SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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, 1998.
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 (IRS 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-- 86,104,134 shares as of July 31, 1998
<PAGE>
INDEX
ANDREW CORPORATION
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated balance sheets--June 30, 1998 and September 30,
1997.
Consolidated statements of income--Three and nine months ended
June 30, 1998 and 1997.
Consolidated statements of cash flows--Nine months ended
June 30, 1998 and 1997.
Notes to consolidated financial statements--June 30, 1998.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
PART II. OTHER INFORMATION
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K.
SIGNATURES
<PAGE>
<TABLE>
ANDREW CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<CAPTION>
June 30 September 30
1998 1997
------------ --------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 93,263 $ 93,823
Accounts Receivable, less allowances
(Jun. $3,583; Sep. $2,754) 158,867 185,752
Inventories
Finished Products 68,047 57,458
Materials and Work in Process 106,435 109,432
------------ --------------
174,482 166,890
Assets related to discontinued
operations, less allowances 0 4,811
Miscellaneous Current Assets 9,677 8,538
------------ --------------
TOTAL CURRENT ASSETS 436,289 459,814
OTHER ASSETS
Cost in excess of net assets of businesses
acquired, less accumulated amortization
(Jun. $9,904; Sep. $8,742) 23,564 24,726
Investment in and Advances to Affiliates 56,225 55,628
Investments and other assets 16,286 13,396
PROPERTY, PLANT AND EQUIPMENT
Land and land improvements 15,424 11,646
Building 71,229 72,884
Equipment 300,621 275,015
Allowances for Depreciation 238,520 221,955
------------ --------------
148,754 137,590
------------ --------------
TOTAL ASSETS $ 681,118 $ 691,154
============ ==============
<FN>
The balance sheet at September 30, 1997 has been derived from the audited
financial statements at that date.
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
ANDREW CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(Continued)
<CAPTION>
June 30 September 30
1998 1997
------------ --------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes Payable $ 10,892 $ 14,319
Accounts Payable 31,221 37,237
Accrued expenses and other liabilities 23,266 21,014
Compensation and related expenses 27,320 29,312
Income taxes 23,779 16,430
Liabilities related to discontinued
operations 0 3,637
Current portion of long term debt 5,365 5,144
------------ --------------
TOTAL CURRENT LIABILITIES 121,843 127,093
------------ --------------
DEFERRED LIABILITIES 10,761 10,239
LONG-TERM DEBT, less current portion 41,276 35,693
MINORITY INTEREST 5,339 9,006
STOCKHOLDERS' EQUITY
Common stock (par value, $.01 a share:
400,000,000 shares authorized; 102,718,210
shares issued, including treasury) 1,027 1,027
Additional paid-in capital 53,129 51,810
Foreign currency translation (11,439) (4,532)
Retained earnings 624,327 547,256
Treasury stock, at cost (16,615,594 shares
in Jun.; 13,060,876 shares in Sep.) (165,145) (86,438)
------------ --------------
501,899 509,123
------------ --------------
TOTAL LIABILITIES AND EQUITY $ 681,118 $ 691,154
============ ==============
<FN>
The balance sheet at September 30, 1997 has been derived from the audited
financial statements at that date.
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
ANDREW CORPORATION
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
June 30 June 30
------------------ ------------------
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
SALES $204,220 $208,911 $632,228 $636,853
Cost of Products Sold 122,905 116,965 384,206 374,692
-------- -------- -------- --------
GROSS PROFIT 81,315 91,946 248,022 262,161
OPERATING EXPENSES
Research and development 6,502 11,345 19,828 30,267
Sales and administrative 37,375 37,019 110,640 109,581
Restructuring expenses 0 5,150 0 5,150
-------- -------- -------- --------
43,877 53,514 130,468 144,998
-------- -------- -------- --------
OPERATING INCOME 37,438 38,432 117,554 117,163
OTHER
Interest expense 1,707 1,657 4,868 4,440
Interest income (2,413) (1,236) (5,307) (2,885)
Other (income) expense 887 (387) 1,219 (2,862)
-------- -------- -------- --------
181 34 780 (1,307)
-------- -------- -------- --------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 37,257 38,398 116,774 118,470
Income Taxes 12,667 13,439 39,703 41,464
-------- -------- -------- --------
INCOME FROM CONTINUING OPERATIONS 24,590 24,959 77,071 77,006
DISCONTINUED OPERATIONS
Loss from operations of Network
Products Business, net of
applicable tax benefit 0 1,135 0 3,330
Loss on disposal of Network
Products Business, including
provision of $1,040 for
operating losses during
phase-out period, net of
applicable tax benefit 0 16,086 0 16,086
-------- -------- -------- --------
0 17,221 0 19,416
-------- -------- -------- --------
NET INCOME $ 24,590 $ 7,738 $ 77,071 $ 57,590
======== ======== ======== ========
BASIC AND DILUTED EARNINGS PER SHARE
Continuing Operations $ 0.28 $ 0.27 $ 0.87 $ 0.84
======== ======== ======== ========
Net Income $ 0.28 $ 0.08 $ 0.87 $ 0.63
======== ======== ======== ========
AVERAGE SHARES OUTSTANDING
Basic 88,227 91,089 88,630 91,146
======== ======== ======== ========
Diluted 88,545 91,693 89,061 91,877
======== ======== ======== ========
<FN>
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
ANDREW CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
<CAPTION>
Nine Months Ended
June 30
-----------------------
1998 1997
---------- ----------
<S> <C> <C>
CASH FLOW FROM OPERATIONS
Net Income $ 77,071 $ 57,590
ADJUSTMENTS TO NET INCOME
Restructuring costs (243) 5,150
Discontinued operations 0 22,771
Depreciation and amortization 26,946 29,143
Decrease in accounts receivable 23,664 15,691
Increase in inventories (8,408) (17,379)
Increase in miscellaneous
current and other assets (3,814) (7,662)
Decrease (increase) in receivables from affiliates 605 (161)
Increase in accounts payable and other liabilities 6,382 4,823
Other (280) (127)
---------- ----------
NET CASH FROM OPERATIONS 121,923 109,839
INVESTING ACTIVITIES
Capital Expenditures (40,963) (31,532)
Acquisition of business, net of cash acquired (3,000) 0
Investments in and advances to affiliates (752) (10,370)
Proceeds from sales of property, plant
and equipment 469 379
---------- ----------
NET CASH USED FOR INVESTING ACTIVITIES (44,246) (41,523)
FINANCING ACTIVITIES
Proceeds from (payments on) long-term borrowings 6,112 (90)
(Payments on) proceeds from short-term borrowings (2,949) 13,115
Payments to acquire treasury stock (80,333) (23,793)
Stock option plans 1,754 4,331
---------- ----------
NET CASH USED FOR FINANCING ACTIVITIES (75,416) (6,437)
Effect of exchange rate changes on cash (2,821) (1,576)
---------- ----------
TOTAL (DECREASE) INCREASE FOR THE PERIOD (560) 60,303
Cash and Equivalents at Beginning of Period 93,823 31,295
---------- ----------
CASH AND EQUIVALENTS AT END OF PERIOD $ 93,263 $ 91,598
========== ==========
<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 June 30, 1998
are not necessarily indicative of the results that may be expected for the year
ending September 30, 1998. 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, 1997.
NOTE B--EARNINGS PER SHARE
In 1997, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share". Statement
128 replaces the computation of primary and fully diluted earnings per share
with basic and diluted earnings per share. Unlike primary earnings per share,
basic earnings per share excludes any dilutive effects of options, warrants and
convertible securities. Diluted earnings per share is very similar to the
previously reported fully diluted earnings per share. The Company adopted
Statement 128 in the first quarter of fiscal year 1998. All share and per share
amounts have been presented, and where necessary, restated to conform with the
requirements of Statement 128.
<PAGE>
The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30 June 30
------------------ --------------------
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
(In thousands, except per share
amounts)
BASIC EARNINGS PER SHARE
Numerator:
Numerator for income from
continuing operations
per share $24,590 $24,959 $77,071 $77,006
Numerator for net income
per share $24,590 $ 7,738 $77,071 $57,590
Denominator:
Weighted average shares
outstanding 88,227 91,089 88,630 91,146
======== ======== ======== ========
Income from continuing operations
per share - basic $0.28 $0.27 $0.87 $0.84
======== ======== ======== ========
Net income per share - basic $0.28 $0.08 $0.87 $0.63
======== ======== ======== ========
DILUTED EARNINGS PER SHARE
Numerator:
Numerator for income from
continuing operations
per share $24,590 $24,959 $77,071 $77,006
Numerator for net income
per share $24,590 $ 7,738 $77,071 $57,590
Denominator:
Weighted average shares
outstanding 88,227 91,089 88,630 91,146
Effect of dilutive securities:
Stock options 318 604 431 731
======== ======== ======== ========
88,545 91,693 89,061 91,877
======== ======== ======== ========
Income from continuing operations
per share - diluted $0.28 $0.27 $0.87 $0.84
======== ======== ======== ========
Net income per share - diluted $0.28 $0.28 $0.87 $0.63
======== ======== ======== ========
</TABLE>
<PAGE>
Options to purchase 1,519,000 shares of common stock, at prices ranging from
$21.31 - $38.17 per share, were not included in the June 1998 computation of
diluted earnings per share, because the option's exercise price was greater than
the average market price of the common shares. Options to purchase 739,000
shares of common stock at prices ranging from $27.88 - $38.17 per share were not
included in the June 1997 diluted earnings per share calculation since the
option's exercise price was higher than the average market price of the common
shares.
NOTE C--RESTRUCTURING
During June 1997, the Company initiated a plan to restructure its European
wireless products business and phase out its fiber optic sensors and global
messaging development activities. The restructuring is substantially complete as
of June 30, 1998. Actual costs were not materially different than the total
after-tax charges of $3.3 million or $.04 per share recorded in June 1997.
NOTE D--DISCONTINUED OPERATIONS
On July 14, 1997, the Company adopted a plan to discontinue the operations of
its network products business. The business was acquired by NLynx Systems Inc.
during 1998. As such, there are no remaining assets and liabilities related to
the business. The losses associated with the disposition did not materially
differ from the estimated loss on disposal of the discontinued operations of
$16.1 million (net of applicable taxes of $6.7 million), recorded during the
third quarter 1997.
NOTE E - ACCOUNTING CHANGES
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income".
This statement establishes standards for the reporting and display of
comprehensive income and its components in a full set of general purpose
financial statements. The Company will adopt this statement in the first quarter
of fiscal year 1999. The Company does not believe the additional reporting and
disclosures will have a significant impact on the Company's financial
statements.
In June 1997, the FASB issued SFAS No. 131, "Disclosure about Segments of an
Enterprise and Related Information." This statement, which is effective for the
Company's fiscal year-end 1999 financial statements, establishes standards for
the way enterprises report information about operating segments in annual
financial statements and requires that enterprises report selected information
about operating segments in interim financial reports. The Company does not
believe the additional disclosures will have a significant impact on the
Company's financial statements.
In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures about
Pensions and Other Postretirement Benefits". Statement No. 132 changes the
existing disclosure requirements for pensions and other postretirement benefits
plans. It does not change the measurement or recognition of those plans. The
Company will adopt this statement in the first quarter of fiscal year 1999.
Adoption of this statement is not expected to have a material effect on the
Company's financial statements.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts (collectively referred to as
derivatives), and for hedging activities. It requires that an entity recognize
all derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. The Company will adopt
this statement in the first quarter of fiscal year 2000. Adoption of this
statement is not expected to have a material effect on the Company's financial
statements.
<PAGE>
In March 1998, the American Institute of Certified Public Accountants (AICPA)
issued Statement of Position (SOP) 98-1, " Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use". SOP 98-1 provides guidance on
the accounting treatment of costs related to software obtained or developed for
internal use. The Company will adopt this statement in the first quarter of
fiscal year 2000. Adoption of this statement is not expected to have a material
effect on the Company's financial statements.
In April 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of Start-Up
Activities". SOP 98-5 provides guidance on the accounting treatment of costs
related to start-up activities. The Company will adopt this statement in the
first quarter of fiscal year 2000. Adoption of this statement is not expected to
have a material effect on the Company's financial statements.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Sales for the quarter ended June 30, 1998 were $204.2 million, a decrease of
2.0% compared to the same period last fiscal year. For the first nine months of
fiscal year 1998, sales were $632.2 million, 1.0% below last fiscal year's sales
of $636.9 million. Wireless infrastructure sales remained relatively stable for
both the quarter and nine months ended June 30, 1998 when compared to the same
periods last fiscal year. Compared to the same quarter last year, sales to the
land mobile radio market and broadcast and government markets decreased
slightly, while still showing growth for fiscal year 1998. Common carrier and
private microwave sales were down for the quarter and nine months ended June 30,
1998 compared to the same periods last fiscal year. Excluding the effects of the
restructured European portion of its business, the wireless accessories business
had strong growth for both the quarter and first nine months of fiscal year
1998.
Cost of products sold as a percentage of sales for the quarter ended June 30,
1998 was 60.2%, an increase of 4.2% over the same period last fiscal year. For
the first nine months of fiscal year 1998, cost of products sold as a percentage
of sales was 60.8% compared to 58.8% for the first nine months of fiscal year
1997. Increased price pressure resulting in higher customer discounts,
particularly for coaxial cable , as well as lower volumes in the towers business
contributed to the growth in cost of products sold as a percentage of sales.
These trends were partially offset by productivity improvements.
Excluding the effect of the $5.2 million charge for the restructuring of the
Company's European wireless products business and the phasing out of the
Company's fiber optic sensors and global messaging development activities taken
in June 1997, operating expenses, as a percentage of sales, decreased 1.7% for
the quarter to 21.5% of sales. For the first nine months of fiscal year 1998,
excluding the $5.2 million restructuring charge, operating expenses, as a
percentage of sales, were 20.6% compared to 22.0% for the same period last
fiscal year. Research and development expenses as a percentage of sales, for
both the quarter and nine months ended June 30, 1998, showed improvement mainly
due to the Company's restructuring in June 1997. Sales and administrative
expenses as a percentage of sales increased slightly for both the quarter and
nine months ended June 30, 1998 compared to the same periods last fiscal year
primarily due to the Company's continued upgrading of its business and
information systems.
Interest expense for the third quarter of fiscal year 1998 remained stable
compared to the same period last fiscal year. Interest income for the quarter
ended June 30, 1998 doubled due mostly to interest earned on advances to the
Company's Russian joint ventures. Net interest income for the nine months ended
June 30, 1998 was $0.4 million compared to net interest expense of $1.6 million
for the same period last fiscal year. This improvement is due to interest earned
on advances to the Company's Russian joint ventures, as well as higher average
investment balances. Other expense increased for both the quarter and nine
months ended June 30, 1998 due primarily to foreign exchange losses.
In June 1997, the Company decided to exit its network products business. As a
result of that decision, the Company incurred a charge of $16.1 million related
to the disposal, net of applicable tax benefits. For more information see Note D
- - Discontinued Operations.
<PAGE>
LIQUIDITY
Cash and cash equivalents for the nine months ended June 30, 1998 remained
relatively unchanged when compared to September 30, 1997. Working capital
decreased by $18.3 million to $314.4 million mainly due to cash generated from
receivables collections being used to fund the Company's stock buyback program.
During the first nine months of fiscal year 1998, the Company generated $121.9
million in cash from operations, principally from earnings of $77.1 million,
which included non-cash charges of $26.9 million. Changes in accounts receivable
generated $23.7 million in cash, while days sales in billed receivables
increased slightly to 68 days compared to 67 days at September 30, 1997. Growth
in inventories and prepaid and other assets along with payments of accounts
payable partially offset the cash inflows generated from earnings, accounts
receivable and the growth in income taxes payable.
Net cash used in investing activities, for the nine months ended June 30, 1998,
totaled $44.2 million. Of the $41.0 million the Company spent on property, plant
and equipment, $10.0 million was spent on the Company's Chinese facility, while
$9.6 million was spent on the construction of new facilities in Texas. In the
first quarter of fiscal year 1998, the Company purchased an additional 19%
interest in its Brazilian operations for $3.0 million.
Net cash used in financing activities, for the nine months ended June 30, 1998,
totaled $75.4 million. In June 1998, the Company's board of directors authorized
an additional five million shares of common stock to be repurchased under the
Company's stock buyback plan, bringing the total authorized for repurchase to 10
million shares. During fiscal year 1998 the Company has repurchased a total of
3.8 million shares at a cost of $80.3 million. Since the inception of the stock
buyback program in May 1997, the Company has repurchased 5.3 million shares for
a total cost of $122.0 million. During the first quarter of fiscal year 1998,
the Company's Brazilian operations borrowed $6.1 million at a weighted average
interest rate of 12% to repay borrowings made under a line of credit agreement
with ABN-AMRO with a weighted average interest rate of 22%.
YEAR 2000
The "Year 2000 issue" arose because many existing computer programs use only the
last two digits to refer to a year. Therefore, these computer programs do not
properly recognize a year that begins with "20" instead of "19". If not
corrected, many computer applications could fail or create erroneous results. In
1994, the Company instituted a program to routinely review its computer hardware
and software to increase operational efficiency. From this review it was
determined that a new business system would be needed to meet the Company's
growing needs. During this review it was also determined that the Company's
current business systems were not year 2000 compliant. In 1994 the Company
purchased a new business system that would not only meet the Company's needs,
but was also year 2000 compliant. To date, the Company has completed its testing
of the system and is currently in the process of implementing the system at all
operating locations. The Company expects to have the system fully implemented by
December 1998. Amounts expended, or to be expended, exclusively to ensure year
2000 compliance are not expected to be material to the Company's consolidated
results of operations or financial position. Although, the Company does not
expect any significant disruption in operations from its suppliers or customers'
inability to achieve year 2000 compliance, the potential impact and related
costs associated with this potential noncompliance could be material. To ensure
this, the Company is in the process of contacting all of its significant third
party relationships to determine the extent to which the company is vulnerable
to their failure to obtain year 2000 compliance.
<PAGE>
RISK FACTORS
Statements included in this Form 10-Q which are not historical in nature are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Certain factors that could
cause the Company's results to differ materially from forecasts or expectations
include, but are not limited to: the impact of competitive products and pricing;
regional economic or political conditions that may impact customers' ability to
purchase our products and services; availability of qualified technical
management, principally in emerging markets and end user demand for wireless
communication products.
PART II--OTHER INFORMATION
Item 5. Other Information
Stockholder proposals and nominations for directors intended for inclusion in
the Company's proxy statement relating to the next annual meeting
(February 1999) must be received at the Company's offices (addressed to the
attention of the Secretary) not later than August 28, 1998. Any such proposal
must comply with Rule 14a-8 of Regulation 14A of the proxy rules of the
Securities and Exchange Commission. Under the Company's By-laws, proposals of
stockholders not intended for inclusion in the proxy statement, but intended to
be raised at the February 1999 annual meeting, must be received not later than
November 12, 1998 and must set forth as to each matter the stockholder proposes
to bring before the meeting: (i) a brief description of the business desired to
be brought before the meeting; (ii) the name and address, as they appear on the
Company's stock records, of the stockholder proposing such business; (iii) the
class and number of shares of the Company that are beneficially owned by the
stockholder; and (iv) any interest of the stockholder in such business. In
addition, the proxy rules of the Securities and Exchange Commission permit the
persons named in the proxies solicited by the Company's Board of Directors to
exercise discretionary voting power with respect to any proposal that is
submitted later than November 11, 1998 for consideration at the February 1999
annual meeting and that is not submitted for inclusion in the Company's proxy
statement and form of proxy.
Item 6. Exhibits and reports on Form 8-K
a) EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
10 May 4, 1998 Assignment Agreement between ABN-AMRO Bank N.V.
and Bank Austria Aktiengesellschaft
27 Financial Data Schedule
June 30, 1998
</TABLE>
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended June 30, 1998.
<PAGE>
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.
Date August 13, 1998 /s/ F. L. English
----------------------- -----------------
F. L. English
Chairman, President and Chief
Executive Officer
Date August 13, 1998 /s/ C. R. Nicholas
----------------------- ------------------
C. R. Nicholas
Executive Vice President and Chief
Financial Officer
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
10 May 4, 1998 Assignment Agreement between ABN-AMRO Bank N.V.
and Bank Austria Aktiengesellschaft
27 Financial Data Schedule
June 30, 1998
</TABLE>
LENDER ASSIGNMENT AGREEMENT
THIS LENDER ASSIGNMENT AGREEMENT (the "ASSIGNMENT") is made and entered into as
of May 4, 1998 by and between ABN AMRO BANK N.V. (the "ASSIGNOR") and BANK
AUSTRIA AKTIENGESELLSCHAFT, (the "ASSIGNEE").
WITNESSETH
WHEREAS, an Amended and Restated Credit Agreement dated as of November
1, 1997, the ("AGREEMENT") has been entered into among Andrew Corporation, a
Delaware corporation (the "COMPANY"), certain Designated Subsidiaries of the
Company, the financial institutions from time to time party thereto including
the Assignor (individually a "LENDER" and collectively, the "LENDERS"), and Bank
of America National Trust and Savings Association as agent for the Lenders (in
such capacity, the "AGENT"). Unless otherwise defined herein, terms defined in
the Agreement are used herein with the same meanings; and
WHEREAS, pursuant to the Agreement, on the date hereof, and without
giving effect to any other assignments to become effective on the Assignment
Effective Date (hereafter defined) or any other assignments thereof which have
not yet become effective (a) the Assignor's Commitment (the "Assignor's
Commitment") is the amount specified in ITEM 1 of SCHEDULE 1 hereto, (b) the
aggregate principal amount of outstanding Reference Rate Loans, Eurodollar
Loans, Eurocurrency Loans and Quoted Rate Loans made by the Assignor to the
Borrowers pursuant to the Assignor's Commitment is specified in ITEM 2 of
SCHEDULE 1 hereto and (c) the Assignor's Percentage is the percentage set forth
in ITEM 3 of SCHEDULE 1 hereto; and
WHEREAS, the Assignor wishes to sell to the Assignee, and the Assignee
wishes to purchase and assume from the Assignor (a) the portion of the
Assignor's Commitment specified in ITEM 4 of SCHEDULE 1 hereto (the "ASSIGNED
COMMITMENT") and (b) the portion of the Assignor's outstanding Reference Rate
Loans, Eurodollar Loans, Eurocurrency Loans and Quoted Rate Loans Revolving
Loans (the "ASSIGNED LOANS"), specified in Item 5 of SCHEDULE 1 hereto.
NOW, THEREFORE, the parties hereto agree as follows:
1. Subject to the terms and conditions set forth herein, the Assignor
hereby sells and assigns to the Assignee, and the Assignee hereby purchases and
assumes from the Assignor, WITHOUT RECOURSE, as of the Assignment Effective Date
and without giving effect to other assignments to become effective on the
Assignment Effective Date or any other assignments thereof which have not yet
become effective (a) all right, title and interest of the Assignor to the
Assigned Loans and (b) all obligations of the Assignor under the Agreement with
respect to the Assigned Commitment including, without limitation, any Notes held
by the Assignor and any interest, fees and commissions which accrue after the
Assignment Effective Date; PROVIDED, HOWEVER, that Assignee does not purchase or
assume any liability resulting from acts or omissions of Assignor occurring
prior to the Assignment Effective Date. After giving effect to the transactions
contemplated by this Assignment and Assumption, (i) the amount of the Assigned
Loans shall be the amounts set forth in ITEM 5 of SCHEDULE 1 and (ii) Assignor's
and Assignee's respective Percentages and Commitments shall be set forth in Item
6 of SCHEDULE I hereto.
<PAGE>
2. The Assignor (i) represents and warrants that the information set
forth in ITEMS 1, 2 and 3 is true and correct as of the date hereof; (ii)
represents and warrants that (a) it is the legal and beneficial owner of the
Loans and Commitments being assigned by it hereunder, (b) it has the full power
and legal right to execute and deliver this Assignment and to perform its
obligations hereunder, (c) the execution, delivery of this Assignment, and the
performance by it of its obligations hereunder, have been duly authorized by all
necessary corporate or other action and do not violate any provisions of its
charter or by-laws or any contractual obligation or requirement of law binding
upon it and (d) the Assigned Loans and Assigned Commitment are free and clear of
any adverse claim; (iii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made by any Borrower or any other Person in or in connection with the Agreement
or any other Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Agreement or any other
Loan Documents or any other instrument or document furnished by or on behalf of
any Borrower or any other Person pursuant thereto; (iv) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of any Borrower or any other Person or the performance or observance
by any Borrower or any other Person of any of its obligations under the
Agreement or any other Loan Documents or any agreement, instrument or document
furnished pursuant thereto; and (v) represents and warrants that, to its
knowledge, the Agent has not notified the Company of the existence of any
Default which currently exists.
3. The Assignee (i) represents and warrants that (a) it has the full
power and legal right to execute and deliver this Assignment and to perform its
obligations hereunder and, to the extent of its interest therein, under the
Agreement and the other Loan Documents and (b) the execution and delivery by it
of this Assignment, and the performance by it of its obligations hereunder and,
to the extent of its interest therein, under the Agreement and the other Loan
Documents, have been duly authorized by all necessary corporate or other action
and do not violate any provisions of its charter or by-laws or any contractual
obligation or requirement of law binding upon it; (ii) confirms that it has
received a copy of the Agreement and the other Loan Documents, together with
copies of the most currently available financial statements referred to in
SECTION 7.1.1 of the Agreement and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment; (iii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the
Agreement; (iv) appoints and authorizes the Agent to take such actions on its
behalf and to exercise such powers under the Agreement and the other Loan
Documents as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (v) agrees that it will become a
party to and a Lender under the Agreement on the Assignment Effective Date and
perform in accordance with their terms all of the obligations which by the terms
of the Agreement are required to be performed by it as a Lender; (vi) specifies
as its address for notices the office set forth in ITEM 7 of SCHEDULE 1 hereto;
and (vii) agrees that no fee is payable by Borrower to Assignee in connection
with the execution and delivery of this Assignment and Assumption.
4. The Assignor agrees that the Assignor shall pay to the Agent, for
the account of the Agent, any processing fee required by the Agent to be paid to
it pursuant to SECTION 10.11.1 of the Agreement. The Assignor further agrees
that, within one Banking Day following receipt of new Notes duly executed by a
Borrower reflecting the amount of the Assigned Commitment and the Assigned
Loans, it will return its superseded Note(s) to the Agent for the account of
such Borrower.
<PAGE>
5. The obligations of the Assignee and the Assignor hereunder shall be
subject to the requirement that the Assignor (a) shall have received good funds
representing payment in full of all amounts due from the Assignee for purchase
of the Commitment and Loans being purchased by and assigned to the Assignee and
(b) complied with all other provisions of this Assignment and all applicable
provisions of SECTION 10.11 of the Agreement. The effective date of this
Assignment (the "ASSIGNMENT EFFECTIVE DATE") shall be May 4, 1998 or, if later,
the first Banking Day on which the requirements of the preceding sentence of
this SECTION 5 have been satisfied. Following the execution of this Assignment
by the Assignor and the Assignee and the acknowledgment of the same by the
Company and each other Borrower, it will be delivered to the Agent for
acceptance and recording by the Agent.
6. Upon such acceptance and recording, as of the Assignment
Effective Date, (i) the Assignee shall be a party to the Agreement and, to the
extent provided in this Assignment, have the rights and obligations of a Lender
thereunder and under the other Loan Documents and (ii) the Assignor shall, to
the extent provided in this Assignment, relinquish its rights and be released
from its obligations under the Agreement and under the other Loan Documents.
7. Upon such acceptance and recording, from and after the Assignment
Effective Date, the Agent shall make all payments received by it under the
Agreement and the other Loan Document in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and fees
with respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Agreement for periods prior to the
Assignment Effective Date directly between themselves.
8. This Assignment shall be governed by, and construed in accordance
with, the internal laws and decisions (as opposed to conflicts of law
provisions) of the State of Illinois.
9. This Assignment shall inure to the benefit of and be binding upon
successors and assigns of the Assignor and the Assignee.
10. This Assignment shall supersede any prior agreement or
understanding between the parties (other than the Agreement and the other Loan
Documents) as to the subject matter hereof. This Assignment shall be deemed to
be a Loan Documents for all purposes under the Agreement.
11. This Assignment may be executed by Assignor and Assignee in any
number of counterparts and on the same or separate counterparts, each of which,
when executed and delivered, shall be an original but all of which taken
together, shall be but a single Lender Assignment Agreement.
<PAGE>
IN WITNESS WHEREOF, the Assignor and the Assignee have executed this
Assignment and Assumption as of this day of this 4th day of May, 1998.
ABN AMRO BANK N.V., Assignor
By: /s/ DAWN NICHOLSON
---------------------------
Title: ASSISTANT VICE PRESIDENT
By: /s/ LINDA BOARDMAN
---------------------------
Title: VICE PRESIDENT
BANK AUSTRIA AKTIENGESELLSCHAFT, ASSIGNEE
By: /s/ J. ANTHONY SEAY
---------------------------
Title: FIRST VICE PRESIDENT
By: /s/ JEANINE B. LONG
---------------------------
Title: VICE PRESIDENT
Pursuant to SECTION 10.11.1 of the Agreement, the Company, on behalf of
itself and each of the Designated Subsidiaries, hereby agrees, accepts and
consents to the foregoing Assignment. The Company further agrees, on behalf of
itself and each of the Designated Subsidiaries that, within five Banking Days
from Assignment Effective Date, it will execute and deliver, and will cause each
Designated Subsidiary to execute and deliver, to the Agent, a new Note to the
Assignee and the Assignor, reflecting the amount of the Assignor's Commitment
assigned to the Assignee pursuant to this Assignment, and the Assignor's
Commitment less the Assigned Commitment respectively.
ANDREW COPRORATION
By: /s/ JEFF GITTELMAN
-------------------
JEFF GITTELMAN
Title: TREASURER
Date: 5-22-98
<PAGE>
Pursuant to SECTION 10.11.1 of the Agreement the undersigned, as Agent
for the Lenders (i) accepts the foregoing Assignment and (ii) agrees that the
execution and delivery of the Assignment shall not alter the rights and
obligations of the undersigned as Agent.
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
as Agent for the lenders
By: /s/ DAVID A. JOHANSON
----------------------
DAVID A. JOHANSON
Title: VICE PRESIDENT
Date:
By:
Title:
Date:
<PAGE>
SCHEDULE 1
to
Lender Assignment Agreement
dated as of May 4, 1998 between
ABN AMRO BANK N.V., Assignor
and
BANK AUSTRIA AKTIENGESELLSCHAFT, Assignee
ITEM 1. Assignor's Commitment $ 12,500,000
- ------
ITEM 2. Assignor's Loans Outstanding
- ------ COMPANY:
Reference Rate Loans $ 0
Eurodollar Loans $ 0
Eurocurrency Loans $ 5,250,000 FRF
Quoted Rate Loans $ 4.0625%
[DESIGNATED SUBSIDIARY]
Reference Rate Loans $
Eurodollar Loans $
Eurocurrency Loans $
Quoted Rate Loans $
ITEM 3. Assignor's Percentage .50%
- ------
ITEM 4. Amount of Assigned Commitment $ 6,250,000
- ------
ITEM 5. Amount of Assigned Loans
- ------ COMPANY:
Reference Rate Loans $ 0
Eurodollar Loans $ 0
Eurocurrency Loans $ 2,625,000 FRF
Quoted Rate Loans $
[DESIGNATED SUBSIDIARY]
Reference Rate Loans $
Eurodollar Loans $
Eurocurrency Loans $
Quoted Rate Loans $
ITEM 6. Commitments and Percentage After Assignment
- ------ Commitments
a. Assignor $ 2,625,000 FRF
b. Assignee $ 2,625,000 FRF
Percentages
a. Assignor .50%
b. Assignee .50%
ITEM 7. Notice Address of Assignee
- ------
565 Fifth Avenue
26-29th Floor
New York, New York 10017
Attention: Jeanine Long
Telephone: (212) 880-1075
Facsimile: (212) 880-1080
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> JUN-30-1998
<CASH> 93,263
<SECURITIES> 0
<RECEIVABLES> 162,450
<ALLOWANCES> 3,583
<INVENTORY> 174,482
<CURRENT-ASSETS> 436,289
<PP&E> 387,274
<DEPRECIATION> 238,520
<TOTAL-ASSETS> 681,118
<CURRENT-LIABILITIES> 121,843
<BONDS> 41,276
0
0
<COMMON> 1,027
<OTHER-SE> 500,872
<TOTAL-LIABILITY-AND-EQUITY> 681,118
<SALES> 632,228
<TOTAL-REVENUES> 632,228
<CGS> 384,206
<TOTAL-COSTS> 384,206
<OTHER-EXPENSES> 130,468
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<INTEREST-EXPENSE> 4,868
<INCOME-PRETAX> 116,774
<INCOME-TAX> 39,703
<INCOME-CONTINUING> 77,071
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
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<EPS-PRIMARY> 0.87
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