-----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, AKNwJ18DFBF/UxyVDGgRebMRR9UxtpufgtymHFwp5COpxHXaP6ZX+A/OowuBx4ch sIbttvvElrWtx/q1fEDm6w== 0000950005-98-000070.txt : 19980209 0000950005-98-000070.hdr.sgml : 19980209 ACCESSION NUMBER: 0000950005-98-000070 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980206 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANFORD TELECOMMUNICATIONS INC CENTRAL INDEX KEY: 0000725727 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 942207636 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-11473 FILM NUMBER: 98523004 BUSINESS ADDRESS: STREET 1: 1221 CROSSMAN AVENUE CITY: SUNNYVALE STATE: CA ZIP: 94089 BUSINESS PHONE: 4087450818 MAIL ADDRESS: STREET 1: 221 CROSSMAN AVENUE CITY: SUNNYVALE STATE: CA ZIP: 94088-3733 10-Q 1 FORM 10-Q 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 DECEMBER 31, 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 0-12734 Stanford Telecommunications, Inc. --------------------------------- (Exact name of registrant as specified in its charter) Delaware 94-2207636 (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 1221 Crossman Avenue, Sunnyvale, CA 94089 (Address of principal executives offices) (Zip Code) 408/745-0818 ------------ (Registrant's telephone number, including area code) ------------ (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 --- --- APPLICABLE ONLY TO CORPORATE USERS: Indicate the number of outstanding shares of each of the issuer's classes of common stock, as of the latest practical date. 12,952,623 as of January 26, 1998 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS STANFORD TELECOMMUNICATIONS, INC. CONDENSED FINANCIAL STATEMENTS (Unaudited) The condensed financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes the disclosures which are made are adequate to make the information presented not misleading. Further, the condensed financial statements have been prepared in all material respects in conformity with the standards of accounting measurement set forth in Accounting Principles Board Opinion No. 28 and reflect, in the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position and results of operations as of and for the periods indicated. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Stanford Telecommunications, Inc. 1997 Annual Report. The results of operations for the first nine months of fiscal year 1998 ended December 31, 1997 are not necessarily indicative of results to be expected for the entire year ending March 31, 1998. 2 STANFORD TELECOMMUNICATIONS, INC. CONDENSED STATEMENTS OF INCOME (UNAUDITED) (in thousands, except per share amounts)
Three Months Ended Nine Months Ended December 31, December 31, ---------------------- ---------------------- 1997 1996 1997 1996 --------- --------- --------- --------- Revenues $ 40,713 $ 42,028 $ 112,881 $ 123,929 Cost of revenues 30,778 32,305 84,673 95,187 --------- --------- --------- --------- Gross profit 9,935 9,723 28,208 28,742 Expenses Research and development 3,814 2,903 10,712 8,576 Marketing and administrative 4,463 4,170 13,316 12,297 --------- --------- --------- --------- Total expenses 8,277 7,073 24,028 20,873 Operating income 1,658 2,650 4,180 7,869 Interest income, net 502 342 1,453 924 --------- --------- --------- --------- Income before income taxes 2,160 2,992 5,633 8,793 Provision for income taxes (583) (1,032) (1,746) (3,034) --------- --------- --------- --------- Net income $ 1,577 $ 1,960 $ 3,887 $ 5,759 ========= ========= ========= ========= Weighted average common 13,226 13,042 13,173 13,068 shares and equivalents Net income per share - basic and diluted $ 0.12 $ 0.15 $ 0.30 $ 0.44 ========= ========= ========= ========= See accompanying notes
3 STANFORD TELECOMMUNICATIONS, INC. CONDENSED BALANCE SHEETS (in thousands, except per share amount)
ASSETS December 31, March 31, 1997 1997 --------- --------- Current assets: (Unaudited) Cash and cash equivalents $ 7,129 $ 8,235 Short-term investments 18,221 25,074 Accounts receivable 29,931 25,856 Unbilled receivables 23,398 19,754 Inventories, net of related progress billings 14,246 6,011 Prepaid expenses 3,858 4,201 --------- --------- Total current assets 96,783 89,131 --------- --------- Property and equipment at cost: Electronic test equipment 46,072 42,797 Furniture and fixtures 3,836 3,613 Leasehold improvements 3,914 3,722 --------- --------- 53,822 50,132 Less: Accumulated depreciation and amortization (39,503) (36,019) --------- --------- Net property and equipment 14,319 14,113 --------- --------- Other assets 324 274 --------- --------- $ 111,426 $ 103,518 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current maturities of long-term obligations $ 52 $ 88 Accounts payable 10,075 5,902 Advance payments from customers 2,522 1,581 Accrued liabilities 9,061 10,601 Accrued and current deferred income taxes 3,673 4,549 --------- --------- Total current liabilities 25,383 22,721 --------- --------- Long-term obligations, less current maturities 0 30 --------- --------- Other long-term liabilities 820 910 --------- --------- Deferred income taxes 121 151 --------- --------- Shareholders' equity: Common shares- par value $.01; 25,000 shares authorized Outstanding- 12,952 shares at December 31, 1997 130 128 12,833 shares at March 31, 1997 Paid-in capital 41,917 40,410 Retained earnings 43,055 39,168 --------- --------- Total shareholders' equity 85,102 79,706 --------- --------- $ 111,426 $ 103,518 ========= ========= See accompanying notes.
4 STANFORD TELECOMMUNICATIONS, INC. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)
Nine Months Ended December 31, -------------------- Cash flows from operating activities: 1997 1996 -------- -------- Net income $ 3,887 $ 5,759 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation and amortization 4,303 3,875 Issuances of stock to employees under bonus and award plans 22 85 Change in provision for losses on receivables and contracts (963) 1,298 Loss on disposition of property and equipment 11 3 (Increase) decrease in assets: Receivables billed and unbilled (7,417) (11,512) Inventories (7,527) 7,574 Prepaid expenses and other assets 293 682 Increase (decrease) in liabilities: Accounts payable, advance payments, and accrued expenses 3,527 2,149 Other long-term liabilities (90) (57) Accrued and deferred income taxes (759) 93 -------- -------- Net cash (used in) provided by operating activities (4,713) 9,949 -------- -------- Cash flows provided by (used in) investing activities: Proceeds from maturities (purchase) of short-term investments, net 6,853 (4,452) Purchase of property and equipment (4,520) (4,547) -------- -------- Net cash provided by (used in) investing activities 2,333 (8,999) -------- -------- Cash flows from financing activities: Payments on capital lease obligations (66) (54) Proceeds from transactions under stock plans 1,340 1,401 -------- -------- Net cash provided by financing activities 1,274 1,347 -------- -------- Net (decrease) increase in cash and cash equivalents (1,106) 2,297 Cash and cash equivalents at beginning of period 8,235 4,409 -------- -------- Cash and cash equivalents at end of period $ 7,129 $ 6,706 -------- -------- Supplemental cash flow information: Cash paid for interest and income taxes Interest $ 17 $ 5 Income taxes $ 1,792 $ 967 See accompanying notes.
5 STANFORD TELECOMMUNICATIONS, INC. Notes to Condensed Interim Financial Statements (Unaudited) December 31, 1997 1. In February 1997 the Statement of Financial Accounting Standards (SFAS) No. 128 "Earnings per Share" (EPS) was issued to replace Accounting Principles Board (APB) No. 15 and is effective for periods ending after December 15, 1997. The statement established standards for computing and presenting basic and diluted EPS. The Company has adopted SFAS No. 128 in the third quarter of fiscal 1998. Basic and diluted earnings per share are substantially the same. Accordingly, the Company has reported them together on one line in the condensed statement of income. 2. Inventories Inventories are stated at the lower of cost (first-in, first-out) or market. Cost includes materials, labor and related indirect expenses. General and administrative costs are only included in inventory for government contracts, as such costs are reimbursed by the government. The components of inventory are (in thousands): December 31, 1997 March 31, 1997 ----------------- -------------- Work-in-progress $ 11,894 3,721 Finished goods 2,404 2,318 Allocated general and administrative costs 265 118 Less: progress billings (317) (146) --------- --------- $ 14,246 $ 6,011 ========= ========= 4. Credit Agreement On December 12, 1997 the Company amended and restated its credit line agreement to expire on December 18, 1998. The bank credit commitment of $15 million requires the Company to maintain certain financial covenants. At December 31, 1997, the Company was in compliance with all such financial covenants. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview Since the Company's inception in 1973, revenues have been generated primarily from sales to agencies of the U.S. Government, including the DoD, the U.S. Air Force, Army and Navy, NASA and the FAA, or their prime contractors. Such revenues are generated from many contracts including programs requiring multi-year hardware and software development and limited production of products and systems. The Company's contracts often require the design, production, operation and maintenance of sophisticated equipment and systems and providing integration services in the digital telecommunications and satellite communications fields. A substantial portion of the digital telecommunications and satellite communications research and development performed by the Company since its inception has been funded by its customers and recorded as revenues by the Company. Accordingly, the cost of performing this customer-funded research and development is included in "Cost of Revenues" in the Company's financial statements. The Company's government contracts are generally cost-reimbursement plus profit or fixed-price contracts. The Company generally recognizes revenues from its long-term government contracts on a percentage-of-completion basis. Commencing in the late 1980's, the Company began to pursue commercial opportunities utilizing its digital telecommunications technology developed and enhanced by the Company since its inception. Commercial revenues have risen from less than 6% of total revenues in fiscal year 1989 to approximately 41% of total revenues in fiscal year 1997. During fiscal year 1997, commercial revenues which amounted to approximately $68.5 million included: (i) contract manufacturing revenues from the Company's electronics assembly business ($34.0 million); (ii) sales of ASICs, circuit boards and subsystems to the telecommunications industry ($17.0 million); an (iii) other commercial systems and product business ($17.5 million). During the first nine months of fiscal 1998, commercial revenues amounted to approximately $42.6 million or approximately 38% of total revenues reported. The Company includes in commercial revenues sales of standard or off-the-shelf products to any customers, including government customers. Over the past two fiscal years the Company has greatly increased its level of independent research and development expenditures. The Company believes that this increase is necessary to successfully develop competitive products for the commercial telecommunications market. The Company has applied much of its research and development expenditures to commercial products and initiatives in the areas of wireless broadband communications, cable high speed modem components and board level products and satellite personal communications. The Company's operating results have from time to time been adversely affected by non-recoverable cost overruns on certain fixed-price contracts, primarily fixed-price development contracts. The Company has instituted additional management controls to more closely monitor its bidding process and costs incurred on fixed-price development contracts, however, no assurance can be given that the Company will not incur losses on future fixed-price contracts or additional losses on existing contracts. The Company believes that development contracts are an important element in maintaining its technological leadership position in digital telecommunications. As a result, the Company may incur losses on certain fixed-price contracts. Such losses will be charged against results of operations in the period when they first become known, typically near the initiation of the contract and may have a material adverse effect on the Company's results of operations. 7 Cautionary Statements In the interest of providing the Company's shareholders and potential investors with certain Company information, including management's assessment of the Company's future potential, certain statements set forth herein (a) contain or are based on projections of revenue, income, earnings per share and other financial items or (b) relate to management's future plans, expectations, and objectives or to the Company's future economic performance. Such statements are "forward-looking statements" within the meaning of Section 27A(i) of the Securities Act of 1933, as amended, and in Section 21E(i) of the Securities Exchange Act of 1934, as amended. Although any forward-looking statements contained herein or otherwise expressed by or on behalf of the Company are to the knowledge and in the judgement of the officers and directors of the Company, expected to prove true and to come to pass, management is not able to predict the future with absolute certainty. Accordingly, shareholders and potential investors are hereby cautioned that certain events or circumstances could cause actual results to differ materially from those projected or predicted herein. In addition, the forward-looking statements herein are based on management's knowledge and judgment as of the date hereof, and the Company does not intend to update any forward-looking statements to reflect events occurring or circumstances existing hereafter. For further information on the foregoing, reference is made to the Company's Securities and Exchange Commission report on Form 10-K. Quarterly Results The following table presents the Company's financial results by quarter for fiscal 1997 and the first three quarters of fiscal 1998. These quarterly financial results are unaudited. In the opinion of management, however, they have been prepared on the same basis as the audited financial information and include all adjustments necessary for a fair presentation of the information set forth therein. The operating results for any quarter are not necessarily indicative of the results that may be expected for any future period. Quarter Ended Statement of Operations Data (in thousands, except per share data)
Fiscal 1997 Fiscal 1998 ---------------------------------------- --------------------------- June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 -------- -------- ------- ------- ------- ------- ------- Revenues $40,843 $41,058 $42,028 $43,073 $35,331 $36,838 $40,713 Cost of revenues 31,993 30,889 32,305 32,245 26,430 27,465 30,778 -------- ------- ------- ------- ------- ------- ------- Gross profit 8,850 10,169 9,723 10,828 8,901 9,373 9,935 -------- ------- ------- ------- ------- ------- ------- Expenses: Research and development 2,229 3,444 2,903 3,292 3,031 3,868 3,814 Marketing and administrative 4,022 4,105 4,170 4,511 4,251 4,602 4,463 -------- ------- ------- ------- ------- ------- ------- Total expenses 6,251 7,549 7,073 7,803 7,282 8,470 8,277 Operating income 2,599 2,620 2,650 3,025 1,619 903 1,658 Interest income, net 284 298 342 412 459 492 502 -------- ------- ------- ------- ------- ------- ------- Income before provision for income taxes 2,883 2,918 2,992 3,437 2,078 1,395 2,160 Provision for income taxes (995) (1,007) (1,032) (1,185) (696) (467) (583) -------- ------- ------- ------- ------- ------- ------- Net income $ 1,888 $ 1,911 $ 1,960 $ 2,252 $ 1,382 $ 928 $ 1,577 ======== ======= ======= ======= ======= ======= ======= Net income per share-basic and diluted $ 0.14 $ 0.15 $ 0.15 $ 0.17 $ 0.11 $ 0.07 $ 0.12 ======== ======= ======= ======= ======= ======= ======= Weighted average common shares and equivalents 13,048 13,098 13,042 13,040 13,073 13,219 13,226
8 The Company's revenues and results of operations are subject to fluctuation from period to period. Factors that could cause the Company's revenues and operating results to vary from period to period include: underestimating costs on fixed-price contracts, particularly for software and hardware development, timing, bidding activity and delivery of significant contracts and orders, termination of contracts, mix of products and systems sold, and services provided, reduced levels of operation during the holidays which occur primarily in the Company's third fiscal quarter, disruptions in delivery of components or subsystems, regulatory developments, and general economic conditions. Research and development expenses include both research and development costs as well as bid and proposal expenses. Bid and proposal expenses vary significantly from period to period based on the number of proposals being prepared at any time. These requests for proposals are not received evenly during the year or in any predictable pattern. Comparison of the Third Quarter Ended December 31, 1997 and 1996 Revenues. Revenues were $40.7 million and $42.0 million for the third quarter of fiscal years 1998 and 1997, respectively, representing a decrease of approximately 3%. Government revenues during the third quarter of fiscal 1998 totaled $25.4 million, a decrease of 8% from government revenues of $27.7 million recorded during the third quarter of fiscal 1997. Commercial revenues grew from $14.3 million during the third quarter of fiscal 1997 to $15.3 million for the third quarter of fiscal 1998. During the third quarter of fiscal 1998, revenues from the Company's commercial contract manufacturing services totaled $7.0 million, up from $6.7 million recorded for the third quarter of fiscal 1997. Revenues from the sale of commercial telecommunication chip and board level products totaled $4.7 million for the third quarter of fiscal 1998, up from $4.0 million achieved during the third quarter of the previous fiscal year. Cost of Revenues. Cost of revenues were $30.8 million and $32.3 million for the third quarter of fiscal 1998 and 1997, respectively, representing a 5% decrease. The decrease was a result of the recognition of costs on lower revenue and an increase in margins. Research and Development. During recent quarters, the Company has focused its available research and development funds on the development of commercial products. Research and development expenses, including bid and proposal expenses were $3.8 million and $2.9 million during the third quarter of fiscal 1998 and 1997, respectively. Excluding bid and proposal expenses, the Company's research and development expenses applied to the development of its products such as, wireless broadband communications and cable high speed modems were $3.0 million and $2.3 million during the third quarter of fiscal 1998 and 1997, respectively. Bid and proposal expenses are largely the initial advanced technology development efforts directed toward a specific product or technical task for which the Company must show technical viability. Marketing and Administrative. Marketing and Administrative expenses were $4.5 million and $4.2 million for the third quarter of fiscal 1998 and 1997, respectively. This increase is primarily a result of increased legal expenses primarily associated with a patent infringement case brought by the Company in December 1996 and increased marketing expenses in pursuit of commercial opportunities. Operating Income. Operating income was $1.7 million and $2.6 million for the third quarter of fiscal 1998 and 1997, respectively. The decrease in operating income during the third quarter of fiscal 1998 was primarily attributable to a decrease in revenue, increased research and development, and increased marketing and administrative expenses in pursuit of commercial opportunities. 9 Interest Income. Interest income for the third quarter of fiscal 1998 was $502 thousand versus $342 thousand for the third quarter of the previous fiscal year. The increase in interest income is primarily a result of the Company maintaining higher average balances in U.S. treasury instruments and money market accounts. Provision for Income Taxes. Provision for income taxes was $0.6 million and $1.0 million for the third quarter of fiscal years 1998 and 1997, respectively. This represents a provisional tax rate of 27.0% and 34.5% for the third quarter of fiscal 1998 and 1997, respectively. The decrease in the effective tax rate results primarily from increased Research and Development tax credits and other state income tax credits. The Company anticipates its effective tax rate to be 31.0 % for fiscal year 1998. Comparison of Nine Months Ended December 31, 1997 and 1996 Revenues. Revenues were $112.9 million and $123.9 million for the nine months ended December 31, 1997 and 1996, respectively, representing a decrease of 9%. Government revenues of $70.2 million recorded during the first nine months of fiscal 1997, were essentially the same during the first nine months of fiscal 1998. Commercial revenues during the first nine months of fiscal 1998 totaled $42.6 million, a decrease of 20% from commercial revenues of $53.6 recorded during the first nine months of fiscal 1997. During the first nine months of fiscal 1998, revenues from the Company's commercial contract manufacturing services totaled $18.4 million down from $28.3 million recorded for the nine months of fiscal 1997. Revenues from the sale of commercial telecommunication chip and board level products totaled $11.4 million for the first nine months of fiscal 1998, down from $13.5 million achieved during the nine months of the previous fiscal year. Cost of Revenues. Cost of revenues were $84.7 million and $95.2 million for the nine months of fiscal 1998 and 1997, respectively, representing an 11% decrease. The decrease during the nine months of fiscal 1998 was a result of the recognition of costs on lower revenue and a decrease in lower margin commercial electronic manufacturing revenues. Research and Development. Research and development expenses, including bid and proposal expenses were $10.7 million and $8.6 million for the first nine months of fiscal 1998 and 1997, respectively, representing an increase of approximately 25%. Excluding bid and proposal expenses, the Company's research and development expenses applied to the development of products such as, wireless broadband communications and cable high speed modems were $8.6 million and $6.8 million for the first nine months of fiscal 1998 and 1997, respectively. Marketing and Administrative. Marketing and administrative expenses were $13.3 million and $12.3 million for the first nine months of fiscal 1998 and 1997, respectively, representing an increase of approximately 8%. This increase is a result of increased legal expenses primarily associated with a patent infringement case brought by the Company in December 1996 and increased marketing expenses in pursuit of commercial opportunities. Operating Income. Operating income was $4.2 million and $7.9 million for the nine months of fiscal 1998 and 1997, respectively. The decrease in operating income during the first nine months of fiscal 1998 was primarily attributable to a decrease in revenue, increased research and development, and increased marketing and administrative expenses in pursuit of commercial opportunities. Interest Income. Interest income for the first nine months of fiscal 1998 was $1.4 million versus $0.9 million for the first nine months of the previous fiscal year. The increase in interest income is primarily a result of the Company maintaining higher average balances in U.S. treasury instruments and money market accounts. 10 Provision for Income Taxes. Provision for income taxes was $1.7 million and $3.0 million for the first nine months of fiscal 1998 and 1997, respectively. This represents a provisional tax rate of 31.0% and 34.5% for the first nine months of fiscal 1998 and 1997, respectively. The decrease in the effective tax rate results primarily from increased Research and Development tax credits and other state income tax credits. The Company anticipates its effective tax rate to be 31.0 % for fiscal year 1998. Bookings and Backlog Funded bookings were $38.0 million and $42.1 million for the third quarter of fiscal 1998 and 1997, respectively, and $123.5 million and $121.0 million for the nine months ended December 31, 1997 and 1996, respectively. Bookings were derived from both the Company's commercial operations as well as its government business sectors. At the end of the third quarter of fiscal 1998 and 1997, backlog stood at $94.5 million and $79.9 million, respectively. Liquidity and Capital Resources Working capital increased from $63.3 million to $71.4 million at December 31, 1996 and 1997, respectively, and increased by $5.0 million from the end of fiscal 1997. The Company's cash and cash equivalents and short-term investments decreased to $25.3 million at December 31, 1997 from $33.3 million at March 31, 1997. The decrease in cash has primarily been the result of (i) the payment for inventories to support future delivery of commercial products,(ii) the timing of collections from customers and payment of operating costs and (iii) the requirement to secure capital equipment to support company growth. Net cash used in operating activities for the nine months of fiscal 1998 ended December 31, 1997 was $4.7 million. During the first three quarters of fiscal 1998, the Company realized net income of $3.9 million, increased its inventories by $7.5 million, increased its billed and unbilled receivables by $7.4 million, and increased its liabilities by $2.7 million. Net cash provided by operating activities for the nine months of fiscal 1997 ended December 31, 1996 was $9.9 million. During the nine months of fiscal 1997, the Company realized net income of $5.7 million, decreased its inventories by $7.6 million, increased its receivables, billed and unbilled, by $11.5 million, and increased its liabilities by $2.2 million. The Company has a bank credit commitment of $15.0 million which it can utilize to augment cash flow needs and to secure standby letters of credit. Available borrowings under this line at December 31, 1997 were $15.0 million. Under this line of credit the Company must maintain certain financial covenants. The Company was in compliance with all covenants as of December 31, 1997. The credit agreement expires on December 18, 1998. At December 31, 1997, the Company's long-term obligations (including current maturities) and other long-term liabilities totaled approximately $1.0 million. At December 31, 1997, cash and cash equivalents of $7.1 million were substantially held in money market accounts, and short term investments of $18.2 million were held in U.S. treasury instruments with maturities not exceeding 365 days. The Company believes that its current cash position, funds generated from operations and funds available from its existing bank credit agreement, will be adequate to meet the Company's requirements for working capital, capital expenditures and debt service for the next several fiscal quarters. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K No current Reports on Form 8-K were filed with the Securities and Exchange Commission during the period covered by this Form 10-Q. 11 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. Stanford Telecommunications, Inc. (Registrant) /s/ Jerome F. Klajbor - -------------------------------------------- Jerome F. Klajbor Vice-President and Chief Financial Officer (Principal Financial and Accounting Officer) January 30, 1997 11
EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED STATEMENT OF INCOME AND THE CONSOLIDATED BALANCE SHEET AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS APR-01-1997 MAR-31-1998 DEC-01-1997 7,129 18,221 53,329 0 14,246 96,783 53,822 39,503 111,426 25,383 0 0 0 130 84,972 111,426 112,881 112,881 84,673 108,701 0 0 0 5,633 1,746 3,887 0 0 0 3,887 0.30 0.30
-----END PRIVACY-ENHANCED MESSAGE-----