<PAGE>
INDEX
ANDREW CORPORATION
PART I. FINANCIAL INFORMATION
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Item 1. Financial Statements (Unaudited)
Consolidated condensed balance sheets--December 31, 1993 and
September 30, 1993.
Consolidated condensed statements of income--Three months ended
December 31, 1993 and 1992.
Consolidated condensed statements of cash flows--Three months ended
December 31, 1993 and 1992.
Notes to consolidated condensed financial statements--December 31,
1993.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
PART II OTHER INFORMATION
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Item 6. Exhibits and Reports on Form 8-K.
EXHIBIT 11 - Computation of Earnings per Share.
SIGNATURES
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<PAGE>
ANDREW CORPORATION CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
December 31 September 30
ASSETS 1993 1993
----------- ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 7,736 $ 21,729
Accounts receivable, less allowance of (Dec. $3,496;
Sep. $3,167) 113,952 107,276
Inventories:
Finished products 16,933 18,611
Materials and work in process 60,327 51,695
--------- ---------
77,260 70,306
Miscellaneous current assets 3,571 3,309
--------- ---------
TOTAL CURRENT ASSETS 202,519 202,620
OTHER ASSETS
Cost in excess of net assets of businesses
acquired, less amortization (Dec. $11,986,
Sep. $11,310) 40,205 40,881
Investment in affiliates 18,530 16,493
Investments and other assets 9,667 8,996
PROPERTY, PLANT AND EQUIPMENT 212,954 207,511
Less allowances for depreciation (143,231) (139,398)
--------- ---------
69,723 68,113
--------- ---------
$ 340,644 $ 337,103
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 17,525 $ 18,561
Accrued expenses and other liabilities 23,862 19,170
Compensation and related expenses 8,708 15,950
Income taxes 10,612 10,250
--------- ---------
TOTAL CURRENT LIABILITIES 60,707 63,931
DEFERRED LIABILITIES 4,055 3,602
LONG-TERM DEBT 50,000 50,000
STOCKHOLDERS' EQUITY
Common Stock - (par value $.01 a share)
Authorized - 100,000,000
Issued - 30,435,882 203 203
Additional paid-in capital 28,551 28,448
Retained earnings 256,961 250,534
Foreign currency translation (5,792) (5,410)
Treasury stock, at cost (5,205,138 shares Dec.,
5,243,517 shares Sep.) (54,041) (54,205)
--------- ---------
225,882 219,570
--------- ---------
$ 340,644 $ 337,103
========= =========
</TABLE>
The balance sheet at September 30, 1993 has been derived from the audited
financial statements at that date. See notes to consolidated condensed
financial statements.
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ANDREW CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
December 31
-------------------
1993 1992
-------- --------
<S> <C> <C>
Sales $121,746 $101,032
Cost of products sold 72,926 61,285
-------- --------
Gross profit 48,820 39,747
Operating expenses:
Sales and administrative 31,324 26,566
Research and development 6,602 5,356
-------- --------
37,926 31,922
Operating income 10,894 7,825
Other:
Interest expense 1,235 1,574
Interest income (285) (218)
Other income (98) (1,103)
-------- --------
852 253
Income before income taxes 10,042 7,572
Income taxes 3,615 2,802
-------- --------
Net income $ 6,427 $ 4,770
======== ========
Net income per average share of common stock
outstanding $ .25 $ .19
======== ========
Average shares outstanding 25,967 25,287
======== ========
</TABLE>
See notes to consolidated condensed financial statements.
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ANDREW CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
December 31
------------------
1993 1992
-------- --------
<S> <C> <C>
Cash Flows from Operations
Net income $ 6,427 $ 4,770
Adjustments to net income
Depreciation and amortization 5,238 4,520
(Increase) decrease in accounts receivable (7,259) 6,340
(Increase) decrease in inventories (6,771) 1,056
Increase in prepaid expenses and other assets (1,008) (441)
Decrease in accounts payable and other
liabilities (1,896) (8,389)
Other (18) (151)
-------- -------
Net Cash provided by (used in) Operations (5,287) 7,705
Investing Activities
Increased investment in affiliates (2,037) (1,382)
Capital expenditures (6,563) (3,773)
Proceeds from sale of property, plant,
and equipment 70 59
-------- -------
Net Cash used in Investing Activities (8,530) (5,096)
Financing Activities
Payment of short-term borrowings (6,000)
Payments on long-term debt (90)
Stock purchase and option plans 110 2,319
-------- -------
Net Cash provided by (used in) Financing Activities 110 (3,771)
Foreign currency translation adjustments (286) (1,167)
-------- -------
Decrease for the period (13,993) (2,329)
Cash and cash equivalents at beginning of period 21,729 7,433
-------- -------
Cash and cash equivalents at end of period $ 7,736 $ 5,104
======== =======
</TABLE>
See notes to consolidated condensed financial statements.
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ANDREW CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended December 31,
1993 are not necessarily indicative of the results that may be expected for the
year ending September 30, 1994. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended September 30, 1993.
NOTE B--ACCOUNTS RECEIVABLE
At December 31, 1993 unbilled receivables of $13,120,000 are included in
accounts receivable, compared to $8,936,000 of unbilled receivables at September
30, 1993. These amounts will be billed to customers in accordance with contract
terms and delivery schedules, and are generally expected to be collected within
one year.
NOTE C--INCOME TAXES
Effective October 1, 1993 Andrew Corporation changed it's method of accounting
for income taxes from the deferred method to the liability method required by
SFAS No. 109, "Accounting for Income Taxes". Adoption of this statement did not
have a material effect on the company's financial statements.
NOTE D--POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The company adopted SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions", effective October 1, 1993. Adoption of this
statement did not have a material effect on the company's financial statements.
NOTE E--STOCK SPLIT
On February 2, 1994 the company's Board of Directors declared a three-for-two
stock split to stockholders of record on February 16, 1994, payable on March 2,
1994. On February 2, 1994 the Board of Directors approved an increase in the
common stock authorized from 30,000,000 to 100,000,000. All share and per share
amounts have been restated for all periods presented to reflect the stock split.
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS
---------------------
RESULTS OF OPERATIONS
Net sales for the three months ended December 31, 1993 increased 20.5% to
$121,746,000. The increase reflects higher coaxial cable sales due to strength
in the cellular and land mobile markets, and the company's participation in
construction of new cellular sites in Argentina. These increases were partially
offset by softness in network products and government electronic businesses.
The Argentina contract added $7.4 million or approximately one-third of the
sales increase compared to the December 1992 quarter.
Cost of goods sold as a percentage of sales dropped to 59.9% from 60.7% last
year. The percentage improved slightly due to the increase in higher margin
coaxial cable sales.
Sales and administrative expenses totalled $31,324,000 for the quarter ended
December 31, 1993, up $4,758,000 from the prior year quarter. The growth
reflects increased staffing in sales, marketing and product line management,
primarily in Europe, and increased profit sharing expense. Research and
development expenses grew by $1,246,000 due mainly to increased development
costs for wireless telephone products. As a percent of sales, selling and
administrative expenses were 25.7% of sales for the quarter ended December 31,
1993 versus 26.3% for the prior year quarter.
Other income was $98,000 for the quarter ended December 31, 1993 compared to
$1,103,000 for the prior year quarter. Other income includes foreign exchange
gains of $87,000 and $1,005,000 for the quarters ended December 31, 1993 and
December 31, 1992, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operations totalled $5,287,000, compared to net cash from
operations of $7,705,000 for the prior year quarter. Growth in receivables and
inventory accounted for most of the cash used. The increase in sales drove the
growth in receivables. The growth in inventory reflects an increase in new
orders and the Argentina contract.
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<PAGE>
PART II - OTHER INFORMATION
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
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(a) Exhibits:
Exhibit 11 - Computation of earnings per share.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
December 31, 1993.
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<PAGE>
EXHIBIT 11
ANDREW CORPORATION
Computation of Earnings Per Share
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
December 31
------------------
1993 1992
--------- --------
<S> <C> <C>
PRIMARY EARNINGS PER SHARE
Average shares outstanding 25,217 24,552
Net effect of dilutive stock options--
based on the treasury stock method
using average market price 713 630
------- -------
TOTAL 25,930 25,182
======= =======
Net income $ 6,427 $ 4,770
======= =======
Per share amount $ .25 $ .19
======= =======
FULLY DILUTED EARNINGS PER SHARE (NOTE)
Average shares outstanding 25,217 24,552
Net effect of dilutive stock options--
based on the treasury method
using quarter-end market price 750 735
------- -------
TOTAL 25,967 25,287
======= =======
Net income $ 6,427 $ 4,770
======= =======
Per share amount $ .25 $ .19
======= =======
</TABLE>
NOTE: This calculation is submitted in accordance with the Securities Exchange
Act of 1934 Release No. 9038 although not required by footnote 2 to
paragraph 14 of APB Opinion No. 15 because it results in dilution of
less than 3%.
NOTE: All amounts and per share amounts in this exhibit have been restated to
reflect a three-for-two stock split to stockholders of record on
February 16, 1994.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
ANDREW CORPORATION
Date 14 February 1994 F. L. English
--------------------------------- -------------------------------------
F. L. English
President and Chief Executive Officer
Date 14 February 1994 C. R. Nicholas
--------------------------------- -------------------------------------
C. R. Nicholas
Vice President, Finance and
Administration and Chief Financial
Officer
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