-----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, NXbegEuq3H7fXTbxDoGP6tuhcGUz4uhq8rXV9KnH5eY6mETd/mpzX0MlgA0+EVyh GaAfVlNZFTU0BF05rLLPUg== 0000914039-97-000038.txt : 19970222 0000914039-97-000038.hdr.sgml : 19970222 ACCESSION NUMBER: 0000914039-97-000038 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970214 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: 97535250 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 DECEMBER 31, 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 February 11, 1997, the registrant had outstanding 2,342,422 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 8 Item 2. Changes in Securities 8 Item 3. Defaults Upon Senior Securities 8 Item 4. Submission of Matters to a Vote of Security Holders 8 Item 5. Other Information 8 Item 6. Exhibits and Reports on Form 8-K 8 i 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES Consolidated Statements of Operations (Unaudited) For the Quarters and Nine-Month Periods Ended December 31, 1996 and 1995 (Amounts in Thousands Except Per Share Amounts)
Three Months Ended Nine Months Ended December 31, December 31, -------------- ----------------- 1996 1995 1996 1995 ---- ---- ---- ---- Revenue from continuing operations $ 35,653 $ 29,353 $ 103,648 $ 91,808 Costs & expenses 34,007 27,745 98,707 86,986 ------ ------ ------- ------ Operating earnings from continuing operations 1,646 1,608 4,941 4,822 ----- ----- ----- ----- Other deductions (income): Interest expense 129 175 303 546 Interest income (2) (55) (62) (59) Equity in income of joint venture (101) (83) (123) (239) Other, net 194 169 533 518 --- --- --- --- 220 206 651 766 --- --- --- --- Earnings from continuing operations before income taxes 1,426 1,402 4,290 4,056 Income taxes 558 582 1,780 1,295 --- --- ----- ----- Net earnings from continuing operations 868 820 2,510 2,761 Discontinued Operations: Loss from discontinued operations, net of income tax benefit -- (53) -- (195) Loss on the disposal of discontinued operations, net of income tax benefit -- -- -- (1,316) ------ Net earnings $ 868 $ 767 $ 2,510 $ 1,250 ========= ========= ========= ========= Primary earnings (loss) per common and common equivalent share: Continuing operations $ 0.36 $ 0.33 $ 1.04 $ 1.11 Discontinued operations -- (0.02) -- (0.61) --------- --------- --------- --------- Net earnings $ 0.36 $ 0.31 $ 1.04 $ 0.50 ========= ========= ========= ========= Fully diluted earnings (loss) per common and common equivalent share: Continuing operations $ 0.36 $ 0.33 $ 1.03 $ 1.11 Discontinued operations -- (0.02) -- (0.61) --------- --------- --------- --------- Net earnings $ 0.36 $ 0.31 $ 1.03 $ 0.50 ========= ========= ========= ========= Weighted average shares and common equivalent shares outstanding Primary 2,418 2,514 2,416 2,482 Fully Diluted 2,422 2,515 2,429 2,497
See accompanying notes to the consolidated financial statements. 1 4 ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS)
ASSETS DECEMBER 31, 1996 (UNAUDITED) MARCH 31, 1996 ------ ----------------------------- -------------- Current assets: Cash and cash equivalents $ -- $ 4,179 Marketable equity securities 199 -- Contract receivables 28,008 24,250 Notes and other receivables 1,126 1,260 Prepaid expenses 2,020 1,543 ----- ----- Total current assets 31,353 31,232 Property, buildings, and equipment, net 14,029 14,132 Other assets: Goodwill, net of accumulated amortization 9,572 6,548 Product development costs, net of accumulated amortization 484 362 Deposits and other 350 261 Deferred Compensation Plan investments 2,939 2,601 Investment in joint venture 1,424 1,301 ----- ----- 14,769 11,073 ------ ------ TOTAL ASSETS $60,151 $56,437 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current installments of long-term debt $ 217 $ 180 Accounts payable 2,023 1,779 Accrued expenses 7,200 7,648 Dividends payable -- 659 Deferred income taxes 1,701 1,176 ----- ----- Total current liabilities 11,141 11,442 Long-term debt, excluding current installments 5,826 2,901 Deferred income taxes 18 114 Other long-term liabilities 2,959 2,701 ----- ----- TOTAL LIABILITIES 19,944 17,158 ------ ------ Shareholders' equity: Common stock, $.125 stated value Authorized 7,500,000 shares; issued and outstanding, 2,318,914 shares at December 31, 1996 and 2,440,303 at March 31, 1996 290 305 Additional paid-in capital 8,368 9,964 Unrealized holding gains on marketable equity securities 29 -- Retained earnings 31,520 29,010 ------ ------ TOTAL SHAREHOLDERS' EQUITY 40,207 39,279 ------ ------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $60,151 $56,437 ======= =======
See accompanying notes to the consolidated financial statements. 2 5 ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE NINE-MONTH PERIODS ENDED DECEMBER 31, 1996 AND 1995 (AMOUNTS IN THOUSANDS)
DECEMBER 31, 1996 DECEMBER 31, 1995 ----------------- ----------------- OPERATING ACTIVITIES: NET EARNINGS $ 2,510 $ 1,250 ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH PROVIDED BY CONTINUING OPERATIONS: Loss associated with discontinued operations -- 1,511 Equity in income of joint venture (123) (239) Depreciation and amortization of fixed assets 1,904 1,812 Amortization of goodwill 404 333 Amortization of product development costs 81 91 Provision for deferred income taxes 429 (253) Loss on sale of equipment 200 413 Decrease (increase) in: Contract receivables (623) 1,909 Notes and other receivables 140 65 Prepaid expenses (386) 466 Other assets (372) (96) Increase (decrease) in: Accounts payable and accrued expenses (1,677) (2,597) Other long-term liabilities (571) 236 ---- --- NET CASH PROVIDED BY CONTINUING OPERATIONS 1,916 4,901 NET CASH USED BY DISCONTINUED OPERATIONS -- (3,345) NET CASH PROVIDED BY OPERATING ACTIVITIES 1,916 1,556 ----- ----- INVESTING ACTIVITIES: Proceeds from sale of discontinued operations -- 8,007 Additions to property, buildings, and equipment (1,719) (1,359) Product development costs - continuing operations (204) (116) Product development costs - discontinued operations -- (1,125) Proceeds from the sale of equipment 18 6 Acquisition of business units (net of cash acquired) (4,883) (219) ------ ---- NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (6,788) 5,194 ------ ----- FINANCING ACTIVITIES: Proceeds from long-term borrowings 3,162 -- Repayments of long-term debt (199) (3,759) Proceeds from sale of common stock 191 559 Repurchase of common stock (1,802) -- Dividends paid (659) (616) ---- ---- NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 693 (3,816) Increase (decrease) in cash and cash equivalents (4,179) 2,934 CASH AND CASH EQUIVALENTS: Beginning of period 4,179 502 ----- --- End of period $ -- $ 3,436 ======= =======
During the nine-month period ended December 31, 1996 unrealized holding gains on marketable equity securities resulted in increases to shareholders' equity and to marketable equity securities of $29 thousand. See accompanying notes to the consolidated financial statements. 3 6 ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 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. 3. On July 26, 1996, the Company acquired all of the stock of Vector Research Company, Inc. ("Vector") of Rockville, Maryland, for approximately $6.0 million in cash plus related expenses and assumption of tax liabilities. Vector provides engineering and technical services to U.S. Navy customers. Goodwill totaling approximately $3.3 million was recorded in connection with this acquisition. 4. During the second quarter of fiscal 1996, the Company analyzed research expenditures incurred in prior years by the Company and its subsidiaries. As a result of this analysis, the Company determined it was entitled to certain federal and state research and development tax credits. The total amount of such credits accrued in the quarter ended September 30, 1995 was $400,000 and is presented as a reduction of income taxes on earnings from continuing operations in the accompanying unaudited Consolidated Statements of Operations for the nine-month period ended December 31, 1995. 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 quarter and nine-month periods ended December 31, 1996 and December 31, 1995 is as follows:
(UNAUDITED) THREE MONTHS ENDED DECEMBER 31, PERCENT 1996 1995 CHANGE ---- ---- ------ Revenue from continuing operations $ 35,653 $ 29,353 21.5 Operating earnings from continuing operations 1,646 1,608 2.4 Earnings from continuing operations before income taxes 1,426 1,402 1.7 Net earnings from continuing operations 868 820 5.9 Loss from discontinued operations, net of income tax benefit -- (53) -- Net earnings 868 767 13.2 Primary earnings (loss) per common and common equivalent share: Continuing operations 0.36 0.33 9.1 Discontinued operations -- (0.02) -- Net earnings per common share 0.36 0.31 16.1 Primary weighted average shares and common equivalent shares outstanding 2,418 2,514 (3.8) (UNAUDITED) NINE MONTHS ENDED DECEMBER 31, PERCENT 1996 1995 CHANGE ---- ---- ------ Revenue from continuing operations $103,648 $ 91,808 12.9 Operating earnings from continuing operations 4,941 4,822 2.4 Earnings from continuing operations before income taxes 4,290 4,056 5.8 Net earnings from continuing operations Without R&D tax credit 2,510 2,361 6.3 Including R&D tax credit N/A 2,761 -- Loss from discontinued operations, net of income tax benefit -- (195) -- Loss on the disposal of discontinued operations, net of income tax benefit -- (1,316) -- Net earnings 2,510 1,250 -- Primary earnings (loss) per common and common equivalent share: Continuing operations Without R&D tax credit 1.04 0.95 9.5 Including R&D tax credit N/A 1.11 -- Discontinued operations -- (0.61) -- Net earnings per common share 1.04 0.50 -- Primary weighted average shares and common equivalent shares outstanding 2,416 2,482 (2.7)
5 8 Revenue from continuing operations increased 21.5% to $35.7 million for the three months ended December 31, 1996 from $29.4 million for the three months ended December 31, 1995. For the nine-month period ended December 31, 1996 (the first nine months of fiscal 1997), revenues increased 12.9% to $103.6 million compared with $91.8 million in the first nine months of fiscal 1996. The increase in revenue is attributable to growth in core defense business including an increase in non-labor related revenue due to purchased materials and work subcontracted to other companies, and to the purchase of Vector Research Company, Inc. (Vector Research) on July 26, 1996. Non-labor related revenue contributed $1.3 million and $4.0 million, and Vector Research added $3.6 million and $6.0 million for the quarter and nine-month period respectively. For the quarter and nine-month period ended December 31, 1996, operating earnings from continuing operations were $1.6 million and $4.9 million, respectively, compared with $1.6 million and $4.8 million in the comparable quarter and nine-month period ended December 31, 1995. Operating margins for the quarter and nine-month period ended December 31, 1996 were 4.6% and 4.8% compared with 5.5% and 5.3% in the prior fiscal year quarter and nine-month period. The decrease in operating margins was primarily due to lower fees earned this year on fixed price contracts than in the comparable quarter and nine-month period ended December 31, 1995. In addition, operating margins were adversely affected by marketing and sales costs incurred to expand the Company's commercial information technology and interactive multimedia (IMM) training work. Total other expenses as a percentage of revenue decreased to 0.6% for both the current quarter and nine-month period as compared with 0.7% and 0.8% for the quarter and nine-month period ended December 31, 1995. Interest expense decreased for both the current quarter and nine-month period as a result of cash generated by the sale of the commercial business of the Company's subsidiary, General Systems Solutions (GSS) on October 31, 1995. Interest income decreased in the current quarter as a result of the Company's acquisition of Vector Research as discussed more fully below in "Liquidity and Capital Resources". The Company's share of income in its joint venture, Automation Software, Incorporated (ASI) for the nine-month period ended December 31, 1996 was $123,000 compared with $239,000 in the nine-month period ended December 31, 1995. Earlier in the current fiscal year, ASI experienced a slowdown of sales during the transition to a new Windows 95 compatible software product. However, in the current quarter the Company's share of ASI's income was $101,000 compared with $83,000 in the prior fiscal year third quarter. Earnings from continuing operations before income taxes were $1.4 million for both the third quarter of fiscal 1997 and the third quarter of fiscal 1996. For the first nine months of fiscal 1997, earnings from continuing operations before income taxes increased 5.8% to $4.3 million from $4.1 million for the same period in the prior fiscal year. The Company's effective tax rate on earnings from continuing operations was 39.2% for the third quarter and 41.5% for the first nine months of fiscal 1997 compared with 41.5% and 31.9% for the third quarter and first nine months of fiscal 1996. The lower effective tax rate in the prior fiscal year's nine-month period was mainly the result of the Company's one-time accrual of federal and state research and development (R&D) tax credits totaling $400,000. The lower effective tax rate for the current quarter was due, in part, to earnings in Australia which are not taxed because they are offset against prior losses for which no previous tax benefit had been recorded. Net earnings from continuing operations for the third quarter of fiscal 1997 were $868,000, or $0.36 per share. This compares to net earnings from continuing operations for the third quarter of fiscal 1996, of $820,000 or $0.33 per share. Upon the sale of GSS in October 1995, its commercial business was reclassified retroactively as a discontinued operation. Net earnings for the third quarter of fiscal 1996 included a loss of $53,000 from this discontinued operation which resulted in a net earnings of $0.31 per share for the quarter. For the first nine months of fiscal 1997, net earnings from continuing operations were $2.5 million, or $1.04 per share. This compares to net earnings from continuing operations for the first nine months of fiscal 1996, not including the one-time R&D tax credit previously mentioned, of $2.4 million, or $0.95 per share. Net earnings for the first nine months of fiscal 1996 included the R&D tax credit of $400,000 and a loss from discontinued operations of $1.5 million which resulted in net earnings of $0.50 per share. The weighted average number of common and common equivalent shares outstanding decreased to 2.4 million in the third quarter and first nine months of fiscal 1997 compared with 2.5 million in comparable periods of fiscal 6 9 1996. The decrease was due in part to the repurchase of the Company's common shares as discussed more fully below in "Liquidity and Capital Resources". LIQUIDITY & CAPITAL RESOURCES For the nine-month period ended December 31, 1996, net cash provided by operating activities totaled $1.9 million. The net cash increase resulted primarily from earnings from continuing operations of $2.5 million offset in part by an increase in contract receivables and a decrease in accounts payable and accrued expenses. Contract receivables increased $623,000. Government delays in approving the Vector Research novation agreement resulted in delayed payment of invoices and added $3.5 million to contract receivables. This increase was partially offset by the collection of receivables under firm fixed price contracts. Contract receivables totaled $28.0 million at December 31, 1996, $24.2 million at March 31, 1996, and $25.4 at December 31, 1995 and represented 47%, 43% and 46%, respectively of total assets at each of those dates. The average period for payment to the Company was 72 days at December 31, 1996, 71 days at March 31, 1996 and 79 days at December 31, 1995. Net cash used by investing activities for the nine-month period ended December 31, 1996 was $6.8 million. The primary use of cash was for the acquisition of Vector Research. On July 26, 1996, the Company purchased all of the shares of Vector Research for approximately $6.0 million plus related expenses and assumption of tax liabilities. The purchase was made from existing cash and funds available under the Company's revolving credit agreement. The primary use of cash from financing activities for the nine-month period ended December 31, 1996 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 December 31, 1996 the Company had repurchased 140,700 shares under the repurchase program at current market prices on the date of purchases. Funds borrowed as a result of the Vector Research acquisition offset in part by funds used for share repurchases resulted in net cash provided by financing activities for the first nine months of fiscal 1997 of $693,000. 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 December 31, 1996 were $20.0 million. The amount borrowed under the Company's borrowing agreement was $3.2 million as of December 31, 1996. There were no borrowings under the Company's revolving credit agreement at March 31, 1996 and December 31, 1995. 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. As of December 31, 1996, the Company does not have any other major capital commitments. The Company believes inflation has not had a material impact on its business. 7 10 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 4 Third Amendment to Revolving Credit and Term Loan Agreement and Revolving Credit Note dated November 13, 1996 11 Earnings Per Share Calculation 27 Financial Data Schedule b. Reports on Form 8-K None. 8 11 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: February 12, 1997 /s/Gary P. Bennett - ------------------------ --------------------------- Gary P. Bennett President and CEO Date: February 12, 1997 /s/David M. Nolf - ------------------------ --------------------------- David M. Nolf Executive Vice President 9 12 =============================================================================== 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: DECEMBER 31, 1996 COMMISSION FILE NUMBER: 0-14161 ------------------ ANALYSIS & TECHNOLOGY, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) =============================================================================== 13 Exhibit Index Exhibit Number Description of Documents - -------------- ------------------------ 4 Third Amendment to Revolving Credit and Term Loan Agreement and Revolving Credit Note Dated November 13, 1996 11 Earnings Per Share Calculation 27 Financial Data Schedule i EX-4 2 EXHIBIT 4 1 Exhibit 4 THIRD AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT AND REVOLVING CREDIT NOTE THIS AMENDMENT, dated as of November 13, 1996 (the "Amendment") to the Amended and Restated Revolving Credit and Term Loan Agreement and the Revolving Credit Note, both dated as of November 15, 1993 and amended pursuant to a certain First Amendment to Revolving Credit and Term Loan Agreement and Revolving Credit Note dated as of December 9, 1994 and a Second Amendment to Revolving Credit and Term Loan Agreement dated as of November 29, 1995 (as so amended, the "Agreement" and the "Note" respectively), is entered into by and between ANALYSIS & TECHNOLOGY, INC., a Connecticut corporation (the "Company") and FLEET NATIONAL BANK, formerly known as Shawmut Bank Connecticut, National Association, a national banking association (the "Bank"). W I T N E S S E T H WHEREAS, pursuant to the Agreement, the Bank has made certain advances to the Company and the Company has made certain covenants to the Bank; and WHEREAS, the Bank and the Company now desire to amend the Agreement to provide for, among other things, a change in the net worth covenant and an extension of the Termination Date. NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged 2 2 and pursuant to the requirements of the Agreement, the parties hereto hereby agree as follows: Section 1. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings specified in, or by reference in, the Agreement. Section 2. Amendment to the Agreement. (a) Section 1.1 of the Agreement is amended and restated to read as follows: Section 1.1 Amounts. Subject to the terms and conditions contained in this Agreement, the Bank agrees to make loans (the "Revolving Credit Loans" and individually, a "Revolving Credit Loan") to the Company from time to time prior to October 31, 1998 (the "Termination Date") in principal amounts not exceeding at any one time outstanding the sum of $20,000,000 (such amount, as it may be reduced from time to time as hereinafter provided, is herein called the "Commitment") less the face amount of all Letters of Credit issued for the account of the Company or any other party guaranteed by the Company (the "Letters of Credit" and each individually a "Letter of Credit"). Each Revolving Credit Loan shall be either a Domestic Loan, a CD Loan, or a Eurodollar Loan as the Company may elect subject to the provisions of this Agreement. Notwithstanding anything herein to the contrary, during the term of this Agreement, the sum of (i) the aggregate outstanding principal amount of Revolving Credit Loans hereunder plus (ii) the aggregate available face amount of all Letters of Credit, shall not at any time exceed the Commitment. 3 3 (b) Section 1.3 of the Agreement is amended to change the maturity date of the Term Loan from November 1, 2002 to November 1, 2003, by substituting the reference to "November 1, 2002" with "November 1, 2003." (c) Section 7.15 of the Agreement is amended and restated to read as follows: Section 7.15. Tangible Net Worth. Permit consolidated Tangible Net Worth to be less than $22,000,000 at any time as determined in accordance with generally accepted accounting principles applied on a consistent basis with that of the period ending March 31, 1996. (d) The definition of Intangible Assets set forth in Section 9.1(m) is amended and restated to read as follows: (m) "Intangible Assets" shall mean capitalized merger costs, capitalized product development costs (net of accumulated amortization), copyrights, organization costs and goodwill. (e) The definition of Tangible Net Worth set forth in Section 9.1(z) is amended and restated to read as follows: (z) "Tangible Net Worth" shall mean consolidated shareholders' equity reduced by Intangible Assets. (f) Exhibits C, D, E and F to the Agreement are each amended and restated to read in the form of Exhibits C, D, E and F respectively, attached hereto and made a part hereof as Exhibits C, D, E and F. 4 4 Section 3. Conditions and Effectiveness. This Amendment shall become effective when, and only when, the Bank and the Company have received counterparts of this Amendment executed by the Bank and by the Company. Section 4. Reference to and Effect on the Agreement. (a) Upon the effectiveness of Section 2 hereof, on and after the date hereof, (i) each reference in the Agreement to "this Agreement," "hereunder," "hereof," "herein," or words of like import, and each reference to the Agreement in the Revolving Credit Note and any other document relating to the Agreement, shall mean and be in reference to the Agreement as amended hereby and (ii) each reference in the Revolving Credit Note to "this Note, " "hereunder," "hereof," "herein," or words of similar import, and each reference in the Agreement to "the Note" or "the Revolving Credit Note" shall mean and be in reference to the Revolving Credit Note as amended hereby. (b) Except as specifically amended herein, the Agreement and the Note shall remain in full force and effect and are hereby ratified and confirmed. Section 5. Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose. Section 6. Execution and Counterparts. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which when taken together shall constitute one in the same instrument. 5 5 Section 7. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Connecticut. 6 6 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the date first above written. ANALYSIS & TECHNOLOGY, INC. By: /s/ David M. Nolf ------------------------------ Name: David M. Nolf Its: Executive Vice President Chief Financial and Administrative Officer FLEET NATIONAL BANK By: /s/ Matthew E. Hummel ----------------------------- Name: Matthew E. Hummel Its: Vice President 7 7 ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES EXHIBIT C PERMITTED LIENS --------------- I. REAL ESTATE -----------
Initial Present Balance Mortgagor Description Amount*/ 9/30/96 --------- ----------- -------- ------- Fleet Bank Mortgage loan dated May 30, 1986, as $1,345,000 $687,592 amended, secured by a mortgage on land and buildings at Technology Park, North Stonington, Connecticut. Chelsea Groton Mortgage loan dated March 8, 1978, $522,800 $278,396 Savings Bank secured by a mortgage on land and buildings at Technology Park, North Stonington, Connecticut. Fleet Bank Mortgage loan dated November 25, 1987, $2,300,000 $1,749,011 secured by a mortgage on land and buildings at 238-258 Bank Street, New London, Connecticut. Connecticut Innovations, Rights in technology under an agreement $300,000 $100,000 Inc. (CII) dated October 19, 1994, to secure royalties payable in conjunction with grant for image processing business development. Connecticut Department Second mortgage on land and buildings at $450,000 $450,000 of Economic Development 238-258 Bank Street, New London, (DED) Connecticut, to secure royalties payable in connection with a grant for development of IMM Connecticut based multimedia commercial business.
- ------------------------- */ Initial amounts reflect amount borrowed or maximum amount of grant, as applicable. 8 8 ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES EXHIBIT C (CONTINUED) PERMITTED LIENS --------------- II. LEASES ------ Nothing contained in the Amended and Restated Revolving Credit and Term Loan Agreement shall be construed to limit the ability of the Company to enter into leases of either real or personal property, including so called "financing leases" of personal property. 9 9 ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES EXHIBIT D PERMITTED INDEBTEDNESS I. REAL ESTATE
Initial Present Balance Mortgagor Description Amount*/ 9/30/96 --------- ----------- -------- ------- Fleet Bank Mortgage dated May 30, 1986, as amended, $1,345,000 $687,592 payable with interest at 7.97% with monthly installments of $11,500 through September 1, 2001, secured by a mortgage on land and buildings. Chelsea Groton 9 1/4% mortgage note dated March 8, $522,800 $278,396 Savings Bank 1978, payable in monthly installments of $4,477 including interest through February 2003, secured by a mortgage on land and buildings. Fleet Bank Mortgage note dated November 25, 1987, $2,300,000 $1,749,011 payable with interest at 6.98% in monthly installments of $18,826 through November 1, 2002, secured by a mortgage on land and building at 238-258 Bank Street, New London, Connecticut.
II. SUBSIDIARY INDEBTEDNESS ----------------------- A. APPLIED SCIENCE ASSOCIATES, INC. (ASA) -------------------------------------- Small Business Administration Loan, with interest at 8.5%, due in monthly installments of principal and interest of $4,923 through May 2001, secured by an interest in the ASA headquarters building. $500,000 $230,198 ======== ========
*/ Initial amounts reflect amount borrowed. 10 10 ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES EXHIBIT D (CONTINUED) PERMITTED INDEBTEDNESS ---------------------- III. LEASES Nothing contained in the Amended and Restated Revolving Credit and Term Loan Agreement shall be construed to limit the ability of the Company to enter into leases of either real or personal property, including so called "financing leases" of personal property. 11 11 ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES EXHIBIT E PERMITTED LOAN GUARANTEE ------------------------ I. APPLIED SCIENCE ASSOCIATES, INC. (ASA) -------------------------------------- Small Business Administration Loan, with interest at 8.5% , due in monthly installments of principal and interest of $4,923 through May 2001, secured by an interest in the ASA building. $500,000 ========
*/ Initial amounts reflect amount borrowed. 12 12 ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES EXHIBIT F PERMITTED INTER-COMPANY LOANS, ADVANCES AND INVESTMENTS ------------------------------------------------------- I. OUTSTANDING LOANS, ADVANCES AND INVESTMENTS AS OF 09/30/96 ----------------------------------------------------------
Amount ------ Applied Science Associates, Inc. -------------------------------- Purchase investment $ 6,250,000 Other investment 2,637,067 ----------- $ 8,887,067 A&T Australia ------------- Capital investment $ 100,000 Other investment 278,149 ----------- $ 378,149 A&T International ----------------- Capital investment $ 52,174 Other investment 56,143 ----------- $ 108,317 Integrated Performance Decisions -------------------------------- Capital investment $ 500,000 Other investment (213,916) ----------- $ 286,084 II. ADDITIONAL LOANS, ADVANCES, AND INVESTMENTS AUTHORIZED FOR EXPENDITURE AFTER 09/30/96 Applied Science Associates, Inc. $ 500,000 A&T International, Inc. 0 A&T Australia 0 Available for allocation by A&T among A&T subsidiaries $ 600,000 ----------- $ 1,100,000 ----------- Total $10,759,617 ===========
Revision Date: October 31, 1996 EX-11 3 EXHIBIT 11 1 Exhibit 11 ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (UNAUDITED) FOR THE QUARTERS AND NINE-MONTH PERIODS ENDED DECEMBER 31, 1996 AND 1995 (AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED DECEMBER 31, DECEMBER 31, --------------------- --------------------- 1996 1995 1996 1995 ---- ---- ---- ---- Primary: - -------- Weighted average shares outstanding 2,333,670 2,421,648 2,340,331 2,400,760 Net effect of dilutive stock options based on the treasury stock method using the average market price 84,454 92,206 75,691 81,749 ---------- ---------- ---------- ---------- Total 2,418,124 2,513,854 2,416,022 2,482,509 ========== ========== ========== ========== Net earnings $ 867,322 $ 767,401 $2,509,629 $1,250,356 ========== ========== ========== ========== Earnings per common and common equivalent share $ 0.36 $ 0.31 $ 1.04 $ 0.50 ========== ========== ========== ========== Fully Diluted: - -------------- Weighted average shares outstanding 2,333,670 2,421,648 2,340,331 2,400,760 Net effect of dilutive stock options based on the treasury stock method using the ending market price 88,438 93,664 88,601 96,067 ---------- ---------- ---------- ---------- Total 2,422,108 2,515,312 2,428,932 2,496,827 ========== ========== ========== ========== Net earnings $ 867,322 $ 767,401 $2,509,629 $1,250,356 ========== ========== ========== ========== Earnings per common and common equivalent share $ 0.36 $ 0.31 $ 1.03 $ 0.50 ========== ========== ========== ==========
EX-27 4 EXHIBIT 27
5 1,000 US DOLLARS 3-MOS MAR-31-1997 APR-01-1996 DEC-31-1996 1 0 0 28,008 0 0 31,353 33,125 19,096 60,151 11,141 0 0 0 290 39,917 60,151 0 103,648 0 98,707 410 0 241 4,290 1,780 2,510 0 0 0 2,510 1.04 1.03
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