SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
March 28, 1996
LOGICON, INC.
DELAWARE
(State or other jurisdiction of incorporation or organization)
1-7777 95-2126773
(Commission File Number) (IRS Employer
identification number)
3701 Skypark Drive, Torrance, California 90505-4794
(Address of principal executive offices) (Zip Code)
(310) 373-0220
Registrant's telephone number, including area code
<PAGE>
Item 2. Acquisition or Disposition of Assets
(a) On March 28, 1996 Logicon, Inc., a Delaware corporation
and the Registrant, acquired all of the outstanding stock
of Geodynamics Corporation, a California corporation,
located at 21171 Western Avenue, Suite 110 Torrance, CA
90501, for a purchase price including transaction costs,
of $31.7 million in cash.
(b) The acquisition will be accounted for as a purchase and
has been paid for in cash. Geodynamics Corporation will
operate as a wholly-owned subsidiary of Logicon, Inc.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial Statements of Business Acquired.
The financial statements listed below previously have been
filed with the Commission in Geodynamics Corporation's Proxy
Statement for its Special Meeting of Shareholders, filed with the
Commission on February 29, 1996, Commission File Number 0-15034
and are incorporated herein by reference.
Fiscal Year
Report of Independent Accountants
Consolidated Balance Sheets as of June 2, 1995 and
June 3, 1994
Consolidated Statements of Income for Years
Ended June 2, 1995, June 3,1994 and May 28, 1993
Consolidated Statements of Shareholders' Equity
for the Years Ended June 2, 1995, June 3, 1994 and
May 28, 1993
Consolidated Statements of Cash Flows for the
Years Ended June 2, 1995, June 3, 1994 and
May 28, 1993
Notes to Consolidated Financial Statements
Interim
Condensed Consolidated Balance Sheets as of
December 1, 1995 (unaudited) and June 2, 1995
Unaudited Condensed Consolidated Statements of
Income for the Three and Six Months Ended
December 1, 1995 and December 2, 1994
Unaudited Condensed Consolidated Statements of
Cash Flows for the Six Months Ended December 1,
1995 and December 2, 1994
Notes to Condensed Consolidated Financial Statements
(b) Pro forma Financial Information.
The unaudited pro forma condensed combined statement of income
of Logicon, Inc. (Logicon) and Geodynamics Corporation
(Geodynamics) for the nine month period ended December 31, 1995,
and for the most recent fiscal year ended March 31, 1995, reflect
adjustments as if the transaction had occurred on April 1, 1994.
The unaudited pro forma condensed combined balance sheet is
presented as if the transaction had been consummated on December
31, 1995, the end of Logicon's third fiscal quarter. The
acquisition is being accounted for using the purchase method.
The historical results of operations of Geodynamics for the
three month period ended June 2, 1995, have been included in both
the pro forma condensed statement of income for the nine months
ended December 31, 1995, and for the fiscal year ended March 31,
1995. In management's opinion, the inclusion of this three month
period in both pro forma presentations does not materially impact
the pro forma results. On January 17, 1996, Geodynamics sold its
LaFehr & Chan Technologies, Inc. (LCT) subsidiary to an investor
group. The operations of LCT have been deducted from all pro
forma statements presented. A loss of $6.1 million was recorded
by Geodynamics on the disposition. For purposes of the pro forma
income statement presentations for the year ended March 31, 1995,
and for the nine month period ended December 31, 1995, the loss,
realized on the sale, has been excluded because of the
nonrecurring nature of that transaction and because the
transaction occurred in a period subsequent to the periods being
presented. The loss, however, is reflected in the pro forma
balance sheet for December 31, 1995.
The unaudited pro forma condensed combined financial
statements reflect Logicon's allocation of the purchase price,
including transaction costs, of approximately $31.7 million to
the assets and liabilities of Geodynamics based upon Logicon's
current estimates of the relative values of the assets acquired
and liabilities assumed. The final allocation of the purchase
price may vary as additional information is obtained, and
accordingly, the ultimate allocation may differ from those used
in the unaudited pro forma condensed combined financial
statements.
The unaudited pro forma condensed combined financial
statements should be read in conjunction with the separate
historical financial statements and related notes of Geodynamics,
appearing in answer to Item 7 (a) of this current report on Form
8-K and the historical financial statements, related notes and
"Management's Discussion and Analysis of Consolidated Financial
Condition and Results of Operations" of Logicon for the year
ended March 31, 1995, and the nine month period ended December
31, 1995, previously filed with the Securities and Exchange
Commission. The pro forma information is not necessarily
indicative of the results that would have been reported had the
acquisition actually occurred on the dates specified, nor is it
necessarily indicative of the future results of the combined
companies.
<PAGE>
<TABLE>
LOGICON, INC. AND GEODYNAMICS CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (Unaudited)
Nine-Month Period Ended December 31, 1995
<CAPTION>
12/31/95 12/1/95
Logicon Geodynamics Less Pro Forma
Historical Historical LCT Adjust Combined
Note 1 Note 1 Note 2 Pro Forma
---------- ------ ------ -------- ---------
(Dollar and shares in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Contract revenues and $348,093 $48,754 $5,705 $-1,248 (a) $389,894
interest
Costs of contract
revenues 290,233 46,604 5,614 -350 (c) 330,873
Selling and
administrative expenses 27,557 27,557
Interest expense 63 43 20
Amortization of goodwill
due to Geodynamics 353 (b) 353
------- ------- ------- ------- -------
Income before taxes on
income 30,303 2,087 48 -1,251 31,091
Provision for taxes on
income 12,299 820 18 -335 (d) 12,766
------- ------- ------- ------- -------
Net income $ 18,004 $ 1,267 $ 30 $ -916 $ 18,325
======= ======= ======= ======= =======
Earnings per share of
common stock: $ 1.27 $ 1.29
======= =======
Average number of common
shares, including common
stock equivalents 14,178 22 (e) 14,200
======= ======= =======
<FN>
<F1>
Note 1 - Geodynamics and LCT nine month periods ended December 1, 1995.
The Geodynamics financial statements are based on a 52-53 week year. The
quarterly periods for Geodynamics in fiscal year 1995 ended on September 2 and
December 2, 1994 and March 3 and June 2, 1995. The quarterly periods for
Geodynamics for the first six months of fiscal year 1996 ended on September 1
and December 1, 1995.In order to present the Geodynamics information on a nine
month period comparable to the Logicon information, the historical results of
operations of Geodynamics and LCT for the three month period ended June 2, 1995,
have been included in both the pro forma condensed statement of income for the
nine months ended December 31, 1995, and for the fiscal year ended March 31,
1995. In management's opinion, the inclusion of this three month period in both
pro forma presentations does not materially impact the pro forma results. The
unaudited condensed results of operations of Geodynamics and LCT for the three
months ended June 2, 1995, are summarized as follows:
</FN>
</TABLE>
<TABLE>
<CAPTION>
Three Month
Period Ended June 2, 1995
Geodynamics LCT
includes LCT
----------- ---
(Dollars in thousands)
<S> <C> <C>
Revenues $16,451 $1,604
Costs and expenses 16,021 1,984
------- -------
Income (loss) from
operations 430 -380
------- -------
Other income (expense)
Interest income 91
Interest expense -13 -39
------- -------
Net other 78 -39
------- -------
Income (loss) before
provision for income
taxes 508 -419
Provision (benefit) for
income taxes 212 -197
------- -------
Net income (loss) $ 296 $ -222
======= =======
<FN>
<F2>
On January 17, 1996, Geodynamics sold its LCT subsidiary to an investor group.
A loss of $6.1 million was recorded by Geodynamics on the disposition. For
purposes of this pro forma income statement presentation, the loss, realized on
the sale, has been excluded because of the nonrecurring nature of that
transaction and because the transaction occurred in a period subsequent to the
periods being presented.
<F3>
Note 2 - Pro forma adjustments to nine month period ended December 31, 1995 (in
thousands)
(a) To reflect a reduction in interest income from the use of $31,700, in cash, for the purchase price plus transaction c
months.
(b) To reflect nine months amortization of goodwill of $9,400 over a twenty
year period. This amount represents the current estimate of the excess
of purchase price over the relative values of the assets acquired and liabilities assumed.
(c) To eliminate acquisition costs incurred by Geodynamics to complete
this transaction.
(d) To reflect the income tax effect of pro forma adjustments calculated a at applicable federal and state statutory rates
(e) To reflect the conversion of Geodynamics stock options to Logicon stock
options.
</FN>
</TABLE>
<TABLE>
LOGICON, INC. AND GEODYNAMICS CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (Unaudited)
Year Ended March 31, 1995
<CAPTION>
March 31, 1995 Pro Forma 6/2/95 6/2/95 Pro For
Logicon Geodynamics Less LCT Adjustments Combined
Note 3 Historical Historical Note 4 Pro Forma
---------- ---------- -------- -------- ---------
(Dollar and shares in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Contract revenues and
interest $455,842 $61,153 $5,182 $-1,506 (a) $510,307
Costs of contract
revenues 377,821 57,937 5,342 430,416
Selling and
administrative expenses 45,827 45,827
Interest expense 71 71
Pro forma amortization
of goodwill 957 470 (b) 1,427
------- ------- ------- ------- -------
Income before taxes on
income 31,237 3,145 -231 -1,976 32,637
Provision for taxes on
income 13,086 1,227 -147 -664 (c) 13,796
------- ------- ------- ------- -------
Net income $18,151 $1,918 $- 84 $-1,312 $18,841
======= ======= ======= ======= ========
Earnings per share of
common stock: $1.28 $1.33
======= =======
Average number of common
shares, including common
stock equivalents 14,204 14,204
======= =======
<FN>
<F4>
Note 3 - Pro forma statements for Logicon's year ended March 31, 1995, include
pro forma adjustments to reflect the acquisition of Syscon Corporation
effective February 16, 1995, as if the acquisition of Syscon
Corporation had occurred on April 1, 1994, as follows: <PAGE>
</FN>
</TABLE>
<TABLE>
<CAPTION>
Year Ended
March 31, 1995 Jan.31, 1995 Pro Forma
Logicon SYSCON Adjustments Combined
Historical Historical Note A Pro Forma
---------- ---------- ---------- --------
(Dollars and shares in thousands, except per share data)
<S> <C> <C> <C> <C>
Contract revenues and
interest $345,191 $128,675 $-1,883 (1) $455,842
-1,708 (2)
-14,433 (3)
Costs of contract revenues 282,074 107,764 -12,017 (3) 377,821
Selling and administrative
expenses 30,302 17,277 -1,752 (3) 45,827
HII management fee 2,539 -2,539 (4)
Amortization of goodwill 2,535 -2,535 (5) 957
957 (6)
------- ------- ------- -------
Income before taxes on
income 32,815 -1,440 -138 31,237
Provision for taxes on
income 13,306 415 -635 (7) 13,086
------- ------- ------- -------
Net income $ 19,509 $ -1,855 $ 497 $ 18,151
======= ======= ======= =======
Earnings per share of
common stock: $ 1.37 $ 1.28
======= =======
Average number of common
shares, including common
stock equivalents 14,204 14,204
======= =======
<FN>
<F5>
Note A - Pro forma adjustments to period ended March 31, 1995 (Dollars in thousands).
(1) To reflect a reduction in interest income from the use of $45,300, in cash, for the purchase price incl
en and one half months.
(2) To eliminate interest income paid to Syscon by its former parent Harnischfeger Industries, Inc. (HII).
(3) To eliminate Syscon's revenues and costs included in Logicon's historical year ended March 31, 1995.
(4) To eliminate management fees charged to Syscon by its former parent HII.
(5) To eliminate amortization of goodwill charged to Syscon by its former parent HII.
(6) To reflect the amortiza tion of goodwill of $21,855 over a twenty year period less the amortization o
s the excess of purchase price over the relative values of the assets acquired and liabilities assumed.
(7) To reflect the income tax effect of pro forma adjustments calculated at applicable federal and state statut
<F6>
Note 4 - Pro forma adjustments to the period ended March 31, 1995 (Dollars in thousands).
(a) To reflect a reduction in interest income from the use of $31,700, in cash, for the purchase price including
he
year.
(b) To reflect one year's worth of the amortization of goodwill of $9,400 over a twenty year period. This amoun
the assets acquired and liabilities assumed.
(c) To reflect the income tax effect of pro forma adjustments calculated at applicable federal and state statut
</FN>
</TABLE>
<TABLE>
LOGICON, INC. AND GEODYNAMICS CORPORATION
PRO FORMA CONDENSED COMBINED BALANCE SHEET (Unaudited)
December 31, 1995
<CAPTION>
Pro
Dec. 31, 1995 Dec 1, 1995 Less Forma
Logicon Geodynamics LCT Adjust Combined
Historical Historical Note 5(b)Note 5 Pro Forma
---------- --------- ----- ------- ---------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C>
Current assets:
Cash, cash
equivalents and
marketable securities $ 36,915 $ 6,836 $ 98 $-31,700 (a) $ 12,162
1,809 (b-1)
-1,600 (b-2)
Accounts receivable 84,569 15,119 1,592 98,096
Prepaid expenses 1,419 1,421 310 2,530
Deferred income tax
benefits 8,654 513 -139 9,306
------- ------- ------- ------- -------
Total current assets 131,557 23,889 1,861 -31,491 122,094
Property, plant and
equipment 9,092 11,121 7,598 -57 (a) 12,558
Excess of purchase price
over net assets of
businesses acquired,
net of accumulated
amortization 27,939 1,387 1,387 9,400 (a) 37,339
Other assets 3,440 775 2,665
------- ------- ------- ------- -------
$168,588 $39,837 $11,621 $-22,148 $174,656
======= ======= ======= ======== ========
Current liabilities:
Accounts payable and
other accrued
liabilities $ 13,635 $ 5,022 $ 741 $ 89 (c) $18,005
Accrued salaries, wages
and employee benefits 26,941 1,297 926 647 (b-6) 27,959
Intercompany LCT 8,121 4,950 (b-3)
-1,600 (b-2)
4,771 (b-4)
Estimated taxes on income 246 680 (b-5) 926
------- ------- ------- ------- -------
Total current
liabilities 40,822 6,319 9,788 9,537 46,890
Long-term liabilities 1,834 1,745 -89 (c)
Stockholders' equity:
Common stock 1,389 12,552 -9,411 (a) 1,389
-3,141 (b-7)
Other paid-in capital 17,493 17,493
Retained earnings 111,964 19,132 88 -12,946 (a) 111,964
-6,098 (b-8)
Unrealized loss on
available for sale
securities -25 -25
Unrealized compensation
and notes receivable -3,055 -3,055
------- ------- ------- ------- -------
127,766 31,684 88 -31,596 127,766
------- ------- ------- ------- -------
$168,588 $39,837 $11,621 $-22,148 $174,656
======== ======= ======= ======= =======
<FN>
<F7>
Note 5 - Pro forma adjustments (Dollars in thousands).
(a) To reflect the payment of $31,700, in cash, for the purchase price plus transaction costs to acquire Geodynamics an
estimate of the relative values of the assets acquired and liabilities assumed.
(b) To reflect the sale of LCT on January 17, 1996.
(1) Cash proceeds from the sale.
(2) Cash payment for settlement of earnout agreement.
(3) Agreed sales price of LCT as adjusted.
(4) Loss on sale of LCT before estimated tax liability and assumption of bank debt.
(5) Estimated tax liability in connection with LCT sale.
(6) Assumption of bank debt by Geodynamics.
(7) Repurchase of 261,756 Geodynamics shares in connection with the sale.
(8) Loss on the sale of LCT.
(c) To reclassify long-term liability to current liability.
</FN>
</TABLE>
<PAGE>
(c) Exhibits
Exhibit 2: Agreement and plan of merger dated October 18, 1995,
and as amended by Amendment No. 1 dated February 15, 1996, effective
March 28, 1996, by and among Logicon, Inc. (the registrant), LIN, Inc.
and Geodynamics Corporation is incorporated by reference to Annex I of
Geodynamics Corporation's Proxy Statement for its Special Meeting of
Shareholders, filed with the Commission on February 29, 1996,
Commission file number 0-15034 and is incorporated herein by
reference.
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.
Logicon, Inc.
(Registrant)
April 11, 1996 By: RALPH L. WEBSTER
Ralph L. Webster
Vice President -
Chief Financial Officer
