0000317093-95-000007.txt : 19950821 0000317093-95-000007.hdr.sgml : 19950821 ACCESSION NUMBER: 0000317093-95-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950814 DATE AS OF CHANGE: 19950818 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANDREW CORP CENTRAL INDEX KEY: 0000317093 STANDARD INDUSTRIAL CLASSIFICATION: 3663 IRS NUMBER: 362092797 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-09514 FILM NUMBER: 95564410 BUSINESS ADDRESS: STREET 1: 10500 W 153RD ST CITY: ORLAND PARK STATE: IL ZIP: 60462 BUSINESS PHONE: 7083493300 MAIL ADDRESS: STREET 1: 10500 WEST 153RD ST CITY: ORLANDO PARK STATE: IL ZIP: 60462 10-Q 1 FORM 10-Q (06-30-95) 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 For the transition period from to -------------- -------------- Commission file number 0-9514 ANDREW CORPORATION (Exact name of Registrant as specified in its charter) DELAWARE 36-2092797 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) identification No.) 10500 W. 153rd Street, Orland Park, Illinois 60462 (Address of principal executive offices and zip code) (708) 349-3300 (Registrant's telephone number, including area code) No Change (Former name, former address and former fiscal year, if changed since last report) 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 as 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 latest practical date. Common Stock, $.01 Par Value--38,869,109 shares as of July 31, 1995 ------------------------------------------------------------------- INDEX ANDREW CORPORATION PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Consolidated balance sheets--June 30, 1995 and September 30, 1994. Consolidated statements of income--Three months ended June 30, 1995 and 1994; Nine months ended June 30, 1995 and 1994. Consolidated statements of cash flows--Nine months ended June 30, 1995 and 1994. Notes to consolidated financial statements--June 30, 1995. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. EXHIBIT 11 - Computation of Earnings per Share. SIGNATURES ANDREW CORPORATION CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
June 30 Sept. 30 1995 1994 --------- --------- (Unaudited) ASSETS Current Assets Cash and cash equivalents $ 36,200 $ 40,267 Accounts receivable, less allowances (Jun. $3,041; Sept. $2,769) 140,065 126,821 Inventories Finished products 41,217 31,413 Materials and work in process 71,589 56,174 --------- --------- 112,806 87,587 Miscellaneous current assets 4,888 5,974 --------- --------- Total Current Assets 293,959 260,649 --------- --------- Other Assets Costs in excess of net assets of businesses acquired, less accumulated amortization (Jun. $15,886; Sept. $13,919) 36,315 38,272 Investments in and advances to affiliates 31,128 27,119 Investments and other assets 9,971 14,157 Property, Plant, and Equipment Land and land improvements 9,222 8,496 Building 53,300 52,422 Equipment 196,177 169,716 Allowances for depreciation and amortization (167,000) (155,668) --------- --------- 91,699 74,966 --------- --------- Total Assets $ 463,072 $ 415,163 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $ 28,539 $ 24,902 Accrued expenses and other liabilities 22,925 24,354 Compensation and related expenses 22,569 22,928 Income taxes 4,017 14,899 Current portion of long-term debt 4,545 4,545 --------- --------- Total Current Liabilities 82,595 91,628 Deferred Liabilities 8,538 5,226 Long-Term Debt, less current portion 49,255 45,455 Stockholders' Equity Common Stock (par value, $.01 a share: 100,000,000 shares authorized 45,653,823 shares issued, including treasury) 457 304 Additional paid-in capital 39,817 31,205 Foreign currency translation 855 (1,283) Retained earnings 338,718 294,929 Treasury stock, at cost (6,802,789 shares Jun.; 7,336,740 shares Sept.) (57,163) (52,301) --------- --------- 322,684 272,854 --------- --------- Total Liabilities and Equity $ 463,072 $ 415,163 ========= ========= The balance sheet at September 30, 1994 has been derived from the audited financial statements at that date. See Notes to Consolidated Financial Statements.
ANDREW CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except per share amounts)
Three Months Ended Nine Months Ended June 30 June 30 ---------------------- ---------------------- 1995 1994 1995 1994 --------- --------- --------- --------- Sales $ 161,272 $ 135,970 $ 460,220 $ 399,875 Cost of products sold 90,931 77,232 267,673 239,634 --------- --------- --------- --------- Gross Profit 70,341 58,738 192,547 160,241 Operating Expenses Sales and administrative 35,642 32,333 102,902 94,322 Research and development 6,100 6,045 17,576 18,993 --------- --------- --------- --------- 41,742 38,378 120,478 113,315 Operating Income 28,599 20,360 72,069 46,926 Other Interest expense 940 1,257 3,783 3,815 Interest income (208) (259) (1,579) (766) Other (income) expense (954) 2,068 1,445 2,335 --------- --------- --------- --------- (222) 3,066 3,649 5,384 Income Before Income Taxes 28,821 17,294 68,420 41,542 Income taxes 10,375 6,226 24,631 14,955 --------- --------- --------- --------- Net Income $ 18,446 $ 11,068 $ 43,789 $ 26,587 ========= ========= ========= ========= Net Income per Average Share of Common Stock Outstanding $ 0.47 $ 0.28 $ 1.11 $ 0.68 ========= ========= ========= ========= Average Shares Outstanding 39,454 39,213 39,290 39,038 ========= ========= ========= ========= See Notes to Consolidated Financial Statements.
ANDREW CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)
Nine Months Ended June 30 ---------------------- 1995 1994 --------- --------- Cash Flows from Operations Net Income $ 43,789 $ 26,587 Adjustments to Net Income Equity in losses of affiliates 1,462 Depreciation and amortization 17,522 16,153 Change in Assets and Liabilities Accounts receivable (11,375) (11,889) Inventories (25,440) (15,759) Prepaid expenses and other assets 5,506 (727) Receivables from affiliates (709) (5,928) Accounts payable and other liabilities (4,192) 14,229 Other (59) 101 --------- --------- Net Cash From Operations 26,504 22,767 Investing Activities Capital expenditures (32,040) (16,371) Investments in and advances to affiliates (5,471) (9,887) Proceeds from sale of property, plant, and equipment 260 251 --------- --------- Net Cash Used In Investing Activities (37,251) (26,007) Financing Activities Proceeds from long-term debt 3,800 Stock purchase and option plans 2,669 1,258 --------- --------- Net Cash From Financing Activities 6,469 1,258 Effect of exchange rate changes on cash 211 486 --------- --------- Decrease for the period (4,067) (1,496) Cash and equivalents at beginning of period 40,267 21,729 --------- --------- Cash and Equivalents at End of Period $ 36,200 $ 20,233 ========= ========= See Notes to Consolidated Financial Statements.
ANDREW CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE A--BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended June 30, 1995 are not necessarily indicative of the results that may be expected for the year ending September 30, 1995. For further information, refer to the consolidated financial statements and footnotes hereto included in the company's annual report on Form 10-K for the year ended September 30, 1994. NOTE B--CHANGES IN ACCOUNTING PRINCIPLES Effective October 1, 1994 Andrew Corporation adopted Statement of Financial Accounting Standards (SFAS) No. 115 "Accounting for Certain Investments in Debt and Equity Securities." Adoption of this statement did not have a material effect on the company's financial statements. NOTE C--STOCK SPLIT On February 3, 1995, the company's Board of Directors declared a three-for-two stock split to stockholders of record on February 22, 1995, payable March 8, 1995. All share and per share amounts have been restated for all periods presented to reflect the stock split. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS - Period Ended June 30, 1995 Net sales for the third quarter of fiscal year 1995 increased $25.3 million, or 19% compared to the same period last year. On a year-to-date basis, net sales totaled $460.2 million, an increase of 15% compared to last year. Increased demand for the company's products in the worldwide wireless communications markets accounted for the majority of the sales growth for both the quarter and the year. The company also benefited from increased sales to terrestrial microwave and broadcast markets. Weakness in the network products segment has partially offset the overall sales growth. Fiscal year 1994 results included sales from the company's major cellular project in Argentina, which totaled $38.3 million for the first nine months of the year and $6.4 million for the quarter. Total backlog has grown substantially since the 1994 fiscal year end. Total backlog has increased $67 million to $152 million, while backlog over 12 months has increased $20 million to $21 million during the first nine months of fiscal year 1995. These increases are primarily attributable to the company's major distributed communications projects with MFS Technologies and the Hong Kong Metro, which total $60 million in year-to-date orders. Cost of products sold as a percentage of sales for the quarter remained relatively stable. On a year-to-date basis, cost of products sold decreased to 58.2% of sales, a decrease of 1.7% compared with the first nine months of fiscal year 1994. The year-to-date decrease is the result of a favorable product mix during the first six months of fiscal year 1995, and lower than average margins on the company's fiscal year 1994 Argentina project. As a percentage of revenue, sales and administrative expenses have decreased for both the quarter and the first nine months of fiscal year 1995 compared to fiscal year 1994. Cost reduction programs implemented in the network products segment partially offset the overall dollar growth in sales and administrative expenses for both the quarter and year. For the year, research and development costs have decreased $1.4 million, or 7% compared with the same period last year. This decrease resulted from cost control efforts in Network Products and from the narrowing of its focus to local area network (LAN) products. Other income for the quarter totaled $1.0 million compared to other expense of $2.1 million for the third quarter of fiscal year 1994. This increase was due primarily to the conversion and sale of the Allen Group debentures held by the company, which resulted in other income of $1.7 million. Decreased foreign exchange losses contributed to the remainder of the improvement. On a year-to-date basis, other expense decreased $.9 million compared to the same period last year. The company's estimated share of its joint venture losses, which totaled $1.5 million, partially offset the gain on the conversion and sale of the Allen Group debentures for the year. LIQUIDITY AND CAPITAL RESOURCES Increased inventory and growth in accounts receivables partially offset the increased cash flows from net income and noncash expenses, resulting in net cash from operations of $26.5 million. The increase in inventory is due primarily to the company's increased investment in its wireless telephone products, equipment buildings, and distributed communications businesses. The growth in capital expenditures is the result of manufacturing expansion and upgrades and the implementation of new business information systems. The company's investment in its affiliates has decreased compared to fiscal year 1994, due to the fact that basic system construction has been completed at three of its fiber optic ventures. In the first quarter of fiscal year 1995, the company issued an Industrial Development Revenue Bond of $3.8 million. The proceeds from this issue are being used to finance the company's new equipment building production facility in Newnan, Georgia. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: Exhibit 11 - 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. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ANDREW CORPORATION Date 14 August 1995 F. L. English ----------------------- -------------------------------- F. L. English Chairman of the Board, President and Chief Executive Officer Date 14 August 1995 C. R. Nicholas ----------------------- ------------------------------------------ C. R. Nicholas Vice President, Finance and Administration and Chief Financial Officer EX-11 2 EXHIBIT 11 EXHIBIT 11 ANDREW CORPORATION Computation of Earnings Per Share (In thousands, except per share amounts)
Three Months Nine Months Ended Ended June 30 June 30 --------------- --------------- 1995 1994 1995 1994 ------ ------ ------ ------ PRIMARY EARNINGS PER SHARE Average shares outstanding 38,693 38,133 38,529 37,958 Net effect of dilutive stock options-- based on the treasury stock method using average market price 700 1,067 588 957 ------ ------ ------ ------ TOTAL 39,393 39,200 39,117 38,915 ====== ====== ====== ====== Net income 18,446 11,068 43,789 26,587 ====== ====== ====== ====== Per share amount 0.47 0.28 1.12 0.68 ====== ====== ====== ====== FULLY DILUTED EARNINGS PER SHARE Average shares outstanding 38,693 38,133 38,529 37,958 Net effect of dilutive stock options-- based on the treasury stock method using quarter end market price 761 1,080 761 1,080 ------ ------ ------ ------ TOTAL 39,454 39,213 39,290 39,038 ====== ====== ====== ====== Net income 18,446 11,068 43,789 26,587 ====== ====== ====== ====== Per share amount 0.47 0.28 1.11 0.68 ====== ====== ====== ======
EX-27 3 ARTICLE 5 FDS
5 1,000 9-MOS SEP-30-1995 JUN-30-1995 36,200 0 143,106 3,041 112,806 293,959 258,699 167,000 463,072 82,595 49,255 457 0 0 322,227 463,072 460,220 460,220 267,673 267,673 120,478 699 3,783 68,420 24,631 43,789 0 0 0 43,789 1.12 1.11 All per share amounts in this exhibit have been restated to reflect a three-for-two stock split to stockholders of record on February 22, 1995.