<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to__________________
Commission File Number 0-7428
CALIFORNIA MICROWAVE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-1668412
(State or other jurisdiction of Incorporation) (I.R.S. Employer Identification
Number)
555 TWIN DOLPHIN DRIVE, REDWOOD CITY, CALIFORNIA 94065
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (415) 596-9000
- --------------------------------------------------------------------------------
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 April 30, 1996
- ---------------------------- ------------------------------
<S> <C>
Common Stock $.10 Par Value 16,008,595
</TABLE>
-1-
<PAGE> 2
Part I. Financial Information
Item 1. Financial Statements
CALIFORNIA MICROWAVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31 March 31
-------------------------- --------------------------
1996 1995* 1996 1995*
---- ----- ---- -----
<S> <C> <C> <C> <C>
Sales $ 100,073 $ 121,893 $ 332,125 $ 356,095
Cost of products sold 70,377 84,499 233,526 250,002
--------- --------- --------- ---------
Gross margin 29,696 37,394 98,599 106,093
--------- --------- --------- ---------
Expenses:
Research and development 7,707 8,040 22,405 21,553
Marketing and administration 18,438 18,866 55,731 53,175
Amortization of intangible assets 547 634 1,641 1,902
--------- --------- --------- ---------
Total expenses 26,692 27,540 79,777 76,630
--------- --------- --------- ---------
Operating income 3,004 9,854 18,822 29,463
Interest expense (981) (1,343) (3,147) (3,695)
Interest income 45 134 74 314
--------- --------- --------- ---------
Income before income taxes 2,068 8,645 15,749 26,082
Provision for income taxes 743 2,610 5,669 8,927
--------- --------- --------- ---------
Net income $ 1,325 $ 6,035 $ 10,080 $ 17,155
========= ========= ========= =========
Net income per share:
Primary $ .08 $ .37 $ .62 $ 1.06
========= ========= ========= =========
Fully diluted $ .08 $ .36 $ .62 $ 1.02
========= ========= ========= =========
Average shares and equivalents outstanding:
Primary 16,148 16,332 16,203 16,180
Fully diluted 18,397 18,554 18,433 18,499
</TABLE>
* Restated to include the results of Microwave Networks Incorporated which was
acquired in a pooling of interests transaction in May 1995.
See accompanying notes.
-2-
<PAGE> 3
CALIFORNIA MICROWAVE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited, See Note A)
<TABLE>
<CAPTION>
March 31 June 30
1996 1995
--------- ---------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 1,502 $ 1,983
Short-term investments 1,247 613
Accounts receivable 101,695 106,635
Inventories 105,220 100,431
Deferred tax assets 11,494 11,494
Prepaid expenses 2,397 1,898
--------- ---------
Total current assets 223,555 223,054
--------- ---------
Net property, plant and equipment 45,852 40,268
Deferred tax assets 5,467 5,467
Intangible and other assets 56,108 57,823
--------- ---------
$ 330,982 $ 326,612
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable $ 1,200 $ --
Current portion of long-term debt 209 301
Accounts payable 41,988 38,637
Accrued income taxes 5,910 2,892
Other accrued liabilities 40,743 55,403
--------- ---------
Total current liabilities 90,050 97,233
--------- ---------
Long-term liabilities 72,907 75,667
Stockholders' equity:
Common stock 1,598 1,572
Capital in excess of par value 88,038 84,034
Retained earnings 78,800 68,720
Unamortized restricted stock plan expense (253) (462)
Cumulative translation adjustment (158) (152)
--------- ---------
Total stockholders' equity 168,025 153,712
--------- ---------
$ 330,982 $ 326,612
========= =========
</TABLE>
A- The balance sheet at June 30, 1995 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.
-3-
<PAGE> 4
CALIFORNIA MICROWAVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
March 31
------------------------
1996 1995*
---- -----
<S> <C> <C>
Operating activities:
Net income $ 10,080 $ 17,155
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 9,396 6,840
Amortization of intangible assets 1,641 1,902
Debt issuance costs paid 157 --
Net effect of changes in:
Accounts receivable 4,940 (9,404)
Inventories (4,789) (10,151)
Prepaid expenses (499) (1,250)
Accounts payable 3,351 (3,392)
Accrued income taxes 3,593 (203)
Other accrued liabilities (17,495) 1,747
-------- --------
Net cash provided by (used in) operating activities 10,375 3,244
-------- --------
Investing activities:
Capital expenditures (14,776) (10,364)
Acquisition of Microwave Radio Corporation -- (9,600)
Other (722) 203
-------- --------
Net cash provided by (used in) investing activities (15,498) (19,761)
-------- --------
Financing activities:
Proceeds from (payments on) debt (17) 1,308
Proceeds from issuance of common stock 3,459 5,879
Proceeds from short-term borrowings 1,200 2,600
-------- --------
Net cash provided by (used in) financing activities 4,642 9,787
-------- --------
Net increase (decrease) in cash and cash equivalents (481) (6,730)
Cash and cash equivalents at beginning of year 1,983 13,949
-------- --------
Cash and cash equivalents at end of period $ 1,502 $ 7,219
======== ========
Cash paid during the period for:
Interest $ 2,059 $ 2,149
Income taxes 1,865 7,897
</TABLE>
* Restated to include the results of Microwave Networks Incorporated which
was acquired in a pooling of interests transaction in May 1995.
See accompanying notes.
-4-
<PAGE> 5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Note 1 - Basis of Presentation
The information at March 31, 1996, and for the three- and
nine-month periods ended March 31, 1996 and 1995, is
unaudited, but includes all adjustments (consisting only of
normal recurring adjustments) which the management of
California Microwave, Inc. believes are necessary for a 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, 1995 included in the
California Microwave, Inc. 1995 Annual Report to Stockholders.
Note 2 - Fiscal Periods
The Company's three-and nine-month and fiscal year periods end
on the Saturday closest to March 31 and June 30, respectively.
For clarity of presentation, all fiscal periods are reported
as ending on a calendar month end.
Note 3 - Reclassifications
Certain fiscal year 1995 amounts have been reclassified to
conform to the fiscal year 1996 presentation.
<TABLE>
<CAPTION>
Note 4 - Inventories (in thousands)
March 31 June 30
1996 1995
-----------------------
<S> <C> <C>
Projects in process $ 24,619 $ 35,062
Less progress billings 10,155 13,358
-------- --------
14,464 21,704
Work-in-process and finished goods 37,490 38,179
Raw materials and parts 53,266 40,548
-------- --------
$105,220 $100,431
======== ========
</TABLE>
Note 5 - Unbilled Accounts Receivable
Included in accounts receivable at March 31, 1996 and June 30,
1995 is approximately $6.6 million and $12.7 million,
respectively, of unbilled receivables principally due to
provisions contained in certain export contracts and, to a
lesser degree, to the billing provisions of government
contracts.
The unbilled receivables at March 31, 1996 are expected to be
billed and collected within one year.
Note 6 - Stockholders' Equity
The change in capital in excess of par value for the nine
months ended March 31, 1996 consists principally of common
stock issuances and tax benefit of options exercised.
Note 7- Contingent Liabilities
See Part II, Item I for a description of outstanding
litigation.
-5-
<PAGE> 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
To the extent that this Form 10-Q includes forward-looking statements, such
statements are subject to certain risks and uncertainties, including such
factors, among others, as the level of new orders received and unexpected
delays in shipments during the remainder of the fiscal year and other risks
detailed in the Company's Securities and Exchange Commission filings, including
the Form S-4 registration statement of the Company that became effective May 5,
1995.
The following table sets forth for the periods indicated (i) certain income and
expense items expressed as a percentage of the Company's total sales and (ii)
the percentage change of such items for the three and nine months ended March
31, 1996 compared to the three and nine months ended March 31, 1995. See
Condensed Consolidated Statements of Income.
<TABLE>
<CAPTION>
Period to Period
Percent of Sales Increase (Decrease)
---------------- -------------------
Three Months Nine Months Three Months Nine Months
Ended Ended Ended Ended
March 31 March 31 March 31 March 31
-------- -------- -------- --------
1996 1995 1996 1995 1996 vs 1995 1996 vs 1995
---- ---- ---- ---- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Sales 100.0% 100.0% 100.0% 100.0% (17.9)% (6.7)%
Gross margin 29.7 30.7 29.7 29.8 (20.6) (7.1)
Research and development expenses 7.7 6.6 6.7 6.1 (4.1) 4.0
Marketing and administration expenses 18.4 15.5 16.7 14.9 (2.3) 4.8
Amortization of intangible assets 0.6 0.5 0.5 0.5 (13.7) (13.7)
Operating income 3.0 8.1 5.7 8.3 (69.5) (36.1)
Interest (expense) net (0.9) (1.0) (0.9) (1.0) (22.6) (9.1)
Income before income taxes 2.1 7.1 4.7 7.3 (76.1) (39.6)
Net income 1.3 5.0 3.0 4.8 (78.0) (41.2)
</TABLE>
The following table sets forth sales by product class and by market sector for
the three and nine months ended March 31, 1996 and 1995 (in thousands):
<TABLE>
<CAPTION>
Sales
-----
Three Months Nine Months
Ended Ended
March 31 March 31
-------- --------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Satellite Communications $ 39,819 $ 41,975 $152,381 $133,051
Wireless 40,066 60,550 123,787 173,243
Intelligence 20,044 19,170 55,114 48,001
Other 144 198 843 1,800
-------- -------- -------- --------
$100,073 $121,893 $332,125 $356,095
======== ======== ======== ========
International $ 44,624 $ 55,046 $167,284 $169,342
U.S. Commercial 28,910 34,366 90,781 101,840
U.S. Government 26,539 32,481 74,060 84,913
-------- -------- -------- --------
$100,073 $121,893 $332,125 $356,095
======== ======== ======== ========
</TABLE>
-6-
<PAGE> 7
RESULTS OF OPERATIONS
Sales Sales were $100.1 million and $121.9 million for the three months
ended March 31, 1996 and 1995, respectively, representing a decrease of 18%.
Wireless product sales and satellite communications sales decreased 34% and 5%,
respectively. The decrease in wireless product sales was due to continued
slowness in transmission equipment purchases in certain international cellular
markets. Additionally, regulatory and other issues have delayed at least until
the first half of fiscal 1997 the development of the Personal Communications
Services (PCS) infrastructure market in the United States. Intelligence
system sales increased 5%.
International and U.S. commercial sales and sales to the U.S. government
decreased 19%, 16% and 18%, respectively. Products represented 63% of total
sales in the third quarter of 1996 compared to 69% in the third quarter of 1995,
with the balance represented by system sales.
Sales were $332.1 million and $356.1 million for the nine months ended March
31, 1996 and 1995, respectively, representing a decrease of 7%. Satellite
communications and intelligence systems sales each increased 15%, offsetting, in
part, a 29% decrease in wireless product sales. International sales remained
flat while U.S. commercial sales and sales to the U.S. government decreased 11%
and 13%, respectively.
Gross Margin Gross margin was $29.7 million and $37.4 million for the three
months ended March 31, 1996 and 1995, respectively, representing a decrease of
21%. This decrease was principally due to the decrease in sales noted above.
Gross margin as a percentage of total sales was 29.7% and 30.7% for such
periods, respectively. The decrease in gross margin as a percentage of sales was
due primarily to the higher percentage of total sales in 1996 represented by
system sales, which have relatively lower margins than product sales.
Gross margin was $98.6 million and $106.1 million for the nine months ended
March 31, 1996 and 1995, respectively, representing a decrease of 7%. Gross
margin as a percentage of total sales was 29.7% and 29.8% for such periods,
respectively.
System sales, compared to product sales, include a relatively high
percentage of large subcontracted items to which the Company adds less value and
which therefore have lower gross margins. In addition, engineering costs in
turnkey satellite earth stations and intelligence systems are usually customer
funded and are included in cost of products sold. The Company's strategy
includes increasing the proportion of higher margin product sales.
Research and Development Research and development expenses were $7.7 million
and $8.0 million for the three months ended March 31, 1996 and 1995,
respectively, representing a decrease of 4%. Research and development expenses
as a percentage of total sales were 7.7% and 6.6% for such periods,
respectively. The Company continues to focus its research and development
efforts primarily on the development of new satellite networking products and
software and wireless products with higher anticipated gross margins.
Research and development expenses were $22.4 million and $21.6 million for
the nine months ended March 31, 1996 and 1995, respectively, representing an
increase of 4%. Research and development expenses as a percentage of total sales
were 6.7% and 6.1% for such periods, respectively.
In general, as stated above, engineering expenditures for turnkey satellite
earth stations and intelligence systems are largely customer funded and are
included in cost of products sold.
Marketing and Administration Marketing and administration expenses were
$18.4 million and $18.9 million for the three months ended March 31, 1996 and
1995, respectively, representing
-7-
<PAGE> 8
a decrease of 2%. Marketing and administration expenses as a percentage of total
sales were 18.4% and 15.5% for such periods, respectively, reflecting reduced
sales during the third quarter of fiscal 1996.
Marketing and administration expenses were $55.7 million and $53.2 million
for the nine months ended March 31, 1996 and 1995, respectively, representing an
increase of 5%. Marketing and administration expenses as a percentage of total
sales were 16.8% and 14.9% for such periods respectively.
Amortization of Intangible Assets Amortization expenses associated with
intangible assets were $.5 million and $.6 million for the three months ended
March 31, 1996 and 1995, respectively, representing a decrease of 14%. This
decrease reflects the $10 million write-down of intangible assets in the fourth
quarter of fiscal 1995.
Operating Income Operating income was $3.0 million and $9.9 million for the
three months ended March 31, 1996 and 1995, respectively, representing a 70%
decrease. Operating income as a percentage of total sales was 3.0% and 8.1% for
such periods.
Operating income was $18.8 million and $29.5 million for the nine months
ended March 31, 1996 and 1995, respectively, representing a decrease of 36%.
Operating income as a percentage of total sales was 5.7% and 8.3% for such
periods, respectively.
Interest Expense, Net Net interest expense was $.9 million and $1.2 million
for the three months ended March 31, 1996 and 1995, respectively, representing a
decrease of 23%. Net interest expense was $3.1 million and $3.4 million for the
nine months ended March 31, 1996 and 1995, respectively, representing a decrease
of 9%. The decrease in net interest expense reflects the improved cash flow in
fiscal 1996 compared to fiscal 1995, lessening the need for the Company to
borrow against its credit lines.
Provision for Income Taxes The provision for income taxes was $.7 million
and $2.6 million for the three months ended March 31, 1996 and 1995,
respectively, representing a decrease of 72%. The provision for income taxes was
$5.7 million and $8.9 million for the nine months ended March 31, 1996 and 1995,
respectively, representing a decrease of 37%. The effective tax rate was 36% for
each of such fiscal 1996 periods.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1996, the Company had working capital of $133.5 million,
including $1.5 million of cash and cash equivalents, compared with working
capital of $125.8 million, including cash and cash equivalents of $2.0 million,
at June 30, 1995.
During the first nine months of fiscal 1996 cash and cash equivalents were
provided by operating income (including depreciation and amortization) and
decreases in accounts receivable and increases in accounts payable and accrued
income taxes, and were used to fund an increase in inventories and to pay
year-end accrued liabilities, including payments under incentive agreements and
employee benefit plans and certain restructuring payments. The net result was
cash and cash equivalents provided by operations of $10.4 million. During the
first nine months of fiscal 1995, cash and cash equivalents were provided by
operating income (including depreciation and amortization ) and were used to
fund growth in accounts receivable and inventories and for payment of year-end
accounts payable. The net result was operational cash and cash equivalents
provided of $3.2 million.
The Company's investing activities during the first nine months of fiscal
1996 included capital expenditures of $14.8 million. Total cash used for
investing activities was $15.5 million. Net cash used for investing activities
during the first nine months of fiscal 1995 was $19.8 million, which included
$10.4 million of capital expenditures and a $9.6 million payment to the former
shareholders of Microwave Radio Corporation (MRC) under the 1992 MRC acquisition
agreement.
-8-
<PAGE> 9
During the first nine months of fiscal 1996, cash and cash equivalents of
$4.6 million were provided by financing activities, including borrowings of $1.2
million under the Company's credit lines and sales of $3.5 million of common
stock to employees under on-going stock option and purchase plans. During the
first nine months of 1995, the Company borrowed $2.6 million under its credit
lines and sold $5.9 million of common stock to its employees.
The above activity resulted in a net decrease in cash and cash equivalents
of $.5 million for the first nine months of fiscal 1996 compared to a net
decrease in cash and cash equivalents of $6.7 million for the first nine months
of fiscal 1995.
The Company has available two unsecured committed credit facilities,
totaling $65 million, $60.0 million of which expires in September 1998, and $5
million of which expires in October 1996. At March 31, 1996, there were
borrowings of $1.2 million and $11.7 million of standby letters of credit
outstanding under these credit lines, leaving $52.1 million of available credit
lines.
The Company believes that its current cash position, funds generated from
operations and funds available from its credit facilities will be adequate to
meet the Company's requirements for working capital, capital expenditures, debt
service and external investments for the next 12 months.
RESTRUCTURING AND OTHER CHARGES
In June 1995, the Company recorded restructuring and other charges of
approximately $37 million in connection with a program to reduce costs and
improve operating efficiencies. The program included, among other things: the
integration of operations within the Company's Wireless Products Group and the
exit by California Microwave-TeleCom Transmission Systems, Inc. (TTS) from the
short-haul radio market, which included certain short-haul radio contracts and
the shifting of short-haul radio sales to MRC; the recording of certain contract
costs at California Microwave-Satellite Transmission Systems Division (STS); the
elimination of excess facilities; the reduction of employees at STS; the
write-off of excess inventory and capital equipment; and the write down of
intangible assets.
Asset writedowns represented approximately $14 million of the 1995 charges,
and future cash payments represented approximately $23 million. During the nine
months ended March 31, 1996 cash payments approximated $4.8 million and
approximately $4.2 of additional asset writedowns were taken, reducing the
remaining liability at March 31, 1996 to approximately $13.5 million as shown
below (in thousands):
<TABLE>
<CAPTION>
Cash Outlay
-----------
Less: asset write-
1995 downs during fiscal Completed through
Provision 1996 and 1995 March 31, 1996 Future
--------- -------------- -------------- ------
<S> <C> <C> <C> <C>
Contract termination
and other costs $13,450 $ 4,983 B $ 600 $ 7,867
Excess facilities 4,902 A 955 533 3,414
Severance costs 3,054 A - 2,353 701
Inventory write-offs 227 227 - -
Capital equipment write-offs 1,363 1,363 - -
Other 3,400 600 1,306 1,494
Intangible asset write-down 10,000 10,000 - -
------- ------- ------- -------
$36,396 $18,128 $ 4,792 $13,476
======= ======= ======= =======
</TABLE>
A- in October 1995, the Company commenced the integration of operations within
the Wireless Products Group by merging the operations of California
Microwave-Microwave Networks Incorporated and TTS. As a result of this merger
and of implementing the restructuring plans, certain amounts totaling $1.8
million originally provided for excess facilities were determined to not be
needed and were reallocated to additional severance costs.
-9-
<PAGE> 10
B-in the third quarter of fiscal 1996 a foreign customer with receivables
totalling approximately $8 million, of which approximately $4 million was
unbilled, applied for protection from its creditors under its local law. At the
time of establishing the restructuring and other charges, it was expected that
certain contract termination and other costs would be incurred relative to the
contract with this customer. As a result of the application for protection by
the customer, certain costs the Company expected to incur relating to the
contract will not be incurred and the amount of the receivable the Company
expects to collect was reduced. Accordingly, in the third quarter of fiscal
1996, the Company offset certain of its contract obligation liabilities against
the outstanding receivable amount.
Except as discussed in A and B above, there have been no other material
changes in the restructuring plan or in estimates of the restructuring costs.
The Company expects that cash expenditures that will be incurred to complete the
restructuring will not have a material effect on the Company's liquidity.
OTHER FINANCIAL INFORMATION
Bookings Orders booked were $90.4 million and $117.6 million for the three
months ended March 31, 1996 and 1995, respectively, representing a decrease of
23%. Wireless products bookings decreased 19% to 46% of total bookings.
Satellite communications and intelligence systems decreased 30% and 14%,
respectively.
Backlog Backlog was $206.0 million and $266.3 million at March 31, 1996 and
1995, respectively, representing a decrease of 23%. Substantially all of the
March 31, 1996 backlog is expected to be delivered within twelve months.
-10-
<PAGE> 11
Part II - Other Information
Item 1. Legal Proceedings
On November 9, 1995, and December 12, 1995, putative class action
lawsuits entitled Rick Fairchild v. California Microwave, Inc. et
al. and Mark E. McKinney v. California Microwave, Inc. et al. were
filed in the United States District Court for the Northern
District of California. The plaintiffs in these two cases, which
have been consolidated, purport to represent a class of all
persons who purchased common stock of California Microwave, Inc.
(the "Company") between September 6, 1994 and June 29, 1995 (the
"Class Period"). Named as defendants are the Company and certain
of its executive officers. The complaints allege that defendants
violated various federal securities laws through material
misrepresentations and omissions during the Class Period.
Defendants filed motions to dismiss the complaints, which the
court granted on April 19, 1996 with leave to amend. California
Microwave, Inc. believes that it has meritorious defenses to the
claims alleged in these lawsuits and intends to defend the actions
vigorously.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11 - Statement re computation of per share earnings.
Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K.
None.
-11-
<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.
CALIFORNIA MICROWAVE, INC.
May 10, 1996 BY /s/ Philip F. Otto
- ----------------- --------------------------------------
Date Philip F. Otto
President and Chief Executive Officer
Chairman of the Board
May 10, 1996 BY /s/ George L. Spillane
- ----------------- --------------------------------------
Date George L. Spillane
Vice President
Chief Financial Officer
-12-
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
No. Exhibit Page Number
- ------- ------- ------------
<S> <C> <C>
Exhibit 11 Statement re computation of per share earnings.....
Exhibit 27 Financial Data Schedule............................
</TABLE>
-12A-
<PAGE> 1
California Microwave, Inc.
Computation of Per Share Earnings
Exhibit 11
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three months ended
March 31
---------------------
1996 1995
---- ----
<S> <C> <C>
PRIMARY - EPS:
Net income, as reported $ 1,325 $ 6,035
======= =======
Average shares outstanding 15,969 15,616
Add - Common stock equivalents of Company's
stock options using the treasury stock method 179 716
------- -------
Average shares and equivalents - Primary 16,148 16,332
======= =======
Net income per share - Primary $ .08 $ .37
======= =======
FULLY DILUTED - EPS:
Net income, as reported $ 1,325 $ 6,035
Add back interest, net of taxes 562 605
------- -------
Net income for fully diluted $ 1,887 $ 6,640
======= =======
Average shares and equivalents - primary 16,148 16,332
Add- additional common stock equivalents of
the Company's stock options 27 --
Add - Shares to be issued at conversion of
Convertible Debentures 2,222 2,222
------- -------
Average shares and equivalents - Fully Diluted 18,397 18,554
======= =======
Net income per share - Fully Diluted $ .08 $ .36
======= =======
</TABLE>
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 1502
<SECURITIES> 1247
<RECEIVABLES> 101695
<ALLOWANCES> 2144
<INVENTORY> 105220
<CURRENT-ASSETS> 223555
<PP&E> 101409
<DEPRECIATION> 55557
<TOTAL-ASSETS> 330982
<CURRENT-LIABILITIES> 90050
<BONDS> 67866
0
0
<COMMON> 1598
<OTHER-SE> 166427
<TOTAL-LIABILITY-AND-EQUITY> 330982
<SALES> 332125
<TOTAL-REVENUES> 332125
<CGS> 233526
<TOTAL-COSTS> 233526
<OTHER-EXPENSES> 79777
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3073
<INCOME-PRETAX> 15749
<INCOME-TAX> 5669
<INCOME-CONTINUING> 10080
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10080
<EPS-PRIMARY> .62
<EPS-DILUTED> .62
</TABLE>
