-----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, Ep/oHjIlujjQmG5yMSAt+IBWLmzBJbo/RDnbYHE2ls79w8p2TUsLitP+bzdi1BbU AK/yYGoQ1DN3mvJtekjpDw== 0000317093-97-000008.txt : 19970807 0000317093-97-000008.hdr.sgml : 19970807 ACCESSION NUMBER: 0000317093-97-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970806 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-09514 FILM NUMBER: 97652306 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 (06/30/97) SECURITIES AND EXCHANGE COMMISSION Washington, DC 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, 1997 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 (IRS 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 -- 90,206,795 shares as of July 18, 1997 INDEX ANDREW CORPORATION PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Consolidated balance sheets--June 30, 1997 and September 30, 1996. Consolidated statements of income--Three months ended June 30, 1997 and 1996; Nine months ended June 30, 1997 and 1996. Consolidated statements of cash flows--Nine months ended June 30, 1997 and 1996. Notes to consolidated financial statements--June 30, 1997. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. PART II. FINANCIAL INFORMATION Item 6. Exhibits and Reports on Form 8-K Exhibit 11 Computation of Earnings per Share. Exhibit 27.1 Financial Data Schedule - June 30, 1997 Exhibit 27.2 Financial Data Schedule - June 30, 1996 SIGNATURES ANDREW CORPORATION CONSOLIDATED BALANCE SHEET (Dollars in thousands)
June 30 September 30 1997 1996 ---------- --------- (unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 91,598 $ 31,295 Accounts receivable, less allowances 174,231 197,589 (Jun. - $4,165; Sep. - $3,648) Inventories Finished products 53,538 56,947 Materials and work in process 125,640 109,662 -------- -------- 179,178 166,609 Assets related to discontinued operations, less allowances 5,878 -- Miscellaneous current assets 10,301 6,491 -------- -------- TOTAL CURRENT ASSETS 461,186 401,984 OTHER ASSETS Costs in excess of net assets of businesses acquired, less accumulated amortization 26,259 42,667 (Jun. - $9,635; Sep. - $19,732) Investments in and advances to affiliates 52,901 42,510 Investments and other assets 14,306 11,368 PROPERTY, PLANT, AND EQUIPMENT Land and land improvements 11,718 11,103 Buildings 69,285 68,248 Equipment 273,937 254,737 Allowances for depreciation and amortization (218,721) (201,388) -------- -------- 136,219 132,700 -------- -------- TOTAL ASSETS $ 690,871 $ 631,229 ======== ======== The balance sheet at September 30, 1996 has been derived from the audited financial statements at that date. See Notes to Consolidated Financial Statements.
ANDREW CORPORATION CONSOLIDATED BALANCE SHEET (Dollars in thousands)
June 30 September 30 1997 1996 ---------- ----------- (unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 13,096 $ - Accounts payable 34,609 38,887 Accrued expenses and other liabilities 32,224 26,170 Compensation and related expenses 26,835 27,006 Income taxes 18,447 20,367 Restructuring 5,150 - Liabilities related to discontinued operations 5,966 - Current portion of long-term debt 5,010 4,952 -------- -------- TOTAL CURRENT LIABILITIES 141,337 117,382 -------- -------- DEFERRED LIABILITIES 5,083 7,919 LONG-TERM DEBT, less current portion 40,254 40,423 MINORITY INTEREST 9,289 9,291 STOCKHOLDERS' EQUITY Common stock (par value, $.01 a share: 1,027 685 400,000,000 shares authorized; 102,718,210 shares issued, including treasury) Additional paid-in capital 50,054 43,257 Foreign currency translation (3,382) 349 Retained earnings 516,504 458,914 Treasury stock, at cost (12,509,897 shares Jun.; 12,070,844 shares Sep.) (69,295) (46,991) -------- -------- 494,908 456,214 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 690,871 $ 631,229 ======== ======== The balance sheet at September 30, 1996 has been derived from the audited financial statements at that date. See Notes to Consolidated Financial Statements.
ANDREW CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Amounts in thousands, except per share amounts)
Three Months Ended Nine Months Ended June 30 June 30 ----------------------- ----------------------- 1997 1996 1997 1996 ----------------------- ----------------------- SALES $208,911 $189,907 $636,853 $535,818 Cost of products sold 116,965 107,696 374,692 315,300 -------- -------- -------- -------- GROSS PROFIT 91,946 82,211 262,161 220,518 OPERATING EXPENSES Research and development 11,345 7,724 30,267 21,104 Sales and administrative 37,019 35,341 109,581 99,206 Restructuring 5,150 - 5,150 - -------- -------- -------- -------- 53,514 43,065 144,998 120,310 -------- -------- -------- -------- OPERATING INCOME 38,432 39,146 117,163 100,208 OTHER Interest expense 1,657 1,470 4,440 4,211 Interest income (1,236) (555) (2,885) (1,711) Other (income) expense (387) (262) (2,862) 1,565 -------- -------- -------- -------- 34 653 (1,307) 4,065 INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 38,398 38,493 118,470 96,143 Income taxes 13,439 13,887 41,464 34,614 -------- -------- -------- -------- INCOME FROM CONTINUING OPERATIONS 24,959 24,606 77,006 61,529 -------- -------- -------- -------- DISCONTINUED OPERATIONS Loss from operations of Network Products Business, net of applicable tax benefit 1,135 599 3,330 2,319 Loss on disposal of Network Products Business, including provision of $1,040 for operating losses during phase-out period - net of applicable tax benefits 16,086 - 16,086 - -------- -------- -------- -------- 17,221 599 19,416 2,319 -------- -------- -------- -------- NET INCOME $ 7,738 $ 24,007 $ 57,590 $ 59,210 ======== ======== ======== ======== INCOME FROM CONTINUING OPERATIONS PER AVERAGE SHARE OF COMMON STOCK OUTSTANDING $ 0.27 $ 0.27 $ 0.84 $ 0.67 ======== ======== ======== ======== NET INCOME PER AVERAGE SHARE OF COMMON STOCK OUTSTANDING $ 0.08 $ 0.26 $ 0.63 $ 0.64 ======== ======== ======== ======== AVERAGE SHARES OUTSTANDING 91,627 91,976 91,953 91,872 ======== ======== ======== ======== See Notes to Consolidated Financial Statements.
ANDREW CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollars in thousands)
Nine Months Ended June 30 ------------------------ 1997 1996 --------- -------- CASH FLOWS FROM OPERATIONS Net Income $ 57,590 $ 59,210 ADJUSTMENTS TO NET INCOME Restructuring 5,150 - Discontinued operations 22,771 - Depreciation and amortization 29,143 23,924 Decrease (increase) in accounts receivable 15,691 (11,638) Increase in inventories (17,379) (33,879) Increase in miscellaneous current and other assets (7,662) (1,348) Increase in receivables from affiliates (161) (111) Increase in accounts payable and other liabilities 4,823 5,622 Other (127) 270 -------- -------- NET CASH FROM OPERATIONS 109,839 42,050 INVESTING ACTIVITIES Capital expenditures (31,532) (37,692) Acquisition of businesses, net of cash acquired - (18,550) Investments in and advances to affiliates (10,370) (7,704) Proceeds from sale of property, plant and equipment 379 452 -------- -------- NET CASH USED IN INVESTING ACTIVITIES (41,523) (63,494) FINANCING ACTIVITIES Payments on long-term debt (90) (995) Proceeds from (payments on) short-term borrowings 13,115 (2,452) Payments to acquire treasury stock (23,793) - Stock purchase and option plans 4,331 2,666 -------- -------- NET CASH USED IN FINANCING ACTIVITIES (6,437) (781) Effect of exchange rate changes on cash (1,576) (936) -------- -------- INCREASE (DECREASE) FOR THE PERIOD 60,303 (23,161) Cash and equivalents at beginning of period 31,295 46,064 -------- -------- CASH AND EQUIVALENTS AT END OF PERIOD $ 91,598 $ 22,903 ======== ======== 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, 1997 are not necessarily indicative of the results that may be expected for the year ending September 30, 1997. For further information, refer to the consolidated financial statements and footnotes thereto included in the company's annual report on Form 10-K for the year ended September 30, 1996. NOTE B--STOCK SPLIT On February 11, 1997 the company's Board of Directors declared a three-for-two stock split to stockholders of record on February 25, 1997, payable March 11, 1997. All share and per share amounts have been restated for all periods presented to reflect the stock split. Also, on February 11, 1997 the stockholders approved an increase in the common stock authorized from 100,000,000 to 400,000,000. NOTE C--RESTRUCTURING During June 1997, the company initiated a plan to restructure its European wireless products business and phase out its fiber optic sensors and global messaging development activities. In connection with the restructuring plan, approximately 300 employees will be terminated. Estimated employee termination costs of $1.6 million have been accrued in June 1997. In addition to termination costs, the restructuring reserve includes an estimated loss on disposal of equipment of $1.7 million, long-term lease commitments of $.8 million, and a goodwill writeoff of $1.1 million. The severance costs are expected to be paid by the end of the fiscal fourth quarter of 1997. Total after-tax charges were $3.3 million or $.04 per share. NOTE D--DISCONTINUED OPERATIONS On July 14, 1997 the company adopted a plan to discontinue the operations of its network products business. The company expects to complete the disposition by the end of the 1997 calendar year. The network products business operating loss of $1.1 million and $3.3 million (net of applicable taxes of $.6 million and $1.8 million) for the three months and nine months ended June 30, 1997 are shown separately under discontinued operations in the accompanying income statement. Likewise, fiscal year 1996 has been restated to show separately under Discontinued Operations, the operating loss of $.6 million and $2.3 million (net of applicable taxes of $.3 million and $1.3 million) for the three months and nine months ended June 30, 1996. The estimated loss on disposal of the discontinued operations of $16.1 million (net of applicable taxes of $6.7 million) represents the estimated loss on the disposal of the assets of the network products business and a provision of $1.0 million (net of applicable taxes of $.6 million) for expected operating losses during the phase-out period. Net sales of the network products business for the nine months ended June 30, 1997 and 1996 were $17.1 million and $22.5 million respectively. The assets of the network products business to be disposed of consist primarily of accounts receivable, inventories and equipment. NOTE E--ACCOUNTING CHANGES In February 1997, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 128, "Earnings per Share," which requires the company to change the method currently used to compute earnings per share and to restate all prior periods. The Company is required to adopt SFAS No. 128 during the first quarter of fiscal year 1998. Adoption of this statement is not expected to have a material effect on the company's financial statements. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Net sales for the quarter ended June 30, 1997 increased 10% to $208.9 million compared to $189.9 million for the third quarter of fiscal year 1996. Personal Communication Services (PCS) and European wireless products sales were down compared to the third quarter of fiscal year 1996 while U.S. cellular sales were flat. On a worldwide basis, wireless infrastructure, land mobile radio, private microwave and broadcast sales were higher while network and wireless products as a whole were down. For the first nine months of fiscal year 1997 net sales totaled $636.9 million compared to $535.8 million for the same period last fiscal year. As a percentage of sales, cost of products sold for the third quarter of fiscal year 1997 improved to 56.0%, down from 56.7% in the same period last year. For the first nine months of fiscal year 1997 cost of products sold, as a percentage of sales, remained unchanged. For the quarter ended June 30, 1997, research and development expenses increased 47% and accounted for 5.4% of sales, or $11.3 million, compared to 4.1% of sales or $7.7 million in the quarter ended June 30, 1996. For the first nine months of fiscal year 1997, research and development expense increased 43% to $30.3 million. The growth for both the quarter and the year is attributable to the continued development of new wireless applications in the communication products group. Sales and administrative expenses increased 4.7% to $37.0 million this quarter, however, as a percentage of sales, sales and administrative expenses decreased to 17.7% compared to 18.6% in the third quarter of fiscal year 1996. For the year sales and administrative expenses have increased $10.3 million to $109.6 million, while decreasing to 17.2% of sales. Sales and administrative expenses, for the first nine months of fiscal year 1996, were $99.2 million and accounted for 18.5% of sales. Fiscal year 1997 operating expenses also include a $5.2 million charge for the restructuring of the company's European wireless products business and phasing out of the company's fiber optic sensors and global messaging development activities. For more information see Note C - Restructuring. Net interest expense, for both the third quarter and first nine months of fiscal year 1997, improved slightly compared to the same periods last year due to improved liquidity. Other income for the third quarter of fiscal year 1997 remained relatively stable, when compared to the same period last fiscal year while other income/expense for the year has improved by $4.4 million mainly due to foreign currency conversion gains. Fiscal year 1996 other expense included a charge of $1.5 million related to the acquisition of The Antenna Company in March 1996. In June 1997, the company decided to discontinue its network products business. As a result of this decision the company has incurred a charge of $16.1 million related to the disposal, net of applicable tax benefits. For more information see Note D - Discontinued Operations. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) LIQUIDITY AND CAPITAL RESOURCES Net cash from operations, for the first nine months of fiscal year 1997, totaled $109.8 million, an increase of $67.8 million compared to the same period last fiscal year. Increased inflows from accounts receivable and a decreased investment in inventories contributed to the increase in cash from operations. Cash from operations also benefitted from the significant non-cash expenses recorded as a result of the company's decision to discontinue its network products business. Net cash used in investing activities, for the first nine months of fiscal year 1997, decreased $22.0 million to $41.5 million compared to the same period last fiscal year. The decrease is due primarily to the company's purchase, in December 1996, of Mapra Industria e Comercio, Ltda. and Gerbo Telecommunicacoes e Servicos Ltda. for $14.6 million, net of cash received, and the company's purchase in June 1996 of the SATCOM Group of companies. Net cash used in financing activities increased to $6.4 million compared to $0.8 million for the first nine months of fiscal year 1996. During fiscal year 1997, the company has borrowed $9.5 million for the expansion of its manufacturing facilities in Brazil. During the third quarter of fiscal year 1997 the company initiated a stock buy-back program. Shares acquired through the stock buy-back program will be held to meet any employee compensation needs or held for use in future acquisitions. During the first nine months of fiscal year 1997, the company purchased 895,000 shares of its common stock. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: Exhibit 11 - Computation of Earnings per Share Exhibit 27.1 - Financial Data Schedule - June 30, 1997 Exhibit 27.2 - Financial Data Schedule - June 30, 1996 (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ending June 30, 1997. 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. ANDREW CORPORATION Date August 6, 1997 /s/ F. L. English --------------------- ------------- F. L. English Chairman, President and Chief Executive Officer Date August 6, 1997 /s/ C. R. Nicholas --------------------- -------------- C. R. Nicholas Executive Vice President and Chief Financial Officer EX-11 2 COMPUTATION OF EARNINGS PER SHARE EXHIBIT 11 ANDREW CORPORATION Computation of Earnings Per Share (Amounts in thousands, except per share amounts)
Three Months Ended Nine Months Ended June 30 June 30 ------------------- ----------------- 1997 1996 1997 1996 ------ ------ ------- ------- PRIMARY EARNINGS PER SHARE Average shares outstanding 90,639 90,284 90,796 90,180 Net effect of dilutive stock options-- based on the treasury stock method using average market price 964 1,593 1,157 1,194 ------ ------ ------ ------ TOTAL 91,603 91,877 91,953 91,374 ====== ====== ====== ====== Income from Continuing Operations $24,959 $24,606 $77,006 $61,529 ====== ====== ====== ====== Net income $ 7,738 $24,007 $57,590 $59,210 ====== ====== ====== ====== Income from Continuing Operations per Share $ 0.27 $ 0.27 $ 0.84 $ 0.67 ====== ====== ====== ====== Net Income per Share $ 0.08 $ 0.26 $ 0.63 $ 0.65 ====== ====== ====== ====== FULLY DILUTED EARNINGS PER SHARE Average shares outstanding 90,639 90,284 90,796 90,180 Net effect of dilutive stock options-- based on the treasury method using the greater of ending or average market price 988 1,692 1,157 1,692 ------ ------ ------ ------ TOTAL 91,627 91,976 91,953 91,872 ====== ====== ====== ====== Income from Continuing Operations $24,959 $24,606 $77,006 $61,529 ====== ====== ====== ====== Net income $ 7,738 $24,007 $57,590 $59,210 ====== ====== ====== ====== Income from Continuing Operations per Share $ 0.27 $ 0.27 $ 0.84 $ 0.67 ====== ====== ====== ====== Net Income per Share $ 0.08 $ 0.26 $ 0.63 $ 0.64 ====== ====== ====== ======
EX-27.1 3 ART. 5 FINANCIAL DATA SCHEDULE FOR 06-30-97
5 1000 9-MOS SEP-30-1997 JUN-30-1997 91,598 0 178,396 4,165 179,178 461,186 354,940 218,721 690,871 141,337 40,254 0 0 1,027 493,881 690,871 636,853 636,853 374,692 374,692 144,998 407 4,440 118,470 41,464 77,006 19,416 0 0 57,590 0.63 0.63
EX-27.2 4 ART. 5 FINANCIAL DATA SCHEDULE FOR 06-30-96
5 1000 9-MOS SEP-30-1996 JUN-30-1996 22,903 0 165,387 3,411 165,025 356,049 319,972 193,062 580,207 102,630 45,013 0 0 685 417,513 580,207 535,818 535,818 315,300 315,300 120,310 633 4,211 96,143 34,614 61,529 2,319 0 0 59,210 0.65 0.64 All amounts in this exhibit have been restated to reflect the disposal of the company's network products business, as well as a three-for-two stock split for stockholders of record on February 25, 1997.
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