10-Q/A
1
AYDIN CORPORATION
Telephone 700 Dresher Road
(215) 657-7510 P.O. Box 349
FAX Horsham, PA 19044
(215) 657-3830 U.S.A.
Telex
685 1211 AYDIN UW
March 29, 1995
(VIA EDGAR)
SECURITIES & EXCHANGE COMMISSION
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549-1004
Attn: Filing Desk, Stop 1-4
RE: Form 10-Q/A Third Quarter 1994
File No. 1-7203
Gentlemen:
We are enclosing for filing Aydin Corporation's Form 10-Q/A amending
portions of the Third Quarter Period for the period ending October 1,
1994.
Very truly yours,
/s/ Robert A. Clancy
Robert A. Clancy
Secretary and
Corporate Counsel
RAC:sbk
Enclosures
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(Mark One)
_X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended _______October 1, 1994_________
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 ________1-7203__________________________
AYDIN CORPORATION
_________________________________________________________________
(Exact name of registrant as specified in its charter)
DELAWARE 23-1686808
_________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700 DRESHER ROAD, HORSHAM, PA 19044
_________________________________________________________________
(Address of principle executive offices) (Zip Code)
(215) 657-7510
_________________________________________________________________
(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 ____________________
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Shares of common stock, $1.00 par value, outstanding as of November
11, 1994
_____4,988,900_____
PART 1, ITEM 1, FINANCIAL INFORMATION
page 1 of 5
AYDIN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands except for per share amounts)
3 Months Ended 9 Months Ended
10/1/94 10/1/94
Restated 10/2/93 Restated 10/2/93
(Unaudited) (Unaudited)
NET SALES $ 35,053 $ 31,577 $ 107,663 $ 105,980
COST AND EXPENSES
Cost of sales 24,931 22,896 78,669 76,744
Selling, general and
administrative 6,671 5,922 19,339 19,260
Research and
development 1,203 1,028 3,664 3,881
Interest expense,
(income) net 90 (49) 280 126
________ _________ ________ _________
Total 32,895 29,797 101,952 100,011
________ _________ ________ _________
INCOME BEFORE
INCOME TAXES AND
MINORITY INTEREST 2,158 1,780 5,711 5,969
INCOME TAXES 854 704 1,942 2,199
________ _________ ________ _________
INCOME BEFORE
MINORITY INTEREST 1,304 1,076 3,769 3,770
LESS MINORITY INTEREST -0- 9 -0- 115
________ _________ ________ _________
NET INCOME $ 1,304 $ 1,067 $ 3,769 $ 3,655
________ _________ ________ _________
________ _________ ________ _________
EARNINGS PER SHARE $ .26 $ .21 $ .75 $ .73
________ _________ ________ _________
________ _________ ________ _________
WEIGHTED AVERAGE
COMMON AND COMMON
EQUIVALENT SHARES
OUTSTANDING 4,991 5,039 4,998 5,025
________ _________ ________ _________
________ _________ ________ _________
PART 1, ITEM 1, FINANCIAL INFORMATION
page 2 of 5
AYDIN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
($000 Omitted)
ASSETS
Oct. 1, 1994
Restated Dec. 31, 1993
(Unaudited)
CURRENT ASSETS:
Cash, including cash equivalents-
1994, $13,737; 1993, $10,908 $ 18,088 $ 11,822
Short-term investments 8,428 13,058
Accounts receivable 36,518 33,525
Unbilled revenue, after
progress billings 54,720 66,559
Inventories:
Raw materials 9,519 8,549
Work-in-process 7,194 6,036
Finished product 3,456 3,012
Prepaid expenses 1,904 1,470
_________ _________
TOTAL CURRENT ASSETS 139,827 144,031
PROPERTY, PLANT AND EQUIPMENT,
net of accumulated depreciation:
1994, $56,665; 1993, $53,623 25,206 25,182
OTHER ASSETS 488 508
_________ _________
TOTAL ASSETS $ 165,521 $ 169,721
_________ _________
_________ _________
NOTE TO FINANCIAL STATEMENTS:
Interim financial statements reflect all adjustments which are, in
the opinion of management, necessary to a fair statement of the
results for the periods. The 1993 balance sheet has been derived
from the audited financial statements contained in the 1993 Annual
Report to Stockholders. The 1994 periods have been restated as a result
of previously not including the results of a foreign subsidiary. In
previous periods the results of this subsidiary were not significant.
These interim financial statements conform with the requirements for
interim financial statements and consequently do not include all the
disclosures normally required by generally accepted accounting
principles. Disclosures are updated where appropriate. There are no
changes in contingency disclosures. Pretax income for 1994 includes
foreign currency translation gains relating to the Turkish subsidiary of
$72,000 for the third quarter and $874,000 for the nine months.
PART 1, ITEM 1, FINANCIAL INFORMATION
page 3 of 5
AYDIN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
($000 Omitted)
LIABILITIES AND STOCKHOLDERS' EQUITY
Oct. 1, 1994
Restated Dec. 31, 1993
(Unaudited)
CURRENT LIABILITIES:
Current maturities of long-term debt $ 399 $ 397
Short-term bank debt 7,806 21,525
Accounts payable 27,525 21,731
Accrued liabilities 10,896 15,295
Advanced payments and contract
billings in excess of recognized
revenue 2,342 1,563
Accrued and deferred income taxes 9,993 7,014
_________ __________
TOTAL CURRENT LIABILITIES 58,961 67,525
LONG-TERM DEBT, less current maturities 1,597 1,902
DEFERRED INCOME TAXES 6,972 6,230
MINORITY INTEREST -0- 105
STOCKHOLDERS' EQUITY:
Common stock, par value $1-authorized
7,500,000 shares: issued 1994,
4,988,900 shares; 1993, 4,981,273
shares 4,989 4,981
Additional paid-in capital 770 697
Retained earnings 92,675 88,906
Foreign currency translation effects (443) (625)
_________ __________
STOCKHOLDERS' EQUITY 97,991 93,959
_________ __________
TOTAL LIABILITIES AND EQUITY $165,521 $169,721
_________ __________
_________ __________
PART 1, ITEM 1, FINANCIAL INFORMATION
page 4 of 5
AYDIN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
($000 Omitted)
Nine Months Ended
Oct. 1, 1994
Restated Oct. 2, 1993
(Unaudited) (Unaudited)
OPERATING ACTIVITIES
Net Income $ 3,769 $ 3,655
Items not affecting cash:
Depreciation and amortization 3,132 3,488
Deferred income taxes (19) (478)
Minority Interest -0- 115
Other 180 81
Changes in certain working
capital items:
Accounts receivable (2,993) 4,740
Unbilled revenue 11,839 (19,402)
Advance payments and contract
billings in excess of
recognized revenue 779 27
Inventories (2,572) 995
Prepaid expenses (434) 572
Accounts payable and accrued
liabilities 1,395 (752)
Accrued income taxes 3,740 597
__________ ___________
CASH PROVIDED (USED) BY
OPERATING ACTIVITIES 18,816 (6,362)
INVESTING ACTIVITIES
Net property, plant and
equipment additions (3,134) (2,034)
Short-term investments 4,630 (546)
__________ ___________
CASH PROVIDED (USED) BY
INVESTING ACTIVITIES 1,496 (2,580)
FINANCING ACTIVITIES
Payments on long-term debt (303) (295)
Proceeds from (repayment) of
short-term borrowings (13,719) (1,000)
Minority investment in
consolidated subsidiary (105) (2,310)
Proceeds from exercise of
stock options 81 263
__________ ___________
CASH USED BY
FINANCING ACTIVITIES (14,046) (3,342)
__________ ___________
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 6,266 (12,284)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 11,822 17,086
__________ ___________
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 18,088 $ 4,802
__________ ___________
__________ ___________
PART 1, ITEM 1, FINANCIAL INFORMATION
page 5 of 5
INDEPENDENT ACCOUNTANTS' REPORT ON REVIEW OF
INTERIM FINANCIAL INFORMATION
BOARD OF DIRECTORS AND STOCKHOLDERS
AYDIN CORPORATION
We have reviewed the condensed consolidated balance sheet of Aydin
Corporation and subsidiaries as of October 1, 1994, and the
related condensed consolidated statements of income and cash flows
for the three and nine month periods ended October 1, 1994 as restated.
See note to the Financial Statement regarding this restatement. The
condensed consolidated statements of income and cash flows for the
three and nine-month periods ended October 2, 1993 were reviewed
by other accountants. These condensed consolidated financial
statements are the responsibility of the Company's management.
Our review and that of the prior accountants was conducted in
accordance with standards established by the American Institute of
Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in
scope than an audit in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.
Based on our review, and that of the prior accountants, we are not
aware of any material modifications that should be made to the
condensed consolidated financial statements referred to above for
them to be in conformity with generally accepted accounting
principles.
The consolidated balance sheet of Aydin Corporation and
subsidiaries as of December 31, 1993, and the related consolidated
statements of operations and cash flows for the year then ended
(not presented herein), were audited by other accountants in
accordance with generally accepted auditing standards. In their
report dated February 25, 1994, they expressed an unqualified
opinion on those consolidated financial statements. In their
opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of December 31, 1993 is fairly
stated in all material respects in relation to the consolidated
balance sheet from which it has been derived.
/s/ Grant Thornton LLP
Philadelphia, Pennsylvania
March 22, 1995
AYDIN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(1) Material Changes in Financial Condition (10/1/94 versus
12/31/93)
Unbilled revenue decreased by $11.8 million primarily because of
increased billings on a major contract.
Net inventories increased by $2.6 million primarily because of a
build-up of selected commercial standard product type inventories
in order to provide a faster response and boost sales to customers
in these product areas.
Accrued liabilities decreased by $4.4 million primarily because of
$2 million of payments made and other costs incurred in connection
with the terms of a settlement made with the Department of Justice
on the AN/GRC-222 microwave radio contract with the U.S. Army (see
Note K of the 12/31/93 Annual Report).
Accounts receivable, accounts payable and accrued and deferred income
taxes increased by $3.0 million, $5.8 million and $3.0 million,
respectively, primarily because of volume and tax liability increases of
the Argentina subsidiary.
Short-term bank debt was reduced by $13.7 million during the nine months
owing to the favorable cash flow. Of the total of $26.5 million of cash
and short-term investments at 10/1/94, approximately $18.1 million
represents interest bearing collateral required to be maintained against
letters of credit for foreign contracts.
The Company at October 1, 1994 had short-term bank borrowings
outstanding of $7.8 million. The banks are requesting partial or full
reductions of these short-term borrowings. The Company anticipates
making full payment of these bank loans in 1995 from internal cash flow.
The Company is seeking new banking arrangements to cover its future
potential needs.
Based on the present backlog and projected cash flows, the Company
anticipates financing its capital needs from internal sources and
from some short-term borrowings in the foreseeable future.
(2) Material Changes in Operations (Third Quarter and Nine Months
1994 versus 1993)
Net sales increased by 11% in the quarter and 2% in the nine months
because of increased sales at the Argentina subsidiary. Partially
offsetting this was a low level of bookings in the U.S. defense
business.
Cost of sales as a percentage of sales decreased in the quarter to 71.1%
from 72.5% and increased in the nine months to 73.1% from 72.4%.
Operating efficiencies were achieved in both the quarter and nine months
but were partially offset by a higher percentage of cost of sales versus
sales at the Argentina subsidiary.
Selling, general and administrative expenses increased by $749,000 in
the quarter because of a higher level of proposal activity and resulting
proposal costs and increased costs at the Argentina subsidiary.
PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following is a list of amended Exhibits filed as part of
this reports:
Exhibit 27 - Financial Data Schedule (electronic filing
only)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this to be signed on its behalf by the
undersigned thereunto duly authorized.
AYDIN CORPORATION
DATE _____March 27, 1995_____ /s/ Herbert Welber
Herbert Welber, Controller
DATE _____March 27, 1995_____ /s/ Robert A. Clancy
Robert A. Clancy, Secretary
EX-27
2
ARTICLE 5 FDS FOR 3RD QUARTER 10-Q/A
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5
1,000
QTR-3
DEC-31-1994
OCT-01-1994
18,088
8,428
36,518
0
20,169
139,827
81,871
56,665
165,521
58,961
1,597
4,989
0
0
93,002
165,521
107,663
107,663
78,669
101,952
0
0
280
5,711
1,942
3,769
0
0
0
3,769
.75
.75