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 DECEMBER 31, 1994.
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
------- -------
COMMISSION FILE NUMBER 0-9514
-------
ANDREW CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 36-2092797
------------------------------ --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
10500 W. 153RD STREET, ORLAND PARK, ILLINOIS 60462
-----------------------------------------------------
(Address of principal executive offices and zip code)
(708) 349-3300
---------------------------------------------------
(Registrant's telephone number, including area code)
No Change
----------------------------------------------------
(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 as 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
--- ---
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--38,488,863 shares as of February 3, 1995
----------------------------------------------------------------------
<PAGE>
INDEX
ANDREW CORPORATION
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated balance sheets--December 31, 1994 and September 30,
1994.
Consolidated statements of income--Three months ended December 31,
1994 and 1993.
Consolidated statements of cash flows--Three months ended December
31, 1994 and 1993.
Notes to consolidated financial statements--December 31, 1994.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
EXHIBIT 11-Computation of Earnings per Share.
EXHIBIT 27-Article 5 financial data schedule.
SIGNATURES
<PAGE>
ANDREW CORPORATION
CONSOLIDATED BALANCE SHEET
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
DECEMBER 31 September 30
1994 1994
------------ ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 33,766 $ 40,267
Accounts receivable, less allowances (Dec. $2,965; Sep. $2,769) 124,579 126,821
Inventories
Finished products 36,704 31,413
Materials and work in process 60,317 56,174
------------ ------------
97,021 87,587
Miscellaneous current assets 6,233 5,974
------------ ------------
TOTAL CURRENT ASSETS 261,599 260,649
OTHER ASSETS
Costs in excess of net assets of businesses
acquired, less accumulated amortization (Dec. $14,588; Sep. $13,919) 37,631 38,272
Investments in and advances to affiliates 29,356 27,119
Investments and other assets 15,136 14,157
PROPERTY, PLANT, AND EQUIPMENT
Land and land improvements 8,536 8,496
Building 52,731 52,422
Equipment 176,893 169,716
Allowances for depreciation and amortization (158,744) (155,668)
------------ ------------
79,416 74,966
------------ ------------
TOTAL ASSETS $ 423,138 $ 415,163
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 28,028 $ 24,902
Accrued expenses and other liabilities 24,540 24,354
Compensation and related expenses 13,770 22,928
Income taxes 14,088 14,899
Current portion of long-term debt 4,545 4,545
------------ ------------
TOTAL CURRENT LIABILITIES 84,971 91,628
DEFERRED LIABILITIES 5,483 5,226
LONG-TERM DEBT, less current portion 49,255 45,455
STOCKHOLDERS' EQUITY
Common Stock (par value, $.01 a share:
100,000,000 shares authorized;
45,653,823 shares issued, including treasury) 457 304
Additional paid-in capital 30,798 31,205
Foreign currency translation (1,460) (1,283)
Retained earnings 306,163 294,929
Treasury stock, at cost (7,258,230 shares Dec.; 7,336,740 shares Sep.) (52,529) (52,301)
------------ ------------
283,429 272,854
------------ ------------
TOTAL LIABILITIES AND EQUITY $ 423,138 $ 415,163
============ ============
<FN>
The balance sheet at September 30, 1994 has been derived from the audited
financial statements at that date.
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
ANDREW CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
December 31
1994 1993
----------- -----------
<S> <C> <C>
SALES $ 142,605 $ 121,746
Cost of products sold 83,847 72,926
----------- -----------
GROSS PROFIT 58,758 48,820
OPERATING EXPENSES
Sales and administrative 34,115 31,324
Research and development 5,640 6,602
----------- -----------
39,755 37,926
OPERATING INCOME 19,003 10,894
OTHER
Interest expense 1,383 1,235
Interest income (636) (285)
Other (income) expense 703 (98)
----------- -----------
1,450 852
INCOME BEFORE INCOME TAXES 17,553 10,042
Income taxes 6,319 3,615
----------- -----------
NET INCOME $ 11,234 $ 6,427
=========== ===========
NET INCOME PER AVERAGE SHARE
OF COMMON STOCK OUTSTANDING $ .28 $ .17
=========== ===========
AVERAGE SHARES OUTSTANDING 39,435 38,951
=========== ===========
<FN>
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
ANDREW CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
December 31
1994 1993
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATIONS
Net Income $ 11,234 $ 6,427
ADJUSTMENTS TO NET INCOME
Depreciation and amortization 5,280 5,238
(Increase) decrease in accounts receivable 2,063 (7,259)
Increase in inventories (10,461) (6,771)
Increase in prepaid expenses and other assets (770) (1,008)
Increase in receivables from affiliates (885)
Decrease in accounts payable and other
liabilities (6,802) (1,896)
Other (73) (18)
-------- --------
NET CASH USED IN OPERATIONS (414) (5,287)
INVESTING ACTIVITIES
Capital expenditures (8,234) (6,563)
Investments in and advances to affiliates (2,237) (2,037)
Proceeds from sale of property, plant, and
equipment 91 70
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (10,380) (8,530)
FINANCING ACTIVITIES
Proceeds from long-term borrowings 3,800
Stock option plans 600 110
-------- --------
NET CASH FROM FINANCING ACTIVITIES 4,400 110
Foreign currency translation adjustments (107) (286)
-------- --------
Decrease for the period (6,501) (13,993)
Cash and equivalents at beginning of period 40,267 21,729
-------- --------
CASH AND EQUIVALENTS AT END OF PERIOD $ 33,766 $ 7,736
======== ========
<FN>
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
ANDREW CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited consolidated 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,
1994 are not necessarily indicative of the results that may be expected for the
year ending September 30, 1995. 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, 1994.
NOTE B--STOCK SPLIT
On February 3, 1995 the company's Board of Directors declared a three-for-two
stock split to stockholders of record on February 22, 1995, payable on March 8,
1995. All share and per share amounts have been restated for all periods
presented to reflect the stock split.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales for the quarter ended December 31, 1994 totalled $142.6 million, a 17%
increase over the prior year quarter. This increase was primarily attributable
to increased worldwide demand for the company's wireless communications products
and services. The commercial segment was our strongest performer with
significant sales growth in both international and domestic geographic
territories. This segment's strength was partially offset by weaker performances
in the network products and government electronic businesses.
During the quarter ended December 31, 1994, two large, multi-year contracts were
received; a $46.4 million contract with the Hong Kong Metro and a $12.3 million
contract with MFS Technologies, Inc. The company expects to recognize
approximately one-half of the revenue from these two contracts during fiscal
year 1995.
As a percentage of sales, cost of products sold decreased 1% and accounted for
59% of sales. This decrease reflects improved manufacturing productivity and
increased demand for higher margin products in the commercial segment.
Sales and administrative expense for the quarter increased to $34.1 million, a
$2.8 million increase over the prior year first quarter. This increase was due
primarily to higher profit sharing expenses. As a percent of sales, sales and
administrative expenses were 24%, a 2% decline compared to the same period last
year. Research and development expenditures for the first quarter decreased $1.0
million, or 15% over the same period last year. This decrease can be attributed
to cost control efforts, particularly in the network business.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operations improved compared to the same period last year by
$4.9 million. Earnings in the first quarter of fiscal year 1995, combined with
collections of strong fourth quarter fiscal year 1994 sales provided increased
cash inflows. These improvements were offset by payouts of fiscal year 1994
liabilities, such as profit sharing, and higher inventory investments in the
wireless telephone products business.
During the first quarter of fiscal year 1995, the company issued an Industrial
Development Revenue Bond for $3.8 million. The funds from this issue are being
used to finance the company's new concrete shelter facility in Newnan, Georgia.
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 11 - Computation of earnings per share.
Exhibit 27 - Article 5 financial data schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended December
31, 1994.
<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 February 10, 1995 F. L. English
---------------------- ----------------------------
F. L. English
Chairman of the Board, President
and Chief Executive Officer
Date February 10, 1995 C. R. Nicholas
---------------------- -----------------------------
C. R. Nicholas
Vice President, Finance and Administration
and Chief Financial Officer
EXHIBIT 11
ANDREW CORPORATION
COMPUTATION OF EARNINGS PER SHARE
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
December 31
1994 1993
------- -------
<S> <C> <C>
PRIMARY EARNINGS PER SHARE
Average shares outstanding 38,348 37,826
Net effect of dilutive stock options--
based on the treasury stock method
using average market price 1,071 1,069
------- -------
TOTAL 39,419 38,895
======= =======
Net income $11,234 $ 6,427
======= =======
Per share amount $ .28 $ .17
======= =======
FULLY DILUTED EARNINGS PER SHARE (NOTE)
Average shares outstanding 38,348 37,826
Net effect of dilutive stock options--
based on the treasury method
using quarter-end market price 1,087 1,125
------- -------
TOTAL 39,435 38,951
======= =======
Net income $11,234 $ 6,427
======= =======
Per share amount $ .28 $ .17
======= =======
<FN>
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 shares and per share amounts in this exhibit have been restated to
reflect a three-for-two stock split to stockholders of record on
February 22, 1995.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> DEC-31-1994
<CASH> 33,766
<SECURITIES> 0
<RECEIVABLES> 127,544
<ALLOWANCES> 2,965
<INVENTORY> 97,021
<CURRENT-ASSETS> 261,599
<PP&E> 238,160
<DEPRECIATION> 158,744
<TOTAL-ASSETS> 423,138
<CURRENT-LIABILITIES> 84,971
<BONDS> 49,255
<COMMON> 457
0
0
<OTHER-SE> 282,972
<TOTAL-LIABILITY-AND-EQUITY> 423,138
<SALES> 142,605
<TOTAL-REVENUES> 142,605
<CGS> 83,847
<TOTAL-COSTS> 83,847
<OTHER-EXPENSES> 39,755
<LOSS-PROVISION> 300
<INTEREST-EXPENSE> 1,383
<INCOME-PRETAX> 17,553
<INCOME-TAX> 6,319
<INCOME-CONTINUING> 11,234
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,234
<EPS-PRIMARY> .28
<EPS-DILUTED> .28
<FN>
All per share amounts in this exhibit have been restated to
reflect a three-for-two stock split to stockholders of
record on February 22, 1995.
</FN>
</TABLE>
