UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] 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: 0-7445
DATRON SYSTEMS INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 95-2582922
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3030 Enterprise Court, Vista, California 92083-8347
(Address of principal executive offices) (zip code)
(760) 734-5454
(Registrant's telephone number, including area code)
(Former name, former address and formal 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.
[ X ] Yes [ ] No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15 (d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
[ ] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
As of October 23, 2000, the Registrant had only one class
of common stock, par value $0.01, of which there were 2,736,499 shares
outstanding.
<PAGE>1
PART 1 - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Item 1. Financial Statements
DATRON SYSTEMS INCORPORATED
CONSOLIDATED BALANCE SHEETS (In Thousands)
September 30,
2000 March 31,
(Unaudited) 2000
----------- ---------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $2,828 $12,183
Accounts receivable, net 18,732 12,658
Inventories 11,774 11,626
Deferred income taxes 2,603 2,603
Prepaid expenses and other current assets 313 343
------ ------
Total current assets 36,250 39,413
Property, plant and equipment, net 8,835 9,427
Goodwill, net 5,135 5,237
Other assets 555 320
------ ------
Total assets $50,775 $54,397
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,015 $2,921
Accrued expenses 8,333 9,632
Customer advances 860 1,408
Income taxes payable 385 1,433
Current portion of long-term debt 93 90
------ ------
Total current liabilities 11,686 15,484
Long-term debt 3,033 3,080
Deferred income taxes 1,614 1,614
Deferred rent 133 103
------ ------
Total liabilities 16,466 20,281
------ ------
Stockholders' equity:
Preferred stock -- par value $0.01;
authorized 2,000,000 shares,
none issued or outstanding --- ---
Common stock -- par value $0.01;
authorized 10,000,000 shares,
3,106,881 and 3,098,943 shares
issued in September and March,
respectively 31 31
Additional paid-in capital 10,960 10,904
Retained earnings 25,506 25,460
Treasury stock, at cost; 370,382 and
387,303 shares in September and
March, respectively (2,024) (2,115)
Stock option plan and stock purchase
plan notes receivable (164) (164)
------ ------
Total stockholders' equity 34,309 34,116
------ ------
Total liabilities and stockholders'
equity $50,775 $54,397
====== ======
See notes to consolidated financial statements.
</TABLE>
<PAGE>2
<TABLE>
<CAPTION>
DATRON SYSTEMS INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per-share amounts)
Three Months Ended Six Months Ended
September 30, September 30,
2000 1999 2000 1999
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net sales $14,616 $14,130 $27,970 $27,653
Cost of sales 9,894 10,412 19,840 20,050
------- ------- ------- ------
Gross profit 4,722 3,718 8,130 7,603
Selling, general and administrative 3,007 2,796 6,003 5,603
Research and development 1,174 962 2,197 1,958
------- ------ ------ ------
Operating income (loss) 541 (40) (70) 42
Interest expense (54) (54) (107) (109)
Interest income 87 51 217 120
Other income 45 1,042 37 1,033
------ ------ ------ ------
Income before income taxes 619 999 77 1,086
Income taxes 246 396 31 431
------ ------ ------ -----
Net income $373 $603 $46 $655
====== ====== ====== ======
Earnings per common share--basic $0.14 $0.22 $0.02 $0.24
====== ====== ====== ======
Weighted average number of
common shares outstanding 2,733 2,701 2,727 2,699
====== ====== ====== ======
Earnings per common share--diluted $0.13 $0.22 $0.02 $0.24
====== ====== ====== ======
Weighted average number of
common and common equivalent
shares outstanding 2,808 2,709 2,765 2,705
====== ====== ====== ======
See notes to consolidated financial statements.
</TABLE>
<PAGE>3
<TABLE>
<CAPTION>
DATRON SYSTEMS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Six Months Ended
September 30,
2000 1999
------ -----
<S> <C> <C>
Cash Flows from Operating Activities
Net income $46 $655
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 947 1,011
Changes in operating assets
and liabilities:
Accounts receivable (6,074) (263)
Inventories (148) (932)
Prepaid expenses and other assets (205) 377
Accounts payable and accrued expenses (2,205) (1,057)
Customer advances (548) (492)
Income taxes payable (1,048) 410
Deferred rent 30 73
Other 16 31
------ -----
Net cash used in operating activities (9,189) (187)
------ -----
Cash Flows from Investing Activities
Additions to property, plant and equipment (264) (737)
Proceeds from sales of property, plant and
equipment --- 384
------ ------
Net cash used in investing activities (264) (353)
------ ------
Cash Flows from Financing Activities
Repayments of long-term debt (44) (42)
Stock options exercised 85 ---
Issuance of common stock 57 36
----- ------
Net cash provided by (used in) financing
activities 98 (6)
----- -----
Decrease in cash and cash equivalents (9,355) (546)
Cash and cash equivalents at beginning
of period 12,183 5,548
------ ------
Cash and cash equivalents at end of period $2,828 $5,002
====== ======
See notes to consolidated financials statements.
</TABLE>
<PAGE>4
Datron Systems Incorporated
Notes to Consolidated Financial Statements (Unaudited)
1. Basis of Presentation
The unaudited consolidated financial statements included herein
contain the accounts of Datron Systems Incorporated and its
wholly owned subsidiaries (the "Company") and have been prepared
in accordance with the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have
been condensed or omitted pursuant to such rules and regulations.
It is suggested that these financial statements be read in
connection with the financial statements and notes thereto
included in the Company's annual report on Form 10-K for the
fiscal year ended March 31, 2000.
In the opinion of the Company's management, the accompanying
unaudited financial statements contain all adjustments,
consisting only of normal recurring adjustments, unless otherwise
stated, which are necessary to present fairly its financial
position at September 30, 2000 and the results of its operations
and its cash flows for the periods presented. Results of
operations for the periods presented herein are not necessarily
indicative of what results will be for the entire fiscal year.
The balance sheet at March 31, 2000 has been derived from audited
financial statements.
2. Earnings per Share
Basic earnings per share ("EPS") is calculated based on the
weighted average number of shares outstanding during the period.
Diluted EPS is calculated based on the weighted average number of
shares outstanding during the period plus equivalent shares
issuable under the Company's stock option plans when such amounts
are dilutive. Options to purchase 85,500 shares of common stock
at prices ranging from $12.75 to $15.73 were not included in the
computation of diluted EPS at September 30, 2000 because the
effect of such options would be anti-dilutive. Such options
expire at various dates from November 10, 2005 to February 22,
2010. At September 30, 1999, options to purchase 232,000 shares
of common stock at prices ranging from $7.00 to $15.73 were not
included in the computation of diluted EPS because the effect of
such options would be anti-dilutive.
3. Accounts Receivable
At September 30, 2000 and March 31, 2000, accounts receivable
were as follows:
<TABLE>
<CAPTION>
September 30, March 31,
2000 2000
----------- -----------
<S> <C> <C>
Billed $13,482,000 $ 9,108,000
Unbilled 5,360,000 3,659,000
----------- -----------
Subtotal 18,842,000 12,767,000
Allowance for doubtful
accounts (110,000) (109,000)
----------- -----------
Total $18,732,000 $12,658,000
=========== ===========
</TABLE>
<PAGE>5
4. Inventories
At September 30, 2000 and March 31, 2000, inventories were as
follows:
<TABLE>
<CAPTION>
September 30, March 31,
2000 2000
----------- -----------
<S> <C> <C>
Raw materials $ 7,298,000 $ 7,587,000
Work-in-process 2,983,000 2,233,000
Finished goods 1,493,000 1,806,000
----------- -----------
Total $11,774,000 $11,626,000
=========== ===========
</TABLE>
Inventories are presented net of allowances for obsolescence of
$1,505,000 and $1,572,000 at September 30, 2000 and March 31,
2000, respectively.
5. Property, Plant and Equipment
At September 30, 2000 and March 31, 2000, property, plant and
equipment was as follows:
<TABLE>
<CAPTION>
September 30, March 31,
2000 2000
----------- -----------
<S> <C> <C>
Land and buildings $ 8,914,000 $ 8,901,000
Machinery and equipment 15,402,000 15,298,000
Furniture and office
equipment 1,548,000 1,548,000
Leasehold improvements 748,000 726,000
Construction-in-process 53,000 ---
----------- -----------
Subtotal 26,665,000 26,473,000
Accumulated depreciation
and amortization (17,830,000) (17,046,000)
----------- -----------
Total $ 8,835,000 $ 9,427,000
=========== ===========
</TABLE>
6. Segment Information
Segment information was as follows for the periods shown:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales:
Antenna and Imaging
Systems $ 9,019,000 $ 9,856,000 $18,867,000 $19,718,000
Communication Products 5,597,000 4,274,000 9,103,000 7,935,000
----------- ----------- ----------- -----------
Consolidated net sales $14,616,000 $14,130,000 $27,970,000 $27,653,000
=========== =========== =========== ===========
Operating income (loss):
Antenna and Imaging
Systems $ 253,000 $ 405,000 $ 459,000 $ 1,255,000
Communication Products 693,000 (109,000) 229,000 (547,000)
General corporate
expenses (405,000) (336,000) (758,000) (666,000)
---------- ---------- ---------- ----------
Consolidated operating
income (loss) 541,000 (40,000) (70,000) 42,000
Interest income (expense),
net 33,000 (3,000) 110,000 11,000
Other income 45,000 1,042,000 37,000 1,033,000
---------- ---------- --------- ----------
Income before income taxes $619,000 $999,000 $77,000 $1,086,000
========== ========== ========= ==========
</TABLE>
<PAGE>6
7. Commitments and Contingencies
In connection with a Defense Contract Audit Agency (DCAA) audit
of a $9.6 million U.S. Navy contract completed in 1989, DCAA has
submitted a report to the Contracting Officer alleging
deficiencies in the information provided to the Navy at the time
the contract was negotiated and recommending a reduction in the
contract value. During the second quarter ended September 30,
2000, the Company reached a settlement agreement with the
Contracting Officer and refunded a portion of the contract value
plus accrued interest using amounts previously reserved.
Resolution of this matter did not have a material affect on the
consolidated financial position of the Company or its results of
operations.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Datron Systems Incorporated and its wholly owned subsidiaries
(the "Company") report operations in two business segments:
Antenna and Imaging Systems, and Communication Products. The
Antenna and Imaging Systems business segment designs and
manufactures satellite communication systems, subsystems and
antennas that are sold worldwide to commercial and governmental
customers. Its major product lines are remote sensing satellite
earth stations, tracking antennas and systems for U.S. and
foreign governmental agencies (including the U.S. Department of
Defense ("DoD")) and commercial satellite service providers, and
mobile direct broadcast satellite ("DBS") television reception
systems for recreational vehicles, boats and large business jets.
The Communication Products business segment designs, manufactures
and distributes high frequency and very high frequency radios and
accessories for worldwide military and civilian purposes.
This Management's Discussion and Analysis of Financial Condition
and Results of Operations contains "forward-looking statements"
as defined in the Private Securities Litigation Reform Act of
1995. A variety of factors could cause the Company's actual
results to differ from the anticipated results expressed in such
forward-looking statements. These include, among others,
uncertainties stemming from the dependence of the Company on
foreign sales and on large orders from a relatively small number
of customers, risks relating to the decline in the Company's
traditional defense business and the Company's efforts to develop
and market consumer products, lack of timely development or
customer acceptance of new products, changes in or unavailability
of products and services offered by satellite service providers
and their related suppliers, worldwide economic downturns and
currency devaluations, restrictions that may be imposed by the
U.S. government on the export of Company products, and the impact
of competition. Investors are referred to the Company's periodic
reports under the Securities Exchange Act of 1934, including
without limitation the Investment Considerations set forth in the
Company's Annual Report on Form 10-K.
Results of Operations
Net income for the second quarter of fiscal 2001 was $373,000, or
$0.13 per diluted share, compared with net income of $603,000, or
$0.22 per diluted share, in the second quarter of fiscal 2000.
Net sales in the second quarter of fiscal 2001 were $14,616,000,
a 3% increase from second quarter net sales last fiscal year of
$14,130,000. The increase in sales was primarily due to an
increase in sales of Communication Products, partially offset by
a decrease in sales of Antenna and Imaging Systems products. The
lower net income was primarily due to the absence of a $1.1
million ($0.6 million, or $0.23 per diluted share, after tax)
license fee the Company received in the second quarter last
fiscal year for the manufacturing rights to its airborne DBS
antenna for business jets.
Net income for the six months ended September 30, 2000 was
$46,000, or $0.02 per diluted share, compared with net income of
$655,000, or $0.24 per diluted share, for the comparable period
last fiscal year. Net sales for the six months were $27,970,000,
a 1% increase from net sales of $27,653,000 for the first six
months last fiscal year. The increase in sales was primarily due
to an increase in sales of Communication Products, partially
offset by a decrease in sales of Antenna and Imaging Systems
products. The decline in net income was primarily due to the
absence of the license fee mentioned above and higher operating
expenses during the current period.
<PAGE>7
Operating results for each business segment were as follows:
<TABLE>
<CAPTION>
Antenna and Imaging Systems
Three Months Ended Six Months Ended
September 30, September 30,
2000 1999 2000 1999
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $9,019,000 $9,856,000 $18,867,000 $19,718,000
========== ========== =========== ===========
Gross profit $2,587,000 $2,431,000 $5,127,000 $5,294,000
========== ========== =========== ===========
Operating income $253,000 $405,000 $459,000 $1,255,000
========== ========== =========== ===========
</TABLE>
Sales of Antenna and Imaging Systems products decreased 8% in the
second quarter of fiscal 2001 compared with the second quarter of
fiscal 2000. The decrease was primarily due to lower sales of
remote sensing satellite earth stations, partially offset by
higher sales of military antenna systems and DBS antenna
products. Sales in the first six months of fiscal 2001 were 4%
lower than in the first six months of fiscal 2000. Lower sales
of remote sensing satellite earth stations were partially offset
by higher sales of military antenna systems and DBS antenna
products.
Gross profit percentage on sales of Antenna and Imaging Systems
products was 28.7% in the second quarter of fiscal 2001 compared
with 24.7% in the second quarter last fiscal year. The increase
was primarily due to higher margins on DBS antenna products.
Gross profit percentage for the first six months of fiscal 2001
was 27.2% of sales compared with 26.8% of sales for the first six
months of fiscal 2000. The increase was primarily due to higher
margins on DBS antenna products.
Operating income percentage on sales of Antenna and Imaging
Systems products was 2.8% in the second quarter of fiscal 2001
compared with 4.1% in the second quarter last fiscal year. The
decrease was primarily due to higher R&D expenditures on DBS
antenna products. Operating income percentage for the first six
months of fiscal 2001 was 2.4% of sales compared with 6.4% of
sales for the first six months of fiscal 2000. The decline was
primarily due to higher R&D expenditures on DBS antenna products
and higher administrative expenses.
<TABLE>
<CAPTION>
Communication Products
Three Months Ended Six Months Ended
September 30, September 30,
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales $5,597,000 $4,274,000 $9,103,000 $7,935,000
========== ========== ========== ==========
Gross profit $2,135,000 $1,287,000 $3,003,000 $2,309,000
========== ========== ========== ==========
Operating
income (loss) $693,000 $(109,000) $229,000 ($547,000)
========== ========== ========== ===========
</TABLE>
Sales of Communication Products Increased 31% in the second
quarter of fiscal 2001 compared with the second quarter of fiscal
2000. The increase was due to an $8 million order received in
the first quarter, approximately half of which was shipped during
the second quarter. Sales in the first six months of fiscal 2001
were 15% higher than in the first six months of fiscal 2000 due
to shipments against the $8 million order.
Gross profit percentage on sales of Communication Products was
38.1% in the second quarter of fiscal 2001 compared with 30.1% in
the second quarter last fiscal year. The increase was due to
manufacturing efficiencies related to a higher level of sales and
to a more favorable product mix. Gross profit percentage for the
first six months of fiscal 2001 was 33.0% of sales compared with
29.1% of sales for the first six months of fiscal 2000. The
increase was due to manufacturing efficiencies related to a
higher level of sales and the absence of move related expenses
associated with this business segment's relocation to Vista,
California incurred in fiscal 2000.
<PAGE>8
Operating profit percentage on sales of Communication Products
was 12.4% in the second quarter of fiscal 2001 compared with an
operating loss percentage of 2.6% in the second quarter last
fiscal year. The improvement from an operating loss percentage
to an operating income percentage was primarily due to higher
gross profits on the higher sales. Operating profit percentage
for the first six months of fiscal 2001 was 2.5% of sales
compared with an operating loss percentage of 6.9% of sales for
the first six months of fiscal 2000. The improvement from an
operating loss percentage to an operating income percentage was
primarily due to higher gross profits on the higher sales.
Consolidated expenses
Selling, general and administrative expenses were $3,007,000 in
the second quarter of fiscal 2001, an 8% increase compared with
second quarter of fiscal 2000 expenses of $2,796,000. The
increase was primarily due to higher administrative expenses at
both business segments. Selling, general and administrative
expenses for the first six months of fiscal 2001 were $6,003,000,
a 7% increase compared with first six months of fiscal 2000
expenses of $5,603,000. The increase was primarily due to higher
selling and administrative expenses at the Antenna and Imaging
Systems business segment.
Research and development ("R&D") expenses were $1,174,000 in the
second quarter of fiscal 2001 compared with $962,000 in the
second quarter last fiscal year. The 22% increase was due to
higher spending on development programs to improve land and sea
mobile DBS products. R&D expenses in the first six months of
fiscal 2001 were $2,197,000, a 12% increase compared with first
six months of fiscal 2000 expenses of $1,958,000. The increase
was due to higher spending on development programs to improve
land and sea mobile DBS products, partially offset by lower
spending on development of new radio products.
<TABLE>
<CAPTION>
Order backlog at September 30
2000 1999
----------- -----------
<S> <C> <C>
Antenna and Imaging Systems $19,324,000 $20,809,000
Communication Products 3,385,000 2,100,000
----------- -----------
Total $22,709,000 $22,909,000
=========== ===========
</TABLE>
The 7% decrease in Antenna and Imaging Systems backlog at
September 30, 2000 compared with September 30, 1999 was primarily
due to lower bookings of remote sensing satellite earth stations.
The 61% increase in Communication Products backlog at September
30, 2000 compared with September 30, 1999 was primarily due to
receipt of an $8 million order for tactical radios in the first
quarter, a portion of which was shipped during the first and
second quarters.
Liquidity and Capital Resources
At September 30, 2000, working capital was $24,564,000 compared
with $23,929,000 at March 31, 2000, an increase of $635,000 or
3%. Major changes affecting working capital during this period
were the following: accounts receivable increased $6,074,000
primarily due to strong September sales of Communication
Products; inventories increased $148,000; accounts payable and
accrued expenses decreased $2,205,000 primarily due to current
year payment of expenses associated with a large sale of
Communication Products in the fourth quarter of the previous
fiscal year; customer advances decreased $548,000; and income
taxes payable decreased $1,048,000. The Company's cash position
at September 30, 2000 was $2,828,000 compared with $12,183,000 at
March 31, 2000, a 77% decrease. At September 30, 2000, the
Company had no borrowings against its revolving line of credit.
Capital equipment expenditures were $264,000 during the first six
months of fiscal 2001 compared with $737,000 in the first six
months last fiscal year. Although capital expenditures in the
first six months of fiscal 2001 were lower than in the first six
months of fiscal 2000, the Company anticipates total capital
expenditures in fiscal 2001 will be comparable to the fiscal 2000
total of $1,289,000 due to anticipated tooling requirements for
new products in the second half of the fiscal year.
<PAGE>9
At September 30, 2000, the Company had a $13,000,000 revolving
line of credit with a bank. The line may be used for the
issuance of letters of credit and for direct working capital
advances, of which $2,000,000 is restricted to working capital
and letters of credit required to finance non-military
international business. That portion of the line of credit
expires on April 1, 2001 and is subject to a borrowing base
formula. The remaining $11,000,000 facility expires on April 1,
2002. At September 30, 2000, there were no borrowings under the
line and the bank had issued letters of credit against the line
totaling $4,239,000. The Company believes its existing working
capital, anticipated future cash flows from operations and
available credit with its bank are sufficient to finance
presently planned capital and working capital requirements.
Recently Issued Accounting Pronouncements
In December, 1999, the Securities and Exchange Commission ("SEC")
issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue
Recognition in Financial Statements," which summarizes the SEC's
interpretation of applying generally accepted accounting
principles to revenue recognition in the financial statements.
SAB No. 101 was subsequently amended in June 2000 and becomes
effective for the fourth fiscal quarter of fiscal years beginning
after December 15, 1999. Based on the Company's current revenue
recognition policies, the Company does not believe the adoption
of SAB No. 101, as amended, will have a material affect on the
Company's consolidated financial position or its results of
operations.
<PAGE>10
PART II -- OTHER INFORMATION
Item 2. Changes in Securities.
Pursuant to a business loan agreement with a bank, the Company
must comply with certain financial covenants. The agreement also
prohibits the Company from declaration or payment of dividends or
other distributions on the Company's stock, except under certain
conditions specified in the agreement. The Company is in
compliance with both requirements.
Item 3. Legal Proceedings.
In February 2000, Datron/Transco Inc. ("D/T"), a wholly owned
subsidiary of the Company, was named as defendant in a lawsuit
filed by KVH Industries, Inc. ("KVH"). KVH alleged that D/T
breached a 1999 Settlement Agreement and, through its DBS-4500
system, had infringed a KVH patent. On July 31, 2000, D/T and
KVH agreed to terminate the litigation between them. Based on
new information since the suit was filed, KVH determined that
D/T's DBS-4500 does not infringe the KVH patent and that D/T was
not in violation of the 1999 Settlement Agreement.
Item 4. Submission of Matters to a Vote of Security Holders.
On August 4, 2000, the Company held its annual meeting of
stockholders, proxies for which were solicited pursuant to
Regulation 14a under the Act. Six directors were to be elected
to serve until the next annual meeting. The six existing
directors who were standing for re-election were elected.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
27.1 Financial Data Schedule
(b) Reports on Form 8-K:
The Registrant filed a report on Form 8-K on August 30, 2000
announcing the adoption by the Board of Directors of a
Stockholders Rights Plan..
<PAGE>
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.
DATRON SYSTEMS INCORPORATED
Date: October 30, 2000 By: /s/William L. Stephan
Vice President and Chief
Financial Officer
(Principal Financial and
Accounting Officer)
