0000950117-95-000286.txt : 19950816 0000950117-95-000286.hdr.sgml : 19950816 ACCESSION NUMBER: 0000950117-95-000286 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950701 FILED AS OF DATE: 19950815 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NAI TECHNOLOGIES INC CENTRAL INDEX KEY: 0000072575 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER TERMINALS [3575] IRS NUMBER: 111798773 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-03704 FILM NUMBER: 95564092 BUSINESS ADDRESS: STREET 1: 1000 WOODBURY RD STREET 2: SUITE 412 CITY: WOODBURY STATE: NY ZIP: 11797-2530 BUSINESS PHONE: 5163644433 MAIL ADDRESS: STREET 2: 1000 WOODBURY ROAD STE 412 CITY: WOODBURY STATE: NY ZIP: 11797-2530 FORMER COMPANY: FORMER CONFORMED NAME: NORTH ATLANTIC INDUSTRIES INC DATE OF NAME CHANGE: 19920703 10-Q 1 NAI 10-Q 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 July 1, 1995 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 0-3704 NAI TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) New York 11-1798773 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 1000 Woodbury Road, Woodbury, New York 11797-2530 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (516) 364-4433 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 ---- ---- As of August 8, 1995, 7,459,437 shares of NAI Technologies, Inc.'s $.10 par value Common Stock were outstanding. PART I - FINANCIAL INFORMATION Item 1. Financial Statements NAI TECHNOLOGIES, INC. AND SUBSIDIARIES Consolidated Balance Sheets (in thousands)
-------------------------------------------------------------------------------- July 1, Dec. 31, 1995 1994 (Unaudited) -------------------------------------------------------------------------------- ASSETS Current Assets: Cash and cash equivalents $ 1,572 $ 1,658 Accounts receivables, net 12,696 12,508 Income taxes receivable 643 4,732 Inventories, net 11,134 14,052 Deferred tax asset 379 378 Other current assets 1,299 871 -------------------------------------------------------------------------------- Total current assets 27,723 34,199 -------------------------------------------------------------------------------- Property, plant and equipment, net 5,574 7,657 Excess of cost over fair value of assets acquired, net 10,578 10,865 Long-term notes receivable 1,190 -- Other assets 1,038 999 -------------------------------------------------------------------------------- Total assets $ 46,103 $ 53,720 ================================================================================ LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Notes payable $ -- $ 127 Current installments of long-term debt 15,421 2,179 Accounts payable 8,016 7,484 Accrued payroll and commissions 568 535 Other accrued expenses 5,048 6,435 Income taxes payable 120 774 -------------------------------------------------------------------------------- Total current liabilities 29,173 17,534 -------------------------------------------------------------------------------- Notes payable -- 6,000 Long-term debt 287 7,990 Other accrued expenses 2,298 1,522 Deferred income taxes 378 378 -------------------------------------------------------------------------------- Total liabilities 32,136 33,424 -------------------------------------------------------------------------------- Shareholders' Equity: Capital Stock: Preferred stock, no par value, 2,000,000 shares authorized and unissued -- -- Common stock, $.10 par value, 10,000,000 shares authorized; shares issued: 7,459,437 in 1995 and 7,174,592 in 1994 745 717 Capital in excess of par value 15,215 14,718 Foreign currency translation adjustment 152 107 Retained earnings (2,145) 4,754 -------------------------------------------------------------------------------- Total shareholders' equity 13,967 20,296 -------------------------------------------------------------------------------- Total liabilities and shareholders' equity $ 46,103 $ 53,720 ================================================================================
NAI TECHNOLOGIES, INC. AND SUBSIDIARIES Consolidated Statements of Operations (in thousands except per share amounts) (Unaudited)
-------------------------------------------------------------------------------- For the Three Months Ended July 1, July 2, 1995 1994 -------------------------------------------------------------------------------- Net sales $ 14,084 $ 14,909 -------------------------------------------------------------------------------- Cost of sales 15,911 10,651 -------------------------------------------------------------------------------- Gross margin (1,827) 4,258 -------------------------------------------------------------------------------- Selling expense 1,242 2,056 General and administrative expense 1,408 1,169 Research and development 485 1,005 Other 196 131 -------------------------------------------------------------------------------- Total expenses 3,331 4,361 -------------------------------------------------------------------------------- Operating loss (5,158) (103) -------------------------------------------------------------------------------- Non-operating income (expense) Deferred debt expense (300) -- Interest income 34 11 Interest expense (357) (361) -------------------------------------------------------------------------------- (623) (350) -------------------------------------------------------------------------------- Loss before income taxes (5,781) (453) Provision for (recovery of) income taxes 24 (79) -------------------------------------------------------------------------------- Net loss $ (5,805) $ (374) ================================================================================ Loss per common share $ (0.78) $ (0.06) ================================================================================ Average shares outstanding 7,418 6,793 ================================================================================
NAI TECHNOLOGIES, INC. AND SUBSIDIARIES Consolidated Statements of Operations (in thousands except per share amounts) (Unaudited)
For the Six Months Ended July 1, July 2, 1995 1994 Net sales $ 26,771 $ 30,425 -------------------------------------------------------------------------------- Cost of sales 26,080 24,612 -------------------------------------------------------------------------------- Gross margin 691 5,813 -------------------------------------------------------------------------------- Selling expense 2,506 4,322 General and administrative expense 2,759 3,093 Research and development 1,026 2,016 Restructuring Expense -- 7,321 Other 226 281 -------------------------------------------------------------------------------- Total expenses 6,517 17,033 -------------------------------------------------------------------------------- Operating loss (5,826) (11,220) -------------------------------------------------------------------------------- Non-operating income (expense) Deferred debt expense (300) -- Interest income 88 23 Interest expense (751) (675) -------------------------------------------------------------------------------- (963) (652) -------------------------------------------------------------------------------- Loss before income taxes (6,789) (11,872) Provision for (recovery of) income taxes 110 (4,158) -------------------------------------------------------------------------------- Net loss $ (6,899) $ (7,714) ================================================================================ Loss per common share $ (0.94) $ (1.14) ================================================================================ Average shares outstanding 7,304 6,787 ================================================================================
NAI TECHNOLOGIES, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (in thousands) (Unaudited)
---------------------------------------------------------------------------------------------------- For the Six Months Ended July 1, July 2, 1995 1994 ---------------------------------------------------------------------------------------------------- Cash Flows from Operating Activities: Net loss $(6,899) $(7,714) Adjustments to reconcile net loss to cash provided by operating activities: Depreciation and amortization 1,377 1,289 Gain on disposal of property, plant & equipment (4) -- Change in assets and liabilities, excluding effects from acquisitions and foreign currency adjustments: Accounts receivable (188) 3,115 Inventories 2,918 2,357 Accounts payable and other accrued expenses (697) 5,079 Income taxes 4,184 (3,915) Other, net 73 812 ---------------------------------------------------------------------------------------------------- Net cash flow provided by operating activities 764 1,023 ---------------------------------------------------------------------------------------------------- Cash Flows from Investing Activities: Contingent payment on purchase of KMS Advanced Products (26) (104) Purchase of property, plant and equipment (378) (708) Proceeds from sale of property, plant and equipment 417 26 ---------------------------------------------------------------------------------------------------- Net cash provided by (used in) investing activities 13 (786) ---------------------------------------------------------------------------------------------------- Cash Flows from Financing Activities: Issuances of notes payable 6 7,779 Payments of notes payable (133) (5,053) Payments of long-term debt (461) (2,108) Receipts of notes receivable -- 158 Payments for debt restructuring (340) -- Proceeds from exercise of stock options and stock purchase plan 25 104 ---------------------------------------------------------------------------------------------------- Net cash provided by (used in) financing activities (903) 880 ---------------------------------------------------------------------------------------------------- Effect of foreign currency exchange rates on cash 40 102 ---------------------------------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents (86) 1,219 Cash and cash equivalents at beginning of year 1,658 1,717 ---------------------------------------------------------------------------------------------------- Cash and cash equivalents at end of period $ 1,572 $ 2,936 ==================================================================================================== Supplemental disclosure of cash flow information: Cash paid (refunded) for: Interest $ 743 $ 652 Income taxes $(3,949) $ (241) Non-cash investing and financing activities Notes receivable from sale of property $ 1,190 -- Common stock issued in debt restructuring $ 500 -- ====================================================================================================
OTHER FINANCIAL INFORMATION UNAUDITED FINANCIAL STATEMENTS The accompanying unaudited consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ('SEC') and, in the opinion of management, include all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods. 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 the rules and regulations of the SEC. The Company believes that the disclosures contained herein are adequate to make the information presented not misleading. The consolidated statements of operations for the six months ended July 1, 1995 are not necessarily indicative of the results to be expected for the full year. These unaudited financial statements should be read in conjunction with the audited financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 1994. INVENTORIES Inventories are summarized by major classification as follows:
-------------------------------------------------------------------------------- July 1, Dec. 31, 1995 1994 (Unaudited) -------------------------------------------------------------------------------- (In thousands of dollars) Raw materials and components $ 7,042 $ 9,698 Work-in-process 3,715 3,849 Finished goods 553 662 Unliquidated progress payments (176) (157) -------------------------------------------------------------------------------- Inventories, net $ 11,134 $ 14,052 ================================================================================
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Second Quarter 1995 Compared with Second Quarter 1994 The nature of the Company's business is such that year to year changes in sales levels are predominantly due to changes in shipping volume or product mix rather than changing sales prices. Net sales for the second quarter of 1995 were $14.1 million, a 6% decrease when compared with $14.9 million for the same period in 1994. The following chart provides the sales breakdown by product line for the second quarter:
In thousands of dollars 1995 1994 % Change -------------------------------------------------------------------------------- Electronic Systems Segment Systems $ 4,640 $ 5,762 (19%) Component 5,791 4,082 42% Service 1,863 2,984 (38%) ----------------------------------- Total Electronic Systems Segment 12,294 12,828 (4%) Telecommunications Segment Line treatment 1,024 1,354 (24%) Test equipment 763 727 5% Data comm 3 -- 100% ------------------------------------ Total Telecommunications Segment 1,790 2,081 (14%) ------------------------------------ TOTAL $14,084 $14,909 (6%) ====================================
Sales in the Electronic Systems segment (net of intercompany eliminations) decreased 4% to $12.3 million from $12.8 million for the same period in 1994. The sales decrease was primarily attributable to lower systems revenue and service revenue, partially offset by higher component revenue. The decrease in systems revenue was principally attributable to the completion of the NST-II contract in the second quarter of 1994 offset by higher systems revenue from NAI's Systems Division. The decrease in service revenue is primarily attributable to the lower revenue from Codar Technology, Inc. The increase in component revenue is attributable to higher shipments of rugged computers from Codar Technology, Inc. The 1994 second quarter had approximately $5.0 million of revenue produced at the Hauppauge facility which was subsequently closed in September 1994 when the Military Products Division was consolidated into one location at Codar. The merging of the two businesses placed significant strain on Codar which resulted in delayed shipments and significant cost overruns on long-term contracts, large losses and significant cash issues. In 1995 the Company reorganized the Codar management. During the second quarter of 1995, which was the first full quarter under the new management team, the Company recorded mixed results. Revenue was $7.5 million, the highest in Codar's history. Operating losses during the quarter were $3.0 million primarily due to cost overruns on long-term contracts which were recognized during the quarter and inventory write-downs on slow moving or obsolete inventory. Sales in the Telecommunications segment decreased 14% to $1.8 million as compared to $2.1 million for the same period in 1994. The decrease in sales was attributable to lower line treatment revenue which was adversely affected by lower orders from the regional Bell operating companies and foreign telecommunications companies. The Company believes this decline is temporary and that revenue will increase now that the Company has begun delivery of its new Enhanced Line Powered Amplifier products. The consolidated gross margin percentage for the second quarter of 1995 was (13.0%) as compared with 28.6% for the same period in 1994. The gross margin percentage was adversely affected by a $4.7 million charge to operations and an unfavorable mix of high and low margin product deliveries. The $4.7 million charge to operations was attributable to cost growth on certain long-term contracts due to engineering design changes and greater than anticipated labor and material costs and increased provisions for slow moving, excess and obsolete inventory at Codar. Low margins are expected to continue at least during the third quarter of 1995 principally at Codar due to a disproportionate level of low margin revenue as a result of past cost overruns on certain long-term contracts for which the Company continues to provide products. Selling expense for the second quarter of 1995 was $1.2 million as compared with $2.1 million for the same period in 1994. This decrease is attributable to savings associated with the consolidation of the military products division in the third quarter of 1994. General and administrative expenses for the second quarter of 1995 were $1.4 million as compared with $1.2 million for the same period in 1994. This increase is primarily attributable to higher general and administrative expenses at the Codar subsidiary as a result of increased management resources, partially offset by the savings associated with the previously mentioned consolidation in 1994. The 1994 second quarter was favorably impacted by the reversal of certain over-accruals. Company-sponsored research and development expenditures for the second quarter of 1995 were $0.5 million as compared with $1.0 million for the same period in 1994. This decrease is attributable to savings associated with the previously mentioned consolidation and the change in mix between Company-sponsored research and development and customer-funded research and development. A key component to the Electronic Systems segment's strategy is to focus on its systems integration business. Although systems integration work by its nature will require significant engineering content, such costs must be classified as contract costs and charged to cost of sales as opposed to Company-sponsored research and development (IR&D). For the second quarter of 1995 the Company had an operating loss of $5.2 million as compared with a loss of $0.1 million for the same period in 1994. The operating loss was primarily attributable to the $4.7 million charge previously noted and lower sales volume. Interest expense, net of interest income, was $0.3 million in the second quarter of 1995, approximately the same as the comparable quarter of 1994. The second quarter of 1995 also included a $0.3 million charge for debt restructuring expense related to the April 7, 1995 agreement reached with the Company's two lending institutions. The Company was unable to recognize a tax benefit for its loss in the second quarter of 1995 due to uncertainties as to whether or not a future benefit will be realized. Any earnings in 1995 will not be taxed at the statutory rate. The small tax provision is associated with Lynwood Scientific Development Ltd., the Company's U.K. subsidiary. For the second quarter of 1995 the Company had a net loss of $5.8 million as compared with a net loss of $0.4 million in the second quarter of 1994. Loss per share was $(0.78) as compared with $(0.06) for the same period in 1994, based on a weighted average of 7.4 million and 6.8 million shares outstanding, respectively. The 1994 loss per share includes a pre-tax restructuring charge of $7.3 million. First Six Months 1995 Compared with First Six Months 1994 The nature of the Company's business is such that year to year changes in sales levels are predominantly due to changes in shipping volume or product mix rather than changing sales prices. Net sales for the first six months of 1995 were $26.8 million, a 12% decrease when compared with $30.4 million for the same period in 1994. The following chart provides the sales breakdown by product line for the first six months:
In thousands of dollars 1995 1994 % Change -------------------------------------------------------------------------------- Electronic Systems Segment Systems $ 9,117 $ 9,863 (8%) Component 10,422 9,631 8% Service 3,712 6,627 (44%) -------------------------------------- Total Electronic Systems Segment 23,251 26,121 (11%) Telecommunications Segment Line treatment 2,223 2,732 (19%) Test equipment 1,276 1,572 (19%) Data comm 21 -- 100% --------------------------------------- Total Telecommunications Segment 3,520 4,304 (18%) -------------------------------------- TOTAL $26,771 $30,425 (12%) ========================================
Sales in the Electronic Systems segment (net of intercompany eliminations) decreased 11% to $23.3 million from $26.1 million for the same period in 1994. The sales decrease was primarily attributable to lower systems revenue and service revenue, partially offset by higher component revenue. The decrease in systems revenue was principally attributable to the completion of the NST-II contract in the second quarter of 1994 offset by higher systems revenue from NAI's Systems Division. The decrease in service revenue is primarily attributable to the lower revenue from Codar Technology, Inc. The increase in component revenue is attributable to higher shipments of rugged computers by Codar Technology, Inc. The Company expects a significant amount of 1995 sales to be directly to the military or through prime contractors to the military. The Company is not aware of any programs in which it participates that are specifically targeted for termination or curtailment. The Company's products are utilized on many different U.S. Government programs which reduces the adverse impact of cancelling a single specific program. However, changes in future U.S. defense spending levels could impact the Company's future sales volume. Sales in the Telecommunications segment decreased 18% to $3.5 million as compared to $4.3 million for the same period in 1994. The decrease in sales was attributable to lower line treatment and test equipment revenue which was adversely affected by lower orders from the regional Bell operating companies and foreign telecommunications companies primarily due to their cost cutting measures. The Company believes this decline is temporary and that revenue will increase now that the Company has begun delivery of its new Enhanced Line Powered Amplifier products. The consolidated gross margin percentage for the first six months of 1995 was 2.6% as compared with 19.1% for the same period in 1994. The gross margin percentage was adversely affected by a $4.7 million charge to operations and an unfavorable mix of high and low margin product deliveries. The $4.7 million charge to operations was attributable to cost growth on certain long-term contracts due to engineering design changes and greater than anticipated labor and material costs and increased provisions for slow moving, excess and obsolete inventory. Low margins are expected to continue at least during the third quarter of 1995 principally at Codar due to a disproportionate level of low margin revenue as a result of past cost overruns on certain long-term contracts for which the Company continues to provide products. Selling expense for the first six months of 1995 was $2.5 million as compared with $4.3 million for the same period in 1994. This decrease is attributable to savings associated with the consolidation of the military products division in the third quarter of 1994. General and administrative expenses for the first six months of 1995 were $2.8 million as compared with $3.1 million for the same period in 1994. This decrease is primarily attributable to savings associated with the previously mentioned consolidation in 1994, partially offset by higher general and administrative expenses at the Codar subsidiary as a result of increased management resources. Company-sponsored research and development expenditures for the first half of 1995 were $1.0 million as compared with $2.0 million for the same period in 1994. This decrease is attributable to savings associated with the previously mentioned consolidation and the change in mix between Company-sponsored research and development and customer-funded research and development. A key component to the Electronic Systems segment's strategy is to focus on its systems integration business. Although systems integration work by its nature will require significant engineering content, such costs must be classified as contract costs and charged to cost of sales as opposed to Company-sponsored research and development (IR&D). For the first six months of 1995 the Company had an operating loss of $5.8 million as compared with a loss of $11.2 million for the same period in 1994. The operating loss was primarily due to the $4.7 million charge previously noted and lower sales volume. The 1994 operating loss included a $7.3 million restructuring expense. Interest expense, net of interest income, was $0.7 million in the first half of 1995, the same as the first half of 1994. The second quarter of 1995 also included a $0.3 million charge for debt restructuring expense related to the April 7, 1995 agreement reached with the Company's two lending institutions. The effective income tax expense rate is below the combined statutory federal and state rates for the first six months of 1995. The Company was unable to recognize a tax benefit for its loss in the first six months of 1995 due to uncertainties as to whether or not a future benefit will be realized. Any earnings in 1995 will not be taxed at the statutory rate. For the first six months of 1995 the Company had a net loss of $6.9 million as compared with a net loss of $7.7 million in the first six months of 1994. Loss per share was $(0.94) as compared with $(1.14) for the same period in 1994, based on a weighted average of 7.3 million and 6.8 million shares outstanding, respectively. The 1994 loss per share includes a pre-tax restructuring charge of $7.3 million. Liquidity and Capital Resources Although the Company reported a net loss of $6.9 million in the first six months of 1995, it still generated a positive cash flow of $0.8 million from operations due to the receipt in January of a Federal tax refund of $4.0 million attributable to the 1994 tax loss carryback. Company operations have historically provided a positive cash flow. However, the Company is currently experiencing financial difficulties due to lower shipping volumes and cost overruns on certain long-term contracts. Although the second quarter revenue level was up approximately 11% over the first quarter revenue level, the Company is still shipping at a revenue rate below breakeven. The Company must continue to increase its shipment rate. However, its ability to do so is constrained by a shortage of working capital. On April 7, 1995 the Company entered into an amended and restated credit agreement with its two primary lending institutions. Under the terms of the new agreement, the existing term debt and lines of credit were converted into a revolving credit line in exchange for a cash payment of $100,000 and the issuance of 250,000 shares of the Company's common stock. The new agreement required quarterly principal payments, commencing in September 1995, of $875,000 with a balloon payment of $13,425,000 due on January 15, 1996. At July 1, 1995 the Company was in violation of certain debt covenants of this new agreement. The defaults have been waived and the agreement has been amended to establish new covenants. In addition, the payment of a fee of $50,000 and quarterly principal payments which were scheduled to begin in September 1995 were deferred and added to the balloon payment due on January 15, 1996. The payment of the $15,175,000 principal obligation in January 1996, will be dependent upon the Company's ability either to obtain alternate financing or to restructure the remaining balance due. The Company is considering several alternatives to achieve this, including the sale of common or preferred stock, the issuance of convertible debt, a business combination, the sale of all or a portion of the Company and the establishment of a borrowing relationship with new lending institutions. The Company continues to work with Needham & Company, Inc. as its investment advisor to assist in this process. The ability of the Company to accomplish this will be dependent upon the Company's business prospects and operating results in 1995. The restructuring actions taken in 1994 have significantly reduced the expense structure of the Company. However, it is not certain that the Company will be able to achieve the revenue level necessary to return to profitability. The Company is taking action to minimize its cash outlays by deferring or eliminating discretionary expenses and capital asset purchases. The Company must increase its shipment rate to an acceptable level within the near future, or obtain additional financing, in order to meet its cash flow requirements during 1995. At July 1, 1995 the Company's long-term secured debt totaled $15.7 million of which current installments were $15.4 million. This compares to $16.2 million at December 31, 1994 of which current installments were $2.2 million. The Company's long-term borrowings, secured by plant and equipment, bear interest at rates ranging from 70% of prime (8.75% at July 1, 1995) to 12.43%. Cash and cash equivalents totaled $1.6 million at July 1, 1995 as compared to $1.7 million at December 31, 1994. Cash provided by operating activities amounted to $0.8 million in the first six months of 1995 as compared to $1.0 million in the first six months of 1994. In January 1995, the Company received a Federal tax refund of $4.0 million. For the first six months of 1995 the Company used cash of $0.4 million for the purchase of property, plant and equipment. In May 1995, the Company sold its vacated manufacturing facility located in Hauppauge, NY, and received cash of $0.4 million with a note for the balance payable in two years in the amount of $1.2 million. For the first six months of 1995, the Company made debt principal payments of $0.5 million and payments against notes payable of $0.1 million. Inflation The Company's financial statements are prepared in accordance with historical accounting systems, and therefore do not reflect the effect of inflation. The impact of changing prices on the financial statements is not considered to be significant. Backlog The backlog of unfilled orders at July 1, 1995 stood at $48.2 million compared to $36.0 million at July 2, 1994. Approximately 80% of the backlog is scheduled for delivery over the next twelve months. PART II. OTHER INFORMATION Item 5. Other Information On July 13, 1995 the Company announced that Diagnostic/Retrieval Systems, Inc. ('DRS') informed NAI that DRS will not proceed with the proposed merger of NAI into DRS on the terms previously announced. Under the prior proposal, NAI shareholders would have received .6 share of DRS Class B common stock for each outstanding share of NAI common stock. NAI and DRS may continue to discuss whether another transaction with revised terms can be structured, but there can be no assurance that any transaction will take place. NAI stated that it was disappointed that the merger could not be accomplished on the prior terms. NAI stated that it will continue to seek strategic and financing alternatives, including new financing, a business combination, or the sale of all or a portion of the Company. Item 6. Exhibits and Reports on Form 8-K a) Exhibits Exhibit 27--Financial Data Schedule (EDGAR filing only). b) Reports on Form 8-K None. S I G N A T U R E S 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. NAI TECHNOLOGIES, INC. (Registrant) DATE August 15, 1995 By:\s\Richard A. Schneider -------------------------- Richard A. Schneider Executive Vice President (On behalf of the registrant and as Principal Financial Officer) EX-27 2 EXHIBIT 27
5 1,000 6-MOS DEC-31-1995 JUL-01-1995 1,572 0 12,696 0 11,134 27,723 12,666 (7,092) 46,103 29,173 287 745 0 0 13,222 46,103 26,771 26,771 26,080 32,597 0 0 663 (6,789) 110 (6,899) 0 0 0 (6,899) (0.94) 0