-----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, O1KcTJ/G6YZ6I4Mbr2IuDUv6S+4fu9e7s+ZYIWszT1166ghOlWUNKX3AU4BUTWwV 5fL2gQJ9SQj4XvSWtW2pLw== 0000317093-96-000016.txt : 19960923 0000317093-96-000016.hdr.sgml : 19960923 ACCESSION NUMBER: 0000317093-96-000016 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 19950930 ITEM INFORMATION: Other events FILED AS OF DATE: 19960920 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANDREW CORP CENTRAL INDEX KEY: 0000317093 STANDARD INDUSTRIAL CLASSIFICATION: DRAWING AND INSULATING NONFERROUS WIRE [3357] IRS NUMBER: 362092797 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-09514 FILM NUMBER: 96632520 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 8-K 1 FORM 8-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 September 18, 1996 Date of Report (Date of earliest event reported) Andrew Corporation (Exact name of registrant as specified in its charter) Delaware 0-9514 36-2092797 (State or other jurisdiction of (Commission file number) (I.R.S. Employer incorporation or organization) Identification No.) 10500 W. 153rd Street, Orland Park, Illinois 60462 (Address of principal executive offices) (708) 349-3300 (Registrant's telephone number, including area code) No Change (Former name or former address, if changed since last report.) ================================================================================ Item 5. Other Events Supplemental Financial Statements. In March 1996, Andrew Corporation completed its acquisition of The Antenna Company, a manufacturer and distributor of wireless telephone antennas and accessories for mobile applications. The transaction has been accounted for as a pooling of interests. In compliance with the accounting rules for a pooling of interests, Andrew has restated its consolidated financial statements and related notes included in Form 10-K for the fiscal year ended September 30, 1995 to reflect the results of operations of The Antenna Company for all periods prior to the merger. Management's Discussion and Analysis and all other items in the September 30, 1995 Form 10-K were not materially impacted by the merger. Signatures 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. Date: September 18, 1996 By: /s/Floyd L. English ---------------- Floyd L. English Chairman, President and Chief Executive Officer Date: September 18, 1996 By: /s/Charles R. Nicholas ------------------- Charles R. Nicholas Executive Vice-President and Chief Financial Officer ANDREW CORPORATION EXHIBIT INDEX ------------- Exhibit Number Description - -------------- ----------- 23 Consent of Independent Auditors. 27.1 Financial Data Schedule 12/31/95. 27.2 Financial Data Schedule 9/30/95. 27.3 Financial Data Schedule 6/30/95. 27.4 Financial Data Schedule 3/31/95. 27.5 Financial Data Schedule 12/31/94. 27.6 Financial Data Schedule 9/30/95. 99 Restated 1995 Annual Report to Shareholders. EX-23 2 CONSENT OF INDEPENDENT AUDITORS CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in Registration Statement No. 2-86070 on Form S-8 dated August 23, 1983; Registration Statement No. 33-30364 on Form S-8 dated August 7, 1989; Registration Statement No. 33-58750 on Form S-8 dated February 24, 1993; Registration Statement No. 33-58752 on Form S-8 dated February 24,1993; Registration Statement No. 33-52487 on Form S-8 dated March 2, 1994 and Post-Effective Amendment No. 1 to Registration Statement No. 33-52487 on Form S-8 dated March 3, 1994 of our report dated November 3, 1995 (except for Subsequent Events footnote, as to which the date is August 28, 1996) with respect to the consolidated financial statements of Andrew Corporation included in its Current Report on Form 8-K dated September 18, 1996, filed with the Securities and Exchange Commission. /s/Ernst & Young, LLP Chicago, Illinois September 18, 1996 EX-27.1 3 RESTATED ART. 5 FDS 12/31/95
5 1,000 3-MOS SEP-30-1996 DEC-31-1995 22,893 0 159,247 3,472 138,482 322,351 298,828 180,128 533,855 101,916 45,879 0 0 457 373,167 533,855 177,924 177,924 106,071 106,071 44,383 266 1,277 26,424 9,513 16,911 0 0 0 16,911 0.28 0.28 All amounts in this exhibit have been restated to reflect the merger of Andrew Corporation and The Antenna Company, as well as a three-for-two stock split to stockholders of record on February 21, 1996.
EX-27.2 4 RESTATED ARTICLE 5 FDS 09/30/95
5 1,000 YEAR SEP-30-1995 SEP-30-1995 46,064 0 150,669 3,071 124,325 322,745 277,423 174,862 505,114 95,581 45,255 0 0 457 356,734 505,114 663,960 663,960 381,842 381,842 168,139 1,148 5,643 109,473 39,518 69,955 0 0 0 69,955 1.16 1.16 All amounts in this exhibit have been restated to reflect the merger of Andrew Corporation and The Antenna Company, as well as a three-for-two stock split to stockholders of record on February 22, 1995 and the three-for-two stock split to stockholders of record on February 21, 1996.
EX-27.3 5 RESTATED ART. 5 FDS 06/30/95
5 1,000 9-MOS SEP-30-1995 JUN-30-1995 36,598 0 147,385 3,044 117,402 303,494 262,466 168,675 474,699 88,249 50,335 0 0 457 327,120 474,699 485,945 485,945 284,023 284,023 127,632 699 4,064 70,343 25,300 45,043 0 0 0 45,043 0.74 0.74 All amounts in this exhibit have been restated to reflect the merger of Andrew Corporation and The Antenna Company, as well as a three-for-two stock split to stockholders of record on February 22, 1995 and the three-for-two stock split to stockholders of record on February 21, 1996.
EX-27.4 6 RESTATED ART. 5 FDS 03/31/95
5 1,000 6-MOS SEP-30-1995 MAR-31-1995 24,592 0 141,999 3,200 111,711 280,862 252,970 163,833 451,308 89,915 50,923 0 0 457 304,216 451,308 315,467 315,467 187,233 187,233 83,661 524 3,013 40,608 14,525 26,083 0 0 0 26,083 0.43 0.43 All amounts in this exhibit have been restated to reflect the merger of Andrew Corporation and The Antenna Company, as well as a three-for-two stock split to stockholders of record on February 22, 1995 and the three-for-two stock split to stockholders of record on February 21, 1996.
EX-27.5 7 RESTATED ART. 5 FDS 12/31/94
5 1,000 3-MOS SEP-30-1995 DEC-31-1994 34,380 0 131,692 3,041 102,368 271,942 241,297 160,038 435,324 91,068 50,949 0 0 304 287,520 435,324 151,731 151,731 89,480 89,480 42,153 300 1,451 18,543 6,589 11,954 0 0 0 11,954 0.20 0.20 All amounts in this exhibit have been restated to reflect the merger of Andrew Corporation and The Antenna Company, as well as a three-for-two stock split to stockholders of record on February 22, 1995 and the three-for-two stock split to stockholders of record on February 21, 1996.
EX-27.6 8 RESTATED ART. 5 FDS 09/30/94
5 1,000 YEAR SEP-30-1994 SEP-30-1994 40,714 0 133,265 2,826 91,917 269,160 233,334 156,716 425,326 97,455 46,092 0 0 304 276,249 425,326 588,233 588,233 345,768 345,768 163,377 1,164 5,492 71,644 25,877 45,767 0 0 0 45,767 0.76 0.76 All amounts in this exhibit have been restated to reflect the merger of Andrew Corporation and The Antenna Company, as well as a three-for-two stock split to stockholders of record on February 16, 1994, a three-for-two stock split to stockholders of record on February 22, 1995 and the three-for-two stock split to stockholders of record on February 21, 1996.
EX-99 9 SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS REPORT OF INDEPENDENT AUDITORS We have audited the supplemental consolidated balance sheets of Andrew Corporation (formed as a result of the consolidation of Andrew Corporation and The Antenna Company) as of September 30, 1995 and 1994 and the related supplemental consolidated statements of income, stockholders' equity, and cash flows for each of the three years in the period ended September 30, 1995. The supplemental consolidated financial statements give retroactive effect to the merger of Andrew Corporation and The Antenna Company, on March 15, 1996, which has been accounted for using the pooling of interests method as described in the notes to the supplemental consolidated financial statements. These supplemental financial statements are the responsibility of the management of Andrew Corporation. Our responsibility is to express an opinion on these supplemental financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those stanadards require that we plan and perform the audit to obtain reaonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the supplemental financial statements referred to above present fairly, in all material respects, the consolidated financial position of Andrew Corporation at September 30, 1995 and 1994, and the consolidated results of its operations and its cash flows for each of the three years in the period ended September 30, 1995 after giving retroactive effect to the merger of The Antenna Company, as described in the notes to the supplemental consolidated financial statements, in conformity with generally accepted accounting principles. /s/ Ernst & Young, LLP November 3, 1995 except for Subsequent Events footnote, as to which the date is August 28, 1996 CONSOLIDATED STATEMENTS OF INCOME
ANDREW CORPORATION Year Ended September 30 - --------------------------------------------------------------------------------- Amounts in Thousands, Except per Share Amounts 1995 1994 1993 - --------------------------------------------------------------------------------- SALES $663,960 $588,233 $451,957 Cost of products sold 381,842 345,768 265,357 - --------------------------------------------------------------------------------- GROSS PROFIT 282,118 242,465 186,600 OPERATING EXPENSES Sales and administrative 143,015 136,766 114,558 Research and development 25,124 26,611 22,479 - --------------------------------------------------------------------------------- 168,139 163,377 137,037 - --------------------------------------------------------------------------------- OPERATING INCOME 113,979 79,088 49,563 OTHER Interest expense 5,643 5,492 5,772 Interest income (2,562) (1,343) (830) Other expense (income) 1,425 3,295 (1,530) - --------------------------------------------------------------------------------- 4,506 7,444 3,412 - --------------------------------------------------------------------------------- INCOME BEFORE INCOME TAXES 109,473 71,644 46,151 Income taxes 39,518 25,877 16,748 - --------------------------------------------------------------------------------- NET INCOME $69,955 $45,767 $29,403 ================================================================================= NET INCOME PER AVERAGE SHARE OF COMMON STOCK OUTSTANDING $1.16 $0.76 $0.50 ================================================================================= AVERAGE SHARES OUTSTANDING 60,485 60,308 59,192 ================================================================================= See Notes to Consolidated Financial Statements
ANDREW CORPORATION CONSOLIDATED BALANCE SHEETS
September 30 - --------------------------------------------------------------------- Dollars in Thousands 1995 1994 - --------------------------------------------------------------------- ASSETS Current Assets Cash and cash equivalents $ 46,064 $ 40,714 Accounts receivables, less allowances (1995 - $3,071; 1994 - $2,826) 147,598 130,439 Inventories Finished products 45,333 34,005 Materials and work in process 78,992 57,912 - --------------------------------------------------------------------- 124,325 91,917 Miscellaneous current assets 4,758 6,090 - --------------------------------------------------------------------- Total Current Assets 322,745 269,160 Other Assets Costs in excess of net assets of businesses acquired less accumulated amortization (1995 - $16,524; 1994 - $13,919) 35,667 38,272 Investments in and advances to affiliates 33,480 27,119 Investments and other assets 10,661 14,157 Property, Plant and Equipment Land and land improvements 9,402 8,496 Buildings 55,069 52,422 Equipment 212,952 172,416 Allowances for depreciation and amortization (174,862) (156,716) - --------------------------------------------------------------------- 102,561 76,618 - --------------------------------------------------------------------- $ 505,114 $ 425,326 - --------------------------------------------------------------------- See Notes to Consolidated Financial Statements
ANDREW CORPORATION CONSOLIDATED BALANCE SHEET
September 30 - ------------------------------------------------------------------------- Dollars in Thousands 1995 1994 - ------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Notes Payable $ 2,450 $ 1,700 Accounts payable 30,628 26,894 Accrued expenses and other liabilites 17,893 24,740 Compensation and related expenses 25,815 23,228 Income taxes 13,994 15,188 Current portion of long-term debt 4,801 5,705 - ------------------------------------------------------------------------- TOTAL CURRENT LIABILITIES 95,581 97,455 DEFERRED LIABILITIES 7,087 5,226 LONG-TERM DEBT, less current portion 45,255 46,092 STOCKHOLDERS' EQUITY Common stock (par value, $.01 a share: 100,000,000 shares authorized; 68,480,735 shares issued, including treasury) 457 304 Additional paid-in capital 35,588 22,356 Foreign currency translation 1,077 (1,250) Retained earnings 368,517 298,562 Treasury stock, at cost (8,431,449 shares in 1995; 9,463,546 shares in 1994) (48,448) (43,419) - ------------------------------------------------------------------------- 357,191 276,553 - ------------------------------------------------------------------------- $ 505,114 $ 425,326 - ------------------------------------------------------------------------- See Notes to Consolidated Financial Statements
ANDREW CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended September 30 - ------------------------------------------------------------------------------------ Dollars in Thousands 1995 1994 1993 - ------------------------------------------------------------------------------------ CASH FLOWS FROM OPERATIONS Net Income $ 69,955 $ 45,767 $ 29,403 ADUSTMENTS TO NET INCOME Depreciation and amortization 25,803 22,889 21,478 Equity in losses of affiliates 1,462 913 150 Increase in accounts receivable (15,334) (18,087) (1,078) Increase in inventories (32,078) (17,725) (5,185) Decrease (increase) in miscellaneous current and other assets 5,488 (1,667) (1,479) Increase in receivable from affiliates (1,171) (6,467) - Increase in accounts payable and other liabilities 1,638 27,561 10,204 Other 53 (841) 1,418 - ------------------------------------------------------------------------------------ NET CASH FROM OPERATIONS 55,816 52,343 54,911 INVESTING ACTIVITIES Capital expenditures (48,076) (28,471) (18,479) Investments in and advances to affiliates (7,823) (10,626) (15,513) Proceeds from sale of property, plant and equipment 532 405 697 - ------------------------------------------------------------------------------------ NET CASH USED IN INVESTING ACTIVITIES (55,367) (38,692) (33,295) FINANCING ACTIVITIES Proceeds from issuance of long-term debt 3,842 - 800 Payments on long-term debt (5,583) (696) (4,202) Short-term borrowings (payments)-net 750 1,700 (8,000) Stock purchase and option plans 5,561 3,255 5,464 - ------------------------------------------------------------------------------------ NET CASH FROM (USED IN) FINANCING ACTIVITIES 4,570 4,259 (5,938) Effect of exchange rate changes on cash 331 803 (1,440) - ------------------------------------------------------------------------------------ Increase for the year 5,350 18,713 14,238 Cash and equivalents at beginning of year 40,714 22,001 7,763 - ------------------------------------------------------------------------------------ CASH AND EQUIVALENTS AT END OF YEAR $ 46,064 $ 40,714 $ 22,001 - ------------------------------------------------------------------------------------ See Notes to Consolidated Financial Statements
ANDREW CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Year Ended September 30 - --------------------------------------------------------------------------------------------- In Thousands 1995 1994 1993 - --------------------------------------------------------------------------------------------- COMMON STOCK ISSUED Balance at beginning of year (1993 as previously stated) $ 304 $ 203 $ 101 Three-for-two stock split 153 101 Two-for-one stock split 102 - --------------------------------------------------------------------------------------------- BALANCE AT END OF YEAR $ 457 $ 304 $ 203 ============================================================================================= ADDITIONAL PAID-IN CAPITAL Balance at beginning of year (1993 as previously stated) $ 22,356 $ 19,599 $ 28,343 Three-for-two stock split (153) (101) - Two-for-one stock split - - (102) Stock purchase and option plans 13,385 2,858 207 Pooling of Interests with The Antenna Company - - (8,849) - --------------------------------------------------------------------------------------------- BALANCE AT END OF YEAR $ 35,588 $ 22,356 $ 19,599 ============================================================================================= RETAINED EARNINGS Balance at beginning of year (1993 as previously stated) $ 298,562 $ 252,795 $ 222,672 Net Income 69,955 45,767 29,403 Pooling of Interests with The Antenna Company - - 720 - --------------------------------------------------------------------------------------------- BALANCE AT END OF YEAR $ 368,517 $ 298,562 $ 252,795 ============================================================================================= TREASURY STOCK Balance at beginning of year (1993 as previously stated) $ (43,419) $ (45,323) $ (61,144) Stock purchase and option plans (5,029) 1,904 6,939 Pooling of Interests with The Antenna Company - - 8,882 - --------------------------------------------------------------------------------------------- BALANCE AT END OF YEAR $ (48,448) $ (43,419) $ (45,323) ============================================================================================= See Notes to Consolidated Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Summary of Significant Accounting Policies Principles of consolidation The consolidated financial statements include the accounts of the company and its majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Cash equivalents The company considers all highly liquid investments purchased with maturities of three months or less to be cash equivalents. The carrying amount of cash equivalents approximates fair value due to the relative short-term maturity of these investments. Inventories Inventories are stated at the lower of cost or market. Inventories stated under the last-in, first-out (LIFO) method represent 39% of total inventories in 1995 and 42% of total inventories in 1994. The remaining inventories are valued on the first-in, first-out (FIFO) method and the weighted average method. If the FIFO method, which approximates current replacement cost, had been used for all inventories, the total amount of inventories would have been increased by $11,189,000 and $11,610,000 at September 30, 1995 and 1994, respectively. Depreciation and amortization The company provides for depreciation and amortization of property, plant and equipment, all of which are recorded at cost, principally using accelerated methods based on estimated useful lives of the assets for both financial reporting and tax purposes. Costs in excess of net assets of businesses acquired are amortized on the straight-line basis over periods ranging from 10 to 40 years. Investments in affiliates Investments in affiliates are accounted for using the equity method, under which the company's share of earnings or losses of these affiliates is reflected in income as earned and dividends are credited against the investment in affiliates when received. Revenue recognition Revenue is recognized from sales, other than long-term contracts, when a product is shipped or a service is performed. Sales under long-term contracts generally are recognized under the percentage of completion method and include a portion of the earnings expected to be realized on the contract in the ratio that costs incurred bear to estimated total costs. Contracts in progress are reviewed monthly, and sales and earnings are adjusted in current accounting periods based on revisions in contract value and estimated costs at completion. Estimated losses on contracts are provided when identified. Foreign currency translation The functional currency for the company's foreign operations is predominantly the applicable local currency. Accounts of foreign operations are translated into US dollars using year-end exchange rates for assets and liabilities and average monthly exchange rates for revenue and expense accounts. Adjustments resulting from translation are included as a seperate component of stockholders' equity. Gains and losses resulting from foreign currency transactions are included in determining net income. Income taxes Deferred income taxes reflect the impact of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. In accordance with Statement of Financial Accounting Standards ("SFAS") No. 109 "Accounting for Income Taxes," these deferred taxes are measured by applying currently enacted tax laws. In years prior to fiscal 1994, deferred taxes were accounted for in accordance with Accounting Principles Board ("APB") Opinion No. 11. Net income per share Net income per share is based on the weighted average number of common shares outstanding during each year after giving effect to stock options considered to be dilutive common stock equivalents. Fully diluted net income per share is not materially different from primary earnings per share. Accounting changes The company adopted SFAS No. 115 "Accounting for Certain Investments in Debt and Equity Securities" during the first quarter of fiscal year 1995. During the first quarter of 1994, the company adopted SFAS No. 106 "Employers' Accounting for Postretirement Benefits Other Than Pensions," SFAS No. 109 "Accounting for Income Taxes" and SFAS No. 112 "Employers' Accounting for Postemployment Benefits". The adoption of these statements did not have a material effect on the company's financial statements. Investments in Affiliates The company's investments in affiliates represent 40 to 50 percent interests in several start-up network telecommunications joint ventures located in Russia and Ukraine. The combined operating results of the ventures and the company's share thereof were not material to the company's 1995, 1994 and 1993 operating results. Unbilled Receivables At September 30, 1995, unbilled receivables of $11,750,000 are included in accounts receivable, compared to $14,207,000 at September 30, 1994. These amounts will be billed in accordance with contract terms and delivery schedules and are generally expected to be collected within one year. Profit Sharing Plans Most employees of Andrew Corporation and its subsidiaries participate in various retirement plans, principally defined contribution profit sharing plans. The amounts charged to earnings for these plans in 1995, 1994, and 1993 were $11,696,000, $11,027,000, and $7,025,000 respectively. Borrowings - -------------------------------------------------------------------------------- Lines of Credit The Company maintains a $50 million revolving line of credit agreement with Bank of America, Illinois and a $5 million line of credit agreement with LaSalle National Bank. The maximum outstanding during 1995 under the LaSalle line of credit was $3.3 million with a weighted average interest rate of 8.75%. There were no amounts outstanding under the Bank of America, Illinois line of credit at September 30, 1995. Long-term Debt Long-term debt at September 30 consisted of the following:
In Thousands 1995 1994 ------- ------- 9.52% senior notes payable to insurance companies in annual installments from 1995 to 2005 $45,455 $50,000 Variable rate Industrial Development Revenue Bond with Coweta County, Georgia 3,800 - Other 801 1,797 Less Current Portion 4,801 5,705 ------- ------- Total Long-Term Debt $45,255 $46,092 ======= =======
Under the terms of the loan agreements, the company has agreed to maintain certain levels of working capital and net worth. The loan agreements further provide restrictions on dividend payments. At September 30, 1995, all these requirements have been met. The principal amounts of long-term debt maturing after September 30, 1995 are: In Thousands 1996 1997 1998 1999 2000 Thereafter ------ ------ ------ ------ ------ ---------- $4,801 $5,080 $4,555 $4,545 $4,545 $26,530 Cash payments for interest on all borrowings were $5,339,000, $5,307,000 and $5,398,000 in 1995,1994 and 1993, respectively. The carrying amount of long-term debt as of September 30, 1995 approximates fair value. The fair value was determined by discounting the future cash outflows based upon the current market rates for instruments with a similar risk and term to maturity. INCOME TAXES - -------------------------------------------------------------------------------- The composition of the provision for income taxes follows:
YEAR ENDED SEPTEMBER 30 DOLLARS IN THOUSANDS 1995 1994 1993 -------- -------- -------- Currently Payable: Federal $ 19,957 $ 14,191 $ 4,809 Non-United States 13,640 12,860 10,817 State 3,624 3,008 1,391 -------- -------- -------- 37,221 30,059 17,017 Deferred (Credit): Federal and State 2,199 (3,662) (232) Non-United States 98 (520) (37) -------- -------- -------- 2,297 (4,182) (269) -------- -------- -------- $ 39,518 $ 25,877 $ 16,748 ======== ======== ======== Income Taxes Paid $ 27,387 $ 19,461 $ 8,155 ======== ======== ======== Components of Income Before Income Taxes: United States 67,079 32,918 14,577 Non-United States 42,394 38,726 31,574 -------- -------- -------- $109,473 $ 71,644 $ 46,151 ======== ======== ========
The company's effective income tax rate varied from the statutory United States federal income tax rate because of the following:
1995 1994 1993 ------ ------ ------ Statutory United States federal tax rate 35.0 % 35.0 % 35.0 % Foreign Sales Corporation (FSC) (2.3) (2.7) (2.5) State income taxes, net of federal tax effect 2.2 2.4 1.8 Goodwill amortization 0.9 1.3 2.1 Other items 0.3 0.1 (0.1) ------ ------ ------ Effective Tax Rate 36.1 % 36.1 % 36.3 % ====== ====== ======
The tax effects of temporary differences have given rise to gross deferred tax assets of $7,402,000, primarily accrued expenses and inventory, and gross deferred tax liabilities of $5,781,000, primarily depreciation, as of September 30, 1995. The company has not recorded a valuation allowance for deferred tax assets, because the existing net deductible temporary differences will reverse during periods in which the company expects to generate taxable income. No provision has been made for income taxes of approximately $4,584,000 at September 30, 1995, which would be payable should undistributed net income of $75,329,000 of subsidiaries located outside the United States be distributed as dividends, since any tax resulting from such a distribution could be substantially offset by resulting tax credits. STOCKHOLDERS' EQUITY - -------------------------------------------------------------------------------- Each outstanding common share has attached to it a one Share Purchase Right which, until exercisable, cannot be transferred apart from the company's Common Stock. The Rights will only become exercisable if a person or group acquires 27% or more of the company's Common Stock or announces an offer to acquire 30% or more of the company's Common Stock. In the event the Rights become exercisable, each Right may entitle the holder to purchase Common Stock of either the surviving or acquired company at one-half its market price. The company currently maintains a long-term Management Incentive Program which provides for the issuance of up to 6,075,000 common shares in the form of stock options and awards and the awarding of performance units payable in cash or stock to key officers and other employees. Substantially all options granted under this plan become fully exercisable at the end of a four-year period and expire five years after grant. The company also maintains a Stock Option Plan for non-employee Directors that provides for the issuance of up to 675,000 common shares. Options issued under this plan vest over a five-year period and expire ten years after grant. Information on options for the last three years ended September 30 is as follows:
Year Ended September 30 -------------------------------------- 1995 1994 1993 ---------- --------- ---------- Outstanding at beginning of year 2,347,200 2,531,142 3,929,810 Granted 558,675 693,225 337,500 Expired or cancelled (48,101) (95,715) (280,085) Exercised (1,279,350) (781,452) (1,456,083) ---------- --------- ---------- Outstanding at End of Year 1,578,424 2,347,200 2,531,142 ========== ========= ========== Exercisable at End of Year 204,525 765,742 699,975 ========== ========= ==========
Year Ended September 30 ------------------------------------------------- 1995 1994 1993 ---------------- --------------- -------------- Price range of options: Outstanding at end of year $ 1.97 - 25.67 $ 1.97 - 14.37 $ 1.97 - 8.07 Granted during the year $ 22.89 - 25.67 $ 10.45 - 14.37 $ 6.26 - 8.07 Exercised during the year $ 2.89 - 6.26 $ 2.07 - 8.07 $ 1.97 - 5.87
The company also has an Employee Stock Purchase Plan which expires February 1, 1999. All employees with six months of service as of the annual offering date are eligible to participate in this Plan. The Plan authorizes up to 1,181,250 shares of Common Stock to be sold to employees at 85% of market value. Through September 30, 1995, 277,767 shares have been issued under the Plan. At September 30, 1995, 3,491,685 shares of Common Stock were reserved for the various stock plans described above. On February 8, 1995, the company's Board of Directors approved a three-for-two stock split to stockholders of record on February 22, 1995, payable March 8, 1995. A three-for-two stock split was also effected in March, 1994 and a two-for-one stock split was effected in March, 1993. Common Stock issued and outstanding and held in treasury is summarized in the tables below:
Year Ended September 30 1995 1994 1993 ---------- ---------- ---------- Shares of Common Stock - Issued Balance at beginning of year 30,435,882 20,290,588 10,145,294 Three-for-two stock split 15,217,941 10,145,294 -- Two-for-one stock split -- -- 10,145,294 ---------- ---------- ---------- Balance at End of Year 45,653,823 30,435,882 20,290,588 ========== ========== ========== Shares of Common Stock - Held in Treasury Balance at beginning of year (1993 as previously stated) 4,206,023 3,038,920 1,982,452 Three-for-two stock split 2,103,012 1,519,460 -- Two-for-one stock split -- -- 1,825,057 Stock purchase and option plans (688,065) (352,357) (311,831) Pooling of Interests with The Antenna Company -- -- (456,758) ---------- ---------- ---------- Balance at End of Year 5,620,970 4,206,023 3,038,920 ========== ========== ==========
Foreign currency translation adjustments increased equity by $2.3 million during the year ended September 30, 1995. Foreign currency translation adjustments increased equity $4.2 million and decreased equity $7.6 million during the years ended September 30, 1994 and 1993, respectively. Geographic Area Information
______________________________________________________________ In thousands 1995 1994 1993 - -------------------------------------------------------------- Sales: United States: Customers $479,883 $440,439 $328,879 Intercompany 62,302 42,754 34,539 - -------------------------------------------------------------- 542,185 483,193 363,418 Europe: Customers 129,029 99,039 81,134 Intercompany 13,890 5,462 2,510 - -------------------------------------------------------------- 142,919 104,501 83,644 Australasia: Customers 32,531 29,254 17,201 Intercompany 1,208 390 228 - -------------------------------------------------------------- 33,739 29,644 17,429 Other Americas: Customers 22,517 19,501 24,743 Intercompany 5,285 3,449 3,008 - -------------------------------------------------------------- 27,802 22,950 27,751 Eliminations 82,685 52,055 40,285 - -------------------------------------------------------------- Consolidated Sales $663,960 $588,233 $451,957 - -------------------------------------------------------------- United States - Export Sales $103,090 $101,829 $54,253 - -------------------------------------------------------------- Operating Income: United States 73,230 44,733 20,074 Europe 20,092 17,629 17,983 Australasia 16,979 12,447 6,472 Other Americas 3,678 4,279 5,034 - -------------------------------------------------------------- Consolidated Operating Income $113,979 $79,088 $49,563 - -------------------------------------------------------------- Assets Identifiable to: United States 371,455 321,497 258,642 Europe 101,550 76,758 61,112 Australasia 13,019 11,406 7,273 Other Americas 19,090 15,665 16,849 - -------------------------------------------------------------- Consolidated Assets $505,114 $425,326 $343,876 - --------------------------------------------------------------
Industry Segment Information - -------------------------------------------------------------------------------- The company operates in three strategic business segments: commercial, government and network. The commercial segment serves commercial markets, including telecommunications companies, radio equipment companies, television stations, utilities and distributors. Products include antennas and antenna systems, and coaxial cable. The government segment serves government markets-federal, foreign and local. Products include specialized antennas and communication reconnaissance systems sold to various United States government agencies and friendly foreign governments. Products also include coaxial cable and standard antennas sold to government customers. The network segment provides products and services supporting the integration of voice, data and video in corporate telecommunication networks. The corporate and other category includes certain expenses for corporate administration; long-range research and development; costs related to unconsolidated affiliates; and results of operations which do not relate to business segments, as well as the assets associated therewith. Corporate identifiable assets also include cash and equivalents. In 1995, direct and indirect sales to agencies of the United States federal government totaled $22,337,000 compared to $27,840,000 in 1994 and $31,257,000 in 1993. Financial information by industry segment is as follows:
Corporate In Thousands Commercial Government Network And Other Total ---------- ---------- -------- --------- -------- 1995: Sales $579,984 $ 41,455 $ 39,217 $ 3,304 $663,960 Operating income (loss) 142,658 3,879 (3,048) (29,510) 113,979 Identifiable assets 329,039 75,308 36,834 63,933 505,114 Capital Expenditures 42,535 1,436 1,305 2,800 48,076 Depreciation and amortization 19,132 2,131 3,202 1,338 25,803 1994: Sales $487,579 $ 43,611 $ 52,208 $ 4,835 $588,233 Operating income (loss) 114,590 1,067 (5,409) (31,160) 79,088 Identifiable assets 238,276 66,800 42,502 77,748 425,326 Capital Expenditures 24,362 1,527 655 1,927 28,471 Depreciation and amortization 14,076 3,256 3,494 2,063 22,889 1993: Sales $336,621 $ 53,958 $ 57,681 $ 3,697 $451,957 Operating income (loss) 74,145 2,547 (1,586) (25,543) 49,563 Identifiable assets 177,061 65,109 52,131 49,575 343,876 Capital Expenditures 11,453 2,614 1,975 2,437 18,479 Depreciation and amortization 12,743 3,531 3,440 1,764 21,478
Selected Quarterly Financial Information (Unaudited) - ------------------------------------------------------------------------------- Due to variability of shipments under large contracts, customers' seasonal installation considerations, variations in product mix and in profitability of individual orders, the company can experience wide quarterly fluctuations in net sales and income. Consequently, it is more meaningful to focus on annual rather than quarterly results.
- ----------------------------------------------------------------------------------------- In Thousands, Except Per Share Amounts December March June September Total - ----------------------------------------------------------------------------------------- 1995: Sales 151,731 163,736 170,478 178,015 663,960 Gross profit 62,251 65,983 73,688 80,196 282,118 Income before income taxes 18,543 22,065 29,735 39,130 109,473 Net Income 11,954 14,129 18,960 24,912 69,955 Net income per share 0.20 0.23 0.31 0.41 1.16 Common Stock Price Range: High 23.83 29.83 38.59 42.67 Low 19.67 22.67 27.33 36.67 - ----------------------------------------------------------------------------------------- 1994: Sales 128,976 149,205 143,464 166,588 588,233 Gross profit 51,029 55,236 61,297 74,903 242,465 Income before income taxes 10,218 14,865 17,967 28,594 71,644 Net Income 6,584 9,511 11,505 18,167 45,767 Net income per share 0.11 0.16 0.19 0.30 0.76 Common Stock Price Range: High 12.92 15.42 17.58 22.33 Low 8.75 10.75 13.67 16.00 - ---------------------------------------------------------------------------------------- The sum of net income per share for the four quarters in 1995 does not equal earnings per share for the year due to differences in average shares outstanding.
SUBSEQUENT EVENTS - -------------------------------------------------------------------------------- Stock Split On February 7, 1996, the Company's Board of Directors declared a three-for-two stock split to stockholders of record on February 21, 1996, payable March 6, 1996. All share and per share amounts have been restated for all periods presented to reflect the stock split. Business Acquisitions In March 1996 Andrew Corporation completed its acquisition of The Antenna Company, a manufacturer and distributor of wireless telephone antennas and accessories for mobile applications. The transaction has been accounted for as a pooling of interests, and accordingly, the accompanying financial statements have been restated to include the accounts and operations of The Antenna Company for all perions prior to the merger. Andrew exchanged 1,541,564 shares of its common stock for all the outstanding stock of the privately held The Antenna Company. Separate results of the combining entities for the three years ended September 30, 1995 are as follows:
Year Ended September 30 ----------------------------------------- In Thousands 1995 1994 1993 ----------------------------------------- Sales: Andrew Corporation $626,463 $558,457 $430,820 The Antenna Company 37,497 29,776 21,137 ----------------------------------------- $663,960 $558,233 $451,957 ========================================= Net Income: Andrew Corporation $ 67,809 $ 44,395 $ 27,862 The Antenna Company 2,146 1,372 1,541 ----------------------------------------- $ 69,955 $ 45,767 $ 29,403 =========================================
-----END PRIVACY-ENHANCED MESSAGE-----