-----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, D4np332PgbCkpGIviZ2nhJokehVRdetTLbzp3jw53D2MKTp4gn4YOoKqdCSPXLT3 zjsKM8+/6Wns68fnEjAtbg== 0000311946-96-000005.txt : 19960213 0000311946-96-000005.hdr.sgml : 19960213 ACCESSION NUMBER: 0000311946-96-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960212 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: 96515136 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: DECEMBER 31, 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 January 31, 1996. $.10 par value Common - 13,905,142 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 ___________________ __________________ 1995 1994 1995 1994 REVENUES: Contract revenues $120,605 $80,009 $346,358 $234,170 Interest 659 891 1,735 2,399 _______ _______ _______ _______ 121,264 80,900 348,093 236,569 _______ _______ _______ _______ COSTS AND EXPENSES: Costs of contract revenues 99,532 66,505 290,233 193,662 Selling and administrative expenses 10,144 6,578 27,557 20,784 _______ _______ _______ _______ 109,676 73,083 317,790 214,446 _______ _______ _______ _______ Income before taxes on income 11,588 7,817 30,303 22,123 Provision for taxes on income -4,710 -3,091 -12,299 -8,938 _______ _______ _______ _______ NET INCOME 6,878 4,726 18,004 13,185 Retained earnings at beginning of period 105,780 91,311 95,889 87,742 Cash dividends (Note 2) -694 -540 -1,929 -1,646 Purchase and retirement of treasury shares -5,391 -9,175 _______ _______ _______ _______ Retained earnings at end of period $111,964 $90,106 $111,964 $ 90,106 ======= ======= ======= ======= EARNINGS PER SHARE OF COMMON STOCK $0.48 $0.33 $1.27 $0.92 (Note 3) ======= ======= ======= ======= Cash dividends per share of common stock (Note 2) $0.05 $0.04 $0.14 $0.12 Average number of common shares, including common stock equivalents 14,241 14,138 14,178 14,278 (Note 3) See notes to consolidated financial statements LOGICON, INC. CONSOLIDATED BALANCE SHEET (dollars in thousands) 1995 __________________________ December 31 March 31 (unaudited) ASSETS: Current assets: Cash and cash equivalents $ 27,587 $ 31,564 Marketable securities 9,328 9,210 Accounts receivable 84,569 64,233 Prepaid expenses 1,419 2,418 Deferred income tax benefits 8,654 8,308 _______ _______ TOTAL CURRENT ASSETS 131,557 115,733 Property, plant and equipment, net 9,092 9,090 Excess of purchase price over net assets of businesses acquired, net 27,939 27,654 _______ _______ $168,588 $152,477 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable and other accrued liabilities $ 13,635 $ 12,549 Accrued salaries, wages and employee benefits 26,941 30,831 Estimated taxes on income 246 1,583 _______ _______ TOTAL CURRENT LIABILITIES 40,822 44,963 _______ _______ STOCKHOLDERS' EQUITY: Common stock $.10 par value - Authorized 40,000,000 shares, outstanding 13,889,000 and 6,753,000 shares (Note 3) 1,389 675 Other paid-in capital 17,493 14,416 Retained earnings 111,964 95,889 Unrealized loss on available for sale securities -25 -159 Unearned compensation and notes receivable under restricted stock purchase plan -3,055 -3,307 _______ _______ TOTAL STOCKHOLDERS' EQUITY 127,766 107,514 _______ _______ $168,588 $152,477 ======= ======= See notes to consolidated financial statements. LOGICON, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (dollars in thousands) (unaudited) For the Nine Months Ended December 31 __________________ 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $18,004 $13,185 Income charges (credits) not affecting cash-- Depreciation and amortization 5,060 2,448 Amortization of deferred compensation 409 433 Benefit from deferred taxes -330 -444 Changes in assets and liabilities, net of acquisition-- Accounts receivable -18,878 3,135 Prepaid expenses 1,017 -350 Accounts payable and other accrued liabilities 975 -1,382 Accrued salaries, wages and employee benefits -3,890 -3,078 Income taxes payable -1,337 -2,847 _______ _______ Net cash provided from operating activities 1,030 11,100 _______ _______ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant, and equipment, net of sales -3,638 -1,634 Purchase of available for sale securities -1,948 Payment for acquisition, net of cash acquired (Note 4) -3,074 _______ _______ Net cash used in investing activities -6,712 -3,582 _______ _______ CASH FLOWS FROM FINANCING ACTIVITIES: Cash dividends (Note 2) -1,929 -1,646 Transactions of stock plans 3,634 1,364 Purchase and retirement of treasury shares -9,657 _______ _______ Net cash provided by (used in) financing activities 1,705 -9,939 ______ _______ Net decrease in cash and cash equivalents -3,977 -2,421 Cash and cash equivalents at beginning of period 31,564 43,389 _______ _______ CASH AND CASH EQUIVALENTS AT END OF PERIOD $27,587 $40,968 ======= ======= Cash paid for income taxes $11,771 $11,956 ======= ======= 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 nine months ended December 31, 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 the consolidated financial statements for the unaudited nine months ended December 31, 1995, and 1994 have been made. NOTE 2. DIVIDENDS. On December 8, 1995, the Company declared a quarterly cash dividend of five cents per share, which was paid on January 9, 1996, to stockholders of record as of December 19, 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. ACQUISITIONS. 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 generates annual defense-related business revenues of approximately $55 million. The transaction will be consummated through a plan of acquisition whereby holders of Geodynamics shares will receive between $11.25 per share, as adjusted pursuant to the agreement, from Logicon plus the net proceeds from the sale of Geodynamics' wholly-owned subsidiary, LaFehr and Chan Technologies, Inc. (LCT). The agreement is subject to Geodynamics shareholder approval. Closing is expected after a Geodynamics shareholder vote in March 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 Nine Months Ended December 31 December 31 _______________________________________________________________________ (dollars in thousands) 1995 1994 1995 1994 Contract revenue: Cost plus fixed fee $ 30,195 $ 21,607 $ 91,381 $ 58,971 Cost plus award and incentive fee 36,914 27,099 109,561 87,034 Fixed-price 22,444 11,361 52,870 31,046 Time and material 31,052 19,942 92,546 57,119 _______ _______ _______ _______ $ 120,605 $ 80,009 $346,358 $ 234,170 ======= ======= ======= ======= December 31 March 31 ________________________________________________________________________ (dollars in thousands) 1995 1994 1995 Backlog: Firm Contracts: Cost plus fixed fee $ 155,764 $ 158,729 $ 155,283 Cost plus award and incentive fee 171,518 101,246 163,044 Fixed-price 42,209 45,924 34,166 Time and material 208,663 119,564 165,385 _________ _______ _______ 578,154 425,463 517,878 _________ _______ _______ Contract options and untasked indefinite quantity contract values: Cost type 555,619 342,317 367,904 Fixed-price 724,606 738,711 743,261 Time and material 114,327 24,762 57,285 _________ _________ _________ 1,394,552 1,105,790 1,168,450 _________ _________ _________ Total Backlog $1,972,706 $1,531,253 $1,686,328 ========= ========= ========= REVENUES AND BACKLOG (CONT.) Contract revenues during the first nine months of fiscal year 1996 were 48% higher than in the first nine months of fiscal year 1995. The increase in revenues and net income in the first nine months of fiscal year 1996 from the first nine months of fiscal year 1995 is primarily the result of the acquisition of Syscon Corporation (Syscon) on February 16, 1995. Backlog at December 31, 1995, including priced options, increased by 29% from backlog at December 31, 1994 primarily as a result of including Syscon's backlog in the total and by 17% from March 31, 1995 as the result of strong third quarter bookings valued at $220 million. Third quarter firm contract awards include: the exercise of a one-year contract option, valued at $39 million, from the Naval Surface Warfare Center for test and evaluation services on the Aegis program; $25 million in additional tasks under the Joint Interoperability Engineering Organization (JIEO) contract; the exercise of the first of four one-year contract options, valued at $23 million, for continued training and technical support to the U.S. Army's Battle Command Training Program; a four-year contract, valued at $21 million, from the U.S. Air Force for systems analysis, imaging and laser support to the Air Force's Phillips Laboratory; and a contract extension, valued at $16 million from the U.S. Army for additional tasks in support of test and evaluation of C3I systems at the Army's Experimentation Site at Fort Lewis in Tacoma, Washington. PROFIT MARGINS Three Months Ended Nine Months Ended December 31 December 31 _______________________________________________________________________ 1995 1994 1995 1994 Return on revenue before tax 9.6% 9.7% 8.7% 9.4% Return on revenue 5.7% 5.8% 5.2% 5.6% Income tax rate 40.6% 39.5% 40.6% 40.4% The profit margin for the first nine months of fiscal year 1996 decreased from the margin reported in the first nine months 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 protfolio. Days sales in receivables decreased to 67 days at December 31, 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 $1.0 million in the first nine months of fiscal 1996 and $11.1 million in the first nine months of fiscal 1995, and is the Company's primary source of liquidity. The Company's working capital increased to $90.7 million at December 31, 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 December 31, 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 nine months of fiscal year 1996. ACQUISITIONS On October 3, 1995, Logicon completed the acquisition of the Space and Engineering Group of Applied Technology Associates, 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 generates annual defense-related business revenues of approximately $55 million. The transaction will be consummated through a plan of acquisition whereby holders of Geodynamics shares will receive $11.25 per share, as adjusted pursuant to the agreement, from Logicon plus the net proceeds from the sale of Geodynamics' wholly-owned subsidiary, LaFehr and Chan Technologies, Inc. (LCT). The agreement is subject to Geodynamics shareholder approval. Closing is expected after a Geodynamics shareholder vote in March 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 nine months ended December 31, 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 February 9, 1996. 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 1995 1994 1995 1994 Weighted average number 13,871,000 13,622,000 13,704,000 13,735,000 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 370,000 516,000 474,000 543,000 _________ _________ _________ _________ Weighted average number of common shares, including common stock equivalents 14,241,00 14,138,00 14,178,000 14,278,000 ========= ========= ========== ========== 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 96 FOR THE PERIOD ENDED DECEMBER 31, 1995) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000311946 LOGICON, INC. 1,000 9-MOS MAR-31-1996 DEC-31-1995 27,587 9,328 84,569 0 0 131,557 37,132 28,040 168,588 40,822 0 1,389 0 0 126,377 168,588 346,358 348,093 290,233 317,790 0 0 0 30,303 12,299 18,004 0 0 0 18,004 1.27 1.27
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