. 42,956 46,715 87,312 (74,451) 102,532 Inventories........... -- 13,884 52,388 (3,757) 62,515 Deferred income taxes................ 561 4,482 3,879 -- 8,922 Other current assets.. 156 1,917 11,563 -- 13,636 -------- -------- -------- --------- -------- Total current assets............. 43,684 71,576 167,642 (78,208) 204,694 Property, plant and equipment, net......... 1,361 8,013 51,201 -- 60,575 Intangible assets, net.. 5,617 110,170 46,695 -- 162,482 Investment in subsidiaries........... 167,992 -- -- (167,992) -- Other non-current assets................. 6 1,988 4,988 -- 6,982 -------- -------- -------- --------- -------- Total assets........ $218,660 $191,747 $270,526 $(246,200) $434,733 ======== ======== ======== ========= ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable......... $ -- $ -- $ 17,510 $ -- $ 17,510 Current portion of long-term obligations.......... -- 685 5,517 -- 6,202 Current portion of long-term obligations to related parties... -- -- 10,721 -- 10,721 Trade payables........ 17,236 17,322 61,873 (64,882) 31,549 Accrued compensation.. 396 6,734 19,496 -- 26,626 Income taxes payable.. (18,986) 18,978 4,258 -- 4,250 Other current liabilities.......... 4,516 5,786 28,536 -- 38,838 -------- -------- -------- --------- -------- Total current liabilities........ 3,162 49,505 147,911 (64,882) 135,696 Long-term obligations, net of current portion................ 198,080 7,784 31,695 (9,476) 228,083 Pension liabilities..... -- -- 35,671 -- 35,671 Deferred income taxes... (519) 19,953 (11,477) -- 7,957 Other non-current liabilities............ -- 4,088 5,301 -- 9,389 -------- -------- -------- --------- -------- Total liabilities... 200,723 81,330 209,101 (74,358) 416,796 -------- -------- -------- --------- -------- Commitments and contingencies Stockholders' equity: Common stock.......... 132 -- -- -- 132 Additional paid-in capital.............. 72,948 171,121 87,187 (258,308) 72,948 Accumulated deficit... (65,641) (60,682) (36,282) 96,964 (65,641) Other comprehensive income (loss)........ 10,498 (22) 10,520 (10,498) 10,498 -------- -------- -------- --------- -------- Total stockholders' equity............. 17,937 110,417 61,425 (171,842) 17,937 -------- -------- -------- --------- -------- Total liabilities and stockholders' equity............. $218,660 $191,747 $270,526 $(246,200) $434,733 ======== ======== ======== ========= ========
F-46 WAVETEK WANDEL GOLTERMANN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (Unaudited) CONSOLIDATING STATEMENTS OF OPERATIONS For The Three Months Ended March 31, 2000 (Dollars in Thousands)
Wavetek Wandel Goltermann Subsidiary Foreign Inc. Guarantors Subsidiaries Eliminations Consolidated -------------- ---------- ------------ ------------ ------------ Net sales............... $ -- $46,224 $100,851 $(19,920) $127,155 Cost of goods sold...... -- 21,908 47,534 (19,008) 50,434 ------- ------- -------- -------- -------- Gross margin............ -- 24,316 53,317 (912) 76,721 Operating expenses: Marketing and selling.............. 552 9,764 25,658 -- 35,974 Research and development.......... -- 5,881 12,573 -- 18,454 General and administrative....... 17 3,148 7,469 -- 10,634 Amortization of intangible assets.... (52) 2,993 1,108 -- 4,049 Provisions for restructuring operations and other non-recurring charges.............. 521 779 641 (289) 1,652 ------- ------- -------- -------- -------- Total operating expenses........... 1,038 22,565 47,449 (289) 70,763 ------- ------- -------- -------- -------- Operating income (loss)................. (1,038) 1,751 5,868 (623) 5,958 Other (income) expense, net: Interest income....... (514) (174) (133) 514 (307) Interest expense...... 3,260 264 1,596 (514) 4,606 Equity in net (income) loss of subsidiaries......... Other, net............ (386) 85 (5,321) 1,788 (3,834) ------- ------- -------- -------- -------- Other (income) expense, net....... 2,360 175 (3,858) 1,788 465 ------- ------- -------- -------- -------- Income (loss) before provision (benefit) for income taxes .......... (3,398) 1,576 9,726 (2,411) 5,493 Provision (benefit) for income taxes........... (6,420) (128) 6,800 2,219 2,471 ------- ------- -------- -------- -------- Net income (loss)....... 3,022 1,704 2,926 (4,630) 3,022 ======= ======= ======== ======== ========
F-47 WAVETEK WANDEL GOLTERMANN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (Unaudited) CONSOLIDATING STATEMENTS OF OPERATIONS For the Three Months Ended March 31, 1999 (Dollars in Thousands)
Wavetek Wandel Subsidiary Foreign Goltermann Inc. Guarantors Subsidiaries Eliminations Consolidated --------------- ---------- ------------ ------------ ------------ Net sales............... $ -- $36,025 $94,383 $(15,942) $114,466 Cost of goods sold...... 11 17,274 47,122 (16,480) 47,927 ------- ------- ------- -------- -------- Gross margin............ (11) 18,751 47,261 538 66,539 Operating expenses: Marketing and selling.............. 487 8,994 25,434 -- 34,915 Research and development.......... 2 5,846 12,923 -- 18,771 General and administrative....... 1,824 2,388 7,326 -- 11,538 Amortization of intangible assets.... 85 3,008 1,781 -- 4,874 ------- ------- ------- -------- -------- Total operating expenses........... 2,398 20,236 47,464 -- 70,098 ------- ------- ------- -------- -------- Operating income (loss)................. (2,409) (1,485) (203) 538 (3,559) Other (income) expense, net: Interest income....... (305) (85) (157) 305 (242) Interest expense...... 3,694 153 1,702 (305) 5,244 Equity in net (income) loss of subsidiaries......... (439) -- -- 439 -- Other, net............ (558) (35) 963 -- 370 ------- ------- ------- -------- -------- Other (income) expense, net....... 2,392 33 2,508 439 5,372 ------- ------- ------- -------- -------- Income (loss) before provision (benefit) for income taxes .......... (4,801) (1,518) (2,711) 99 (8,931) Provision (benefit) for income taxes........... (1,586) (112) 2,024 (6,042) (5,716) ------- ------- ------- -------- -------- Net income (loss)....... $(3,215) $(1,406) $(4,735) $ 6,141 $ (3,215) ======= ======= ======= ======== ========
F-48 WAVETEK WANDEL GOLTERMANN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (Unaudited) CONSOLIDATING STATEMENTS OF OPERATIONS For the Six Months Ended March 31, 2000 (dollars In Thousands)
Wavetek Wandel Subsidiary Foreign Goltermann Inc. Guarantors Subsidiaries Eliminations Consolidated --------------- ---------- ------------ ------------ ------------ Net sales............... $ -- $92,877 $209,460 $ (39,606) $262,731 Cost of goods sold...... -- 43,587 97,985 (38,144) 103,428 ------ ------- -------- --------- -------- Gross margin............ -- 49,290 111,475 (1,462) 159,303 Operating expenses: Marketing and selling.............. 1,082 19,502 52,458 -- 73,042 Research and development.......... -- 11,566 24,665 -- 36,231 General and administrative....... 306 6,497 14,467 -- 21,270 Amortization of intangible assets.... (73) 6,080 2,481 -- 8,488 Provisions for non- recurring charges.... 521 783 1,005 (289) 2,020 ------ ------- -------- --------- -------- Total operating expenses........... 1,836 44,428 95,076 (289) 141,051 ------ ------- -------- --------- -------- Operating income (loss)................. (1,836) 4,862 16,399 (1,173) 18,252 Other (income) expense, net: Interest income....... (1,031) (199) (368) 1,031 (567) Interest expense...... 7,201 541 3,257 (1,031) 9,968 Equity in net (income) loss of subsidiaries......... (5,105) -- -- 5,105 -- Other, net............ 87 338 (4,735) 1,788 (2,522) ------ ------- -------- --------- -------- Other (income) expense, net....... 1,152 680 (1,846) 6,893 6,879 ------ ------- -------- --------- -------- Income (loss) before provision (benefit) for income taxes .......... (2,988) 4,182 18,245 (8,066) 11,373 Provision (benefit) for income taxes........... (9,242) 1,567 11,572 1,222 5,119 ------ ------- -------- --------- -------- Net income (loss)....... 6,254 2,615 6,673 (9,288) 6,254 ====== ======= ======== ========= ========
F-49 WAVETEK WANDEL GOLTERMANN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (Unaudited) CONSOLIDATING STATEMENTS OF OPERATIONS For The Six Months Ended March 31, 1999 (Dollars in Thousands)
Wavetek Wandel Subsidiary Foreign Goltermann Inc. Guarantors Subsidiaries Eliminations Consolidated --------------- ---------- ------------ ------------ ------------ Net sales............... $ -- $74,859 $198,864 $(32,792) $240,931 Cost of goods sold...... 39 38,032 95,829 (31,338) 102,562 ------- ------- -------- -------- -------- Gross margin............ (39) 36,827 103,035 (1,454) 138,369 Operating expenses: Marketing and selling.............. 1,512 18,054 50,871 -- 70,437 Research and development.......... 2 11,189 25,424 -- 36,615 General and administrative....... 2,885 5,377 15,364 -- 23,626 Amortization of intangible assets.... 121 6,016 3,553 -- 9,690 ------- ------- -------- -------- -------- Total operating expenses........... 4,520 40,636 95,212 -- 140,368 ------- ------- -------- -------- -------- Operating income (loss)................. (4,559) (3,809) 7,823 (1,454) (1,999) Other (income) expense, net: Interest income....... (339) (135) (306) 305 (475) Interest expense...... 6,563 293 3,884 (305) 10,435 Equity in net (income) loss of subsidiaries......... (2,451) -- 1,452 999 -- Other, net............ (693) (288) 1,112 -- 131 ------- ------- -------- -------- -------- Other (income) expense, net....... 3,080 (130) 6,142 999 10,091 ------- ------- -------- -------- -------- Income (loss) before provision (benefit) for income taxes........... (7,639) (3,679) 1,681 (2,453) (12,090) Provision (benefit) for income taxes........... (3,287) 119 5,979 (10,549) (7,738) ------- ------- -------- -------- -------- Net income (loss)....... $(4,352) $(3,798) $ (4,298) $ 8,096 $ (4,352) ======= ======= ======== ======== ========
F-50 WAVETEK WANDEL GOLTERMANN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (Unaudited) CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For The Six Months Ended March 31, 2000 (Dollars in Thousands)
Wavetek Wandel Goltermann Subsidiary Foreign Inc. Guarantors Subsidiaries Eliminations Consolidated -------------- ---------- ------------ ------------ ------------ OPERATING ACTIVITIES Net cash provided by (used in) operating activities............. $ (764) $ 6,795 $ 12,473 $ -- $ 18,504 INVESTING ACTIVITIES Purchase of property and equipment.............. (230) (1,209) (4,926) -- (6,365) --------- ------- -------- ----- --------- Net cash provided by (used in) investing activities............. 25,345 (8,024) 5,989 -- 23,310 FINANCING ACTIVITIES Proceeds from long-term obligations............ 95,077 -- 12,400 -- 107,477 Principal payments on long-term obligations.. (119,007) -- (28,400) -- (147,407) Capital contribution from Wavetek Wandel Goltermann, Inc. to subsidiary............. -- 650 (650) -- -- Loans to subsidiaries from Wavetek Wandel Goltermann, Inc. ...... (1,461) -- 1,461 -- -- Repayment of loan from subsidiary to Wavetek Wandel Goltermann, Inc. ....................... 297 (26) (271) -- -- Repayment of loans from subsidiaries........... (1,575) -- 1,575 -- -- Other, net.............. 2,739 451 (3,190) -- -- --------- ------- -------- ----- --------- Net cash provided by (used in) financing activities ............ (23,930) 1,075 (17,075) -- (39,930) Effect of exchange rate changes on cash and cash equivalets ....... -- -- (999) -- (999) --------- ------- -------- ----- --------- Increase (decrease) in cash and cash equivalents ........... 651 (154) 388 -- 885 Cash and cash equivalents at beginning of period ... 11 4,578 12,500 -- 17,089 --------- ------- -------- ----- --------- Cash and cash equivalents at end of period................. 663 4,424 12,887 -- 17,974 ========= ======= ======== ===== =========
F-51 WAVETEK WANDEL GOLTERMANN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (Unaudited) CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Six Months Ended March 31, 1999 (Dollars in Thousands)
Wavetek Wandel Subsidiary Foreign Goltermann Inc. Guarantors Subsidiaries Eliminations Consolidated --------------- ---------- ------------ ------------ ------------ OPERATING ACTIVITIES Net cash provided by (used in) operating activities ............ $(23,865) $ 22,301 $ 1,147 $ -- $ (417) INVESTING ACTIVITIES Purchase of property and equipment.............. (264) (1,588) (5,790) -- (7,642) Transfer of subsidiaries........... (28,536) -- 28,536 -- -- -------- -------- -------- ----- --------- Net cash provided by (used in) investing activities ............ (28,800) (1,588) 22,746 -- (7,642) FINANCING ACTIVITIES Proceeds from long-term obligations............ 107,352 1,402 30,305 -- 139,059 Principal payments on long-term obligations.. (59,408) (1,775) (84,519) -- (145,702) Dividend from subsidiary to Wavetek Wandel Goltermann, Inc. ...... 22,000 (22,000) Capital contribution from Wavetek Wandel Goltermann, Inc. to subsidiary ............ (2,034) -- 2,034 -- -- Loans to subsidiaries from Wavetek Wandel Goltermann, Inc. ...... (36,078) 6,203 29,875 -- -- Repayment of loan from subsidiary to Wavetek Wandel Goltermann, Inc. ....................... 28,996 (28,996) -- -- -- Repayment of loans from subsidiaries........... (7,500) (1,818) 9,318 -- -- Other, net.............. (672) -- -- -- (672) -------- -------- -------- ----- --------- Net cash provided by (used in) financing activities ............ 52,656 (46,984) (12,987) -- (7,315) Effect of exchange rate changes on cash and cash equivalents ...... -- -- (3,047) -- (3,047) -------- -------- -------- ----- --------- Increase (decrease) in cash and cash equivalents ........... (9) (26,271) 7,859 -- (18,421) Cash and cash equivalents at beginning of period ... 19 31,143 4,382 -- 35,544 -------- -------- -------- ----- --------- Cash and cash equivalents at end of period................. $ 10 $ 4,872 $ 12,241 $ -- $ 17,123 ======== ======== ======== ===== =========
F-52