-----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, JPlclVLsPPqPfFrkXu6jbnHkhJCxZ8HPMlyYTH4gDqAiFviiy6WIaqw+BxM43ez6 OcXoKkS4CZdCVwTcwODRCQ== 0000914039-96-000254.txt : 19960814 0000914039-96-000254.hdr.sgml : 19960814 ACCESSION NUMBER: 0000914039-96-000254 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANALYSIS & TECHNOLOGY INC CENTRAL INDEX KEY: 0000310876 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING SERVICES [8711] IRS NUMBER: 952579365 STATE OF INCORPORATION: CT FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14161 FILM NUMBER: 96609459 BUSINESS ADDRESS: STREET 1: TECHNOLOGY PARK RTE 2 STREET 2: PO BOX 220 CITY: NORTH STONINGTON STATE: CT ZIP: 06359 BUSINESS PHONE: 2035993910 MAIL ADDRESS: STREET 1: TECHNOLOGY PARK RTE 2 STREET 2: P O BOX 220 CITY: NORTH STONINGTON STATE: CT ZIP: 06359 10-Q 1 FORM 10-Q 1 ================================================================================ FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended JUNE 30, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-14161 ANALYSIS & TECHNOLOGY, INC. (Exact name of registrant as specified in its charter) Connecticut 95-2579365 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Route 2, North Stonington, Connecticut 06359 (Address of principal executive office) (Zip Code) (860) 599-3910 (Registrant's telephone number, including area code) - -------------------------------------------------------------------------------- (Former name, former address, and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of the close of business August 5, 1996, the registrant had outstanding 2,341,615 shares of Common Stock. ================================================================================ 2 CONTENTS PAGE ---- PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS 1 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 5 PART II. OTHER INFORMATION REQUIRED IN REPORT ITEM 1. LEGAL PROCEEDINGS 7 ITEM 2. CHANGES IN SECURITIES 7 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 7 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 7 ITEM 5. OTHER INFORMATION 7 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 7 i 3 PART I. FINANCIAL INFORMATION Item 1. Financial Statements ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE QUARTERS ENDED JUNE 30, 1996 AND 1995 (AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
JUNE 30, 1996 JUNE 30, 1995 ------------- ------------- Revenue from continuing operations $32,488 $31,335 Costs and expenses 30,991 29,705 ------- ------- Operating earnings from continuing operations 1,497 1,630 ------- ------- Other expense (income): Interest expense 76 185 Interest income (37) (1) Equity in income of joint venture (59) (64) Other, net 162 194 ------- ------- 142 314 ------- ------- Earnings from continuing operations before income taxes 1,355 1,316 Income taxes on earnings from continuing operations 562 556 ------- ------- Net earnings from continuing operations $ 793 $ 760 ======= ======= Discontinued Operations: Loss from discontinued operations, net of income tax benefit -- (46) ------- ------- Net earnings $ 793 $ 714 ======= ======= Earnings (loss) per common and common equivalent share: Continuing operations $ 0.33 $ 0.31 Discontinued operations -- (0.02) ------- ------- Net earnings $ 0.33 $ 0.29 ======= ======= Weighted average shares and common equivalent shares outstanding 2,422 2,455 ======= =======
See accompanying note to the consolidated financial statements. 1 4 ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS)
ASSETS JUNE 30, 1996 (UNAUDITED) MARCH 31, 1996 ------------------------ -------------- Current assets: Cash and cash equivalents $ 2,322 $ 4,179 Contract receivables 23,208 24,250 Notes and other receivables 1,115 1,260 Prepaid expenses 1,312 1,543 ------- ------- Total current assets 27,957 31,232 Property, buildings, and equipment, net 14,163 14,132 Other assets: Goodwill, net of accumulated amortization 6,443 6,548 Product development costs, net of accumulated amortization 363 362 Deferred Compensation Plan investments 2,871 2,601 Investment in joint venture 1,360 1,301 Deposits and other 209 261 11,246 11,073 ------- ------- TOTAL ASSETS $53,366 $56,437 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current installments of long-term debt $ 186 $ 180 Accounts payable 1,243 1,779 Accrued expenses 6,197 7,648 Dividends payable -- 659 Deferred income taxes 1,076 1,176 ------- ------- Total current liabilities 8,702 11,442 Long-term debt, excluding current installments 2,836 2,901 Deferred income taxes 85 114 Other long-term liabilities 2,942 2,701 ------- ------- TOTAL LIABILITIES 14,565 17,158 ------- ------- Shareholders' equity: Common stock, $.125 stated value Authorized 7,500,000 shares; issued and outstanding 2,341,615 shares as of June 30, 1996 and 2,440,303 shares as of March 31, 1996 293 305 Additional paid-in capital 8,705 9,964 Retained earnings 29,803 29,010 ------- ------- TOTAL SHAREHOLDERS' EQUITY 38,801 39,279 ------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $53,366 $56,437 ======= =======
See accompanying note to the consolidated financial statements. 2 5 ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE QUARTERS ENDED JUNE 30, 1996 AND 1995 (AMOUNTS IN THOUSANDS)
JUNE 30, 1996 JUNE 30, 1995 ------------- ------------- OPERATING ACTIVITIES: Net earnings $ 793 $ 714 Adjustments to reconcile net earnings to net cash provided (used) by operating activities: Loss associated with discontinued operations -- 45 Equity of income of joint venture (59) (64) Depreciation and amortization of fixed assets 621 636 Amortization of goodwill 115 112 Amortization of product development costs 18 154 Provision for deferred income taxes (129) 187 Loss on sale of equipment 13 251 Decrease (increase) in: Contract receivables 1,042 1,149 Notes and other receivables 145 44 Prepaid expenses 231 316 Other assets (218) (89) Increase (decrease) in: Accounts payable and accrued expenses (1,987) (3,696) Other long-term liabilities 241 164 ------- ------- Net cash provided (used) by continuing operations 826 (77) Net cash used by discontinued operations -- (25) ------- ------- NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 826 (102) ------- ------- INVESTING ACTIVITIES: Additions to property, buildings, and equipment (665) (372) Product development costs - continuing operations (19) (185) Product development costs - discontinued operations -- (620) Proceeds from the sale of equipment -- 5 Acquisition of business units (net of cash acquired) (10) (117) ------- ------- NET CASH USED BY INVESTING ACTIVITIES (694) (1289) ------- ------- FINANCING ACTIVITIES: Net repayments of short-term borrowings -- 404 Proceeds provided by long-term borrowings -- 1,910 Repayments of long-term borrowings (59) (74) Proceeds from sale of common stock 168 54 Repurchase of common stock (1,439) -- Dividends paid (659) (616) ------- ------- NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES (1,989) 1,678 ------- ------- Increase (decrease) in cash and cash equivalents (1,857) 287 CASH AND CASH EQUIVALENTS: Beginning of period 4,179 502 ------- ------- END OF PERIOD $ 2,322 $ 789 ------- -------
See accompanying note to the consolidated financial statements. 3 6 ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES NOTE TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1996 1. The information furnished in the accompanying unaudited Consolidated Statements of Operations, Consolidated Balance Sheets, and Consolidated Statements of Cash Flows reflect all adjustments (consisting only of items of a normal recurring nature) which are, in the opinion of management, necessary for a fair statement of the Company's results of operations and financial position for the interim periods. These financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company's Annual Report for the year ended March 31, 1996. 2. On October 31, 1995, the Company sold the commercial business of its Groton, Connecticut-based subsidiary, General Systems Solutions, Inc. (GSS), to GE Capital Corporation. GSS's Navy business was transferred to the Company prior to the sale and its commercial business was reclassified retroactively as a discontinued operation. The accompanying Consolidated Statement of Operations for the period ended June 30, 1995 has been restated to present the GSS commercial results as discontinued operations. 3. On July 26, 1996 the Company purchased all the shares of Vector Research Company, Inc. of Rockville, Maryland for approximately $6.5 million. Vector Research Company, Inc. provides engineering and technical services primarily to U.S. Navy customers. The acquisition will be accounted for as a purchase. 4 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS A summary of comparative results for the quarters ended June 30, 1996 and June 30, 1995 is as follows:
THREE MONTHS ENDED JUNE 30 PERCENT 1996 1995 CHANGE ---- ---- ------- Revenue from continuing operations $32,488,000 $31,335,000 3.7% Operating earnings from continuing operations 1,497,000 1,630,000 (8.2%) Earnings from continuing operations before income taxes 1,355,000 1,316,000 2.9% Net earnings from continuing operations 793,000 760,000 4.3% Loss from discontinued operations, net of tax benefit -- (46,000) -- Net earnings 793,000 714,000 11.0% Earnings (loss) per common and common equivalent share Continuing operations 0.33 0.31 6.5% Discontinued operations -- (0.02) -- Net earnings 0.33 0.29 13.8% Weighted average shares and common equivalent shares outstanding 2,422,000 2,455,000 (1.3%)
Revenue from continuing operations increased 3.7% to $32.5 million for the three months ended June 30, 1996 (the first quarter of fiscal 1997) from $31.3 million for the three months ended June 30, 1995. The increase in revenue is mainly attributable to an increase in non-labor related revenue. Non-labor related revenue generated by purchased components, computer usage, travel and work subcontracted to other companies increased $1.1 million to $7.6 million in the first quarter of fiscal 1997 from $6.5 million in the first quarter of fiscal 1996. The increase was mainly due to work subcontracted to other companies. Operating earnings from continuing operations decreased 8.2% to $1.5 million for the three months ended June 30, 1996 from $1.6 million for the three months ended June 30, 1995. Operating earnings from continuing operations as a percentage of revenue (operating margins) decreased to 4.6% compared with 5.2% in the previous year comparable quarter. The decrease in operating margins was due primarily to higher than anticipated earnings on a large fixed price project recorded in the first quarter of last year. If the additional earnings from this project are excluded from the comparison, operating margins are consistent from year to year. Total other expenses as a percentage of revenue decreased to 0.4% for the quarter ended June 30, 1996 as compared with 1.0% in the prior year first quarter. The decrease was primarily due to a decrease in interest expense and an increase in interest income as a result of the sale of the commercial business of the Company's subsidiary, General Systems Solutions, Inc. (GSS), on October 31, 1995. The proceeds from the sale enabled the Company to repay amounts borrowed under its revolving credit agreement and to increase cash and cash equivalents. Earnings from continuing operations before income taxes increased 2.9% to $1.4 million in the first quarter of fiscal 1997 from $1.3 million in the first quarter of fiscal 1996. The increase was primarily a result of lower interest expense and an increase in interest income which more than offset the decrease in operating earnings, as noted above. 5 8 The Company's effective tax rate was 41.5% for the three-month period ended June 30, 1996 compared with 42.4% for the three-month period ended June 30, 1995. The lower effective tax rate in fiscal 1997 was due, in part, to earnings in Australia which were not taxed because of prior losses for which no previous tax benefit had been recorded. Net earnings from continuing operations for the first quarter of fiscal 1997 increased 4.3% to $793 thousand from $760 thousand in the first quarter of fiscal 1996. Earnings per share from continuing operations were $0.33 for the first quarter of fiscal 1997 compared with $0.31 in the first quarter of fiscal 1996. Upon the sale of GSS in October 1995, its commercial business was reclassified retroactively as a discontinued operation. The after tax loss in last year's quarter from discontinued operations was $46 thousand or $0.02 per share. Net earnings per share were $0.33 for the first quarter of fiscal 1997 compared with $0.29 for the first quarter of fiscal 1996 after deducting the loss from discontinued operations. The weighted average number of common and common equivalent shares outstanding decreased slightly to 2.42 million for the current fiscal quarter compared with 2.46 million in fiscal 1996 first quarter. The decrease was due in part to the repurchase of the Company's common shares as discussed more fully below in liquidity & capital resources. LIQUIDITY AND CAPITAL RESOURCES In the first quarter of fiscal 1997, net cash provided by operating activities totaled $826 thousand. Cash generated by net earnings, and collection of contract receivables was offset in part by payments to subcontractors and material suppliers and reduction in other accrued expenses totaling nearly $2.0 million. Contract receivables totaled $23.2 million at June 30, 1996, $24.2 million at March 31, 1996, and $26.2 million at June 30, 1995 and represented 44%, 43%, and 44%, respectively, of total assets at each of those dates. The average period for payment to the Company was 65 days at June 30, 1996; 71 days at March 31, 1996; and 76 days as of June 30, 1995. The decrease in the average period for payment to the Company was due in part to the billing and collection of receivables under a firm fixed price contract. Net cash used by financing activities in the first quarter of fiscal 1997 totaled $2.0 million. The primary use of cash from financing activities was the repurchase of the Company's common shares. On March 25, 1996, the Company's Board of Directors announced that it had authorized the repurchase of up to 200 thousand common shares over a one year period. Through June 30, 1996 the Company had repurchased 115.6 thousand shares under this repurchase program at current market prices on the date of purchase. Any capital needs not satisfied by cash generated from operations were, and in the future will be, met with money borrowed by the Company under its revolving credit agreement. The total funds available to the Company under this agreement at June 30, 1996 was $20.0 million. Borrowings under the Company's borrowing agreements were $5.8 million at June 30, 1995. There were no borrowings under the Company's revolving credit agreement at June 30, 1996 and March 31, 1996. It is anticipated that the Company's existing cash, together with funds generated from operations and borrowings under its revolving credit agreement, will be sufficient to meet its normal working capital requirements for the foreseeable future. On July 26, 1996 the Company purchased all the shares of Vector Research Company, Inc. of Rockville, Maryland for approximately $6.5 million. The purchase was made from existing cash and funds available under the Company's revolving credit agreement. As of June 30, 1996, the Company does not have any other major capital commitments. The Company believes that inflation has not had a material effect on its business. 6 9 PART II. OTHER INFORMATION REQUIRED IN REPORT ITEM 1. LEGAL PROCEEDINGS NONE. ITEM 2. CHANGES IN SECURITIES NONE. ITEM 3. DEFAULTS UPON SENIOR SECURITIES NONE. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS NONE. ITEM 5. OTHER INFORMATION NONE. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a. EXHIBITS 11 EARNINGS PER SHARE CALCULATION 27 FINANCIAL DATA SCHEDULE b. REPORTS ON FORM 8-K None. 7 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. ANALYSIS & TECHNOLOGY, INC. Date: August 12, 1996 /s/Gary P. Bennett ---------------------------------- Gary P. Bennett President and CEO Date: August 12, 1996 /s/David M. Nolf ---------------------------------- David M. Nolf Executive Vice President 8 11 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ EXHIBITS TO FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 ------------------------ FOR THE QUARTER ENDED: JUNE 30, 1996 COMMISSION FILE NUMBER: 0-14161 ------------------------ ANALYSIS & TECHNOLOGY, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) ================================================================================ 12 EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION OF DOCUMENTS - -------------- ------------------------ 11 EARNINGS PER SHARE CALCULATION 27 FINANCIAL DATA SCHEDULE i EX-11 2 COMPUTATION OF EARNINGS PER SHARE 1 Exhibit 11 ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES Computation of Earnings per Share For the years ended March 31, 1996, 1995 and 1994
1996 1995 1994 ---- ---- ---- Primary: Weighted average shares outstanding 2,415,970 2,346,487 2,215,778 Net effect of dilutive stock options based on the treasury stock method using the average market price 77,781 122,661 150,692 Total 2,493,751 2,469,148 2,366,470 Net earnings $2,077,621 $2,773,144 $2,498,578 Earnings per common and common equivalent share $ 0.83 $ 1.12 $ 1.06 Fully Diluted: Weighted average shares outstanding 2,415,570 2,346,487 2,215,778 Net effect of dilutive stock options based on the treasury stock method using the period end price 85,198 130,325 186,579 Total 2,500,768 2,476,812 2,402,357 Net earnings $2,077,621 $2,773,144 $2,498,578 Earnings per common and common equivalent share $ 0.83 $ 1.12 $ 1.04
EX-27 3 FINANCIAL DATA SCHEDULE
5 0000310876 ANALYSIS & TECHNOLOGY, INC. 1,000 U.S. DOLLARS 3-MOS MAR-31-1997 APR-01-1996 JUN-30-1996 1 2,322 0 23,208 0 0 27,957 31,827 17,664 53,366 8,702 0 0 0 293 38,508 53,366 0 32,488 0 30,991 103 0 39 1,355 562 793 0 0 0 793 0.33 0
-----END PRIVACY-ENHANCED MESSAGE-----