0000311946-95-000010.txt : 19950809 0000311946-95-000010.hdr.sgml : 19950809 ACCESSION NUMBER: 0000311946-95-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950808 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: 95559583 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: JUNE 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 July 31, 1995. $.10 par value Common - 6,812,602 LOGICON, INC. CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS (shares and dollars in thousands, except per-share data) (unaudited) For the Three Months Ended June 30 ___________________ 1995 1994 REVENUES: Contract revenues $111,667 $75,277 Interest 540 680 ______ ______ 112,207 75,957 COSTS AND EXPENSES 103,160 69,183 _______ _______ Income before taxes on income 9,047 6,774 Provision for taxes on income -3,679 -2,769 _______ _______ NET INCOME 5,368 4,005 Retained earnings at beginning of period 95,889 87,742 Cash dividends (Note 2) -544 -552 Purchase and retirement of treasury shares -1,396 _______ _______ Retained earnings at end of period $100,713 $89,799 ======= ======= EARNINGS PER SHARE OF COMMON STOCK $ .76 $ .56 Cash dividends per share of common stock (Note 2) $.08 $.08 Average number of common shares, including common stock equivalents 7,042 7,172 See notes to consolidated financial statements. LOGICON, INC. CONSOLIDATED BALANCE SHEET (dollars in thousands) 1995 __________________________ June 30 March 31 (unaudited) ASSETS: Current assets: Cash and cash equivalents $25,033 $ 31,564 Marketable securities 9,330 9,210 Accounts receivable 68,914 64,233 Prepaid expenses 2,828 2,418 Deferred income tax benefits 7,761 8,308 _______ _______ TOTAL CURRENT ASSETS 113,866 115,733 Property, plant and equipment, net 8,674 9,090 Excess of purchase price over net assets of businesses acquired, net 27,369 27,654 _______ _______ $149,909 $152,477 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable and other accrued liabilities $9,466 $12,549 Accrued salaries, wages and employee benefits 24,935 30,831 Estimated taxes on income 2,579 1,583 _______ _______ TOTAL CURRENT LIABILITIES 36,980 44,963 _______ _______ STOCKHOLDERS' EQUITY: Common stock $.10 par value - Authorized 40,000,000 shares, outstanding 6,795,000 and 6,753,000 shares 680 675 Other paid-in capital 14,743 14,416 Retained earnings 100,713 95,889 Unrealized loss on available for sale securities -82 -159 Unearned compensation and notes receivable under restricted stock purchase plan -3,125 -3,307 _______ _______ TOTAL STOCKHOLDERS' EQUITY 112,929 107,514 _______ _______ $149,909 $152,477 ======= ======= See notes to consolidated financial statements. LOGICON, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (dollars in thousands) (unaudited) For the Three Months Ended June 30 __________________ 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $5,368 $4,005 Income charges not affecting cash-- Depreciation and amortization 1,285 761 Amortization of deferred compensation 154 121 Provision for deferred taxes 504 Changes in assets and liabilities-- Increase in accounts receivable -4,681 -1,262 Increase in prepaid expenses -410 -687 Decrease in accounts payable and other accrued liabilities -3,083 -349 Decrease in accrued salaries, wages and employee benefits -5,896 -4,842 Increase (decrease) in income taxes payable 996 -267 _______ _______ Net cash used in operating activities -5,763 -2,520 _______ _______ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment, net of sales -584 -314 Maturity of available for sale securities 10,901 _______ _______ Net cash provided by (used in) investing activities -584 10,587 _______ _______ CASH FLOWS FROM FINANCING ACTIVITIES: Cash dividends (Note 2) -544 -552 Transactions of stock plans 360 292 Purchase and retirement of treasury shares -1,460 _______ _______ Net cash used in financing activities -184 -1,720 _______ _______ Net increase (decrease) in cash and cash equivalents -6,531 6,347 Cash and cash equivalents at beginning of period 31,564 43,389 _______ _______ CASH AND CASH EQUIVALENTS AT END OF PERIOD $25,033 $49,736 ======= ======= Cash paid for income taxes $1,225 $2,992 ======= ======= 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 three months ended June 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 three months ended June 30, 1995 and 1994 have been made. NOTE 2. DIVIDENDS. On June 1, 1995, the Company declared a quarterly cash dividend of eight cents per share, which was paid on July 13, 1995, to stockholders of record as of June 29, 1995. NOTE 3. SUBSEQUENT EVENT On August 7, 1995 the Board of Directors voted a two-for-one split of the company's common stock. One additional share will be issued for each share currently outstanding. New shares will be issued on September 13, 1995, to stockholders of record on August 23, 1995. There were 6,822,856 shares outstanding on August 4, 1995. In another action at the same meeting, the Board of Directors declared a cash dividend of five cents per split share, payable on October 17, 1995, to stockholders of record as of September 28, 1995. 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 June 30 ________________________________________________________________________ (dollars in thousands) 1995 1994 Revenues from services and systems: Cost plus fixed fee $30,129 $18,231 Cost plus award and incentive fee 36,162 31,075 Fixed-price 13,826 8,089 Time and material 31,550 17,882 _______ _______ $111,667 $75,277 ======= ======= June 30 March 31 __________________________________________________________________________ (dollars in thousands) 1995 1994 1995 Backlog: Firm Contracts: Cost plus fixed fee $121,803 $119,021 $155,283 Cost plus award and incentive fee 148,492 119,038 163,044 Fixed-price 10,887 25,526 34,166 Time and material 156,026 82,813 165,385 _________ _______ _______ 437,208 346,398 517,878 _________ _______ _______ Contract options and untasked indefinite quantity contract values: Cost type 424,199 235,467 367,904 Fixed-price 747,780 757,795 743,261 Time and material 83,690 31,520 57,285 _________ __________ _________ 1,255,669 1,024,782 1,168,450 _________ __________ _________ Total Backlog $1,692,877 $1,371,180 $1,686,328 ========= ========== ========= REVENUES AND BACKLOG (CONT.) Contract revenues during the first quarter of fiscal year 1996 were 48% higher than in the first quarter of fiscal year 1995. Backlog at June 30, 1995, including priced options, increased by 23% from backlog at June 30, 1994, and remained consistent with backlog at March 31, 1995. Major bookings for the first quarter include a $15 million contract recompetition award from the Naval Undersea Warfare Center for continued support of the Undersea Range Modernization work; $8 million in additional tasks under the JIEO (Joint Interoperability Engineering Organization) contract; and $4 million in task orders under a contract with the Joint Interoperability Test Center. The Company's backlog is not subject to any significant seasonal fluctuations, but is likely to vary substantially as contracts near completion, and in conjunction with the execution of major contract renewals or the award of major new contracts. All the Company's government contracts are subject to termination for convenience or redirection by the customer. PROFIT MARGINS Three Months Ended June 30 _______________________________________________________________________________ 1995 1994 Return on revenue before tax 8.1% 8.9% Return on revenue after tax 4.8% 5.3% Income tax rate 40.7% 40.9% The increase in revenue and net income in the first quarter of fiscal year 1996 from the first quarter of fiscal year 1995 is primarily the result of the acquisition of Syscon Corporation (Syscon) on February 16, 1995. The profit margin for the first quarter of fiscal year 1996 decreased from the margin reported in the first quarter of fiscal year 1995 due to a lower profit margin on the Syscon revenues. Days sales in receivables decreased to 56 days at June 30, 1995, from 69 days at March 31, 1995. The Company has adequate cash and credit lines available to fund fluctuations in receivable balances. LIQUIDITY AND CAPITAL RESOURCES Net cash used in operating activities was $5.8 million and $2.5 million in the first quarter of fiscal years 1996 and 1995, respectively and is the Company's primary source of liquidity. The Company's working capital increased to $76.9 million at June 30, 1995, from $70.8 million at March 31, 1995. The strong working capital position is reflected in the current ratio of 3.1 to 1 at June 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 quarter of fiscal year 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 or results of operations. 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. (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended June 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 August 8, 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 June 30 __________________________________________________________________ 1995 1994 Weighted average number 6,775,000 6,890,000 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 267,000 282,000 _________ _______ Weighted average number of common shares including common stock equivalents 7,042,000 7,172,000 ========= ========= Fully diluted earnings per share of common stock 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, Q1, FY 1996 FOR THE PERIOD ENDED JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000311946 LOGICON, INC. 1,000 3-MOS MAR-31-1995 JUN-30-1995 25,033 9,330 68,914 0 0 113,866 34,764 26,090 149,909 36,980 0 680 0 0 112,249 149,909 111,667 112,207 94,678 103,160 0 0 0 9,047 3,679 5,368 0 0 0 5,368 .76 .76