-----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, G1uGutJ7tWMP/8J0s9Xb/g/iWY3lchJPf/zDjq21wn3pKLplhT3R4IL5h4wEwUhJ 9b6wpzKVPa8OpfWpryIrtg== 0000031617-96-000009.txt : 19960515 0000031617-96-000009.hdr.sgml : 19960515 ACCESSION NUMBER: 0000031617-96-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960330 FILED AS OF DATE: 19960514 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: EDO CORP CENTRAL INDEX KEY: 0000031617 STANDARD INDUSTRIAL CLASSIFICATION: SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812] IRS NUMBER: 110707740 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03985 FILM NUMBER: 96563737 BUSINESS ADDRESS: STREET 1: 14 04 111TH ST CITY: COLLEGE POINT STATE: NY ZIP: 113561434 BUSINESS PHONE: 7183214000 MAIL ADDRESS: STREET 1: 14 04 111TH ST CITY: COLLEGE POINT STATE: NY ZIP: 11356-1434 10-Q 1 FORM 10-Q FOR QUARTER ENDED MAR 30 1996 Page 1 of 11 Pages FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended March 30, 1996 Commission File Number 1-3985 EDO CORPORATION (Exact name of registrant as specified in its charter) New York No. 11-0707740 (State or other jurisdiction (I.R.S Employer of incorporation or organization) Identification No.) 14-04 111th Street, College Point, New York 11356-1434 (Address of principal executive offices) (Zip Code) Telephone Number (718) 321-4000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this report. Class Outstanding at March 30, 1996 Common shares, par value $1 per share 5,942,539 Page 2 EDO CORPORATION INDEX Page No. Face Sheet 1 Index 2 Part I Financial Information Item 1. Financial Statements Consolidated Balance Sheets - March 30, 1996 and December 31, 1995 3 Consolidated Statements of Operations - Three Months Ended March 30, 1996 and March 31, 1995 4 Consolidated Statements of Cash Flows - Three Months Ended March 30, 1996 and March 31, 1995 5 Other Financial Information 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-8 Part II Other Information 9 Signature 10 Page 3 PART I - FINANCIAL INFORMATION Item I. Financial Statements EDO Corporation and Subsidiaries Consolidated Balance Sheets (in thousands) Assets March 30, 1996 Dec. 31, 1995 (unaudited) Current assets: Cash and cash equivalents $ 26,245 $ 25,609 Accounts receivable 26,078 26,786 Inventories 11,911 10,330 Prepayments 3,747 1,381 ---------- ---------- Total current assets 67,981 64,106 Property, plant and equipment, net 13,491 14,133 Assets held for sale, net - 8,700 Cost in excess of fair value of net assets acquired, net 10,114 10,258 Other assets 10,776 6,302 ---------- ---------- $102,362 $103,499 ========== ========== Liabilities and Shareholders' Equity - ------------------------------------ Current liabilities: Accounts payable and accrued liabilities $ 20,466 $ 20,581 Contract advances and deposits 4,425 5,853 ---------- ---------- Total current liabilities 24,891 26,434 Long-term debt 29,317 29,317 ESOT loan obligation 12,584 12,887 Postretirement obligation 12,198 12,348 Environmental Obligation 3,769 3,769 Minority interest 4,440 4,582 Shareholders' Equity - -------------------- Preferred shares, par value $1 per share, (liquidation preference $213.71 per share), authorized 500,000 shares (71,001 issued in both periods) 71 71 Common shares, par value $1 per share, authorized 25,000,000 shares, (issued 8,453,902 in both periods) 8,454 8,454 Additional paid-in capital 36,681 37,847 Retained earnings 19,766 19,116 ---------- ---------- 64,972 65,488 Less: Treasury shares at cost 2,511,363 shares in 1996 and 2,645,863 shares in 1995 <35,693> <37,604> Translation adjustment <832> <835> ESOT loan obligation <12,584> <12,887> Deferral under long-term incentive plan <700> - ---------- ---------- Total shareholders' equity 15,163 14,162 ---------- ---------- $102,362 $103,499 ========== ========== Page 4 EDO Corporation and Subsidiaries Consolidated Statements of Operations (in thousands except per share amounts) For the three months ended Mar. 30, 1996 Mar. 31, 1995 (unaudited) Income Net sales $ 26,281 $ 20,918 Other 41 164 ---------- ---------- 26,322 21,082 Costs and Expenses Cost of sales 20,749 15,736 Selling, general and administrative 4,337 4,391 Research and development 266 322 ---------- ---------- 25,352 20,449 Operating Earnings 970 633 ---------- ---------- Non-Operating Income (Expense) Interest income 418 262 Interest expense <552> <568> Other, net <25> <25> ---------- ---------- <159> <331> Earnings before Federal income taxes 811 302 Provision for Federal income taxes - - ---------- ---------- Net earnings before minority interest 811 302 Minority interest 142 129 ---------- ---------- Net earnings 953 431 Dividends on preferred shares 303 322 ---------- ---------- Net earnings available for Common Shares $ 650 $ 109 ========== ========== Net earnings per Common Share $ 0.11 $ 0.02 ========== ========== Average shares outstanding 5,923 5,644 ========== ========== Page 5 EDO Corporation and Subsidiaries Consolidated Statements of Cash Flows (in thousands) For the three months ended Mar. 30, 1996 Mar. 31, 1995 (unaudited) Operating Activities: Net earnings $ 953 $ 431 Adjustments to net earnings to arrive at cash from operations: Depreciation and amortization 1,509 1,369 Common shares issued for employee benefits 45 - Changes in: Accounts receivable 708 <2,534> Inventories <1,581> 534 Prepayments, other assets and other <429> <509> Accounts payable and accrued liabilities <115> <1,996> Contract advances and deposits <1,428> 546 ---------- ---------- Cash used by operations <338> <2,159> Investing Activities: Purchase of property, plant and equipment <723> <501> Net proceeds from sale of assets 2,000 - ---------- ---------- Cash provided (used) by investing activities 1,277 <501> Financing Activities: Payment of preferred share cash dividends <303> <322> ---------- ---------- Cash used by financing activities <303> <322> Net increase (decrease) in cash and cash equivalents 636 <2,982> Cash and cash equivalents at beginning of period 25,609 18,076 ---------- ---------- Cash and cash equivalents at end of period $ 26,245 $ 15,094 ========== ========== Supplemental disclosures: Cash paid for: Interest $ 5 $ 50 Income taxes $ 7 $ 23 Page 6 Other Financial Information Unaudited Financial Statements The accompanying unaudited financial statements and other related financial information furnished reflect all adjustments which are, in the opinion of management, necessary to present a fair statement of the operating results for the three months ended March 30, 1996 and March 31, 1995. Backlog Data The dollar amount of backlog of firm orders at March 30, 1996 was $95,760,000 compared to $88,995,000 at March 31, 1995. Inventories Inventories are summarized by major classification as follows. March 30, 1996 Dec. 31, 1995 (in thousands) Raw material and supplies $ 6,130 $ 6,186 Work in process 4,595 3,023 Finished goods 1,186 1,121 --------- --------- $ 11,911 $ 10,330 Reclassifications Certain reclassifications of 1995 amounts have been made to conform with the 1996 presentation. Page 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion relates to the operations of EDO Corporation in its two business segments: Defense and Space Systems; and Industrial Products. Results of Operations - --------------------- First Three Months of 1996 Compared with First Three Months of 1995 - ------------------------------------------------------------------- Sales in the first three months of 1996 were $26.3 million compared with $20.9 million in 1995. Sales in the Defense and Space Systems segment increased 23% to $15.7 million. Higher sales in the Electro-Optics and Marine and Aircraft business units were partially offset by lower sales in the Combat Systems business unit. The Industrial Products segment sales increased 19% to $10.5 million. The higher sales were recorded in the Fiber Science and Ceramics business units. Earnings from operations (before general corporate expense allocations) in the first three months of 1996 were $2.0 million, compared with $1.5 million in 1995, (included in 1995 earnings was a pension plan curtailment gain of $645,000 resulting from reductions previously made in the Company's work force). Operating earnings in the Defense and Space Systems segment increased to $1.7 million in the first quarter of 1996 from $1.1 million for the same period in 1995. This increase resulted primarily from an improvement at the Electro-Optics business unit. The Industrial Products segment recorded operating earnings of $0.3 million in the first three months of 1996, compared with $0.4 million for the same period in 1995. Operating earnings in the Industrial Products segment are being adversely affected by the energy business units where the rate of growth of the related markets is not as fast as projected. The business units in this area have adjusted their operations in response to this slower growth rate and the level of investment in these units continues to be evaluated. Selling, general and administrative expenses in the first three months of 1996 were $4.3 million, compared with $4.4 million in the first three months of 1995. Company sponsored research and development expenditures decreased 30% from the like 1995 period to $0.2 million. This reduction was recorded principally in the Defense and Space Systems segment and reflects a more selective approach to development efforts. Interest expense, net of interest income, declined to $0.2 million in the first three months of 1996, compared with $0.4 million in the like period of 1995, resulting from higher interest income in 1996. Page 8 The Company reported net earnings available for common shares of $650,000, or $0.11 per share in the first quarter of 1996, compared to net earnings of $109,000 or $0.02 per share a year ago. Earnings per share calculations were based on a weighted average of 5.9 million shares outstanding for the first quarter of 1996, and 5.6 million shares for the like period in 1995. Liquidity and Capital Resources The Company's cash and cash equivalents increased $0.6 million from December 31, 1995 to $26.2 million at March 30, 1996. During the quarter the net proceeds from the sale of the College Point facilities of approximately $2.0 million, as previously disclosed, was largely offset by cash used by operations, purchases of equipment and the payment of preferred share dividends. The Company has an ESOT loan obligation that is currently $12.6 million. The repayment of this obligation is funded principally through dividends on the Company's preferred shares. The Company also has outstanding $29.3 million of 7% Convertible Subordinated Debentures Due 2011. In accordance with authorization from the Board of Directors, the Company has previously acquired $5.7 million of such debentures. These debentures will be used to satisfy approximately three years of sinking fund requirements that commence in December of 1996. In April 1996, the Company completed negotiations, and has received a commitment from its bank to extend the maturity date of the $15 million line of credit agreement for both short term borrowings and letters of credit to June 30, 1997 and to extend the option to cancel or refinance its ESOT borrowing to April 1, 2000. Capital expenditures in the first three months of 1996 amounted to $0.7 million. The total expenditures for 1996 is expected to be higher than the $1.9 million spent in 1995. In August 1994, the Board of Directors of the Company suspended payment of cash dividends on its common shares to preserve cash and to facilitate funding of the Company's strategic business plan. The Company believes it has adequate liquidity and sufficient capital resources to fund its plans. Backlog The backlog of unfilled orders at March 30, 1996 stood at $95.8 million compared with $89.0 million a year ago and $89.7 million at December 31, 1995. The increased backlog occurred primarily in the Company's Defense and Space Systems segment. Page 9 PART II - OTHER INFORMATION Item 5. Other Information None Item 6.(a) Exhibits 10. (a) EDO Corporation 1996 Long-Term Incentive Plan. Incorporated by reference to Appendix A to the Company's Definitive Proxy Statement dated March 22, 1996. 27 - Financial Data Schedule Page 10 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. EDO Corporation (Registrant) by: K. A. Paladino ----------------------------- Vice President-Finance and Treasurer (Principal Financial Officer) Dated: May 14, 1996 EX-27 2 ART. 5 DFS FOR 1996 3 MOS. 10-Q
5 1,000 3-MOS DEC-31-1996 MAR-30-1996 26,245 0 26,078 493 11,911 67,981 61,622 48,131 102,362 24,891 41,901 8,454 0 71 6,638 102,362 26,281 26,322 20,749 25,352 25 22 552 418 0 650 0 0 0 650 .11 .09
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