-----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, R3q5joQ8vvrC2I6S2HsqFERtjspf/cjh7Zfmgw4ZRhxwia8pwBWE0hRoojRL6Pul cUXGdXDyAOm+XIeuFR+tIw== 0001157523-06-007449.txt : 20060727 0001157523-06-007449.hdr.sgml : 20060727 20060727080305 ACCESSION NUMBER: 0001157523-06-007449 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20060727 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20060727 DATE AS OF CHANGE: 20060727 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03985 FILM NUMBER: 06982932 BUSINESS ADDRESS: STREET 1: 60 EAST 42ND STREET STREET 2: 42ND FLOOR CITY: NEW YORK STATE: NY ZIP: 10165 BUSINESS PHONE: 2127162000 MAIL ADDRESS: STREET 1: 60 EAST 42ND STREET STREET 2: 42ND FLOOR CITY: NEW YORK STATE: NY ZIP: 10165 8-K 1 a5197092.txt EDO CORP. 8-K SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ______________ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ______________ Date of Report (Date of earliest event reported): July 27, 2006 EDO Corporation (Exact name of Registrant as specified in its charter) New York 3812 11-0707740 (State or Other (Primary Standard (I.R.S. Employer Jurisdiction of Industrial Identification No.) Incorporation or Classification Organization) Code Number) ______________ 60 East 42nd Street 42nd Floor New York, NY 10165 212.716.2000 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) ______________ Not applicable (Former name or former address, if changed since last report) ______________ Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On July 27, 2006, EDO Corporation issued an earnings release announcing its financial results for the quarter ended June 24, 2006. On the same day, EDO Corporation also announced definitive agreements to acquire CAS, Inc, and Impact Science & Technology, Inc. Copies of these press releases are attached hereto as Exhibit 99. The information in this Current Report on Form 8-K and the Exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing. SIGNATURE Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: July 27, 2006 EDO CORPORATION By: /s/ Frederic B. Bassett ------------------------------------------- Name: Frederic B. Bassett Title: Vice President-Finance, Treasurer and Chief Financial Officer EXHIBIT INDEX Exhibit Number Description of Exhibit - --------------------- --------------------------------------------------------- 99a Earnings Press Release of EDO Corporation dated July 27, 2006 99b Press Release regarding Agreement to Acquire CAS, Inc. 99c Press Release regarding Agreement to Acquire Impact Science & Technology - -------------------------------------------------------------------------------- EX-99 2 a5197092ex99a.txt EXHIBIT 99A Exhibit 99a EDO Reports Second Quarter Results; Signs Two Acquisition Agreements NEW YORK--(BUSINESS WIRE)--July 27, 2006--EDO Corporation (NYSE: EDO) recorded revenue of $152.4 million in the second quarter of 2006, a decline of 2.4 percent from the $156.1 million recorded in the second quarter of 2005. Net earnings for the quarter were $6.3 million, up 3.0 percent from $6.1 million in the prior year's quarter. On a diluted per-share basis, earnings were $0.30 for the second quarter of 2006, versus $0.31 in the second quarter of 2005. Results were impacted by a decline in revenue related to electronic-force-protection products. During the second quarter of 2005, EDO was in accelerated production of a large order that generated $27.6 million in revenue. Corresponding electronic-force-protection revenue in the second quarter of 2006 was $4.5 million. Excluding this product, revenue for the quarter was $147.9 million versus $128.5 million in 2005, an increase of 15 percent. Results for the quarter were also impacted by a $3.7 million benefit due to the reversal of income-tax-contingency reserves related to the resolution of an outstanding tax matter. For the six-month period ended June 24, 2006, revenue was $272.1 million, versus $272.6 million recorded in the first half of 2005. This included $9.5 million in sales of electronic force protection products for the first half of 2006 versus $38.3 million in the first half of 2005. Net earnings for the first half of 2006 were $5.3 million, versus $9.0 million in the same period last year. On a diluted per-share basis, earnings were $0.29, versus $0.49 in the first half of 2005. "We expect improvement in revenue and earnings during the second half of 2006," said Chief Executive Officer James M. Smith. "A key driver in this improvement will be revenue growth from our communications and networking products. Additionally, we expect both of our announced acquisitions to be accretive to earnings." Acquisitions On July 26, EDO agreed to acquire CAS Inc, a privately-held company that provides engineering services and weapons-systems analysis to the Department of Defense. This acquisition is expected to be completed by September and will triple the size of EDO's Professional and Engineering Services. The CAS financial results will be included in EDO's Engineered Systems and Services reporting segment, adding approximately $65 million to revenue in 2006. Also on July 26, EDO agreed to acquire Impact Science & Technology Inc, a privately-held company that provides signal intelligence services and systems to the intelligence community, and advanced countermeasures and electronic attack systems to the Department of Defense and various government agencies. This acquisition is expected to be completed by September and will add approximately $20 million to revenue in 2006. Impact Science & Technology will be included in EDO's Electronic Systems and Communications reporting segment. Organic Revenue Growth Organic revenue, which excludes revenue from acquisitions owned less than one year, declined by $12.0 million, or 7.5 percent. This is due to higher revenue in 2005 driven by significantly accelerated deliveries in order to meet the force protection needs of our soldiers. Excluding revenue related to electronic-force-protection products, organic growth was 9.2 percent, and will be approximately 15 percent for the full year. For 2007, we expect to return to our organic-revenue-growth target of 8 to 10 percent annually. Increased Revenue Guidance In anticipation of acquiring CAS and Impact Science & Technology by September, the 2006 revenue forecast is being increased to a range of $735 million to $750 million, compared to $648 million achieved in 2005. This takes into account a reduced revenue forecast for electronic-force-protection products following the government's decision to conduct a new competition for counter-IED systems. Margins Operating margins for the three months ended June 24, 2006 were 3.8 percent of net sales, versus 8.0 percent in the second quarter of 2005. This decline was due primarily to the lower sales related to electronic-force-protection products. Margins this year also have been reduced by certain low-margin developmental contracts. As is typical of such developmental work, these contracts should result in high-revenue contracts at normal production margins in future years. In particular during the second quarter, margins were impacted by higher than expected development costs for sonar and aircraft-armament-system contracts. EBITDA, as adjusted, was $12.8 million, or 8.4 percent of revenue in the second quarter of 2006, versus $18.4 million, or 11.8 percent of revenue in the prior year's quarter. For the year-to-date, EBITDA, as adjusted, was $19.3 million, or 7.1 percent of revenue in the first half of 2006, versus $31.4 million, or 11.5 percent of revenue in the prior year. For the full year of 2006, adjusted EBITDA margin is expected to be approximately 10 percent. This is lower than previously estimated due to the impact of the developmental contracts discussed above. EBITDA is a generally accepted metric employed by our industry. Our adjustments include primarily ESOP and pension expenses, and are identified in detail on the attached reconciliation schedule. Cash Flow Cash used by operations was $4.1 million, versus $2.5 million in the second quarter of 2005. Year-to-date, positive cash flow from operations was $9.9 million, versus $7.9 million of cash used by operations in the prior year. For the full year, we expect to generate positive cash flow from operations in a range consistent with our historical performance, which over the long term is in excess of net earnings. EDO's cash balance at the end of the second quarter was $109.1 million, versus $108.7 million at the end of 2005. Most of this cash will be used in funding the acquisitions that are expected to close by September. Backlog The total funded backlog of unfilled orders as of June 24 stood at $608.0 million, versus $585.5 million on March 25; $558.7 on Dec. 31, 2005; and $535.1 million at the end of the second quarter of 2005. Backlog does not include portions of contracts for which the U.S. government has not yet appropriated funds, nor does it include unexercised options in any contract. Such unfunded contracts and unexercised options add approximately $642 million in what we view as high-confidence future revenue, for a total of more than $1.2 billion. Backlog does not include any amounts related to the pending acquisition of CAS or Impact Science & Technology. Conference Call EDO will conduct a conference call at 10:30 a.m. EDT on July 27 to review these results in more detail. A live webcast of the conference call will be available at www.edocorp.com or www.InvestorCalendar.com. For those who cannot listen to the live broadcast, a replay of the call will be available on these websites. There will also be a telephone replay available until August 3. To listen to the telephone replay, dial 1-877-660-6853, account #286, and conference ID #207052 (outside the U.S. dial 1-201-612-7415). About EDO Corporation EDO Corporation designs and manufactures a diverse range of products for defense, intelligence, and commercial markets, and provides related engineering and professional services. Major product groups include: Defense Electronics, Communications, Aircraft Armament Systems, Undersea Warfare, Integrated Composite Structures, and Professional and Engineering Services. EDO's advanced systems are at the core of the transformation to lighter, faster, and smarter defense capabilities. With headquarters in New York, EDO Corporation (www.edocorp.com) employs 3,000 people worldwide. The company was founded in 1925 and had revenues of $648 million in 2005. Forward-Looking Statements Certain statements made in this release, including statements about future revenues, long-term organic revenue growth, annual revenue expectations, future earnings, and EBITDA margins, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about the Company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: changes in demand for the Company's products and services, product mix, the timing of customer orders and deliveries, changes in the government's funding priorities, the impact of competitive products and pricing, and other risks discussed from time to time in the Company's Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release. EDO Corporation and Subsidiaries Condensed Consolidated Statements of Earnings (In thousands, except per share amounts) Three months ended Six months ended June 24, June 25, June 24, June 25, 2006 2005 2006 2005 ----------- --------- ----------- --------- (unaudited) (unaudited) Net sales $152,398 $156,112 $272,107 $272,620 Costs and expenses: Cost of sales 119,657 118,360 210,901 203,414 Selling, general and administrative 23,903 20,014 49,261 40,302 Research and development 3,006 3,994 6,212 8,412 Environmental cost provision - 1,250 - 1,250 ----------- --------- ----------- --------- 146,566 143,618 266,374 253,378 ----------- --------- ----------- --------- Operating earnings 5,832 12,494 5,733 19,242 Interest income 1,101 294 2,122 795 Interest expense (2,237) (2,274) (4,661) (4,465) Other, net (111) (15) (257) (60) ----------- --------- ----------- --------- Non-operating expense, net (1,247) (1,995) (2,796) (3,730) ----------- --------- ----------- --------- Net earnings before income taxes 4,585 10,499 2,937 15,512 Income tax benefit (expense) 1,686 (4,410) 2,395 (6,515) ----------- --------- ----------- --------- Net earnings $ 6,271 $ 6,089 $ 5,332 $ 8,997 =========== ========= =========== ========= Net earnings per common share: Basic: $ 0.35 $ 0.34 $ 0.30 $ 0.50 Diluted: $ 0.30 $ 0.31 $ 0.29 $ 0.49 =========== ========= =========== ========= Weighted average shares outstanding Basic 18,099 18,065 18,055 17,998 Diluted (a) 24,467 22,741 18,538 22,690 =========== ========= =========== ========= Backlog of unfilled orders $608,034 $535,091 =========== ========= (a) Assumes exercise of dilutive stock options. The convertible notes were dilutive in the second quarter of both years, as well as the first half of 2005. They were anti-dilutive in the first half of 2006. EDO Corporation and Subsidiaries Condensed Consolidated Balance Sheets ($000's omitted) June 24, Dec 31, 2006 2005 ---------------------- (unaudited) Assets Current Assets: Cash and cash equivalents $ 109,092 $ 108,731 Accounts receivable, net 168,015 189,190 Inventories 70,761 56,567 Deferred income tax asset, net 9,090 8,946 Notes receivable 7,000 7,100 Prepayments & other 13,159 3,809 ---------------------- Total Current Assets 377,117 374,343 Property, plant and equipment, net 52,013 49,574 Goodwill 149,419 152,347 Other intangible assets 58,211 55,925 Deferred income tax asset, net 27,300 29,637 Other assets 25,217 25,573 ---------------------- Total Assets $ 689,277 $ 687,399 ====================== Liabilities & Shareholders' Equity Current Liabilities: Accounts payable and accrued liabilities $ 72,845 $ 85,237 Contract advances and deposits 45,405 42,244 Note payable, current 2,000 2,000 ---------------------- Total Current Liabilities 120,250 129,481 Income taxes payable 6,513 6,513 Note payable, long term 5,000 5,000 Long-term debt 201,250 201,250 Post-retirement benefits obligations 104,268 103,815 Environmental obligation 1,386 1,392 Other long-term liabilities 48 55 Shareholders' equity 250,562 239,893 ---------------------- Total Liabilities & Shareholders' Equity $ 689,277 $ 687,399 ====================== EDO Corporation and Subsidiaries SEGMENT DATA (In thousands) Three months ended Six months ended June 24, June 25, June 24, June 25, 2006 2005 2006 2005 ------------------ ------------------ (unaudited) (unaudited) Net sales: Engineered Systems & Services $ 62,164 $ 61,638 $121,430 $112,661 Electronic Systems & Communications 90,234 94,474 150,677 159,959 ------------------ ------------------- $152,398 $156,112 $272,107 $272,620 ================== =================== Operating earnings: Engineered Systems & Services $ 1,588 $ 2,396 $ 3,217 $ 6,163 Electronic Systems & Communications 4,244 11,348 2,516 14,329 Environmental cost provision - (1,250) (1,250) ------------------ ------------------- 5,832 12,494 5,733 19,242 Net interest expense (1,136) (1,980) (2,539) (3,670) Other, net (111) (15) (257) (60) ------------------ ------------------- Earnings before income taxes $ 4,585 $ 10,499 $ 2,937 $ 15,512 ================== =================== EDO Corporation and Subsidiaries Calculation of EBITDA (In thousands, except per share amounts) Three months ended Six months ended June 24, June 25, June 24, June 25, 2006 2005 2006 2005 ---------- -------- ---------- -------- (unaudited) (unaudited) Net earnings before income taxes $ 4,585 $ 10,499 $ 2,937 $ 15,512 Interest expense 2,237 2,274 4,661 4,465 Interest (income) (1,101) (294) (2,122) (795) ---------- -------- ---------- -------- Net interest expense 1,136 1,980 2,539 3,670 Depreciation 2,958 2,300 5,736 4,942 Amortization 1,800 1,311 3,414 2,621 ---------- -------- ---------- -------- Total depreciation & amortization 4,758 3,611 9,150 7,563 ----------- --------- ----------- --------- EBITDA 10,479 16,090 14,626 26,745 ESOP compensation expense 1,149 1,236 2,335 2,550 Pension expense 1,194 1,069 2,388 2,139 ---------- -------- ---------- -------- EBITDA, as adjusted $ 12,822 $ 18,395 $ 19,349 $ 31,434 Diluted shares outstanding * 18,581 18,333 18,538 18,282 EBITDA, as adjusted, per share * $ 0.69 $ 1.00 $ 1.04 $ 1.72 ========== ======== ========== ======== * Excludes potential impact of subordinated note conversion. Summary of Cash Flows (In thousands) Three months ended Six months ended June 24, June 25, June 24, June 25, 2006 2005 2006 2005 ---------- -------- ---------- -------- (unaudited) (unaudited) Cash provided (used) by operations $ (4,105) $ (2,474) $ 9,912 $ (7,887) Cash (used) by investing activities $ (4,317) $(41,616) $ (9,541) $(48,011) Cash provided (used) by financing activities $ 27 $ (4,752) $ (10) $ (5,058) ---------- -------- ---------- -------- $ (8,395) $(48,842) $ 361 $(60,956) ========== ======== ========== ======== EDO Corporation and Subsidiaries GUIDANCE DATA ESTIMATES Fiscal 2006 ------------ Revenue range $735 million - $750 million Pension expense $4.8 million FAS 123(R) Option Expense $0.9 million Effective operating tax rate range 42% - 43% Adjusted EBITDA margin 10.00% ESOP shares issued per quarter 42,376 Average diluted shares outstanding*: - If Note conversion is NOT dilutive 18.1 million - If Note conversion is dilutive 24.5 million * "If-converted method" (FAS 128) to determine diluted EPS: (Shares to be issued if 4.00% Notes are converted at $34.19/share would be 5,886,422.) - - Quarterly Dilution Test Since the after-tax interest on Notes reduces Net Earnings by $1,187,375 per quarter, the decision point for the dilution test is $1,187,375 / 5,886,422 shares, or $0.20 per share. When basic EPS for a quarter are more than $0.20, the impact of the Notes is dilutive. The Notes were dilutive to EPS this quarter but not for the year to date. Annual Dilution Test Since the after-tax interest on Notes reduces Net Earnings by $4,749,500 per year, the decision point for the dilution test is $4,749,500 / 5,886,422 shares, or $0.81 per share. When basic EPS for the year are more than $0.81, the impact of the Notes is dilutive. Based on current projections, the Notes are expected to be dilutive for the 2006 full-year. If so, the EPS calculation will be based on about 24.5 million shares. This table contains estimates based on management's current expectations. This information is forward-looking, and actual results may differ materially. CONTACT: EDO Corporation Investor Relations: William A. Walkowiak, 212-716-2038 ir@edocorp.com EX-99 3 a5197092ex99b.txt EXHIBIT 99B Exhibit 99b EDO to Acquire Huntsville-based CAS Inc; $185M Professional and Engineering Services Company NEW YORK--(BUSINESS WIRE)--July 27, 2006--EDO Corporation (NYSE: EDO) has signed a definitive agreement to acquire CAS Inc, a privately-held company that provides engineering services, logistics support, and weapons-systems analysis to the Department of Defense. The purchase price of $175.6 million will include a cash payment of $170.7 million plus restricted EDO common shares valued at $4.9 million. In addition, certain senior managers will receive retention payments over a three-year period valued at $10 million. A portion of the cash payment will be made from EDO's current cash balance, which exceeds $100 million. The remaining amount will be financed through the company's existing, unused, $300 million credit facility provided by a bank group led by Citigroup Global Markets Inc. and Wachovia Capital Markets LLC. The transaction is expected to close in the third quarter, subject to the customary closing conditions. CAS is a premier full service provider based in Huntsville, Ala., a growing center for the missile-defense, aviation, and logistics programs of its largest customer, the United States Army. It has approximately 1,000 employees operating in 13 states, as well as on military bases worldwide. Revenue for the 12 months ended March 31, 2006 was $184.3 million. Revenue has grown steadily since the company's founding in 1979, with annual growth averaging more than 18 percent over the past five fiscal years. The acquisition will be immediately accretive to EDO's earnings. "This acquisition will significantly increase the breadth and scale of our professional and engineering services-related revenue base," said EDO Chief Executive Officer James M. Smith. EDO will benefit from a substantially increased presence with the Army, while CAS will benefit from a larger customer base and EDO's broad technical diversity and capabilities. "The management team at CAS is well respected within their customer community, as reflected by their impressive record of wins on all re-competed contracts over the past ten years. We expect the CAS team to play a major role along side our current Professional and Engineering Services team in executing our combined professional services operational strategy. "As a result of this acquisition, we see substantial new opportunities for growth," continued Smith. "We will also strengthen our ability to serve the expanding Army presence in Huntsville, where a number of operations will be consolidated as a result of base closings mandated by the 2005 Base Realignment and Closure round. This is truly an excellent opportunity for all employees of the combined organizations to excel as part of a larger, more diverse business." Services provided by CAS include system engineering and analysis support for theater missile defense, air defense, aviation, and land-combat missile systems. A prominent example is the company's support of the PATRIOT missile program. The current PATRIOT support contract, valued at $377 million, was awarded in October 2003 and extends until October 2008. In 2005 CAS won the Army's Aviation and Missile Command (AMCOM) Expedited Professional and Engineering Support Services (EXPRESS) competition in the "Programmatic" domain. EXPRESS is a contractual vehicle that enables AMCOM to acquire qualified, cost-effective services in a timely and efficient manner. This significant win will allow the company to continue as a premier systems-engineering and technical-assistance contractor providing support to projects at Redstone Arsenal. CAS had a funded backlog of $147 million, plus unfunded contracts and unexercised options of approximately $750 million, as of its latest fiscal year ended March 31. The company will become part of EDO's Engineered Systems and Services reporting segment. BB&T Capital Markets | Windsor Group acted as the exclusive financial advisor to CAS, Inc. in this transaction. About EDO Corporation EDO Corporation designs and manufactures a diverse range of products for defense, intelligence, and commercial markets. Major product groups include: Professional and Engineering Services, Defense Electronics, Communications, Aircraft Armament Systems, Undersea Warfare, and Integrated Composite Structures. EDO's advanced systems are at the core of the transformation to lighter, faster, and smarter defense capabilities. With headquarters in New York, EDO Corporation (www.edocorp.com) employs 3,000 people worldwide. The company was founded in 1925 and had revenues of $648 million in 2005. Forward-Looking Statements Certain statements made in this release, including statements about future revenue and revenue growth, future earnings, and anticipated financing arrangements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about the company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: changes in demand for the company's products and services, product mix, the timing of customer orders and deliveries, the impact of competitive products and services and pricing, and other risks discussed from time to time in the company's Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release. CONTACT: EDO Corporation Investor Relations: William A. Walkowiak, 212-716-2038 ir@edocorp.com or Corporate Communications: Sara Banda, 212-716-2071 media@edocorp.com EX-99 4 a5197092ex99c.txt EXHIBIT 99C Exhibit 99c EDO to Acquire Impact Science & Technology; Provider of Advanced SIGINT & Information Warfare Systems NEW YORK--(BUSINESS WIRE)--July 27, 2006--EDO Corporation (NYSE: EDO) has signed a definitive agreement to acquire Impact Science & Technology Inc (IST), a privately-held company that provides Signals Intelligence (SIGINT) systems and analysis support to the intelligence community, and advanced countermeasures and electronic-attack systems to the DOD and other government agencies. EDO will purchase all of the outstanding shares of the company for $124 million, consisting of a cash payment of $106 million and an $18 million promissory note to be paid over three years. This results in a purchase price of $113 million net of the company's cash balance of $11 million at the time of the offer. The definitive agreement includes a purchase price adjustment based on changes in the company's net book value at the time of the closing. In addition, certain senior managers will receive retention payments in the form of restricted common shares valued at approximately $9 million. EDO will fund the acquisition from its current cash balance and its existing $300 million credit facility provided by a bank group led by Citigroup Global Markets Inc. and Wachovia Capital Markets LLC. The transaction is expected to close in the third quarter, subject to the customary closing conditions. IST has approximately 200 employees and is based in Nashua, N.H., with additional operations in Maryland and Colorado. Revenue for the 12 months ended March 31, 2006 was $63 million. Over the past five years, revenue has grown at a compound annual growth rate of 60 percent. IST will become part of the Electronic Systems and Communications reporting segment, and will be immediately accretive to EDO's earnings. "IST will greatly increase our presence with key customers in the intelligence community, DOD, and Homeland Security," said EDO Chief Executive Officer James M. Smith. "Combining the SIGINT and advanced countermeasure technologies of IST with EDO's specialized surveillance, communications, and force-protection products will strengthen our presence in a number of strategically important, growing business areas. "IST has some unique capabilities that have been recognized by its customers. As part of EDO, these capabilities can be enhanced to an even larger scale." Much of the work done by IST is classified. The company's products involve Electronic Intelligence (ELINT) collection and storage systems, software products, and systems engineering and analysis services for the intelligence community. IST also provides advanced radar countermeasures, electronic attack and information warfare systems for the DOD and other government agencies. About EDO Corporation EDO Corporation designs and manufactures a diverse range of products for defense, intelligence, and commercial markets, and provides related engineering and professional services. Major product groups include: Defense Electronics, Communications, Aircraft Armament Systems, Undersea Warfare, Professional and Engineering Services, and Integrated Composite Structures. EDO's advanced systems are at the core of the transformation to lighter, faster, and smarter defense capabilities. With headquarters in New York, EDO Corporation (www.edocorp.com) employs 3,000 people worldwide. The company was founded in 1925 and had revenues of $648 million in 2005. Forward-Looking Statements Certain statements made in this release, including statements about future revenue and revenue growth, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about the company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: changes in demand for the company's products and services, product mix, the timing of customer orders and deliveries, the impact of competitive products and services and pricing, and other risks discussed from time to time in the company's Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release. CONTACT: EDO Corporation Investor Relations: William A. Walkowiak, CFA, 212-716-2038 ir@edocorp.com or Corporate Communications: Sara Banda, 212-716-2071 media@edocorp.com -----END PRIVACY-ENHANCED MESSAGE-----