-----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, AH28/zAkZ08Gjacd5jQUt+TnFjYfMh1o8XCwsdlkhVK67U8YGyJZsC4x9EU6h0z7 /g2DgwLqZUXQi8rf5e7m5Q== 0000311946-95-000005.txt : 19950517 0000311946-95-000005.hdr.sgml : 19950517 ACCESSION NUMBER: 0000311946-95-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950208 SROS: NONE 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: 95506309 BUSINESS ADDRESS: STREET 1: 3701 SKYPARK DR CITY: TORRANCE STATE: CA ZIP: 90505-4794 BUSINESS PHONE: 310-373-0220 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: DECEMBER 31, 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 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 January 31, 1995. $.10 par value Common - 6,742,567 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 Nine Months Ended December 31 Ended December 31 ___________________ __________________ 1994 1993 1994 1993 REVENUES: Services and systems $80,009 $76,955 $234,170 $238,498 Interest 891 550 2,399 1,380 _______ _______ _______ _______ 80,900 77,505 236,569 239,878 _______ _______ _______ _______ COSTS AND EXPENSES: Costs of services and systems 66,505 65,505 193,662 193,103 Selling and administrative expenses 6,578 5,295 20,784 20,335 _______ _______ _______ _______ 73,083 70,800 214,446 213,438 _______ _______ _______ _______ Income before taxes on income 7,817 6,705 22,123 26,440 Provision for taxes on income -3,091 -2,765 -8,938 -10,773 _______ _______ _______ _______ Income before cumulative effect of a change in accounting principle 4,726 3,940 13,185 15,667 Cumulative effect, on prior years, of change in accounting for taxes on income 635 _______ _______ _______ _______ NET INCOME $ 4,726 $ 3,940 $ 13,185 $ 16,302 Retained earnings at beginning of period 91,311 92,251 87,742 80,903 Cash dividends (Note 2) -540 -506 -1,646 -1,520 Purchase and retirement of treasury shares -5,391 -6,885 -9,175 -6,885 _______ _______ _______ _______ Retained earnings at end of period $90,106 $88,800 $ 90,106 $ 88,800 ======= ======= ======= ======= EARNINGS PER SHARE OF COMMON STOCK: Before cumulative effect of a change in accounting principle $ .67 $ .52 $1.85 $2.07 Cumulative effect, on prior years, of a change in accounting for taxes on income .08 _______ _______ _______ _______ Net income $ .67 $ .52 $1.85 $2.15 ======= ======= ======= ======= Cash dividends per share of common stock (Note 2) .08 .07 .24 .21 Average number of common shares, including common stock equivalents 7,069 7,592 7,139 7,571 See notes to consolidated financial statements LOGICON, INC. CONSOLIDATED BALANCE SHEET (dollars in thousands) 1994 __________________________ December 31 March 31 (unaudited) ASSETS: Current assets: Cash and cash equivalents $ 40,968 $ 43,389 Marketable securities 29,173 27,350 Accounts receivable 35,730 38,865 Prepaid expenses 1,479 1,129 Deferred income tax benefits 6,831 6,387 _______ _______ TOTAL CURRENT ASSETS 114,181 117,120 Equipment and leasehold improvements, net 5,205 5,698 Excess of purchase price over net assets of businesses acquired, net 6,190 6,511 _______ _______ $125,576 $129,329 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable and other accrued liabilities $ 5,155 $ 6,537 Accrued salaries, wages and employee benefits 17,912 20,990 Estimated taxes on income 1,280 4,127 _______ _______ TOTAL CURRENT LIABILITIES 24,347 31,654 _______ _______ STOCKHOLDERS' EQUITY: Common stock $.10 par value - Authorized 40,000,000 shares, outstanding 6,725,000 and 6,922,000 shares 672 692 Other paid-in capital 14,172 11,976 Retained earnings 90,106 87,742 Unrealized loss on available for sale securities -261 -136 Unearned compensation and notes receivable under restricted stock purchase plan -3,460 -2,599 _______ _______ TOTAL STOCKHOLDERS' EQUITY 101,229 97,675 _______ _______ $125,576 $129,329 ======= ======= See notes to consolidated financial statements. LOGICON, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (dollars in thousands) (unaudited) For the Nine Months Ended December 31 __________________ 1994 1993 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $13,185 $16,302 Income charges (credits) not affecting cash-- Depreciation and amortization 2,448 2,383 Provision for the collectibility of accounts receivable -2,000 Amortization of deferred compensation 433 294 Effect of change in accounting for taxes on income -635 Changes in assets and liabilities-- Decrease in accounts receivable 3,135 16,605 Increase in deferred income tax benefits -444 -861 Increase in prepaid expenses -350 -264 Decrease in accounts payable and other accrued liabilities -1,382 -2,351 Decrease in accrued salaries, wages and employee benefits -3,078 -5,704 Increase (decrease) in income taxes payable -2,847 1,894 _______ _______ Net cash provided by operating activities 11,100 25,663 _______ _______ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of equipment and leasehold improvements, net of sales -1,634 -1,836 Purchase of available for sale securities -1,948 -37,195 _______ _______ Net cash used in investing activities -3,582 -39,031 _______ _______ CASH FLOWS FROM FINANCING ACTIVITIES: Cash dividends (Note 2) -1,646 -1,520 Transactions of stock plans 1,364 1,352 Purchase and retirement of treasury shares -9,657 -7,202 _______ _______ Net cash used in financing activities -9,939 -7,370 _______ _______ Net decrease in cash and cash equivalents -2,421 -20,738 Cash and cash equivalents at beginning of period 43,389 48,089 _______ _______ CASH AND CASH EQUIVALENTS AT END OF PERIOD $40,968 $27,351 ======= ======= Cash paid for income taxes $11,956 $ 8,944 ======= ======= 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 nine months ended December 31, 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 nine months ended December 31, 1994, and 1993 have been made. NOTE 2. DIVIDENDS. On December 9, 1994, the Company declared a quarterly cash dividend of eight cents per share, which was paid on January 10, 1995, to stockholders of record as of December 20, 1994. NOTE 3. SUBSEQUENT EVENTS. On January 20, 1995, Logicon and Harnischfeger Industries, Inc. signed an agreement whereby Logicon will acquire Harnischfeger's Syscon Corporation subsidiary. Syscon had revenues of approximately $130 million for its fiscal year ended October 31, 1994, and has 1,500 employees. Its headquarters are in Falls Church, Virginia, and there are major offices in Arlington, Dahlgren and Virginia Beach, Virginia; Gautier, Mississippi; Newport,Rhode Island; and San Diego, California. The company specializes in systems engineering, software development and systems development and integration for the Department of Defense and other government customers. 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 Nine Months Ended December 31 December 31 _______________________________________________________________________ (dollars in thousands) 1994 1993 1994 1993 Revenues from services and systems: Cost plus fixed fee $21,607 $23,542 $58,971 $69,489 Cost plus award and incentive fee 27,099 29,614 87,034 98,602 Fixed-price 11,361 7,347 31,046 25,139 Time and material 19,942 16,452 57,119 45,268 _______ _______ _______ _______ $80,009 $76,955 $234,170 $238,498 ======= ======= ======= ======= At At December 31 March 31 _________________________________________________________________________ (dollars in thousands) 1994 1993 1994 Backlog: Firm Contracts: Cost plus fixed fee $158,729 $152,015 $139,118 Cost plus award and incentive fee 101,246 105,111 102,952 Fixed-price 45,924 18,468 17,919 Time and material 119,564 87,936 87,078 _________ _______ _______ 425,463 363,530 347,067 _________ _______ _______ Contract options and untasked indefinite quantity contract values: Cost type 342,317 230,033 259,882 Fixed-price 738,711 105,302 98,521 Time and material 24,762 24,299 21,941 _________ _______ _______ 1,105,790 359,634 380,344 _________ _______ _______ Total Backlog $1,531,253 $723,164 $727,411 ========= ======= ======= REVENUES AND BACKLOG (CONT.) Contract revenues during the first nine months of fiscal year 1995 were 1.8% less than in the first nine months of fiscal year 1994. Backlog at December 31, 1994, including priced options, increased by more than 110% from backlog at December 31, 1993 and March 31, 1994. The large increase in backlog during the first nine months 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. During the third quarter of fiscal 1995, the DOD's Formal Qualification Tests (FQT) associated with Logicon's I-CASE contract were successfully completed, resulting in the formal establishment of the I-CASE baseline. At the close of the quarter, the first six of the LOGICORE (TM) systems were shipped to Navy, Air Force, Marine Corps and Defense Logistics sites. Third quarter fiscal 1995 bookings include $17 million in additional tasks under the Joint Interoperability Engineering Organization contract; $15.4 million for support of the U.S. Army's Battle Command Training Program; $10.6 million for development, testing and fielding of advanced C3I systems at the U.S. Army's Experimentation Site at Fort Lewis in Tacoma, Washington; and $7.9 million for continued support of the Strategic/Mating and Ranging Software contract. PROFIT MARGINS Three Months Ended Nine Months Ended December 31 December 31 _______________________________________________________________________ 1994 1993 1994 1993 Return on revenue before tax 9.7% 8.7% 9.4% 11.0% Return on revenue before cumulative effect of an accounting change 5.8% 5.1% 5.6% 6.5% Return on revenue 5.8% 5.1% 5.6% 6.8% Income tax rate 39.5% 41.2% 40.4% 40.7% Nine month results for the period ended December 31, 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 nine months of fiscal 1994 was also increased by $635,000, or eight cents per share, as a result of the Company's adoption of Financial Accounting Standard No. 109, "Accounting for Income Taxes". These two events added 1.9% to the first nine months of fiscal 1994 after tax results. Excluding the non-recurring items mentioned above, after tax results improved for the first nine months of fiscal year 1995 by .7% over the first nine months of fiscal year 1994 due to an increase in interest income received on a larger cash and marketable securities portfolio earning interest at higher short-term rates and improved margins on award fees and time and material contracts. Days sales in receivables decreased to 42 days for December 31, 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 $11.1 million in the first nine months of fiscal 1995 and $25.7 million in the first nine months of fiscal 1994, and is the Company's primary source of liquidity. The Company's working capital increased to $89.8 million at December 31, 1994, from $85.5 million at March 31, 1994. The strong working capital position is reflected in the current ratio of 4.7 to 1 at December 31, 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 nine months of fiscal year 1995. PURCHASE OF TREASURY STOCK 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. The Company purchased and retired 331,300 shares during the first nine months of fiscal 1995. SUBSEQUENT EVENTS On January 20, 1995, Logicon and Harnischfeger Industries, Inc. signed an agreement whereby Logicon will acquire Harnischfeger's Syscon Corporation subsidiary. Syscon had revenues of approximately $130 million for its fiscal year ended October 31, 1994, and has 1,500 employees. Its headquarters are in Falls Church, Virginia, and there are major offices in Arlington, Dahlgren and Virginia Beach, Virginia; Gautier, Mississippi; Newport, Rhode Island; and San Diego, California. The company specializes in systems engineering, software development and systems development and integration for the Department of Defense and other government customers. 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 nine months ended December 31, 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 February 3, 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 Nine Months Ended December 31 December 31 1994 1993 1994 1993 Weighted average number 6,811,000 7,252,000 6,867,000 7,234,000 of shares outstanding during the period Net additional shares issuable in connection with dilutive stock options based upon use of the treasury stock method based on average market prices 258,000 340,000 272,000 337,000 _________ _________ _________ _________ Weighted average number of common shares including common stock equivalents 7,069,000 7,592,000 7,139,000 7,571,000 ========= ========= ========= ========= 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, Q3, FY 1995 FOR THE PERIOD ENDED DECEMBER 31, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000311946 LOGICON, INC. 1,000 9-MOS MAR-31-1995 DEC-31-1994 40,968 29,173 35,730 0 0 114,181 29,743 24,538 125,576 24,347 0 672 0 0 100,557 125,576 234,170 236,569 193,662 214,446 0 0 0 22,123 8,938 13,185 0 0 0 13,185 1.85 1.85
-----END PRIVACY-ENHANCED MESSAGE-----