<Body Text>U.S. SECURITIES AND EXCHANGE COMMISSION
<Body Text>Washington, D.C. 20549
<Body Text>
<Body Text>Form 10-Q
<Body Text>
<Body Text>X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
<Body Text>THE SECURITIES EXCHANGE ACT OF 1934
<Body Text>
<Body Text>For the quarterly period ended June 30, 1994
<Body Text>
<Body Text>Commission file number 0-7438
<Body Text>
<Body Text>
<Body Text> DYNATECH CORPORATION
<Body Text>(Exact name of registrant as specified in its charter)
<Body Text>
<Body Text>
<Body Text>MASSACHUSETTS 04-2258582
<Body Text>(State or other jurisdiction of (I.R.S. Employer
<Body Text>incorporation or organization) Identification
Number)
<Body Text>
<Body Text>3 New England Executive Park
<Body Text>Burlington, Massachusetts 01803-5087
<Body Text>(Address of principal executive offices)(Zip code)
<Body Text>
<Body Text>Registrant's telephone number, including area code:
(617) 272-6100
<Body Text>
<Body Text>
<Body Text>
<Body Text>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. Yes X
No .
<Body Text>
<Body Text>
<Body Text>At July 15, 1994 there were 9,057,649 shares of
common stock of the registrant outstanding.PART I. Financial
Information
<Body Text>
<Body Text>
<Body Text>
<Body Text><Page>
<Body Text>Item 1. Financial Statements
<Body Text>
<Body Text>DYNATECH CORPORATION
<Body Text>CONSOLIDATED STATEMENTS OF INCOME
<Body Text>(In thousands except per share data)
<Body Text>(Unaudited)
<Body Text> Three Months Ended
<Body Text> June 30
<Body Text> 1994 1993
<Body Text>
<Body Text>Sales $117,772 $117,749
<Body Text>Cost of sales 56,724 54,573
<Body Text>Gross profit 61,048 63,176
<Body Text>Selling, general and
<Body Text> administrative expense 39,134 40,543
<Body Text>Product development expense 12,796 13,464
<Body Text>Amortization of intangibles 2,048 2,746
<Body Text>Operating income 7,070 6,423
<Body Text>Interest expense (1,157) (568)
<Body Text>Interest income 236 257
<Body Text>Other income 279 27
<Body Text>Income from continuing operations
<Body Text> before income taxes 6,428 6,139
<Body Text>Provision for income taxes 2,768 2,687
<Body Text>Net income from continuing
<Body Text> operations 3,660 3,452
<Body Text>Income from discontinued
<Body Text> operations, net of income
<Body Text> taxes of $105 in fiscal 1993 --- 101
<Body Text>Net income $ 3,660 $ 3,553
<Body Text>
<Body Text>Income per common share
<Body Text> Continuing operations $ .39 $ .37
<Body Text> Discontinued operations --- .01
<Body Text> $ .39 $ .38
<Body Text>
<Body Text>Weighted average number
<Body Text> of common shares 9,298 9,269
<Body Text>
<Body Text>
<Body Text>
<Body Text>
<Body Text>See notes to condensed consolidated financial
statements.DYNATECH CORPORATION
<Body Text>CONSOLIDATED CONDENSED BALANCE SHEETS
<Body Text>(In thousands)
<Body Text> June 30 March 31
<Body Text> 1994 1994
<Body Text>ASSETS (Unaudited)
<Body Text>
<Body Text>Current assets:
<Body Text> Cash and cash equivalents $ 21,803 $ 23,101
<Body Text> Accounts receivable, net 76,539 73,090
<Body Text> Inventories:
<Body Text> Raw materials 28,992 26,923
<Body Text> Work in process 13,144 14,091
<Body Text> Finished goods 20,007 20,671
<Body Text> 62,143 61,685
<Body Text> Other current assets 25,398 26,683
<Body Text> Net current assets of
<Body Text> discontinued operations 9,446 10,805
<Body Text> Total current assets 195,329 195,364
<Body Text>Property and equipment, net 38,414 39,253
<Body Text>Intangible assets, net 34,990 37,238
<Body Text>Other assets 9,624 8,698
<Body Text> $278,357 $280,553
<Body Text>LIABILITIES
<Body Text>
<Body Text>Current liabilities:
<Body Text> Notes payable and current
<Body Text> portion of long-term debt $ 3,000 $ 2,911
<Body Text> Accounts payable 17,789 20,234
<Body Text> Streamlining & restructuring accrual 33,457
35,276
<Body Text> Other accrued expenses 41,887 45,283
<Body Text> Accrued income taxes 1,339 650
<Body Text> Total current liabilities 97,472 104,354
<Body Text>Long-term debt 33,004 33,006
<Body Text>Deferred income taxes 448 550
<Body Text>
<Body Text>SHAREHOLDERS' EQUITY
<Body Text>
<Body Text>Common stock 2,477 2,477
<Body Text>Additional paid-in capital 9,396 9,414
<Body Text>Retained earnings 189,617 185,957
<Body Text>Cumulative foreign currency adjustments 334
(757)
<Body Text>Treasury stock (54,391) (54,448)
<Body Text> Total shareholders' equity 147,433 142,643
<Body Text> $278,357 $280,553
<Body Text>
<Body Text>
<Body Text>
<Body Text>
<Body Text>See notes to condensed consolidated financial
statements.DYNATECH CORPORATIONCONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
<Body Text>(In thousands)
<Body Text>(Unaudited)
<Body Text>
<Body Text>
<Body Text> Three Months Ended
<Body Text> June 30
<Body Text> 1994 1993
<Body Text>Operating activities:
<Body Text> Net income from continuing
<Body Text> operations $ 3,660 $ 3,452
<Body Text> Adjustments for noncash
<Body Text> items included in net income:
<Body Text> Depreciation 3,617 3,355
<Body Text> Amortization of intangibles 2,048 2,747
<Body Text> Increase in deferred taxes 1,930 164
<Body Text> Other 68 740
<Body Text> Change in operating assets and
<Body Text> liabilities, net of effects of
<Body Text> business acquisitions and
<Body Text> divestitures (10,801) (8,476)
<Body Text> Net cash flows provided by
<Body Text> continuing operations 522 1,982
<Body Text> Net cash flows provided by
<Body Text> discontinued operations (3,121) (289)
<Body Text> (2,599) 1,693
<Body Text>Investing activities:
<Body Text> Purchases of property and equipment (3,115) (4,009)
<Body Text> Disposals of property and equipment 127 69
<Body Text> Proceeds from sale of businesses 3,010 ---
<Body Text> Other 495 1,975
<Body Text> Net cash flows used in investing
<Body Text> activities 517 (1,965)
<Body Text>
<Body Text>Financing activities:
<Body Text> Debt borrowings 71 ---
<Body Text> Repayment of debt (138) (2,861)
<Body Text> Proceeds from exercise of stock
<Body Text> options 102 666
<Body Text> Purchases of treasury stock (63) ---
<Body Text> Net cash flows used in financing
<Body Text> activities (28) (2,195)
<Body Text>Effect of exchange rate on cash 812 (154)
<Body Text>Decrease in cash and cash equivalents (1,298)
(2,621)
<Body Text>Cash and cash equivalents at beginning
<Body Text> of year 23,101 24,350
<Body Text>Cash and cash equivalents at end of
<Body Text> period $21,803 $21,729
<Body Text>
<Body Text>Supplemental data:
<Body Text> Cash paid during the period
<Body Text> for interest $ 2,097 $ 1,538
<Body Text> Cash paid during the period for
<Body Text> income taxes $ 785 $ 1,303
<Body Text> Tax benefit of disqualifying
<Body Text> dispositions of stock options --- $ 314
<Body Text>
<Body Text>
<Body Text>See notes to condensed consolidated financial
statements.
<Body Text>
<Body Text>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<Body Text>
<Body Text>A. Condensed Consolidated Financial Statements
<Body Text>In the opinion of management, the unaudited condensed
consolidated balance sheet at June 30, 1994, and the unaudited
consolidated statements of income and unaudited consolidated
condensed statements of cash flows for the interim periods ended
June 30, 1994 and 1993 include all adjustments (including normal
recurring adjustments) necessary to present fairly these
financial statements. The aforementioned financial statements
have been subject to a review by Coopers & Lybrand, the
Company's independent accountants, whose report is included as
page 7 to this filing. Coopers & Lybrand did not propose any
adjustments or additional disclosures as a result of their
review.
<Body Text>
<Body Text>Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. The year-end balance sheet data was derived from
audited financial statements, but does not include disclosures
required by generally accepted accounting principles. It is
suggested that these condensed statements be read in conjunction
with the Company's most recent Form 10-K and Annual Report as of
March 31, 1994.
<Body Text>
<Body Text>B. Divestments
<Body Text>During the quarter, the Corporation sold Micro
Processor Systems, Inc., which has been classified as a
discontinued operation, and two other businesses for
approximately $3.1 million in cash and long-term promissory
notes approximating $3.3 million.
<Body Text>
<Body Text>On July 1, 1994 the Corporation sold the operating
net assets of Whistler Corporation, which has been classified as
a discontinued operation, for $11.1 million in cash, completing
Dynatech's exit from the automotive products market.
<Body Text>
<Body Text>The effects of these transactions are not material to
the consolidated financial statements.
<Body Text>
<Body Text>C. Treasury Stock
<Body Text>In June 1994 the Board of Directors authorized a
repurchase of up to $30 million of Dynatech common stock on the
open market and in private transactions. At June 30, 1994 the
Corporation had repurchased 3,000 shares at a cost of $62,850.
From July 1, 1994 through July 15, 1994 an additional 242,000
shares were repurchased for approximately $5.2 million. All of
the acquired shares are held as common stock in treasury.
<Body Text>
<Body Text>Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
<Body Text>
<Body Text>Results of Operations
<Body Text>Consolidated sales for the three months ended June
30, 1994 were $117,772,000 compared to $117,749,000 in the
prior year's first quarter. Information Support Products
segment sales rose 3.4% for the three months ended in fiscal
1994 reflecting growth for Transmission products. Sales in the
Diversified Instrumentation segment increased 1.4% from base
business growth compared to the prior year quarter reflecting a
24% increase of sales of medical and diagnostic products offset
partially by a 13% reduction of expansion memory boards. The
sale of four businesses in this segment resulted in an overall
decline of 6.6%. Backlog from continuing operations was $94.0
million at both June 30, 1994 and March 31, 1994.
<Body Text>Consolidated gross profit was 51.8% for the current
quarter compared to 53.7% in the prior year quarter. The
decrease in rate was primarily driven by higher production costs
for new product introductions and price sensitivity in video
graphics generation markets. Information Support Products gross
margin declined to 55.1% compared to 57.6% in the prior year
quarter while Diversified Instrumentation gross margin was 45.8%
in each period. Selling, general and administrative expenses
were lower in dollars and as a percent of sales from the prior
year first quarter resulting in part from the streamlining
actions announced in the fourth quarter of fiscal 1994. Product
development expense was 10.9% of consolidated sales for the
current quarter compared to 11.4% in the first quarter of the
prior year. The reduction was attributed primarily to the
nonstrategic businesses in the Diversified Instrumentation
segment. Amortization of intangibles, of which $1.0 million in
the first quarter of fiscal 1995 and $1.3 million in the first
quarter of the prior year related to product technology and was
excluded from cost of sales, declined due to business
divestments and discontinuance of product lines. Interest
expense from continuing and discontinued operations declined in
the current quarter to $1,490,000 as compared with $1,538,000 in
the prior year as a result of repayment of loan debt from
operating cash flow. Interest income declined due to lower
investment rates. The effective tax rate declined to
approximately 43% for the current quarter compared to 43.8% in
the prior year quarter resulting from lower nondeductible
amortization changes.
<Body Text>
<Body Text>Income from continuing operations increased 6% to
$3,660,000, or $.39 per share, for the current quarter from
$3,452,000, or $.37 per share, for the first quarter of the
prior year, reflecting lower product development and
amortization costs offset partially by lower gross margins.
Earnings for the quarter were aided by two factors: shipments
of high-margin software related to the roll out of a three
dimensional radiation therapy planning system, and the licensing
of certain technology rights.
<Body Text>
<Body Text>Estimated savings from implementing the streamlining
and restructuring actions were $1.6 million in the first quarter
of fiscal 1995 which included $.7 million in reduced
amortization charges resulting from intangible asset
revaluations. Employee headcount from continuing operations has
declined 6% since the implementation of the streamlining plan
and is on schedule toward a 10% reduction in work force upon
completion of announced restructurings and divestitures. In
addition, the consumer automotive business units which employed
approximately 10% of the work force have been sold.
<Body Text>
<Body Text>While the Company believes that the outlook for the
second quarter of fiscal 1995 is good, no assurance can be given
that operating results for the quarter will meet those of the
second quarter of fiscal 1994 which produced net income from
continuing operations of $.35 per share. Operating results for
the second quarter of fiscal 1995 will depend upon, among other
things, the incoming order rate during the quarter for the
Company's various businesses, product mix, and the continued
successful implementation of the Company's reorganization plan.
While the European economy continues to recover, European
business activity is normally slower in the second quarter than
during other parts of the fiscal year.
<Body Text>
<Body Text>Capital Resources and Liquidity
<Body Text>The Company's funded debt was reduced to 19.6% of
total capital at June 30, 1994, an improvement from the year-end
level of 20.1% at March 31, 1994, the lowest level in eight
years. The working capital ratio improved to 2.0 to 1 at June
30, 1994 from 1.9 to 1 at March 31, 1994. Cash outlays for the
streamlining and restructuring actions approximated $1.2 million
in the first quarter. Dynatech believes it has sufficient
resources to finance its cash requirements over the next year
including the necessary streamlining and restructuring actions
and treasury stock repurchases.
<Body Text>
<Body Text>Item 6. (a) Exhibits
<Body Text> Exhibit 15(1) Reort of Independent Accountants
<Body Text>
<Body Text> Exhibit 15(2) SEC Awareness Letter
<Body Text>
<Body Text>PART II. OTHER INFORMATION
<Body Text>
<Body Text>Item 6. Reports on Form 8-K
<Body Text>
<Body Text>(a) Exhibit 4. Fourth Amendment to Multicurrency
Revolving Credit and Term Loan Agreement dated March 31, 1994
between Dynatech and The First National Bank of Boston, ABN AMRO
Bank N.V. and Mellon Bank N.A. is filed herewith.
<Body Text>
<Body Text>(b) No current reports on Form 8-K were filed by the
Registrant during the quarter ended June 30, 1994.
<Body Text>
<Body Text>
<Body Text>
<Body Text>SIGNATURES
<Body Text>
<Body Text>
<Body Text>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.
<Body Text>
<Body Text>
<Body Text>
<Body Text> DYNATECH CORPORATION
<Body Text>
<Body Text>
<Body Text>
<Body Text>
<Body Text>Date August 3, 1994 /S/ Robert H. Hertz
<Body Text> Robert H. Hertz
<Body Text> Chief Financial Officer
<Body Text> and Treasurer
<Body Text>
<Body Text>
<Body Text>Date August 3, 1994 /S/ John C. Maag
<Body Text> John C. Maag
<Body Text> Corporate Controller
<Body Text>
<Body Text><Page>
<Body Text>REPORT OF INDEPENDENT ACCOUNTANTS
<Body Text>
<Body Text>
<Body Text>
<Body Text>To the Audit Committee of
<Body Text>The Board of Directors of
<Body Text>Dynatech Corporation:
<Body Text>
<Body Text>We have made a review of the unaudited condensed
consolidated balance sheet of Dynatech Corporation as of June
30, 1994, and the related consolidated statements of income and
cash flows for the three month periods ended June 30, 1994 and
1993, in accordance with standards established by the American
Institute of Certified Public Accountants.
<Body Text>
<Body Text>A review of interim financial information consists
principally of obtaining an understanding of the system for the
preparation of interim financial information, applying
analytical procedures to financial data, and making inquiries of
persons responsible for financial and accounting matters. It is
substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an
opinion.
<Body Text>
<Body Text>Based on our review, we are not aware of any material
modifications that should be made to the financial statements
referred to above for them to be in conformity with generally
accepted accounting principles.
<Body Text>
<Body Text>
<Body Text>
<Body Text>
<Body Text>
<Body Text>
<Body Text>
<Body Text>COOPERS & LYBRAND
<Body Text>Boston, Massachusetts
<Body Text>July 21, 1994
<Body Text>
<Body Text>DYNATECH CORPORATION
<Body Text>
<Body Text>FOURTH AMENDMENT
<Body Text>TO
<Body Text>MULTICURRENCY REVOLVING CREDIT
<Body Text>AND TERM LOAN AGREEMENT
<Body Text>
<Body Text> Amendment Agreement (this "Amendment") dated as of
March 31, 1994, by and among Dynatech Corporation ("Dynatech"),
each of the Subsidiaries of Dynatech appearing on the signature
pages hereof (Dynatech and such Subsidiaries referred to
collectively as the "Borrowers" and individually as a
"Borrower"), The First National Bank of Boston ("FNBB"), ABN
AMRO Bank N.V., Boston Branch ("ABN AMRO") and Mellon Bank, N.A.
("Mellon") (each of FNBB, ABN AMRO and Mellon being referred to
herein collectively as the "Banks" and individually as a "Bank")
and The First National Bank of Boston, as Agent for the Banks
(the "Agent").
<Body Text>
<Body Text> PRELIMINARY STATEMENT. Dynatech, certain
Subsidiaries named therein, FNBB, The First National Bank of
Chicago ("FNBC"), Bank of America National Trust and Savings
Association ("BofA") and the Agent entered into a Multicurrency
Revolving Credit and Term Loan Agreement, amended and restated
as of December 31, 1990 (as amended by the First Amendment to
Multicurrency Revolving Credit and Term Loan Agreement dated as
of September 25, 1992 to, among other things, replace FNBC and
BofA with ABN AMRO, by the Second Amendment to Multicurrency
Revolving Credit and Term Loan Agreement dated as of December
22, 1992, to, among other things, include Mellon as a Bank, and
by the Third Amendment to Multicurrency Revolving Credit and
Term Loan Agreement dated as of March 30, 1994 to, among other
things permit certain investments by Dynatech in connection with
the sale of Micro Processor Systems, Inc., the "Credit
Agreement"). The parties hereto desire to make certain
amendments to the Credit Agreement as hereinafter set forth
including, without limitation, making certain amendments to
certain of the financial covenants, to permit Dynatech to sell
certain of its assets and to permit certain investments by
Dynatech in connection with the sale of certain of its assets.
Capitalized terms used herein shall have the meanings assigned
to them in the Credit Agreement, unless such terms are otherwise
defined herein.
<Body Text>
<Body Text>SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT. The
Credit Agreement is hereby amended as follows:
<Body Text>
<Body Text> A. Amendment to Section 5.1 of the Credit Agreement
(Current Ratio). Section 5.1 of the Credit Agreement is hereby
amended by deleting Section 5.1 in its entirety and restating it
as follows:
<Body Text>
<Body Text>"5.1. Current Ratio. Cause Dynatech to maintain a
Current Ratio of at least 2 to 1; provided, however, when
calculating the Current Ratio there shall be excluded from the
Consolidated Current Liabilities portion of Current Ratio up to
a maximum aggregate amount of $35,000,000 of current liabilities
attributable to any restructuring charge of Dynatech taken in
the quarter ending March 31, 1994."
<Body Text>
<Body Text> B. Amendment to Section 5.4 of the Credit Agreement
(Fixed Charge Coverage). Section 5.4 of the Credit Agreement is
hereby amended by deleting Section 5.4 in its entirety and
restating it as follows:
<Body Text>
<Body Text>"5.4. Fixed Charge Coverage. Cause Dynatech to
maintain a ratio of (a) Net Revenues Available for Debt Service
(excluding, for the fiscal quarter ending March 31, 1994, any
deductions for operating and maintenance expenses attributable
to any restructuring of Dynatech up to a maximum aggregate
amount of $50,000,000) for each period of four (4) consecutive
fiscal quarters, to (b) Debt Service for such period, of at
least 3 to 1."
<Body Text>
<Body Text> C. Amendment to Section 6.3 of the Credit Agreement
(Investments). Section 6.3 of the Credit Agreement is hereby
amended by (a) deleting the word "and" at the end of section
6.3(f); (b) deleting the period at the end of section 6.3(g) and
substituting in place thereof a semicolon and the word "and";
and (c) inserting immediately after the last line of section 6.3
the following:
<Body Text>
<Body Text>"(h) Investments consisting of notes made by any
purchaser of certain assets or stock of the Borrowers or any of
their Subsidiaries, and delivered to such seller pursuant to a
sale permitted by section 6.4 hereof, provided that the
aggregate amount of all such notes does not exceed $5,000,000
and such notes relate to sales which are effective on or prior
to December 31, 1995."
<Body Text>
<Body Text> D. Amendment to Section 6.4 of the Credit Agreement
(Merger, Consolidation or Sale of Assets, Etc.). Section 6.4 of
the Credit Agreement is hereby amended as follows:
<Body Text>
<Body Text>(a) Section 6.4(c) of the Credit Agreement is hereby
amended by inserting immediately after phrase "or is such
Subsidiary is not a Material Subsidiary" the words "(or is one
of the material Subsidiaries identified as any of Whistler
Corporation, Dynatech Systems France, SA, Piiceon, Inc.,
Qualimetrics, Inc. or Dynatech Data Communications Ltd. and such
disposition is completed by December 1, 1995)".
<Body Text>
<Body Text>(b) Section 6.4(d) of the Credit Agreement is hereby
amended by inserting immediately after phrase "or is such
Subsidiary is not a Material Subsidiary" the words "(or is one
of the Material Subsidiaries identified as any of Whistler
Corporation, Dynatech Systems France, SA, Piiceon, Inc.,
Qualimetrics, Inc. or Dynatech Data Communications, Ltd. and
such disposition is completed by December 1, 1995)".
<Body Text>
<Body Text> E. Substitution of New Schedule 1 and Schedule 5.
The Schedule 1 and Schedule 5 annexed to the Credit Agreement
are hereby deleted in their entirety, and the new Schedule 1 and
Schedule 5 annexed hereto are hereby substituted in place
thereof.
<Body Text>
<Body Text> SECTION 2. EFFECTIVENESS.
<Body Text>
<Body Text> The amendments of the Credit Agreement to be made
pursuant to section 1 of this Amendment shall become effective
as of March 31, 1994 when the Agent shall have received this
Amendment, signed by each of the Borrowers, the Majority Banks
and the Agent.
<Body Text>
<Body Text> SECTION 3. REPRESENTATIONS AND WARRANTIES; NO
DEFAULT.
<Body Text>
<Body Text> Each of the Borrowers represents and warrants to
each of the Banks and the Agent that (a) the representations and
warranties contained in Section 4 of the Credit Agreement are
true and accurate in all material respects as of the date of
this Amendment, with the same effect as if made as of the date
hereof and after giving effect to the provisions of this
Amendment; (b) there exists no Default or Event of Default under
the Credit Agreement; (c) there are not Material Subsidiaries as
of the date hereof other than those listed on Schedule 5 to the
Credit Agreement; (d) the execution, delivery, and performance
of this Amendment, and the Credit Agreement as amended hereby,
are within the corporate powers, and have been duly authorized
by all necessary corporate action on the part of, each of the
Borrowers; and (e) this Amendment, and the Credit Agreement as
amended hereby, constitute valid and legally binding obligations
of each of the Borrowers, enforceable against each of the
Borrowers in accordance with their respective terms, except as
limited by bankruptcy, insolvency, reorganization or similar
laws affecting generally the enforcement of creditors' rights,
and except that the availability of specific performance or
other equitable remedies may be subject to the discretion of the
court in which an action for such remedies is brought.
<Body Text>
<Body Text> SECTION 4. REFERENCE TO AND EFFECT ON CREDIT
AGREEMENT.
<Body Text>
<Body Text> (a) Upon the effectiveness of this Amendment, each
reference in the Credit Agreement to "this Agreement,"
"hereunder," "hereof," "herein" or words of like import, shall
mean and be a reference to the Credit Agreement as amended
hereby.
<Body Text>
<Body Text> (b) Except as specifically amended hereby, the
Credit Agreement shall remain in full force and effect, and is
hereby ratified and confirmed.
<Body Text>
<Body Text> (c) The execution, delivery and effectiveness of
this Amendment shall not, except as expressly provided herein,
operate as a waiver of any right, power or remedy of any Bank
under the Credit Agreement.
<Body Text>
<Body Text> SECTION 5. GOVERNING LAW.
<Body Text>
<Body Text> This Amendment shall be deemed to be a contract
under the laws of the Commonwealth of Massachusetts and shall
for all purposes be construed in accordance with and governed by
the laws of said Commonwealth.
<Body Text>
<Body Text> SECTION 6. MISCELLANEOUS.
<Body Text>
<Body Text> The captions in this Agreement are for convenience
of reference only and shall not define or limit the provisions
hereof. This Amendment may be executed in one or more
counterparts, each of which when so executed and delivered shall
be an original, but all of which together shall constitute one
instrument. In proving this Amendment, it shall not be
necessary to produce or account for more than one such
counterpart.
<Body Text>
<Body Text>(Remainder of Page Intentionally Left Blank)
<Body Text>
<Body Text><Page>
<Body Text>
<Body Text> Signed, sealed and delivered, as of the date set
forth at the beginning of this Amendment, by each of the
Borrowers, the Majority Banks and the Agent.
<Body Text>
<Body Text>DYNATECH CORPORATION
<Body Text>WHISTLER CORPORATION
<Body Text>PIICEON, INC.
<Body Text>DYNATECH USA, INC.
<Body Text>DYNATECH LABORATORIES, INC.
<Body Text>UTAH SCIENTIFIC, INC.
<Body Text>TELECOMMUNICATIONS
<Body Text> TECHNIQUES CORPORATION
<Body Text>ASINC, INC.
<Body Text>TRONTECH, INC.
<Body Text>QUALIMETRICS, INC.
<Body Text>INDUSTRIAL COMPUTER SOURCE
<Body Text>
<Body Text>By: Robert H. Hertz
<Body Text>Title: CFO & Treasurer
<Body Text>
<Body Text>THE FIRST NATIONAL BANK OF
<Body Text> BOSTON, individually
<Body Text> and as Agent
<Body Text>
<Body Text>By: Jay S. Massimo
<Body Text>Title: Vice President
<Body Text>
<Body Text>MELLON BANK
<Body Text>
<Body Text>By: Robert Summersgill
<Body Text>Title: Vice President
<Body Text>
<Body Text>ABN AMRO BANK N.V.,
<Body Text> BOSTON BRANCH
<Body Text>
<Body Text>By: Lisa C. Sheehan
<Body Text>Title: Assistant Vice President
<Body Text>
<Body Text>By: Elliott O. May
<Body Text>Title: Vice President
<Body Text><Page>
<Body Text>
<Body Single>DYNATECH CORPORATION
<Body Single>Subsidiaries of the Registrant
<Body Single>EXHIBIT 21
<Body Single> State or other
<Body Single> jurisdiction
<Body Single>Name of Parent of Subsidiary of organization
<Body Single>Dynatech Corporation - Parent Massachusetts
<Body Single>Dynatech U.S.A., Inc. Massachusetts
<Body Single>Alpha Image, Inc. Delaware
<Body Single>Alta Group, Inc. California
<Body Single>Asinc, Incorporated California
<Body Single>Atmospheric Research Systems, Inc. Florida
<Body Single>Bradley Telcom Corporation (inactive) New Jersey
<Body Single>ColorGraphics Systems, Inc. Wisconsin
<Body Single>ComCoTec, Inc. Illinois
<Body Single>Computerized Medical Systems, Inc. Missouri
<Body Single>DaVinci Systems, Inc. Florida
<Body Single>Digital Technology, Inc. Ohio
<Body Single>Dolphin Networks, Inc. Georgia
<Body Single>Dyna FSC Corporation U.S. Virgin
Islands
<Body Single>Dynatech Cable Products Group, Inc. Utah
<Body Single>Dynatech Communications, Inc. Delaware
<Body Single>Dynatech Laboratories, Inc. Delaware
<Body Single>Dynatech Leasing Corporation Nevada
<Body Single>Dynatech Microwave Technology, Inc. Nevada
<Body Single>Dynatech Nevada, Inc. Nevada
<Body Single>Dynatech NewStar, Inc. Wisconsin
<Body Single>Dynatech Precision Sampling Corporation Louisiana
<Body Single>Dynatech Tactical Communications,
Inc. Massachusetts
<Body Single>Dynatech Video Group, Inc. Utah
<Body Single>Dynatech Video & Specialty Computers, Inc. Wisconsin
<Body Single>Geomet Data Services, Inc. Arizona
<Body Single>Dynatech Spectrum, Inc. California
<Body Single>Industrial Computer Source, Inc. California
<Body Single>Innovative Electronics, Inc. Florida
<Body Single>Interface Technology, Inc. California
<Body Single>L.E.A. Dynatech, Incorporated Florida
<Body Single>Lightning Location and Protection, Inc. Arizona
<Body Single>LP Com (inactive) California
<Body Single>Parallax Graphics, Inc. California
<Body Single>Piiceon, Inc. California
<Body Single>Qualimetrics, Inc. California
<Body Single>Quanta Corporation Utah
<Body Single>Quanta International Corporation Utah
<Body Single>Science Associates, Inc.
<Body Single> (in liquidation) New Jersey
<Body Single>Telecommunications Techniques
<Body Single> Corporation Maryland
<Body Single>Trigon Industries, Inc. California
<Body Single>Trontech, Inc. New Jersey
<Body Single>Unex Corporation Massachusetts
<Body Single>U.S. Computer Systems, Inc. Ohio
<Body Single>Utah Scientific Inc. Nevada
<Body Single>V.I. Corporation Massachusetts
<Body Single>Weathertronics International, Inc.
<Body Single> (inactive) California
<Body Single>Whistler Corporation Massachusetts
<Body Single>XKD Corporation California
<Body Single>Alpha Image, Limited England
<Body Single>Cromemco, G.m.b.H. (inactive) Germany
<Body Single>Cromemco, Limited (inactive) England
<Body Single>Cybermation, Limited (inactive) England
<Body Single>Dynatech A.G. (in liquidation) Switzerland
<Body Single>Dynatech Video Group, Ltd. England
<Body Single>Dynatech Communications, Ltd. Canada
<Body Single>Dynatech Communications, Ltd. England
<Body Single>Dynatech Scandinavia A/S Norway
<Body Single>Dynatech Communications SRL Italy
<Body Single>Dynatech Communications Svenska A.B. Sweden
<Body Single>Dynatech Data Communications, Ltd. Guernsey,
<Body Single> Channel Islands
<Body Single>Dynatech Communications Espani
<Body Single> (in liquidation) Spain
<Body Single>Dynatech Communications G.m.b.H. Germany
<Body Single>Dynatech Deutschland, G.m.b.H. Germany
<Body Single>Dynatech Gesellschaft Furdated
<Body Single> Verarbeitung Germany
<Body Single>Dynatech Systems France, SA France
<Body Single>Dynatech Holdings Ltd. Guernsey,
<Body Single> Channel Islands
<Body Single>Dynatech Holdings Ltd. England
<Body Single>Dynatech Holdings S.A.R.L. France
<Body Single>Dynatech Hong Kong, Ltd. Hong Kong
<Body Single>Dynatech Investments, Ltd. Guernsey,
<Body Single> Channel Islands
<Body Single>Nihon Dynatech K.K. Japan
<Body Single>Dynatech Laboratories, Ltd. England
<Body Single>Dynatech Medical Products, Ltd. Guernsey,
<Body Single> Channel Islands
<Body Single>Dynatech Systems, Limited England
<Body Single>Industrial Computer Source France France
<Body Single>Laboratorie Dynatech SARL France
<Body Single>Piiceon, Ltd. England
<Body Single>Qualimetrics, Limited England
<Body Single>Telecommunications Techniques Company
<Body Single> (UK), Ltd. England
<Body Single>Dynatech Laboratories s.r.o. Czech Republic
<Body Single>Telecommunications Techniques Company
<Body Single> (Ireland) Ltd. Ireland
<Body Single>V.I. Corporation (Europe) Ltd. England
<Body Single>
<Body Text><Page>
<Body Text>SCHEDULE 5 - MATERIAL SUBSIDIARIES
<Body Text>
<Body Text>DYNATECH CORPORATION
<Body Text>
<Body Text>
<Body Text>Material Subsidiaries which contribute greater than
5% of Tangible Net Worth or Gross Revenues - March 31, 1994
<Body Text>
<Body Text>
Company Percent of Percent of
<Body Text> Tangible Net Gross
<Body Text> Worth (1) Revenue (2)
<Table Text>TTC 28.8% 22.6%
<Table Text>Whistler Corporation 11.2% N/A
<Table Text>Dynatech Systems France SA 7.7%
<Table Text>Piiceon, Inc. 6.2% 6.5%
<Table Text>Asinc, Inc. 5.1%
<Table Text>Industrial Computer Source, Inc. 5.6% 6.9%
<Table Text>Qualimetrics, Inc. 5.4%
<Body Text>
<Body Text>
<Body Text>1. For purpose of this presentation, tangible net
worth of subsidiaries is exclusive of intercompany transactions.
Intercompany amounts can include dividend distributions to the
parent company. Consolidated Tangible Net Worth at March 31,
1994 was $103,722,000. Subsidiary amounts do not include any
portion of treasury stock repurchases which serves to reduce
consolidated tangible net worth.
<Body Text>
<Body Text>2. Consolidated gross revenues for the year ended
March 31, 1994 were $458,449,000.
<Body Text>
<Body Single>
<Body Text>EXHIBIT 15.1
<Body Text>
<Body Text>REPORT OF INDEPENDENT ACCOUNTANTS
<Body Text>
<Body Text>
<Body Text>To the board of Directors and
<Body Text>Shareholders of Dynatech Corporation:
<Body Text>
<Body Text>
<Body Text>We have reviewed the unaudited condensed consolidated
balance sheet of Dynatech Corporation as of June 30, 1994, and
the related condensed consolidated statements of income and cash
flows for the three-month periods ended June 30, 1994 and 1993.
These financial statements are the responsibility of the
Company's management.
<Body Text>
<Body Text>We conducted our review in accordance with standards
established by the American Institute of Certified Public
Accountants. A review of interim financial information consists
principally of applying analytical procedures to financial data
and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do
not express such an opinion.
<Body Text>
<Body Text>Based on our review, we are not aware of any material
modifications that should be made to the condensed consolidated
financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
<Body Text>
<Body Text>We have previously audited, in accordance with
generally accepted auditing standards, the consolidated balance
sheet as of March 31, 1994, and the related consolidated
statements of operations, shareholders' equity, and cash flows
for the year then ended (not presented herein), and in our
report, dated May 23, 1994, we expressed an unqualified opinion
on those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated
balance sheet as of March 31, 1994, is fairly presented, in all
material respects, in relation to the consolidated balance sheet
from which it has been derived.
<Body Text>
<Body Text>
<Body Text>
<Body Text>COOPERS & LYBRAND
<Body Text>
<Body Text>Boston, Massachusetts
<Body Text>July 21, 1994
<Body Text>EXHIBIT 15.2
<Body Text>
<Body Text>
<Body Text>
<Body Text>
<Body Text>
<Body Text>
<Body Text>July 21, 1994
<Body Text>
<Body Text>
<Body Text>
<Body Text>
<Body Text>Securities and Exchange Commission
<Body Text>450 Fifth Street, N.W.
<Body Text>Washington, D.C. 20549
<Body Text>
<Body Text>RE: Dynatech Corporation
<Body Text>
<Body Text>We are aware that our report dated July 21, 1994 on
our review of interim financial information of Dynatech
Corporation for the interim periods ended June 30, 1994 and
1993, and included in the Coorporation's quarterly report on
Form 10-Q for the quarter ended June 30, 1994 is incorporated by
reference in various registration statements on Form S-3 (File
Nos. 2-78465, 2-81026, 2-82260, 2-85387, 2-86467, 2-92391,
2-94757, 33-365, 33-2387, 33-5544, 33-17169, 33-24058, and
33-30610) and on Form S-8 (File Nos. 2-87779, 33-10465, 33-17243
and 33-42427). Pursuant to Rule 436(c) under the Securities Act
of 1933, this report should not be considered a part of the
registration statements prepared or certified by us within the
meaning of Sections 7 and 11 of that Act.
<Body Text>
<Body Text>
<Body Text>
<Body Text>
<Body Text>
<Body Text>
<Body Text> Coopers & Lybrand
<Body Text>
