<TABLE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings (Unaudited)
For the Quarters and Nine-Month Periods Ended
December 31, 1994 and 1993
(Amounts in Thousands Except Per Share Amounts)
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Revenues $ 32,794 $32,622 $96,757 $96,702
Costs & expenses 31,368 31,328 92,708 92,797
Operating earnings 1,426 1,294 4,049 3,905
Other deductions:
Interest expense, net 119 149 409 460
Interest income (12) (22) (15) (40)
Other, net 74 65 156 288
181 192 550 708
Earnings before income 1,245 1,102 3,499 3,197
taxes
Income taxes 538 442 1,478 1,350
Net earnings $ 707 $ 660 $2,021 $1,847
Earnings per common and
common equivalent
share $ 0.28 $ 0.27 $ 0.82 $ 0.79
Weighted average shares
and common equivalent
shares outstanding
during the period 2,495 2,457 2,470 2,334
See accompanying notes to quarterly consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
(Amounts in Thousands)
<CAPTION>
December 31, 1994 March 31, 1994
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 645 $ 729
Contract receivables 22,012 24,418
Notes and other
receivables 780 371
Prepaid expenses 1,034 839
Total current assets 24,471 26,357
Property, buildings, and
equipment, net 15,736 15,680
Other assets:
Goodwill 6,892 6,314
Deposits and other
receivables 437 469
New product development
costs, net 7,745 5,319
Other 3,123 2,615
18,197 14,717
Total assets $ 58,404 $ 56,754
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 29 $ 594
Current installments of
long-term debt 300 286
Accounts payable 2,877 3,297
Accrued expenses 6,993 7,181
Dividends payable - 556
Deferred income taxes 1,017 1,132
Total current liabilities 11,216 13,046
Long-term debt, excluding
current installments 4,486 4,345
Deferred income taxes 3,467 2,787
Other long-term
liabilities 2,332 2,134
Total liabilities 21,501 22,312
Shareholders' equity:
Common stock, $.125
stated value; Authorized
7,500,000 shares;issued
2,361,437 shares at
December 31, 1994 and
2,149,708 at March 31,
1994. 295 290
Additional paid-in capital 9,153 8,718
Retained earnings 27,455 25,434
Total shareholders' equity 36,903 34,442
Total liabilities and
shareholders' equity $ 58,404 $ 56,754
See accompanying notes to quarterly consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
For the Nine-Month Periods Ended December 31, 1994, and 1993
(Amounts in Thousands)
<CAPTION>
December 31, 1994 December 31, 1993
<S> <C> <C>
Operating activities:
Net earnings $ 2,021 $ 1,847
Adjustments to reconcile net
earnings to net cash
provided by operating
activities:
Depreciation and
amortization of fixed assets 1,981 2,230
Amortization of goodwill 320 206
Loss on sale of equipment 23 139
Advance from customer (30) 198
Decrease (increase) in:
Contract receivables 2,429 1,172
Accounts receivable-other (409) 91
Prepaid expenses (194) (946)
Other assets (474) (596)
Increase (decrease) in:
Accounts payable and accrued (608) (1,566)
Deferred income taxes 565 674
Other long-term liabilities 197 358
Net cash provided by operating
activities 5,821 3,807
Investing activities:
Additions to property, buildings,
and equipment (2,054) (2,010)
New product development costs (2,377) (1,928)
Proceeds from the sale of
equipment 7 62
Acquisition of business units
(net of cash acquired) (986) (338)
Net cash used in investing
activities (5,410) (4,214)
Financing activities:
Net repayments of short-term
borrowings (534) (152)
Proceeds from long-term debt 365 (53)
Principal payments on long-term
debt (210) (310)
Proceeds from sale of common stock 440 1,341
Dividends paid (556) (474)
Net cash provided (used) by
financing activities (495) 352
Decrease in cash and cash
equivalents (84) (55)
Cash and cash equivalents:
Beginning of period 729 314
End of period $ 645 $ 259
See accompanying notes to quarterly consolidated financial statements.
</TABLE>
<PAGE>
ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1994
Notes to Consolidated Financial Statements
1. The information furnished in the accompanying unaudited
consolidated Statements of Earnings, Consolidated Balance Sheets,
and Consolidated Statements of Cash Flows reflects all adjustments
(consisting only of items of a normal recurring nature) which are,
in the opinion of management, necessary for a fair statement of the
Company's results of operations and financial position for the
interim periods. The financial statements should be read in
conjunction with the audited financial statements and notes
included in the Company's Annual Report for the year ended
March 31, 1994.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Results of Operations
<TABLE>
A summary of comparative results for the quarters and nine-month
periods ended December 31, 1994 and December 31, 1993 is as follows:
<CAPTION>
Three Months Ended December 31, Percent
1994 1993 Change
<S> <C> <C> <C>
Revenues $ 32,794,000 $ 32,622,000 0.5
Operating earnings 1,426,000 1,294,000 10.2
Earnings before
income taxes 1,245,000 1,102,000 13.0
Net earnings 707,000 660,000 7.1
Earnings per common
and common equivalent
share 0.28 0.27 3.7
Weighted average
shares and common
equivalent shares
outstanding during
the period 2,495,000 2,457,000 1.5
<CAPTION>
Nine Months Ended December 31 Percent
1994 1993 Change
<S> <C> <C> <C>
Revenues 96,757,000 96,702,000 0.1
Operating earnings 4,049,000 3,905,000 3.7
Earnings before income
taxes 3,499,000 3,197,000 9.4
Net earnings 2,021,000 1,847,000 9.4
Earnings per common and
common equivalent
share 0.82 0.79 3.8
Weighted average
shares and common
equivalent shares
outstanding during
the period 2,470,000 2,334,000 5.8
</TABLE>
<PAGE>
Revenues increased 0.5% to $32.8 million for the three months
ended December 31, 1994 from $32.6 million for the three months
ended December 31, 1993. For the nine-month period ended December
31, 1994 ( the first nine months of fiscal 1995), revenues increased
0.1% to $96.8 million compared with $96.7 million in the first
nine months of fiscal 1994. Although the Company's labor related
revenues increased for the quarter and nine-month period compared
with the same periods in the prior year, this increase was offset
by a decrease in non labor related revenue for the current quarter
and nine-month period of $1.0 million and $2.1 million,
respectively. The decrease in non labor revenue was primarily
due to reduced purchases of components by the Company's subsidiary
General Systems Solutions, Inc. (GSS) under its original contracts
to provide minesweeping gear to the U. S. Navy. While GSS began
work on a follow-on contract in the current quarter, purchases
of components were less than the prior year. Progress by GSS
on commercial implementation of the On-line Registration System
(OLRS) moved more slowly than anticipated in New York and
California during the third quarter although OLRS implementation
in New Jersey progressed well.
For the quarter and nine-month period ended December 31, 1994,
operating earnings were $1.4 million and $4.0 million compared
with $1.3 million and $3.9 million in the comparable quarter
and nine-month period in fiscal 1994.
The operating margins for the quarter and nine-month period
ended December 31, 1994 were 4.3% and 4.2% compared with 4.0%
in both the prior fiscal quarter and nine-month period. For the
current quarter and nine-month period, higher fees earned in the
Company's field services operations and in its traditional Navy
business were offset in part, by contract overruns on naval air
work in the Company's subsidiary, Continental Dynamics, Inc.,
(CDI). Delays in award of anticipated new naval air work may
adversely affect future revenues and earnings. The Company's level
of expenditure for new business diversification initiatives was
approximately the same in the fiscal 1995 and fiscal 1994 periods.
The Company plans to continue such expenditures and anticipates
that future margins will be affected.
The net amount of interest expense, interest income and other,
net expense as a percentage of revenue remained constant at 0.6% for
both the current and prior year quarter and nine-month period ended
December 31, 1994 compared with 0.7% for the nine-month period ended
December 31, 1993. Interest expense, net of interest income, was 0.4%
for both the current and prior year quarter and decreased to 0.4% for
the current nine-month period compared with 0.5% in the prior year
period. The decrease was primarily the result of an improvement in
the Company's collection period as discussed more fully below (see
Liquidity and Capital Resources). Other, net expense remained constant
for the current quarter compared with the prior year quarter. The
decrease in other, net expense in the nine-month period was due to
the offsetting effect of higher earnings reported by the Company's
joint venture with Brown & Sharp Manufacturing Company, Automation
Software Inc.,(ASI). Higher earnings were due, in part, to a key
person insurance payment resulting from the death of ASI's president.
The effect of this payment, net of expenses, on the Company's earnings
was $115,000.
<PAGE>
Earnings before income taxes were $1.2 million and $3.5 million for
the third quarter and the first nine months of fiscal 1995 as compared
with $1.1 million and $3.2 million for the same periods in the prior
fiscal year.
The Company's effective tax rate was 43.1% for the third quarter and
42.2% for the first nine months of fiscal 1995 compared with 40.1% and
42.2 % for the third quarter and first nine months of fiscal 1994. The
higher effective tax rate in the current fiscal quarter ended
December 31, 1994 and the lower than average rate in the prior year
quarter were primarily the result of the changes in earnings of the
Company's ASI joint venture. Because the Company's share af ASI's income
is reported on an after tax basis and is not included in the Company's
taxable income, changes in level of income change the Company's
effective tax rate.
Net earnings were $707 thousand and $2.0 million for the third
quarter and first nine months of fiscal 1995 as compared with net
earnings of $660 thousand and $1.8 million in the third quarter and
first nine months of fiscal 1994.
Earnings per share were $0.28 and $0.82 in the third quarter and first
nine months of fiscal 1995 as compared with $0.27 and $0.79 in the same
prior year periods. The weighted average number of shares and equivalent
shares outstanding were 2.5 million in the third quarter, the first
nine months of fiscal 1995 and the prior year quarter. For the first
nine months of fiscal 1994 the average number of shares and equivalent
shares outstanding were 2.3 million.
The increase in the number of common stock equivalent shares outstanding
for the nine-month period is principally due to the exercise of stock
options and an increase in the average price of the Company's stock,
which increased the average number of common equivalent shares
attributable to stock options.
Liquidity and Capital Resources
For the nine-month period ended December 31, 1994, net cash provided
from operating activities, which totaled $5.8 million, benefited from a
decrease in contract receivables of $2.4 million. The decrease in contract
receivables was due primarily to a reduction in the period of time
to be paid by the Government's paying offices and by improvements in
invoice processing by the Company's subsidiaries.
Contract receivables totaled $22.0 million at December 31, 1994,
$24.4 million at March 31, 1994 and $22.4 million at December 31, 1993
and represented 38%, 43% and 41% of total assets at each of those dates.
The average period for payment to the Company was 61 days at
December 31, 1994, 66 days at March 31, 1994 and 62 days at December 31,
1993.
<PAGE>
For the nine-month period ended December 31, 1994, net cash used in
investing activities totaled $5.4 million. There were three primary uses
of this cash. The first was for the purchase of equipment and leasehold
improvements totaling $2.1 million. The second was for software product
development costs associated with the vehicle on-line registration system
being developed by GSS. Software product development costs, net of
amortization, totaled $2.4 million. Other uses of cash for investing
activities included $986,000 for acquisitions, including a final
contingent payment to the former owners of the Company's subsidiary,
Continental Dynamics, Inc. and the purchase of a small software development
company in the Naval Architecture industry.
Net cash used for financing activities for the nine-month period ended
December 31, 1994 totaled $495 thousand. The primary use of cash was to
repay borrowings under the Company's revolving credit agreements and
to pay dividends.
Any capital needs not satisfied by cash generated from operations will
be met with money borrowed by the Company under its revolving credit
agreements. The total funds available to the Company under these
agreements at December 31, 1994 was $20 million. Borrowings under the
Company's banking agreements were $1.0 million at December 31, 1994,
$1.2 million at March 31, 1994 and $875 thousand at December 31, 1993.
It is anticipated that the Company's existing cash together with cash
provided by operating activities and its revolving credit agreements will
be sufficient to meet normal working capital requirements for the
foreseeable future. As of December 31, 1994 the Company does not have
any major capital commitments.
The Company believes inflation has not had a material effect on
its business.
<PAGE>
Part II. OTHER INFORMATION REQUIRED IN REPORT
Item 1. Legal Proceedings - None.
Item 2. Changes in Securities - None.
Item 3. Defaults Upon Senior Securities - None.
Item 4. Submission of Matters to a Vote of Security Holders - None.
Item 5. Other Information - None.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
4A First Amendment to Revolving Credit
and Term Loan Agreement and Revolving
Credit Note as of December 9, 1994
b. Reports - none.
<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.
ANALYSIS & TECHNOLOGY, INC.
Date: February 10, 1995
/s/Gary P. Bennett
President and CEO
Date: February 10, 1995
/s/David M. Nolf
Executive Vice President
<PAGE>
Exhibit Index
Exhibit
Number Description of Documents
4A First Amendment to Revolving Credit and
Term Loan Agreement and Revolving
Credit Note as of December 9, 1994
27 Financial Data Schedule
<PAGE>
1
FIRST AMENDMENT TO REVOLVING
CREDIT AND TERM LOAN AGREEMENT AND REVOLVING CREDIT NOTE
THIS AMENDMENT, dated as of December 9, 1994 ("Amendment") to
the Amended and Restated Revolving Credit and Term Loan Agreement and the
Revolving Credit Note, both dated as of November 15, 1993 (the
"Agreement"), is entered into by and between ANALYSIS & TECHNOLOGY, INC., a
Connecticut corporation (the "Company") and SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION, a national banking association (the "Bank").
W I T N E S S E T H
WHEREAS, pursuant to the Agreement, the Bank has made certain
advances to the Company and the Company has made certain covenants to the
Bank; and
WHEREAS, the Bank and the Company now desire to amend the
Agreement to provide for, among other things, an increase in the Commitment
and an extension of the Termination Date.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged and pursuant to the requirements of the Agreement, the
parties hereto hereby agree as follows:
Section 1. Definitions. Capitalized terms used herein and not
otherwise defined herein shall have the meanings specified in, or by
reference in, the Agreement.
<PAGE>
2
Section 2. Amendment to the Agreement
(a) Section 1.1 of the Agreement is amended and restated to read
as follows:
Section 1.1 Amounts. Subject to the terms and
conditions contained in this Agreement, the Bank agrees
to make loans (the "Revolving Credit Loans" and
individually, a "Revolving Credit Loan") to the Company
from time to time prior to October 31, 1996 (the
"Termination Date") in principal amounts not exceeding
at any one time outstanding the sum of $18,500,000
(such amount, as it may be reduced from time to time as
hereinafter provided, is herein called the
"Commitment") less the face amount of all Letters of
Credit issued for the account of the Company or any
other party guaranteed by the Company (the "Letters of
Credit" and each individually a "Letter of Credit").
Each Revolving Credit Loan shall be either a Domestic
Loan, a CD Loan, or a Eurodollar Loan as the Company
may elect subject to the provisions of this Agreement.
Notwithstanding anything herein to the contrary, during
the term of this Agreement, the sum of (i) the
aggregate outstanding principal amount of Revolving
Credit Loans hereunder plus (ii) the aggregate
available face amount of all Letters of Credit, shall
not at any time exceed the Commitment.
(b) The Revolving Credit Note attached to the Agreement as
Exhibit A-1 is amended to substitute "$18,500,000" for each reference in
the Agreement to "$17,500,000" and "Eighteen Million Five Hundred Thousand
Dollars" for each reference in the Agreement to "Seventeen Million Five
Hundred Thousand Dollars."
<PAGE>
3
(c) Section 1.3 of the Agreement is amended to change the
maturity date of the Term Loan from August 1, 2000 to November 1, 2001, by
substituting the reference to "August 1, 2000" with "November 1, 2001."
(d) Exhibits C, D, E and F to the Agreement are each amended and
restated to read in the form of Exhibits C, D, E and F respectively,
attached hereto and made a part hereof as Exhibits C, D, E and F.
Section 3. Conditions and Effectiveness. This Amendment shall
become effective when, and only when, the Bank and the Company have
received counterparts of this Amendment executed by the Bank and by the
Company.
Section 4. Reference to and Effect on the Agreement.
(a) Upon the effectiveness of Section 2 hereof, on and after the
date hereof, (i) each reference in the Agreement to "this Agreement,"
"hereunder," "hereof," "herein," or words of like import, and each
reference to the Agreement in the Revolving Credit Note and any other
document relating to the Agreement, shall mean and be in reference to the
Agreement as amended hereby and (ii) each reference in the Revolving Credit
Note to "this Note, " "hereunder," "hereof," "herein," or words of similar
import, and each reference in the Agreement to "the Note" or "the Revolving
Credit Note" shall mean and be in reference to the Revolving Credit Note as
amended hereby.
(b) Except as specifically amended herein, the Agreement and the
Note shall remain in full force and effect and are hereby ratified and
confirmed.
<PAGE>
4
Section 5. Headings. Section headings in this Amendment are
included herein for convenience of reference only and shall not constitute
a part of this Amendment for any other purpose.
Section 6. Execution and Counterparts. This Amendment may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which when taken
together shall constitute one in the same instrument.
Section 7. Governing Law. This Amendment shall be governed by
and construed in accordance with the laws of the State of Connecticut.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed by their respective officers thereunto duly authorized as of
the date first above written.
ANALYSIS & TECHNOLOGY, INC.
By:__/s/ DAVID M. NOLF____
Name: David M. Nolf
Its: Executive Vice President
Chief Financial and Administrative Officer
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION
By:__/s/ MATTHEW E. HUMMEL_
Name: Matthew E. Hummel
Its: Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000310876
<NAME> NANCY HOBERT
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<EXCHANGE-RATE> 1
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-START> APR-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 645
<SECURITIES> 0
<RECEIVABLES> 22,012
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 24,471
<PP&E> 32,345
<DEPRECIATION> 16,609
<TOTAL-ASSETS> 58,404
<CURRENT-LIABILITIES> 11,216
<BONDS> 0
<COMMON> 295
0
0
<OTHER-SE> 36,608
<TOTAL-LIABILITY-AND-EQUITY> 58,404
<SALES> 96,757
<TOTAL-REVENUES> 96,757
<CGS> 0
<TOTAL-COSTS> 92,708
<OTHER-EXPENSES> 156
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 394
<INCOME-PRETAX> 3,499
<INCOME-TAX> 1,478
<INCOME-CONTINUING> 2,021
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,021
<EPS-PRIMARY> 0.82
<EPS-DILUTED> 0
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