<PAGE>
Exhibit 99.3
WAVETEK WANDEL GOLTERMANN, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars and Shares In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
March 31, September 30,
2000 1999
----------- -------------
(unaudited) (note)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ......................... $ 17,974 $ 17,089
Accounts receivable (less allowance for doubtful
accounts of $4,071 at March 31, 2000 (unaudited)
and $4,608 at September 30, 1999) ................ 92,113 102,532
Inventories ....................................... 71,506 62,515
Deferred income taxes ............................. 6,467 8,922
Other current assets .............................. 13,997 13,636
-------- --------
Total current assets ............................ 202,057 204,694
Property, plant and equipment, net .................. 53,066 60,575
Intangible assets, net .............................. 136,903 162,482
Other non-current assets ............................ 5,457 6,982
-------- --------
Total assets .................................... $397,483 $434,733
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to banks ............................ $ 9,094 $ 17,510
Current portion of long-term obligations .......... 5,079 6,202
Current portion of long-term obligations to related
parties .......................................... 9,582 10,721
Trade payables .................................... 34,307 31,549
Accrued compensation .............................. 22,811 26,626
Income taxes payable .............................. 4,105 4,250
Other current liabilities ......................... 42,283 38,838
-------- --------
Total current liabilities ....................... 127,261 135,696
Long-term obligations, net of current portion ..... 199,942 228,083
Pension liabilities ............................... 33,455 35,671
Deferred income taxes ............................. 4,418 7,957
Other non-current liabilities ..................... 7,582 9,389
-------- --------
Total liabilities ............................... 372,658 416,796
-------- --------
Commitments and contingencies Stockholders' equity:
Common stock, par value $.01, 50,000 shares
authorized, 13,320 shares at March 31, 2000 and
13,202 shares at September 30, 1999 issued and
outstanding ...................................... 133 132
Additional paid-in capital ........................ 73,222 72,948
Accumulated deficit ............................... (59,387) (65,641)
Other comprehensive income ........................ 10,857 10,498
-------- --------
Total stockholders' equity ...................... 24,825 17,937
-------- --------
Total liabilities and stockholders' equity ...... $397,483 $434,733
======== ========
</TABLE>
---------------------
Note: The balance sheet at September 30, 1999 has been derived from the audited
financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
The Accompanying Notes to Consolidated Financial Statements are an Integral
Part of these Balance Sheets.
F-37
<PAGE>
WAVETEK WANDEL GOLTERMANN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars and Shares in Thousands, Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended March 31, Ended March 31,
------------------ ------------------
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales ............................. $127,155 $114,466 $262,731 $240,931
Cost of goods sold .................... 50,434 47,927 103,428 102,562
-------- -------- -------- --------
Gross margin .......................... 76,721 66,539 159,303 138,369
Operating expenses:
Marketing and selling ............... 35,974 34,915 73,042 70,437
Research and development ............ 18,454 18,771 36,231 36,615
General and administrative .......... 10,634 11,538 21,270 23,626
Amortization of intangible assets ... 4,049 4,874 8,488 9,690
Provisions for restructuring
operations and other non-recurring
charges ............................ 1,652 -- 2,020
-------- -------- -------- --------
Total operating expenses .......... 70,763 70,098 141,051 140,368
-------- -------- -------- --------
Operating income (loss) ............... 5,958 (3,559) 18,252 (1,999)
Other (income) expense, net:
Interest income ..................... (307) (242) (567) (475)
Interest expense .................... 4,606 5,244 9,968 10,435
Other, net .......................... (3,834) 370 (2,522) 131
-------- -------- -------- --------
Other (income) expense, net ....... 465 5,372 6,879 10,091
-------- -------- -------- --------
Income (loss) before provision
(benefit) for income taxes............ 5,493 (8,931) 11,373 (12,090)
Provision (benefit) for income taxes .. 2,471 (5,716) 5,119 (7,738)
-------- -------- -------- --------
Net income (loss) ..................... $ 3,022 $ (3,215) $ 6,254 $ (4,352)
======== ======== ======== ========
Basic net income (loss) per share ..... $ .23 $ (0.24) $ .47 $ (0.33)
======== ======== ======== ========
Weighted average number of shares
outstanding-basic .................... 13,313 13,202 13,288 13,202
======== ======== ======== ========
Diluted net income (loss) per share ... $ .22 $ (0.24) $ .46 $ (0.33)
======== ======== ======== ========
Weighted average number of shares
outstanding--diluted ................. 13,653 13,202 13,567 13,202
======== ======== ======== ========
</TABLE>
The Accompanying Notes to Consolidated Financial Statements are an Integral
Part of these Statements of Operations.
F-38
<PAGE>
WAVETEK WANDEL GOLTERMANN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
March 31,
------------------
2000 1999
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) ........................................ $ 6,254 $ (4,352)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization expense .................. 14,428 17,308
Restructuring and other non-recurring charges .......... 2,020 --
Deferred income taxes .................................. (1,082) (7,984)
Changes in operating assets and liabilities:
Accounts receivable .................................. 10,462 1,989
Inventories .......................................... (8,958) 5,558
Other current assets ................................. 488 6
Accounts payable and accrued expenses ................ (1,425) (16,267)
Income taxes payable, net ............................ (144) 14
Pension liabilities .................................. (2,200) 2,033
Gain on sale of assets ............................... (3,229) --
Other, net ........................................... 1,890 1,278
-------- --------
Net cash provided by (used in) operating activities ...... 18,504 (417)
INVESTING ACTIVITIES:
Purchase of property, plant and equipment ................ (6,365) (7,642)
Exercise of stock options ................................ 275 --
Proceeds from sale of assets ............................. 29,400 --
-------- --------
Net cash provided (used in) by investing activities ...... 23,310 (7,642)
FINANCING ACTIVITIES:
Proceeds from long-term obligations ...................... 107,477 139,059
Principal payments on long-term obligations .............. (147,407) (145,702)
Other, net ............................................... -- (672)
-------- --------
Net cash used in financing activities .................... (39,930) (7,315)
Effect of exchange rate changes on cash and cash
equivalents ............................................. (999) (3,047)
-------- --------
Increase (decrease) in cash and cash equivalents ......... 885 (18,421)
Cash and cash equivalents at beginning of period ......... 17,089 35,544
-------- --------
Cash and cash equivalents at end of period ............... $ 17,974 $ 17,123
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:
Cash paid for interest ................................... $ 10,406 $ 9,067
======== ========
Cash paid for income taxes ............................... $ 3,223 $ 3,653
======== ========
</TABLE>
The Accompanying Notes to Consolidated Financial Statements are an Integral
Part of these Statements of Cash Flows.
F-39
<PAGE>
WAVETEK WANDEL GOLTERMANN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. ORGANIZATION AND BASIS OF PRESENTATION
Wavetek Wandel Goltermann, Inc., (the "Company") is a leading global
designer, manufacturer, and marketer of a broad range of communications test
instruments used to develop, manufacture, install, and maintain communications
networks and equipment. The Company conducts its communications test business,
which addresses most sectors of the communications test market, in four product
areas: (1) telecom networks (traditional voice/data transmissions and new
multi-service networks), (2) enterprise networks (local and wide-area network
infrastructures), (3) multimedia (cable television and digital video
broadcast), and (4) wireless (mobile telephony and data). These products
provide comprehensive testing solutions to a wide range of end users. The
Company's high-end instruments are used during the product development phase to
stress test product functionality and performance. Other products are used
during the production process to verify conformance to manufacturing
specifications, while the Company's enhanced portable field service tools
enable field technicians to quickly install, repair and maintain complex
network infrastructures, as well as validate service levels. The Company also
provides distributed remote test systems to many of its service provider
customers, which allow such customers to more efficiently utilize their network
engineers to monitor and test service levels. In addition, the Company provides
repair, upgrade, and calibration services, as well as value-added professional
services such as consulting and training on a worldwide basis.
The consolidated financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. The consolidated balance sheet as of
September 30, 1999 has been taken from the audited financial statements as of
that date. Certain information and note 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, although the Company believes that the disclosures are adequate to
make the information presented not misleading. These consolidated financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's latest annual report on
Form 10-K for the fiscal year ended September 30, 1999.
The consolidated financial statements included herein reflect all
adjustments (none of which are other than normal recurring accruals) which are,
in the opinion of management, necessary for a fair presentation of the
information included. All significant intercompany accounts and transactions
have been eliminated in consolidation. Interim results are not necessarily
indicative of results to be expected for the full year. For comparative
purposes, certain amounts have been reclassified to conform with the fiscal
2000 presentation.
2. NET INCOME (LOSS) PER SHARE
The Company computes earnings per share in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 128, EARNINGS PER SHARE ("SFAS
128"). Basic net income (loss) per share is based only on average common shares
outstanding and excludes the dilutive effects of the Company's outstanding
stock options. Diluted net income (loss) per share includes the dilutive effect
of the Company's outstanding stock options. The Company has a simple capital
structure and, accordingly, the only difference in the Company's computations
of basic and diluted net income (loss) per share is the dilutive effect of
outstanding stock options. For the three and six months ended March 31, 1999,
the effect of outstanding stock options would have been anti-dilutive and,
therefore, was not considered in the computation of diluted loss per share for
such periods. All net income (loss) per share amounts for all periods have been
presented in accordance with the requirements of SFAS 128.
F-40
<PAGE>
WAVETEK WANDEL GOLTERMANN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Unaudited)
3. FINANCIAL STATEMENT DETAILS
Inventories consist of the following:
<TABLE>
<CAPTION>
March 31, September 30,
2000 1999
--------- -------------
(dollars in thousands)
<S> <C> <C>
Materials ......................................... $17,919 $13,997
Work-in-progress .................................. 14,718 18,172
Finished goods .................................... 38,869 30,346
------- -------
$71,506 $62,515
======= =======
</TABLE>
4. OTHER COMPREHENSIVE INCOME (LOSS)
On October 1, 1998, the Company adopted SFAS No. 130, Reporting
Comprehensive Income, which established standards for reporting and displaying
comprehensive income (loss) and its components in a financial statement that is
displayed with the same prominence as other financial statements. Comprehensive
income (loss) includes net income (loss) and other comprehensive income (loss).
The Company's current and accumulated other comprehensive income (loss) as of
and for the three and six month periods ended March 31, 2000 and 1999 is
comprised solely of foreign currency translation adjustments.
Comprehensive income (loss) is as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
------------------- ----------------
2000 1999 2000 1999
--------- --------- ----------------
(dollars in thousands)
<S> <C> <C> <C> <C>
Net income (loss) ................ $ 3,022 $(3,215) $ 6,254 $(4,352)
Foreign currency translation
adjustments...................... (764) (345) 360 (671)
-------- --------- ------- --------
Comprehensive income (loss) ...... $ 2,258 $(3,560) $ 6,614 $(5,023)
======== ========= ======= ========
</TABLE>
5. SEGMENT INFORMATION
Based on its organizational structure prior to January 2000, the Company
previously operated in two reportable segments: communications test and other
test products. The Company's communications test business includes telecom
networks, enterprise networks, multimedia, wireless and the service business.
In the second quarter of 2000, the Company divested itself of its other test
products business, which included test tools, precision measurement
instruments, and electromagnetic measurement instruments.
The Company's chief operating decision makers utilize revenue and operating
income (loss) information, as defined below, in assessing performance and
making overall operating decisions and resource allocations.
The accounting policies of the segments are the same as those described in
the summary of significant accounting policies.
F-41
<PAGE>
WAVETEK WANDEL GOLTERMANN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Unaudited)
Information about the Company's operating segments for the three months
ended March 31, 2000 and 1999 is as follows (in thousands):
<TABLE>
<CAPTION>
Communications Other Test Corporate/
Test Products Other Total
-------------- ---------- ---------- --------
<S> <C> <C> <C> <C>
Revenues:
2000 ..................... $124,592 $ 2,563 $ -- $127,155
1999 ..................... 106,825 7,641 -- 114,466
Operating income (loss):
2000(1) .................. 10,764 333 562 11,659
1999(1) .................. 2,846 204 (1,735) 1,315
Information about the Company's operating segments for the six months ended
March 31, 2000 and 1999 is as follows (in thousands):
<CAPTION>
Communications Other Test Corporate/
Test Products Other Total
-------------- ---------- ---------- --------
<S> <C> <C> <C> <C>
Revenues:
2000 ..................... $250,564 $12,167 $ -- $262,731
1999 ..................... 226,090 14,841 -- 240,931
Operating income (loss):
2000 (1) ................. 28,423 287 51 28,760
1999(1) .................. 14,176 937 (7,422) 7,691
Information about the Company's operating segments as of March 31, 2000 and
September 30, 1999 is as follows (in thousands):
<CAPTION>
Communications Other Test Corporate/
Test Products Other(2) Total
-------------- ---------- ---------- --------
<S> <C> <C> <C> <C>
Total Assets:
March 31, 2000 ........... $117,619 $ 3,934 $275,931 $397,483
September 30, 1999 ....... 129,426 6,749 298,558 434,733
</TABLE>
---------------------
Notes:
(1) Operating income (loss) on reportable segments is defined by management as
operating income (loss), including intersegment profits, and excluding
amortization of intangible assets and restructuring and other non-recurring
charges.
(2) Corporate/Other assets include purchased intangible assets and investments
in subsidiaries at March 31, 2000 and September 30, 1999 totaling $203,433
and $237,499, respectively.
6. SALE OF PRECISION MEASUREMENT AND TEST TOOLS DIVISIONS
In January 2000, the Company completed the sale of its precision measurement
and test tools divisions to Fluke Electronics Corporation, a subsidiary of
Danaher Corporation. It was determined that these businesses were not a
strategic fit with the Company's core communications test business. Sales for
the three months ended December 31, 1999 amounted to $8.8 million and fiscal
year 1999 sales totaled $25.8 million. There were no significant gains or
losses realized on the sale of these two divisions.
F-42
<PAGE>
WAVETEK WANDEL GOLTERMANN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Unaudited)
7. SALE OF SAFETY TEST SOLUTION BUSINESS
In February 2000, the Company completed the sale of its safety test solution
business to L-3 Communications Corporation. It was determined that this
business was not a strategic fit with the Company's core communications test
business. Sales for the three months ended December 31, 1999 amounted to $.8
million and fiscal year 1999 sales totaled $4.4 million. Sales from January 1,
2000 to the closing date of the sale were immaterial. The gain realized on the
sale was approximately $3.2 million.
8. MERGER WITH DYNATECH CORPORATION
On February 14, 2000, the Company, Dynatech corporation, a Delaware
corporation ("Dynatech"), and DWW Acquisition Corporation, a Delaware
corporation and indirect subsidiary of Dynatech ("Mergerco"), entered into an
Agreement and Plan of Merger pursuant to which Mergerco would merge with the
Company, with the Company as the surviving corporation. The merger is subject
to customary closing conditions, including obtaining applicable competition law
approvals. In the merger, at the election of holders of the Company's common
stock, such holders will be entitled to receive with respect to each share of
common stock of the Company (i) $25.00 or (ii) 4.49 shares of common stock of
Dynatech. The aggregate transaction value is approximately $600 million, which
includes approximately $224 million of the Company's indebtedness.
The merger will constitute a change in control with respect to the Company's
10.125% Senior Subordinated Notes due June 14, 2007. As a result, the Company
will be obligated to send to the holders of the notes within ten days following
the closing of the merger an offer to purchase the notes at 101% of their
principal amount. Such offer must specify a day not less than 30 and not more
than 60 days from the date the Company's notice mailed on which the Company
will purchase all notes tendered to the Company. On March 14, 2000, the Company
launched a tender offer to repurchase all of the outstanding notes. The tender
offer for the notes is conditioned upon the closing of the merger.
In connection with the merger, Dynatech intends to enter into a new multi-
currency senior credit facility with a syndicate of banks for an aggregate
principal amount of approximately $860 million including revolver and term
loans, and to sell newly-issued common stock to Clayton, Dubilier & Rice Fund V
Limited Partnership ("Fund V"), Dynatech's controlling stockholder, and Clayton
Dublier & Rice Fund VI Limited Partnership ("Fund VI"), an affiliate of
Dynatech's controlling stockholder, at a price per share of $4.00. In addition,
Dynatech expects to make a rights offering to the Company's other stockholders
to purchase newly issued shares at the same price per share offered to Fund V
and Fund VI.
The Company anticipates the customary closing conditions, including
obtaining applicable competition law approvals will be finalized by late May
2000 and the Company estimates that the closing of the merger will occur
shortly thereafter.
Peter Wagner, the Company's Chief Executive Officer, has indicated that he
will remain with the Company through the closing of the Merger with Dynatech.
However, Mr. Wagner has accepted employment with another company as of June 1,
2000. In the event that the Merger is not consummated by such time, the Company
will appoint an interim Chief Executive Officer or make other interim
arrangements.
9. SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL DATA
The Company's payment obligations under its 10.125% Senior Subordinated
Notes are guaranteed by all of the Company's current and future domestic
subsidiaries (collectively, the "Subsidiary Guarantors"). WGTI,
F-43
<PAGE>
WAVETEK WANDEL GOLTERMANN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Unaudited)
Wandel & Goltermann ATE Systems, Inc., and Wavetek U.S. Inc. and its
subsidiary, Digital Transport Systems, Inc. are shown as Subsidiary Guarantors
for all periods presented. Such guarantees are full and unconditional and joint
and several. Separate financial statements of the Subsidiary Guarantors are not
presented because the Company's management has deemed that they would not be
material to investors. The following supplemental condensed consolidating
financial data sets forth, on an unconsolidated basis, balance sheets,
statements of operations, and statements of cash flows data for (i) the Company
(Wavetek Wandel Goltermann, Inc., formerly Wavetek Corporation, the issuer of
the Notes), (ii) the current Subsidiary Guarantors, and (iii) the Company's
foreign subsidiaries (the "Foreign Subsidiaries"). The supplemental financial
data reflects the investments of the Company in the Subsidiary Guarantors and
the Foreign Subsidiaries using the equity method of accounting.
F-44
<PAGE>
WAVETEK WANDEL GOLTERMANN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Unaudited)
CONSOLIDATING BALANCE SHEETS
As of March 31, 2000
(Dollars and Shares in Thousands)
<TABLE>
<CAPTION>
Wavetek Wandel
Goltermann Subsidiary Foreign
Inc. Guarantors Subsidiaries Eliminations Consolidated
-------------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents.......... $ 663 $ 4,424 $ 12,887 $ -- $ 17,974
Accounts receivable
(less allowance for
doubtful accounts of
$4,071).............. 44,998 62,503 79,405 (94,793) 92,113
Inventories........... -- 19,161 57,564 (5,219) 71,506
Deferred income
taxes................ 2,912 3,932 (876) 499 6,467
Other current assets.. 57 1,009 12,931 -- 13,997
-------- -------- -------- ---------- ---------
Total current assets.... 48,630 91,029 161,911 (99,513) 202,057
Property, plant and
equipment, net......... 1,322 7,266 44,478 -- 53,066
Intangible assets, net.. 5,922 100,875 30,106 -- 136,903
Investment in
subsidiaries........... 166,712 -- -- (166,712) --
Other non-current
assets................. 3 (434) 2,618 3,270 5,457
-------- -------- -------- ---------- ---------
Total assets........ $222,589 $198,736 $239,113 $ (262,955) $ 397,483
======== ======== ======== ========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable......... $ -- $ -- $ 9,094 $ -- $ 9,094
Current portion of
long-term obligations
..................... -- 633 4,446 -- 5,079
Current portion of
long-term obligations
to related parties .. -- -- 9,582 -- 9,582
Trade payables........ 31,105 28,127 62,870 (87,795) 34,307
Accrued compensation.. 1,195 4,551 17,065 -- 22,811
Income taxes payable.. (21,650) 21,419 4,336 -- 4,105
Other current
liabilities.......... 3,814 8,122 32,667 (2,320) 42,283
-------- -------- -------- ---------- ---------
Total current
liabilities............ 14,464 62,852 140,060 (90,115) 127,261
Long-term obligations,
net of current
portion................ 172,565 1,626 29,323 (3,572) 199,942
Pension liabilities..... -- 203 33,252 -- 33,455
Deferred income taxes... (519) 22,662 (15,696) (2,029) 4,418
Other non-current
liabilities............ -- 2,140 5,442 -- 7,582
-------- -------- -------- ---------- ---------
Total liabilities 186,510 89,483 192,381 (95,716) 372,658
-------- -------- -------- ---------- ---------
Commitments and
contingencies
Stockholders' equity:
Common stock.......... 133 -- (1,466) 1,466 133
Additional paid-in
capital.............. 73,222 171,122 85,506 (256,628) 73,222
Accumulated deficit... (59,386) (61,841) (33,946) 95,786 (59,387)
Other comprehensive
income (loss)........ 22,110 (28) (3,362) (7,863) 10,857
-------- -------- -------- ---------- ---------
Total stockholders'
equity............. 36,079 109,253 46,732 (167,239) 24,825
-------- -------- -------- ---------- ---------
Total liabilities
and stockholders'
equity............. $222,589 $198,736 $239,113 $ (262,955) $ 397,483
======== ======== ======== ========== =========
</TABLE>
F-45
<PAGE>
WAVETEK WANDEL GOLTERMANN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Unaudited)
CONSOLIDATING BALANCE SHEETS
As of September 30, 1999
(Dollars in Thousands)
<TABLE>
<CAPTION>
Wavetek Wandel Subsidiary Foreign
Goltermann, Inc. Guarantors Subsidiaries Eliminations Consolidated
---------------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents.......... $ 11 $ 4,578 $ 12,500 $ -- $ 17,089
Accounts receivable
(less allowance for
doubtful accounts of
$4,608).............. 42,956 46,715 87,312 (74,451) 102,532
Inventories........... -- 13,884 52,388 (3,757) 62,515
Deferred income
taxes................ 561 4,482 3,879 -- 8,922
Other current assets.. 156 1,917 11,563 -- 13,636
-------- -------- -------- --------- --------
Total current
assets............. 43,684 71,576 167,642 (78,208) 204,694
Property, plant and
equipment, net......... 1,361 8,013 51,201 -- 60,575
Intangible assets, net.. 5,617 110,170 46,695 -- 162,482
Investment in
subsidiaries........... 167,992 -- -- (167,992) --
Other non-current
assets................. 6 1,988 4,988 -- 6,982
-------- -------- -------- --------- --------
Total assets........ $218,660 $191,747 $270,526 $(246,200) $434,733
======== ======== ======== ========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable......... $ -- $ -- $ 17,510 $ -- $ 17,510
Current portion of
long-term
obligations.......... -- 685 5,517 -- 6,202
Current portion of
long-term obligations
to related parties... -- -- 10,721 -- 10,721
Trade payables........ 17,236 17,322 61,873 (64,882) 31,549
Accrued compensation.. 396 6,734 19,496 -- 26,626
Income taxes payable.. (18,986) 18,978 4,258 -- 4,250
Other current
liabilities.......... 4,516 5,786 28,536 -- 38,838
-------- -------- -------- --------- --------
Total current
liabilities........ 3,162 49,505 147,911 (64,882) 135,696
Long-term obligations,
net of current
portion................ 198,080 7,784 31,695 (9,476) 228,083
Pension liabilities..... -- -- 35,671 -- 35,671
Deferred income taxes... (519) 19,953 (11,477) -- 7,957
Other non-current
liabilities............ -- 4,088 5,301 -- 9,389
-------- -------- -------- --------- --------
Total liabilities... 200,723 81,330 209,101 (74,358) 416,796
-------- -------- -------- --------- --------
Commitments and
contingencies
Stockholders' equity:
Common stock.......... 132 -- -- -- 132
Additional paid-in
capital.............. 72,948 171,121 87,187 (258,308) 72,948
Accumulated deficit... (65,641) (60,682) (36,282) 96,964 (65,641)
Other comprehensive
income (loss)........ 10,498 (22) 10,520 (10,498) 10,498
-------- -------- -------- --------- --------
Total stockholders'
equity............. 17,937 110,417 61,425 (171,842) 17,937
-------- -------- -------- --------- --------
Total liabilities
and stockholders'
equity............. $218,660 $191,747 $270,526 $(246,200) $434,733
======== ======== ======== ========= ========
</TABLE>
F-46
<PAGE>
WAVETEK WANDEL GOLTERMANN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Unaudited)
CONSOLIDATING STATEMENTS OF OPERATIONS
For The Three Months Ended March 31, 2000
(Dollars in Thousands)
<TABLE>
<CAPTION>
Wavetek Wandel
Goltermann Subsidiary Foreign
Inc. Guarantors Subsidiaries Eliminations Consolidated
-------------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales............... $ -- $46,224 $100,851 $(19,920) $127,155
Cost of goods sold...... -- 21,908 47,534 (19,008) 50,434
------- ------- -------- -------- --------
Gross margin............ -- 24,316 53,317 (912) 76,721
Operating expenses:
Marketing and
selling.............. 552 9,764 25,658 -- 35,974
Research and
development.......... -- 5,881 12,573 -- 18,454
General and
administrative....... 17 3,148 7,469 -- 10,634
Amortization of
intangible assets.... (52) 2,993 1,108 -- 4,049
Provisions for
restructuring
operations and other
non-recurring
charges.............. 521 779 641 (289) 1,652
------- ------- -------- -------- --------
Total operating
expenses........... 1,038 22,565 47,449 (289) 70,763
------- ------- -------- -------- --------
Operating income
(loss)................. (1,038) 1,751 5,868 (623) 5,958
Other (income) expense,
net:
Interest income....... (514) (174) (133) 514 (307)
Interest expense...... 3,260 264 1,596 (514) 4,606
Equity in net (income)
loss of
subsidiaries.........
Other, net............ (386) 85 (5,321) 1,788 (3,834)
------- ------- -------- -------- --------
Other (income)
expense, net....... 2,360 175 (3,858) 1,788 465
------- ------- -------- -------- --------
Income (loss) before
provision (benefit) for
income taxes .......... (3,398) 1,576 9,726 (2,411) 5,493
Provision (benefit) for
income taxes........... (6,420) (128) 6,800 2,219 2,471
------- ------- -------- -------- --------
Net income (loss)....... 3,022 1,704 2,926 (4,630) 3,022
======= ======= ======== ======== ========
</TABLE>
F-47
<PAGE>
WAVETEK WANDEL GOLTERMANN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Unaudited)
CONSOLIDATING STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 1999
(Dollars in Thousands)
<TABLE>
<CAPTION>
Wavetek Wandel Subsidiary Foreign
Goltermann Inc. Guarantors Subsidiaries Eliminations Consolidated
--------------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales............... $ -- $36,025 $94,383 $(15,942) $114,466
Cost of goods sold...... 11 17,274 47,122 (16,480) 47,927
------- ------- ------- -------- --------
Gross margin............ (11) 18,751 47,261 538 66,539
Operating expenses:
Marketing and
selling.............. 487 8,994 25,434 -- 34,915
Research and
development.......... 2 5,846 12,923 -- 18,771
General and
administrative....... 1,824 2,388 7,326 -- 11,538
Amortization of
intangible assets.... 85 3,008 1,781 -- 4,874
------- ------- ------- -------- --------
Total operating
expenses........... 2,398 20,236 47,464 -- 70,098
------- ------- ------- -------- --------
Operating income
(loss)................. (2,409) (1,485) (203) 538 (3,559)
Other (income) expense,
net:
Interest income....... (305) (85) (157) 305 (242)
Interest expense...... 3,694 153 1,702 (305) 5,244
Equity in net (income)
loss of
subsidiaries......... (439) -- -- 439 --
Other, net............ (558) (35) 963 -- 370
------- ------- ------- -------- --------
Other (income)
expense, net....... 2,392 33 2,508 439 5,372
------- ------- ------- -------- --------
Income (loss) before
provision (benefit) for
income taxes .......... (4,801) (1,518) (2,711) 99 (8,931)
Provision (benefit) for
income taxes........... (1,586) (112) 2,024 (6,042) (5,716)
------- ------- ------- -------- --------
Net income (loss)....... $(3,215) $(1,406) $(4,735) $ 6,141 $ (3,215)
======= ======= ======= ======== ========
</TABLE>
F-48
<PAGE>
WAVETEK WANDEL GOLTERMANN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Unaudited)
CONSOLIDATING STATEMENTS OF OPERATIONS
For the Six Months Ended March 31, 2000
(dollars In Thousands)
<TABLE>
<CAPTION>
Wavetek Wandel Subsidiary Foreign
Goltermann Inc. Guarantors Subsidiaries Eliminations Consolidated
--------------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales............... $ -- $92,877 $209,460 $ (39,606) $262,731
Cost of goods sold...... -- 43,587 97,985 (38,144) 103,428
------ ------- -------- --------- --------
Gross margin............ -- 49,290 111,475 (1,462) 159,303
Operating expenses:
Marketing and
selling.............. 1,082 19,502 52,458 -- 73,042
Research and
development.......... -- 11,566 24,665 -- 36,231
General and
administrative....... 306 6,497 14,467 -- 21,270
Amortization of
intangible assets.... (73) 6,080 2,481 -- 8,488
Provisions for non-
recurring charges.... 521 783 1,005 (289) 2,020
------ ------- -------- --------- --------
Total operating
expenses........... 1,836 44,428 95,076 (289) 141,051
------ ------- -------- --------- --------
Operating income
(loss)................. (1,836) 4,862 16,399 (1,173) 18,252
Other (income) expense,
net:
Interest income....... (1,031) (199) (368) 1,031 (567)
Interest expense...... 7,201 541 3,257 (1,031) 9,968
Equity in net (income)
loss of
subsidiaries......... (5,105) -- -- 5,105 --
Other, net............ 87 338 (4,735) 1,788 (2,522)
------ ------- -------- --------- --------
Other (income)
expense, net....... 1,152 680 (1,846) 6,893 6,879
------ ------- -------- --------- --------
Income (loss) before
provision (benefit) for
income taxes .......... (2,988) 4,182 18,245 (8,066) 11,373
Provision (benefit) for
income taxes........... (9,242) 1,567 11,572 1,222 5,119
------ ------- -------- --------- --------
Net income (loss)....... 6,254 2,615 6,673 (9,288) 6,254
====== ======= ======== ========= ========
</TABLE>
F-49
<PAGE>
WAVETEK WANDEL GOLTERMANN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Unaudited)
CONSOLIDATING STATEMENTS OF OPERATIONS
For The Six Months Ended March 31, 1999
(Dollars in Thousands)
<TABLE>
<CAPTION>
Wavetek Wandel Subsidiary Foreign
Goltermann Inc. Guarantors Subsidiaries Eliminations Consolidated
--------------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales............... $ -- $74,859 $198,864 $(32,792) $240,931
Cost of goods sold...... 39 38,032 95,829 (31,338) 102,562
------- ------- -------- -------- --------
Gross margin............ (39) 36,827 103,035 (1,454) 138,369
Operating expenses:
Marketing and
selling.............. 1,512 18,054 50,871 -- 70,437
Research and
development.......... 2 11,189 25,424 -- 36,615
General and
administrative....... 2,885 5,377 15,364 -- 23,626
Amortization of
intangible assets.... 121 6,016 3,553 -- 9,690
------- ------- -------- -------- --------
Total operating
expenses........... 4,520 40,636 95,212 -- 140,368
------- ------- -------- -------- --------
Operating income
(loss)................. (4,559) (3,809) 7,823 (1,454) (1,999)
Other (income) expense,
net:
Interest income....... (339) (135) (306) 305 (475)
Interest expense...... 6,563 293 3,884 (305) 10,435
Equity in net (income)
loss of
subsidiaries......... (2,451) -- 1,452 999 --
Other, net............ (693) (288) 1,112 -- 131
------- ------- -------- -------- --------
Other (income)
expense, net....... 3,080 (130) 6,142 999 10,091
------- ------- -------- -------- --------
Income (loss) before
provision (benefit) for
income taxes........... (7,639) (3,679) 1,681 (2,453) (12,090)
Provision (benefit) for
income taxes........... (3,287) 119 5,979 (10,549) (7,738)
------- ------- -------- -------- --------
Net income (loss)....... $(4,352) $(3,798) $ (4,298) $ 8,096 $ (4,352)
======= ======= ======== ======== ========
</TABLE>
F-50
<PAGE>
WAVETEK WANDEL GOLTERMANN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Unaudited)
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For The Six Months Ended March 31, 2000
(Dollars in Thousands)
<TABLE>
<CAPTION>
Wavetek Wandel
Goltermann Subsidiary Foreign
Inc. Guarantors Subsidiaries Eliminations Consolidated
-------------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net cash provided by
(used in) operating
activities............. $ (764) $ 6,795 $ 12,473 $ -- $ 18,504
INVESTING ACTIVITIES
Purchase of property and
equipment.............. (230) (1,209) (4,926) -- (6,365)
--------- ------- -------- ----- ---------
Net cash provided by
(used in) investing
activities............. 25,345 (8,024) 5,989 -- 23,310
FINANCING ACTIVITIES
Proceeds from long-term
obligations............ 95,077 -- 12,400 -- 107,477
Principal payments on
long-term obligations.. (119,007) -- (28,400) -- (147,407)
Capital contribution
from Wavetek Wandel
Goltermann, Inc. to
subsidiary............. -- 650 (650) -- --
Loans to subsidiaries
from Wavetek Wandel
Goltermann, Inc. ...... (1,461) -- 1,461 -- --
Repayment of loan from
subsidiary to Wavetek
Wandel Goltermann, Inc.
....................... 297 (26) (271) -- --
Repayment of loans from
subsidiaries........... (1,575) -- 1,575 -- --
Other, net.............. 2,739 451 (3,190) -- --
--------- ------- -------- ----- ---------
Net cash provided by
(used in) financing
activities ............ (23,930) 1,075 (17,075) -- (39,930)
Effect of exchange rate
changes on cash and
cash equivalets ....... -- -- (999) -- (999)
--------- ------- -------- ----- ---------
Increase (decrease) in
cash and cash
equivalents ........... 651 (154) 388 -- 885
Cash and cash
equivalents at
beginning of period ... 11 4,578 12,500 -- 17,089
--------- ------- -------- ----- ---------
Cash and cash
equivalents at end of
period................. 663 4,424 12,887 -- 17,974
========= ======= ======== ===== =========
</TABLE>
F-51
<PAGE>
WAVETEK WANDEL GOLTERMANN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Unaudited)
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Six Months Ended March 31, 1999
(Dollars in Thousands)
<TABLE>
<CAPTION>
Wavetek Wandel Subsidiary Foreign
Goltermann Inc. Guarantors Subsidiaries Eliminations Consolidated
--------------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net cash provided by
(used in) operating
activities ............ $(23,865) $ 22,301 $ 1,147 $ -- $ (417)
INVESTING ACTIVITIES
Purchase of property and
equipment.............. (264) (1,588) (5,790) -- (7,642)
Transfer of
subsidiaries........... (28,536) -- 28,536 -- --
-------- -------- -------- ----- ---------
Net cash provided by
(used in) investing
activities ............ (28,800) (1,588) 22,746 -- (7,642)
FINANCING ACTIVITIES
Proceeds from long-term
obligations............ 107,352 1,402 30,305 -- 139,059
Principal payments on
long-term obligations.. (59,408) (1,775) (84,519) -- (145,702)
Dividend from subsidiary
to Wavetek Wandel
Goltermann, Inc. ...... 22,000 (22,000)
Capital contribution
from Wavetek Wandel
Goltermann, Inc. to
subsidiary ............ (2,034) -- 2,034 -- --
Loans to subsidiaries
from Wavetek Wandel
Goltermann, Inc. ...... (36,078) 6,203 29,875 -- --
Repayment of loan from
subsidiary to Wavetek
Wandel Goltermann, Inc.
....................... 28,996 (28,996) -- -- --
Repayment of loans from
subsidiaries........... (7,500) (1,818) 9,318 -- --
Other, net.............. (672) -- -- -- (672)
-------- -------- -------- ----- ---------
Net cash provided by
(used in) financing
activities ............ 52,656 (46,984) (12,987) -- (7,315)
Effect of exchange rate
changes on cash and
cash equivalents ...... -- -- (3,047) -- (3,047)
-------- -------- -------- ----- ---------
Increase (decrease) in
cash and cash
equivalents ........... (9) (26,271) 7,859 -- (18,421)
Cash and cash
equivalents at
beginning of period ... 19 31,143 4,382 -- 35,544
-------- -------- -------- ----- ---------
Cash and cash
equivalents at end of
period................. $ 10 $ 4,872 $ 12,241 $ -- $ 17,123
======== ======== ======== ===== =========
</TABLE>
F-52
