-----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, TBvdbPwEKsPXYMDxvvYV+hzag02FeG1iK3y9zDaD91YQgEnXUHw0NdccOTPsFJiC pIRoaBhlmP8sbZpTaEWj0A== 0000311946-95-000013.txt : 19951102 0000311946-95-000013.hdr.sgml : 19951102 ACCESSION NUMBER: 0000311946-95-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951101 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LOGICON INC /DE/ CENTRAL INDEX KEY: 0000311946 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [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: 95586411 BUSINESS ADDRESS: STREET 1: 3701 SKYPARK DR CITY: TORRANCE STATE: CA ZIP: 90505-4794 BUSINESS PHONE: 3103730220X3237 MAIL ADDRESS: STREET 1: 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, 1995 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, 1995. $.10 par value Common -13,855,627 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 ___________________ __________________ 1995 1994 1995 1994 REVENUES: Contract revenues $114,086 $78,884 $225,753 $154,161 Interest 536 828 1,076 1,508 _______ _______ _______ _______ 114,622 79,712 226,829 155,669 _______ _______ _______ _______ COSTS AND EXPENSES: Costs of contract revenues 96,023 65,748 190,701 127,157 Selling and administrative expenses 8,931 6,432 17,413 14,206 _______ _______ _______ _______ 104,954 72,180 208,114 141,363 _______ _______ _______ _______ Income before taxes on income 9,668 7,532 18,715 14,306 Provision for taxes on income -3,910 -3,078 -7,589 -5,847 _______ _______ _______ _______ NET INCOME 5,758 4,454 11,126 8,459 Retained earnings at beginning of period 100,713 89,799 95,889 87,742 Cash dividends (Note 2) -691 -554 -1,235 -1,106 Purchase and retirement of treasury shares -2,388 -3,784 _______ _______ _______ _______ Retained earnings at end of period $105,780 $91,311 $105,780 $ 91,311 ======= ======= ======= ======= EARNINGS PER SHARE OF COMMON STOCK $0.41 $0.31 $0.79 $0.59 ======= ======= ======= ======= Cash dividends per share of common stock (Note 2) $0.05 $0.04 $0.09 $0.08 Average number of common shares, including common stock equivalents 14,209 14,354 14,146 14,349 See notes to consolidated financial statements. LOGICON, INC. CONSOLIDATED BALANCE SHEET (dollars in thousands) 1995 __________________________ September 30 March 31 (unaudited) ASSETS: Current assets: Cash and cash equivalents $ 33,283 $ 31,564 Marketable securities 9,408 9,210 Accounts receivable 67,586 64,233 Prepaid expenses 3,706 2,418 Deferred income tax benefits 7,827 8,308 _______ _______ TOTAL CURRENT ASSETS 121,810 115,733 Property, plant and equipment, net 9,113 9,090 Excess of purchase price over net assets of businesses acquired, net 27,127 27,654 _______ _______ $158,050 $152,477 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable and other accrued liabilities $ 8,666 $ 12,549 Accrued salaries, wages and employee benefits 29,346 30,831 Estimated taxes on income 1,583 _______ _______ TOTAL CURRENT LIABILITIES 38,012 44,963 _______ _______ STOCKHOLDERS' EQUITY: Common stock $.10 par value - Authorized 40,000,000 shares, outstanding 13,825,000 and 6,753,000 shares (Note 3) 1,382 675 Other paid-in capital 15,846 14,416 Retained earnings 105,780 95,889 Unrealized loss on available for sale securities -58 -159 Unearned compensation and notes receivable under restricted stock purchase plan -2,912 -3,307 _______ _______ 120,038 107,514 _______ _______ $158,050 $152,477 ======= ======= See notes to consolidated financial statements. LOGICON, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (dollars in thousands) (unaudited) For the Six Months Ended September 30 __________________ 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $11,126 $ 8,459 Income charges (credits) not affecting cash-- Depreciation and amortization 2,517 1,569 Amortization of deferred compensation 293 280 Provision for(benefit from) deferred taxes 384 -118 Changes in assets and liabilities-- Decrease (increase) in accounts receivable -3,353 5,172 Increase in prepaid expenses -1,288 -467 Decrease in accounts payable and other accrued liabilities -3,883 -1,716 Decrease in accrued salaries, wages and employee benefits -1,485 -1,420 Decrease in income taxes payable -1,583 -3,066 _______ _______ Net cash provided by operating activities 2,728 8,693 _______ _______ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment, net of sales -2,013 -1,039 Purchase of available for sale securities -9,923 _______ _______ Net cash used in investing activities -2,013 -10,962 _______ _______ CASH FLOWS FROM FINANCING ACTIVITIES: Cash dividends (Note 2) -1,235 -1,106 Transactions of stock plans 2,239 1,034 Purchase and retirement of treasury shares -3,969 _______ _______ Net cash used in financing activities 1,004 -4,041 _______ _______ Net increase (decrease) in cash and cash equivalents 1,719 -6,310 Cash and cash equivalents at beginning of period 31,564 43,389 _______ _______ CASH AND CASH EQUIVALENTS AT END OF PERIOD $33,283 $37,079 ======= ======= Cash paid for income taxes $ 8,341 $ 8,441 ======= ======= 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, 1995. Results for the six months ended September 30, 1995, 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, 1995, and 1994 have been made. NOTE 2. DIVIDENDS. On August 7, 1995, the Company declared a quarterly cash dividend of five cents per share, which was paid on October 17, 1995, to stockholders of record as of September 28, 1995. NOTE 3. TWO-FOR-ONE STOCK SPLIT. On August 7, 1995, the Company declared a two-for-one split of the Company's common stock providing one additional share to be issued for each share outstanding to shareholders of record on August 23, 1995. New shares were issued on September 13, 1995. Accordingly, all per share data presented have been restated to reflect the stock split. NOTE 4. SUBSEQUENT EVENTS. On October 3, 1995, Logicon completed the acquisition of the Space and Engineering Group of Applied Technology Associates, Inc. As a result of the acquisition, the Space and Engineering Group has become a unit of Logicon Ultrasystems, Inc. The Space and Engineering Group has annual revenues of approximately $10 million and is primarily located in Mountain View, California. On October 18, 1995, the Company signed an agreement to acquire the defense business of Geodynamics Corporation. Geodynamics is based in Torrance, California, and has 410 employees and annual revenues on defense-related business of approximately $55 million. The transaction will be consummated through a plan of acquisition whereby holders of Geodynamics shares will receive between $11.15 and $11.25 per share from Logicon plus shares in Geodynamics' wholly-owned subsidiary, LaFehr and Chan Technologies, Inc. (LCT). The agreement is subject to Geodynamics shareholder approval. Closing is expected after a shareholder vote in early 1996. 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) 1995 1994 1995 1994 Contract revenues: Cost plus fixed fee $ 31,057 $19,133 $ 61,186 $ 37,364 Cost plus award and incentive fee 36,485 28,860 72,647 59,935 Fixed-price 16,600 11,596 30,426 19,685 Time and material 29,944 19,295 61,494 37,177 _______ _______ _______ _______ $114,086 $78,884 $225,753 $154,161 ======= ======= ======= ======= September 30 March 31 ______________________________________________________________________ (dollars in thousands) 1995 1994 1995 Backlog: Firm Contracts: Cost plus fixed fee $ 118,123 $ 164,896 $ 155,283 Cost plus award and incentive fee 143,732 120,039 163,044 Fixed-price 42,326 49,214 34,166 Time and material 171,924 103,544 165,385 _________ _______ _______ 476,105 437,693 517,878 _________ _______ _______ Contract options and untasked indefinite quantity contract values: Cost type 628,829 350,193 367,904 Fixed-price 739,353 740,702 743,261 Time and material 123,411 21,165 57,285 _________ _______ _______ 1,491,593 1,112,060 1,168,450 _________ _______ _______ Total Backlog $1,967,698 $1,549,753 $1,686,328 ========= ======= ======= REVENUES AND BACKLOG (CONT.) Contract revenues during the first half of fiscal year 1996 were 46% higher than in the first half of fiscal year 1995. Backlog at September 30, 1995, including priced options, increased by 27% from backlog at September 30, 1994, and increased by 17% from backlog at March 31, 1995. The increase in revenue and net income in the first half of fiscal year 1996 from the first half of fiscal year 1995 is primarily the result of the acquisition of Syscon Corporation (Syscon) on February 16, 1995. Second quarter bookings include the award of an indefinite-delivery/indefinite quantity contract, valued at $200 million from the Internal Revenue Service to provide engineering and software services in support of its program to modernize its information systems; $30 million in additional tasks under the Joint Interoperability Engineering Organization (JIEO) contract; a one-year extension on the Navy Center for Tactical Systems Interoperability (NCTSI) contract, valued at $16.8 million; and a five-year subcontract, valued at $20 million, from Computer Sciences Corporation, for automated data processing facilities management support services to the Health Care Financing Administration. PROFIT MARGINS Three Months Ended Six Months Ended September 30 September 30 _______________________________________________________________________ 1995 1994 1995 1994 Return on revenue before tax 8.4% 9.4% 8.3% 9.2% Return on revenue after tax 5.0% 5.6% 4.9% 5.4% Income tax rate 40.4% 40.9% 40.6% 40.9% The profit margin for the first half of fiscal year 1996 decreased from the margin reported in the first half of fiscal year 1995 due to lower profit margins on the Syscon revenues and to a decrease in interest income earned on a smaller cash and marketable securities portfolio. Days sales in receivables decreased to 55 days for September 30, 1995, from 69 days for March 31, 1995. 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 $2.7 million in the first half of fiscal 1996 and $8.7 million in the first half of fiscal 1995, and is the Company's primary source of liquidity. The Company's working capital increased to $83.8 million at September 30, 1995, from $70.8 million at March 31, 1995. The strong working capital position is reflected in the current ratio of 3.2 to 1 at September 30, 1995. 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 1996. PURCHASE OF TREASURY STOCK On October 13, 1995, the Board of Directors authorized the Company to spend up to $10 million to repurchase additional shares of the Company's common stock in open market transactions. SUBSEQUENT EVENTS On October 3, 1995, Logicon completed the acquisition of the Space and Engineering Group of Applied Technology Associates. The Space and Engineering Group has annual revenues of approximately $10 million, and is primarily located in Mountain View, California. On October 18, 1995, the Company signed an agreement to acquire the defense business of Geodynamics Corporation. Geodynamics is based in Torrance, California, and has 410 employees and annual revenues on defense-related business of approximately $55 million. The transaction will be consummated through a plan of acquisition whereby holders of Geodynamics shares will receive between $11.15 and $11.25 per share from Logicon plus shares in Geodynamics' wholly-owned subsidiary, LaFehr and Chan Technologies, Inc. (LCT). The agreement is subject to Geodynamics shareholder approval. Closing is expected after a shareholder vote in early 1996. 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 (b) Reports on Form 8-K No reports on Form 8-K were filed during the six months ended September 30, 1995. 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. 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 October 31, 1995. 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 1995 1994 1995 1994 Weighted average number of shares outstanding during the period 13,692,000 13,804,000 13,621,000 13,791,000 Net additional shares issuable in connection with dilutive stock options based upon use of the treasury stock method based on average market prices 517,000 550,000 525,000 558,000 _________ _________ _________ _________ Weighted average number of common shares including common stock equivalents 14,209,000 14,354,000 14,146,000 14,349,000 ========= ========= ========= ========= 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 SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (FORM 10-Q Q2 FY96 FOR THE PERIOD ENDED SEPTEMBER 30, 1995) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000311946 LOGICON, INC. 1,000 6-MOS MAR-31-1996 SEP-30-1995 33,283 9,408 67,586 0 0 121,810 36,015 26,902 158,050 38,012 0 1,382 0 0 118,656 158,050 225,753 226,829 190,701 208,114 0 0 0 18,715 7,589 11,126 0 0 0 11,126 .79 .79
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