SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
August 13, 1997
Date of Report (Date of earliest event reported)
CALIFORNIA MICROWAVE, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-7428 94-1668412
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
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
-1-<PAGE>
Item 5. Other Events.
On August 13, 1997, California Microwave, Inc. (the
"Company") issued the press release attached as Exhibit 99.1
hereto announcing results from continuing operations for its
fiscal years ended June 30, 1996 and 1997, including results for
the fourth quarters of its 1996 and 1997 fiscal years.
The Company is also filing as an exhibit hereto
selected results from continuing operations for each of the
quarters in its 1996 and 1997 fiscal years.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
99.1 Press Release of California Microwave, Inc. dated
August 13, 1997
99.2 Fiscal 1996 and 1997 selected quarterly results
from continuing operations
SIGNATURE
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 hereunto duly authorized.
CALIFORNIA MICROWAVE, INC.
(Registrant)
By: /s/ George L. Spillane
_______________________________
Name: George L. Spillane
Title: Vice President,
Chief Financial Officer
Dated: August 18, 1997
-2-<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
99.1 Press Release of California
Microwave, Inc. dated August 13,
1997
99.2 Fiscal 1996 and 1997 selected
quarterly results from continuing
operations
-3-<PAGE>
California Microwave, Inc.
555 Twin Dolphin Drive
Redwood City, CA 94065 USA
(415) 596-9000 Fax: (415) 596-
6600
FOR IMMEDIATE RELEASE
Wednesday, August 13, 1997
For Further Information Contact:
Stephanie M. Day Investor Information Line: Deborah Passik
Vice President- (Toll-free) 1-888-225-6789 William Dunk
Corporate Communications http://www.calmike.com Partners, Inc.
(415) 596-6629 (919) 929-4100
CALIFORNIA MICROWAVE REPORTS
FY 1997 RESULTS
REDWOOD CITY, CALIFORNIA - CALIFORNIA MICROWAVE, INC. (Nasdaq National
Market: CMIC) today reported results from continuing operations for its
fiscal year ended June 30, 1997. Continuing operations for all periods
presented exclude the operating results of Microwave Networks (MN) and
Satellite Transmission Systems (STS) which are being divested. Fiscal 1997
income from continuing operations was $2.6 million, or $.16 per share, on
sales of $254.2 million, compared to income from continuing operations of
$13.4 million, or $.82 per share, on sales of $240 million in fiscal 1996.
Results of continuing operations include $4.8 million (net of tax) of
write-downs and other charges that were announced in California Microwave s
second-quarter release of operating results. New orders booked in fiscal
1997 totaled $248.1 million compared to $217.5 million for last year.
Backlog at June 30, 1997, stood at $91.1 million (95% of which is expected
to be delivered over the next 12 months), compared to $97.1 million
recorded at the end of fiscal 1996.
Fiscal 1997 fourth quarter results showed income from continuing operations
of $2.6 million, or $.16 per share, on sales of $71.1 million, compared to
income from continuing operations of $2.8 million, or $.17 per share, on
sales of $63.8 million reported in 1996. New orders booked in the fourth
quarter of 1997 totaled $42.3 million compared to $50.6 million reported in
the prior year; a break-down of bookings and sales by product and market
areas is attached.
The company expects to receive a tax refund of approximately $10 million
early in fiscal 1998 due to tax-loss carryback provisions.
Discontinued Operations
In June, 1997, California Microwave announced the planned divestiture of MN
and STS. The losses (net of tax) of MN and STS were $26.1 million for the
fourth quarter and $59.3 million for the year. Included in the
discontinued operations results for the quarter and year ended June 30,
1997, are $14.4 million (net of tax) and $8.3 million (net of tax),
<PAGE>
August 13, 1997 2
respectively, for the write-off of the unamortized balance of goodwill and
for the estimated losses, fees and expenses associated with the divestiture
process. Also included in the discontinued operations results for the year
are $26.6 million (net of tax) of write-downs, restructuring charges and
other charges that were announced in the company s second-quarter release
of operating results.<PAGE>
August 13, 1997 3
Lawrence New CEO: Global Telecom Operating Experience
On July 17, after an extensive search process, California Microwave
appointed Frederick D. Lawrence chairman of the board, chief executive
officer and president. Lawrence has 27 years operating experience in
telecommunications. His previous experiences at ComStream and ADC
Telecommunications bring to California Microwave global experience in both
satellite and terrestrial networks and products. According to Lawrence, "I
joined California Microwave because of the strength and potential of its
continuing businesses. Our near-term focus will be on operationally
strengthening the business, moving from our business review to execution.
This means we will be giving high priority to margin improvement and
product development, while simultaneously developing a comprehensive
California Microwave strategic thrust."
Focus on Market Leaders
In December 1996, California Microwave s board of directors initiated a
comprehensive business review that culminated in a decision to focus on
maintaining and expanding product areas where the company has leading
market share positions and high profit potential. Retained businesses
include satellite communications and up-link services (EFData and Services
divisions), terrestrial video and data radio (Microwave Radio
Communications and Microwave Data Systems divisions), and information
collection and communications systems (Airborne Systems Integration and
Government Electronics divisions). These six remaining divisions all
participate in point-to-point and point-to-multipoint data transmission
markets.
Accelerated Product Development
New product development is key to maintaining California Microwave s
leading market share positions. During fiscal 1997, the company introduced
a number of significant new products. Examples of application-specific
products developed to meet certain market needs follow.
The rapid transition to digital television requires new products to
produce, record, transport, and broadcast high-definition digital
television programs. In the fourth quarter of its 1997 fiscal year, the
company s Microwave Radio Communications division introduced and installed
its first 13-GHz digital video microwave radio system for a major network
studio-to-transmitter link in New York City.
In addition to news broadcasters delivering digital television signals via
microwave radio, direct-to-home digital television is being transmitted via
satellite communications. In response to this new market development,
California Microwave s EFData division introduced a new modem designed for
the delivery of compressed digital television over satellite. While the
modem is currently used for transmitting digital TV in direct-to-home and
satellite news gathering applications, in the future it will transmit new
high definition TV over satellite. During the year, EFData completed an
intensive development project to produce an application-specific integrated
circuit-based (ASIC) satellite modem. The incorporation of ASIC technology
resulted in a software-configurable satellite modem; characteristics and
features can be changed remotely. The product is in full production now
<PAGE>
August 13, 1997 4
and enjoying wide customer acceptance.
The utility industry has been encountering difficulties in obtaining FCC
operating licenses for wireless data collection and telemetry in a point-
to-multipoint licensed service band. In response to its customers needs,
the company s Microwave Data Systems (MDS) division just introduced and
received FCC certification for a new high-performance, interference-
resistant radio that requires no license.
New Applications for Current Products
In 1997, MDS won an award valued at $7 million from RACIMEC Informatica
Brasileira S.A., a subsidiary of GTEC Corporation in Brazil, to provide
radio system equipment for Brazil s National Lottery. Approximately 5,000
remote radios and 500 master station radios will provide reliable, cost-
effective point-to-multipoint data communications to lottery terminals in
areas not served by telephone lines. Delivery of the radios commenced in
March 1997, with the bulk shipping in June 1997.
Statements made in this press release that are not historical facts,
including any statements about expectations for fiscal year 1998 and beyond
are forward-looking statements, involving certain risks and uncertainties.
Factors that could cause the company s actual results to differ materially
from management s projections, estimates and expectations include, but are
not limited to, delays in the receipt of orders or in the shipment of
products, any delay in execution of the company s divestiture plan, and
other factors referred to in the company s Securities and Exchange
Commission filings.
California Microwave, Inc. is a leading U.S. supplier of satellite earth
station and microwave radio infrastructure products, installed in more than
110 countries.<PAGE>
August 13, 1997 5
CALIFORNIA MICROWAVE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except per share amounts)
Years Ended Three Months Ended
June 30 June 30
1997 1996 %Change 1997 1996 %
Change
Net Sales $254,161 $ 239,964 + 6 $ 71,071 $ 63,822 + 11
Costs of
products sold 181,404 158,042 + 15 47,324 42,757 + 11
_______ ________ _______ _______
Gross margin 72,757 81,922 - 11 23,747 21,065 + 13
Expenses:
Research and
development 18,214 16,608 + 10 4,788 4,962 - 4
Marketing and
administration 46,107 38,747 + 19 12,927 10,330 + 25
Amortization of
intangible assets 1,394 1,381 + 1 331 344 - 4
_______ ________ _______ _______
Total expenses 65,715 56,736 + 16 18,046 15,636 + 15
_______ ________ _______ _______
Operating income 7,042 25,186 - 72 5,701 5,429 + 5
Interest (expense)
net (5,939) (4,314) + 38 (1,879) (1,114) + 69
Gain on sale
of subsidiary 2,744 - - -
_______ ________ _______ _______
Income from continuing
operations before
income taxes 3,847 20,872 - 82 3,822 4,315 - 11
Provision for
income taxes 1,268 7,514 - 83 1,260 1,554 - 19
_______ ________ _______ _______
Income from continuing
operations 2,579 13,358 - 81 2,562 2,761 - 7
Loss from discontinued
operations (59,345) (1,735) NM (26,056) (1,218) NM
_______ ________ _______ _______
Net income (loss) $ (56,766) $ 11,623 NM $ (23,494) $ 1,543 NM
======== ======== ======== =======
Per share
Income from continuing
operations $ .16 $ .82 - 80 $ .16 $.17 - 6
Discontinued
operations (3.66) (.11) NM (1.59) (.08) NM
Net income (3.50) .72 NM (1.44) .10 NM
Average Shares
and Equivalents
(Thousands) 16,226 16,200 - 16,351 16,193 -
Bookings $ 248,135 $ 217,461 + 14 $ 42,261 $50,557 - 16
<PAGE>
August 13, 1997 6
Backlog 91,082 97,108 - 6 91,082 97,108 - 6
<PAGE>
CALIFORNIA MICROWAVE, INC.
CONDENSED BALANCE SHEET
(Dollars in thousands)
June 30 June 30
1997 1996
_______ _______
Assets
Cash and cash equivalents $ 4,974 $ 4,560
Receivables 51,374 38,576
Inventories 50,353 50,026
Income tax refunds and
deferred tax assets 35,855 12,360
Net assets of discontinued
businesses 79,656 126,990
Property, plant and equipment (net) 22,812 23,597
Intangible assets 29,488 30,882
Other assets 7,534 7,296
_______ _______
$ 282,046 $ 294,287
======== ========
Liabilities and stockholders'
equity
Current liabilities $ 85,931 $ 47,142
Long-term liabilities 78,091 77,133
Stockholders' equity 118,024 170,012
________ ________
$ 282,046 $ 294,287
# # #<PAGE>
August 13, 1997 7
CALIFORNIA MICROWAVE, INC.
Fiscal 1997 Bookings and Sales by Product and Market Areas
(in millions)
% % of
FY97 FY96 Change FY97
_______________________________________________________________
BOOKINGS
Satellite Communications $ 90.7 $77.8 + 17 37
Information Collection
and Communications 81.0 67.9 + 19 33
Radio Products 76.4 71.9 + 6 30
__________________________________
Total $248.1 $217.6 + 14 100
__________________________________
US Government $ 98.0 $ 84.0 + 17 39
US Commercial 76.3 70.6 + 8 31
International 73.8 63.0 + 17 30
__________________________________
Total $248.1 $217.6 + 14 100
__________________________________
SALES
Satellite Communications $ 85.7 $ 91.5 (6) 34
Information Collection
and Communications 91.8 78.7 + 17 36
Radio Products 76.7 69.8 + 10 30
__________________________________
Total $254.2 $240.0 + 6 100
__________________________________
US Government $105.7 $ 95.1 + 11 41
US Commercial 75.6 72.2 + 5 30
International 72.9 72.7 - 29
__________________________________
Total $254.2 $240.0 + 6 100
__________________________________
FY97 FY96 % % of
Q4 Q4 Change FY97
_______________________________________________________________
BOOKINGS
Satellite Communications $ 19.3 $ 17.0 + 14 46
Information Collection
and Communications 6.6 15.9 (58) 15
Radio Products 16.4 17.7 (7) 39
__________________________________
Total $ 42.3 $ 50.6 (16) 100
__________________________________<PAGE>
August 13, 1997 8
US Government $ 8.4 $ 19.4 (57) 20
US Commercial 19.2 18.0 + 7 45
International 14.7 13.2 + 11 35
__________________________________
Total $ 42.3 $ 50.6 (16) 100
__________________________________
SALES
Satellite Communications $ 27.5 $ 22.1 + 24 39
Information Collection
and Communications 23.8 22.7 + 5 33
Radio Products 19.8 19.0 + 4 28
__________________________________
Total $ 71.1 $ 63.8 + 11 100
__________________________________
US Government $ 27.5 $ 27.4 - 39
US Commercial 20.9 22.0 (5) 29
International 22.7 14.4 58 32
___________________________________
Total $ 71.1 $ 63.8 + 11 100
___________________________________<PAGE>
<TABLE>
FINANCIAL RESULTS BY FISCAL QUARTER
(Unaudited)
(In thousands, except per share amounts)
<CAPTION>
Earnings Per Share
Income Income
(Loss) from (Loss) from Net
Fiscal Gross Continuing Discontinued Income Continuing Discontinued Net
Quarter Sales Margin Operations Operations (Loss) Operations Operations Loss
1997
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Q1 $ 61,777 $18,277 $ 990 $ (2,863) $ (1,873) $0.06 $(0.18) $(0.12)
Q2 62,754 12,371 (2,828) (22,567) (25,395) (0.18) (1.40) (1.57)
Q3 58,559 18,362 1,855 (7,859) (6,004) 0.11 (0.48) (0.37)
Q4 71,071 23,747 2,562 (26,056) (23,494) 0.16 (1.59) (1.44)
$254,161 $72,757 $2,579 $(59,345) $(56,766) $0.16 $(3.66) $(3.50)
1996
Q1 $ 58,044 $19,944 $ 3,222 $ 1,885 $ 5,107 $0.20 $0.12 $0.31
Q2 61,564 21,125 4,370 (722) 3,648 0.27 (0.04) 0.23
Q3 56,534 19,788 3,005 (1,680) 1,325 0.19 (0.10) 0.08
Q4 63,822 21,065 2,761 (1,218) 1,543 0.17 (0.08) 0.10
$239,964 $81,922 $13,358 $(1,735) $11,623 $0.82 $(0.11) $0.72<PAGE>
</TABLE>
