UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A2
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
July 10, 2000 0-7928
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Date of Report (Date of earliest event reported) (Commission File Number)
COMTECH TELECOMMUNICATIONS CORP.
(Exact name of registrant as specified in its charter)
Delaware 11-2139466
----------------------------------- --------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
105 Baylis Road, Melville, NY 11747
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(Address of Principal Executive Offices) (Zip Code)
(631)777-8900
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(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. ACQUISITION OF ASSETS.
This Amendment to Form 8-K/A filed on September 25, 2000 is being
submitted to provide corrected pro forma financial information.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) Pro Forma Financial Information
Attached is the unaudited pro forma financial information of the Company
as of April 30, 2000 and for the year ended July 31, 1999 and the nine
months ended April 30, 2000.
(1)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Comtech Telecommunications Corp. has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
COMTECH TELECOMMUNICATIONS CORP.
By: /s/ J. Preston Windus, Jr.
-----------------------------------
Name: J. Preston Windus, Jr.
Title: Senior Vice President and
Chief Financial Officer
Date: September 27, 2000
(2)
<PAGE>
Comtech Telecommunications Corp.
Pro Forma Condensed Combined Financial Statements
On July 10, 2000 Comtech Telecommunications Corp. acquired the business of the
EF Data division of Adaptive Broadband Corporation for an adjusted purchase
price of $54.4 million.
The attached unaudited pro forma condensed combined balance sheet as of April
30, 2000 and statements of operations for the nine months ended April 30, 2000
and the year ended July 31, 1999 give effect to the purchase by the Company of
the net assets of EF Data for an adjusted purchase price of $54.4 million. The
unaudited pro forma condensed combined statements of operations for the year
ended July 31, 1999 combines the Company's historical results for the year ended
July 31, 1999 and EF Data's historical results for the year ended June 30, 1999,
giving effect to the acquisition as if it had occurred as of August 1, 1998. The
unaudited pro forma condensed combined statements of operations for the nine
months ended April 30, 2000 and EF Data's historical results for the nine months
ended March 31, 2000 also gives effect to the acquisition as if it had occurred
as of August 1, 1998. The unaudited pro forma condensed combined balance sheet
combines the Company's balance sheet as of April 30, 2000 with EF Data's balance
sheet as of March 31, 2000 giving effect to the acquisition as if it had
occurred on April 30, 2000.
The unaudited pro forma condensed combined financial statements were prepared
utilizing the accounting principles of the respective entities as outlined in
each entitiy's historical financial statements. The pro forma adjustments are
based upon available information and certain assumptions that the Company
believes are reasonable under the circumstances. The unaudited condensed
combined financial statements do not purport to be indicative of the operating
results or financial position that would have been achieved had the acquisition
taken place on the dates indicated or the results that may be obtained in the
future.
Contents
Pro Forma Condensed Combined Balance Sheet as of April 30, 2000........F-16
Pro Forma Condensed Combined Statement of Operations for the
Nine Month Period Ended April 30, 2000.................................F-17
Pro Forma Condensed Combined Statement of Operations for the Year
Ended July 31, 1999....................................................F-18
Notes to Pro Forma Condensed Combined Financial Statements.............F-19-F-20
(F-15)
<PAGE>
Comtech Telecommunications Corp.
Unaudited Pro Forma Condensed Combined Balance Sheet
April 30, 2000
(in thousands)
<TABLE>
<CAPTION>
Comtech Tel. Pro Forma Pro Forma
Corp. EF Data Adjustments Combined
----- ------- ----------- --------
<S> <C> <C> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents $ 10,483 1 (5,397)(a) 5,087
Marketable investment securities 35,857 -- (8,962)(a) 26,895
Accounts receivable, net 7,729 16,700 24,429
Inventories, net 11,493 13,674 25,167
Prepaid expenses and other current assets 642 33 675
Deferred tax asset-current 731 -- 731
Net assets of discontinued operations 192 -- -- 192
-------- -------- -------- --------
Total current assets 67,127 30,408 (14,359) 83,176
Property, plant and equipment, net 4,708 6,062 10,770
Intangible assets, net of amortization 2,159 -- 15,939(a) 18,098
Other assets 237 2 239
Deferred tax asset-non current 2,917 -- -- 2,917
-------- -------- -------- --------
Total assets $ 77,148 36,472 1,580 115,200
======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Current installments of long-term debt $ 588 -- 588
Accounts payable 5,343 4,193 9,536
Accrued expenses and other current liabilities 6,357 4,077 -- 10,434
-------- -------- -------- --------
Total current liabilities 12,288 8,270 20,558
Long-term debt, less current installments 824 -- 40,000(b) 40,824
Other long-term liabilities 394 -- -- 394
-------- -------- -------- --------
Total liabilities 13,506 8,270 40,000 61,776
-------- -------- -------- --------
Stockholders' equity:
Preferred stock --
Capital stock 735 735
Additional paid-in capital 66,743 66,743
Accumulated other comprehensive income (231) (231)
(Accumulated deficit) retained earnings (28,202)(c)
(2,578) 28,202 (10,218)(d) (12,796)
-------- -------- -------- --------
64,669 28,202 (38,420) 54,451
Less:
Treasury stock (184) (184)
Deferred compensation expense (843) -- -- (843)
-------- -------- -------- --------
63,642 28,202 (38,420) 53,424
-------- -------- -------- --------
Total liabilities and stockholders' equity $ 77,148 36,472 1,580 115,200
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these unaudited pro
forma condensed combined financial statements.
(F-16)
<PAGE>
Comtech Telecommunications Corporation
Unaudited Pro Forma Condensed Combined Statement of Operations
For the nine month period ended April 30, 2000
(in thousands except per share data)
<TABLE>
<CAPTION>
Comtech Tel. Pro Forma Pro Forma
Corp. EF Data Adjustments Combined
----- ------- ----------- --------
<S> <C> <C> <C> <C>
Net sales $ 40,950 69,144 -- 110,094
-------- -------- -------- --------
Operating costs and expenses:
Cost of sales 29,080 45,468 74,548
Selling, general and administrative 7,381 13,267(h) 1,673(e) 22,321
Research and development 1,611 7,385 -- 8,996
-------- -------- -------- --------
Total operating costs and expenses 38,072 66,120 1,673 105,865
-------- -------- -------- --------
Operating income (loss) 2,878 3,024 (1,673) 4,229
Other expense (income):
Interest expense 99 2,775(f) 2,874
Interest income (635) -- -- (635)
-------- -------- -------- --------
Income (loss) before provision for income taxes 3,414 3,024 (4,448) 1,990
Provision (benefit) for income taxes 1,246 1,089 (1,646)(g) 689
-------- -------- -------- --------
Net income (loss) $ 2,168 1,935 (2,802) 1,301
======== ======== ======== ========
Net income per share:
Basic $ 0.42 0.25
======== ========
Diluted $ 0.38 0.23
======== ========
Weighted average number of common
shares outstanding - basic computation 5,120 5,120
Potential dilutive common shares 652 652
-------- --------
Weighted average number of common and
common equivalent shares outstanding
assuming dilution - diluted computation 5,772 5,772
======== ========
</TABLE>
The accompanying notes are an integral part of these unaudited pro
forma condensed combined financial statements.
(F-17)
<PAGE>
Comtech Telecommunications Corporation
Unaudited Pro Forma Condensed Combined Statement of Operations
For the year ended July 31, 1999
(in thousands except per share data)
<TABLE>
<CAPTION>
Comtech Tel. Pro Forma Pro Forma
Corp. EF Data Adjustments Combined
----- ------- ----------- --------
<S> <C> <C> <C> <C>
Net sales 37,886 82,372 -- 120,258
-------- -------- -------- --------
Operating costs and expenses:
Cost of sales 26,405 57,887 84,292
Selling, general and administrative 6,632 31,242(h) 2,231(e) 40,105
Research and development 2,022 11,872 -- 13,894
-------- -------- -------- --------
Total operating costs and expenses 35,059 101,001 2,231 138,291
-------- -------- -------- --------
Operating income (loss) from continuing operations 2,827 (18,629) (2,231) (18,033)
Other expense (income):
Interest expense 204 -- 3,700(f) 3,904
Interest income (65) (371) -- (436)
Other (39) -- -- (39)
-------- -------- -------- --------
Income (loss) from continuing operations before income taxes 2,727 (18,258) (5,931) (21,462)
Benefit for income taxes (3,754) (6,573) (2,194)(g) (12,521)
-------- -------- -------- --------
Income (loss) from continuing operations 6,481 (11,685) (3,737) (8,941)
======== ======== ======== ========
Net income (loss) per share:
Basic $ 1.56 (2.16)
Diluted $ 1.42 (1.96)
Weighted average number of common shares outstanding-
Basic computation 4,143 4,143
Potential dilutive common shares 430 430
-------- --------
Weighted average number of common and common equivalent shares
outstanding assuming dilution -
Diluted computation 4,573 4,573
======== ========
</TABLE>
The accompanying notes are an integral part of these unaudited pro
forma condensed combined financial statements.
(F-18)
<PAGE>
Comtech Telecommunications Corp.
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
(in thousands)
(a) Reflects acquisition of EF Data for an aggregate adjusted purchase price
of $54,359, resulting in an excess of the purchase price over the fair
value of the net assets acquired (intangibles) of $15,939. The adjusted
purchase price and adjusted purchase price allocation are summarized as
follows assuming the acquisition had occurred on April 30, 2000:
Cash paid by Comtech $ 12,462
Debt issued 40,000
Estimated transaction expenses 1,897
--------
Adjusted purchase price $ 54,359
========
The adjusted purchase price has been allocated as follows:
Fair value of other net assets acquired $ 28,202
Fair value of in-process research and development
costs 10,218
Fair value of existing technology 7,508
Fair value of assembled workforce 2,835
Fair value of customer base 742
Excess of the purchase price over the fair value of
the net assets 4,854
--------
$ 54,359
========
The fair value of the acquired property, plant and equipment, net is
currently being assessed and may result in an additional adjustment.
(b) Reflects the acquisition of new debt to finance the acquisition.
(c) Represents the elimination of EF Data's retained earnings as a result of
using the purchase method of accounting.
(d) The estimated charge to earnings of $10,218 resulting from purchased
in-process research and development costs has been reflected as a
reduction of stockholders' equity in the pro forma condensed combined
balance sheet as of April 30, 2000. This same charge has been excluded
from the pro forma condensed combined statement of operations for the nine
months ended April 30, 2000 and the year ended July 31, 1999 since the
charge is non-recurring and directly related to the acquisition.
An independent third-party appraiser was used to assess and value the
purchased in-process research and development from the acquisition. The
value was determined by estimating the projected net cash flows related to
products under development based upon future revenues to be earned upon
commercialization of such products.
(F-19)
<PAGE>
The percentage of the cash flow allocated to purchased in-process research
and development was based upon the estimated percentage complete for each
of the projects. These cash flows were discounted back to their net
present value. The resulting projected net cash flows from such projects
were based on management's estimates of revenues and operating profits
related to such products.
(e) Represents the amortization of intangible assets on a straight-line basis
computed as follows:
o Goodwill, totaling $4,854, amortized over 10 years.
o Existing technology and customer base, totaling $8,250, amortized
over 7 years.
o Assembled workforce, totaling $2,835, amortized over 5 years.
(f) Interest expense resulting from the issuance of debt to finance the
acquisition. The interest rate on new debt of $40,000 is 9.25%.
(g) Reflects the income tax effect of increased interest and amortization
expense at the statutory tax rate of 37% for the year ended July 31, 1999
and the nine months ended April 30, 2000.
(h) Includes corporate allocations from Adaptive Broadband Corp. of
approximately $3,753 and $13,267 for the year ended June 30, 1999 and the
nine months ended March 31, 2000, respectively. The allocation was based
on revenues in 1999. However, during fiscal 2000, a shared services
arrangement was entered into whereby a substantial portion of sales,
marketing and administration services were processed as a corporate
function. Accordingly, during 2000 directly incurred expenses were
replaced by corporate allocations.
(F-20)
