<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES 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: DECEMBER 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 0-07428
CALIFORNIA MICROWAVE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 94-1668412
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NUMBER)
</TABLE>
985 ALMANOR AVENUE, SUNNYVALE, CALIFORNIA 94086
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (408) 732-4000
NO CHANGE
------------------------------------------------------------
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.
<TABLE>
<CAPTION>
CLASSES OUTSTANDING AT JANUARY 31, 1995:
------------------------------------ --------------------------------
<S> <C>
COMMON STOCK $.10 PAR VALUE......... 12,342,046
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
CALIFORNIA MICROWAVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------ ---------------------
1994 1993 1994 1993
-------- ------- -------- --------
<S> <C> <C> <C> <C>
Sales............................................ $103,637 $82,596 $205,855 $145,112
Cost of products sold............................ 74,940 59,485 150,613 103,694
-------- ------- -------- --------
Gross margin..................................... 28,697 23,111 55,242 41,418
-------- ------- -------- --------
Expenses:
Research and development....................... 5,348 3,542 10,207 5,788
Marketing and administration................... 14,424 12,634 28,259 22,895
Amortization of intangible assets.............. 634 520 1,268 902
-------- ------- -------- --------
Total expenses......................... 20,406 16,696 39,734 29,585
-------- ------- -------- --------
Operating income................................. 8,291 6,415 15,508 11,833
Interest expense................................. (1,207) (657) (2,248) (753)
Interest income.................................. 48 28 225 142
-------- ------- -------- --------
Income before income taxes....................... 7,132 5,786 13,485 11,222
Provision for income taxes....................... 2,639 2,257 4,989 4,377
-------- ------- -------- --------
Net income....................................... $ 4,493 $ 3,529 $ 8,496 $ 6,845
======== ======= ======== ========
Net income per share:
Primary........................................ $ .35 $ .28 $ .67 $ .55
======== ======= ======== ========
Fully diluted.................................. $ .33 $ .28 $ .64 $ .55
======== ======= ======== ========
Average shares and equivalents outstanding:
Primary........................................ 12,872 12,596 12,725 12,523
Fully diluted.................................. 15,250 13,203 15,093 12,836
</TABLE>
See accompanying notes.
1
<PAGE> 3
CALIFORNIA MICROWAVE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED, SEE NOTE A)
<TABLE>
<CAPTION>
DECEMBER
31, JUNE 30,
1994 1994
-------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.......................................... $ 4,426 $ 13,268
Short-term investments............................................. 456 434
Accounts receivable................................................ 121,960 107,925
Inventories........................................................ 67,738 69,700
Prepaid expenses................................................... 2,288 1,927
-------- ------------
Total current assets....................................... 196,868 193,254
-------- ------------
Net property, plant and equipment.................................... 33,610 33,155
Intangibles and other assets......................................... 66,510 67,574
-------- ------------
$296,988 $293,983
======== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable and current portion of long-term debt................. $ 10,000 $ 389
Accounts payable................................................... 30,492 36,273
Accrued income taxes............................................... 2,189 2,108
Other accrued liabilities.......................................... 29,382 42,510
-------- ------------
Total current liabilities.................................. 72,063 81,280
-------- ------------
Long-term liabilities................................................ 71,532 71,958
Total stockholders' equity........................................... 153,393 140,745
-------- ------------
$296,988 $293,983
======== ==========
</TABLE>
A-- The balance sheet at June 30, 1994 has been derived from the audited
financial statements at that date, but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
See accompanying notes.
2
<PAGE> 4
CALIFORNIA MICROWAVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED
DECEMBER 31,
---------------------
1994 1993
-------- --------
<S> <C> <C>
Operating activities:
Net income............................................................. $ 8,496 $ 6,845
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Depreciation and amortization........................................ 4,673 3,201
Amortization of intangible assets.................................... 1,268 902
Other................................................................ (47) (30)
Net effect of changes in:
Accounts receivable.................................................. (14,035) 5,535
Inventories.......................................................... 1,962 (12,791)
Prepaid expenses..................................................... (369) 35
Accounts payable..................................................... (5,772) (8,575)
Accrued income taxes................................................. 393 1,652
Other accrued liabilities............................................ (3,528) (11,119)
-------- --------
Net cash provided by (used in) operating activities.................... (6,959) (14,345)
-------- --------
Investing activities:
Capital expenditures................................................. (5,128) (3,531)
Acquisition of net assets of business purchased (TTS), net of cash
acquired.......................................................... -- (24,096)
Acquisition of MRC................................................... (9,600) --
Unexpended plant and equipment funds................................. -- 214
Other................................................................ (296) (315)
-------- --------
Net cash provided by (used in) investing activities.................... (15,024) (27,728)
-------- --------
Financing activities:
Proceeds from issuance of $63,200 of convertible subordinated notes,
net of costs and expenses......................................... -- 61,365
Payments on long-term debt........................................... (209) (109)
Proceeds from issuance of common stock............................... 3,650 3,241
Proceeds from short-term borrowings.................................. 9,700 --
-------- --------
Net cash provided by (used in) financing activities.................... 13,141 64,497
-------- --------
Net increase (decrease) in cash and cash equivalents................... (8,842) 22,424
Cash and cash equivalents at beginning of year......................... 13,268 5,251
-------- --------
Cash and cash equivalents at end of period............................. $ 4,426 $ 27,675
======== ========
Cash paid during the period for:
Interest............................................................. $ 1,861 $ 759
Income taxes......................................................... $ 4,677 $ 3,599
======== ========
</TABLE>
3
<PAGE> 5
CALIFORNIA MICROWAVE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 BASIS OF PRESENTATION
The information at December 31, 1994, and for the three- and six-month
periods ended December 31, 1994 and 1993, is unaudited, but includes all
adjustments (consisting only of normal recurring adjustments) which the
management of California Microwave, Inc., believes are necessary for fair
presentation of the results for the periods presented. Interim results are not
necessarily indicative of results for a full year. The consolidated interim
financial statements should be read in conjunction with the audited consolidated
financial statements for the year ended June 30, 1994 included in the California
Microwave, Inc. 1994 Annual Report to Stockholders.
NOTE 2 FISCAL PERIODS
The Company's six months and fiscal year periods end on the Saturday
closest to December 31 and June 30, respectively. For clarity of presentation,
all fiscal periods are reported as ending on a calendar month end.
NOTE 3 INVENTORIES (IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1994 1994
------------ ------------
<S> <C> <C>
Projects in process........................................ $ 26,487 $ 20,963
Less progress billings..................................... 7,098 4,702
------------ ------------
19,389 16,261
Work-in-process and finished goods......................... 24,647 28,208
Raw materials and parts.................................... 23,702 25,231
------------ ------------
$ 67,738 $ 69,700
========== =========
</TABLE>
NOTE 4 UNBILLED ACCOUNTS RECEIVABLE
Included in accounts receivable at December 31, 1994 and June 30, 1994 were
$19,615,000 and $21,359,000, respectively, of unbilled receivables principally
due to provisions contained in certain export contracts and to a lesser degree
the billing provisions of a government contract.
The balance at December 31, 1994 is expected to be billed and collected
within one year.
4
<PAGE> 6
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following table sets forth for the periods indicated (i) percentages
which certain items reflected in the financial data bear to total sales of the
Company and (ii) the change of such items expressed as a percentage increase or
decrease from the indicated prior period. See Condensed Consolidated Statements
of Income and Note 1.
<TABLE>
<CAPTION>
PERCENT OF SALES PERIOD INCREASE (DECREASE)
-------------------------------- ----------------------------
THREE MONTHS SIX MONTHS THREE MONTHS SIX MONTHS
ENDED DECEMBER ENDED DECEMBER ENDED ENDED
31, 31, DECEMBER 31, DECEMBER 31,
-------------- -------------- ------------ ------------
1994 1993 1994 1993 1994 VS 1993 1994 VS 1993
----- ----- ----- ----- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Sales................................. 100.0% 100.0% 100.0% 100.0% 25.5% 41.9%
Gross margin.......................... 27.7 28.0 26.8 28.5 24.2 33.4
Research and development expenses..... 5.2 4.3 5.0 4.0 51.0 76.3
Marketing and administration
expenses............................ 13.9 15.3 13.7 15.8 14.2 23.4
Amortization of intangible assets..... 0.6 0.6 0.6 0.6 21.9 40.6
Operating income...................... 8.0 7.8 7.5 8.1 29.2 31.1
Interest income (expense), net........ (1.1) (0.8) (1.0) (0.4) 84.3 231.1
Income before income taxes............ 6.9 7.0 6.6 7.7 23.3 20.2
Net income............................ 4.3 4.3 4.1 4.7 27.3 24.1
</TABLE>
5
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Sales. Sales were $205.9 million and $145.1 million for the six months
ended December 31, 1994 and 1993, respectively, representing an increase of 42%.
Sales increased in each of CMI's three primary product areas. Approximately 61%
of the increase was in wireless which includes the sales of TTS from the date of
acquisition in October 1993. Wireless sales represented 41% of total sales in
the first half of fiscal 1995 compared to 32% of total sales in the prior year
period. Satellite communications sales increased by 16% and represented 42% of
total sales. Most of the satellite communications increase was in product sales
rather than system sales. Intelligence systems sales increased 46% and
represented 16% of total sales. This increase was due to increased U.S.
government funding for the Airborne Reconnaissance Low program.
Sales also increased significantly in each major market sector
(international, U. S. commercial, and U. S. government.) International sales
continued to lead CMI's growth, rising by 58%. About half of the overall
increase in sales was in the international sector. This increase was due to the
growing demand for wireless and satellite networking products in expanding the
worldwide telecommunications infrastructure, both within and between countries.
International sales represented 42% of total sales in the period compared to 37%
in the prior year period.
Another trend was the continuing increase in wireless and satellite product
sales relative to lower margin intelligence and satellite system sales. Product
sales were up 63% in the first half of fiscal 1995 while system sales were up
17%. Thus, products represented 62% of total sales in the period, compared to
54% in the prior year period.
Sales for the three months ended December 31, 1994 increased to $103.6
million from $82.6 million for the three months ended December 31, 1993, an
increase of 25.5%. The Company's sales growth was due principally to increases
in sales of wireless and satellite products.
No single customer accounted for more than 10% of sales in either period.
However, CMI's total sales to all departments and agencies of the U.S.
government represented 26% of total sales in the period. Because CMI is
concentrating its investments in commercial areas, this percentage is expected
to continue to decline.
Gross Margin. Gross margin was $55.2 million and $41.4 million for the six
months ended December 31, 1994 and 1993, respectively, representing an increase
of 33%. Gross margin as a percentage of total sales was 26.8% and 28.5% for such
periods, respectively. Gross margins, which expanded sequentially from the 24.2%
recorded in the second half of fiscal 1994, declined relative to the six-month
period ended December 31, 1993 due to sales from the low margin backlog acquired
in the purchase of TTS and shipments of lower-margin satellite communications
systems.
Gross margins were 27.7% and 28.0% for the three months ended December 31,
1994 and 1993 respectively. This decline was due to shipments of lower-margin
satellite communications systems.
Gross margins as a percentage of sales for products are generally in the
35% to 45% range, while turnkey satellite earth station and intelligence systems
typically yield gross margins in the 10% to 20% range. System sales include a
relatively high percentage of large subcontracted items to which CMI adds less
value and upon which customers allow minimal markup. In addition, engineering
costs in turnkey satellite earth stations and intelligence systems are customer
funded and are included in costs of products sold. CMI's strategy includes
increasing the proportion of product sales.
Research and Development. Research and development expenses were $10.2
million and $5.8 million for the six months ended December 31, 1994 and 1993,
respectively, representing an increase of 76%. Research and development expenses
as a percentage of sales were 5.0% and 4.0%, respectively, for such periods. CMI
anticipates that research and development expenses will continue to increase at
a faster rate than sales as wireless and satellite networking product sales
represent an increasingly higher percentage of total sales. In general,
engineering expenditures in turnkey satellite earth stations and intelligence
systems are customer funded and are included in cost of products sold.
6
<PAGE> 8
Research and development expenses during the three months ended December
31, 1994, increased 51.0% to $5.3 million from $3.5 during the comparable prior
year period due primarily to new product development in satellite communications
and wireless products.
Marketing and Administration. Marketing and administration expenses were
$28.3 million and $22.9 million for the six months ended December 31, 1994 and
1993, respectively, representing an increase of 23%. Marketing and
administration expenses as a percentage of sales were 13.7% and 15.8%,
respectively, for such periods. The percentage decrease is due to increased
sales, particularly in the satellite communications business area, without a
corresponding increase in marketing and administration expenses.
Marketing and administration expenses were $14.4 million and $12.6 million,
respectively, during the three months ended December 31, 1994 and 1993
representing an increase of 14.2%. These expenses as a percent of sales,
however, declined to 13.9% for the three months ended December 31, 1994 from
15.3% for the three months ended December 31, 1993 for the reasons discussed
above.
Amortization of Intangible Assets. Amortization expenses associated with
intangible assets were $1.3 million and $0.9 million for the six months ended
December 31, 1994 and 1993, respectively, representing an increase of 41%. The
increase was due to the amortization of purchased intangible assets recorded in
the acquisitions of TTS and MRC.
Operating Income. Operating income was $15.5 million and $11.8 million for
the six months ended December 31, 1994 and 1993, respectively, representing an
increase of 31%. Operating income as a percentage of total sales was 7.5% and
8.1% for periods, respectively. This percentage decline was due to lower gross
margins and higher research and development costs offset by lower marketing and
administration expenses, related to sales discussed above.
Operating income was $8.3 million and $6.4 million for the three months
ended December 31, 1994 and 1993, respectively, representing an increase of
29.2%. Operating income as a percentage of sales during the three months ended
December 31, 1994 was 8.0% compared to 7.8% during the comparable prior year
period.
Interest Expense (Net). Net interest expense was $2.0 million and $0.6
million for the six months ended December 31, 1994 and 1993, respectively. In
the second quarter of fiscal 1994, CMI issued $65,200,000 of convertible
subordinated notes and used the proceeds principally to finance the acquisition
of TTS. Interest expense also increased due to the impact of the final $9.6
million cash payment to the former stockholders of MRC and extended payment
terms on certain international system contracts.
Provisions for Income Taxes. The provision for income taxes was $5.0
million and $4.4 million for the six months ended December 31, 1994 and 1993,
respectively. The effective tax rate was 37% and 39% for such periods,
respectively. CMI's effective tax rate for fiscal 1994 was 37%; however, the
estimated tax rate used for the six months ended December 31, 1993 was 39%. This
reduction in CMI's effective tax rate was due primarily to increased research
and development tax credits as a result of increased research and development
expenditures.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1994, CMI had working capital of $124.8 million, including
$4.4 million of cash and cash equivalents, compared with working capital of
$115.4 million, including cash and cash equivalents of $27.7 million, at
December 31, 1993. This increase was the result of profitable operations and the
impact of the $61.1 million net proceeds from CMI's sale of long-term
convertible subordinated notes in December 1993. Net cash used in operating
activities was $7.0 million and $14.3 million in the six months ended December
31, 1994 and 1993, respectively. The negative operating cash flow in the current
period was due to the impact of extended payment terms on certain international
system contracts booked in fiscal 1994, while the negative operating cash flow
in the prior period was due to the need to fund the post-acquisition working
capital requirements of TTS.
During the first half of fiscal 1995, funds were generated from operating
income (including depreciation and amortization) and were used to finance
increased receivable balances and payments of June 30, 1994
7
<PAGE> 9
payables and accruals, principally payments under incentive agreements and
employee benefit plans. The net result was an operational cash outflow of $7.0
million. CMI's investing activities during the first half of fiscal 1995 were a
payment, under the April 1992 MRC acquisition agreement, to MRC's stockholders
of $9.6 million and payments for capital equipment additions of $5.1 million.
Total cash outflow for investing activities was $15.0 million. Sale of CMI
Common Stock to CMI employees under on-going CMI stock option plans resulted in
a cash inflow of $3.7 million. During the six months ended December 31, 1994,
CMI borrowed $9.7 million under its credit lines in order to finance the
operating cash outflows and the MRC additional acquisition payment. The above
activity was responsible for a net decrease in cash of $8.8 million for the
first half of fiscal 1995.
Compared to the prior year period, inventory turnover improved and the
average receivable collection period lengthened. Due to operational efficiencies
in both wireless and satellite communications product areas, inventory turnover
increased from 3.6 turns to 4.4 turns. Due to the extended payment terms on
certain international system contracts, average receivables increased to 102
days from 79 days. CMI anticipates that average receivables will be reduced to
the 80-90 day range by the last quarter of fiscal 1995.
In February 1994, CMI renewed two unsecured committed credit facilities,
totaling $33.5 million, $25 million of which expires in October 1995 and $8.5
million of which expires in April 1995. At December 31, 1994, there were $9.7
million of borrowings and $11.0 million of standby letters of credit outstanding
under these credit lines, leaving $12.8 million of available credit lines.
CMI believes that its current cash position, funds generated from
operations and funds available from its credit facilities will be adequate to
meet CMI's requirements for working capital, capital expenditures, debt service
and external investments for the foreseeable future.
8
<PAGE> 10
OTHER FINANCIAL INFORMATION
Bookings and Backlog. Bookings were $239.6 million and $223.4 million for
the six months ended December 31, 1994 and 1993, respectively, representing an
increase of 7%. Bookings growth in commercial markets of approximately 14% more
than offset a 7% decline in U.S. government orders. International orders
represented 49% of total orders in the six month period ended December 31, 1994
compared to 46% of total orders in the six months ended December 31, 1993.
Orders for wireless and satellite communications products were up 36% and
accounted for all of the bookings growth. Orders for intelligence and satellite
communications systems each declined approximately 10% from the record levels of
the prior period.
Backlog was $254.2 million and $267.2 million at December 31, 1994 and
1993, respectively, representing a decrease of 5%. The decrease was principally
due to an increase in product business relative to system business and
completion of deliveries against a multi-year U.S. government radio contract
booked in fiscal 1993. The proportion of backlog that was expected to be
delivered within twelve months was 75% and 85% as of December 31, 1994 and 1993,
respectively. This percentage decrease was due to a $40 million contract from
AT&T under which most deliveries will occur in fiscal 1996.
Acquisition of TTS. CMI acquired substantially all of the assets and
certain of the liabilities of TTS on October 23, 1993. TTS's product line
consists of digital microwave radios for the cellular, personal communications
network and private network markets. CMI paid $28.7 million for those net assets
at closing, consisting of $23.7 million in cash and a $5 million, five-year 5%
convertible subordinated note, convertible at the option of the holder into
Common Stock of CMI at a conversion price of $28.50 per share. Of the $5 million
note, $3 million was offset against advances from TTS to its parent during the
period prior to the closing of the acquisition and is no longer payable.
Acquisition of Microwave Networks Incorporated. On January 31, 1995 CMI
announced that it has entered into an Agreement and Plan of Reorganization and
Merger (the "Agreement") among CMI, Microwave Networks Incorporated, a Texas
corporation ("MNI"), and CMI Acquisition Corporation, a Texas corporation wholly
owned by CMI ("Acquisition Corp."), pursuant to which (i) Acquisition Corp. will
be merged into MNI, (ii) MNI will be the surviving corporation and a wholly
owned subsidiary of CMI, (iii) each outstanding share of MNI Common Stock and
MNI Preferred Stock (together, the "MNI Capital Stock") (other than shares, if
any, as to which dissenters' rights have been exercised pursuant to Texas law)
will be converted into that number of shares of CMI Common Stock determined by
dividing 3,350,000 (the "Numerator") by the total number of shares of MNI
Capital Stock outstanding immediately prior to the closing (including for this
purpose any MNI Capital Stock issuable under then outstanding options, warrants
or other convertible securities) and rounding the quotient off to the nearest
ten-thousandth (.0001); and (iv) CMI will assume all outstanding options of MNI.
Notwithstanding the foregoing, (i) MNI has the right to terminate the Agreement
if the average closing price of CMI Common Stock on the Nasdaq National Market
for the 15 consecutive trading days immediately preceding the date of the CMI
Special Meeting ("Final Closing Price") is less than $30.00 (as reported by
Nasdaq), provided that if MNI exercises this right, the termination shall not be
effective if CMI agrees to increase the Numerator to the number which when
multiplied by the Final Closing Price equals $100,500,000, and (ii) CMI has the
right to terminate the Agreement if the Final Closing Price is more than
$41.375, provided that if CMI exercises this right, the termination shall not be
effective if MNI agrees to decrease the Numerator to the number which when
multiplied by the Final Closing Price is equal to $138,606,250.
9
<PAGE> 11
PART II -- OTHER FINANCIAL INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 11 -- Statement re computation of per share earnings.
(b) No reports on Form 8-K were filed in the quarterly period ended
December 31, 1994.
10
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
<TABLE>
<S> <C>
February 13, 1994 By /s/ PHILIP F. OTTO
- -------------------------------------------- -------------------------------------------
Date Philip F. Otto
President and Chief Executive Officer
Chairman of the Board
February 13, 1994 By /s/ GARRETT E. PIERCE
- -------------------------------------------- -------------------------------------------
Date Garrett E. Pierce
Executive Vice President
Chief Financial Officer
</TABLE>
11
<PAGE> 13
EXHIBIT INDEX
Exhibit 11 Statement re computation of per share earnings.
Exhibit 27 Financial Data Schedule.
<PAGE> 1
CALIFORNIA MICROWAVE, INC.
COMPUTATION OF PER SHARE EARNINGS
EXHIBIT 11
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------------- --------------------------
1994 1993 1994 1993
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PRIMARY
Net income, as reported.................. $ 4,493,000 $ 3,529,000 $ 8,496,000 $ 6,845,000
========== ========== ========== ==========
Average shares outstanding............... 12,226,000 11,914,000 12,173,000 11,843,000
Add: common equivalents of Company's
stock options using treasury stock
method................................. 646,000 572,000 552,000 572,000
Add: Contingent shares based upon
Microwave Radio Corporation earnings
exceeding target levels................ -- 110,000 -- 108,000
----------- ----------- ----------- -----------
Average shares and
equivalents.................. 12,872,000 12,596,000 12,725,000 12,523,000
========== ========== ========== ==========
Net income per share........... $0.35 $0.28 $0.67 $0.55
----- ----- ----- -----
----- ----- ----- -----
FULLY DILUTED
Net income, as reported.................. $ 4,493,000 $ 3,529,000 $ 8,496,000 $ 6,845,000
Add back interest charges, net of
taxes.................................. 554,000 170,000 1,124,000 170,000
----------- ----------- ----------- -----------
Net income, for fully
diluted...................... $ 5,047,000 $ 3,699,000 $ 9,620,000 $ 7,015,000
========== ========== ========== ==========
Average shares and
equivalents -- primary................. 12,872,000 12,596,000 12,725,000 12,523,000
Add: additional common stock equivalents
of Company's stock options............. 156,000 -- 110,000 9,000
Add: shares to be issued at conversion of
Convertible Debentures................. 2,222,000 607,000 2,258,000 304,000
----------- ----------- ----------- -----------
Total shares for fully
diluted...................... 15,250,000 13,203,000 15,093,000 12,836,000
========== ========== ========== ==========
Net income per share........... $0.33 $0.28 $0.64 $0.55
----- ----- ----- -----
----- ----- ----- -----
</TABLE>
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CALIFORNIA
MICROWAVE, INC.'S BALANCE SHEET AT DECEMBER 31, 1994 AND STATEMENT OF INCOME FOR
THE THREE MONTHS ENDED DECEMBER 31, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS AS FILED ON THE COMPANY'S FORM 10-Q FOR
THE PERIOD ENDED DECEMBER 31, 1994
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 4,426
<SECURITIES> 456
<RECEIVABLES> 123,065
<ALLOWANCES> 1,105
<INVENTORY> 67,738
<CURRENT-ASSETS> 196,868
<PP&E> 70,340
<DEPRECIATION> 36,730
<TOTAL-ASSETS> 296,988
<CURRENT-LIABILITIES> 72,063
<BONDS> 69,981
<COMMON> 1,226
0
0
<OTHER-SE> 152,167
<TOTAL-LIABILITY-AND-EQUITY> 296,988
<SALES> 103,637
<TOTAL-REVENUES> 103,637
<CGS> 74,940
<TOTAL-COSTS> 74,940
<OTHER-EXPENSES> 20,406
<LOSS-PROVISION> 186
<INTEREST-EXPENSE> 1,207
<INCOME-PRETAX> 7,132
<INCOME-TAX> 2,639
<INCOME-CONTINUING> 4,493
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,493
<EPS-PRIMARY> .35
<EPS-DILUTED> .33
</TABLE>
