SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark one)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED: JUNE 30, 1995
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission File Number: 1-7777
LOGICON, INC.
DELAWARE 95-2126773
(State or other jurisdiction of (IRS Employer
incorporation or organization) identification number)
3701 Skypark Drive, Torrance, California 90505-4794
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 373-0220
Indicate by check mark whether the registrant (1) has filed all reports required
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
previous 12 months (or for such shorter period that the registrant was required
to file) and (2) has been subject to such filing requirements for the past 90
days.
[X] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of July 31, 1995.
$.10 par value Common - 6,812,602
<PAGE>
LOGICON, INC.
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
(shares and dollars in thousands, except per-share data)
(unaudited)
For the Three Months
Ended June 30
___________________
1995 1994
REVENUES:
Contract revenues $111,667 $75,277
Interest 540 680
______ ______
112,207 75,957
COSTS AND EXPENSES 103,160 69,183
_______ _______
Income before taxes on income 9,047 6,774
Provision for taxes on income -3,679 -2,769
_______ _______
NET INCOME 5,368 4,005
Retained earnings at beginning
of period 95,889 87,742
Cash dividends (Note 2) -544 -552
Purchase and retirement
of treasury shares -1,396
_______ _______
Retained earnings at end of period $100,713 $89,799
======= =======
EARNINGS PER SHARE OF COMMON STOCK $ .76 $ .56
Cash dividends per share of
common stock (Note 2) $.08 $.08
Average number of common shares,
including common stock equivalents 7,042 7,172
See notes to consolidated financial statements.<PAGE>
LOGICON, INC.
CONSOLIDATED BALANCE SHEET
(dollars in thousands)
1995
__________________________
June 30 March 31
(unaudited)
ASSETS:
Current assets:
Cash and cash equivalents $25,033 $ 31,564
Marketable securities 9,330 9,210
Accounts receivable 68,914 64,233
Prepaid expenses 2,828 2,418
Deferred income tax benefits 7,761 8,308
_______ _______
TOTAL CURRENT ASSETS 113,866 115,733
Property, plant and equipment, net 8,674 9,090
Excess of purchase price over
net assets of businesses
acquired, net 27,369 27,654
_______ _______
$149,909 $152,477
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable and other
accrued liabilities $9,466 $12,549
Accrued salaries, wages and
employee benefits 24,935 30,831
Estimated taxes on income 2,579 1,583
_______ _______
TOTAL CURRENT LIABILITIES 36,980 44,963
_______ _______
STOCKHOLDERS' EQUITY:
Common stock $.10 par value - Authorized
40,000,000 shares, outstanding 6,795,000
and 6,753,000 shares 680 675
Other paid-in capital 14,743 14,416
Retained earnings 100,713 95,889
Unrealized loss on available for sale
securities -82 -159
Unearned compensation and notes receivable
under restricted stock purchase plan -3,125 -3,307
_______ _______
TOTAL STOCKHOLDERS' EQUITY 112,929 107,514
_______ _______
$149,909 $152,477
======= =======
See notes to consolidated financial statements.
<PAGE>
LOGICON, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(dollars in thousands)
(unaudited)
For the Three Months
Ended June 30
__________________
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $5,368 $4,005
Income charges not affecting cash--
Depreciation and amortization 1,285 761
Amortization of deferred compensation 154 121
Provision for deferred taxes 504
Changes in assets and liabilities--
Increase in accounts receivable -4,681 -1,262
Increase in prepaid expenses -410 -687
Decrease in accounts payable and other
accrued liabilities -3,083 -349
Decrease in accrued salaries, wages
and employee benefits -5,896 -4,842
Increase (decrease) in income taxes payable 996 -267
_______ _______
Net cash used in operating activities -5,763 -2,520
_______ _______
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment,
net of sales -584 -314
Maturity of available for sale securities 10,901
_______ _______
Net cash provided by (used in) investing
activities -584 10,587
_______ _______
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends (Note 2) -544 -552
Transactions of stock plans 360 292
Purchase and retirement of treasury shares -1,460
_______ _______
Net cash used in financing activities -184 -1,720
_______ _______
Net increase (decrease) in cash and
cash equivalents -6,531 6,347
Cash and cash equivalents at beginning
of period 31,564 43,389
_______ _______
CASH AND CASH EQUIVALENTS AT END OF PERIOD $25,033 $49,736
======= =======
Cash paid for income taxes $1,225 $2,992
======= =======
See notes to consolidated financial statements.<PAGE>
LOGICON, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1. ACCOUNTING POLICIES.
The consolidated financial information included in this report has been
prepared in accordance with the accounting principles reflected in the
consolidated financial statements in Form 10-K filed with the Securities
and Exchange Commission for the year ended March 31, 1995. Results for
the three months ended June 30, 1995, are not necessarily indicative of
results for the entire year. In the opinion of Company management, all
adjustments consisting of recurring accruals and other normal month-end
adjustments necessary for a fair presentation of net income for the
unaudited three months ended June 30, 1995 and 1994 have been made.
NOTE 2. DIVIDENDS.
On June 1, 1995, the Company declared a quarterly cash dividend of eight
cents per share, which was paid on July 13, 1995, to stockholders of
record as of June 29, 1995.
NOTE 3. SUBSEQUENT EVENT
On August 7, 1995 the Board of Directors voted a two-for-one split of the
company's common stock. One additional share will be issued for each
share currently outstanding. New shares will be issued on September 13,
1995, to stockholders of record on August 23, 1995. There were 6,822,856
shares outstanding on August 4, 1995.
In another action at the same meeting, the Board of Directors declared a
cash dividend of five cents per split share, payable on October 17, 1995,
to stockholders of record as of September 28, 1995.
<PAGE>
LOGICON, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS
REVENUES AND BACKLOG
The following tables present an analysis of the Company's revenues and
backlog by contract type:
Three Months Ended
June 30
________________________________________________________________________
(dollars in thousands) 1995 1994
Revenues from services
and systems:
Cost plus fixed fee $30,129 $18,231
Cost plus award and
incentive fee 36,162 31,075
Fixed-price 13,826 8,089
Time and material 31,550 17,882
_______ _______
$111,667 $75,277
======= =======
June 30 March 31
__________________________________________________________________________
(dollars in thousands) 1995 1994 1995
Backlog:
Firm Contracts:
Cost plus fixed fee $121,803 $119,021 $155,283
Cost plus award and
incentive fee 148,492 119,038 163,044
Fixed-price 10,887 25,526 34,166
Time and material 156,026 82,813 165,385
_________ _______ _______
437,208 346,398 517,878
_________ _______ _______
Contract options and
untasked indefinite
quantity contract values:
Cost type 424,199 235,467 367,904
Fixed-price 747,780 757,795 743,261
Time and material 83,690 31,520 57,285
_________ __________ _________
1,255,669 1,024,782 1,168,450
_________ __________ _________
Total Backlog $1,692,877 $1,371,180 $1,686,328
========= ========== =========
<PAGE>
REVENUES AND BACKLOG (CONT.)
Contract revenues during the first quarter of fiscal year 1996 were 48%
higher than in the first quarter of fiscal year 1995. Backlog at June
30, 1995, including priced options, increased by 23% from backlog at
June 30, 1994, and remained consistent with backlog at March 31, 1995.
Major bookings for the first quarter include a $15 million contract
recompetition award from the Naval Undersea Warfare Center for continued
support of the Undersea Range Modernization work; $8 million in
additional tasks under the JIEO (Joint Interoperability Engineering
Organization) contract; and $4 million in task orders under a contract
with the Joint Interoperability Test Center. The Company's backlog is
not subject to any significant seasonal fluctuations, but is likely to
vary substantially as contracts near completion, and in conjunction with
the execution of major contract renewals or the award of major new
contracts. All the Company's government contracts are subject to
termination for convenience or redirection by the customer.
PROFIT MARGINS
Three Months Ended
June 30
_______________________________________________________________________________
1995 1994
Return on revenue before tax 8.1% 8.9%
Return on revenue after tax 4.8% 5.3%
Income tax rate 40.7% 40.9%
The increase in revenue and net income in the first quarter of fiscal
year 1996 from the first quarter of fiscal year 1995 is primarily the
result of the acquisition of Syscon Corporation (Syscon) on February 16,
1995.
The profit margin for the first quarter of fiscal year 1996 decreased
from the margin reported in the first quarter of fiscal year 1995 due to
a lower profit margin on the Syscon revenues.
Days sales in receivables decreased to 56 days at June 30, 1995, from 69
days at March 31, 1995. The Company has adequate cash and credit lines
available to fund fluctuations in receivable balances.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities was $5.8 million and $2.5 million
in the first quarter of fiscal years 1996 and 1995, respectively and is
the Company's primary source of liquidity. The Company's working
capital increased to $76.9 million at June 30, 1995, from $70.8 million
at March 31, 1995. The strong working capital position is reflected in
the current ratio of 3.1 to 1 at June 30, 1995.
The Company's Consolidated Balance Sheet is exceptionally strong, with
no debt. Management believes that the Company's existing capital
resources are sufficient to provide for its operating needs and
continued growth. A $25,000,000 unsecured line of credit exists to
provide working capital for temporary requirements. There were no
borrowings under the line during the first quarter of fiscal year 1996.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no pending or existing legal proceedings which, in the opinion
of Company management, if decided against the Company, would have any
material adverse effect on its financial position or results of
operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a) Exhibits
Exhibit
No. Description
4 Instruments defining rights of security holders
(a) Common Stock Certificate (1)
(b) Stockholder Rights Plan (2)
11 Statement regarding computation of earnings per
share.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended June 30,
1995.
Note:
(1) Filed with the Securities and Exchange Commission in Form 8-A on
December 14, 1984, registration No. 1-7777.
(2) Filed with the Securities and Exchange Commission in Form 8-A on
May 7, 1990.
<PAGE>
LOGICON, INC.
SIGNATURE
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, in the City of Torrance, State of
California, on August 8, 1995.
LOGICON, INC.
registrant
RALPH L. WEBSTER
Ralph L. Webster,
Vice President -
Chief Financial Officer
(Principal Financial Officer
and Duly Authorized to Sign
on Behalf of Registrant)
<PAGE>
Exhibit 11
LOGICON, INC.
COMPUTATION OF EARNINGS PER SHARE
Earnings per share of common stock, including common stock equivalents,
have been computed based on the following weighted average number of
shares:
Three Months Ended
June 30
__________________________________________________________________
1995 1994
Weighted average number 6,775,000 6,890,000
of shares outstanding
during the period
Net additional shares
issuable in connection
with dilutive stock
options based upon use
of the treasury stock
method based on average
market prices 267,000 282,000
_________ _______
Weighted average number
of common shares
including common stock
equivalents 7,042,000 7,172,000
========= =========
Fully diluted earnings per share of common stock are omitted because
there is less than 3% dilution in any period.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q,
Q1, FY 1996 FOR THE PERIOD ENDED JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000311946
<NAME> LOGICON, INC.
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<PERIOD-END> JUN-30-1995
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<OTHER-SE> 112,249
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