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
Date of Report (Date of earliest event reported): January 30, 1994
COMSAT Corporation
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(Exact name of Registrant as specified in Charter)
District of Columbia 1-4929 52-0781863
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(State or other juris- (Commission (IRS Employer
diction of incorporation File Number) Identification
Number)
6560 Rock Spring Drive, Bethesda, MD 20817
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(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code (301) 214-3000
Communications Satellite Corporation
950 L'Enfant Plaza, S.W., Washington, D.C. 20024
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(Former name or former address, if changed since last report).
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Item 5. Other Events
Attached to this report as Exhibit 20, and incorporated by
reference in this item, is a Press Release of the Corporation,
distributed on January 31, 1994, announcing COMSAT Corporation
entering into a definitive merger agreement for the acquisition
of Radiation Systems, Inc.
Item 7. Financial Statements and Exhibits
(c) Exhibits (listed according to the number assigned in
Item 601 of Regulation S-K).
Exhibit No. Description
20 Press Release dated January 31, 1994.
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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 hereunto duly authorized.
COMSAT Corporation
By: /s/ Allen E. Flower
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Allen E. Flower
Controller
Date: January 31, 1994
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page
<C> <S> <C>
20 Press Release dated January 31, 1994. 5E
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EXHIBIT 20
January 31, 1994
COMSAT TO ACQUIRE RADIATION SYSTEMS, INC.
RADIATION SYSTEMS REPORTS 2ND QUARTER RESULTS
BETHESDA, Md. COMSAT Corporation (NYSE:CQ) has entered into
a definitive merger agreement for the acquisition of Radiation
Systems, Inc. (NASDAQ:RADS), a Sterling, Va.-based designer,
manufacturer and integrator of satellite earth stations, advanced
antennas and other turnkey systems for telecommunications, radar,
air traffic control and military uses.
Following the merger, COMSAT's existing systems integration
business, COMSAT Technology Services (CTS), will be combined with
Radiation Systems, Inc. (RSi) to form COMSAT RSI. COMSAT RSI
will pursue opportunities in the high-growth wireless
communications market. Offering integrated systems and products,
COMSAT RSI will target international and domestic markets that
include cellular, PCS and VSAT antenna technology.
"By combining the core competencies of CTS and RSi, the new
company will provide comprehensive solutions to customers with
sophisticated wireless communications needs," said Bruce L.
Crockett, President and CEO of COMSAT.
"Wireless communications presents a unique business
opportunity for the company and makes this merger a natural fit,"
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said Richard E. Thomas, Chairman, President and CEO of Radiation
Systems, Inc. "Our business experience, manufacturing skills and
antenna expertise will blend with COMSAT's international
reputation and sharpened systems integration abilities to produce
a new, combined business that will be a major force in the
international marketplace." Thomas will head COMSAT RSI, which
will leverage the resources of COMSAT Laboratories, a world-
renowned center for communications satellite research and
development.
Under the merger agreement, RSi will be merged with a wholly
owned subsidiary of COMSAT and each share of Radiation Systems'
common stock will be exchanged for $18.25 in COMSAT common stock,
based on the average closing price of COMSAT stock during 20
trading days ending five trading days before the closing of the
transaction. However, in no event would a share of Radiation
Systems common stock be exchanged for less than 0.638 or more
than 0.780 shares of COMSAT common stock. Radiation Systems has
approximately eight million shares outstanding, giving the
transaction an approximate value of $150 million.
The merger is subject to the approval of Radiation Systems'
shareholders, receipt of all required government approvals and
compliance with other customary conditions. A registration
statement relating to the offering of COMSAT common stock to RSi
shareholders will be filed with the SEC. The offering will be
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made only by means of a prospectus which will be sent, together
with a proxy statement, to RSi shareholders, who are expected to
vote on the merger during the second quarter of 1994.
COMSAT currently owns 4.9 percent of Radiation Systems' stock.
Radiation Systems may be required to pay COMSAT up to $7.5
million if the transaction is not completed under certain
circumstances. Radiation Systems also has granted COMSAT, as
part of the transaction, an irrevocable option that can be
exercised under certain circumstances to purchase up to an
additional 15 percent of Radiation Systems' outstanding common
stock, at an exercise price of $18.25 per share.
It is a condition to the merger that it be treated as a
pooling of interests for accounting purposes. It is also
expected that the merger will qualify as a tax-free
reorganization. At the current trading price of COMSAT stock,
and excluding non-recurring transaction costs, COMSAT expects
that the acquisition will not have a materially dilutive effect
on 1994 earnings per share.
Financial advisors for the transaction are Goldman, Sachs &
Co. for COMSAT and Alex. Brown & Sons Incorporated for Radiation
Systems.
RADIATION SYSTEMS SECOND QUARTER RESULTS
Radiation Systems, Inc. today reported net income of
$1,304,000 (16 cents per share) for the three months ended
December 31, 1993, a decline of 42 percent from net income of
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$2,251,000 (27 cents per share) in the second quarter of last
fiscal year. Total revenues for the second quarter were $27.0
million compared to $29.3 million in the last fiscal year. For
the six months ended December 31, 1993, net income was $3.7
million (45 cents per share) on total revenues of $53.9 million,
compared to net income of $4.8 million (58 cents per share) on
revenues of $61.8 million for the same period the prior year.
Radiation Systems attributed the decline in net income largely
to the delay in the settlement of its business interruption
insurance claim from the previously reported tornado which struck
its division in Largo, Florida. Radiation Systems has previously
received $827,000, and $2,996,000 which have been included in
total revenues for the three month period ended September 30,
1993 and the year ended June 30, 1993 (including $802,000 in the
three month period ended December 31, 1992), respectively.
Radiation Systems anticipates that it will reach a settlement for
the current period claim by the end of the fiscal year at which
time the additional revenue will be recognized.
Also, additional expenses incurred in two contracts of the
Universal Antenna Division have contributed to a decline in
pretax operating margins in the second quarter.
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New orders for the quarter ended December 31, 1993 were $35.6
million including the previously announced $18 million contract
for telecommunications systems in Kuwait. Radiation Systems also
received notice that its $6.2 million contract with Raytheon for
the Ground Based Radar project had been terminated for
convenience by the U.S. Government, resulting in net bookings for
the quarter of $29.4 million. Total backlog of unfilled orders
on December 31, 1993 was $133.1 million compared to a backlog of
$130.8 million on September 30, 1993 and $142.1 million on
December 31, 1992.
Mr. Thomas said that, with the formation of COMSAT RSI, he
expects to realize scale economies, critical mass and increased
marketing success, particularly in the high-growth international
markets.
COMSAT Corporation is an international communications,
information and entertainment-distribution services company. It
provides voice, video and data services to customers worldwide by
fixed and mobile technologies and is the largest owner and user
of the global INTELSAT and Inmarsat communications satellite
networks. COMSAT Corporation also furnishes satellite systems
integration, wireless networks and technical consulting; offers
on-demand entertainment and information services to the
hospitality industry, and owns the NBA Denver Nuggets.
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Radiation Systems, Inc. designs, manufactures and installs a
broad range of antenna turnkey systems and components for radar,
air traffic control, tactical military, satellite communications,
wireless and other specialized uses throughout the world.
# # #
CONTACT:
Paul Jacobson COMSAT Corporation 301.214.3658 (media)
Mike Troiano COMSAT Corporation 301.214.3600 (investment community)
Mark D. Funston, Chief Financial
Officer Radiation Systems, Inc. 703.450.5680
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COMSAT CORPORATION
RADIATION SYSTEMS, INC.
(Dollars in millions except per share and employee amounts)
COMSAT Corporation Radiation Systems, Inc.
(year ended 12/31/92) (year ended 6/30/93)
$563.6 Annual Revenues $121.8
$42.9 Annual Net Income $10.2
$1.09* Earnings Per Share $1.23
$0.70* Annual Dividends Per Share $0.10
CQ Ticker Symbol RADS
39,318,000* Outstanding Shares 8,285,000
$1,542.8 Assets $123.4
1,644 Employees 975
Bethesda, Md. Headquarters Sterling, Va.
1963 Founded 1960
December 31 Fiscal Year Ends June 30
International Fixed & Principal Business Antennas, Antenna
Mobile Satellite Activities Subsystems and Turnkey
Communications; Earth Station Terminals;
Information & Commercial Satellite,
Entertainment Tactical Military &
Distribution; The Denver Terrestrial Microwave
Nuggets; Wireless Communications; Radar;
Networks; Systems Scientific & Special
Integration; Applied Applications
Research; International
Ventures
*after adjustment for 6/93 2-for-1 stock split
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Radiation Systems, Inc.
Comparative Highlights
(Unaudited)
(In Thousands, except per share amounts and percentages)
<TABLE>
<CAPTION>
Three Months Ended Six Month Ended Year
December 31 December 31 Ended
6/30/93
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1993 1992 % 1993 1992 %
change change
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<S> <C> <C> <C> <C> <C> <C> <C>
Sales $27,061 $28,492 -5% $53,035 $60,951 -13% 118,790
Business Inter-
ruption Insurance 0 802 -100% 827 802 3% 2,996
Total Revenues 27,061 29,294 -8% 53,862 61,753 -13% 121,786
Earnings Before
Taxes and Accounting
Change 2,115 3,629 -42% 5,313 7,713 -31% 15,576
Income Taxes (811) (1,378) -41% (1,998) (2,893) -31% (5,336)
Earnings Before
Accounting Change 1,304 2,251 -42% 3,315 4,820 -31% 10,240
Cumulative Effect of
Change in Accounting
for Income Taxes 0 0 N/A 377 -- N/A 0
Net Earnings 1,304 2,251 -42% 3,692 4,820 -29% 10,240
Earnings Per Share $0.16 $0.27 -41% $0.45 $0.58 -22% $1.23
Average and Equivalent
Shares Outstanding
During the Period 8,299 8,368 8,293 8,364 8,356
Investment Income,
Net of Interest
Expense (pretax) (124) (46) (228) (2) (80)
Operating Margins
(pretax) 8.3% 12.9% 10.4% 12.7% 13.2%
Effective Tax Rate 38.3% 38.0% 37.6% 37.5% 34.3%
Net Earnings as a
Percent of Sales 4.8% 7.9% 7.0% 7.9% 8.6%
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