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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 December 31, 1995
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OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-14161
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ANALYSIS & TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
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Connecticut 95-2579365
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Route 2, North Stonington, Connecticut 06359
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(Address of principal executive office)
(Zip Code)
(860) 599-3910
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(Registrant's telephone number, including area code)
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(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
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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 February 7, 1996, the registrant had
outstanding 2,435,327 shares of Common Stock.
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<PAGE> 2
CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
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
</TABLE>
i
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE QUARTERS AND NINE-MONTH PERIODS ENDED DECEMBER 31, 1995 AND 1994
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
----------------------- ----------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue from continuing
operations $29,353 $32,454 $91,808 $95,954
Costs & expenses 27,745 30,922 86,986 91,514
------- ------ ------ ------
Operating earnings from
continuing operations 1,608 1,532 4,822 4,440
------- ------- ------- ------
Other deductions:
Interest expense 175 119 546 409
Interest income (55) (11) (59) (15)
Other, net 86 73 279 156
------ ------ ------- ------
206 181 766 550
--- ------ ------- ------
Earnings from continuing operations
before income taxes 1,402 1,351 4,056 3,890
Income taxes on earnings from
continuing operations 582 581 1,295 1,638
------ ------ ------- -------
Net earnings from
continuing operations 820 770 2,761 2,252
Discontinued Operations:
Loss from discontinued
operations, net of income
tax benefit (53) (63) (195) (231)
Loss on the disposal of
discontinued operations, net
of income tax benefit -- -- (1,316) --
------- ------- -------- -------
Net earnings $ 767 $ 707 $ 1,250 $ 2,021
======= ======= ======== =======
Earnings (loss) per common and
common equivalent share:
Continuing operations $ 0.33 $ 0 .31 $ 1.11 $ 0.91
Discontinued operations (0.02) (0.03) (0.61) (0.09)
-------- -------- ------- -------
Net earnings $ 0.31 $ 0.28 $ 0.50 $ 0.82
======= ======= ====== =======
Weighted average shares and
common equivalent shares
outstanding during the period 2,514 2,495 2,482 2,470
</TABLE>
See accompanying notes to the consolidated financial statements.
1
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ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS DECEMBER 31, 1995 (UNAUDITED) MARCH 31, 1995
------ ----------------------------- --------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 3,436 $ 502
Contract receivables 25,413 27,322
Notes and other receivables 1,077 1,142
Prepaid expenses 477 943
------- -------
Total current assets 30,403 29,909
Property, buildings, and equipment, net 14,464 15,336
Other assets:
Goodwill, net 6,669 6,783
Deposits and other receivables 164 429
Product development costs, net 226 201
Other 3,827 3,227
Net noncurrent assets of discontinued
operations -- 5,117
------- -------
10,886 15,757
------- -------
TOTAL ASSETS $55,753 $61,002
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Short-term borrowings $ 4 $ 4
Current installments of long-term debt 331 309
Accounts payable 2,282 3,834
Accrued expenses 7,359 8,404
Dividends payable -- 616
Deferred income taxes 633 1,063
Net current liabilities of discontinued operations -- 69
------- -------
Total current liabilities 10,609 14,299
Long-term debt, excluding current installments 3,152 6,933
Deferred income taxes 371 194
Other long-term liabilities 2,639 2,403
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TOTAL LIABILITIES 16,771 23,829
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Shareholders' equity:
Common stock, $.125 stated value
Authorized 7,500,000 shares; issued
2,428,507 shares at December 31, 1995
and 2,371,399 at March 31, 1995 304 296
Additional paid-in capital 9,837 9,286
Retained earnings 28,841 27,591
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TOTAL SHAREHOLDERS' EQUITY 38,982 37,173
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $55,753 $61,002
======= =======
</TABLE>
See accompanying notes to the consolidated financial statements.
2
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ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE-MONTH PERIODS ENDED DECEMBER 31, 1995 AND 1994
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------- -----------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net earnings $ 1,250 $ 2,021
ADJUSTMENTS TO RECONCILE NET EARNINGS TO
NET CASH PROVIDED BY CONTINUING OPERATIONS:
Loss associated with discontinued operations 1,511 231
Depreciation and amortization of fixed assets 1,812 1,873
Amortization of goodwill 333 320
Amortization of new product development costs 91 --
Loss on sale and disposal of equipment 413 23
Decrease (increase) in:
Contract receivables 1,909 2,490
Notes and other receivables 65 (395)
Prepaid expenses 466 (96)
Other assets (335) (473)
Increase (decrease) in:
Accounts payable and accrued expenses (2,597) (676)
Deferred income taxes (253) (529)
Other long-term liabilities 236 197
Advance from customer -- (30)
-------- --------
NET CASH PROVIDED BY CONTINUING OPERATIONS 4,901 4,956
NET CASH PROVIDED BY (USED FOR) DISCONTINUED
OPERATIONS (3,345) 1,382
-------- -----
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,556 6,338
------- -----
INVESTING ACTIVITIES:
Proceeds from sale of discontinued operations 8,007 --
Additions to property, buildings, and equipment (1,359) (1,992)
New product development costs - continuing operations (116) (159)
New product development costs - discontinued operations (1,125) (2,797)
Proceeds from the sale of equipment 6 7
Acquisition of business units (net of cash acquired) (219) (986)
--------- ---------
NET CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES 5,194 (5,927)
-------- ---------
FINANCING ACTIVITIES:
Net repayments of short-term borrowings ---- (534)
Proceeds from long-term borrowings ---- 365
Repayments of long-term debt (3,759) (210)
Proceeds from sale of common stock 559 440
Dividends paid (616) (556)
--------- -------
NET CASH USED FOR FINANCING ACTIVITIES (3,816) (495)
-------- -------
Increase (decrease) in cash and cash equivalents 2,934 (84)
CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD 502 729
------- -------
End of period $ 3,436 $ 645
------- ------
</TABLE>
See accompanying notes to the consolidated financial statements.
3
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ANALYSIS & TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 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 the pretax loss associated
with the sale of $2.7 million ($1,316,000 after tax or $0.53 per common
share) during the second quarter of fiscal 1996.
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 nine-month
period ended December 31, 1994 have been restated to present the GSS
commercial results as discontinued operations.
The assets and liabilities of the GSS commercial business as of March 31,
1995 have been reclassified on the Consolidated Balance Sheet from their
previously reported classifications and are shown as the net current
liabilities and net noncurrent assets of discontinued operations.
3. During the second quarter of fiscal 1996 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 second quarter of fiscal 1996 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 nine-month
periods ended December 31, 1995 and December 31, 1994 is as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED DECEMBER 31, Percent
1995 1994 Change
---- ---- -------
<S> <C> <C> <C>
Revenue from Continuing Operations $29,353 $32,454 (9.6)
Operating Earnings from Continuing Operations 1,608 1,532 5.0
Earnings from Continuing Operations
before Income Taxes 1,402 1,351 3.8
Net Earnings from Continuing Operations 820 770 6.5
Loss from Discontinued Operations
Net of Income Tax Benefit (53) (63) 15.9
Net Earnings 767 707 8.5
Earning (Loss) per Common and Common
Equivalent Share: 0.33 0.31 6.5
Continuing Operations (0.02) (0.03) 33.3
Discontinued Operations
Net Earnings 0.31 0.28 10.7
Weighted Average Shares and Common
Equivalent Shares Outstanding 2,514 2,495 0.8
<CAPTION>
NINE MONTHS ENDED DECEMBER 31, Percent
1995 1994 Change
---- ---- -------
<S> <C> <C> <C>
Revenue from Continuing Operations $91,808 $95,954 (4.3)
Operating Earnings from Continuing Operations 4,822 4,440 8.6
Earnings from Continuing Operations
before Income Taxes 4,056 3,890 4.3
Net Earnings from Continuing Operations 2,761 2,252 22.6
Loss from Discontinued Operations
Net of Income Tax Benefit (195) (231) 15.6
Loss on the Disposal of Discontinued Operations
Net of Income Tax Benefit (1,316) -- --
Net Earnings 1,250 2,021 (38.1)
Earning (Loss) per Common and Common
Equivalent Share: 1.11 0.91 22.0
Continuing Operations (0.61) (0.09) --
Discontinued Operations
Net Earnings 0.50 0.82 (39.0)
Weighted Average Shares and Common
Equivalent Shares Outstanding 2,482 2,470 0.5
</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
5
<PAGE> 8
Company accrued a $1.3 million after tax loss ($.053 per common share)
associated with the sale during the second quarter of fiscal 1996.
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 after tax loss from discontinued
operations, excluding the loss associated with the sale, totaled $53,000 or
$0.02 per share and $195,000 or $0.08 per share for the quarter and nine-month
period ended December 31, 1995, as compared to $63,000 or $0.03 per share and
$231,000 or $0.09 per share for the same prior year periods.
Revenue from continuing operations decreased 9.6% to $29.4 million for the
quarter ended December 31, 1995 from $32.5 million for the quarter ended
December 31, 1994. For the nine-month period ended December 31, 1995 (the
first nine months of fiscal 1996), revenues decreased 4.3% to $91.8 million
compared with $96.0 million in the first nine 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 nine-month period of $1.4
million and $2.2 million, respectively. Non-labor revenue was down due to
reduced purchases of components by the Company under a contract to provide
minesweeping gear to the U.S. Navy and to reduced funding by the U.S. Navy for
projects that would have been subcontracted by the Company to others. In
addition, although contractual backlog increased during the quarter,
uncertainty in Navy program funding priorities and budget reductions in
submarine weapons programs slowed the flow of funds to Company contracts.
These factors contributed to the revenue decline and are likely to affect
fourth quarter revenue as well.
For the quarter and nine-month period ended December 31, 1995, operating
earnings from continuing operations were $1.6 million and $4.8 million compared
with $1.5 million and $4.4 million in the comparable quarter and nine-month
period in fiscal 1995.
Operating margins from continuing operations for the quarter and nine-month
period ended December 31, 1995 were 5.5% and 5.3% compared with 4.7% and 4.6%
in the prior fiscal year quarter and nine-month period. The increase in
operating margins was due to higher fees earned on the Company's defense
related work, as well as in its commercial interactive multimedia operations,
including higher than anticipated earnings on fixed price contracts.
The total of interest expense, interest income and other net expenses as a
percentage of revenue increased to 0.7% and 0.8% for the quarter and nine-month
period ended December 31, 1995 compared with 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 to fund investment in software product development (prior to the
sale) associated with GSS's on-line registration systems and a longer
collection period as discussed more fully below in Liquidity and Capital
Resources. Other net expense was low for the first nine 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 from continuing operations before income taxes were $1.4 million
in both the third quarter of fiscal 1996 and the third quarter of fiscal 1995.
For the first nine months of fiscal 1996, earnings before income taxes were
$4.1 million compared with $3.9 million for the same period in the prior fiscal
year.
The Company's effective tax rate on earnings from continuing operations was
41.5% for the third quarter and 31.9% for the first nine months of fiscal 1996
compared with 43.0% and 42.1% for the third quarter and first nine months of
fiscal 1995. The lower effective tax rate in the third quarter of fiscal 1996
was the result of higher earnings from ASI. Because the Company's share of
ASI's income is reported on an after tax basis and is not included in the
Company's taxable income, changes in the level of income change the Company's
effective tax rate. The lower effective tax rate for the nine-month period 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 second 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.
6
<PAGE> 9
Net earnings from continuing operations were $820 thousand and $2.8 million
for the third quarter and first nine months of fiscal 1996 as compared with net
earnings of $770 thousand and $2.3 million in the third quarter and first nine
months of fiscal 1995. Excluding R&D tax credits, net earnings from continuing
operations for the current year periods were $820 thousand and $2.4 million,
respectively.
Net earnings per share were $0.31 and $0.50 for the current quarter and
first nine months of fiscal 1996 compared with $0.28 and $0.82 in the same
prior year periods. The current year nine month period was adversely affected
by the loss on the disposal of discontinued operations. Earnings per share
from continuing operations were $0.33 and $1.11 in the third quarter and first
nine months of fiscal 1996 as compared with $0.31 and $0.91 in the quarter and
first nine months of fiscal 1995. Excluding the effect of R&D tax credits,
earnings per share from continuing operations for the quarter and nine-month
period ended December 31, 1995 were $0.33 and $0.95, respectively.
The weighted average number of shares and common equivalent shares
outstanding were 2.5 million in both the third quarter and first nine months of
fiscal 1996 and fiscal 1995.
LIQUIDITY & CAPITAL RESOURCES
For the nine-month period ended December 31, 1995, net cash provided by
operating activities from continuing operations totaled $4.9 million. The net
cash increase resulted primarily from earnings from continuing operations of
$2.8 million and a decrease in contract receivables. Contract receivables
decreased $1.9 million mainly due to the collection of receivables due under a
large firm fixed price contract. Contract receivables totaled $25.4 million at
December 31, 1995, $27.3 million at March 31, 1995 and $21.7 million at
December 31, 1994 and represented 46%, 45% and 40%, respectively, of total
assets at each of those dates. The average period for payment to the Company
was 79 days as of December 31, 1995, 71 days as of March 31, 1995, and 61 days
at December 31, 1994. The increase in the average period for payment to the
Company since December 1994 has been due to procedural changes at the
Government Paying Office which have delayed the processing of the Company's
invoices, and Government delays in transferring a large GSS firm fixed price
contract to the Company in connection with the GSS sale. This delay has added
approximately nine days to the Company's collection period.
For the nine-month period ended December 31, 1995 net cash provided by
investing activities totaled $5.2 million. The sale of GSS provided
approximately $8.0 million of cash. Uses of cash included purchase of
equipment, facility improvements and software product development by GSS prior
to the sale of that company. Cash will be reduced in the future by payment of
approximately $2.5 million in taxes associated with the GSS sale. 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 nine-month period ended December 31, 1995 net cash used by
financing activities totaled $3.8 million. Cash was used to repay borrowings
under the Company's line of credit and revolving credit agreements. A $1.5
million bank line of credit was terminated as of October 31, 1995 in
conjunction with the sale of GSS and was replaced by a $1.5 million increase in
the amount available under the Company's revolving credit agreement. The
total funds available to the Company under its revolving credit agreement at
December 31, 1995 was $20.0 million. There was no borrowing under its
agreement at December 31, 1995. Borrowings under these agreements were $3.5
million at March 31, 1995, and $1.0 million as of December 31, 1994.
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
December 31, 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
NONE.
ITEM 5. OTHER INFORMATION
NONE.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS
4 SECOND AMENDMENT TO REVOLVING CREDIT AND TERM
LOAN AGREEMENT AND REVOLVING CREDIT NOTE DATED
NOVEMBER 29, 1995
10 AMENDMENT TO ANALYSIS & TECHNOLOGY, INC. SAVINGS
AND INVESTMENT PLAN DATED DECEMBER 4, 1995
27 FINANCIAL DATA SCHEDULE
B. REPORTS ON FORM 8-K
A REPORT ON FORM 8-K DATED OCTOBER 31, 1995 REPORTING ITEM
2, "DISPOSITION OF ASSETS" AND ITEM 7, "FINANCIAL
STATEMENTS AND EXHIBITS" WAS FILED ON NOVEMBER 9, 1995.
8
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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.
<TABLE>
<CAPTION>
ANALYSIS & TECHNOLOGY, INC.
<S> <C> <C>
Date: February 7, 1996 /s/Gary P. Bennett
---------------------------------------- -------------------------------------------------
Gary P. Bennett
President and CEO
Date: February 7, 1996 /s/David M. Nolf
---------------------------------------- -------------------------------------------------
David M. Nolf
Executive Vice President
</TABLE>
9
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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: DECEMBER 31, 1995
COMMISSION FILE NUMBER: 0-14161
-----------------------------------
ANALYSIS & TECHNOLOGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF DOCUMENTS
- -------------- ------------------------
<S> <C>
4 SECOND AMENDMENT TO REVOLVING CREDIT AND TERM LOAN
AGREEMENT AND REVOLVING CREDIT NOTE DATED NOVEMBER 29, 1995
10 AMENDMENT TO ANALYSIS & TECHNOLOGY, INC. SAVINGS AND
INVESTMENT PLAN DATED DECEMBER 4, 1995
27 FINANCIAL DATA SCHEDULE
</TABLE>
i
<PAGE> 1
SECOND AMENDMENT TO REVOLVING
CREDIT AND TERM LOAN AGREEMENT AND REVOLVING CREDIT NOTE
THIS AMENDMENT, dated as of November 29, 1995 ("Amendment") to the
Amended and Restated Revolving Credit and Term Loan Agreement and the Revolving
Credit Note, both dated as of November 15, 1993 and amended pursuant to a
certain First Amendment to Revolving Credit and Term Loan Agreement and
Revolving Credit Note dated as of December 9, 1994 (as so amended, the
"Agreement" and the "Note" respectively), 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
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, 1997 (the "Termination Date") in principal amounts
not exceeding at any one time outstanding the sum of
$20,000,000 (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 a form of which is attached to the
Agreement as Exhibit A-1, is amended to substitute "$20,000,000" for each
reference in the Agreement to "$18,500,000" and "Twenty Million Dollars" for
each reference in the Agreement to "Eighteen Million Five Hundred Thousand
Dollars."
(c) Section 1.3 of the Agreement is amended to change the maturity
date of the Term Loan from November 1, 2001 to November 1, 2002, by substituting
the reference to "November 1, 2001" with "November 1, 2002."
<PAGE> 3
3
(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.
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.
<PAGE> 4
4
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
<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;
NOW, THEREFORE, the Plan is hereby amended, effective as of October 31, 1995, as
follows:
1. Section 6.1 of the Plan shall be amended by adding the following paragraph
to the conclusion of said Section:
Notwithstanding the foregoing provisions of this Section 6.1, any
Participant who was employed by General Systems Solutions, Inc.
("GSS") as of October 31, 1995, and who transferred employment from
the Sponsoring Employer's "related group" (within the meaning of
Section 2.5(b) as of such date in connection with the sale of GSS to
General Electric Capital Corporation, shall be one hundred percent
(100%) vested in his Account as of such date.
2. 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 4th day of December, 1995.
ANALYSIS & TECHNOLOGY, INC.
By: /s/ David M. Nolf
---------------------------
David M. Nolf
Executive Vice President
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