-----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, VXBNgwEcY0GmKmHzdbd2EuDRZTpauxV5UyhVt3+AalO6ugFJIw+jjkpVOCMiF19U CMKll1pp1WSP3F5xregSHQ== 0000047035-96-000012.txt : 19960606 0000047035-96-000012.hdr.sgml : 19960606 ACCESSION NUMBER: 0000047035-96-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960428 FILED AS OF DATE: 19960605 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HERLEY INDUSTRIES INC /NEW CENTRAL INDEX KEY: 0000047035 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS, NEC [3679] IRS NUMBER: 232413500 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-05411 FILM NUMBER: 96576955 BUSINESS ADDRESS: STREET 1: 10 INDUSTRY DR CITY: LANCASTER STATE: PA ZIP: 17603 BUSINESS PHONE: 7173972777 MAIL ADDRESS: STREET 1: 10 INDUSTRY DRIVE CITY: LANCASTER STATE: PA ZIP: 17603 FORMER COMPANY: FORMER CONFORMED NAME: HERLEY MICROWAVE SYSTEMS INC DATE OF NAME CHANGE: 19900510 FORMER COMPANY: FORMER CONFORMED NAME: HERLEY INDUSTRIES INC DATE OF NAME CHANGE: 19831103 10-Q 1 QUARTERLY REPORT FOR 39 WEEKS ENDED APR 28 1996 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 period ended: April 28, 1996 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 0-5411 HERLEY INDUSTRIES, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) DELAWARE #23-2413500 - -------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 10 Industry Drive, Lancaster, Pennsylvania 17603 - ------------------------------------------ ---------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, including Area Code: (717) 397-2777 -------------- --------------------------------------------------------------- (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. [X] Yes [ ] No APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. [ ] Yes [ ] No APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of June 3, 1996 - 2,798,106 shares of Common Stock. HERLEY INDUSTRIES, INC. AND SUBSIDIARIES INDEX TO FORM 10-Q PART I - FINANCIAL INFORMATION PAGE Item 1 - Financial Statements: Consolidated Balance Sheets - April 28, 1996 and July 30, 1995 2 Consolidated Statements of Operations - For the thirteen and thirty-nine weeks ended April 28, 1996 and April 30, 1995 3 Consolidated Statements of Cash Flows - For the thirty-nine weeks ended April 28, 1996 and April 30, 1995 4 Notes to Consolidated Financial Statements 5 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II - OTHER INFORMATION 8 Signatures 10 Computation of per share earnings 11 HERLEY INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS April 28, July 30, 1996 1995 --------- --------- Unaudited Audited --------- --------- ASSETS Current Assets: Cash and cash equivalents $ 577,906 $ 272,755 Accounts receivable 4,353,720 4,679,917 Notes receivable-officers 2,052,284 - Other receivables 172,575 163,402 Inventories 8,284,569 9,330,053 Prepaid expenses and other 1,321,285 1,006,503 ---------- ---------- Total Current Assets 16,762,339 15,452,630 Property, Plant and Equipment, net 12,889,055 13,775,710 Intangibles, net of amortization 4,648,261 4,852,336 Available-for-sale Securities 4,892,730 4,114,614 Other Investments 3,000,000 3,727,506 Other Assets 336,411 306,486 ---------- ---------- $ 42,528,796 $ 42,229,282 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $ 321,814 $ 357,078 Accounts payable and accrued expenses 7,103,189 7,644,148 Income taxes payable 268,127 - Reserve for contract losses 500,210 496,000 Advance payments on contracts 2,247,884 1,476,640 ---------- ---------- Total Current Liabilities 10,441,224 9,973,866 ---------- ---------- Long-term Debt 9,175,000 10,525,000 Deferred Income Taxes 1,487,073 1,282,179 Excess of fair value of net assets of business acquired over cost, net of amortization 1,095,375 1,460,500 ---------- ---------- 22,198,672 23,241,545 ---------- ---------- Commitments and Contingencies Shareholders' Equity: Common stock, $.10 par value; authorized 10,000,000 shares; issued 2,806,541 at April 28, 1996 and 3,015,988 at July 30, 1995 280,654 301,599 Additional paid-in capital 11,828,364 13,040,622 Retained earnings 8,450,973 5,620,516 ---------- ---------- 20,559,991 18,962,737 Less: Unrealized loss (gain) on available-for-sale securities 49,279 (25,000) Treasury stock, at cost, 19,700 shares 180,588 - ---------- ---------- Total Shareholders' Equity 20,330,124 18,987,737 ---------- ---------- $ 42,528,796 $ 42,229,282 ========== ========== The accompanying notes are an integral part of these financial statements. 2 HERLEY INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Thirteen weeks ended Thirty-nine weeks ended -------------------- ----------------------- April 28, April 30, April 28, April 30, 1996 1995 1996 1995 ---------- ---------- ---------- ---------- Net sales $ 7,236,163 $ 6,439,622 $ 21,496,209 $ 18,243,592 ---------- ---------- ---------- ---------- Cost and expenses: Cost of products sold 4,929,063 4,817,881 14,845,965 13,785,211 Selling and administrative expenses 1,356,834 1,331,650 4,312,740 3,540,740 Unusual items - 4,870,800 - 5,447,005 ---------- ---------- ---------- ---------- 6,285,897 11,020,331 19,158,705 22,772,956 ---------- ---------- ---------- ---------- Operating income (loss) 950,266 (4,580,709) 2,337,504 (4,529,364) ---------- ---------- ---------- ---------- Other income (expense): Net gain (loss) on sale of marketable securities and other investments (131,211) 62,430 1,033,786 (467,296) Dividend and interest income 126,322 56,767 288,716 525,101 Interest expense (167,900) (220,226) (613,449) (743,652) ---------- ---------- ---------- ---------- (172,789) (101,029) 709,053 (685,847) ---------- ---------- ---------- ---------- Income (loss) before income taxes 777,477 (4,681,738) 3,046,557 (5,215,211) Income tax provision (benefit) - 77,000 216,100 (159,000) ---------- ---------- ---------- ---------- Net income (loss) $ 777,477 $ (4,758,738) $ 2,830,457 $ (5,056,211) ========== ========== ========== ========== Earnings (loss) per common and common equivalent share $.26 $(1.33) $.86 $(1.29) === ==== === ==== Earnings (loss) per common share - assuming full dilution $.25 $(1.33) $.83 $(1.29) === ===== === ==== Weighted average number of common and common equivalent shares outstanding 3,019,108 3,565,234 3,367,704 3,905,161 ========= ========= ========= ========= Weighted average number of common shares outstanding - assuming full dilution 3,156,902 3,565,234 3,421,271 3,905,161 ========= ========= ========= =========
The accompanying notes are an integral part of these financial statements. 3 HERLEY INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Thirty-nine weeks ended ----------------------- April 28, April 30, 1996 1995 ----------- ----------- Cash flows from operating activities: Net income (loss) $ 2,830,457 $ (5,056,211) ----------- ----------- Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 1,165,013 1,576,583 (Gain) loss on sale of marketable securities (1,033,786) 467,296 Decrease (increase) in deferred tax assets 123,555 (323,811) Increase in deferred tax liabilities 130,855 186,218 Litigation settlement - 5,447,005 Changes in operating assets and liabilities: Decrease in accounts receivable 326,197 1,252,902 (Increase) in notes receivable (2,052,284) - Decrease (increase) in other receivables (9,173) 134,348 Decrease in inventories 1,045,484 1,888,684 (Increase) in prepaid expenses and other (314,782) (37,134) (Decrease) in accounts payable and accrued expenses (540,959) (2,494,639) Increase (decrease) in income taxes payable 268,127 (124,865) Increase (decrease) in reserve for contract losses 4,210 (236,000) Increase (decrease) in advance payments on contracts 771,244 (1,368,150) Other, net (53,999) (585) ----------- ----------- Total adjustments (170,298) 6,367,852 ----------- ----------- Net cash provided by operating activities 2,660,159 1,311,641 ----------- ----------- Cash flows from investing activities: Purchase of available-for-sale securities (8,500,471) (20,880,071) Purchase of other investment (2,000,000) - Proceeds from sale of available-for-sale securities 7,536,619 27,365,202 Proceeds from sale of other investments 3,823,233 - Capital expenditures (415,334) (114,751) ----------- ----------- Net cash provided by investing activities 444,047 6,370,380 ----------- ----------- Cash flows from financing activities: Borrowings under bank line of credit 7,875,000 1,818,102 Proceeds from exercise of stock options 77,070 - Payments under lines of credit (9,225,000) (7,385,000) Payments of long-term debt (35,264) (253,149) Purchase of treasury stock (1,490,861) (2,039,683) ----------- ----------- Net cash used in financing activities (2,799,055) (7,859,730) ----------- ----------- Net increase (decrease) in cash and cash equivalents 305,151 (177,709) Cash and cash equivalents at beginning of period 272,755 539,729 ----------- ----------- Cash and cash equivalents at end of period $ 577,906 $ 362,020 =========== ===========
The accompanying notes are an integral part of these financial statements. 4 Herley Industries, Inc. and Subsidiaries Notes to Consolidated Financial Statements - (Unaudited) 1. The consolidated financial statements include the accounts of Herley Industries, Inc. and its subsidiaries, all of which are wholly-owned. All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of the Company, the accompanying consolidated financial statements reflect all adjustments (which include only normal recurring adjustments) necessary to present fairly the results of operations and cash flows for the periods presented. These financial statements (except for the balance sheet presented at July 30, 1995) are unaudited and have not been reported on by independent public accountants. Results of operations for interim periods are not necessarily indicative of the results of operations for a full year due to external factors which are beyond the control of the Company. 2. In November 1995, and March 1996 the Company lent $1,700,000 and $300,000 respectively, to certain officers, as authorized by the Board of Directors, pursuant to the terms of nonnegotiable promissory notes. The loans are secured by 445,774 shares of common stock of the Company. The notes are due November 1996 and March 1997, respectively, and may be renewed by the Company for up to four additional one-year periods. Interest is payable at maturity at the average rate of interest paid by the Company on borrowed funds during the fiscal year. The pledge agreement also provides for the Company to have the right of first refusal to purchase the pledged securities, based on a formula as defined, in the event of the death or disability of the officer. 3. Inventories at April 28, 1996 and July 30, 1995 are summarized as follows: April 28, 1996 July 30, 1995 -------------- ------------- Purchased parts and raw materials $ 3,588,779 $ 5,749,455 Work in process 4,568,442 3,478,268 Finished products 127,348 102,330 --------- --------- $ 8,284,569 $ 9,330,053 ========= ========= 4. The following is a summary of available-for-sale securities: Gross Gross Estimated Unrealized Unrealized Fair Cost Gains Losses Value --------- ------- ------- ---------- April 28, 1996 Government bonds $ 4,439,631 $ 15,848 $ 97,977 $ 4,357,502 Other 531,368 - - 531,368 --------- ------ ------ --------- Total debt securities 4,970,999 15,848 97,977 4,888,870 Equity securities 3,860 - - 3,860 --------- ------ ------ --------- $ 4,974,859 $ 15,848 $ 97,977 $ 4,892,730 ========= ====== ====== ========= July 30, 1995 Government bonds $ 3,878,937 $ 72,968 $ 31,302 $ 3,920,603 Other 189,919 - - 189,919 --------- ------ ------ --------- Total debt securities 4,068,856 72,968 31,302 4,110,522 Equity securities 4,092 - - 4,092 --------- ------ ------ --------- $ 4,072,948 $ 72,968 $ 31,302 $ 4,114,614 ========= ====== ====== ========= 5 In April 1996 the Company invested $2,000,000 in M.D. Sass RE/ENTERPRISE-II, L.P., a Delaware limited partnership. The objective of the partnership is to achieve superior long-term capital appreciation through investments consisting primarily of securities of companies that are experiencing significant financial or business difficulties. This investment is carried at cost, which approximates market, in the consolidated financial statements at April 28, 1996 since the percentage of ownership is less than 3%. The Company liquidated $2,000,000 of its available-for-sale securities to fund this investment. As of December 31, 1995, the Company sold its investment and terminated its partnership interest in M.D. SASS RE/ENTERPRISE PARTNERS, L.P., a Delaware limited partnership for $3,823,233 realizing a gain of $1,095,727. The proceeds from the sale were temporarily invested in marketable securities. During the quarter ended October 29, 1995, the Company liquidated $1,100,000 of its available-for-sale securities and used the proceeds to purchase shares of its common stock in the open market. The Company purchased a total of 213,714 shares of its common stock during the quarter, all of which have been retired. 5. In January 1996, the Company entered into a revolving credit agreement with a new bank that provides for the extension of credit in the aggregate principal amount of $11,000,000 and may be used for general corporate purposes, including business acquisitions. The facility requires the payment of interest only on a monthly basis and payment of the outstanding principal balance on January 31, 1998. Interest is set biweekly at 1% over the bank's Federal Funds Rate (5.26% at April 28, 1996) applied to outstanding balances up to 80% of the net equity value of certain investments, and at the bank's Base Rate (9.25% at April 28, 1996) for outstanding balances in excess of this limit. The premium rate portion of the facility is secured by the marketable securities. The credit facility also provides for the issuance of stand-by letters of credit with a fee of 1.0% per annum of the amounts outstanding under the facility. At April 28, 1996, stand-by letters of credit aggregating $3,325,273 were outstanding. The agreement contains various financial covenants, including, among other matters, the maintenance of working capital, tangible net worth, and restrictions on cash dividends. 6. On March 6, 1996, the Board of directors approved the purchase of an industrial parcel of land from the Chairman and principal shareholder of the Company for $940,000. The purchase price was based on two independent appraisals. A deposit of $94,000 was paid on April 11, 1996, and the balance will be paid at settlement on or before April 30, 1998. The land will be used for future expansion. 7. Supplemental cash flow information is as follows: April 28, 1996 April 30, 1995 -------------- -------------- Cash paid during the period for: Interest $ 562,048 $ 696,114 Income Taxes 16,931 121,809 6 Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources - ------------------------------- As of April 28, 1996 and July 30, 1995, working capital was approximately $6,321,000 and $5,479,000, respectively, and the ratio of current assets to current liabilities was 1.61 to 1 and 1.55 to 1, respectively. In January 1996, the Company entered into a revolving credit agreement with a new bank that provides for the extension of credit in the aggregate principal amount of $11,000,000 and may be used for general corporate purposes, including business acquisitions. The facility expires January 31, 1998. As of April 28, 1996 and July 30, 1995, the Company had borrowings outstanding of $5,650,000 and $7,000,000 (under a prior agreement), respectively. At April 28, 1996, the Company owned high grade investment securities having a market value of approximately $4,893,000, and cash and cash equivalents of approximately $578,000. The Company believes that presently anticipated future cash requirements will be provided by internally generated funds, and existing credit facilities. Results of Operations - --------------------- Thirteen weeks ended April 28, 1996 and April 30, 1995 - ------------------------------------------------------ Net sales for the thirteen weeks ended April 28, 1996 increased by approximately $797,000 or 12% over the comparable period of the prior year due to an increase in flight instrumentation products net sales of approximately $1,190,000 of which the acquisition of Stewart Warner Electronics Co. contributed approximately $1,224,000; offset by a decrease in net sales of microwave components of approximately $393,000. Cost of products sold for the thirteen weeks ended April 28, 1996 decreased as a percentage of net sales from 75% in 1995 to 68% in 1996. This decrease is attributable to higher margins on foreign sales, which were approximately $1,734,000 in the quarter as compared to $1,184,000 in 1995, and increased absorption of fixed costs due to the increase in sales volume. There is no significant change in total selling and administrative expenses for the thirteen weeks ended April 28, 1996. Among the components of selling and administrative expenses, however, representative fees increased $29,000 in line with higher foreign sales, and in the third quarter 1995 there was a provision for customer disputed charges of $100,000. The acquisition of Stewart Warner added $71,000 in selling and administrative expenses. Included in unusual items in 1995 are settlement costs in connection with certain legal actions of $4,310,000, legal fees of $253,000, and related expenses of $308,000. Other net expense for the thirteen weeks ended April 28, 1996 increased $72,000 from the comparable prior year period due to net losses on the sale of marketable securities of approximately $131,000 as compared to a gain in 1995 of $62,000; offset by an increase in investment income of $69,000 and a decrease in interest expense of $52,000. No income tax provision has been recorded in the thirteen weeks ended April 28, 1996 due to the anticipated utilization of net operating losses. Thirty-nine weeks ended April 28, 1996 and April 30, 1995 - --------------------------------------------------------- Net sales for the thirty-nine weeks ended April 28, 1996 increased by approximately $3,253,000 or 18% over the comparable period of the prior year due to an increase in flight instrumentation products net sales of approximately $4,508,000 of which the acquisition of Stewart Warner Electronics Co. contributed approximately $3,324,000; offset by a decrease in net sales of microwave components of approximately $1,255,000. 7 Cost of products sold for the thirty-nine weeks ended April 28, 1996 decreased as a percentage of net sales from 76% in 1995 to 69% in 1996. This decrease is attributable to higher margins on foreign sales, which were approximately $5,130,000 in the period as compared to $2,359,000 in 1995, and increased absorption of fixed costs due to the higher sales volume. Selling and administrative expenses for the thirty-nine weeks ended April 28, 1996 increased approximately $772,000 over the comparable period of the prior year, of which $278,000 is attributable to increased representative fees on foreign sales, and increases of $205,000 in personnel and related expenses, and outside services of $84,000; offset by a reduction in other expenses of $21,000. The third quarter of 1995 included a provision for customer disputed charges of $100,000. The acquisition of Stewart Warner added $326,000 in selling and administrative expenses in 1996. Legal fees were reclassified in the third quarter 1995 and included in the unusual item. Included in unusual items in 1995 are settlement costs in connection with certain legal actions of $4,310,000, legal fees of $829,000, and related expenses of $308,000. Other income, net of interest expense, for the thirty-nine weeks ended April 28, 1996 increased $1,395,000 from the comparable prior year period due to net gains on the sale of a partnership interest in M. D. SASS RE/ENTERPRISE PARTNERS, L.P. and other marketable securities of approximately $1,034,000 as compared to a loss in 1995 of $467,000, and a decrease in interest expense of $130,000; offset by a reduction in investment income of $236,000. PART II - OTHER INFORMATION ITEM 1 - LEGAL PROCEEDINGS: In April 1992, Litton Systems, Inc. Electron Devices Division ("Litton") commenced an action in the Essex Superior Court of Massachusetts against the Company (the "Litton Action") alleging, among other claims for relief, theft of trade secrets, unfair trade practices and related common law claims in connection with the defendants' alleged misappropriation of Litton's beacon magnetron drawings. In a jury trial which ended April 3, 1995, a verdict on liability was rendered against the Company and the other defendants. Prior to a separate, subsequent trial to determine damages, the Company settled the action on April 12, 1995 for the sum of $4,000,000, and agreed to the entry of an injunction precluding the use by the Company of the alleged misappropriated drawings in connection with the manufacture of beacon magnetrons. The settlement provides for two equal payments of $2,000,000 each without interest, the first of which was paid, and the second is due in July 1996. In May and June 1994, the Company was served with two class action complaints against the Company and certain of its officers and directors in the United States District Court for the Eastern District of Pennsylvania. The claims were made under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. One of the claims is also based upon alleged negligence. The claims relate to the Company's acquisition of Carlton Industries, Inc. and its subsidiary, Vega Precision Laboratories, Inc. The claims were combined into one matter and a consolidated Complaint. In April 1995, the Court certified that the claims based on the Securities Exchange Act may proceed as a Class Action pursuant to Rule 23(b) (3), but without prejudice to the rights of the parties thereafter to seek modification of the Class or revocation of leave to proceed. The Court refused to certify the negligence claim as a Class Action. In May 1995, the parties negotiated a tentative settlement of all claims in consideration for a payment of $450,000 subject to the negotiation and execution of a satisfactory Settlement Agreement and Court approval after notice to Class Members. A Stipulation of Settlement has been executed by the parties and is being submitted to the Court for approval after appropriate notice to Class Members. In May 1995, the Company was served with a Class Action Complaint against the Company and its Chief Executive Officer in the United States District Court for the Eastern District of Pennsylvania. The claim was made under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10(b)-5 thereunder. The claim relates to the Company's settlement of the Litton Action in the Essex Superior Court of Massachusetts and alleges, inter alia, that there was insufficient disclosure by the Company of its true potential exposure in that claim. The Company believes it has a meritorious defense and intends to vigorously defend against the action. 8 In or about March 1994, the principal selling shareholders of Carlton Industries, Inc. ("Carlton") and its subsidiary, Vega Precision Laboratories, Inc. ("Vega"), as claimants, commenced an arbitration proceeding before the American Arbitration Association in New York City pursuant to the terms of the Stock Purchase Agreement ("Agreement") by which the Company acquired the stock of Carlton and Vega. The claimants principally are seeking to recover damages for the Company's alleged failure to register timely the claimants' shares of the Company's common stock in accordance with the provisions of the Agreement and other breaches of the Agreement. The Company has denied and has contested vigorously the legitimacy of the claimants' claims and has interposed several counterclaims seeking indemnification under the Agreement against the principal selling shareholders, for damages suffered by the Company in an aggregate amount exceeding $1 million as a result of breaches of contractual representations. Hearings have been closed and final briefs were submitted. The matter has yet to be determined by the Arbitrators. There is no certainty as to the outcome of the above unresolved matters. However, in the opinion of management, the ultimate liability on these matters, if any, will not have a material adverse effect on the consolidated financial position or results of operations of the Company. ITEM 2 - CHANGES IN SECURITIES: None ITEM 3 - DEFAULTS UPON SENIOR SECURITIES: None ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS: None ITEM 5 - OTHER INFORMATION: None ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K: (a) Exhibit 11: Computation of per share earnings. Exhibit 27: Financial Data Schedule (for electronic submission only). (b) During the quarter for which this report is filed, the Registrant filed the following reports under Form 8-K: None. 9 FORM 10-Q 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. HERLEY INDUSTRIES, INC. ----------------------- Registrant BY: /s/ Myron Levy ----------------------- Myron Levy, President BY: /s/ Anello C. Garefino --------------------------- Anello C. Garefino Principal Financial Officer DATE: June 5, 1996 10 EX-11 2 STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS HERLEY INDUSTRIES, INC. AND SUBSIDIARIES Exhibit 11 COMPUTATION OF PER SHARE EARNINGS
Thirteen weeks ended ----------------------------------- April 28, 1996 April 30, 1995 ------------------ ------------------ Primary Fully Diluted Primary Fully Diluted ------- ------------- ------- ------------- Net Income (loss) $ 777,477 $ 777,477 $ (4,758,738) $ (4,758,738) ======= ======= ========= ========= Weighted average shares outstanding: Shares outstanding from beginning of period 2,802,274 2,802,274 3,615,815 3,615,815 Shares issued for options exercised 11,326 11,326 - - Treasury shares acquired (16,608) (16,608) (50,581) (50,581) Common equivalents - options and warrants 222,116 222,116 - - Common equivalents - using period end price - 137,794 - - --------- --------- --------- --------- Weighted average common and common equivalent shares outstanding 3,019,108 3,156,902 3,565,234 3,565,234 ========= ========= ========= ========= Earnings (loss) per common and common equivalent share: $.26 $.25 $(1.33) $(1.33) === === ==== ==== Thirty-nine weeks ended ----------------------------------- April 28, 1996 April 30, 1995 ------------------ ------------------ Primary Fully Diluted Primary Fully Diluted ------- ------------- ------- ------------- Adjustment of net income (loss): Net Income (loss) $ 2,830,457 $ 2,830,457 $ (5,056,211) $ (5,056,211) Add elimination of interest, net of tax benefit, under the modified treasury stock method 77,222 - - - --------- --------- --------- --------- Adjusted net income (loss) $ 2,907,679 $ 2,830,457 $ (5,056,211) $ (5,056,211) ========= ========= ========= ========= Weighted average shares outstanding: Shares outstanding from beginning of period 3,015,988 3,015,988 4,175,689 4,175,689 Shares issued for options exercised 3,775 3,775 15,556 15,556 Treasury shares acquired (200,122) (200,122) (299,307) (299,307) Common equivalents - options and warrants 548,063 548,063 13,223 13,223 Common equivalents - using period end price - 53,567 - - --------- --------- --------- --------- Weighted average common and common equivalent shares outstanding 3,367,704 3,421,271 3,905,161 3,905,161 ========= ========= ========= ========= Earnings (loss) per common and common equivalent share: $.86 $.83 $(1.29) $(1.29) === === ==== ====
11 EX-27 3 FDS--APR-28-1996
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE 39 WEEKS ENDED APRIL 28, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS JUL-28-1996 JUL-31-1995 APR-28-1996 577,906 0 4,353,720 0 8,284,569 16,762,339 23,735,509 10,846,454 42,528,796 10,441,224 0 0 0 280,654 20,049,470 42,528,796 21,496,209 21,496,209 14,845,965 19,158,705 0 0 613,449 3,046,557 216,100 2,830,457 0 0 0 2,830,457 0.86 0.83
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