<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1995
-------------------------------------------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
-------------------- --------------------------
Commission file number 0-14161
--------------------------------------------------------
ANALYSIS & TECHNOLOGY, INC.
------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Connecticut 95-2579365
------------------------------ -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Route 2, North Stonington, Connecticut 06359
------------------------------------------------------------
(Address of principal executive office)
(Zip Code)
(203) 599-3910
------------------------------------------------------------
(Registrant's telephone number, including area code)
------------------------------------------------------------
(Former name, former address, and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the securities exchange act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No
------- -------
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
As of the close of business november 6, 1995, the registrant had
outstanding 2,419,415 shares of common stock.
<PAGE> 2
CONTENTS
PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS 1
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 5
PART II. OTHER INFORMATION REQUIRED IN REPORT
ITEM 1. LEGAL PROCEEDINGS 8
ITEM 2. CHANGES IN SECURITIES 8
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 8
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS 8
ITEM 5. OTHER INFORMATION 8
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 8
i
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE QUARTERS AND SIX-MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1994
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ ----------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue $ 31,120 $ 32,442 $ 62,455 $ 63,500
Costs & expenses 29,536 30,924 59,241 60,593
-------- -------- -------- --------
Operating earnings from
continuing operations 1,584 1,518 3,214 2,907
-------- -------- -------- --------
Other deductions:
Interest expense 188 183 371 290
Interest income (3) (1) (4) (3)
Other, net 62 59 193 82
-------- -------- -------- --------
247 241 560 369
-------- -------- -------- --------
Earnings before income taxes
from continuing operations 1,337 1,277 2,654 2,538
156 544 713 1,056
Income taxes -------- -------- -------- --------
Net earnings from
continuing operations 1,181 733 1,941 1,482
Discontinued Operations:
Loss from discontinued
operations, net of income
taxes (96) (101) (142) (168)
Loss on the disposal of
discontinued operations, net
of income taxes (1,316) -- (1,316) --
-------- -------- -------- --------
Net earnings (loss) $ (231) $ 632 $ 483 $ 1,314
======== ======== ======== ========
Earnings per common and
common equivalent share
Continuing operations $ 0.47 $ 0 .30 $ 0.79 $ 0.60
Discontinued operations (0.56) (0.04) (0.59) (0.07)
-------- -------- -------- --------
Net earnings (loss) $ (0.09) $ 0.26 $ 0.20 $ 0.53
======== ======== ======== ========
Weighted average shares and
common equivalent shares
outstanding during the period 2,500 2,465 2,473 2,466
</TABLE>
See accompanying notes to the consolidated financial statements.
1
<PAGE> 4
ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS SEPTEMBER 30, 1995 MARCH 31, 1995
------ ------------------ --------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,499 $ 502
Contract receivables 25,174 27,322
Notes and other receivables 1,082 1,142
Prepaid expenses 463 943
Net current assets of discontinued operations 306 --
------- -------
Total current assets 28,524 29,909
Property, buildings, and equipment, net 14,646 15,336
Other assets:
Goodwill, net 6,684 6,783
Deposits and other receivables 346 429
Product development costs, net 215 201
Other 3,708 3,227
Net noncurrent assets of discontinued
operations 6,847 5,117
------- -------
17,800 15,757
------- -------
TOTAL ASSETS $60,970 $61,002
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 404 $ 4
Current installments of long-term debt 324 309
Accounts payable 2,270 3,834
Accrued expenses 8,652 8,404
Dividends payable -- 616
Deferred income taxes 547 1,063
Net current liabilities of discontinued operations -- 69
------- -------
Total current liabilities 12,197 14,299
Long-term debt, excluding current installments 7,593 6,933
Deferred income taxes 337 194
Other long-term liabilities 2,779 2,403
------- -------
TOTAL LIABILITIES 22,906 23,829
------- -------
Shareholders' equity:
Common stock, $.125 stated value
Authorized 7,500,000 shares; issued
2,412,815 shares at September 30, 1995
and 2,371,399 at March 31, 1995 302 296
Additional paid-in capital 9,688 9,286
Retained earnings 28,074 27,591
------- -------
TOTAL SHAREHOLDERS' EQUITY 38,064 37,173
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $60,970 $61,002
======= =======
</TABLE>
See accompanying notes to the consolidated financial statements.
2
<PAGE> 5
ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX-MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1994
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
------------------ ------------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net earnings $ 483 $ 1,314
ADJUSTMENTS TO RECONCILE NET EARNINGS TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
Loss associated with discontinued operations 1,458 168
Depreciation and amortization of fixed assets 1,139 1,313
Amortization of goodwill 222 209
Amortization of new product development costs 58 0
Loss on sale and disposal of equipment 652 20
Advance from customer -- (35)
Decrease (increase) in:
Contract receivables 2,148 2,415
Notes and other receivables 60 (222)
Prepaid expenses 480 (638)
Other assets (398) (340)
Increase (decrease) in:
Accounts payable and accrued expenses (1,316) 953
Deferred income taxes (373) (102)
Other long-term liabilities 376 128
------- -------
NET CASH PROVIDED BY CONTINUING OPERATIONS 4,989 5,183
NET CASH PROVIDED (USED) BY DISCONTINUED
OPERATIONS (2,346) 1,050
NET CASH PROVIDED BY OPERATING ACTIVITIES 2,643 6,233
INVESTING ACTIVITIES:
Additions to property, buildings, and equipment (1,279) (1,512)
New product development costs - continuing operations (72) (272)
New product development costs - discontinued operations (1,045) (2,103)
Proceeds from the sale of equipment 6 3
Acquisition of business units (net of cash acquired) (123) (986)
------- -------
NET CASH USED BY INVESTING ACTIVITIES (2,513) (4,870)
------- -------
FINANCING ACTIVITIES:
Net proceeds from short-term borrowings 400 70
Proceeds from long-term debt borrowings 825 1,365
Principal repayments of long-term debt (150) (138)
Proceeds from sale of common stock 408 277
Dividends paid (616) (556)
------- -------
NET CASH PROVIDED BY FINANCING ACTIVITIES 867 1,018
------- -------
Increase in cash and cash equivalents 997 2,381
CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD 502 729
------- -------
End of period $ 1,499 $ 3,110
------- -------
</TABLE>
See accompanying notes to the consolidated financial statements.
3
<PAGE> 6
ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
1. The information furnished in the accompanying unaudited Consolidated
Statements of Operations, Consolidated Balance Sheets, and Consolidated
Statements of Cash Flows reflect 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. These
financial statements should be read in conjunction with the audited
consolidated financial statements and notes included in the Company's
Annual Report for the year ended March 31, 1995.
2. On October 31, 1995, the Company sold the commercial business of its
Groton, Connecticut-based subsidiary, General Systems Solutions, Inc.
(GSS), to GE Capital Corporation for $9.25 million in cash. Of the
$9.25 million purchase price, approximately $8.0 million was paid to
A&T. The balance was paid to minority shareholders. GSS provided
On-Line Registration Systems (OLRS) and related services to various
state agencies. The OLRS enabled vehicle lease and rental companies, as
well as car dealers, to register vehicles from personal computers
networked to GSS. GSS's Navy business was transferred to the Company
prior to the sale and its commercial business has been reclassified
retroactively as a discontinued operation. The Company accrued a pretax
loss of $2.7 million ($1,316,000 after tax or $0.53 per common share)
for the quarter and six-month period ended September 30, 1995. The loss
accrual includes provisions for other estimated costs to be incurred in
connection with the disposal of GSS.
The results of GSS's commercial business have been reported separately
as discontinued operations in the Consolidated Statements of
Operations. Prior year consolidated financial statements for the
quarter and six-month period ended September 30, 1994 have been
restated to present the GSS commercial results as discontinued
operations.
The assets and liabilities of the GSS commercial business have been
reclassified for both the current and prior year periods on the
Consolidated Balance Sheets from their previously reported
classifications to separately identify them as net current assets or
liabilities and net noncurrent assets related to discontinued
operations.
As a result of the sale of GSS, the Company will receive cash net of
taxes and expenses of approximately $5.5 million. However, because the
cash had not been received as of September 30, 1995 it has not yet been
recorded on the balance sheet.
3. During the current quarter the Company analyzed research expenditures
incurred in prior years by the Company and its subsidiaries. As a
result of this analysis, the Company determined it was entitled to
certain federal and state research and development tax credits for
which it can and will file refund claims. The total amount of such
credits accrued in the quarter against income tax on earnings from
continuing operations was $400,000.
4
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
A summary of comparative results for the quarter and six-month periods
ended September 30, 1995 and September 30, 1994 is as follows:
<TABLE>
<CAPTION>
AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ ------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue
from Continuing Operations $ 31,120 $ 32,442 $ 62,455 $ 63,500
Operating Earnings
from Continuing Operations 1,584 1,518 3,214 2,907
Earnings before Income Taxes
from Continuing Operations 1,337 1,277 2,654 2,538
Net Earnings
from Continuing Operations 1,181 733 1,941 1,482
Loss from Discontinued Operations,
net of Income Taxes (96) (101) (142) (168)
Loss on the disposal of Discontinued
Operations, net of Income Taxes (1,316) -- (1,316) --
Net Earnings (Loss) (231) 632 483 1,314
Earnings (Loss) per Common Share
Continuing Operations 0.47 0.30 0.79 0.60
Discontinued Operations (0.56) (0.04) (0.59) (0.07)
Net Earnings (Loss) per
Common Share (0.09) 0.26 0.20 0.53
Weighted Average Shares and
Common Equivalent Shares
Outstanding 2,500 2,465 2,473 2,466
</TABLE>
On October 31, 1995, the Company sold the commercial business of its Groton,
Connecticut-based subsidiary, General Systems Solutions, Inc. (GSS), to GE
Capital Corporation for $9.25 million in cash. The level of future capital
investment necessary to realize GSS's potential, in comparison to A&T's net
worth, was an important factor in the Company's decision to sell. Of the $9.25
million purchase price, approximately $8.0 million was paid to A&T. The balance
was paid to minority shareholders. GSS's Navy business was transferred to the
Company prior to the sale, and its commercial business has been reclassified
retroactively as a discontinued operation. The Company accrued a pretax loss of
$2.7 million ($1,316,000 after tax or $0.53 per common share) for the quarter
and six-month period ended September 30, 1995. The loss accrual includes
provisions for other estimated costs to be incurred in connection with the
disposal of GSS.
5
<PAGE> 8
The results of GSS's commercial business for the current and prior year
periods have been reported separately as discontinued operations in the
Consolidated Statements of Operations. The loss from discontinued operations,
including the loss provision associated with the sale, totaled $1,412,000 or
$0.56 per share and $1,458,000 or $0.59 per share for the quarter and six-month
period ended September 30, 1995, as compared with the loss from discontinued
operations of $0.04 per share and $0.07 per share for the same prior year
periods.
Revenue from continuing operations decreased 4.1% to $31.1 million for the
three months ended September 30, 1995 from $32.4 million for the three months
ended September 30, 1994. For the six-month period ended September 30, 1995 (the
first six months of fiscal 1996), revenues decreased 1.6% to $62.5 million
compared with $63.5 million in the first six months of fiscal 1995. The decrease
in overall revenue is attributable, in part, to a decrease in non-labor related
revenue for the current quarter and six-month period of $486 thousand and $878
thousand, respectively. Non-labor revenue was down primarily due to reduced
purchases of components by the Company under a contract to provide minesweeping
gear to the U.S. Navy.
For the quarter and six-month period ended September 30, 1995, operating
earnings from continuing operations were $1.6 million and $3.2 million compared
with $1.5 million and $2.9 million in the comparable quarter and six-month
period in fiscal 1995.
Operating margins from continuing operations for both the quarter and
six-month period ended September 30, 1995 were 5.1% compared with 4.7% and 4.6%
in the prior fiscal year quarter and six-month period. The increase in operating
margins from continuing operations for the current quarter and six-month period
was due to higher fees earned on the Company's defense related work and improved
operating efficiencies in its commercial interactive multimedia operations,
including higher than anticipated earnings on a large fixed price commercial
training project. Prior to the sale of GSS, operating margins were adversely
affected by business development expenditures for on-line registration systems.
Elimination of these expenditures from continuing operations has increased
margins in both the current and prior year periods.
The total of interest expense, interest income and other net expenses as a
percentage of revenue increased to 0.8% and 0.9% for the current quarter and
six-month period ended September 30, 1995 compared with 0.7% and 0.6% for the
comparable prior year periods. Interest expense, net of interest income
increased because of higher interest rates and increased borrowing under the
Company's revolving credit agreement due to investment in software product
development associated with GSS's on-line registration systems. Other net
expense was low for the first six months of fiscal 1995 due to the effect of a
key person insurance payment received by Automation Software Inc. (ASI), a joint
venture company. The effect of this payment, net of expenses, on the Company's
fiscal 1995 earnings was $115,000.
Earnings before income taxes from continuing operations were $1.3 million in
both the second quarter of fiscal 1996 and the second quarter of fiscal 1995.
For the first six months of fiscal 1996, earnings before income taxes were $2.7
million compared with $2.5 million for the same period in the prior fiscal year.
The Company's effective tax rate on earnings from continuing operations was
11.6% for the second quarter and 26.9% for the first six months of fiscal 1996
compared with 42.6% and 41.6% for the second quarter and first six months of
fiscal 1995. The lower effective tax rate in the current periods was mainly the
result of the Company's accrual of federal and state research and development
(R&D) tax credits totaling $400,000. During the current quarter the Company
analyzed research expenditures incurred in prior years by the Company and its
subsidiaries. As a result of this analysis, the Company determined it was
entitled to certain federal and state R&D tax credits for which it can and will
file refund claims.
Net earnings from continuing operations were $1.2 million and $1.9 million
for the second quarter and first six months of fiscal 1996 as compared with net
earnings of $733 thousand and $1.5 million in the second quarter and first six
months of fiscal 1995. Excluding R&D tax credits, net earnings from continuing
operations for the current year periods were $781 thousand and $1.5 million,
respectively.
6
<PAGE> 9
Net earnings (loss) per share were ($0.09) and $0.20 for the current quarter
and first six months of fiscal 1996 compared with $0.26 and $0.53 in the same
prior year periods. The current year periods were adversely affected by the loss
on the disposal of discontinued operations. Earnings per share from continuing
operations were $0.47 and $0.79 in the second quarter and first six months of
fiscal 1996 as compared with $0.30 and $0.60 in the quarter and first six months
of fiscal 1995. Excluding the effect of R&D tax credits, earnings per share from
continuing operations for the quarter and six-month period ended September 30,
1995 were $0.31 and $0.62, respectively.
The weighted average number of shares and common equivalent shares
outstanding were 2.5 million in both the second quarter and first six months of
fiscal 1996 and fiscal 1995.
LIQUIDITY & CAPITAL RESOURCES
For the six-month period ended September 30, 1995, net cash provided by
operating activities from continuing operations totaled $5.0 million. The net
cash increase resulted primarily from earnings from continuing operations of
$1.9 million and a decrease in contract receivables. Contract receivables
decreased $2.1 million mainly due to the collection of receivables due under a
large firm fixed price contract. Contract receivables totaled $25.2 million at
September 30, 1995, $27.3 million at March 31, 1995 and $21.8 million at
September 30, 1994 and represented 41%, 45% and 38%, respectively, of total
assets at each of those dates. The average period for payment to the Company was
73 days as of September 30, 1995, 71 days as of March 31, 1995, and 60 days at
September 30, 1994. The increase in the average period for payment to the
Company since September 1994 has been due to the continuing software problems at
the Government Paying Office and procedural changes they are implementing which
have delayed the processing of the Company's invoices.
For the six-month period ended September 30, 1995, net cash used by
investing activities totaled $2.5 million. Cash was used primarily for the
purchase of equipment and facility improvements and for software product
development costs associated with on-line registration systems, prior to the
sale of GSS. Any capital needs not satisfied by cash generated from operations
were, and in the future will be, met with money borrowed by the Company under
its line of credit and revolving credit agreements.
For the six-month period ended September 30, 1995 net cash provided by
financing activities totaled $867 thousand and was primarily from borrowing
under the Company's line of credit and revolving credit agreements. The total
funds available to the Company under these agreements at September 30, 1995 was
$20.0 million. Borrowings under these agreements were $4.8 million at September
30, 1995, $3.5 million at March 31, 1995, and $2.6 million as of September 30,
1994. A $1.5 million bank line of credit was terminated as of October 31, 1995
in conjunction with the sale of GSS.
As a result of the sale of GSS, the Company will receive cash net of taxes
and expenses of approximately $5.5 million. However, because the cash had not
been received as of September 30, 1995 it has not yet been recorded on the
balance sheet.
It is anticipated that the Company's existing cash, together with funds
generated from operations and borrowings under its revolving credit agreement,
will be sufficient to meet its normal working capital requirements. As of
September 30, 1995, the Company does not have any major capital commitments.
The Company believes that inflation has not had a material effect on its
business.
7
<PAGE> 10
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
a. The 1995 Annual Meeting of Shareholders was held on August
8, 1995.
b. The Following matters were voted upon at the meeting and
the votes cast for, against or withheld, as well as the
number of abstentions and broker non-votes as to each such
matter, are as follows:
(1) Election of the following individuals to the Board
of Directors:
<TABLE>
<CAPTION>
Total Votes Cast For Withheld
---------------- --- --------
<S> <C> <C> <C>
Larry M. Fox 1,959,234 1,941,714 17,520
David M. Nolf 1,959,234 1,941,022 18,212
Dennis G. Punches 1,959,234 1,937,831 21,403
</TABLE>
Directors Whose Term of Office as Director Continued After
the Meeting:
Gary P. Bennett
James B. Fox
Nelda S. Nardone
Thurman F. Naylor
(2) Appointment of KPMG Peat Marwick as independent
Auditors of the Company for fiscal year 1996:
1,907,622 FOR; 43,472 AGAINST; and 8,140
ABSTAINED.
(3) Approval of the Analysis & Technology, Inc. 1995
Stock Option Plan: 1,684,350 FOR; 232,165 AGAINST;
and 42,719 ABSTAINED.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
10 Amendment to Analysis & Technology, Inc. Savings
and Investment Plan dated September 9, 1995
27 Financial Data Schedule
b. Reports on Form 8-K
None.
8
<PAGE> 11
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: November 8, 1995 /s/ GARY P. BENNETT
-------------------- -------------------------------
Gary P. Bennett
President and CEO
Date: November 8, 1995 /s/ DAVID M. NOLF
-------------------- -------------------------------
David M. Nolf
Executive Vice President
9
<PAGE> 12
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
EXHIBITS
TO
FORM 10-Q
----------
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
----------
FOR THE QUARTER ENDED: SEPTEMBER 30, 1995
COMMISSION FILE NUMBER: 0-14161
----------
ANALYSIS & TECHNOLOGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
================================================================================
<PAGE> 13
EXHIBIT INDEX
Exhibit Number Description of Documents
10 Amendment to Analysis & Technology, Inc. Savings and
Investment Plan Dated September 9, 1995
27 Financial Data Schedule
i
<PAGE> 1
AMENDMENT TO
ANALYSIS & TECHNOLOGY, INC.
SAVINGS AND INVESTMENT PLAN
WHEREAS, Analysis & Technology, Inc. (the "Employer") heretofore adopted the
Analysis & Technology, Inc. Savings and Investment Plan (the "Plan"); and
WHEREAS, the Employer reserved the right to amend the Plan; and
WHEREAS, the Employer desires to amend the Plan to reflect the merger of the
Applied Science Associates, Inc. Employee Stock Ownership and Profit Sharing
Plan into the Plan;
NOW, THEREFORE, the Plan is hereby amended, effective, except as otherwise
specifically provided, as of September 30, 1995, as follows:
1. Section 2.1 of the Plan shall be amended to read in its entirety as
follows:
2.1 YEAR OF SERVICE. An Employee shall be credited with a Year of Service
for each Plan Year in which he is credited with at least one thousand
(1,000) Hours of Service.
Effective January 1, 1995, any Participant who was a participant in the
Applied Science Associates, Inc. 401(k) Retirement Savings Plan (the "ASA
401(k) Plan") and whose account balance under the ASA 401(k) Plan was
transferred to this Plan in connection with the merger of the ASA 401(k)
Plan with this Plan shall be credited with an additional Year of Service in
determining such Participant's nonforfeitable (vested) right to his Account
under the applicable vesting schedule pursuant to Section 6.1.
For purposes of this Section 2.1, any Employee of Applied Science
Associates, Inc. who becomes a Participant in this Plan on or after
September 30, 1995 shall be credited with any "Years of Service" completed
under the Applied Science Associates, Inc. Employee Stock Ownership and
Profit Sharing Plan (the "ASA Profit-Sharing Plan"). In addition, any
Participant who was a participant in the ASA Profit-Sharing Plan and whose
account balance under the ASA Profit-Sharing Plan was transferred to this
Plan in connection with the merger of the ASA Profit-Sharing Plan with this
Plan shall be credited with an additional Year of Service in determining
such Participant's nonforfeitable (vested) right to his Account under the
applicable vesting schedule pursuant to Section 6.1.
2. Article Eight of the Plan shall be amended by adding the following Section
8.3:
8.3 WITHDRAWAL OF ASA PLAN ACCOUNT. The provisions of this Section shall
apply to any Participant who was a participant in the Applied Science
Associates, Inc. Employee Stock Ownership and Profit Sharing Plan (the "ASA
Plan") and whose account balance under the ASA Plan (the Participant's "ASA
Account") was transferred to this Plan in connection with the merger of the
ASA Plan with this Plan as of September 30, 1995. Any such Participant, who
is 100% vested in his
1
<PAGE> 2
Account under Section 6.1, may apply in writing to the Plan Administrator
to withdraw up to 50% of the balance of his ASA Account. However, such
withdrawal may not exceed that part of the balance of the ASA Account
attributable to contributions that had been credited to the Participant's
ASA Account for at least five (5) years. Withdrawals shall be paid as soon
as administratively practicable following such Participant's withdrawal
request. However, once a Participant makes a withdrawal under this Section
8.3, he may not make another such withdrawal until three (3) years after
the date of the prior withdrawal.
3. Except as hereinabove amended, the provisions of the Plan shall continue
in full force and effect.
IN WITNESS WHEREOF, the Employer, by its duly authorized officer, has caused
this Amendment to be executed on the 9th day of September 1995.
ANALYSIS & TECHNOLOGY, INC.
By: /s/ DAVID M. NOLF
---------------------------------------
Executive Vice President
2
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> APR-01-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1
<CASH> 1,499
<SECURITIES> 0
<RECEIVABLES> 25,174
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 28,524
<PP&E> 31,400
<DEPRECIATION> 16,754
<TOTAL-ASSETS> 60,970
<CURRENT-LIABILITIES> 12,197
<BONDS> 0
<COMMON> 302
0
0
<OTHER-SE> 37,762
<TOTAL-LIABILITY-AND-EQUITY> 38,064
<SALES> 0
<TOTAL-REVENUES> 62,455
<CGS> 0
<TOTAL-COSTS> 59,241
<OTHER-EXPENSES> 193
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<INTEREST-EXPENSE> 367
<INCOME-PRETAX> 2,654
<INCOME-TAX> 713
<INCOME-CONTINUING> 1,941
<DISCONTINUED> (1,458)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 483
<EPS-PRIMARY> 0.20
<EPS-DILUTED> 0
</TABLE>
