-----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, A1pB4yyEuOMSGupvkfnVWb6N+k+2Gh7P1yyyU+TZDlJdZTZ3OhMnRWYUJPj85nDW lE63PpB6UptzR2v2RjUP5g== 0000817632-97-000004.txt : 19970520 0000817632-97-000004.hdr.sgml : 19970520 ACCESSION NUMBER: 0000817632-97-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SHARED TECHNOLOGIES FAIRCHILD INC CENTRAL INDEX KEY: 0000817632 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TELEPHONE INTERCONNECT SYSTEMS [7385] IRS NUMBER: 870424558 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-17366 FILM NUMBER: 97609450 BUSINESS ADDRESS: STREET 1: 100 GREAT MEADOW RD STREET 2: STE 104 CITY: WETHERSFIELD STATE: CT ZIP: 06109 BUSINESS PHONE: 8602582474 MAIL ADDRESS: STREET 1: 100 GREAT MEADOW ROAD SUITE 104 STREET 2: 100 GREAT MEADOW ROAD SUITE 104 CITY: WETHERSFIELD STATE: CT ZIP: 06109 FORMER COMPANY: FORMER CONFORMED NAME: SHARED TECHNOLOGIES FAIRCHILD COMMUNICATIONS CORP /CT DATE OF NAME CHANGE: 19960430 FORMER COMPANY: FORMER CONFORMED NAME: SHARED TECHNOLOGIES INC DATE OF NAME CHANGE: 19920703 10-Q 1 MARCH 31, 1997 10Q Form 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15d OF THE SECURITIES AND EXCHANGE ACT OF 1934 For Quarterly Period Ended March 31, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-17366 SHARED TECHNOLOGIES FAIRCHILD INC. (exact name of registrant as specified in its charter) Delaware 87-0424558 (State or other jurisdiction of (I.R.S. Employer Incorporation or organization) Identification No.) 100 Great Meadow Road, Suite 104 Wethersfield, CT 06109 (Address of principal executive offices) (860) 258-2400 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or 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 ______ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the latest practicable date. Class Outstanding at May 15, 1997 Common Stock, $.004 par value 15,819,987 shares FINANCIAL INFORMATION PAGE Item 1. Financial Statements Consolidated Balance Sheets as of March 31, 1997 and December 31, 1996 Consolidated Statements of Operations for the three months ended March 31, 1997 and 1996 Consolidated Statements of Cash Flows for the three months ended March 31, 1997 and 1996 Consolidated Statements of Stockholders' Equity for the three months ended March 31, 1997 Notes to Consolidated Financial Statements Item 2 Management's Discussion and Analysis of Results of Operations and Financial Condition PART II OTHER INFORMATION Signature Page
Item 1. Financial Statements Shared Technologies Fairchild Inc. Consolidated Balance Sheets March 31, 1997 and December 31, 1996 (in thousands except per share date) (unaudited) March 31, 1997 December 31, 1996 CURRENT ASSETS: Cash $ 2,692 $ 2,703 Accounts receivable, less allowance for doubtful accounts of $411 in 1997 and $611 in 1996 34,089 32,563 Inventories 3,082 1,976 Other current assets 2,428 1,853 Total current assets 42,291 39,095 Equipment: Property & Equipment 99,192 95,934 Accumulated depreciation (31,078) (28,169) 68,114 67,765 Other Assets: Investments in affiliates 349 457 Intangible assets 260,723 261,842 Deferred income taxes - - Other 337 407 261,409 262,706 Total assets $ 371,814 $ 369,566 The accompanying notes are an integral part of these financial statements
Shared Technologies Fairchild Inc. Consolidated Balance Sheets March 31, 1997 and March 31, 1996 (in thousands except per share data) (unaudited)
March 31, 1997 December 31, 1996 Liabilities and Stockholders' Equity CURRENT LIABILITIES: Current portion of long-term debt and capital lease obligations $ 14,700 $ 13,576 Accounts payable 19,192 17,356 Accrued expenses 7,879 9,558 Accrued dividends 361 435 Advanced billings 6,770 6,935 Total current liabilities 48,902 47,860 Long-Term Debt and Capital Lease Obligations less current portion 240,435 238,261 Redeemable Put Warrant 517 1,069 Convertible preferred stock $.01 par value, authorized 250 shares, outstanding 250 shares in 1997 and 1996 25,000 25,000 Special preferred stock $.01 par value, authorized 200 shares, outstanding 200 shares in 1997 and 1996 14,459 14,167 STOCKHOLDERS' EQUITY: Preferred Stock, $.01 par value, authorized 25,000 shares: Series C, outstanding 428 shares in 1997 and 1996 4 4 Series D, outstanding 441 shares in 1997 and 1996 4 4 Common stock; $.004 par value, 50,000 shares authorized, outstanding 15,715 shares in 1997 and 15,820 shares in 1996 63 63 Additional paid-in capital 76,193 76,054 Accumulated deficit (33,763) 32,916) Total stockholders' equity 42,501 43,209 Total liabilities and stockholders' equity $371,814 $369,566 The accompanying notes are an integral part of these financial statements
Shared Technologies Fairchild Inc. Consolidated Statements of Operations For the Three Months Ended March 31, 1997 and 1996 (in thousands except per share data) (unaudited) March 31, 1997 March 31,1996 Revenue: Shared telecommunications services $ 27,639 $ 13,230 Telecommunications systems 18,991 4,952 Total Revenue 46,630 18,182 Cost of Revenue: Shared telecommunications services 13,119 6,426 Telecommunications systems 9,534 4,011 Total Cost of Revenue 22,653 10,437 Gross Margin 23,977 7,745 Selling, General & Administrative Expenses: 16,859 6,783 Operating Income 7,118 962 Other income (expense): Equity in loss of affiliate (108) (958) Net interest expense (6,675) (1,259) (6,783) (2,217) Income (loss) before income taxes and extraordinary items: 335 (1,255) Income tax (106) (21) Income (loss) before extraordinary item 229 (1,276) Extraordinary item, loss on early retirement of debt - (310) Net Income(loss) 229 (1,586) Preferred Stock Dividends (1,076) (86) Net income (loss) applicable to common stock $ (847) $(1,672) Net (loss) per common share: Income (loss) before extraordinary item $ (0.05) $ (0.14) Extraordinary item - (.03) Net income (loss) $ (0.05) $(0.17) Weighted Average Shares Outstanding 15,774 9,965 The accompanying notes are an integral part of these financial statements
Shared Technologies Fairchild Inc. Consolidated Statements of Cash Flows For the Three Months Ended March 31, 1997 and 1996 (in thousands) (unaudited) March 31, 1997 March 31, 1996 Cash Flows Used in Operating Activities: Net Income (loss) $ 229 $ (1,586) Adjustments: Extraordinary loss on early retirement of debt - 310 Depreciation & amortization 4,649 1,759 Accretion of put warrant (552) - Equity in loss of subsidiary 108 958 Accretion on 12 1/4% bonds 3,799 - Change in Assets and Liabilities: Accounts receivable (1,526) 2,305 Inventory (1,106) - Other current assets (575) (269) Other assets (256) - Accounts payable 1,836 (2,170) Accrued expenses (1,753) 205 Advanced billings (165) (50) Net cash provided by operating activities 4,688 1,462 Cash Flows Used in Investing Activities Purchases of equipment (3,258) (749) Investments in subsidiaries - (203) Acquisitions, net of cash acquired - (2,108) Net cash used in investing activities (3,258) (3,060) Cash Flows From Financing Activities: Preferred stock dividends (1,076) (86) Repayments of notes payable, long-term debt and capital lease obligations (2,501) (187,432) Borrowings under notes payable and long-term debt 2,000 244,999 Payments to affiliate - (1,937) Deferred finance costs (295) (7,676) Proceeds from sales of common stock 139 4 Repayment of FII preferred stock 292 (40,581) Net cash provided by (used in)financing activities (1,441) 7,291 Net increase (decrease) in cash (11) 5,693 Cash, Beginning of Period 2,703 476 Cash, End of Period $ 2,692 $ 6,169 Supplemental Disclosures of Cash Flow Information: Cash paid during the period for - Interest $ 3,133 $ 443 Income taxes 106 26 Non cash transactions- Issuance of common stock to acquire FII - 27,750 Issuance of preferred stock to acquire FII - 38,269 The accompanying notes are an integral part of these financial statements.
Shared Technologies Fairchild Inc. Consolidated Statement of Stockholders' Equity For the period ended March 31, 1997 (in thousands) Series C Series D Preferred Stock Preferred Stock Shares Amount Shares Amount Balance, January 1, 1997 428 $ 4 441 $ 4 Preferred stock dividends - - - - Dividend accretion of special preferred stock - - - - Exercise of common stock options and warrants - - - - Issuance of common stock for 401k plan match - - - - Net income - - - - Balance, March 31, 1997 428 $ 4 441 $ 4
Shared Technologies Fairchild Inc. Consolidated Statement of Stockholders' Equity For the period ended March 31, 1997 (in thousands) Additional Common Stock Paid-in Shares Amount Capital Balance, January 1, 1997 15,682 $ 63 $ 76,054 Preferred stock dividends Dividend accretion of special preferred stock Exercise of common stock options and warrants 103 - 118 Issuance of common stock for 401k plan match 3 - 21 Net income Balance, March 31, 1997 15,788 $ 63 $ 76,193
Shared Technologies Fairchild Inc. Consolidated Statement of Stockholders' Equity For the period ended March 31, 1997 (in thousands) Total Accumulated Stockholders' Deficit Equity Balance, January 1, 1997 (32,916) 43,209 Preferred stock dividends (784) (784) Dividend accretion of special preferred stock (292) (292) Exercise of common stock options and warrants 118 Issuance of common stock for 401k plan match 21 Net income 229 229 Balance, March 31, 1997 ($33,763) $ 42,501
Shared Technologies Fairchild Inc. Notes to Consolidated Financial Statements March 31, 1997 (Unaudited) 1. Basis of Presentation: The consolidated financial statements included herein have been prepared by Shared Technologies Fairchild Inc. (the Company) pursuant to the rules and regulations of the Securities and Exchange Commission and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary to present a fair statement of the results for interim periods. Certain information and footnote disclosures have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's December 31, 1996 report on Form 10-K. 2. Investment in Unconsolidated Subsidiary The Company's investment in its unconsolidated subsidiary, Shared Technologies Cellular, Inc. (STC), is accounted for under the equity method. Prior to December 1995, STC was a majority owned subsidiary and was included on a consolidated basis. During December 1995, STC issued approximately $3,000 in voting preferred stock to third parties. Although the Company's ownership percentage of approximately 58% did not change, the voting rights assigned to the preferred stock reduced the Company's voting interest in STC, resulting in the Company's loss of voting control of STC. Accordingly, STC has been accounted for on the equity method since 1996. At March 31, 1997 the Company had an ownership interest of approximately 35.8% in STC. Summarized balance sheet and statement of operations information for STC as of, and for the three months ended, March 31, 1997 is as follows: Summarized Balance Sheet Current assets $ 3,113 Property and equipment, net 1,993 Other assets 9,918 Total assets $ 15,024 Current liabilities $ 11,370 Note payable 344 Total liabilities 11,714 Stockholders' equity 3,310 Total liabilities and stockholders' equity $ 15,024 Summarized Statement of Operations Revenues $ 6,102 Gross margin 2,640 Operating loss (228) Net loss (301) In August 1996 the Company reached an agreement with STC to purchase $2,500 in STC preferred stock. This investment was financed through the conversion of existing advances owed by STC to the Company in the amount of $1,200 and a cash payment of $1,300. The STC preferred stock presently are convertible into 833 shares of STC's common stock at the Company's option. In addition, upon conversion of such STC preferred stock, the Company shall receive a warrant to purchase an additional 833 shares of STC common stock, subject to adjustment. 3. Acquisitions: On March 13, 1996, the Company's stockholders approved and the Company consummated its merger with Fairchild Industries, Inc.("FII"), following a reorganization transferring all non-communications assets to FII's parent, RHI Holdings, Inc. ("RHI"). The Company changed its name to Shared Technologies Fairchild Inc.("STFI"). Pursuant to the merger agreement, STFI issued to RHI 6,000 shares of common stock, 250 shares of convertible preferred stock with a $25,000 liquidation preference and 200 shares of special preferred stock with a $20,000 initial liquidation preference. In addition, the Company raised in the capital market approximately $111,000, after offering expenses, through the issuance of 12 1/4% Senior Subordinated Notes Due 2006 and approximately $125,000 (of an available $145,000) in loans from a credit facility with financial institutions. The funds were used primarily for the retirement of certain liabilities assumed from FII in connection with the merger, and the retirement of the Company's existing credit facility. In connection with the merger, the Company entered into two-year employment agreements with key employees for annual compensation initially aggregating $1,250, and adopted the 1996 Equity Incentive Plan. The merger was accounted for using the purchase method of accounting. The total purchase consideration of approximately $71,581 was allocated to the net tangible and intangible assets of FII based upon their respective fair market values as follows: Assets Cash $ 1,551 Accounts receivable 24,747 Other current assets 2,572 Equipment 51,532 Goodwill 248,008 Total Assets 328,410 Liabilities and stockholders' equity Capital lease obligations $ (262) Accounts payable (11,577) Accrued expenses (6,981) Advanced billings (6,102) Due to affiliated company (8,407) Long term debt (182,794) FII preferred stock (40,706) Net purchase price $ 71,581 The following unaudited pro forma statements of operations for the nine months ended March 31, 1996 give effect to the above acquisitions and the change in reporting of STC to the equity method (Note 2) and the pro forma effect of STC acquisitions, as if they occurred on January 1, 1996: 1996 Revenues $ 45,465 Cost of revenues 22,153 Gross margin 23,312 Selling, general and administrative expenses 18,312 Operating income 5,000 Equity in loss of subsidiary (958) Interest expense, net (6,602) Loss before income tax expense and extraordinary item (2,560) Income taxes (11) Loss before extraordinary item (2,571) Extraordinary item. loss on early retirement of debt (332) Net Loss (2,903) Preferred stock dividends (647) Loss applicable to common stock $ (3,550) Net loss per common share $ (.24) Weighted average number of common shares outstanding 14,580 4. Contingencies: In December 1995, a suit was filed against the Company alleging a breach of a letter agreement and seeking an amount in excess of $2,250 for a commission allegedly owed in connection with the merger with FII (Note 3). The Company denies that the claimant at any time was engaged in connection with the merger. The Company filed an answer in January 1996, denying that any commission is owed. This litigation is in the discovery process. While any litigation contains an element of uncertainty, management is of the opinion that the ultimate resolution of this matter should not have a material adverse effect upon results of operations, cash flows or financial position of the Company. The Company's sales and use tax returns in certain jurisdictions are currently under examination. Management believes these examinations will not result in a material change from liabilities provided. In addition to the above matters, the Company is a party to various legal actions, the outcome of which, in the opinion of management, will not have a material adverse effect on results of operations, cash flows or financial position of the Company. 5. Income Taxes: The Company accounts for income taxes under Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes," which requires an asset and liability approach to financial reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future, based on enacted tax laws and rates applicable to the periods in which the differences are expected to effect taxable income. Valuable allowances are established, when necessary, to reduce the deferred income tax assets to the amount expected to be realized. 6. Extraordinary Item: At March 31, 1996, the Company recorded an extraordinary loss of $310 relating to the early retirement of a $5,000 credit facility. The early retirement took place as a result of requirements in the merger agreement with FII (Note 3). 7. Earnings per Share: Statement of Financial Accounting Standards No. 128, "Earnings per Share" changes the reporting requirements for earnings per share ("EPS") for publicly traded companies by replacing primary EPS with basic EPS and changing the disclosures associated with this change. The Company is required to adopt this standard for its December 31, 1997 year-end and is currently evaluating the impact of this standard. 8. Consolidating Financial Statements: The following unaudited statements separately show Shared Technologies Fairchild Inc. and the subsidiaries of Shared Technologies Fairchild Inc. These statements are provided to fulfill SEC reporting requirements. These subsidiaries are guarantors on the 12 1/4% Senior Subordinated Notes due 2006. Shared Technologies Fairchild Inc. Eliminating Consolidated STFTI STFCC STFI Entries STFI ----------------------------------------------------------------- Assets Current Assets: Cash and cash equivalents $2,686 $6 $2,692 Accounts receivable, net 34,047 42 34,089 Inventories 3,082 3,082 Other current assets 2,428 2,428 ---------------------------------------------------- Total current assets 42,243 0 48 0 42,291 --------------------------------------------------------- Equipment: Property & Equipment 99,192 99,192 Accumulated depreciation (31,078) (31,078) -------------------------------------------------- 68,114 0 0 0 68,114 -------------------------------------------------- Other Assets: Investment in affiliates 41 91,784 82,795 (174,271) 349 Intangible assets 252,505 8,218 260,723 Note Receivable 137,396 (137,396) - Deferred income taxes - Other 337 337 - ------------------------------------------------------ 252,883 237,398 82,795 (311,667) 261,409 ------------------------------------------------------- Total assets 363,240 237,398 $82,843 (311,667) 371,814 =========================================================== Liabilities and Stockholders' Equity Current Liabilities: Current portion of long term debt 14,700 14,700 Accounts payable 19,192 19,192 Accrued expens 7,874 5 7,879 Accrued dividends 361 361 Advanced billings 6,770 6,770 ----------------------------------------------------- Total current liabilities 33,836 14,700 366 0 48,902 ------------------------------------------------------- Long-term debt, less current portion 137,396 240,435 (137,396) 240,435 -------------------------------------------------------- Redeemable put warrant 517 517 ----------------------------------------------------------------- Convertible preferred stock 25,000 25,000 ----------------------------------------------------------- Special preferred stock 14,459 14,459 ----------------------------------------------------------------- Stockholders' equity: Preferred Stock, Series C 4 4 Preferred Stock, Series D 4 4 Common Stock 63 63 Additional paid-in capital 76,193 76,193 Accumulated deficit 25,030 (17,737) (33,763) (7,293) (33,763) Intercompany 166,978 (166,978) - ---------------------------------------------------- Total stockholders' equity 192,008 (17,737) 42,501 (174,271) 42,501 ---------------------------------------------------------------- Total liabilities and stockholders' equity 363,240 237,398 82,843 (311,667) 371,814 =============================================================== total revenue 42,463 4,167 46,630 total cost of revenue 22,653 22,653 -------------------------------------------------------------- Gross margin 19,810 - 4,167 - 23,977 ------------------------------------------------------- Selling, general & administrative expenses 16,776 83 16,859 ----------------------------------------------------------------- Operating Income 3,034 - 4,084 - 7,118 Other income (expense): Equity in loss of affiliate (4,411) 4,303 (108) interest expense, net (2,935) (4,295) 555 (6,675) ----------------------------------------------------------------- (2,935) (4,295) (3,856) 4,303 (6,783) ----------------------------------------------------------------- Income (loss) before income taxes and extraordinary item 99 (4,295) 228 4,303 335 Income tax (106) (106) ------------------------------------------------------------- Income (loss) before extraordinary item (7) (4,295) 228 4,303 229 Extraordinary item, loss on early retirement of debt - - - - - ---------------------------------------------------------------- Net income (loss) (7) (4,295) 228 4,303 229 Preferred stock dividends (1,076) (1,076) -------------------------------------------------------------- Net income (loss) applicable to common stock (7) (4,295) (848) 4,303 (847) =========================================================== Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition Results of Operations: Three Months Ended March 31, 1997 compared to March 31, 1996 Revenues STFI's revenues rose to $46.6 million in 1997, an increase of $28.4 million, or 156.5%, over 1996 revenues of $18.2 million. This increase was principally due to the full effect of the March 13, 1996 merger with Fairchild Industries, Inc. ("FII"). Shared Telecommunications Services (STS) revenue increased $14.4 million, or 108.9%, and Telecommunications Systems (Systems) revenue increased $14.0 million, or 283.5%, in 1997 over 1996 levels. Approximately $4.0 million of the increase in the systems revenue was due to the inclusion of management fees from ICS Communications, Inc. ("ICS") and GE Capital-Rescom, L.P. ("Rescom"). The Company is operating as the manager of each of these businesses. Gross margin Gross margin increased to 51.4% of revenues for 1997 from 42.6% for 1996. The change in gross margin was mainly the result of changes in sales mix and the merger with FII. In addition, the revenues generated from the management agreements with ICS and Rescom were included in Systems revenue. Since the associated cost for this revenue of approximately $4 million was in the selling, general and administrative expense, it had a positive effect on Systems gross margin. The following table sets forth the components of the Company's overall gross margin (GM) for the three months ended March 31, 1997 as a factor of sales percentage and gross margin percentage per line of business: Overall Division Sales GM GM STS 59.3% 52.5% 31.1% Systems 40.7% 49.8% 20.3% Company Total 100.0% 51.4% As shown above, the 1997 gross margin was a mix of STS gross margin of 52.5% and Systems gross margin of 49.8%. In 1996 the Company's gross margin was a combination of STS gross margin of 51.4% and Systems gross margin of 19.0%. Selling, general and administrative expenses Selling, general and administrative (SG&A) expenses increased $10.1 million to $16.9 million, due entirely to the merger with FII and the associated increased headcount, goodwill amortization and other general overhead expenses. Despite this, SG&A as a percentage of revenue decreased from 37.3% in 1996 to 36.2% in 1997. Operating income Operating income increased by $6.2 million to $7.1 million in 1997 from $.9 million in 1996. The increase was mainly the result of the FII merger mentioned earlier. Interest expense Interest expense net of interest income increased by $5.4 million for the three months ended March 31, 1997 over the three months ended March 31, 1996. This was attributable to the addition of approximately $245 million in new debt on March 13, 1996. Net income As a result of the factors listed above, an increase in net income for the three months ended March 31, 1997 of $.2 million was recorded, compared to a net loss of $1.6 million for the three months ended March 31, 1996. LIQUIDITY AND CAPITAL RESOURCES Due to the merger with FII on March 13, 1996 and the associated borrowings of $245 million, the Company's liquidity and capital resources were significantly changed. At March 31, 1997 the Company had $372 million in assets, $255 million in various long and short term debt and capital lease obligations and $39.5 million in recently issued preferred stock. The balance sheet at March 31, 1997 showed a working capital deficit of $6.6, compared to a deficit of $17.5 million at March 31, 1996. As of March 31, 1997 the Company had available for future borrowings approximately $11 million on a credit facility. Cash provided by operations was $4.7 million for the three months ended March 31, 1997, compared to $1.5 million for the three months ended March 31, 1996. The Company invested $3.3 million in equipment purchases in the quarter ended March 31, 1997, compared to $.7 million in the quarter ended March 31, 1996. The expenditures were used to grow additional business and sustain the Company's underlying revenue stream. Financing activities for the period ended March 31, 1997 involved the principal payments on the Company's debt of $2.5 million, offset by a $2.0 million take down on the Company's revolver availability. Cash requirements for 1997 will be significant due to the acquisition of FII and associated new debt mentioned earlier. The Company anticipates to continue repaying these borrowings and providing cash for operations and capital expenditures through cash from operations.
PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K: (a) Exhibits None (b) Reports on Form 8-K None.
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SHARED TECHNOLOGIES FAIRCHILD INC. By: /s/ Vincent DiVincenzo Vincent DiVincenzo Senior Vice President-Finance and Administration, Treasurer, Chief Financial Officer Date: May 15, 1997 EX-27 2 ART.5 FINANCIAL DATA SCHEDULE FOR QUARTER END 10-Q
5 1,000 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 2692 0 34500 (411) 0 42291 99192 (31078) 371814 48902 0 0 8 63 0 371814 46630 46630 (22653) (22653) (16859) 0 (6675) 335 (106) 229 0 0 0 229 (.05) 0 -----END PRIVACY-ENHANCED MESSAGE-----