-----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, UicS7YuuqolSg7+Ax0hp956sq84bpZyFwAkpdFtMo6jwYGjSPc0w1pxcPuDVONV7 rOvmOD7b2854EUBe5an9fA== 0000311946-96-000021.txt : 19960809 0000311946-96-000021.hdr.sgml : 19960809 ACCESSION NUMBER: 0000311946-96-000021 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960808 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: 96605957 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, 1996 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, 1996. $.10 par value Common - 13,843,404 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 ___________________ 1996 1995 REVENUES: Contract revenues $149,210 $111,667 Interest 735 540 ______ ______ 149,945 112,207 COSTS AND EXPENSES: Costs of contract revenues 126,149 94,678 Selling and administrative expenses 10,628 8,482 ______ ______ 136,777 103,160 _______ _______ Income before taxes on income 13,168 9,047 Provision for taxes on income -5,441 -3,679 _______ _______ NET INCOME 7,727 5,368 Retained earnings at beginning of period 118,569 95,889 Cash dividends (Note 2) -702 -544 _______ _______ Retained earnings at end of period $125,594 $100,713 ======= ======= EARNINGS PER SHARE OF COMMON STOCK $ 0.54 $ 0.38 Cash dividends per share of $ 0.05 $ 0.04 Average number of common shares, including common stock equivalents 14,335 14,084 See notes to consolidated financial statements. LOGICON, INC. CONSOLIDATED BALANCE SHEET (dollars in thousands) 1996 __________________________ June 30 March31 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 40,700 $ 37,802 Marketable securities 5,220 8,244 Accounts receivable 101,075 87,725 Prepaid expenses 2,886 2,447 Deferred income tax benefits 8,682 8,551 _______ _______ TOTAL CURRENT ASSETS 158,563 144,769 Property, plant and equipment, net 11,098 11,521 Other assets 1,085 1,085 Excess of purchase price over net assets of businesses acquired, net 35,700 36,063 _______ _______ $206,446 $193,438 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and other accrued liabilities $ 28,023 $ 17,995 Accrued salaries, wages and employee benefits 29,172 38,522 Estimated taxes on income 5,175 1,023 _______ _______ TOTAL CURRENT LIABILITIES 62,370 57,540 _______ _______ STOCKHOLDERS' EQUITY Common stock $.10 par value - Authorized 40,000,000 shares, outstanding 14,042,000 and 13,975,000 shares 1,404 1,397 Other paid-in capi 19,761 18,853 Retained earnings 125,594 118,569 Unrealized loss on available for sale securities -5 -13 Unearned compensation and notes receivableunder restricted stock purchase plan -2,678 -2,908 _______ _______ TOTAL STOCKHOLDERS' EQUITY 144,076 135,898 _______ _______ $ 206,446 $193,438 ======== ======== See notes to consolidated financial statements. LOGICON, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (dollars in thousands) (unaudited) For the Three Months Ended June 30 __________________ 1996 1995 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $7,727 $5,368 Income charges not affecting cash-- Depreciation and amortization 1,699 1,285 Amortization of deferred compensation 111 154 Provision for (benefit from) deferred taxes -131 504 Changes in assets and liabilities-- Increase in accounts receivable -13,350 -4,681 Increase in prepaid expenses -439 -410 Increase (decrease) in accounts payable and other accrued liabilities 10,028 -3,083 Decrease in accrued salaries, wages and employee benefits -9,350 -5,896 Increase in income taxes payable 4,152 996 _______ _______ Net cash provided from (used) in operating activities 447 -5,763 _______ _______ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment, net of sales -913 -584 Maturity of available for sale securities 3,032 _______ _______ Net cash provided from (used in) investing activities 2,119 -584 _______ _______ CASH FLOWS FROM FINANCING ACTIVITIES: Cash dividends (Note 2) -702 -544 Transactions of stock plans 1,034 360 ______ _______ Net cash provided from (used in) financing activities 332 -184 _______ _______ Net increase (decrease) in cash and cash equivalents 2,898 -6,531 Cash and cash equivalents at beginning of period 37,802 31,564 _______ ______ CASH AND CASH EQUIVALENTS AT END OF PERIOD $40,700 $25,033 ======= ======= Cash paid for income taxes $ 309 $ 1,225 ======= ======= 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, 1996. Results for the three months ended June 30, 1996, 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, 1996 and 1995 have been made. NOTE 2. DIVIDENDS. On June 7, 1996, the Company declared a quarterly cash dividend of five cents per share, which was paid on July 16, 1996, to stockholders of record as of June 25, 1996. NOTE 3. SUBSEQUENT EVENT On August 5, 1996, the Board of Directors declared a cash dividend of six cents per share, payable on October 15, 1996, to stockholders of record as of September 19, 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 June 30 _____________________________________________________________ dollars in thousands) 1996 1995 Revenues from services and systems: Cost plus fixed fee $ 35,286 $ 30,129 Cost plus award and incentive fee 40,083 36,162 Fixed-price 39,199 13,826 Time and material 34,642 31,550 _______ _______ $149,210 $111,667 ======= ======= June 30 March 31 _____________________________________________________________ (dollars in thousands) 1996 1995 1996 Backlog: Firm Contracts: Cost plus fixed $ 161,875 $121,803 $155,130 Cost plus award and incentive fee 171,261 148,492 159,836 Fixed-price 41,325 10,887 42,705 Time and material 171,341 156,026 188,958 _________ _______ _______ 545,802 437,208 546,629 _________ _______ _______ Contract options and untasked indefinite quantity contract values: Cost type 617,227 424,199 620,261 Fixed-price 749,666 747,780 749,411 Time and material 114,365 83,690 121,498 _________ _________ _________ 1,481,258 1,255,669 1,491,170 _________ ________ _________ Total Backlog $2,027,060 $1,692,877 $2,037,799 ========= ======== ========= REVENUES AND BACKLOG (CONT.) Contract revenues during the first quarter of fiscal year 1997were 34% higher than in the first quarter of fiscal year 1996. Significantly increased sales of hardware and software products under the I-CASE contract and the inclusion of the revenues from Geodynamics, which was acquired on March 28,1996 accounts for a large share of the increase. Backlog at June 30, 1996, including priced options, increased by 20% from backlog at June 30, 1995, and remained consistent with backlog at March 31, 1996. Booking highlights for the first quarter include $28 million for hardware and software products under the I-CASE contract; the exercise of a contract option, valued at $17 million, to operate the vertical motion simulator at the NASA-Ames Research Center; and $9 million in tasks under the Joint Interoperability Engineering Organization (JIEO) contract. 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 contractual renewals or the award of major new contracts. The company's contracts with the government are subject to redirection or termination for convenience, or may not result in future revenues due to events and actions taken by the customer outside of the company's control. Contract awards that authorize the company to provide services and products are included in firm backlog. When such authorizations have become inactive and the company reasonably anticipates no future revenue from such awards, they are removed from firm backlog. Firm backlog may be funded or unfunded. The funded backlog at March 31, 1996, was $225 million and the funded backlog at June 30, 1996 and 1995, was $249 million and $228 million, respectively. Contract awards that allow the customer to contract for services and products at specified values upon the issuance of contract modifications, normally referred to as options or delivery orders, are recorded in backlog at the value stated in the contract. These amounts are not included in firm backlog until such future contract modifications are issued. Accordingly, total backlog reflected above may not result in future revenues. In recent years the company's customers have increasingly entered into this form of contract. ROFIT MARGINS Three Months Ended June 30 ____________________________________________________________ 1996 1995 Return on revenue before tax 8.8% 8.1% Return on revenue after tax 5.2% 4.8% Income tax rate 41.3% 40.7% The profit margin for the quarter ended June 30, 1996 is consistent with the profit margins experienced by the company for the fiscal years 1996 and 1995. The profit margin for the first quarter of fiscal year 1996 was lower than the same period this year due to lower profit margins on revenues from Syscon Corporation which was acquired on February 16, 1995. Day sales in receivables decreased to 62 days at June 30, 1996 from 67 days at March 31, 1996. The company has adequate cash and credit lines available to fund fluctuations in receivable balances. LIQUIDITY AND CAPITAL RESOURCES Net cash provided from operating activities was $.4 million in the first quarter of fiscal year 1997 as compared to net cash used in operating activities of $5.8 million in the first quarter of fiscal year 1996, and is the company's primary source of liquidity. The company's working capital increased to $96.2 million at June 30, 1996 from $87.2 million at March 31, 1996. The strong working capital position is reflected in the current ratio of 2.5 to 1 at June 30, 1996. 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 1997. FORWARD-LOOKING STATEMENTS To the extent the information contained in this discussion and analysis of consolidated financial condition and results of operations and the information included elsewhere in this Form 10-Q, for the quarter ended June 30, 1996, are viewed as forward-looking statements, the reader is cautioned that various risks and uncertainties exist that could cause the actual future results to differ materially from that inferred by the forward-looking statements. Since the company's primary customer is the U.S. government, future results could be impacted by: the right of the government to redirect, modify, terminate or otherwise cause work to be stopped on contracts issued by it; government customers' budgetary constraints; and the contracting practices of the company's current and prospective customers. Some additional factors, among others, that also need to be considered are: the likelihood that actual future revenues that are realized may differ from those inferred from existing total backlog; the ability of the company to attract and retain highly trained professional employees; the availability of capital and/or financing; and changes in the utilization of the company's leased facilities that could result in higher costs. The reader is further cautioned that risks and uncertainities exist that have not been mentioned herein due to their unforeseeable nature, but which, nevertheless, may impact the company's future operations. 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 A report on Form 8-K was filed on April 11, 1996, pursuant to Item 2 "Acquisition or Disposition of Assets" for the acquisition of Geodynamics Corporation by Logicon. The financial statements of Geodynamics Corporation for the year ended June 2, 1995 and for the six month period ended December 1, 1995, were part of that filing along with pro forma financial information for Logicon and Geodynamics Corporation. 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, 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 June 30 1996 1995* Weighted average number of share 13,997,000 13,550,000 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 338,000 534,000 _________ _______ Weighted average number of common shares including common stock equivalents 14,335,000 14,084,000 ========= ======== Fully diluted earnings per share of common stock are omitted because there is less than 3% dilution in any period. * Per share data reflects a two-for-one stock split paid on September 13, 1995. EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q, Q1, FY 1997 FOR THE PERIOD ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 0000311946 LOGICON, INC. 1,000 3-MOS MAR-31-1997 JUN-30-1996 40,700 5,220 101,075 0 0 158,563 43,192 32,094 206,446 62,370 0 0 0 1,404 142,672 206,446 149,210 149,945 126,149 136,777 0 0 0 13,168 5,441 7,727 0 0 0 7,727 .54 .54
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