-----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, AAYFiYyfK9dkqv/pUDywEam4ZjdYQ5tt7NQy5IVrHuc2sugdaoei7c4XCOM3Cwua cJwNV2MoDNkPaf1cNUoTGQ== 0000031791-97-000012.txt : 19970728 0000031791-97-000012.hdr.sgml : 19970728 ACCESSION NUMBER: 0000031791-97-000012 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970723 ITEM INFORMATION: Other events FILED AS OF DATE: 19970725 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05075 FILM NUMBER: 97645178 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 8-K 1 UNITED STATES 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 Date of Report (Date of Earliest Event Reported) July 23, 1997 EG&G, Inc. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Massachusetts 1-5075 04-2052042 ------------- ------ ---------- (State or other (Commission File Number) (IRS Employer jurisdiction of Identification No.) incorporation) 45 William Street, Wellesley, Massachusetts 02181 ------------------------------------------- ----- (Address of principal executive offices) (Zip Code) (617) 237-5100 -------------- (Registrant's telephone number, including area code) Not applicable -------------- (Former name or former address, if changed since last report) Item 5. Other Events On July 23, 1997, the Company issued a press release reporting on its financial results for the second quarter of 1997 (see attached press release). SIGNATURE 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 hereunto duly authorized. EG&G, Inc. By /s/ John F. Alexander, II ---------------------------- Senior Vice President and Chief Financial Officer (Principal Financial Officer) Date: July 23, 1997 ------------- EXHIBIT INDEX Exhibit Number Exhibit Description -------------- --------------------------------- (99) Press Release dated July 23, 1997 FOR IMMEDIATE RELEASE For further information contact: - --------------------- Deborah S. Lorenz, EG&G, Inc. 23 July 1997 Tel. (617) 431-4306 NYSE Symbol: EGG Website: www.egginc.com EG&G REPORTS SECOND QUARTER OPERATING EARNINGS OF $.22 PER SHARE BEFORE A NON-CASH CHARGE OF $28.2 MILLION Wellesley, Massachusetts.......EG&G, Inc., announced today that it has taken a non-cash charge of $28.2 million pre-tax, $23.5 million after-tax or $.51 per share for the second quarter. As a result of the charge, EG&G reported a second quarter 1997 operating loss from continuing operations of $10.2 million, compared to $21.4 million in operating income reported for the same period last year. Sales from continuing operations increased to $368.7 million for the second quarter as compared to $355.9 million for the second quarter of 1996. The Company reported a second quarter loss from continuing operations of $.29 per share. Net income from continuing operations before the non-recurring charge was $.22 per share, which compares to $.30 per share for the same period in 1996. The charge was prompted primarily by the failure of the Company's IC Sensors division to meet its operating plan. This led to the development of a revised operating plan to restructure and stabilize the business, which resulted in an impairment charge of $26.7 million in the second quarter. EG&G REPORTS SECOND QUARTER OPERATING EARNINGS OF $.22 PER SHARE BEFORE A NON-CASH CHARGE OF $28.2 MILLION 23 July 1997 Page 2 of 6 Commenting on the financial performance for the remainder of the year, EG&G Chairman John M. Kucharski indicated that the Company's performance will continue to improve in the third quarter and could well approach the $.30 level of the third quarter last year and pointed to the substantial positive seasonality which occurs each year in the fourth quarter. He also indicated that if a series of divestitures of non-strategic businesses are completed by year end, the second quarter charge could be more than offset by the gains from the divestitures. The Instruments business segment reported second quarter 1997 sales of $72.4 million compared to $78.8 million in the same period in 1996, and operating income of $5.8 million versus $9.5 million in second quarter 1996. The performance reflects a general softness in the European economy, especially in Germany, as well as the absence of revenue from a divested unit. During the quarter, 39 of the Company's explosives-detection systems were placed in Hong Kong for use during the changeover ceremonies and subsequently in that city's new airport. During the second quarter, sales of the Mechanical Components segment rose to $74.3 million from $69.2 million a year earlier. The increased sales levels came largely from the aerospace business. The cost of consolidation of certain operations as well as an unplanned warranty expense (totaling $1.5 million) caused operating income to be off slightly to $7.2 million from $8.1 million in 1996. In the Optoelectronics segment, sales were $65.8 million compared to $68.2 million in the comparable 1996 quarter, while operating income increased to $1.4 million before the charge. This compares to operating income of $0.9 million in second quarter 1996. Significant operating problems at IC Sensors continued into the second quarter, resulting in the business continuing to report a loss. As a result, the Company recorded a charge of $26.7 million in the second quarter, for a write-down of goodwill of $13.6 million and fixed assets of $13.1 million. EG&G REPORTS SECOND QUARTER OPERATING EARNINGS OF $.22 PER SHARE BEFORE A NON-CASH CHARGE OF $28.2 MILLION 23 July 1997 Page 3 of 6 EG&G's Technical Services segment reported sales of $156.3 million compared to $139.7 million in the 1996 second quarter. Operating income was $9.8 million compared to $9.1 million in 1996 excluding a charge of $1.5 million to write off goodwill of the Environmental Services Division as a result of its continuing losses. Technical Services benefited from increased demand for lubricant and automotive structural testing services and revenue from a communications systems project. The operating income level for the automotive testing business remained on plan, while award fees from the operation of a chemical demilitarization facility were below plan. In a recent development, EG&G was informed that "NASA and the Air Force are seeking approval from their respective headquarters to consolidate and recompete base operations requirements at Kennedy Space Center, Cape Canaveral Air Station and certain functions at Patrick Air Force Base in an effort to eliminate duplication and reduce costs. If approved, it is anticipated that any resultant contract would be effective October 1, 1998." Forward-Looking Information All statements contained herein that refer to a time after June 29, 1997, including the words expect, believe and plan, or statements referring to improvements in performance during successive quarters, goals, the future or future actions, continuing actions, trends, strategies, initiatives, challenges or opportunities, or which otherwise are not purely historical, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties. It is important to note that actual results could differ materially from those in the forward-looking statements. EG&G REPORTS SECOND QUARTER OPERATING EARNINGS OF $.22 PER SHARE BEFORE A NON-CASH CHARGE OF $28.2 MILLION 23 July 1997 Page 4 of 6 Factors Affecting Future Performance Future performance of the Company's three product segments will be highly dependent on the technological success, market acceptance and competitive position of new program initiatives, including the amorphous silicon project and the advanced micromachined sensors technology platform. Continued success in improving operational efficiency will be required to offset increasing price pressure in most of the Company's product offerings. Other factors affecting future performance include the ability to operate with reducing backlogs due to shorter customer order cycles, resolve pricing issues with selected customers and attract and retain key personnel in a number of areas. The results of the Optoelectronics segment are dependent on management's ability to restore IC Sensors to profitability, requiring introduction of new products, improvement in manufacturing yields and implementation of cost reductions, including the successful transfer of assembly activities to lower-cost geographies. In the Technical Services segment, future performance will continue to be impacted by a highly competitive procurement environment, continuing changes in federal budget priorities and rapidly changing customer requirements. "NASA and the Air Force are seeking approval from their respective headquarters to consolidate and recompete base operations requirements at the Kennedy Space Center, Cape Canaveral Air Station and certain functions at Patrick Air Force Base in an effort to eliminate duplication and reduce costs. If approved, it is anticipated that any resultant contract would be effective October 1, 1998." Movements in foreign exchange rates could affect operating results. Effective tax rates in the future could be affected by changes in the geographical distribution of income, utilization of net operating loss carry-forwards, repatriation costs, and resolution of outstanding tax audit issues. EG&G is a global technology company that provides complete systems, as well as components to automotive, medical, aerospace, photography and other industries, and delivers skilled support services to government and industrial customers. Based in Wellesley, Massachusetts, EG&G has annual sales of more than $1.4 billion and more than 14,000 employees. CONSOLIDATED STATEMENT OF OPERATIONS EG&G, Inc. and Subsidiaries
Second Quarter Ended Six Months Ended -------------------- ---------------- (In thousands except per share data) June 29, 1997 June 30, 1996 June 29, 1997 June 30, 1996 - ------------------------------------ ------------- ------------- ------------- ------------- Sales $368,672 $355,907 $715,678 $702,698 Costs and Expenses: Cost of sales 278,988 260,080 538,627 516,461 Research and development expenses 11,919 11,414 23,073 22,375 Selling, general and administrative expenses 59,799 62,999 119,457 122,523 Asset impairment charge 28,200 - 28,200 - -------- -------- -------- -------- Total Costs and Expenses 378,906 334,493 709,357 661,359 -------- -------- -------- -------- Operating Income (Loss) From Continuing Operations (10,234) 21,414 6,321 41,339 Other Income (Expense), Net (2,618) (1,059) (4,676) (2,954 -------- -------- -------- -------- Income (Loss) From Continuing Operations Before Income taxes (12,852) 20,355 1,645 38,385 Provision for Income Taxes 538 6,212 5,467 12,360 -------- -------- -------- -------- Income (Loss) From Continuing Operations (13,390) 14,143 (3,822) 26,025 Income From Discontinued Operations, Net of Income Taxes 1,545 1,496 2,003 2,396 -------- -------- -------- -------- Net Income (Loss) $(11,845) $ 15,639 $ (1,819) $ 28,421 ======== ======== ======== ======== Earnings (Loss) Per Share: Continuing Operations $(.29) $ .30 $(.08) $ .55 Discontinued Operations .03 .03 .04 .05 ----- ----- ----- ----- Net Income (Loss) $(.26) $ .33 $(.04) $ .60 ===== ===== ===== ===== Weighted Average Shares of Common Stock Outstanding 45,888 47,424 46,054 47,527
All figures shown are subject to year-end audit. Page 5 of 6 SALES AND OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS BY INDUSTRY SEGMENT EG&G, Inc. and Subsidiaries
Second Quarter Ended Six Months Ended -------------------- ---------------- (In thousands) June 29, 1997 June 30, 1996 June 29, 1997 June 30, 1996 - -------------- ------------- ------------- ------------- ------------- Instruments Sales $ 72,350 $ 78,776 $144,024 $152,357 Operating Income 5,780 9,457 11,915 16,265 8.0% 12.0% 8.3% 10.7% Mechanical Components Sales $ 74,298 $ 69,240 $146,032 $137,781 Operating Income 7,248 8,130 14,863 15,357 9.8% 11.7% 10.2% 11.1% Optoelectronics Sales $ 65,767 $ 68,205 $124,872 $134,084 Operating Income Before Impairment 1,408 864 1,699 4,979 2.1% 1.3% 1.4% 3.7% Asset Impairment Charge (26,700) - (26,700) - Operating Income (Loss) After Impairment (25,292) 864 (25,001) 4,979 Technical Services Sales $156,257 $139,686 $300,750 $278,476 Operating Income Before Impairment 9,834 9,113 18,155 17,563 6.3% 6.5% 6.0% 6.3% Asset Impairment Charge (1,500) - (1,500) - Operating Income After Impairment 8,334 9,113 16,655 17,563 General Corporate Expenses $ (6,304) $ (6,150) $(12,111) $(12,825) Continuing Operations Sales $368,672 $355,907 $715,678 $702,698 Operating Income Before Impairment 17,966 21,414 34,521 41,339 4.9% 6.0% 4.8% 5.9% Asset Impairment Charge (28,200) - (28,200) - Operating Income (Loss) After Impairment (10,234) 21,414 6,321 41,339
OTHER FINANCIAL INFORMATION EG&G, Inc. and Subsidiaries
Six Months Ended ---------------- (In thousands) June 29, 1997 June 30, 1996 - -------------- ------------- ------------- Purchases of Common Stock: 832 531 Number of shares $ 17,440 $ 12,032 Cost of shares $ 63,548 $ 69,794 Cash and Cash Equivalents $184,905 $161,316 Total Debt
All figures shown are subject to year-end audit. Page 6 of 6
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