SECURITIES AND EXCHANGE COMMISSIOON
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly Report Pusuant to Section 13 or 15(d) of the Securities
- ----- Exchange Act of 1934
For the quarterly period ended March 31, 1995 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 1-6435
---------------------------------
Bolt Beranek and Newman Inc.
- --------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-2164398
- ------------------------------------ ---------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 CambridgePark Drive, Cambridge, Massachusetts 02140
- --------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 873-2000
---------------------
__________________________________________________________________________
(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.
Number of shares of common stock, $1.00 par value, outstanding as of
April 30, 1995: 17,283,345
Exhibit index appears on page 17 <PAGE>
<PAGE>
BOLT BERANEK AND NEWMAN INC.
INDEX
Page No.
--------
Part I. Financial Information
Consolidated Statements of Operations -
Three Months Ended March 31, 1995 and 1994 ......3
Consolidated Statements of Operations -
Nine Months Ended March 31, 1995 and 1994 .......4
Consolidated Balance Sheets -
as of March 31, 1995 and June 30, 1994 ..........5
Consolidated Statements of Cash Flows -
Nine Months Ended March 31, 1995 and 1994 .......6
Notes to Consolidated Financial Statements ..........7
Management's Discussion and Analysis of Financial
Condition and Results of Operations ............10
Part II.Other Information
Item 6. Exhibits and Reports on Form 8-K ..........16
Signatures .........................................16<PAGE>
<PAGE>
PART I. FINANCIAL INFORMATION
BOLT BERANEK AND NEWMAN INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Dollars in thousands, except per-share data
Three Months Ended
--------------------------
March 31 March 31
1995 1994
----------- -----------
Revenue:
Services $ 42,996 $ 40,847
Products 8,961 7,678
----------- -----------
51,957 48,525
----------- -----------
Costs and expenses:
Cost of services 31,398 29,314
Cost of products 2,117 2,937
Research and development expenses 6,662 5,954
Selling, general and administrative expenses 17,377 12,676
----------- -----------
57,554 50,881
----------- -----------
Loss from operations (5,597) (2,356)
Interest income 1,724 494
Interest expense (1,103) (1,142)
Minority interests (11,826) 743
Other income (expense), net 105,096 2
----------- -----------
Income (loss) before income taxes 88,294 (2,259)
Provision for income taxes 13,827
----------- -----------
Net income (loss) $ 74,467 $ (2,259)
=========== ===========
Net income (loss) per share $ 4.11 $ (.14)
=========== ===========
Shares used in per-share calculations 18,118,000 16,295,000
The accompanying notes are an integral
part of the consolidated financial statements <PAGE>
<PAGE>
BOLT BERANEK AND NEWMAN INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Dollars in thousands, except per-share data
Nine Months Ended
--------------------------
March 31 March 31
1995 1994
----------- -----------
Revenue:
Services $ 128,366 $ 124,090
Products 26,506 22,772
----------- -----------
154,872 146,862
----------- -----------
Costs and expenses:
Cost of services 87,493 86,815
Cost of products 9,096 9,031
Research and development expenses 18,980 17,179
Selling, general and administrative expenses 51,498 40,245
----------- -----------
167,067 153,270
----------- -----------
Loss from operations (12,195) (6,408)
Interest income 2,933 1,718
Interest expense (3,323) (3,478)
Minority interests (11,085) 1,328
Other income (expense), net 108,631 968
----------- -----------
Income (loss) before income taxes 84,961 (5,872)
Provision for income taxes 14,227
----------- -----------
Net income (loss) $ 70,734 $ (5,872)
=========== ===========
Net income (loss) per share $ 3.96 $ (.36)
=========== ===========
Shares used in per-share calculations 17,864,000 16,116,000
The accompanying notes are an integral
part of the consolidated financial statements <PAGE>
<PAGE>
BOLT BERANEK AND NEWMAN INC.
CONSOLIDATED BALANCE SHEETS
Dollars in thousands March 31 June 30
1995 1994
----------- -----------
(Unaudited) (Audited)
ASSETS
- ------
Current assets:
Cash and temporary investments $ 118,576 $ 67,115
Restricted cash 12,069
Accounts receivable, net 47,160 41,503
Inventories, net 1,416 1,114
Other current assets 3,739 3,592
----------- -----------
Total current assets 182,960 113,324
Property, plant and equipment, net 25,841 19,658
Goodwill, net 18,357
Other assets 3,202 2,958
----------- -----------
$ 230,360 $ 135,940
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accounts payable $ 6,147 $ 4,279
Accrued compensation and retirement plan 5,695 5,198
Accrued restructuring charges 9,598 12,566
Income taxes payable 12,594
Other accrued costs 19,192 19,832
Deferred revenue 15,809 11,112
----------- -----------
Total current liabilities 69,035 52,987
6% convertible subordinated debentures due 2012 73,510 73,510
Commitments and contingencies
Minority interests 3,362 2,172
Shareholders' equity:
Common stock, $1 par value, authorized:
100,000,000 shares; issued: 21,802,090
shares at March 31, 1995 and 21,253,890
shares at June 30, 1994 21,802 21,254
Additional paid-in capital 59,083 55,916
Foreign currency translation adjustment 1,148 337
Retained earnings (deficit) 34,607 (36,127)
----------- -----------
116,640 41,380
Less shares in treasury, at cost: 4,527,464
shares at March 31, 1995 and 4,797,734
shares at June 30, 1994 32,187 34,109
----------- -----------
Total shareholders' equity 84,453 7,271
----------- -----------
$ 230,360 $ 135,940
=========== ===========
The accompanying notes are an integral
part of the consolidated financial statements <PAGE>
<PAGE>
BOLT BERANEK AND NEWMAN INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Dollars in thousands Nine Months Ended
---------------------------
March 31 March 31
1995 1994
Cash flows from operating activities: ------------ ------------
Net income (loss) $ 70,734 $ (5,872)
Adjustments to reconcile net income (loss) to net cash
provided (used) by operating activities:
Depreciation and amortization 6,919 6,659
Amortization of goodwill and capitalized software 465 1,120
Contract adjustments (3,546)
Gain from LightStream sale (105,096)
Minority interest 11,826 743
Change in assets and liabilities:
Accounts receivable (6,163) 558
Inventories (516) 662
Other assets (100) 3,635
Accounts payable and other liabilities 2,169 3,535
Accrued restructuring charges (2,968) (4,319)
Income taxes payable 12,594
Deferred revenue 3,061 (70)
Other (639) (2,707)
------------ ------------
Total adjustments (81,994) 9,816
------------ ------------
Net cash provided (used) by operating
activities (11,260) 3,944
Cash provided (used) by investing activities:
Proceeds from LightStream sale 98,200
Restricted cash (12,069)
Additions to property, plant and equipment (11,313) (4,479)
Acquisition of SURAnet (12,960)
Acquisition of BARRnet (2,000)
------------ ------------
Net cash provided (used) by investing
activities 59,858 (4,479)
------------ ------------
Cash provided by financing activities:
Proceeds from employee stock purchase and
option plans 2,863 2,197
Proceeds from sale of LightStream stock to
minority shareholder 5,000
Sale of treasury shares 213
------------ ------------
Cash provided by financing activities 2,863 7,410
------------ ------------
Net increase in cash and temporary investments 51,461 6,875
Cash and temporary investments-beginning of period 67,115 56,835
------------ ------------
Cash and temporary investments-end of period $ 118,576 $ 63,710
============ ============
Supplemental cash flow information:
Interest paid $ 2,205 $ 2,225
============ ============
The accompanying notes are an integral
part of the consolidated financial statements <PAGE>
<PAGE>
BOLT BERANEK AND NEWMAN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A.Basis of Presentation
The financial information included herein, with the exception of the
consolidated balance sheet at June 30, 1994, has not been audited.
However, in the opinion of management, all material adjustments,
consisting only of normal recurring accruals necessary for a fair
presentation of the results for these periods, have been reflected. The
results for these periods are not necessarily indicative of the results
for the full fiscal year.
Certain amounts reported for the prior periods presented have been
reclassified to be consistent with the current year's presentation.
These reclassifications primarily relate to the formation in FY1995 of
distinct commercial business units.
B.SURAnet Acquisition
On March 31, 1995, BBN Planet Corporation acquired, from the
Southeastern Universities Research Association, the SURAnet
Internet service organization, a provider of Internet services
in the Southeast. Substantially all of the SURAnet net assets were
acquired for approximately $12,960,000 in cash and the assumption of
certain operating liabilities of approximately $5,100,000. The
transaction was accounted for using the purchase method of accounting.
Accordingly, the acquired assets and liabilities were recorded at their
estimated fair values on the date of the acquisition. The aggregate
cost in excess of net assets acquired of approximately $14,000,000 is
being amortized over ten years.
C.Sale of LightStream Corporation
The sale of the assets of the company's majority-owned subsidiary
LightStream Corporation to Cisco Systems, Inc. ("Cisco") for a cash
consideration of $120,000,000, which was completed on January 11, 1995, is
reflected in the company's third quarter results. The company will receive
83% of the net proceeds and Ungermann-Bass Networks, Inc., which owns the
minority interest in LightStream, will receive the remainder. Of the cash
consideration paid to LightStream, $12,000,000 was placed in a restricted
escrow fund, and periodically declining portions of such amount together with
interest are to be maintained for up to two years following the closing of
the transaction, subject to any claims under the Asset Purchase Agreement by
Cisco. As part of the sale, Cisco hired substantially all of the employees
of LightStream, and is operating from the company's former facility in
Billerica, Massachusetts. The company recorded a pre-tax gain from the
sale of approximately $105,000,000 before minority interest of
$11,800,000 and income taxes of $13,800,000. LightStream's FY1995
results through the date of the sale include revenue of approximately
$8,400,000 and an operating loss of approximately $3,700,000. For the
comparable nine-month period of FY1994, the company's ATM activities
resulted in aggregated revenue of approximately $1,100,000 and an
operating loss of approximately $11,000,000. In FY1994, prior to the
formation of LightStream, the company's ATM activities were conducted by
its then Communications Division. <PAGE>
<PAGE>
BOLT BERANEK AND NEWMAN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
D.Other Income
In December 1994, the company settled a claim with the U.S. government
for approximately $700,000. This settlement resulted in an
approximately $2,550,000 reduction in liabilities and is included in
other income for the nine months ended March 31, 1995.
Other income for the nine months ended March 31, 1995 and 1994 also
includes approximately $900,000 resulting from lower than expected costs
associated with a previously divested contract.
E.Commitments and Contingencies
The company, like other companies doing business with the U.S.
government, is subject to routine audit, and in certain circumstances to
inquiry, review, or investigation, by U.S. government agencies, of its
compliance with government procurement policies and practices. In April
1991, the company was informed that it was the subject of an
investigation by U.S. government agencies of its compliance with certain
government procurement policies and practices. No allegations have been
made by the government agencies. Based upon government procurement
regulations, under certain circumstances a contractor violating or not
complying with procurement regulations can be subject to legal or
administrative proceedings, including fines and penalties, as well as be
suspended or debarred from contracting with the government. The
company's policy has been and continues to be to conduct its activities
in compliance with all applicable rules and regulations.
The company is subject to other legal proceedings and claims which arise
in the ordinary course of its business. In the opinion of management,
the results of these other legal proceedings and claims will not have a
material effect on the company's consolidated financial position and
results of operations.<PAGE>
<PAGE>
BOLT BERANEK AND NEWMAN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
F.Segment Information
The company conducts its business in three business segments:
"Internetworking" which consists of its BBN Planet subsidiary; the
networking activities of its Systems and Technologies Division,
including network services, defense communications, X.25 network systems
and the T/10 Integrated Access Device business activities; and the
former activities of its LightStream subsidiary; "Data analysis
software" which consists primarily of its BBN Software Products
subsidiary; and "Collaborative systems and acoustic technologies" which
includes the Systems and Technologies Division's services in distributed
computing, education technology, speech processing and sensor systems
and acoustic engineering; and the activities of its BBN HARK Systems
subsidiary. The following is a summary of business segments information
for the three and nine months ended March 31, 1995 and 1994,
respectively. All data is shown net of intersegment transactions.
Three Months Ended Nine Months Ended
March 31 March 31
____________________ ____________________
Dollars in Thousands 1995 1994 1995 1994
_________ _________ _________ _________
Revenue:
Internetworking $ 19,326 $ 18,616 $ 65,612 $ 57,264
Data analysis software 10,609 8,774 27,000 26,383
Collaborative systems and
acoustic technologies 22,022 21,135 62,260 63,215
_________ _________ _________ _________
$ 51,957 $ 48,525 $ 154,872 $ 146,862
========= ========= ========= =========
Income (loss) from operations:
Internetworking $ (1,847) $ (2,912) $ (4,806) $ (7,647)
Data analysis software (1,322) 223 (3,602) 633
Collaborative systems and
acoustic technologies (1,363) 424 (1,315) 1,694
Unallocated corporate expenses (1,065) (91) (2,472) (1,088)
_________ _________ _________ _________
$ (5,597) $ (2,356) $ (12,195) $ (6,408)
========= ========= ========= =========
Certain amounts reported for the prior periods presented have been
reclassified to be consistent with the current year's presentation. <PAGE>
<PAGE>
BOLT BERANEK AND NEWMAN INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Summary
- -------
For the three months ended March 31, 1995, the company reported net
income of $74.5 million, or $4.11 per share, on revenue of $52.0 million.
These results include a pre-tax gain of approximately $105.0 million from
the previously announced sale of substantially all of the assets of
LightStream Corporation to Cisco Systems, Inc. For the same period a year
ago, the company reported a net loss of $2.3 million, or $.14 per share, on
revenue of $48.5 million. The company's loss from operations in the third
quarter of FY1995 was $5.6 million compared to $2.4 million in the
comparable prior year period.
For the nine months ended March 31, 1995, the company reported a loss
from operations of $12.2 million, compared to a $6.4 million loss from
operations for the same period a year earlier. Including the $105.0
million pre-tax gain from the LightStream sale, the company reported net
income of $70.7 million, or $3.96 per share, on revenue of $154.9 million,
compared with a net loss of $5.9 million, or $.36 per share, on revenue of
$146.9 million for the same period a year earlier.
Primarily as a result of the LightStream sale, the company's cash
position as of March 31, 1995 improved to $130.6 million and the company's
equity position improved to $84.5 million.
The company's loss from operations for both the third quarter and the
nine months of FY1995 reflects increased spending on sales, marketing and
new product development, particularly at BBN Planet Corporation and BBN
Software Products Corporation. The loss also includes a $0.7 million
charge related to the purchase by BBN Software Products of IBM's Process
Analysis Navigation System software which will be used in the development
of a new manufacturing methodology software system.
The company's increased spending represents an accelerated investment in
building the infrastructure necessary to capitalize on opportunities in the
commercial marketplace. The company's FY1995 third quarter revenue
increase results primarily from higher sales at BBN Planet Corporation and
BBN Software Products Corporation. For the nine months ended March 31,
1995, the revenue increase reflects higher sales primarily at LightStream
Corporation and at BBN Planet Corporation, partially offset by declines in
the company's acoustic and defense communications businesses. The
company's Systems and Technologies Division, which is primarily focused on
contract research and development for the U.S. government, continued to be
profitable in the third quarter of FY1995.
Over the next several quarters, the company anticipates continued increased
spending related primarily to its commercial activities and its return to
profitability is highly dependent upon revenue growth principally at BBN
Planet Corporation and BBN Software Products Corporation. <PAGE>
<PAGE>
BOLT BERANEK AND NEWMAN INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
Revenue
- -------
Revenue for the three and nine months ended March 31, 1995 increased
$3.4 million and $8.0 million, respectively, from the prior year periods.
The increase for the three-month period reflects higher revenue at BBN
Planet Corporation and BBN Software Products Corporation. The nine-month
increase reflects higher revenue at LightStream Corporation and at BBN
Planet Corporation, partially offset by continued declines in the company's
acoustic and defense communications activities. Services revenue from
LightStream Corporation for the nine months ended March 31, 1995 of $3.6
million included up-front technology license and initial development fees
from previously announced strategic partnering agreements with Tellabs
Operations, Inc. and NEC Corporation.
The company, like other companies doing business with the Department of
Defense, has been adversely affected by reduced defense spending and
expects this general decline and attendant increased competition within the
defense industry to continue over the next several years. Uncertainty
continues to exist on the size and scope of reductions in future defense
budgets and their impact on the company's defense-related business.
Further, there is the possibility that funding limitations could result in
a reduction, delay, or cancellation of existing or emerging programs.
These factors have reduced the company's U.S. government revenue and
operating margins in recent fiscal years, and this trend is continuing in
FY1995, particularly in the acoustic and defense communications systems
areas.
The Department of Defense's stated intention is to reduce its
procurements but to maintain a strong defense technology base and to fund
research and development in key areas of science and technology at near
current levels. The company has strong capabilities in certain of these
areas but anticipates that competition in all defense-related areas will
continue to be intense. Accordingly, the company is experiencing
competitive pressure which is reducing profitability and decreasing
government revenue particularly in the acoustic area. In addition, the
company expects that the consolidation of large defense contractors into a
smaller number of very large, diverse organizations will continue, and that
this will place additional downward pressure on prices.
In FY1991, the Defense Information Systems Agency awarded the company a
one-year contract in support of the Defense Data Network, with up to four
one-year optional extensions. In September 1994, the company completed the
third option year of the contract, valued at approximately $20 million. In
October 1994, the company was awarded the fourth and last option year of
the contract, valued at approximately $15 million, which will continue
these activities through October 1995. There can be no assurance that this
activity will continue beyond October 1995, and if there is additional
activity related to this contract, the value of any such award, even if
received by the company, would be expected to be lower than the value of
the current year's option award. The company is not aware of any other
defense communications procurements or requests for proposals for which the
company could compete to replace the company's activities under this
contract. Approximately $13.9 million and $15.0 million of revenue has
been recorded under the contract in the nine months ended March 31, 1995
and 1994, respectively. <PAGE>
<PAGE>
BOLT BERANEK AND NEWMAN INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
The company conducts its commercial businesses in environments
characterized by intense competition, shortened product cycles and rapid
technological change, which require significant research and development
expenditures to develop new products and services which address emerging market
requirements and to improve existing products. In recent years, the
company's traditional commercial businesses, consisting principally of
RS/Series(TM) data analysis and visualization software products and X.25
network systems, has been experiencing substantially lower revenue.
During that period, the company invested heavily in the development of
commercial products, primarily the LightStream(TM) Asynchronous Transfer
Mode ("ATM") switch, BBN/Cornerstone(TM) data analysis and visualization
software and the T/10(TM) Integrated Access Device and recently in Internet
services.
The sale, which took place on January 11, 1995, of substantially all of the
assets of LightStream Corporation to Cisco Systems, Inc., is reflected in the
company's third quarter results. Reference is made to footnote C to the
consolidated financial statements for further discussion of this transaction.
The company's T/10 activities are now being primarily focused on a limited
number of reseller and strategic opportunities, and the future success of
the T/10 is highly dependent on these opportunities. To date revenue from
the T/10 has not been financially significant.
The company's data analysis software products business has been affected
by the growth of distributed processing and the associated use of personal
computers, workstations, and other desktop computers. The company's mature
data analysis software products, primarily the RS/Series software,
currently operate primarily on minicomputer systems. As demand for
minicomputer-based software continues to decline, the company is
experiencing substantially lower RS/Series software revenue and downward
pressure on prices. During the fourth quarter of FY1993, BBN Software
Products Corporation introduced its BBN/Cornerstone data analysis and
visualization software specifically designed for use on desktop computers
in a client/server environment. The initial release of BBN/Cornerstone
software operates on Unix-based workstations, utilizing a number of
established graphical user interfaces. Sales of BBN/Cornerstone to date in
FY1995 have not been financially significant. The company is more tightly
integrating its BBN/Cornerstone software with its RS/Series products to
provide platform migration and ease of use for its existing RS/Series
customer base, and to provide greater capabilities and flexibility in
client/server computing environments. During the third quarter of FY1995,
BBN Software Products began shipment of BBN/Cornerstone for Windows. In
March 1995, for $0.7 million BBN Software Products Corporation acquired the
exclusive rights to IBM's Process Analysis Navigation System ("PANS"), a
manufacturing methodology and software system developed by IBM's
Manufacturing Technology Center. BBN Software Products Corporation will
integrate and significantly enhance PANS methodology and technology with
its data analysis software. As part of these efforts, the company is
increasing its research and development expenditures in its software business
and is investing in additional sales and marketing personnel. The company is
focusing its software application solutions primarily on the manufacturing and<PAGE>
<PAGE>
BOLT BERANEK AND NEWMAN INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
health industries. BBN Software Products Corporation health industry offerings
include applications for clinical data management (BBN/Clintrial(TM)) and
adverse events tracking (BBN/ClinTRACE(TM)). The company believes that the
future success of its data analysis and visualization software will depend
primarily upon the development and marketing of software applications that
permit operation on personal computers, continued market acceptance of health
industry software products, and development and timely integration of its
BBN/Cornerstone and RS/Series software.
The company is significantly increasing its investment in the emerging
market for Internet services. Such investment includes a substantial
increase in engineering and sales personnel to support expansion of its
Internet services for business and organizations, including managed access,
security, training and consulting. These investments are expected to
adversely affect the company's financial results for FY1995 and FY1996.
The company's strategy is to provide managed connectivity services and
value-added services to businesses and other organizations. The market for
Internet services is rapidly expanding, and there are considerable
uncertainties as to how the market will develop. Further, the Internet
services business is intensely competitive, and competition is expected to
increase. Competitors and companies announcing plans to enter the market
currently include, in addition to regional and national Internet access
providers and on-line service providers, large communications and software
companies, such as MCI, AT&T, IBM and Microsoft, and there are no substantial
barriers to entry. In March 1995, BBN Planet Corporation expanded its service
offerings from regional to nationwide availability. The company's success in
the Internet services market will depend heavily upon its ability to capitalize
on this recently expanded geographic coverage and related support capabilities
and to provide high quality managed Internet connectivity and functional,
unique, value-added services for organizational users of the Internet at a
competitive cost. The company needs to continue to rapidly attract
additional experienced personnel in order to continue to expand the
existing customer base and grow the business.
In March 1995, BBN Planet Corporation acquired substantially all of the
assets of the Southeastern Universities Research Association Internet
service ("SURAnet"), a leading provider of Internet services in the
Southeast, for approximately $13.0 million in cash and the assumption of
certain operating liabilities of approximately $5.1 million.
In March 1995, the company announced an agreement under which it will
build, maintain and operate a limited portion of the America Online ("AOL")
nationwide, high-speed, dial-in network. The five-year contract for
building and operating the network is expected to be valued at
approximately $11.0 million a year which includes substantial pass-through
costs to the company for telecommunications and other services. As part of
the agreement, the company will have limited access to business use of the
network's excess dial-in capacity, which the company plans to resell.
In support of its Internet business strategy, the company may make additional
acquisitions or enter into strategic alliances.<PAGE>
<PAGE>
BOLT BERANEK AND NEWMAN INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
Cost of Sales
- -------------
Cost of services and products as a percentage of revenue for the three
and nine months ended March 31, 1995 was 65% and 62%, respectively,
compared to 66% and 65%, respectively, for the corresponding prior year
periods. The decrease in the cost of sales percentages is principally due
to a mix of higher margin software product sales in the third quarter and,
for the nine-month period, both the higher margin software product sales and
technology license and initial development fees from strategic partnering
agreements at LightStream Corporation concentrated in the earlier periods
of FY1995.
Research and Development Expenses
- ---------------------------------
Research and development expenses for the three and nine months ended
March 31, 1995 were $6.7 million and $19.0 million, respectively, compared
to $6.0 million and $17.2 million, respectively, for the comparable prior
year periods. The majority of the company's internally funded research and
development spending is currently directed principally toward data analysis
and visualization software products. The increases in the FY1995 periods
relate primarily to such software products, including the $0.7 million
charge for the purchase by BBN Software Products Corporation of the PANS
technology, partially offset by decreased spending on the ATM switch and the
T/10 Integrated Access Device. Research and development expenses for the
ATM switch for the nine months ended March 31, 1995 were $3.9 million compared
to $6.5 million for the comparable prior year period; such expenses were $2.2
million for the three months ended March 31, 1994.
Selling, General and Administrative Expenses
- --------------------------------------------
Selling, general and administrative expenses for the three and nine
months ended March 31, 1995 increased $4.7 million and $11.3 million,
respectively, from the prior year periods reflecting the investment the
company is making primarily in the sales and marketing of its new services
and products at BBN Planet Corporation, BBN Software Products Corporation
and BBN Hark Systems Corporation. The company anticipates continued increased
spending related to its commercial activities for the next several quarters.
Liquidity and Capital Resources
- -------------------------------
As of March 31, 1995, the company's cash and temporary investments,
which consisted primarily of money market funds and short term U.S.
government securities, were $118.6 million, an increase of $51.5 million
from June 30, 1994. The third quarter increase is primarily attributable to
the LightStream sale which, as of March 31, 1995, has provided $98.2 million
of cash proceeds to the company after payment of certain expenses associated
with the sale and initial amounts due to the minority shareholder. Additional
cash payments, currently estimated to be $18.3 million, remain to be paid by
the company for income taxes, amounts due the minority shareholder, and final
expenses of sale.<PAGE>
<PAGE>
BOLT BERANEK AND NEWMAN INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
On a year-to-date basis, the $98.2 million of cash proceeds from the
LightStream sale and $2.9 million of cash generated from employee stock
purchase and option plans have been offset by $15.0 million expended for the
SURAnet and BARRnet acquisitions, $12.1 million in restricted cash, $11.3
million for capital expenditures, and $11.2 million of cash used by
operations. The restricted cash of $12.1 million will become available to the
company in varying amounts, net of any claims, within two years of the closing
of the LightStream sale.
The increase in the company's accounts receivable balance is primarily due to
the increase in revenue.
The company's accrued restructuring balance relates to excess facilities
costs, under long-term leases, which were associated with the company's
FY1993 downsizing. The company has sublet or assigned the majority of its
excess facilities under agreements with terms expiring between 1998 and 2001.
The company anticipates a continued high level of capital expenditures for
the near-term in support of the accelerated investment in commercial
activities. In addition, the company may use a portion of its cash resources
for acquisitions of or investments in businesses, products or technologies or
through the formation of strategic partnerships with other companies.
The company believes that its liquidity in the form of existing cash
resources is adequate to meet its operating requirements through FY1996.
At present, the company does not have any formal bank lines of credit. <PAGE>
<PAGE>
PART II. OTHER INFORMATION
BOLT BERANEK AND NEWMAN INC.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
10.1 Deferred Compensation Plan
11.1 Computation of Net Income (Loss) Per Share
27.1 Financial Data Schedule
(b) The company filed a Current Report on Form 8-K dated January 11,
1995 with the Commission on January 26, 1995, reporting on the
sale of the assets of LightStream Corporation to Cisco Systems,
Inc. and filing pro forma financial information consisting of a
pro forma balance sheet as of December 31, 1994, and pro forma
statements of operations for the year ended June 30, 1994 and
for the six months ended December 31, 1994.
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.
BOLT BERANEK AND NEWMAN INC.
By Ralph A. Goldwasser
----------------------------------
Ralph A. Goldwasser
Senior Vice President and Chief Financial Officer
Date: May 15, 1995 <PAGE>
BOLT BERANEK AND NEWMAN INC.
LIST OF EXHIBITS
10.1 Deferred Compensation Plan
11.1 Computation of Net Income (Loss) Per Share
27.1 Financial Data Schedule<PAGE>
<PAGE>
BOLT BERANEK AND NEWMAN INC.
EXHIBIT 10.1
DEFERRED COMPENSATION PLAN
1. IN GENERAL. Bolt Beranek and Newman Inc. (the "Company") has
established this Deferred Compensation Plan (the "Plan") to further its
business interests by providing eligible employees an opportunity to defer
a portion of their compensation of an unfunded, nonqualified basis as
hereinafter provided. The Plan shall be effective April 1, 1995.
2. DEFINED TERMS. As used in the Plan, the following terms have the
meanings associated with them below:
"Account": A memorandum account maintained by the Administrator to
reflect the Employer's unfunded deferred compensation obligation to a
participant hereunder, including where the context requires any sub-
account. The fact that the Company may cause a portion of its general
assets, including assets held in any so-called "rabbi trust" or similar
account, to be invested so as to yield results intended to approximate
notional returns under the Plan shall not affect the unfunded nature of
the Plan nor the rights of Participants hereunder.
"Administrator": The Deferred Compensation Committee, whose members
are appointed by the Board and serve at the Board's pleasure, or such
other committee, person or persons as the Board may designate. The
term "Administrator" shall also include delegates of any of the
foregoing.
"Board": The Board of Directors of the Company.
"Code": The federal Internal Revenue Code, as amended.
"Earnings Measure": An interest rate, stock index, bond index, mutual
fund or other objective external measure of investment performance
specified by the Administrator for purposes of measuring and crediting
notional earnings under Section 4 (b) below.
"Eligible Employee": An individual employed by an Employer who is
(i) determined by the Administrator to qualify as a "highly
compensated or management" employee for purposes of Sections 201 (a)
(2), 301 (a) (3) and 401 (a) (1) OF ERISA, and (ii) designated by
the Administrator as eligible to participate in the Plan, provided
that such delegation has not been revoked by the Administrator.
"Eligible Pay": Except as otherwise determined by the Administrator,
Eligible Pay shall include base salary plus incentive bonuses. The
Administrator in its discretion may include other remuneration in, or
exclude categories of remuneration from, the definition of "Eligible
Pay," either in general or in particular cases.
"Employer": The Company and its Subsidiaries, or any of them.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Fiscal Year": The Company's fiscal year, which ends June 30.
"Participant": An Eligible Employee who participates in the Plan. <PAGE>
<PAGE>
"Subsidiary": A corporation in which the Company holds, directly or
indirectly, stock possessing 50% or more of the total voting power,
and any other corporation or unincorporated trade or business that the
Board designates as a Subsidiary for purposes of the Plan.
3. DEFERRAL ELECTION.
(a) IN GENERAL. Each Eligible Employee may elect to defer
hereunder a specified portion or percentage of his or her base salary
and other Eligible Pay for any Fiscal Year. Each such deferral shall
be made by the Participant's delivery to the Administrator of a
deferral election on or before the date specified by the
Administrator, but in any case (except as provided in (b) below) prior
to the first day of the Fiscal Year to which the deferral election
relates.
(b) FIRST YEAR OF PARTICIPATION. Notwithstanding (a) above, an
individual who first becomes eligible to participate in the Plan
during the course of a Fiscal Year (including any individual who
becomes eligible to participate upon initial establishment of the
Plan) may elect to defer a specified portion or percentage of his or
her Eligible Pay for the remainder of the year by delivering to the
Administrator a deferral election within 30 days of being notified of
eligibility, such election to take effect as of the first day of the
month next following receipt by the Administrator of such form or
forms (the "initial effective date"). An election under this
paragraph shall be effective as to base salary for the period
commencing on the initial effective date and ending on the last day of
the year, plus any incentive bonuses for the year.
(c) LIMITS. Except as otherwise determined by the
Administrator, an Eligible Employee may elect to defer (i) only that
portion of his or her base salary for any Fiscal Year which exceeds
the then limitation under Section 401 (a) (17) of the Code (as
determined by the Administrator), plus (ii) all or any portion of his
or her other Eligible Pay, if any. In applying (i) above to an Eligible
Employee eligible to participate in the Plan for a full Fiscal Year,
the limitation amount under Section 401 (a) (17) of the Code shall be
treated as allocable on a prorated basis to each pay period within the
Fiscal Year, with the base salary (if any) in excess of such prorated
amount for each such pay period treated as eligible for deferral
hereunder. In the case of any Eligible Employee eligible to
participate for less than a full Fiscal Year, the Administrator shall
apply the limitation of (i) above in such reasonable manner as it
determines in its discretion (including any complete or partial waiver
of such limitation), with a view toward maximizing opportunities for
deferral without reducing a participant's compensation eligible to be
taken into account under the Bolt Beranek and Newman Inc. Retirement
Trust. The Administrator may impose a minimum deferral amount for
anyone electing to participate in the Plan.
(d) FORM OF ELECTION; IRREVOCABILITY. Each deferral election
shall be made in writing on a form prescribed by the Administrator.
The Administrator may condition the effectiveness of any election upon
the delivery by the Participant of such other form or forms as the
Administrator may prescribe. A deferral election applicable to
Eligible Pay to be earned in a particular Fiscal Year shall be
irrevocable once that year has begun (or, in the case of an initial
year of participation described in (b) above, once the 30-day election
period has expired). <PAGE>
<PAGE>
4. ACCOUNTS; CREDITS. For each Participant, the Administrator shall
maintain an Account reflecting deferrals and notional earnings as
hereinafter provided.
(a) DEFERRAL CREDITS. Each amount deferred by a Participant
under Section 3 above shall be credited to the Participant's Account
as of the date it would have been paid absent the deferral. In
addition, for each Fiscal Year during the continuation of this Plan
the Administrator shall credit such additional amounts, if any, to
Participant Accounts (including an Account maintained hereunder for
any Eligible Employee who is not otherwise participating in the Plan)
as the Board in its complete discretion may determine, each such
amount to be credited as of such date or dates as the Administrator
may determine. Amounts, if any, credited pursuant to the immediately
preceding sentence may differ among Participants or groups of
Participants (including Eligible Employees not otherwise participating
in the Plan), and nothing herein shall be construed as obligating the
Board to determine or provide for any such credits for any Fiscal
Year.
(b) NOTIONAL EARNINGS. Not less frequently than annually, the
Administrator shall adjust each Participant's Account to reflect
notional earnings. Notional earnings shall be based on such Earnings
Measure or Measures as the Administrator shall specify. The
Administrator may, but need not, permit Participants to (i) select the
Earnings Measures that will apply to their Accounts from among those
specified by the Administrator, and (ii) change such Measures
prospectively at any time. The Administrator shall have the absolute
discretion at any time to alter or amend the Earnings Measures used in
valuing and adjusting Accounts; provided, that the Administrator may
not, without the written consent of the affected Participant, alter
any Earnings Measure retroactively to the extent that the effect of
such alteration would be to reduce the balance of the Participant's
Account below what it was immediately prior to such alteration.
Nothing herein shall be construed as obligating the Administrator or
any Employer to set aside assets or establish a trust or other fund
for purposes of the Plan.
(c) FICA/MEDICARE TAXES, ETC.. To the extent any amount
deferred or credited hereunder to the Account of a Participant is
treated as "wages" for FICA/Medicare or FUTA tax purposes on a current
basis rather then when distributed, all as determined by the
Administrator, then the Administrator shall require that the
Participant either (i) timely pay such taxes in cash by separate check
to the Employer, or (ii) make other arrangements satisfactory to the
Employer (e.g., additional withholding from other wage payments) for
the payment of such taxes. To the extent a Participant fails to pay
or provide for such taxes as required, the Administrator may suspend
the Participant's participation in the Plan or reduce amounts credited
or to be credited hereunder.
5. PAYMENT OF DEFERRED AMOUNTS. The Participant's Employer shall
make distributions of Account balances as provided in this Section. All
distributions shall be in cash.
(a) TIME OF DISTRIBUTION. At the time of a Participant's
deferral election under Section 3 above, the Participant may elect to
receive all or any portion of the amount then being deferred, adjusted
for notional earnings as described at Section 4(b) above, in a single
lump sum at or as soon as practicable following a fixed date specified
in such election (not earlier than the third anniversary of the
effective date of the election) (a "fixed-term deferral"); provided,
that if the Participant's employment terminates prior to the date so <PAGE>
<PAGE>
specified, any amounts subject to the "fixed-term deferral" then
remaining to the Participant's Account shall be distributed (or
commence to be distributed) upon such termination of employment. Any
amounts deferred under the Plan that are not subject to a "fixed-term
deferral" shall be distributed upon termination of the Participant's
employment whenever occurring. The Administrator may impose
additional limitations on fixed-terms deferrals and shall establish
such sub-Accounts as are necessary to administer the provisions of
this Section.
Notwithstanding the foregoing, the Administrator may defer
payment of a fixed-term deferral beyond its scheduled payment date if
in the judgment of the Administrator such deferral is necessary to
avoid disallowance of a deduction under Section 162 (m) of the Code.
Amounts, if any, deferred pursuant to the preceding sentence shall be
paid or commence to be paid not later than the date Section 162 (m)
would no longer limit the deductibility of such payment, as reasonably
determined by the Administrator.
(b) FORM OF DISTRIBUTIONS. All fixed-term deferrals
distributed prior to termination of employment shall be distributed in
a single lump sum. The remainder of a Participant's Account shall be
distributed, as the Participant elects (a "form of payment election"),
either in a single lump sum following termination of employment or in
installments that commence following termination of employment and
continue over a period not to exceed ten years, subject to the
following:
(i) A Participant may at any time change his or her form of
payment election, but only one form of payment election shall be
in effect at any time and it shall control the manner in which the
entirety of the Participant's Account, other than portions thereof
subject to a fixed-term election, will be paid.
(ii) No change in a form of payment election shall be
effective unless made more than two years prior to termination of
employment.
(iii) If a Participant's employment terminates other than
by reason of (A) retirement at or after age 65, (B) retirement
with the consent of the Company at or after age 55 but before age
65, (C) disability (as determined by the Administrator), or (D)
death, then notwithstanding any form of payment election then in
effect, the entirety of the Participant's remaining Account shall
be distributed in three annual installments or on such
accelerated basis as the Administrator, in its sole discretion,
may direct if the Administrator determines that an accelerated
distribution would be in the best interests of the Company.
In the absence of any effective form of payment election, a
Participant's Account shall be distributed in a single lump sum.
(c) SMALL ACCOUNTS; DISTRIBUTIONS AT DEATH. If the
Participant's Account at termination of employment is $50,000 or less,
or if the Participant should die at any time prior to complete
distribution of his or her Account, then notwithstanding (a) and (b)
above the Account or remaining Account shall be distributed promptly
in a single lump sum payment.
(d) INSTALLMENT PAYMENTS. Except as hereinafter provided, the
amount of any installment payment under (b) above shall be determined
by dividing the Participant's Account or remaining Account by the
number of installments remaining to be paid. If a Participant so <PAGE>
<PAGE>
elects (subject to such limitations as the Administrator may
prescribe), however, the fractions applied in determining each
installment payment may be varied (for example, by providing that 50%
of an Account is distributed in the first installment year, with the
balance distributed over the remainder of the installment period).
Any such election shall be made at the time of deferral under
Section 3, with any changes subject to the rules of (b) above. The
declining balance of the Account shall continue to be credited with
notional earnings determined under Section 4(b) above until
distributed in full; provided, that if the Account becomes payable
otherwise than on account of (i) retirement at or after age 65, (ii)
retirement with the consent of the Company at or after age 55 but
before age 65, (iii) disability (as determined by the Administrator),
or (iv) death, the Administrator may determine notional earnings
during any installment payout period described in (b)(iii) above on
the basis of such interest-rate or other measure or measures as the
Administrator may determine (which measure or measures may, but need
not, be the same as the Earnings Measure or Measures previously
applicable to the Participant's Account).
(e) DESIGNATION OF BENEFICIARY(IES). Each Participant shall
designate in writing, on such form and subject to such conditions as
the Administrator shall prescribe (including, in the Administrator's
discretion, spousal consent in the case of married Participants), a
beneficiary or beneficiaries to receive any amounts remaining to be
paid hereunder at the Participant's death; but if no such beneficiary
designation is in effect at the time of the Participant's death, or if
the Participant's beneficiary(ies) do(es) not survive the Participant,
the Administrator shall cause any such remaining benefits to be paid
to the executor or administrator of the Participant's estate.
(f) HARDSHIP. If a Participant suffers an unforeseeable
financial emergency (caused by an event beyond the Participant's
control) prior to the payment in full of his or her Account, the
Participant may apply in writing for an extraordinary distribution
under this paragraph. If the Administrator in its discretion
determines that an unforeseeable financial emergency has occurred, the
Participant's Employer will pay the Participant an amount equal to the
least of the following amounts: (i) the then balance of the
Participant's Account; (ii) the amount determined by the Administrator
to be necessary to meet the emergency (including applicable taxes);
and (iii) the maximum amount which, in the Administrator's
determination, may be distributed without causing any remuneration
payable to the Participant to fail to be deductible by reason of
Section 162(m) of the Code.
(g) TAXES. All distributions under the Plan shall be subject to
reduction for applicable tax withholding.
6. ASSIGNMENT. Each Employer's obligations under the Plan shall be
binding upon its successors and assigns. The rights of Participants and
beneficiaries under the Plan are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of such Participants and beneficiaries. Any
attempt by any person other than Participants or their beneficiaries to
bring a claim under the Plan shall be null and void.
7. PLAN TO BE UNFUNDED, ETC. The Plan is intended to be a "pension
plan" (within the meaning of Section 3(2) of ERISA) that is unfunded for
ERISA and tax purposes and that qualifies for the exemptions described in
ERISA Sections 201(a)(2), 301(a)(3) and 401(a)(1). The Administrator shall
be the "plan administrator" of the Plan and shall have discretion to
construe its terms and determine each Eligible Employee's or Participant's <PAGE>
<PAGE>
eligibility for deferrals or distributions hereunder. If any person claims
any benefit hereunder, the Administrator shall make and communicate its
decision with respect to the claim within 90 days from the date the claim
was received. Where special circumstances require additional time for
processing the claim, the ninety-day response period may be extended by the
Administrator to 180 days. If the Administrator does not render a written
determination prior to the expiration of such 90-day (or 180-day) period,
the claim will be deemed denied. If a claim hereunder is denied, the
claimant may, within 60 days of such denial, appeal the denial by written
request for review delivered to the Board or its designate, which request
may include a request to review pertinent documents and to submit issues
and comments in writing. The board or its designate shall render a
decision on the appeal within 60 days (or, if special circumstances require
an extension of the time for processing, 120 days) after receipt of the
request for review; but if no written decision is rendered within such
period(s), the appeal will be deemed denied.
Nothing in this Section or in Section 4(b) shall be construed as
prohibiting the Employer from establishing and maintaining a "rabbi trust"
or similar trust or account in connection with the Plan, so long as the
maintenance and funding of such a trust or account does not jeopardize the
unfunded status of the Plan under ERISA or effective tax deferral under the
Code.
8. NO CONTRACT OF EMPLOYMENT. By participating in the Plan, each
Participant expressly acknowledges and agrees that (i) nothing in the Plan
or in its operation, including deferrals hereunder, limits the right of the
Company or any other Employer to terminate the employment of the
Participant at any time, with or without cause, and that (ii) neither he or
she, nor his or her beneficiaries, will claim lost compensation or tax
benefits associated with discontinuance of participation in the Plan as
damages or as a measure of damages in connection with any termination of
employment.
9. PAYMENT OF LEGAL FEES, ETC. The Company shall promptly reimburse
any Participant or former Participant for reasonable expenditures
(including reasonable attorney's fees) incurred by the individual to
enforce his or her rights under the Plan, but only if (a) the individual
has first made written demand to the Administrator for a benefit, stating
the basis for his or her claim, and the claim has been denied or deemed
denied under the provisions of Section 7 above; and (b) there has been a
"change in control" of the Company. For purposes of this Section, a
"change in control" of the Company will be deemed to have occurred if (i)
any individual, company or other entity (including a "group" within the
meaning of section 13(d) of the Securities Exchange Act of 1934, as amended
(the "Act")) becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Act) of securities of the Company representing more than 30% of the
combined voting power of the Company's then outstanding securities, (ii)
there is a change of control of the Company of a kind which would be
required to be reported under Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Act (or a similar item in a similar schedule or
form), whether or not the Company is then subject to such reporting
requirement, (iii) the Company is a party to a merger, consolidation, sale
of assets, or other reorganization, or a proxy contest, as a consequence of
which members of the Board in office immediately prior to such transaction
or event constitute less than a majority of the Board thereafter, or (iv)
individuals who, at April 1, 1995, constitute the Board cease for any
reason to constitute a majority thereof; provided, however, that any
director who is not in office at April 1, 1995 but whose election by the
Board or whose nomination for election by the Company's shareholders was
approved by a vote of at least two-thirds of the directors then still in
office who either were directors at April 1, 1995 or whose election or
nomination for election was previously so approved shall be deemed to have <PAGE>
<PAGE>
been in office at April 1, 1995 for purposes of this definition.
Notwithstanding the foregoing, a "change in control" of the Company will
not be deemed to have occurred solely because of the acquisition of
securities of the Company (or any reporting requirement under the Act
relating thereto) by an employee benefit plan maintained by the Company for
its employees.
10. AMENDMENT AND TERMINATION. The Board may terminate the Plan at
any time and may amend the Plan at any time and from time to time, with or
without retroactive effect, including without limitation amendments that
change the form or timing of distributions; provided, that no such action
shall, without the consent of the affected Participant, reduce the balance
of any Participant's Account below what it was immediately prior to the
taking of such action. If it determines such action to be necessary to
preserve or reinstate the Plan's status as a "top hat" plan under Sections
201(a)(2), 301(a)(3) or 401(a)(1) of ERISA, or to ensure effective tax
deferral under the Plan, the Administrator may at any time exclude any
individual from Participation in the Plan or may make such other changes in
the deferral or distribution rules hereunder as are reasonably determined
by the Administrator to be necessary to accomplish such result or results.
Upon termination of the Plan in general or as to any Participant or group
of Participants (including exclusion of any Participant as described in the
preceding sentence), the Administrator may, but need not, provide for
immediate distribution of Accounts to the affected Participant or
Participants.
11. ADMINISTRATION OF THE PLAN. The Administrator shall have full
power to interpret and administer the Plan and determine the eligibility of
any person for benefits hereunder and the amount of any such benefit, in
its discretion. Without limiting the foregoing, the Administrator shall
have full discretionary power and authority, not inconsistent with the
express provisions of the Plan, to select those individuals who may
participate in the Plan; to determine their remuneration eligible for
deferral under the Plan; to determine their eligibility to commence receipt
of benefits (including, without limitation, any determination as to the
proper treatment of leaves of absence and other periods when an individual
is not actively rendering service to the Employer); to adopt, alter, and
repeal such rules, guidelines and procedures for administration of the Plan
and for its own acts and proceedings as it shall deem advisable; to
prescribe the form of any election under the Plan; and otherwise to
supervise the administration of the Plan. Any discretionary action by the
Administrator under the Plan that affects the rights or benefits under the
Plan of an individual who is a member of the Administrator (other than an
action of general applicability to all Participants) must be approved by
the Compensation and Stock Option Committee of the Board.
BOLT BERANEK AND NEWMAN INC.
By Stephen P. Heinrich
-----------------------------
Stephen P. Heinrich
Date: March 20, 1995
<PAGE>
<PAGE>
BOLT BERANEK AND NEWMAN INC.
EXHIBIT 11.1
COMPUTATION OF NET INCOME (LOSS) PER SHARE
(000's except per-share data)
Three Months Ended
------------------------------------------------
March 31, 1995 March 31, 1994
------------------------ ---------------------
Fully Fully
Primary Diluted Primary Diluted
----------- ----------- ----------- ---------
Weighted average
shares outstanding 17,192 17,192 16,295 16,295
Incremental shares from use
of treasury stock method
for stock options 926 1,071 (a) (a)
----------- ----------- ----------- ---------
Shares used in per-share
calculations 18,118 18,263 16,295 16,295
=========== =========== =========== =========
Net income (loss) $ 74,467 $ 74,467 $ (2,259) $ (2,259)
=========== =========== =========== =========
Net income (loss) per share $ 4.11 $ 4.08 $ (.14) $ (.14)
=========== =========== =========== =========
Nine Months Ended
-------------------------------------------------
March 31, 1995 March 31, 1994
------------------------ ----------------------
Fully Fully
Primary Diluted Primary Diluted
----------- ----------- ----------- ---------
Weighted average
shares outstanding 16,873 16,873 16,116 16,116
Incremental shares from use
of treasury stock method
for stock options 991 1,221 (a) (a)
----------- ----------- ----------- ---------
Shares used in per-share
calculations 17,864 18,094 16,116 16,116
=========== =========== =========== =========
Net income (loss) $ 70,734 $ 70,734 $ (5,872) $ (5,872)
=========== =========== =========== =========
Net income (loss) per share $ 3.96 $ 3.91 $ (.36) $ (.36)
=========== =========== =========== =========
(a) Incremental shares were not used as their effect would be antidilutive. <PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED STATEMENTS OF OPERATIONS AND BALANCE SHEETS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000013021
<NAME> BOLT BERANEK AND NEWMAN INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> MAR-31-1995
<CASH> 130,645
<SECURITIES> 0
<RECEIVABLES> 47,160<F1>
<ALLOWANCES> 0
<INVENTORY> 1,416
<CURRENT-ASSETS> 182,960
<PP&E> 25,841<F2>
<DEPRECIATION> 0
<TOTAL-ASSETS> 230,360
<CURRENT-LIABILITIES> 69,035
<BONDS> 73,510
<COMMON> 21,802
0
0
<OTHER-SE> 62,651
<TOTAL-LIABILITY-AND-EQUITY> 230,360
<SALES> 154,872
<TOTAL-REVENUES> 154,872
<CGS> 96,589
<TOTAL-COSTS> 96,589
<OTHER-EXPENSES> 70,478
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,323
<INCOME-PRETAX> 84,961
<INCOME-TAX> 14,227
<INCOME-CONTINUING> 70,734
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 70,734
<EPS-PRIMARY> 3.96
<EPS-DILUTED> 0
<FN>
<F1>The receivables amount is shown net of contract allowances and allowances
for doubtful accounts.
<F2>The PP&E amount is shown net of accumulated depreciation and amortization.
</FN>
</TABLE>
