-----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, R0+wicS92xuvSATeZiBaKz7J38/Yxl8h2u3Z8mMmgohgGamlr8GoORM1ByBJRAo/ /rDU8B0p4SXB6KFDCrFWqg== 0000031791-96-000010.txt : 19960812 0000031791-96-000010.hdr.sgml : 19960812 ACCESSION NUMBER: 0000031791-96-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960808 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: EG&G INC CENTRAL INDEX KEY: 0000031791 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING SERVICES [8711] IRS NUMBER: 042052042 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05075 FILM NUMBER: 96606353 BUSINESS ADDRESS: STREET 1: 45 WILLIAM ST CITY: WELLESLEY STATE: MA ZIP: 02181-4078 BUSINESS PHONE: 6172375100 MAIL ADDRESS: STREET 1: 45 WILLIAM ST CITY: WELLESLEY STATE: MA ZIP: 02181 FORMER COMPANY: FORMER CONFORMED NAME: EDGERTON GERMESHAUSEN & GRIER INC DATE OF NAME CHANGE: 19670626 10-Q 1 UNITED STATES 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, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-5075 EG&G, Inc. ---------- (Exact name of registrant as specified in its charter) Massachusetts 04-2052042 ------------- ---------- (State or other jurisdiction of (I.R.S. employer identification no.) incorporation or organization) 45 William Street, Wellesley, Massachusetts 02181 -------------------------------------------------- (Address of principal executive offices)(Zip Code) (617) 237-5100 -------------- (Registrant's telephone number, including area code) NONE ---- (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 that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No -------- -------- Number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Class Outstanding at July 28, 1996 ----- ---------------------------- Common Stock, $1 par value 47,312,000 (Excluding treasury shares) PART I. FINANCIAL INFORMATION Item 1. Financial Statements -------------------- EG&G, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS For the Three and Six Months Ended June 30, 1996 and July 2, 1995 (Unaudited) ---------
(In Thousands Except Per Share Data) ---------------------------------- Three Months Ended Six Months Ended ------------------- ------------------- June 30, July 2, June 30, July 2, 1996 1995 1996 1995 -------- ------- -------- ------- Sales: Products $216,221 $207,300 $424,222 $403,680 Services 139,686 134,951 278,476 276,801 -------- -------- -------- -------- Total Sales 355,907 342,251 702,698 680,481 -------- -------- -------- -------- Costs and Expenses: Cost of sales: Products 137,712 135,309 269,637 264,592 Services 122,368 116,222 246,824 240,078 -------- -------- -------- -------- Total cost of sales 260,080 251,531 516,461 504,670 Research and development expenses 11,414 9,587 22,375 20,361 Selling, general and administrative expenses 62,999 60,698 122,523 119,342 -------- -------- -------- -------- Total Costs and Expenses 334,493 321,816 661,359 644,373 -------- -------- -------- -------- Operating Income From Continuing Operations 21,414 20,435 41,339 36,108 Other Income (Expense), Net (Note 2) (1,059) (167) (2,954) (367) -------- -------- -------- -------- Income From Continuing Operations Before Income Taxes 20,355 20,268 38,385 35,741 Provision for Income Taxes 6,212 7,925 12,360 14,046 -------- -------- -------- -------- Income From Continuing Operations 14,143 12,343 26,025 21,695 Income From Discontinued Operations, Net of Income Taxes (Note 3) 1,496 4,033 2,396 8,370 -------- -------- -------- -------- Net Income $ 15,639 $ 16,376 $ 28,421 $ 30,065 ======== ======== ======== ========
2 EG&G, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS For the Three and Six Months Ended June 30, 1996 and July 2, 1995 (Unaudited) ---------
(In Thousands Except Per Share Data) ---------------------------------- Three Months Ended Six Months Ended ------------------ ------------------ June 30, July 2, June 30, July 2, 1996 1995 1996 1995 -------- ------- -------- ------- Earnings Per Share: Continuing Operations $.30 $.23 $.55 $.40 Discontinued Operations .03 .08 .05 .16 ---- ---- ---- ---- Net Income $.33 $.31 $.60 $.56 ==== ==== ==== ==== Cash Dividends Per Common Share $.14 $.14 $.28 $.28 ==== ==== ==== ==== Weighted Average Shares of Common Stock Outstanding 47,424 52,881 47,527 53,649
The accompanying unaudited notes are an integral part of these consolidated financial statements. 3 EG&G, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET As of June 30, 1996 and December 31, 1995 (Dollars in Thousands Except Per Share Data) ------------------------------------------
June 30, December 31, 1996 1995 -------- ----------- (Unaudited) --------- Current assets: Cash and cash equivalents $ 69,794 $ 76,204 Accounts receivable (Note 4) 219,069 211,903 Inventories (Note 5) 125,918 114,199 Other (Note 7) 70,704 66,380 -------- -------- Total Current Assets 485,485 468,686 -------- -------- Property, Plant and Equipment: At cost (Note 6) 447,479 417,566 Accumulated depreciation and amortization (274,768) (270,026) -------- -------- Net Property, Plant and Equipment 172,711 147,540 -------- -------- Investments (Note 7) 13,105 16,072 Intangible Assets (Note 8) 115,371 123,421 Other Assets 50,724 48,196 -------- -------- Total Assets $837,396 $803,915 ======== ========
4 EG&G, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET As of June 30, 1996 and December 31, 1995 (Dollars in Thousands Except Per Share Data)
June 30, December 31, 1996 1995 -------- ----------- (Unaudited) --------- Current Liabilities: Short-term debt $ 46,237 $ 5,275 Accounts payable 78,309 72,759 Accrued expenses (Note 9) 156,053 168,671 Net liabilities of discontinued operations (Note 3) 6,642 3,746 -------- -------- Total Current Liabilities 287,241 250,451 -------- -------- Long-Term Debt 115,079 115,222 Long-Term Liabilities 68,820 71,296 Contingencies Stockholders' Equity: Preferred stock - $1 par value, authorized 1,000,000 shares; none outstanding - - Common stock - $1 par value, authorized 100,000,000 shares; issued 60,102,000 shares 60,102 60,102 Retained earnings 513,234 498,181 Cumulative translation adjustments 20,863 28,679 Net unrealized gain on marketable investments (Note 7) 491 244 Cost of shares held in treasury; 12,805,000 shares at June 30, 1996 and 12,492,000 shares at December 31, 1995 (228,434) (220,260) -------- -------- Total Stockholders' Equity 366,256 366,946 -------- -------- Total Liabilities and Stockholders' Equity $837,396 $803,915 ======== ========
The accompanying unaudited notes are an integral part of these consolidated financial statements. 5 EG&G, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS For the Six Months Ended June 30, 1996 and July 2, 1995 (Unaudited) ---------
(In Thousands) ------------ Six Months Ended ----------------------- June 30, July 2, 1996 1995 -------- -------- Cash Flows Provided by Operating Activities: Net income $ 28,421 $ 30,065 Deduct net income from discontinued operations (2,396) (8,370) -------- -------- Income from continuing operations 26,025 21,695 Adjustments to reconcile income from continuing operations to net cash provided by continuing operations: Depreciation and amortization 18,270 18,580 Changes in assets and liabilities: Decrease (increase) in accounts receivable (8,654) 22,688 Decrease (increase) in inventories (13,234) 5,577 Increase in accounts payable 6,050 2,412 Decrease in accrued expenses (11,107) (5,353) Change in prepaid and deferred taxes (1,477) (1,657) Change in prepaid expenses and other (9,395) (5,731) -------- -------- Net Cash Provided by Continuing Operations 6,478 58,211 Net Cash Provided by Discontinued Operations 5,292 19,124 -------- -------- Net Cash Provided by Operating Activities 11,770 77,335 -------- --------
6 EG&G, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS For the Six Months Ended June 30, 1996 and July 2, 1995 (Unaudited) ---------
(In Thousands) ------------ Six Months Ended ---------------------- June 30, July 2, 1996 1995 -------- -------- Cash Flows Used in Investing Activities: Capital expenditures (45,851) (26,928) Proceeds from sales of investment securities 7,038 4,538 Other 2,804 (1,236) -------- -------- Net Cash Used in Investing Activities (36,009) (23,626) -------- -------- Cash Flows Provided by (Used in) Financing Activities: Increase (decrease) in commercial paper 41,000 (4,911) Other debt payments (226) (3,718) Proceeds from issuance of common stock 3,820 160 Purchases of common stock (12,032) (36,193) Cash dividends (13,330) (15,158) Other 63 (550) -------- -------- Net Cash Provided by (Used in) Financing Activities 19,295 (60,370) -------- -------- Effect of Exchange Rate Changes on Cash and Cash Equivalents (1,466) 1,062 -------- -------- Net Decrease in Cash and Cash Equivalents (6,410) (5,599) Cash and cash equivalents at beginning of period 76,204 66,424 -------- -------- Cash and cash equivalents at end of period $ 69,794 $ 60,825 ======== ========
The accompanying unaudited notes are an integral part of these consolidated financial statements. 7 EG&G, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) Basis of Presentation - -------------------------- The consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. The balance sheet amounts as of December 31, 1995 in this report were extracted from the Company's audited 1995 financial statements included in the latest annual report on Form 10-K. In the opinion of management, the unaudited consolidated financial statements included herein contain all adjustments, consisting only of normal recurring accruals, necessary to present fairly the financial position as of June 30, 1996 and the results of operations for the three and six months ended June 30, 1996 and July 2, 1995 and the cash flows for the six months then ended. The results of operations are not necessarily to be considered indicative of the results for the entire year. Effective January 1, 1996, the Company adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation. SFAS No. 123 requires companies to account for the grant of stock options and other stock-based compensation at fair value or to continue to account for them at intrinsic value in accordance with Accounting Principles Board (APB) Opinion No. 25 with disclosure of the effects of the fair value accounting on compensation expense, net income and earnings per share on a pro forma basis. The Company has elected to continue to apply APB Opinion No. 25. (2) Other Income (Expense), Net - -------------------------------- Other income (expense), net, consisted of the following:
(In Thousands) ------------ Three Months Ended Six Months Ended ------------------- ------------------ June 30, July 2, June 30, July 2, 1996 1995 1996 1995 -------- ------- -------- ------- Interest income $ 820 $ 1,076 $ 1,775 $ 2,135 Interest expense (3,232) (1,967) (6,416) (3,560) Gains (losses) on investments, net 917 (155) 917 745 Other 436 879 770 313 ------- -------- ------- ------- $(1,059) $ (167) $(2,954) $ (367) ======= ======= ======= =======
8 EG&G, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) (3) Discontinued Operations - --------------------------- The former Department of Energy (DOE) Support segment, which has provided services under management and operations contracts, is presented as discontinued operations in accordance with APB Opinion No. 30. Summary operating results of the discontinued operations were as follows:
(In Thousands) Three Months Ended Six Months Ended ------------------ ------------------- June 30, July 2, June 30, July 2, 1996 1995 1996 1995 -------- -------- -------- --------- Sales $28,790 $277,137 $61,079 $523,291 Costs and expenses 26,488 270,933 57,393 510,414 ------- -------- ------- -------- Income from discontinued operations before income taxes 2,302 6,204 3,686 12,877 Provision for income taxes 806 2,171 1,290 4,507 ------- -------- ------- -------- Income from discontinued operations, net of income taxes $ 1,496 $ 4,033 $ 2,396 $ 8,370 ======= ======== ======= ========
Sales and income from discontinued operations decreased in 1996, reflecting the expiration of the Rocky Flats and Nevada Test Site contracts in 1995. Net assets (liabilities) of discontinued operations consisted of the following:
(In Thousands) ------------ June 30, December 31, 1996 1995 -------- ------------ Accounts receivable, primarily unbilled $ 2,050 $ 7,575 Operating current liabilities (8,692) (11,439) Other - 118 ------- ------- $(6,642) $(3,746) ======= =======
9 EG&G, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) (4) Accounts Receivable - ------------------------ Accounts receivable as of June 30, 1996 and December 31, 1995 included unbilled receivables of $43 million and $44 million, respectively, which were due primarily from U.S. Government agencies. Accounts receivable were net of reserves for doubtful accounts of $5 million and $4.4 million as of June 30, 1996 and December 31, 1995, respectively. (5) Inventories - ---------------- Inventories consisted of the following:
(In Thousands) ------------ June 30, December 31, 1996 1995 -------- ----------- Finished goods $ 29,683 $ 28,540 Work in process 33,618 28,613 Raw materials 62,617 57,046 -------- -------- $125,918 $114,199 ======== ========
(6) Property, Plant and Equipment, at Cost - ------------------------------------------- Property, plant and equipment consisted of the following:
(In Thousands) ------------ June 30, December 31, 1996 1995 --------- ----------- Land $ 11,714 $ 12,003 Buildings and leasehold improvements 112,973 108,254 Machinery and equipment 322,792 297,309 --------- -------- $447,479 $417,566 ======== ========
10 EG&G, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) (7) Investments - ---------------- Investments consisted of the following:
(In Thousands) ------------ June 30, December 31, 1996 1995 --------- ------------ Marketable investments $ 8,839 $ 9,547 Other investments 984 1,396 Joint venture investments 4,463 7,349 ------- ------- 14,286 18,292 Less investments classified as other current assets (1,181) (2,220) ------- ------- $13,105 $16,072 ======= =======
11 EG&G, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) At June 30, 1996, marketable investments, all classified as available for sale, had an aggregate market value of $8.8 million and gross unrealized holding gains of $0.8 million. Gross unrealized holding gains, net of deferred taxes, of $0.5 million were reported as a separate component of stockholders' equity at June 30, 1996. Other investments of $1 million and $0.2 million of marketable investments were classified as other current assets at June 30, 1996. (8) Intangible Assets - ---------------------- The decrease in intangible assets resulted primarily from current year amortization and the effect of translating goodwill denominated in non- U.S. currencies at current exchange rates. (9) Accrued Expenses - --------------------- Accrued expenses consisted of the following:
(In Thousands) ------------ June 30, December 31, 1996 1995 -------- ------------ Payroll and incentives $ 21,634 $ 28,660 Employee benefits 46,777 40,178 Federal, non-U.S. and state income taxes 29,047 33,153 Other 58,595 66,680 -------- -------- $156,053 $168,671 ======== ========
12 Item 2. Management's Discussion and Analysis of Results of Operations ------------------------------------------------------------- and Financial Condition ----------------------- EG&G, INC. AND SUBSIDIARIES Results of Operations --------------------- The following industry segment information is presented as an aid to a better understanding of the Company's operating results:
(In Thousands) ------------ Three Months Ended Six Months Ended ---------------------------- ----------------------------- June 30, July 2, Increase June 30, July 2, Increase 1996 1995 (Decrease) 1996 1995 (Decrease) -------- -------- -------- -------- -------- -------- Sales: Instruments $ 78,776 $ 71,333 $ 7,443 $152,357 $141,175 $ 11,182 Mechanical Components 69,240 63,517 5,723 137,781 123,307 14,474 Optoelectronics 68,205 65,944 2,261 134,084 125,377 8,707 Technical Services 139,686 141,457 (1,771) 278,476 290,622 (12,146) -------- -------- ------- -------- -------- -------- $355,907 $342,251 $13,656 $702,698 $680,481 $ 22,217 ======== ======== ======== ======== ======== ======== Operating Income From Continuing Operations: Instruments $ 9,457 $ 2,851 $ 6,606 $ 16,265 $ 6,095 $ 10,170 Mechanical Components 8,130 7,118 1,012 15,357 13,137 2,220 Optoelectronics 864 6,314 (5,450) 4,979 8,634 (3,655) Technical Services 9,113 11,426 (2,313) 17,563 22,536 (4,973) General Corporate Expenses (6,150) 7,274) 1,124 (12,825) (14,294) 1,469 -------- -------- ------- -------- ------- -------- $ 21,414 $ 20,435 $ 979 $ 41,339 $ 36,108 $ 5,231 ======== ======== ======= ======== ======== ========
The discussion that follows is a summary analysis of the majorchanges in operating results by industry segment that occurred for the three and six months ended June 30, 1996 compared to the three and six months ended July 2, 1995. 13 Item 2. Management's Discussion and Analysis of Results of Operations ------------------------------------------------------------- and Financial Condition ----------------------- EG&G, INC. AND SUBSIDIARIES Results of Operations --------------------- Overview Sales from continuing operations increased 4% for the second quarter of 1996 compared to 1995, while sales for the six months increased 3%. The quarter increase reflected 8% growth in the three products segments partially offset by a decrease in Technical Services sales. Operating income from continuing operations increased 5% for the second quarter and 14% on a year-to-date basis. The improvements reflected the impact of higher sales in the Instruments and Mechanical Components segments and lower costs resulting from the Company s restructuring plan, partially offset by decreases in Optoelectronics and Technical Services income. Cost savings under the restructuring plan totaled $6 million for the quarter and $12 million for the six months of 1996. This represents a $3 million increase for the quarter and a $6 million increase for the six months over the savings achieved for the comparable periods in 1995. 14 EG&G, INC. AND SUBSIDIARIES Management's Discussion and Analysis (Continued) Instruments Second Quarter The $7.4 million sales increase resulted mainly from strong demand for advanced explosives detection systems from airport and government agencies. Partially offsetting the increase was a $2.2 million decrease due to the divestiture of two product lines in 1995 and lower sales due to the effect of changes in foreign exchange rates. The $6.6 million increase in operating income resulted primarily from improved margins on higher sales, as well as income from the expiration of a grant liability, the favorable impact on export shipment margins caused by the weakening of the Finnish markka and lower costs resulting from the restructuring plan. Six Months The $11.2 million sales increase resulted mainly from higher demand for security systems and diagnostic products. These increases were partially offset by a $4.4 million decrease due to the divestiture of two product lines in 1995. Operating income increased $10.2 million from improved margins on higher sales, lower costs resulting from the restructuring plan, income from the expiration of a grant liability and the favorable impact on export shipment margins caused by the weakening of the Finnish markka. Mechanical Components Second Quarter The continued recovery of the aerospace market and higher demand for electromechanical and industrial process sealing products resulted in a $5.7 million sales increase. The increase of $1 million in income resulted from the margin on higher sales and lower costs resulting from the restructuring plan partially offset by the recognition of projected excess contract costs in the aircraft exhaust and ducting components business. Six Months Higher demand for aerospace, industrial process sealing and electromechanical products resulted in a $14.5 million sales increase. The $2.2 million income increase resulted from the margin on higher sales and lower costs from the restructuring plan partially offset by projected excess contract costs. Optoelectronics Second Quarter Sales were $2.3 million higher than last year as a result of higher demand for infrared detection and camera products offset partially by decreases caused by the divestiture of a product line in 1995 and continued lower power supplies sales. Operating income decreased $5.5 million primarily as a result of production yield problems, inventory reserve provisions and fixed asset adjustments in the micromachined sensor business, projected excess contract costs and lower sales in the power supplies business, planned increased research and development expenses for the amorphous silicon program and a reserve for a components business receivable. Partially offsetting these decreases were lower costs resulting from the restructuring plan. 15 EG&G, INC. AND SUBSIDIARIES Management's Discussion and Analysis (Continued) Six Months Sales increased $8.7 million due to higher demand for micromachined sensors for the medical market, accelerometers for the automotive market, infrared detectors and camera products. Partially offsetting the increases were decreases caused by the divestiture of a product line in 1995 and lower power supplies sales. Income decreased $3.7 million as a result of production yield problems, inventory reserve provisions and fixed asset adjustments in the micromachined sensor business, planned increased research and development expenses for the amorphous silicon program and projected excess contract costs and lower sales in the power supplies business. Partially offsetting these decreases were lower costs resulting from the restructuring plan. Technical Services Second Quarter The $5 million sales decrease in automotive operations was primarily due to lower demand for stationary testing services and completion of a testing contract at the end of the first quarter of 1996. Sales in government services operations increased $3 million primarily as a result of increased billings from the chemical weapons disposal contract and a new contract for construction and maintenance services, partially offset by the completion of two contracts in 1995. The $2.3 million decrease in income was primarily the result of lower sales in the automotive operations. Six Months The $9 million decrease in automotive operations sales resulted primarily from lower demand for stationary testing services and completion of a testing contract. The $3 million sales decrease in government services operations was mainly due to the combined impact of reduced government funding levels and the completion of two contracts in 1995. The profit impact of the sales reduction, primarily in automotive operations, partially offset by an estimated provision for a legal judgment recorded in 1995, resulted in a $5 million decrease in operating income. General Corporate Expenses The decreases for the quarter and six months were due primarily to lower costs as a result of the restructuring plan. Other The net increase of $0.9 million in other expense for the second quarter was due to higher interest expense reflecting the issuance of $115 million of ten-year notes in the third quarter of 1995, partially offset by investment gains in 1996. The six month increase of $2.6 million was mainly due to higher interest expense. The effective tax rate of 32.2% for the six months of 1996 was lower than the 39.3% rate in 1995 primarily due to lower anticipated repatriation costs and changes in the geographical distribution of income in 1996. 16 EG&G, INC. AND SUBSIDIARIES Management s Discussion and Analysis (Continued) Discontinued Operations Income from discontinued operations, net of income taxes, decreased for the quarter and six months, reflecting the expiration of the Rocky Flats and Nevada Test Site contracts in 1995. The Mound contract, the Company's remaining management and operations contract with the DOE, expires on September 30, 1996. Sales and income from the Mound contract are dependent upon the work scope and fee pools that are negotiated annually. In accordance with contract terms, the DOE may extend the Mound contract, under existing terms and conditions, for up to an additional year. Financial Condition ------------------- The Company's cash and cash equivalents decreased $6.4 million in the first six months of 1996 while short-term debt increased $41 million, mainly due to an increase in capital expenditures. Net cash provided by continuing operating activities was $6.5 million in 1996 compared to $58.2 million in 1995. The change in net cash resulted primarily from increases in accounts receivable and inventories in 1996 compared to decreases in 1995. The accounts receivable increase was mainly caused by higher sales in the products segments and the timing of payments under government contracts. Inventory levels were increased primarily for anticipated sales. Although progress was not achieved in the first half of 1996, the Company s program to reduce receivables and inventories remains a management priority. Discontinued operations generated cash of $5.3 million in the six months of 1996 compared to $19.1 million in 1995, reflecting the expiration of the Rocky Flats and Nevada Test Site contracts. Capital expenditures were $45.9 million in the first six months of 1996, an increase of $19 million over the same period in 1995. In 1996, capital expenditures are expected to exceed the 1995 level by approximately 50%. These increases support new product development initiatives primarily in the Optoelectronics segment. During the first six months of 1996, the Company purchased 531,000 shares of its common stock through periodic purchases on the open market at a cost of $12 million. As of June 30, 1996, the Company had authorization to purchase 5.1 million additional shares. The pace of future purchases will be dependent upon working capital reductions and cash utilization alternatives. In March 1996, the Company renegotiated its credit facilities with the signing of two revolving credit agreements totaling $200 million. These agreements consist of a $100 million, 364-day facility and a $100 million, five-year facility, which expires in March 2001. These agreements serve primarily as backup facilities for the Company's commercial paper borrowing program. 17 Exhibits - -------- EG&G, INC. AND SUBSIDIARIES Exhibit 27 - Financial data schedule 18 PART II. OTHER INFORMATION EG&G, INC. AND SUBSIDIARIES Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits incorporated by reference from Part I herein Exhibit 27 - Financial data schedule (submitted in electronic format only) (b) Reports on Form 8-K There were no reports on Form 8-K filed for the three months ended June 30, 1996. 19 EG&G, INC. AND SUBSIDIARIES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. EG&G, Inc. By /s/ John F. Alexander, II ------------------------- Senior Vice President and Chief Financial Officer (Principal Financial Officer) Date August 7, 1996 -------------- 20 EX-27 2
5 0000031791 EG&G, INC. 1000 US$ 6-MOS DEC-29-1996 JUN-30-1996 1 69,794 0 219,069 4,991 125,918 485,485 447,479 274,768 837,396 287,241 115,079 0 0 60,102 306,154 837,396 702,698 702,698 269,637 516,461 144,898 0 6,416 38,385 12,360 26,025 2,396 0 0 28,421 .60 .60
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