-----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, FhFsnq+3wxyQDYT+qAGeRuObcIK6LCXnXBsW04wY/fSZjhiZxY/iOofyAz5yUQAU LlP3WuQClInd1bTeQUr8sQ== 0000008919-96-000003.txt : 19960515 0000008919-96-000003.hdr.sgml : 19960515 ACCESSION NUMBER: 0000008919-96-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960330 FILED AS OF DATE: 19960514 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AYDIN CORP CENTRAL INDEX KEY: 0000008919 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 231686808 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07203 FILM NUMBER: 96562716 BUSINESS ADDRESS: STREET 1: 700 DRESHER RD CITY: HORSHAM STATE: PA ZIP: 19044 BUSINESS PHONE: 2156577510 10-Q 1 AYDIN CORPORATION Telephone 700 Dresher Road (215) 657-7510 P.O. Box 349 FAX Horsham, PA 19044 (215) 657-3830 U.S.A. May 14, 1996 (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 First Quarter 1996 File No. 1-7203 Gentlemen: We are enclosing for filing Aydin Corporation's Form 10-Q for the First Quarter ending March 30, 1996. Sincerely, /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 (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 30, 1996 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to __________ Commission file number 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 May 10, 1996. ______5,132,800______ AYDIN CORPORATION PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Incorporated herein by reference are the Condensed Consolidated Financial Statements of Aydin Corporation and the related Notes to Financial Statements as set forth on pages 2 through 5 of the "1996 First Quarter Report" to Stockholders. These condensed consolidated financial statements for the three month period ended March 30, 1996 have been subjected to a limited review by Grant Thornton LLP, the Registrant's independent accountants, whose report, set forth on page 6 of the "1996 First Quarter Report" to Stockholders, is incorporated herein by reference. Earnings per share are based on the weighted average number of common shares outstanding plus shares issuable upon the assumed exercise of dilutive common stock options. The number of shares used in the computation of earnings per share for the three months ended March 30, 1996 and April 1, 1995 were 5,162,831 and 5,040,676, respectively. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (1) Material Changes in Financial Condition (3/30/96 versus 12/31/95) Accounts receivable decreased by $15.5 million primarily because of $14.5 million of collections during the quarter on the TMRC Contract with the Government of Turkey. Most of these collections were for the software on this contract, the acceptance for which had been delayed in excess of one year. Accounts payable decreased by $10.3 million primarily because of payment of approximately $8 million to the TMRC software subcontractor. Current accrued and deferred income taxes decreased by $2.2 million primarily because of payments made to the IRS. Long-term debt (including current maturities) consisting of mortgages of $1.1 million was paid off during the quarter, and the properties involved were used as collateral against a $4.5 million line of credit put in place during the quarter. During April $3.0 million of the line of credit was used. Of the $11.8 million of restricted cash at 3/30/96, approximately $9.2 million was being held as collateral by a bank against the TMRC contract, and $2.5 million was held as collateral against the $5.2 million of short-term bank debt at 3/30/96. During April, $5.0 million of the short-term bank debt was paid off. Although the Company's liquidity and financial flexibility have improved since year-end with the TMRC collections during the quarter, they continue to be adversely affected by amounts still due from the Government of Turkey. Based on the present backlog and projected cash flows, the Company anticipates financing its capital needs from internal sources and from some borrowings in the foreseeable future. (2) Material Changes in Operations (1st Quarter 1996 vs. 1995) Cost of sales as a percentage of sales decreased to 69.8% from 72.9% primarily because estimated costs at completion on a major contract substantially completed during the quarter exceeded actual costs incurred. Selling, general and administrative expenses increased by $ 576 thousand (9%) primarily because of increased provisions for doubtful accounts receivable. Research and development costs increased by $881 thousand (61%) because of expanded continuing development efforts in telecommunications products. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Reference is made to Item 3, "Legal Proceedings," in Registrant's Annual Report on Form 10-K, Part I, for the year ended December 31, 1995, regarding the arbitration cross claims of Loral Defense Systems-Eagan and the Registrant. There has been no change in the status of that matter. ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS (a) The Registrant held its Annual Meeting of Stockholders on April 26, 1996. (b) Proxies for the meeting were solicited pursuant to Regulation 14A. There was no solicitation in opposition to management's nominees for directors as listed in the Proxy Statement. All such nominees were elected. (c) The matters voted upon and the results of the voting were as follows: (1) Election of Directors
For Withheld Broker Non-Votes I. Gary Bard 4,004,585 28,232 None. Nev A. Gokcen 4,004,585 28,232 None. Ayhan Hakimoglu 4,004,585 28,232 None. Donald S. Taylor 4,004,585 28,232 None. Harry D. Train II 4,004,585 28,232 None. John F. Vanderslice 4,004,585 28,232 None.
(2) To approve Individual Non-Qualified Stock Options.
For Against Abstain Broker Non-Votes 3,505,067 499,152 28,598 None
ITEM 5. OTHER INFORMATION (a) On May 6, 1996, Ayhan Hakimoglu, the Registrant's Chairman of the Board and Chief Executive Officer, announced that he completed the sale of his 11.7% interest in the Registrant's Common Stock to EA Industries, Inc., West Long Branch, New Jersey and resigned as an officer and director of the Registrant and its subsidiaries. The Registrant's Board of Directors appointed Mr. I. Gary Bard, currently a director of the Registrant, to succeed Mr. Hakimoglu as Chairman of the Board and Chief Executive Officer of the Registrant. The Board also appointed Mr. Irwin L. Gross, Chairman of the Board of EA Industries, Inc., as a Director of the Registrant to fill the vacancy on the Board created by Mr. Hakimoglu's resignation. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) The following is a list of Exhibits filed as part of this report: Exhibit 2 - None Exhibit 3(i) - Restated Certificate of Incorporation (filed as Exhibit 3(i) to Registrant's Annual Report on Form 10-K for the year ended December 31, 1994 and incorporated herein by reference). Exhibit 3(ii) - By-Laws (filed as Exhibit 3(ii) to Registrant's Annual Report on Form 10-K for the year ended December 31, 1994 and incorporated herein by reference). Exhibit 4 - None Exhibit 10 - None Exhibit 11 - None Exhibit 15 - Letter re unaudited interim financial information Exhibit 18 - None Exhibit 19 - "1996 FIRST QUARTER REPORT" to Stockholders Exhibit 22 - None Exhibit 23 - None Exhibit 24 - None Exhibit 27 - Financial Data Schedule (electronic filing only) Exhibit 99 - None (b) Reports on Form 8-K No reports on Form 8-K were filed during the First Quarter 1996. 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. AYDIN CORPORATION DATE May 14, 1996 /s/ Herbert Welber Herbert Welber, Controller DATE May 14, 1996 /s/ Robert A. Clancy Robert A. Clancy, Secretary AYDIN CORPORATION FORM 10-Q QUARTERLY REPORT EXHIBIT INDEX N0. DESCRIPTION OF EXHIBIT 15 Letter re unaudited interim financial information 19 1996 First Quarter Report to Stockholders 27 Financial Data Schedule Exhibit 15 Securities and Exchange Commission Washington, D.C. 20549 We have made a review of the condensed consolidated financial statements of Aydin Corporation and subsidiaries as of March 30, 1996 and for the three-month periods ended March 30, 1996 and April 1, 1995, in accordance with standards established by the American Institute of Certified Public Accountants, and issued our report thereon dated April 26, 1996. We are aware that such financial statements and our above-mentioned report appearing in the Form 10-Q of Aydin Corporation for the quarter ended March 30, 1996 are being incorporated by reference in the Registration Statement Nos. 33-61537; 33-53549; 33-34863; 33-22016; 33-14284; 2-97645; 2-93603; 2-77623; 2-64093 and that such report pursuant to Rule 436(c) of the Securities Act of 1933 is not considered a part of a registration prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Paragraphs 7 and 11 of that Act. /s/ Grant Thornton LLP Philadelphia, Pennsylvania May 13, 1996 Exhibit 19 Dear Stockholder: Aydin's sales for the first quarter of 1996 were $36,283,000, representing a slight increase compared to $35,588,000 in the same period last year. Net income for the first quarter of 1996 was $963,000, a decrease as compared to $1,191,000 in last year's first quarter. Earnings per share for the first quarter of 1996 were $.19, a decrease as compared to $.24 per share in the first quarter of 1995. Backlog at the end of the first quarter of 1996 was $95 Million, a decrease from $106 Million at the end of 1995. There is an additional $150 million of backlog which is subject to prototype approval and the receipt of production quantity releases which are estimated to be received over several years. The Company also has additional production options not included in the above figures. During the quarter, Aydin was awarded a contract valued at $3 Million from a Swedish Company, Forsvarets Materielverk (FMV), to supply Digital Microwave Line-of-Sight (LOS) Radios. Aydin also received several smaller orders and contracts as well. In addition to the previously mentioned awards, management remains optimistic regarding several large contracts which have been mentioned in recent months. Many smaller contracts and opportunities are also being pursued, all of which have significant potential for Aydin. The TMRC contract with the Turkish Government is in the final phase. Due to preliminary acceptance of software and resulting recent payments made to us on this contract, Aydin's cash flow has made some improvements. There is approximately $37 Million of work left on this program, most of which should be completed this year. Restricted cash as shown on the Assets page was approximately $11.8 Million on March 30, 1996. As of this date it has been reduced to approximately $8 Million. The reduction has been used primarily to reduce short-term loans. /s/ Ayhan Hakimoglu Ayhan Hakimoglu Chairman of the Board April 26, 1996 (page 1) AYDIN CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands except for per share amounts)
3 Months Ended March 30, 1996 April 1, 1995 (Unaudited) (Unaudited) NET SALES $ 36,283 $ 35,588 COST AND EXPENSES Cost of Sales 25,308 25,937 Selling, general and administrative 7,100 6,524 Research and development 2,230 1,449 Interest expense (income), net 204 (157) _______ ______ Total 34,842 33,753 _______ ______ INCOME BEFORE INCOMES TAXES AND MINORITY INTEREST 1,441 1,835 INCOME TAXES 472 636 _______ ______ INCOME BEFORE MINORITY INTEREST 969 1,199 LESS MINORITY INTEREST 6 8 _______ ______ NET INCOME $ 963 $ 1,191 _______ ______ _______ ______ EARNINGS PER SHARE $ .19 .24 _______ ______ _______ ______
(page 2) AYDIN CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ($000 Omitted) ASSETS
March 30, 1996 Dec. 31, 1995 _____________ _____________ (Unaudited) CURRENT ASSETS: Cash, including cash equivalents- 1996, $7,700; 1995, $3,569 $ 3,439 $ 4,638 Short-term investments 11,793 11,672 Accounts receivable 37,675 53,216 Unbilled revenue, after progress billings 49,400 46,927 Inventories: Raw materials 11,551 11,581 Work-in-process 8,523 7,965 Finished product 3,283 3,234 Prepaid expenses 1,467 1,577 ________ ________ Total current assets 127,131 140,810 PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation: 1996, $58,831; 1995, $59,055 24,697 25,624 OTHER ASSETS 425 426 ________ ________ TOTAL ASSETS $152,253 $166,860 ________ ________ ________ ________ __________________________________________________________________ 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 1995 balance sheet has been derived from the audited financial statements contained in the 1995 Annual Report to Stockholders. 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. Reporting developments have been updated where appropriate. In this connection, there are no significant changes in contingency disclosures and although the Company's liquidity and financial flexibility have improved since year end, they continue to be adversely affected by amounts due from the Government of Turkey. Pretax income for the first quarter includes foreign currency translation gains relating to the Turkish subsidiary of $219,000 for 1996 and $109,000 for 1995.
(page 3) AYDIN CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ($000 Omitted) LIABILITIES AND STOCKHOLDERS' EQUITY
March 30, 1996 Dec. 31, 1995 _____________ _____________ (Unaudited) CURRENT LIABILITIES: Current maturities of long-term debt $ -0- $ 342 Short-term bank debt 5,186 5,486 Accounts payable 18,873 29,222 Accrued liabilities 7,531 7,370 Advanced payments and contract billings in excess of recognized revenue 1,402 2,843 Accrued and deferred income taxes 7,737 9,932 ________ _______ Total current liabilities 40,729 55,195 LONG-TERM DEBT, less current maturities -0- 770 DEFERRED INCOME TAXES 5,906 6,232 MINORITY INTEREST 96 90 STOCKHOLDERS' EQUITY: Common stock, par value $1- authorized 7,500,000 shares: issued 1996, 5,115,625 shares; 1995, 5,112,127 shares 5,116 5,112 Additional paid-in capital 2,237 2,188 Retained earnings 98,846 97,883 Foreign currency translation effects (667) (610) ________ _______ Stockholders' equity 105,522 104,573 ________ _______ TOTAL LIABILITIES AND EQUITY $152,253 $166,860 ________ _______ ________ _______
(page 4) AYDIN CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ($000 omitted)
Three Months Ended March 30, 1996 April 1, 1995 _____________ _____________ (Unaudited) (Unaudited) OPERATING ACTIVITIES Net Income $ 963 $ 1,191 Items not affecting cash: Depreciation and amortization 852 842 Deferred income taxes 150 142 Minority Interest 6 8 Gain on sale of facility (216) -0- Other (66) 108 Changes in certain working capital items: Accounts receivable 15,541 1,364 Unbilled revenue (2,473) (8,942) Advance payments and contract billings in excess of recognized revenue (1,441) (1,991) Inventories (577) (781) Prepaid expenses 110 (314) Accounts payable and accrued liabilities (10,188) (690) Accrued income taxes (2,671) 722 ________ _________ CASH USED BY OPERATING ACTIVITIES (10) (8,341) INVESTING ACTIVITIES Net property, plant and equipment additions (868) (656) Proceeds from sale of facility 1,159 -0- ________ _________ CASH PROVIDED (USED) BY INVESTING ACTIVITIES 291 (656) FINANCING ACTIVITIES Release of collateral on restricted cash (121) 2,287 Principal payments on long-term debt (1,112) (154) Net repayments of short-term borrowings (300) (1,000) Purchase of Treasury Shares -0- (52) Minority investment in consolidated subsidiary -0- 103 Proceeds from exercise of stock options 53 78 ________ _________ CASH PROVIDED (USED) BY FINANCING ACTIVITIES (1,480) 1,262 ________ _________ DECREASE IN CASH AND CASH EQUIVALENTS (1,199) (7,735) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 4,638 9,771 ________ _________ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,439 $ 2,036 ________ _________ ________ _________
(page 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 March 30, 1996 and the related condensed consolidated statements of income and cash flows for the three month periods ended March 30, 1996 and April 1, 1995. These condensed consolidated financial statements are the responsibility of the Company's management. We conducted our review 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 as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 1995, and the related consolidated statements of operations and cash flows for the year then ended (not presented herein) and in our report dated February 26, 1996 except as to Note A for which the date is March 22, 1996, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1995 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 April 26, 1996 _________________________________________________________________ A copy of Aydin Corporation's Form 10Q may be obtained without charge, upon written request sent to Aydin Corporation (page 6) EX-27 2 ARTICLE 5 FDS FOR 1ST QUARTER 10-Q WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 This schedule contains summary financial information extracted from First Quarter Report to Stockholders and is qualified in its entirety by reference to such financial statements. 1,000 QTR-1 DEC-31-1996 MAR-30-1996 3,439 11,793 37,675 0 23,357 127,131 83,528 58,831 152,253 40,729 0 5,116 0 0 100,406 152,253 36,283 36,283 25,308 34,842 0 0 204 1,441 472 969 0 0 0 963 .19 .19
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