UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended December 31, 1995
Commission File Number 1-8037
AEROFLEX INCORPORATED
(Exact name of Registrant as specified in its Charter)
DELAWARE 11-1974412
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
35 South Service Road
Plainview, N.Y. 11803
(Address of principal executive offices) (Zip Code)
(516) 694-6700
(Registrant's telephone number, including area code)
*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, 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.
February 7, 1996 11,884,319 (excluding 75,772 shares held in treasury)
____________________ _____________________________________________________
(Date) (Number of Shares)
NOTE: THIS IS PAGE 1 OF A DOCUMENT CONSISTING OF 14 PAGES.
<PAGE>
AEROFLEX INCORPORATED
AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PAGE
----
PART I: FINANCIAL INFORMATION
- ------ ---------------------
<S> <C>
CONSOLIDATED BALANCE SHEETS
December 31, 1995 and June 30, 1995 3-4
CONSOLIDATED STATEMENTS OF EARNINGS
Six Months Ended December 31, 1995 and 1994 5
CONSOLIDATED STATEMENTS OF EARNINGS
Three Months Ended December 31, 1995 and 1994 6
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended December 31, 1995 and 1994 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 8-9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Six and Three Months Ended December 31, 1995 and 1994 10-12
PART II: OTHER INFORMATION
- ------- -----------------
ITEM 1 Legal Proceedings 13
ITEM 6 Exhibits and Reports on Form 8-K 13
SIGNATURES 14
</TABLE>
<PAGE>
AEROFLEX INCORPORATED
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, June 30,
1995 1995
------------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 9,576,000 $ 11,330,000
Current portion of invested cash - 635,000
Accounts receivable less allowance for
doubtful accounts of $519,000 and $437,000 17,090,000 18,898,000
Inventories (Note 5) 15,878,000 12,330,000
Deferred income taxes 630,000 467,000
Prepaid expenses and other current assets 1,209,000 605,000
------------ ------------
Total Current Assets 44,383,000 44,265,000
Invested cash 658,000 677,000
Property, plant and equipment, at cost, net 12,518,000 13,859,000
Costs in excess of fair value of net assets
of businesses acquired, net 10,208,000 10,297,000
Deferred income taxes 589,000 589,000
Other assets 2,220,000 2,249,000
------------ ------------
$ 70,576,000 $ 71,936,000
============ ============
<FN>
See notes to consolidated financial statements
</FN>
</TABLE>
<PAGE>
AEROFLEX INCORPORATED
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(continued)
<TABLE>
<CAPTION>
December 31, June 30,
1995 1995
------------ ---------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 412,000 $ 1,936,000
Accounts payable 3,900,000 3,343,000
Accrued expenses and other current liabilities 4,448,000 6,916,000
Income taxes payable 901,000 537,000
------------ ------------
Total Current Liabilities 9,661,000 12,732,000
------------ ------------
Long-term debt (Note 3) 1,651,000 1,851,000
------------ ------------
Other long-term liabilities 956,000 1,009,000
------------ ------------
7-1/2% Senior Subordinated Convertible
Debentures (Note 4) 9,990,000 10,000,000
------------ ------------
Stockholders' equity:
Preferred stock, par value $.10 per share;
authorized 1,000,000 shares:
Series A Junior Participating Preferred
Stock, par value $.10 per share,
authorized 150,000 shares - -
Common stock, par value $.10 per share;
authorized 25,000,000 shares; issued
11,960,000 and 11,818,000 shares 1,196,000 1,182,000
Additional paid-in capital 56,408,000 56,101,000
Accumulated deficit (8,979,000) (10,584,000)
------------ ------------
48,625,000 46,699,000
Less: Treasury stock, at cost (76,000 and
92,000 shares) 307,000 355,000
------------ ------------
48,318,000 46,344,000
------------ ------------
$ 70,576,000 $ 71,936,000
============ ============
<FN>
See notes to consolidated financial statements
</FN>
</TABLE>
<PAGE>
AEROFLEX INCORPORATED
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
Six Months Ended
December 31,
-----------------
1995 1994
---- ----
<S> <C> <C>
Net Sales $ 28,344,000 $ 29,848,000
Cost of Sales 19,715,000 20,411,000
------------ ------------
Gross Profit 8,629,000 9,437,000
Selling, General and Administrative Costs 6,341,000 6,858,000
------------ ------------
Operating Income 2,288,000 2,579,000
------------ ------------
Other Expense (Income)
Life insurance proceeds - (2,000,000)
Interest expense 616,000 784,000
Interest and other income (333,000) (324,000)
------------ ------------
Total Other Expense (Income) 283,000 (1,540,000)
------------ ------------
Income Before Income Taxes 2,005,000 4,119,000
Provision for Income Taxes (Note 6) 400,000 320,000
------------ ------------
Net Income $ 1,605,000 $ 3,799,000
============ ============
Net Income per Common Share
Primary $ .13 $ .31
===== =====
Fully Diluted $ .13 $ .30
===== =====
Weighted Average Number of Common
Shares Outstanding
Primary 12,671,000 12,339,000
============ ============
Fully Diluted 14,459,000 14,135,000
============ ============
<FN>
See notes to consolidated financial statements
</FN>
</TABLE>
<PAGE>
AEROFLEX INCORPORATED
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
Three Months Ended
December 31,
1995 1994
---- ----
<S> <C> <C>
Net Sales $ 15,195,000 $ 15,821,000
Cost of Sales 10,635,000 10,769,000
------------ ------------
Gross Profit 4,560,000 5,052,000
Selling, General and Administrative Costs 3,163,000 3,537,000
------------ ------------
Operating Income 1,397,000 1,515,000
------------ ------------
Other Expense (Income)
Life insurance proceeds - (2,000,000)
Interest expense 313,000 397,000
Interest and other income (163,000) (161,000)
------------ ------------
Total Other Expense (Income) 150,000 (1,764,000)
------------ ------------
Income Before Income Taxes 1,247,000 3,279,000
Provision for Income Taxes (Note 6) 249,000 195,000
------------ ------------
Net Income $ 998,000 $ 3,084,000
============ ============
Net Income per Common Share:
Primary $ .08 $ .25
===== =====
Fully Diluted $ .08 $ .23
===== =====
Weighted Average Number of Common
Shares Outstanding
Primary 12,626,000 12,325,000
============ ============
Fully Diluted 14,402,000 14,103,000
============ ============
<FN>
See notes to consolidated financial statements
</FN>
</TABLE>
<PAGE>
AEROFLEX INCORPORATED
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
December 31,
-----------------
1995 1994
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,605,000 $ 3,799,000
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,547,000 1,561,000
Deferred income taxes (163,000) 35,000
Other 89,000 36,000
Change in operating assets and liabilities:
Decrease (increase) in accounts receivable 1,713,000 3,841,000
Decrease (increase) in inventories (3,548,000) (668,000)
Decrease (increase) in prepaid expenses and
other assets (803,000) (595,000)
Increase (decrease) in accounts payable, accrued
expenses and other long-term liabilities (1,610,000) (2,771,000)
Increase (decrease) in income taxes payable 364,000 (374,000)
------------ ------------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (806,000) 4,864,000
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash provided by (used in)
discontinued operations 94,000 501,000
Proceeds from sale of property, plant
and equipment 313,000 450,000
Decrease (increase) in invested cash 653,000 174,000
Capital expenditures (643,000) (1,671,000)
------------ ------------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 417,000 (546,000)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under debt agreements - 292,000
Net debt repayments (1,725,000) (587,000)
Proceeds from the exercise of stock options 360,000 -
------------ ------------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES (1,365,000) (295,000)
------------ ------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (1,754,000) 4,023,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 11,330,000 8,238,000
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIO D $ 9,576,000 $ 12,261,000
============ ============
<FN>
See notes to consolidated financial statements
</FN>
</TABLE>
<PAGE>
AEROFLEX INCORPORATED
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
---------------------
The consolidated balance sheet of Aeroflex Incorporated and Subsidiaries
("the Company") as of December 31, 1995 and the related consolidated
statements of earnings for the six and three months ended December 31, 1995
and 1994 and the statements of cash flows for the six months ended December
31, 1995 and 1994 have been prepared by the Company and are unaudited. In
the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and cash flows at December 31, 1995 and for all
periods presented have been made. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted.
It is suggested that these consolidated financial statements be read in
conjunction with the financial statements and notes thereto included in the
Company's June 30, 1995 annual report to shareholders. There have been no
changes of significant accounting policies since June 30, 1995.
Certain reclassifications have been made to previously reported financial
statements to conform to current classifications.
Results of operations for the six and three month periods are not
necessarily indicative of results of operations for the corresponding
years.
2. Acquisition of Business
-----------------------
In January 1995, the Company acquired substantially all of the net
operating assets of Lintek, Inc. ("Lintek") for $537,000 plus contingent
consideration based on the next five years' earnings to a maximum of an
additional $675,000. As of December 31, 1995, an additional $63,000 of
consideration was earned. Such amount was recorded as cost in excess of
fair value of net assets acquired as will any further contingent
consideration paid. Lintek designs, develops and manufactures radar cross
section and antenna pattern measurement systems for commercial and military
applications, as well as surface penetrating radars. The acquired Company's
net sales were approximately $2,600,000 for the year ended December 31,
1994. On a pro forma basis, had the Lintek acquisition taken place as of
the beginning of the periods presented, results of operations for those
periods would not have been materially affected.
The acquisition has been accounted for as a purchase and, accordingly, the
acquired assets and liabilities assumed have been recorded at their
estimated fair values at the date of acquisition. The operating results of
the acquired company are included in the consolidated statements of
earnings from the acquisition date.
3. Revolving Credit Agreements
---------------------------
As of April 11, 1994 the Company replaced a previous agreement with a
revised revolving credit and term loan agreement with two banks which is
secured by accounts receivable, inventory and the Company's stockholdings
in certain of its subsidiaries. The agreement provides for a revolving
credit line of $16,000,000 and a term loan of $4,000,000. The term loan was
repaid during the third quarter of fiscal 1995. The interest rate on
borrowings under this agreement is at various rates depending upon certain
financial ratios, with the present rate substantially equivalent to the
prime rate (8.5% at December 31, 1995). The terms of the agreement require
compliance with certain covenants including minimum consolidated working
capital and tangible net worth, maintenance of certain financial ratios,
limitations on capital expenditures and lease commitments, and prohibition
of the payment of cash dividends.
<PAGE>
4. Senior Subordinated Convertible Debentures
------------------------------------------
During June 1994, the Company completed a sale of $10,000,000 principal
amount of 7-1/2% Senior Subordinated Convertible Debentures to non-U.S.
persons. The debentures are due June 15, 2004 and are convertible into the
Company's common stock at a price of $5-5/8 per share. The net proceeds
from the offering were used initially to retire certain bank indebtedness
and for general working capital with excess proceeds placed in temporary
short term bank related investments. In October 1995, $10,000 principal
amount of debentures was converted.
5. Inventories
-----------
Inventories consist of the following:
<TABLE>
<CAPTION>
December 31, June 30,
1995 1995
------------ ------------
<S> <C> <C>
Raw Materials $ 7,402,000 $ 5,509,000
Work in Process 4,845,000 3,398,000
Finished Goods 3,631,000 3,423,000
----------- -----------
$15,878,000 $12,330,000
=========== ===========
</TABLE>
6. Income Taxes
------------
At June 30, 1995 the Company had net operating loss carryforwards of
approximately $14,000,000 for Federal income tax purposes which expire
through 2006. The income tax provisions for the six and three months ended
December 31, 1995 and 1994 include benefits relating to the recognition of
unrealized and realized net operating loss carryforwards.
The Company is undergoing routine audits by various taxing authorities of
several of its state and local income tax returns covering different periods
from 1991 to 1993. Management believes that the probable outcome of these
various audits should not materially affect the consolidated financial
statements of the Company.
7. Contingencies
-------------
A subsidiary of the Company whose operations were discontinued in 1991, is
one of several defendants named in a personal injury action initiated in
August, 1994, by a group of plaintiffs. The plaintiffs are seeking damages
which cumulatively may exceed $500 million. The complaint alleges, among
other things, that the plaintiffs suffered injuries from exposure to
substances contained in products sold by the subsidiary to one of its
customers. Considering its various defenses, together with its product
liability insurance, in the opinion of management of the Company, the
outcome of the action against its subsidiary is not expected to have a
materially adverse effect on the Company's consolidated financial
statements.
8. Life Insurance Proceeds
-----------------------
During the quarter ended December 31, 1994, the Company received $2,000,000
of insurance proceeds on the death of the former chairman.
<PAGE>
AEROFLEX INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
Six Months Ended December 31, 1995
Compared to Six Months Ended December 31, 1994
- -----------------------------------------------
Net sales decreased to $28,344,000 for the six months ended December 31,
1995 from $29,848,000 for the six months ended December 31, 1994. Net income
decreased to $1,605,000 for the six months ended December 31, 1995 from
$3,799,000 for the comparable period in the prior year, primarily due to the
receipt in the prior year of $2,000,000 of life insurance proceeds.
Net sales in the electronics segment decreased to $21,396,000 for the six months
ended December 31, 1995 from $22,985,000 for the six months ended December 31,
1994 primarily as a result of lower sales volume of microelectronics and
electronic systems offset, in part, by the increased volume of stabilization and
tracking devices and the acquisition of Lintek, Inc. in January, 1995. Operating
profits decreased by $400,000 as a result of the lower sales volume partially
offset by decreased selling, general and administrative costs.
Net sales in the isolator products segment increased to $6,948,000 for the six
months ended December 31, 1995 from $6,863,000 for the six months ended December
31, 1994. The increase reflects higher sales volume of commercial isolators
partially offset by decreased sales volume of military isolators caused by
delays in the transition of this product line from our former Puerto Rico
subsidiary to our New Jersey facility. Operating profits increased by $212,000
primarily due to reduced selling, general and administrative costs as a result
of the consolidation of certain operations of the Puerto Rican facility into the
Company's other facilities.
Cost of sales as a percentage of sales increased to 69.6% from 68.4% between the
two periods primarily as a result of inefficiencies in the final production runs
of military isolators in the Company's Puerto Rican facility and start-up costs
of the transition to the New Jersey facility. Selling general and administrative
costs decreased to $6,341,000 from $6,858,000 primarily as a result of cost
savings from the consolidation of certain operations of the Company's Puerto
Rican facility into the Company's other facilities.
Interest expense decreased to $616,000 from $784,000 due to decreased levels of
borrowings. Interest and other income increased to $333,000 from $324,000.
The income tax provisions for the six months ended December 31, 1995 and 1994
were less than the amounts computed by applying the U.S. Federal income tax rate
to income before income taxes primarily as a result of the tax benefits of loss
carryforwards (both unrealized and realized) and, for the period ended December
31, 1994, because of the non-taxable life insurance proceeds of $2,000,000.
Management believes that potential reductions in military spending will not
materially affect its operations. In certain product areas, the Company has
suffered reductions in sales volume due to cutbacks in the military budget. In
other product areas, the Company has experienced increased sales volume due to a
realignment of government spending towards upgrading existing systems instead of
purchasing completely new systems. The overall effect of the cutbacks and
realignment has not been material to the Company.
<PAGE>
Three Months Ended December 31, 1995
Compared to Three Months Ended December 31, 1994
- ------------------------------------------------
Net sales decreased to $15,195,000 for the three months ended December 31,
1995 from $15,821,000 for the three months ended December 31, 1994. Net income
decreased to $998,000 for the three months ended December 31, 1995 from
$3,084,000 for the comparable period in the prior year primarily due to the
receipt in the prior year of $2,000,000 of life insurance proceeds.
Net sales in the electronics segment decreased to $11,552,000 for the three
months ended December 31, 1995 from $12,345,000 for the three months ended
December 31, 1994 primarily as a result of lower sales volume of frequency
synthesizers and electronic systems partially offset by the increased volume of
stabilization and tracking devices and sales of radar cross section and antenna
pattern measurement systems as a result of the acquisition of Lintek, Inc. in
January 1995. Operating profits decreased by $169,000 as a result of the lower
sales volume, partially offset by decreased selling, general and administrative
costs.
Net sales in the isolator products segment increased to $3,643,000 for the three
months ended December 31, 1995 from $3,476,000 for the three months ended
December 31, 1994. The increase is primarily attributable to higher sales volume
of commercial isolators partially offset by lower sales volume of military
isolators caused by delays in the transition of this product line from our
former Puerto Rico subsidiary to our New Jersey facility. Operating profits
increased by $189,000 due to reduced selling, general and administrative costs
as a result of the consolidation of certain operations of the Puerto Rican
facility into the Company's other facilities.
Cost of sales as a percentage of sales increased to 70.0% from 68.1% between the
two periods as a result of inefficiencies in the final production runs of
military isolators in the Company's Puerto Rican facility and start-up costs of
the transition to the New Jersey facility. Selling, general and administrative
costs decreased to $3,163,000 from $3,537,000 primarily as a result of cost
savings from the consolidation of certain operations of the Company's Puerto
Rican facility into the Company's other facilities.
Interest expense decreased to $313,000 from $397,000 due to decreased levels of
borrowings. The income tax provisions for the three month periods ended December
31, 1995 and 1994 were less than the amounts computed by applying the U.S.
Federal income tax rate to income before income taxes primarily as a result of
the tax benefits of loss carryforwards (both unrealized and realized) and, for
the period ended December 31, 1994, because of the non-taxable life insurance
proceeds of $2,000,000.
Financial Condition
- -------------------
The Company's working capital at December 31, 1995 was $34,722,000 as compared
to $31,533,000 at June 30, 1995. The current ratio increased to 4.6 to 1 from
3.5 to 1 at June 30, 1995.
Cash used in operating activities of $806,000 for the six months ended December
31, 1995 was due to increased levels of inventories and reductions in accrued
expenses which were offset, in part, by the continued profitability of the
Company and the collection of receivables. Cash provided by investing activities
of $417,000 was comprised primarily of the sale of marketable securities and
property, plant and equipment partially offset by capital expenditures. Cash
used in financing activities was primarily for the repayment of certain debt of
the Company's Puerto Rico subsidiary. Management believes that the revolving
credit and term loan facility, coupled with cash provided by operations, will be
sufficient for its presently anticipated working capital requirements, capital
expenditure needs, restructuring costs and the servicing of its debt.
<PAGE>
In March 1995, the Company adopted a plan to consolidate its Puerto Rican
manufacturing operations into its existing facilities in New York and New
Jersey. The Company has ceased manufacturing operations in Puerto Rico. In
connection with this restructuring, the Company recorded a charge to earnings
totalling $1,669,000 in the third and fourth quarters of fiscal 1995,
representing costs for abandonment of leasehold improvements, severance costs
for approximately 100 employees, lease termination costs, write-down of excess
equipment and other related costs. Of this amount approximately $597,000 were
non-cash costs and approximately $100,000 remains unpaid.
As of April 11, 1994, the Company entered into a revised revolving credit and
term loan agreement with two banks which is secured by accounts receivable,
inventory, the Company's stockholdings in certain of its subsidiaries and the
Company's principal operating facility. The agreement provides for a revolving
credit line of $16,000,000 and a term loan of $4,000,000. The term loan was
repaid during the third quarter of fiscal 1995. As of December 31, 1995, there
were no borrowings under this agreement. See Note 3 to the Consolidated
Financial Statements.
During June 1994, the Company completed a sale of $10,000,000 principal amount
of 7-1/2% Senior Subordinated Convertible Debentures to non-U.S. persons. The
debentures are due June 15, 2004 subject to prior sinking fund payments of 10%,
10%, 15% and 15% of the principal amount on September 15, 2000, 2001, 2002 and
2003, respectively. The debentures are convertible into the Company's common
stock at a price of $5-5/8 per share. In October 1995, $10,000 principal amount
of debentures was converted.
A subsidiary of the Company whose operations were discontinued in 1991, is one
of several defendants named in a personal injury action initiated in August,
1994, by a group of plaintiffs. The plaintiffs are seeking damages which
cumulatively may exceed $500 million. The complaint alleges, among other things,
that the plaintiffs suffered injuries from exposure to substances contained in
products sold by the subsidiary to one of its customers. Considering its various
defenses, together with its product liability insurance, in the opinion of
management of the Company, the outcome of the action against its subsidiary is
not expected to have a materially adverse effect on the Company's consolidated
financial statements.
The Company's backlog of orders at December 31, 1995 and 1994 was $39,900,000
and $31,600,000, respectively.
At June 30, 1995 the Company had net operating loss carryforwards of
approximately $14,000,000 for Federal income tax purposes. The Company is
undergoing routine audits by various taxing authorities of several of its state
and local income tax returns covering different periods from 1991 to 1993.
Management believes that the probable outcome of these various audits should not
materially affect the consolidated financial statements of the Company.
<PAGE>
AEROFLEX INCORPORATED
AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Old Corp. (formerly Filtron Co., Inc.) a subsidiary of the Company whose
operations were discontinued in October 1991, was one of several
defendants named in a personal injury action instituted recently by
several plaintiffs in the Supreme Court of the State of New York, County
of Kings. According to the allegations of the Amended Verified Complaint,
the plaintiffs, who are current or former employees of a company to whom
Old Corp. sold RFI filters/capacitors, and their wives, are seeking to
recover, respectively, directly and derivatively, on diverse theories of
negligence, strict liability and breach of warranty, for injuries
allegedly suffered from exposure to a liquid substance or material which
Old Corp. incorporated for a period of time in the RFI filters/capacitors
which it manufactured. The plaintiffs are seeking damages which
cumulatively may exceed $500 million. Considering its various defenses,
together with its product liability insurance, in the opinion of
management of the Company, the outcome of the action against its
subsidiary is not expected to have a materially adverse effect on the
Company's consolidated financial statements.
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 11 - Computation of Earnings Per Common Share
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
None
<PAGE>
AEROFLEX INCORPORATED
AND SUBSIDIARIES
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 thereunto duly authorized.
AEROFLEX INCORPORATED
(REGISTRANT)
February 7, 1996 By: /s/ Michael Gorin
--------------------------
Michael Gorin
President and Chief Financial Officer
Exhibit 11
AEROFLEX INCORPORATED
AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
Six Months Three Months
Ended December 31, Ended December 31,
------------------ ------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
COMPUTATION OF ADJUSTED NET INCOME:
Net income for primary earnings
per common share $ 1,605,000 $ 3,799,000 $ 998,000 $ 3,084,000
Add: Debenture interest and amortization
expense, net of income taxes 304,000 382,000 152,000 191,000
------------ ------------- ------------ -------------
Adjusted net income for fully diluted
earnings per common share $ 1,909,000 $ 4,181,000 $ 1,150,000 $ 3,275,000
============ ============ ============ ============
COMPUTATION OF ADJUSTED WEIGHTED AVERAGE
SHARES OUTSTANDING:
Weighted average shares outstanding 11,845,000 11,737,000 11,882,000 11,734,000
Add: Effect of options and warrants
outstanding 826,000 602,000 744,000 591,000
------------ ------------ ------------ ------------
Weighted average shares and common share
equivalents used for computation of primary
earnings per common share 12,671,000 12,339,000 12,626,000 12,325,000
Add: Effect of additional options and warrants
outstanding for fully diluted computation 11,000 18,000 - -
Add: Shares assumed to be issued upon
conversion of debentures 1,777,000 1,778,000 1,776,000 1,778,000
------------ ------------ ------------ ------------
Weighted average shares and common share
equivalents used for computation of fully
diluted earnings per common share 14,459,000 14,135,000 14,402,000 14,103,000
============ =========== =========== ===========
NET INCOME PER COMMON SHARE AND COMMON SHARE EQUIVALENT:
Primary $ .13 $ .31 $ .08 $ .25
===== ===== ===== =====
Fully Diluted $ .13 $ .30 $ .08 $ .23
===== ===== ===== =====
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
consolidated financial statements for the six months ended December 31, 1995 and
is qualified in its entirety by reference to such statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> DEC-31-1995
<CASH> 9,576,000
<SECURITIES> 0
<RECEIVABLES> 17,609,000
<ALLOWANCES> 519,000
<INVENTORY> 15,878,000
<CURRENT-ASSETS> 44,383,000
<PP&E> 33,595,000
<DEPRECIATION> 21,077,000
<TOTAL-ASSETS> 70,576,000
<CURRENT-LIABILITIES> 9,661,000
<BONDS> 9,990,000
0
0
<COMMON> 1,196,000
<OTHER-SE> 47,122,000
<TOTAL-LIABILITY-AND-EQUITY> 70,576,000
<SALES> 28,344,000
<TOTAL-REVENUES> 28,344,000
<CGS> 19,715,000
<TOTAL-COSTS> 26,056,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 616,000
<INCOME-PRETAX> 2,005,000
<INCOME-TAX> 400,000
<INCOME-CONTINUING> 1,605,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,605,000
<EPS-PRIMARY> .13
<EPS-DILUTED> .13
</TABLE>
