<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MAY 10, 2000
TRANSCRYPT INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-21681 47-0801192
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NUMBER)
4800 NW FIRST STREET, LINCOLN, NEBRASKA 68521
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (402) 474-4800
<PAGE>
Item 5. OTHER EVENTS.
On May 10, 2000, Transcrypt International, Inc. issued a press release,
a copy of which is filed herewith as Exhibit 99.1 and is incorporated herein by
this reference, announcing first quarter results of operations.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS.
None.
(b) PRO FORMA FINANCIAL INFORMATION.
None.
(c) EXHIBITS.
The following are furnished as exhibits to this report:
99.1 News Release issued on May 10, 2000 by the Registrant.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
TRANSCRYPT INTERNATIONAL, INC.
Date: May 12, 2000 By: /s/ MASSOUD SAFAVI
Massoud Safavi
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
99.1 News Release issued on May 10, 2000 by the Registrant.
</TABLE>
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
FOR INVESTOR RELATIONS INFORMATION, CONTACT:
The Poretz Group, Investor Relations
Karen Vahouny, 703-506-1778 x224; e-mail: [email protected]
TRANSCRYPT ANNOUNCES FIRST QUARTER
FINANCIAL RESULTS
LINCOLN, NB -- May 10, 2000 -- Transcrypt International, Inc. (OTC Bulletin
Board: TRII) today announced financial results for the quarter ended March 31,
2000. Revenues rose from $9.7 million to $11.4 million--an increase of 17%. The
net loss was $3.2 million, or $0.25 per share, in the first quarter of 2000
versus a net loss of $3.9 million, or $0.31 per share, in the same quarter of
last year.
The revenue increase was largely attributable to increased sales from the
Company's EF Johnson subsidiary. EF Johnson revenues for the first quarter of
2000 were 25% higher than in the comparable quarter of last year--$9.7 million
compared to $7.8 million. Revenues from the Transcrypt Secure Technologies
division decreased from $2.0 million in the first quarter of 1999 to $1.7
million in the same quarter of this year. The decline was due to delays in
closing several orders, as well as a shift in the division's product mix.
Michael E. Jalbert, chairman and chief executive officer of Transcrypt, notes,
"Although our first quarter is typically our weakest and we had not targeted
profitability this quarter, our revenues fell short of expectations. This was
due to the fact that our EF Johnson division experienced a delay of about $2.5
million in product shipments to several key customers during the first quarter.
"On the positive side, we expect these shipments to occur in the second and
third quarters, and we expect that EF Johnson will continue to generate strong
top-line growth."
The overall gross margin was 14% in the first quarter of 2000 compared to 20% in
the same period last year. The margin decrease was due to lower margins in the
EF Johnson division, resulting from product mix changes and the delay of
high-margin orders into subsequent quarters.
According to Jalbert, "Although our profit margin was below par, we believe that
the drop in EF Johnson's margins was a temporary one, and we expect these
margins to rebound over the coming quarters."
He adds, "Our planned investment and focus in EF Johnson should greatly enhance
its potential to expand its current product offerings into new markets, as well
as allow it to develop additional products. Our goal is to build our reputation
from a product provider to a solution provider in the digital wireless
communications marketplace.
Transcrypt International, Inc. (www.transcrypt.com) designs, manufactures and
markets trunked and convention radio systems, stationary land mobile radio
transmitters and receivers, including mobile and portable radios, and
manufactures information security products that prevent the unauthorized
interception of sensitive voice and data communication.
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Certain matters discussed in this press release constitute forward looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. These forward looking statements relate to the Company's efforts to
improve profit margins, second/third quarter revenue, product development and
future product shipments. These forward looking statements are subject to
certain risks and uncertainties that could cause the actual results, performance
or achievements to differ materially from those expressed, suggested or implied
by the forward looking statements due to the number of risk factors including,
but not limited to, the Company's efforts to the level of product sales, mix of
product sales, and other risks detailed in the Company's reports filed with the
Securities & Exchange Commission, including its Annual Report on Form 10-K for
the year ended December 31, 1999.
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TRANSCRYPT INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------------
2000 1999
------------ ------------
<S> <C> <C>
Revenues $ 11,360 $ 9,709
Cost of sales 9,812 7,735
------------ ------------
Gross profit 1,548 1,974
------------ ------------
Operating expenses:
Research and development 1,465 1,714
Sales and marketing 1,790 1,726
General and administrative 2,126 2,634
------------ ------------
Total operating expenses 5,381 6,074
------------ ------------
Loss from operations (3,833) (4,100)
Other income 472 108
Interest income 242 203
Interest expense (132) (168)
------------ ------------
Net income (loss) before income taxes (3,251) (3,957)
Income tax benefit - -
------------ ------------
Net income (loss) $ (3,251) $ (3,957)
============ ============
Net income (loss) per share - Basic and Diluted $ (0.25) $ (0.31)
============ ============
Weighted average common shares - Basic 12,956,871 12,946,624
============ ============
Weighted average common shares - Diluted 12,956,871 12,946,624
============ ============
</TABLE>
--- MORE ---
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TRANSCRYPT INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2000 AND DECEMBER 31, 1999
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
------------------- ------------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 17,876 $ 21,571
Accounts receivable, net 8,253 12,675
Receivables - other 563 316
Cost in excess of billings on uncompleted contracts 3,170 2,298
Inventory 16,766 16,447
Prepaid expenses 795 500
Deferred tax assets 2,395 2,395
------------------- ------------------
Total current assets 49,818 56,202
Property, plant and equipment, net 3,280 3,766
Deferred tax assets 9,981 9,981
Intangible assets, net 14,831 15,011
Other assets 565 561
------------------- ------------------
$ 78,475 $ 85,521
=================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving line of credit $ 7,722 $ 5,809
Current portion of long-term debt 52 116
Accounts payable 3,658 8,514
Billings in excess of cost on uncompleted contracts 5,390 5,116
Deferred revenue 3,935 4,090
Accrued expenses 5,029 5,764
Provision for litigation settlement - -
------------------- ------------------
Total current liabilities 25,786 29,409
Provision for litigation settlement 5,996 5,996
Long-term debt, net of current portion 50 197
Deferred revenue 538 633
------------------- ------------------
32,370 36,235
------------------- ------------------
Stockholders' equity:
Common stock 130 130
Additional paid-in capital 90,401 90,331
Accumulated deficit (44,426) (41,175)
------------------- ------------------
46,105 49,286
------------------- ------------------
$ 78,475 $ 85,521
=================== ==================
</TABLE>
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