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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 June 30, 1994
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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 ------------------
Commision file number 0-9514
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Andrew Corporation
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(Exact name of registrant as specified in its charter)
Delaware 36-2092797
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10500 W. 153rd Street, Orland Park, IL 60462
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(Address of principal executive offices) (Zip Code)
(708) 349-3300
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(Registrant's telephone number, including area code)
No Change
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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 practical date.
Common Stock, $.01 Par Value-- 25,448,108 shares as of July 31, 1994
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INDEX
ANDREW CORPORATION
PART I. FINANCIAL INFORMATION
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Item 1. Financial Statements (Unaudited)
Consolidated condensed balance sheets-- June 30, 1994 and
September 30, 1993.
Consolidated condensed statements of income-- Three months ended
June 30, 1994 and 1993; Nine months ended June 30, 1994 and 1993.
Consolidated condensed statements of cash flows-- Nine months ended
June 30, 1994 and 1993.
Notes to consolidated condensed financial statements-- June 30, 1994.
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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ANDREW CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
June 30 Sept. 30
1994 1993
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ASSETS (Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 20,233 $ 21,729
Accounts receivable,
less allowance (Jun. $2,882; 120,484 107,276
Sep. $3,167)
Inventories:
Finished products 31,823 18,611
Materials and work in process 55,540 51,695
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87,363 70,306
Miscellaneous current assets 4,189 3,309
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TOTAL CURRENT ASSETS 232,269 202,620
OTHER ASSETS
Costs in excess of net assets of
businesses acquired, less amortization
(Jun. $13,285; Sep. $11,310) 38,911 40,881
Investment in and advances to affiliates 26,380 16,493
Investments and other assets 14,643 8,996
PROPERTY, PLANT AND EQUIPMENT 220,857 207,511
Less allowances for depreciation (151,237) (139,398)
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69,620 68,113
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$381,823 $337,103
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 23,061 $ 18,561
Accrued expenses and other liabilities 25,952 19,170
Compensation and related expenses 16,995 15,950
Income taxes 10,001 10,250
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TOTAL CURRENT LIABILITIES 76,009 63,931
DEFERRED LIABILITIES 4,697 3,602
LONG-TERM DEBT 50,000 50,000
STOCKHOLDERS' EQUITY
Common Stock- (par value $.01 a share)
Authorized - 100,000,000
Issued - 30,435,882 304 203
Additional paid-in capital 29,429 28,448
Retained earnings 277,121 250,534
Foreign currency translation (2,936) (5,410)
Treasury stock, at cost (4,988,264
shares Jun.; 5,243,517 shares Sep.) (52,801) (54,205)
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251,117 219,570
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$381,823 $337,103
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<FN>
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 Nine Months Ended
June 30 June 30
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1994 1993 1994 1993
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<S> <C> <C> <C> <C>
Sales $135,970 $110,474 $399,875 $311,392
Cost of products sold 77,232 64,345 239,634 186,014
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Gross profit 58,738 46,129 160,241 125,378
Operating expenses:
Sales and administrative 32,333 29,319 94,322 81,762
Research and development 6,045 5,180 18,993 16,022
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38,378 34,499 113,315 97,784
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Operating income 20,360 11,630 46,926 27,594
Other:
Interest expense 1,257 1,328 3,815 4,196
Interest income (259) (142) (766) (517)
Other (income) expense 2,068 204 2,335 (1,100)
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3,066 1,390 5,384 2,579
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Income before income taxes 17,294 10,240 41,542 25,015
Income taxes 6,226 3,784 14,955 9,255
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Net income $ 11,068 $ 6,456 $ 26,587 $ 15,760
========= ========= ========= =========
Net income per average share
of common stock outstanding $ .42 $ .25 $ 1.02 $ .62
========= ========= ========= =========
Average shares outstanding 26,142 25,673 26,025 25,524
========= ========= ========= =========
<FN>
See notes to consolidated condensed financial statements.
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</TABLE>
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ANDREW CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Nine Months Ended
June 30
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1994 1993
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<S> <C> <C>
Cash Flows from Operations
Net income $ 26,587 $ 15,760
Adjustments to net income
Depreciation and amortization 16,153 15,480
Decrease(increase) in
accounts receivable (11,889) 1,881
(Increase) in inventories (15,759) (1,178)
(Increase) in prepaid expenses
and other assets (727) (690)
(Increase) in receivables from affiliates (5,928)
Increase in accounts payable and
other liabilities 14,229 3,750
Other 101 1,049
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Net Cash from Operations 22,767 36,052
Investing Activities
Capital expenditures (16,371) (13,937)
Proceeds from sale of property, plant,
and equipment 251 481
Investment in affiliates (9,887) (3,688)
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Net Cash used in Investing Activities (26,007) (17,144)
Financing Activities
Payments on short-term borrowings (3,827)
Payments on long-term debt (8,000)
Stock purchase and option plans 1,258 3,036
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Net Cash provided by (used in)
Financing Activities 1,258 (8,791)
Foreign currency translation adjustments 486 (1,528)
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Increase (decrease) for the period (1,496) 8,589
Cash and cash equivalents at
beginning of period 21,729 7,433
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Cash and cash equivalents at end of period $ 20,233 $ 16,022
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<FN>
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 June 30, 1994 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-- INCOME TAXES
Effective October 1, 1993 Andrew Corporation changed its 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 C-- 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 D-- 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 stockholders 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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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDING JUNE 30, 1994 AND 1993
Sales increased to $136.0 million, a 23% increase over the same period
last year. The strong performance primarily reflects continuing global
demand for Andrew's wireless communication products and services.
Cost of products sold as a percentage of sales decreased marginally
to 57% compared to 58% during the same period last year.
Sales and adminstrative expenses were $32.3 million, a 10% increase
over the same period last year. The $3.0 million increase primarily
reflects wireless telephone product selling expense, and administrative
expense related to the Company's Russian joint ventures. Sales and
administrative expenses as a percent of sales were 24%, a 3%
decrease compared to the same quarter in 1993.
Other expenses were $2.1 million, an increase of $1.9 million compared
to the same period last year. Foreign exchange losses accounted for
$1.3 million of the increase.
NINE MONTHS ENDING JUNE 30, 1994 and 1993
Sales increased to $399.9 million, a 28% increase over the first nine
months of fiscal year 1993. The increase reflects strong demand for
Andrew's wireless communication products, including the Company's
participation in the construction of a major cellular turnkey system in
Argentina. Revenue from the Argentina project totaled $38.3 million
for the first nine months of fiscal year 1994.
Cost of products sold as a percentage of sales was 60%, which was
consistent with the results of the same period last year.
Sales and administrative expenses were $94.3 million, an increase
of 15% over the same period last year. The increase reflects joint
venture development expense, wireless telephone product selling
expense, and profit sharing expense. As a percent of sales, sales
and administrative costs were 24%, a 2% decrease compared to the
same period last year.
Research and development expenses were $19.0 million, a 19%
increase over the first nine months of the prior fiscal year. This
increase reflects the Company's commitment to develop new
products, such as the new wireless telephone accessories products.
As a percent of sales, research and development cost was 5%
in both periods.
Other expenses totaled $2.3 million, up $3.4 million compared with the
same period last year. This increase reflects $1.4 million in foreign
exchange losses recorded during the first nine months of fiscal
year 1994, compared to $1.1 million in foreign exchange gains
recorded during the same period of fiscal year 1993.
LIQUIDITY AND CAPITAL RESOURCES
Cash from operations was $22.8 million for the first nine months of
fiscal year 1994, compared to $36.1 million for the same period last
year. The decrease reflects a net increase of $13.4 million in trade
receivables, trade payables and inventory compared to September
30, 1993. This net increase reflects the Company's record sales
growth which pushed receivables and inventory higher.
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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 June 30, 1994.
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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 August 12, 1994 F. L. English
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F. L. English
President and Chief Executive Officer
Date August 12, 1994 C. R. Nicholas
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C. R. Nicholas
Vice President, Finance and
Chief Financial Officer
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EXHIBIT 11
ANDREW CORPORATION
Computation of Earnings Per Share
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30 June 30
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1994 1993 1994 1993
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<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER SHARE
Average shares outstanding 25,422 24,930 25,305 24,782
Net effect of dilutive stock options
--based on the treasury stock
method using average market
price 711 684 638 654
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TOTAL 26,133 25,614 25,943 25,436
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Net Income $ 11,068 $ 6,456 $ 26,587 $ 15,760
========= ========= ========= =========
Per share amount $ .42 $ .25 $ 1.02 $ .62
========= ========= ========= =========
FULLY DILUTED EARNINGS
PER SHARE
Average shares outstanding 25,422 24,930 25,305 24,782
Net effect of dilutive stock options
--based on the treasury stock
method using ending
market price
720 743 720 742
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TOTAL 26,142 25,673 26,025 25,524
========= ========= ========= =========
Net income $ 11,068 $ 6,456 $ 26,587 $ 15,760
========= ========= ========= =========
Per share amount $ .42 $ .25 $ 1.02 $ .62
========= ========= ========= =========
<FN>
NOTE: This calculation is submitted in accordance with the Securitites 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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