SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: October 31, 1997
WATKINS-JOHNSON COMPANY
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(Exact name of registrant as specified in its charter)
CALIFORNIA 1-5631 94-1402710
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(State of Organization) (Commission Number) (IRS Employer I.D. Number)
3333 Hillview Avenue, Palo Alto, California 94304-1223
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (650) 493-4141
NOT APPLICABLE
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(Former name or former address, if changed since last report)
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Watkins-Johnson Company hereby amends Item 7 to read as follows, and
the items shown as (b)(1) through (3) are enclosed herewith:
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
(1) Unaudited Pro Forma Consolidated Condensed Statement
of Operations for the nine-month period ended September 26,
1997.
(2) Unaudited Pro Forma Consolidated Condensed Statement
of Operations for the year ended December 31, 1996.
(3) Unaudited Pro Forma Consolidated Condensed Balance
Sheet as of September 26, 1997.
(c) Exhibits.
Other than the unaudited pro forma financial information
listed as Item 7(b)(1) through (3), no exhibits are attached.
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
WATKINS-JOHNSON COMPANY
By /s/W. Keith Kennedy, Jr.
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W. Keith Kennedy, Jr.
President
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WATKINS-JOHNSON COMPANY
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
On October 31, 1997, Registrant sold all the outstanding shares of its
wholly-owned subsidiary, originally named W-J TSMD, Inc. and later renamed
Stellex Microwave Systems, Inc. ("SMS"), to TSMD Acquisition Corp., an affiliate
of Mentmore Holding Corporation. Registrant had previously contributed its
defense electronics, microwave components and subsystems business to SMS. The
transaction was completed under a previously-announced Stock Purchase Agreement
dated as of August 29, 1997.
The following unaudited pro forma condensed consolidated balance sheet as of
September 26, 1997 and the unaudited pro forma condensed consolidated statements
of operations for the year ended December 31, 1996 and nine months ended
September 26, 1997 give effect to the disposition of SMS. The pro forma
condensed consolidated financial statements should be read in conjunction with
the historical financial statements and the related notes thereto of registrant
contained in its 1996 Annual Report on Form 10-K and its Quarterly Report on
Form 10-Q for the quarter ended September 26, 1997.
The pro forma information is presented for information purposes only and is not
necessarily indicative of the results that would have been obtained had the
disposition actually occurred on the dates assumed, nor is it necessarily
indicative of the future results of operations.
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<TABLE>
WATKINS-JOHNSON COMPANY AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED STATEMENT OF OPERATIONS
For the nine month period ended September 26, 1997
<CAPTION>
---Pro Forma Adjustments---
(Dollars in thousands, except per share Company Less Other Company
amounts) Historical SMS(a) Adjustments Pro Forma
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<S> <C> <C> <C> <C>
Sales $ 286,971 $ (67,900) $ $ 219,071
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Costs and expenses:
Cost of goods sold 187,563 (47,900) 139,663
Selling and administrative 52,144 (7,500) (800)(b) 43,844
Research and development 34,022 (1,600) 32,422
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273,729 (57,000) (800) 215,929
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Income from operations 13,242 (10,900) 800 3,142
Interest and other income (expense)--net 1,067 1,067
Interest expense (1,048) (1,048)
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Income from operations before Federal
and foreign income taxes 13,261 (10,900) 800 3,161
Federal and foreign income taxes (4,111) 4,200 (800)(b) (885)
(174)(c)
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Net income $ 9,150 $ (6,700) $ (174) $ 2,276
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Fully diluted net income per share $ 1.07 $ (0.78) $ (0.02) $ 0.27
Average common and equivalent shares
outstanding 8,572,000 8,572,000 8,572,000 8,572,000
<FN>
Notes to Unaudited Pro Forma Consolidated Condensed Statement of Operations
(a) To remove revenues and expenses of SMS operations.
(b) To remove SMS's state tax expense included in the Company's general and
administrative expenses consistent with the Company's current reporting
practice.
(c) The SMS operating results reflect a provision for income taxes as if SMS
was a separate taxpayer utilizing federal and state statutory tax rates.
For pro forma purposes, tax expense was recalculated on a pro forma basis
for the Company without SMS. This adjustment represents the tax difference
arising from this with and without calculation.
</FN>
</TABLE>
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<TABLE>
WATKINS-JOHNSON COMPANY AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<CAPTION>
---Pro Forma Adjustments---
(Dollars in thousands, except per share Company Less Other Company
amounts) Historical SMS(a) Adjustments Pro Forma
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<S> <C> <C> <C> <C>
Sales $ 438,319 $ (89,200) $ $ 349,119
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Costs and expenses:
Cost of goods sold 298,656 (68,100) 230,556
Selling and administrative 78,075 (11,100) (400)(b) 66,575
Research and development 56,675 (3,500) 53,175
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433,406 (82,700) (400) 350,306
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Income from operations 4,913 (6,500) 400 (1,187)
Interest and other income (expense)--net 980 980
Interest expense (1,574) (1,574)
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Income from operations before Federal
and foreign income taxes 4,319 (6,500) 400 (1,781)
Federal and foreign income taxes (1,285) 2,500 (400)(b) 570
(245)(c)
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Net income $ 3,034 $ (4,000) $ (245) $ (1,211)
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Fully diluted net income per share $ 0.36 $ (0.47) $ (0.03) $ (0.14)
Average common and equivalent shares
outstanding 8,541,000 8,541,000 8,541,000 8,541,000
<FN>
Notes to Unaudited Pro Forma Consolidated Condensed Statement of Operations
(a) To remove revenues and expenses of SMS operations.
(b) To remove SMS's state tax expense included in the Company's general and
administrative expenses consistent with the Company's current reporting
practice.
(c) The SMS operating results reflect a provision for income taxes as if SMS
was a separate taxpayer utilizing federal and state statutory tax rates.
For pro forma purposes, tax expense was recalculated on a pro forma basis
for the Company without SMS. This adjustment represents the tax difference
arising from this with and without calculation.
</FN>
</TABLE>
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<TABLE>
WATKINS-JOHNSON COMPANY AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED BALANCE SHEET
As of September 26, 1997
<CAPTION>
---Pro Forma Adjustments---
(Dollars in thousands, except per share Company Less Other Company
amounts) Historical SMS(a) Adjustments Pro forma
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<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 43,418 $ $ 82,185(b) $ 125,603
Receivables 71,695 (15,500) 56,195
Inventories 68,467 (15,100) 53,367
Deferred income taxes 18,440 (3,000) 15,440
Other 4,417 (300) 8,715(c) 12,832
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Total current assets 206,437 (33,900) 90,900 263,437
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Property, plant, and equipment 228,538 (45,100) 183,438
Accumulated depreciation and
amortization (125,587) 40,800 (84,787)
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Property, plant, and equipment--net 102,951 (4,300) 98,651
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Other assets 3,465 3,465
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Net assets of SMS operations 22,500 (22,500)(c)
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$ 312,853 $ (15,700) $ 68,400 $ 365,553
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LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities:
Payables $ 18,449 (2,400) $ 16,049
Accrued liabilities 60,160 (12,300) 14,550(d) 83,910
21,500(e)
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Total current liabilities 78,609 (14,700) 36,050 99,959
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Long-term obligations 36,858 (1,000) 35,858
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Shareowners' equity:
Common stock 40,191 40,191
Retained earnings 157,195 32,350(f) 189,545
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Total shareowners' equity 197,386 32,350 229,736
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$ 312,853 $ (15,700) $ 68,400 $ 365,553
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<FN>
Notes to Unaudited Pro Forma Consolidated Condensed Balance Sheet
(a) To remove assets and liabilities of the SMS operations and reflect the net
assets on the balance sheet as net assets of SMS operations.
(b) To reflect cash proceeds from the sale of SMS.
(c) To reflect net assets of SMS sold and record the net current assets
retained as part of the purchase price consideration.
(d) To accrue anticipated costs in connection with the sale of SMS.
(e) To accrue anticipated income taxes due in connection with the sale of SMS.
(f) To adjust retained earnings to reflect the net gain on the sale of SMS.
</FN>
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