-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, QgXjhQ1p651yRP5k0M3Lnu8lacf0+ofdam7kFSJz//Gt/IddGaALh7uT3eiO1je/ 7VvirGpVOdO4sadnYUqX7A== 0000311946-94-000004.txt : 19941109 0000311946-94-000004.hdr.sgml : 19941109 ACCESSION NUMBER: 0000311946-94-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941102 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LOGICON INC /DE/ CENTRAL INDEX KEY: 0000311946 STANDARD INDUSTRIAL CLASSIFICATION: 7371 IRS NUMBER: 952126773 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07777 FILM NUMBER: 94557428 BUSINESS ADDRESS: STREET 1: 3701 SKYPARK DR CITY: TORRANCE STATE: CA ZIP: 90505-4794 BUSINESS PHONE: 3103730220 MAIL ADDRESS: STREET 2: 3701 SKYPARK DRIVE CITY: TORRANCE STATE: CA ZIP: 90505-4794 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark one) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 FOR THE QUARTERLY PERIOD ENDED: SEPTEMBER 30, 1994 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number: 1-7777 LOGICON, INC. DELAWARE 95-2126773 (State or other jurisdiction of (IRS Employer incorporation or organization) identification number) 3701 Skypark Drive, Torrance, California 90505-4794 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (310) 373-0220 Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the previous 12 months (or for such shorter period that the registrant was required to file) and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of October 31, 1994. $.10 par value Common - 6,849,743 LOGICON, INC. CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS (shares and dollars in thousands, except per-share data) (unaudited) For the Three Months For the Six Months Ended September 30 Ended September 30 ___________________ __________________ 1994 1993 1994 1993 REVENUES: Services and systems $78,884 $82,743 $154,161 $161,543 Interest 828 443 1,508 830 _______ _______ _______ _______ 79,712 83,186 155,669 162,373 _______ _______ _______ _______ COSTS AND EXPENSES: Costs of services and systems 65,748 63,056 127,157 127,598 Selling and administrative expenses 6,432 6,630 14,206 15,040 _______ _______ _______ _______ 72,180 69,686 141,363 142,638 _______ _______ _______ _______ Income before taxes on income 7,532 13,500 14,306 19,735 Provision for taxes on income -3,078 -5,522 -5,847 -8,008 _______ _______ _______ _______ Income before cumulative effect of a change in accounting principle 4,454 7,978 8,459 11,727 Cumulative effect, on prior years, of change in accounting for taxes on income 635 _______ _______ _______ _______ NET INCOME 4,454 7,978 8,459 12,362 Retained earnings at beginning of period 89,799 84,782 87,742 80,903 Cash dividends (Note 2) -554 -509 -1,106 -1,014 Purchase and retirement of treasury shares -2,388 -3,784 _______ _______ _______ _______ Retained earnings at end of period $91,311 $92,251 $91,311 $92,251 ======= ======= ======= ======= EARNINGS PER SHARE OF COMMON STOCK: Before cumulative effect of a change in accounting principle $0.62 $1.05 $1.18 $1.55 Cumulative effect, on prior years, of a change in accounting for taxes on income 0.08 _______ _______ _______ _______ Net income $0.62 $1.05 $1.18 $1.63 ======= ======= ======= ======= Cash dividends per share of common stock (Note 2) $0.08 $0.07 $0.16 $0.14 Average number of common shares, including common stock equivalents 7,177 7,608 7,174 7,561 See notes to consolidated financial statements LOGICON, INC. CONSOLIDATED BALANCE SHEET (dollars in thousands) 1994 _________________________ September 30 March 31 (unaudited) ASSETS: Current assets: Cash and cash equivalents $ 37,079 $ 43,389 Marketable securities 37,204 27,350 Accounts receivable 33,693 38,865 Prepaid expenses 1,596 1,129 Deferred income tax benefits 6,505 6,387 _______ _______ TOTAL CURRENT ASSETS 116,077 117,120 Equipment and leasehold improvements, net 5,382 5,698 Excess of purchase price over net assets of businesses acquired, net 6,297 6,511 _______ _______ $127,756 $129,329 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable and other accrued liabilities $ 4,821 $ 6,537 Accrued salaries, wages and employee benefits 19,570 20,990 Estimated taxes on income 1,061 4,127 _______ _______ TOTAL CURRENT LIABILITIES 25,452 31,654 _______ _______ STOCKHOLDERS' EQUITY: Common stock $.10 par value - Authorized 40,000,000 shares, outstanding 6,888,000 and 6,922,000 shares 689 692 Other paid-in capital 14,123 11,976 Retained earnings 91,311 87,742 Unrealized loss on available for sale securities -205 -136 Unearned compensation and notes receivable under restricted stock purchase plan -3,614 -2,599 _______ _______ 102,304 97,675 _______ _______ $127,756 $129,329 ======= ======= See notes to consolidated financial statements. LOGICON, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (dollars in thousands) (unaudited) For the Six Months Ended September 30 __________________ 1994 1993 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 8,459 $12,362 Income charges (credits) not affecting cash-- Depreciation and amortization 1,569 1,470 Amortization of deferred compensation 280 174 Effect of change in accounting for taxes on income -635 Changes in assets and liabilities-- Decrease in accounts receivable 5,172 9,814 Increase in deferred income tax benefits -118 -68 Increase in prepaid expenses -467 -385 Decrease in accounts payable and other accrued liabilities -1,716 -2,333 Decrease in accrued salaries, wages and employee benefits -1,420 -4,317 Increase (decrease) in income taxes payable -3,066 1,948 _______ _______ Net cash provided by operating activities 8,693 18,030 _______ _______ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of equipment and leasehold improvements, net of sales -1,039 -1,033 Purchase of available for sale securities -9,923 _______ _______ Net cash used in investing activities -10,962 -1,033 _______ _______ CASH FLOWS FROM FINANCING ACTIVITIES: Cash dividends (Note 2) -1,106 -1,014 Transactions of stock plans 1,034 713 Purchase and retirement of treasury shares -3,969 _______ _______ Net cash used in financing activities -4,041 -301 _______ _______ Net increase (decrease) in cash and cash equivalents -6,310 16,696 Cash and cash equivalents at beginning of period 43,389 48,089 _______ _______ CASH AND CASH EQUIVALENTS AT END OF PERIOD $37,079 $64,785 ======= ======= Cash paid for income taxes $ 8,441 $ 5,563 ======= ======= See notes to consolidated financial statements. LOGICON, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) NOTE 1. ACCOUNTING POLICIES. The consolidated financial information included in this report has been prepared in accordance with the accounting principles reflected in the consolidated financial statements in Form 10-K filed with the Securities and Exchange Commission for the year ended March 31, 1994. Results for the six months ended September 30, 1994, are not necessarily indicative of results for the entire year. In the opinion of Company management, all adjustments consisting of recurring accruals and other normal month-end adjustments necessary for a fair presentation of net income for the unaudited six months ended September 30, 1994, and 1993 have been made. NOTE 2. DIVIDENDS. On August 1, 1994, the Company declared a quarterly cash dividend of eight cents per share, which was paid on October 11, 1994, to stockholders of record as of September 11, 1994. LOGICON, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS REVENUES AND BACKLOG The following tables present an analysis of the Company's revenues and backlog by contract type:
Three Months Ended Six Months Ended September 30 September 30 _______________________________________________________________________________ (dollars in thousands) 1994 1993 1994 1993 Revenues from services and systems: Cost plus fixed fee $19,133 $46,880 $ 37,364 $68,988 Cost plus award and incentive fee 28,860 9,583 59,935 45,947 Fixed-price 11,596 10,845 19,685 17,792 Time and material 19,295 15,435 37,177 28,816 _______ _______ _______ _______ $78,884 $82,743 $154,161 $161,543 ======= ======= ======= ======= At At September 30 March 31 ______________________________________________________________________________ (dollars in thousands) 1994 1993 1994 Backlog: Firm Contracts: Cost plus fixed fee $ 164,896 $163,338 $139,118 Cost plus award and incentive fee 120,039 107,445 102,952 Fixed-price 49,214 20,324 17,919 Time and material 103,544 69,783 87,078 _________ _______ _______ 437,693 360,890 347,067 _________ _______ _______ Contract options and untasked indefinite quantity contract values: Cost type 350,193 271,546 259,882 Fixed-price 740,702 96,997 98,521 Time and material 21,165 31,615 21,941 _________ _______ _______ 1,112,060 400,158 380,344 _________ _______ _______ Total Backlog $1,549,753 $761,048 $727,411 ========= ======= =======
REVENUES AND BACKLOG (CONT.) Contract revenues during the first half of fiscal year 1995 were five percent lower than in the first half of fiscal year 1994. Backlog at September 30, 1994, including priced options, increased by 104% from backlog at September 30, 1993, and increased by 113% from backlog at March 31, 1994. The large increase in backlog during the first half of fiscal 1995 is primarily attributable to the award of the I-CASE contract to Logicon by the U.S. Air Force Standard Systems Center in April. The estimated value of this contract is $670 million over a 10-year period. Logicon will provide Integrated Computer-Aided Software Engineering (I-CASE) systems to the DOD which will be used to establish software engineering environments and standardize the software development process for automated information systems. The Company enjoyed a very active booking period during the second quarter of fiscal year 1995, recording $269 million in contract awards. Highlights include: a five-year contract, potentially valued at $135 million, for Logicon's continued support of the U.S. Army's Battle Command Training Program; $28.4 million in additional funding under the JIEO (Joint Interoperability Engineering Organization) contract; a four-year contract with the U.S. Army Reserve Component, potentially valued at $11 million, for support of the Battle Command Staff Training Program at seven Army reserve sites across the U.S.; a six-year contract with the U.S. Air Force, potentially valued at $8.6 million, for development and integration of the B-1B aircraft's mission planning system; a five-year follow-on contract from the U.S. Army, potentially valued at $15.9 million, for combat training simulation support to the XVIII Airborne Corps at five U.S. sites; a five-year follow-on contract from the U.S. Naval Sea Systems Command, potentially valued at $9.1 million, for data link test equipment and services for the Aegis Cruiser shipbuilding program; and a three-year follow-on contract valued at $8.4 million from the U.S. Air Force's Phillips Laboratory for operation and maintenance support for several Laser Site Research Centers. PROFIT MARGINS Three Months Ended Six Months Ended September 30 September 30 _____________________________________________________________________________ 1994 1993 1994 1993 Return on revenue before tax 9.4% 16.2% 9.2% 12.2% Return on revenue before cumulative effect 5.6% 9.6% 5.4% 7.2% Income tax rate 40.9% 40.9% 40.9% 40.6% Return on revenue 5.6% 9.6% 5.4% 7.6% Second quarter and six month results for the period ended September 30, 1993, include net income of $3.9 million or 51 cents per share, and revenues of $4 million resulting from the settlement of two claims the Company had filed with the United States Court of Federal Claims. The claims were for increased costs relating to changes in contract requirements for two fixed-price development contracts with the U.S. Navy to provide air traffic controller training systems, which were delivered and accepted by the U.S. Navy in prior periods. Net income during the first six months of fiscal 1994 was also increased by $635,000, or eight cents per share, as a result of the Financial Accounting Standard No. 109, "Accounting for Income Taxes". These two events added 2.8% to the first half of fiscal 1994 after tax results. Excluding the non-recurring items mentioned above, after tax results improved for the first half of fiscal year 1995 by .6% over the first half of fiscal year 1994 due to an increase in interest income received on a larger cash and marketable securities portfolio earning interest at a higher short-term rate and improved margins on award fees and time and material contracts. Days sales in receivables decreased to 40 days for September 30, 1994, from 45 days for March 31, 1994. The Company has adequate cash and credit lines available to fund fluctuations in receivable balances. LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities was $8.7 million in the first half of fiscal 1995 and $18 million in the first half of fiscal 1994, and is the Company's primary source of liquidity. The Company's working capital increased to $90.6 million at September 30, 1994, from $85.5 million at March 31, 1994. The strong working capital position is reflected in the current ratio of 4.6 to 1 at September 30, 1994. The Company's Consolidated Balance Sheet is exceptionally strong, with no debt. Management believes that the Company's existing capital resources are sufficient to provide for its operating needs and continued growth. A $25,000,000 unsecured line of credit exists to provide working capital for temporary requirements. There were no borrowings under the line during the first half of fiscal year 1995. PURCHASE OF TREASURY STOCK The Company purchased 86,300 shares for an aggregate cost of $2.5 million during the second quarter of fiscal year 1995. On August 1, 1994, the Board of Directors renewed the authorization for the Company to spend up to $20 million to repurchase additional shares of the Company's common stock in open market transactions. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. There are no pending or existing legal proceedings which, in the opinion of Company management, if decided against the Company, would have any material adverse effect on its financial position. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. a) Exhibits Exhibit No. Description 4 Instruments defining rights of security holders (a) Common Stock Certificate (1) (b) Stockholder Rights Plan (2) 11 Statement regarding computation of earnings per share. 27 Financial Data Schedule Note: (1) Filed with the Securities and Exchange Commission in Form 8-A on December 14, 1984, registration No. 1-7777. (2) Filed with the Securities and Exchange Commission in Form 8-A on May 7, 1990. (b) Reports on Form 8-K No reports on Form 8-K were filed during the six months ended September 30, 1994. LOGICON, INC. SIGNATURE 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, in the City of Torrance, State of California, on November 1, 1994. LOGICON, INC. registrant RALPH L. WEBSTER Ralph L. Webster, Vice President - Chief Financial Officer (Principal Financial Officer and Duly Authorized to Sign on Behalf of Registrant) Exhibit 11 LOGICON, INC. COMPUTATION OF EARNINGS PER SHARE Earnings per share of common stock, including common stock equivalents, have been computed based on the following weighted average number of shares: Three Months Ended Six Months Ended September 30 September 30 1994 1993 1994 1993 Weighted average number of shares outstanding during the period 6,902,000 7,254,000 6,895,000 7,226,000 Net additional shares issuable in connection with dilutive stock options based upon use of the treasury stock method based on average market prices 275,000 354,000 279,000 335,000 _________ _________ _________ _________ Weighted average number of common shares including common stock equivalents 7,177,000 7,608,000 7,174,000 7,561,000 ========= ========= ========= ========= Earnings per share of common stock fully diluted are omitted because there is less than 3% dilution in any period. EX-27 2
5 THIS SCHEDLE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (FORM 10-Q Q2 FY95 FOR THE PERIOD ENDED SEPTEMBER 30, 1994) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000311946 LOGICON, INC. 1,000 6-MOS MAR-31-1995 SEP-30-1994 37,079 37,204 33,693 0 0 116,077 29,338 23,956 127,756 25,452 0 689 0 0 101,615 127,756 154,161 155,669 127,157 141,363 0 0 0 14,306 5,847 8,459 0 0 0 8,459 1.18 1.18
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