SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended April 2, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-5075
EG&G, Inc.
(Exact name of registrant as specified in its charter)
Massachusetts 04-2052042
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
45 William Street, Wellesley, Massachusetts 02181
(Address of principal executive offices)(Zip Code)
(617) 237-5100
(Registrant's telephone number, including area code)
NONE
(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
------ ------
Number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date:
Class Outstanding at April 30, 1995
----- -----------------------------
Common Stock, $1 par value 53,141,000
(Excluding treasury shares)
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
EG&G, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ended April 2, 1995 and April 3, 1994
(Unaudited)
---------
<TABLE>
<CAPTION>
(In Thousands Except Per Share Data)
----------------------------------
Three Months Ended
--------------------
April 2, April 3,
1995 1994
--------- --------
<S> <C> <C>
Sales:
Products $196,380 $173,412
Services 141,850 152,335
-------- --------
Total Sales 338,230 325,747
-------- --------
Costs and Expenses:
Cost of sales:
Products 129,283 113,940
Services 123,856 132,734
-------- --------
Total cost of sales 253,139 246,674
Research and development expenses 10,774 9,517
Selling, general and
administrative expenses 58,644 56,881
-------- --------
Total Costs and Expenses 322,557 313,072
-------- --------
Operating Income From Continuing Operations 15,673 12,675
Other Income (Expense), Net (Note 2) (200) (21)
-------- --------
Income From Continuing Operations
Before Income Taxes 15,473 12,654
Provision for Income Taxes 6,121 4,841
-------- --------
Income From Continuing Operations 9,352 7,813
Income From Discontinued Operations,
Net ofIncome Taxes (Note 3) 4,337 6,540
-------- --------
Net Income $ 13,689 $ 14,353
======== ========
</TABLE>
<PAGE>
EG&G, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS (Continued)
For the Three Months Ended April 2, 1995 and April 3, 1994
(Unaudited)
---------
<TABLE>
<CAPTION>
(In Thousands Except Per Share Data)
----------------------------------
Three Months Ended
--------------------
April 2, April 3,
1995 1994
--------- --------
<S> <C> <C>
Earnings Per Share:
Income From Continuing Operations $.17 $.14
Income From Discontinued Operations,
Net ofIncome Taxes .08 .12
---- ----
Net Income $.25 $.26
==== ====
Cash Dividends Per Common Share $.14 $.14
==== ====
Weighted Average Shares of
Common Stock Outstanding 54,413 55,721
</TABLE>
The accompanying unaudited notes are an integral part of these consolidated
financial statements.
<PAGE>
EG&G, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
As of April 2, 1995 and January 1, 1995
(Dollars in Thousands Except Per Share Data)
------------------------------------------
<TABLE>
<CAPTION>
April 2, January 1,
1995 1995
-------- ----------
<S> <C> <C>
(Unaudited)
Current assets:
Cash and cash equivalents $ 76,624 $ 66,424
Accounts receivable (Note 4) 216,767 226,268
Inventories (Note 5) 123,833 123,299
Other (Note 7) 64,727 56,635
Net assets of discontinued operations (Note 3) - 8,852
-------- --------
Total Current Assets 481,951 481,478
-------- --------
Property, Plant and Equipment:
At cost (Note 6) 380,426 364,801
Accumulated depreciation and amortization (251,610) (243,139)
-------- --------
Net Property, Plant and Equipment 128,816 121,662
-------- --------
Investments (Note 7) 12,161 16,515
Intangible Assets (Note 8) 132,702 127,312
Other Assets (Note 8) 54,184 46,162
-------- --------
Total Assets $809,814 $793,129
======== ========
</TABLE>
<PAGE>
EG&G, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (Continued)
As of April 2, 1995 and January 1, 1995
(Dollars in Thousands Except Per Share Data)
------------------------------------------
<TABLE>
<CAPTION>
April 2, January 1,
1995 1995
-------- ----------
<S> <C> <C>
Current Liabilities:
Short-term debt $ 84,524 $ 59,988
Accounts payable 65,280 66,132
Accrued restructuring costs (Note 9) 17,299 21,532
Accrued expenses (Note 10) 134,771 134,170
Net liabilities of
discontinued operations (Note 3) 1,962 -
-------- --------
Total Current Liabilities 303,836 281,822
-------- --------
Long-Term Liabilities 69,050 65,941
-------- --------
Contingencies
Stockholders' Equity:
Preferred stock - $1 par value, authorized
1,000,000 shares; none outstanding - -
Common stock - $1 par value, authorized
100,000,000 shares;
issued 60,102,000 shares 60,102 60,102
Retained earnings 465,153 459,738
Cumulative translation adjustments 26,586 10,785
Unrealized gain on marketable
investments (Note 7) 2,154 3,337
Cost of shares held in treasury;
6,961,000 shares at April 2, 1995 and
4,978,000 shares at January 1, 1995 (117,067) (88,596)
-------- --------
Total Stockholders' Equity 436,928 445,366
-------- --------
Total Liabilities and Stockholders' Equity $809,814 $793,129
======== ========
</TABLE>
The accompanying unaudited notes are an integral part of these consolidated
financial statements.
<PAGE>
EG&G, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Three Months Ended April 2, 1995 and April 3, 1994
(Unaudited)
---------
<TABLE>
<CAPTION>
(In Thousands)
------------
Three Months Ended
---------------------
April 2, April 3,
1995 1994
-------- --------
<S> <C> <C>
Cash Flows Provided by (Used in) Operating Activities:
Net income $ 13,689 $ 14,353
Deduct net income from discontinued operations (4,337) (6,540)
-------- --------
Income from continuing operations 9,352 7,813
Adjustments to reconcile income from
continuing operations to net cash provided by
(used in) continuing operations:
Depreciation and amortization 8,727 8,815
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 12,737 (1,184)
Decrease (increase) in inventories 2,476 (8,275)
Decrease in accounts payable (1,964) (1,649)
Decrease in accrued restructuring costs (4,233) -
Decrease in accrued expenses (1,658) (1,854)
Change in prepaid and deferred taxes (2,634) (186)
Change in prepaid expenses and other (8,885) (17,295)
-------- --------
Net Cash Provided by (Used in) Continuing Operations 13,918 (13,815)
Net Cash Provided by Discontinued Operations 15,151 10,311
-------- --------
Net Cash Provided by (Used in) Operating Activities 29,069 (3,504)
-------- --------
Cash Flows Used in Financing Activities:
Capital expenditures (9,217) (6,977)
Proceeds from sales of investment securities 2,307 1,877
Other (576) 50
-------- --------
Net Cash Used in Investing Activities (7,486) (5,050)
-------- --------
</TABLE>
<PAGE>
EG&G, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
For the Three Months Ended April 2, 1995 and April 3, 1994
(Unaudited)
---------
<TABLE>
<CAPTION>
(In Thousands)
------------
Three Months Ended
---------------------
April 2, April 3,
1995 1994
-------- --------
<S> <C> <C>
Cash Flows Used in Financing Activities:
Increase in commercial paper 21,751 7,960
Other debt proceeds 2,219 1,616
Purchases of common stock (28,615) (19,139)
Cash dividends (7,721) (7,855)
Other (409) 925
-------- --------
Net Cash Used in Financing Activities (12,775) (16,493)
-------- --------
Effect of exchange rate changes on cash
and cash equivalents 1,392 168
-------- --------
Net Increase (Decrease) in Cash and Cash Equivalents 10,200 (24,879)
Cash and cash equivalents at beginning of period 66,424 72,185
-------- --------
Cash and cash equivalents at end of period $ 76,624 $ 47,306
======== ========
</TABLE>
The accompanying unaudited notes are an integral part of these consolidated
financial statements.
<PAGE>
EG&G, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Basis of Presentation
- --------------------------
The consolidated financial statements included herein have been prepared
by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. The
Company believes, however, that the disclosures are adequate to make the
information presented not misleading. It is suggested that these
consolidated financial statements be read in conjunction with the
financial statements and the notes thereto included in the Company's
latest annual report on Form 10-K. The balance sheet amounts as of
January 1, 1995 in this report were extracted from the Company's audited
1994 financial statements included in the latest annual report on
Form 10-K.
In the opinion of management, the unaudited consolidated financial
statements included herein contain all adjustments, consisting only of
normal recurring accruals, necessary to present fairly the financial
position as of April 2, 1995 and the results of operations for the three
months ended April 2, 1995 and April 3, 1994 and the cash flows for the
three months then ended. The results of operations are not necessarily
to be considered indicative of the results for the entire year.
The Company changed its method of depreciation for certain classes of
plant and equipment purchased after January 1, 1995 from an accelerated
method to the straight-line method for financial reporting purposes.
The Company believes that the straight-line method more appropriately
reflects the timing of the economic benefits to be received from these
assets, which consist mainly of manufacturing equipment. The Company
also changed its convention for calculating depreciation expense during
the year in which an asset is acquired. Previously, the Company used
the half-year convention; starting in 1995, the Company commences
depreciation in the month the asset is placed in service. The effect of
applying these new methods in the first quarter of 1995 was to reduce
depreciation expense by $1.7 million, and to increase income from
continuing operations and net income by $1 million and net income per
share by $.02. The $1.7 million represents the difference between
current quarter depreciation expense under the old and new methods.
<PAGE>
EG&G, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(2) Other Income (Expense), Net
- --------------------------------
Other income (expense), net, consisted of the following:
<TABLE>
<CAPTION>
(In Thousands)
------------
Three Months Ended
---------------------
April 2, April 3,
1995 1994
-------- --------
<S> <C> <C>
Interest and dividend income $ 1,059 $ 839
Interest expense (1,593) (965)
Gains (losses) on investments, net 900 (20)
Other (566) 125
-------- --------
$ (200) $ (21)
======== ========
</TABLE>
(3) Discontinued Operations
- ----------------------------
The former Department of Energy (DOE) Support segment is presented as
discontinued operations in accordance with Accounting Principles Board
Opinion No. 30.
Summary operating results of the discontinued operations were as follows:
<TABLE>
<CAPTION>
(In Thousands)
------------
Three Months Ended
--------------------
April 2, April 3,
1995 1994
-------- --------
<S> <C> <C>
Sales $246,154 $350,739
Costs and expenses 239,481 340,678
-------- --------
Income from discontinued
operations before income taxes 6,673 10,061
Provision for income taxes 2,336 3,521
-------- --------
Income from discontinued
operations, net of income taxes $ 4,337 $ 6,540
======== ========
</TABLE>
<PAGE>
EG&G, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Net assets (liabilities) of discontinued operations consisted of the
following:
<TABLE>
<CAPTION>
(In Thousands)
------------
April 2, January 1,
1995 1995
-------- ----------
<S> <C> <C>
Accounts receivable, primarily
unbilled $ 5,740 $15,717
Operating current liabilities (7,702) (6,934)
Other current assets - 69
------- -------
$(1,962) $ 8,852
======= =======
</TABLE>
(4) Accounts Receivable
- -----------------------
Accounts receivable as of April 2, 1995 and January 1, 1995 included
unbilled receivables of $50 million and $57 million, respectively, due
primarily from U.S. Government agencies. Accounts receivable were net
of reserves for doubtful accounts of $5.4 million and
$5.8 million, respectively.
(5) Inventories
- ----------------
Inventories consisted of the following:
<TABLE>
<CAPTION>
(In Thousands)
------------
April 2, January 1,
1995 1995
-------- ----------
(S> <C> <C>
Finished goods $ 33,279 $ 35,304
Work in process 32,226 28,551
Raw materials 58,328 59,444
-------- --------
$123,833 $123,299
======== ========
</TABLE>
(6) Property, Plant and Equipment, at Cost
- -------------------------------------------
Property, plant and equipment consisted of the following:
<TABLE>
<CAPTION>
(In Thousands)
------------
April 2, January 1,
1995 1995
-------- ----------
<S> <C> <C>
Land $ 17,320 $ 15,877
Buildings and leasehold improvements 101,902 95,938
Machinery and equipment 261,204 252,986
-------- --------
$380,426 $364,801
======== ========
</TABLE>
<PAGE>
EG&G, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(7) Investments
- ----------------
Investments consisted of the following:
<TABLE>
<CAPTION>
(In Thousands)
------------
April 2, January 1,
1995 1995
-------- ----------
<S> <C> <C>
Marketable investments $12,207 $14,187
Other investments 5,821 6,330
Joint venture investments 5,906 5,314
------- -------
23,934 25,831
Less investments classified
as other current assets (11,773) (9,316)
------- -------
$12,161 $16,515
======= =======
</TABLE>
At April 2, 1995, marketable investments, all classified as available for
sale, had an aggregate market value of $12.2 million and gross unrealized
holding gains of $3.3 million. Unrealized holding gains, net of deferred
taxes, of $2.2 million and $3.3 million were reported as a separate
component of stockholders' equity at April 2, 1995 and January 1, 1995,
respectively. In the first quarter of 1995, proceeds and gross realized
gains from sales of available-for-sale securities were $1.5 million and
$1.4 million, respectively. Average cost was the basis for computing the
realized gains. Marketable investments of $6 million and other
investments of $5.8 million were classified as other current assets at
April 2, 1995.
(8) Intangible and Other Assets
- --------------------------------
The increase in intangible assets resulted from the effect of translating
goodwill denominated in non-U.S. currencies at current exchange rates,
partially offset by current year amortization.
The majority of the increase in other assets was due to an increase in
prepaid pension expense.
(9) Accrued Restructuring Costs
- --------------------------------
The decrease in accrued restructuring costs resulted from cash outlays of
$4.2 million in the first quarter of 1995, mainly for employee
termination costs.
<PAGE>
EG&G, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(10) Accrued Expenses
- ----------------------
Accrued expenses consisted of the following:
<TABLE>
<CAPTION>
(In Thousands)
------------
April 2, January 1,
1995 1995
-------- ----------
<S> <C> <C>
Payroll $ 13,045 $ 12,789
Employee benefits 46,894 48,535
Federal, non-U.S. and state
income taxes 23,549 17,243
Other 51,283 55,603
-------- --------
$134,771 $134,170
======== ========
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------
EG&G, INC. AND SUBSIDIARIES
Results of Operations
---------------------
The following industry segment information is presented as an aid to a
better understanding of the Company's operating results:
<TABLE>
<CAPTION>
(In Thousands)
------------
Three Months Ended
--------------------------------
April 2, April 3, Increase
1995 1994 (Decrease)
-------- -------- --------
<S> <C> <C> <C>
Sales:
Technical Services $149,165 $156,421 $(7,256)
Instruments 69,842 62,855 6,987
Mechanical Components 59,790 56,039 3,751
Optoelectronics 59,433 50,432 9,001
-------- -------- -------
$338,230 $325,747 $12,483
======== ======== =======
Operating Income From Continuing
Operations:
Technical Services $ 11,110 $ 12,299 $(1,189)
Instruments 3,244 534 2,710
Mechanical Components 6,019 3,507 2,512
Optoelectronics 2,320 3,550 (1,230)
General Corporate Expenses (7,020) (7,215) 195
-------- -------- -------
$ 15,673 $ 12,675 $ 2,998
======== ======== =======
</TABLE>
The discussion that follows is a summary analysis of the major changes in
operating results by industry segment that occurred for the three months
ended April 2, 1995 compared to the three months ended April 3, 1994.
Sales
Sales from continuing operations were $338 million in the first quarter of
1995, a 4% increase over the 1994 level. In Technical Services, the
$7.3 million decrease was primarily due to reduced government contract
funding, including the phasedown of the Superconducting Super Collider
Laboratory contract during 1995. Partially offsetting this decrease were
increased billings from the chemical weapons disposal contract at Tooele,
which is now in its testing phase. Instruments sales increased
$7 million primarily due to higher security instruments sales
($3.9 million) and the effects of changes in foreign exchange rates,
offset partially by a $2 million decrease due to the divestiture of a
product line under the 1994 repositioning plan. Higher demand for
<PAGE>
EG&G, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
products in the transportation, industrial sealing and card guide
businesses resulted in the $3.8 million increase in Mechanical Components
sales. In Optoelectronics, the $9 million increase was due primarily to
$6.4 million of sales of IC Sensors, acquired at the end of the third
quarter of 1994, and higher shipments of flash products. These increases
were partially offset by decreases due to the completion of a government
contract in September 1994 and lower sales of power supplies.
Operating Income From Continuing Operations
Operating income from continuing operations was $15.7 million in the first
quarter of 1995, a 24% increase over 1994. In Technical Services, the
$1.2 million decrease resulted primarily from an estimated provision for a
legal judgment and start-up costs for the environmental services and
systems business. These decreases were partially offset by the effect
of a contract adjustment relating to work performed in 1994. The
Instruments $2.7 million increase was primarily due to cost reductions of
$2.3 million, with $1.5 million attributable to the 1994 repositioning
plan. The profit on increased sales in this segment was partially offset
by the effects of changes in foreign exchange rates. The Mechanical
Components increase of $2.5 million resulted primarily from higher sales,
lower receivable and inventory provisions and $0.4 million of cost
reductions resulting from the 1994 repositioning plan. The $1.2 million
decrease in Optoelectronics resulted primarily from increased research and
development expenses for the amorphous silicon program, completion of a
government contract in 1994 and lower sales of power supplies. These
decreases were partially offset by cost reductions of $0.4 million
resulting from the 1994 repositioning plan. IC Sensors' operations
resulted in a small loss in 1995 primarily due to manufacturing delays and
planned significant investment in research and development. The $0.2
million decrease in general corporate expenses was the result of cost
reductions under the 1994 repositioning plan. The net change in other
income (expense) was due to higher foreign exchange transaction losses
partially offset by investment gains.
Depreciation Change: The Company changed its method of depreciation for
certain classes of plant and equipment purchased after January 1, 1995
from an accelerated method to the straight-line method for financial
reporting purposes. The Company believes that the straight-line method
more appropriately reflects the timing of the economic benefits to be
received from these assets, which consist mainly of manufacturing
equipment. The Company also changed its convention for calculating
depreciation expense during the year in which an asset is acquired.
Previously, the Company used the half-year convention; starting in 1995,
the Company commences depreciation in the month the asset is placed in
service. The effect of applying these new methods in the first quarter of
1995 was to reduce depreciation expense by $1.7 million, and to increase
income from continuing operations and net income by $1 million and net
income per share by $.02. The $1.7 million represents the difference
between current quarter depreciation expense under the old and new
methods. Most of this difference occurred in the Optoelectronics segment.
Depreciation and amortization for the first quarter of 1995 was
approximately the same as in the first quarter of 1994 because the effect
of the changes in methods was offset by the effect of higher capital
expenditures and the inclusion of IC Sensors' depreciation in 1995.
<PAGE>
EG&G, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Discontinued Operations: Income from discontinued operations, net of
income taxes, was $2.2 million below the 1994 level. The decrease
reflected the expiration of the Idaho contract in September 1994 and the
absence in 1995 of a cost/productivity improvement fee at Rocky Flats.
The DOE has notified the Company of its intention to expedite the
procurement and award of the Rocky Flats contract, which is expected to
result in termination of the Company's contract on or about June 30, 1995.
Future sales and income from discontinued operations will continue to
decrease as the remaining DOE contracts expire in 1995 and 1996. Such
sales and income are dependent upon work scopes and fee pools that are
negotiated annually with the DOE.
Liquidity and Capital Resources
The Company's cash and cash equivalents increased $10.2 million in the
first quarter of 1995 while commercial paper borrowings, used primarily to
finance the common stock purchases described below, increased
$21.8 million. Net cash provided by continuing operations was
$13.9 million in the first quarter of 1995 compared to a use of
$13.8 million in the first quarter of 1994. In the first quarter of 1995,
accounts receivable were reduced by $12.7 million and inventories were
reduced by $2.5 million, reflecting the results of the aggressive working
capital reduction program. These reductions were partially offset by
$4.2 million in payments under the 1994 repositioning plan. In addition,
the Company's prepaid funding of its pension plan, which the Company
elected in both 1994 and 1995 to effect in the first quarter for the
entire year, was $5.3 million lower in the first quarter 1995 as compared
to 1994. The net cash provided by discontinued operations in the first
quarter of 1995 was greater than in 1994 due to a reduction in
receivables.
Under the 1994 repositioning plan, cash outlays for the first quarter of
1995 were $4.2 million, mainly for employee termination costs, bringing
the total spent under the plan to slightly over $8 million. Future cash
outlays of $17.3 million are expected to be incurred mainly in 1995.
During the first quarter of 1995, the net work force reduction was 150
employees, bringing the total reduction to 350 employees to date. The
repositioning plan calls for a net work force reduction of approximately
800 employees in continuing operations. The actions taken resulted in
pre-tax savings of $2.5 million during the first quarter of 1995.
Capital expenditures during the first quarter of 1995 were $9.2 million,
an increase of $2.2 million over the 1994 level. Capital expenditures in
1995 are expected to exceed $80 million, more than twice the 1994 level.
These increases support new product development initiatives primarily in
the Optoelectronics segment. Depreciation expense in 1995 is projected to
be higher than in 1994 due to the higher level of capital expenditures.
During the first quarter of 1995, the Company purchased approximately two
million shares of common stock at a cost of $28.6 million under a stock
repurchase program. As of April 2, 1995, the Company had authorization to
purchase approximately 11.3 million additional shares.
<PAGE>
Exhibits
--------
EG&G, INC. AND SUBSIDIARIES
Exhibit 18 - Letter re change in accounting principle
Exhibit 27 - Financial data schedule
<PAGE>
PART II. OTHER INFORMATION
EG&G, INC. AND SUBSIDIARIES
Item 4. Results of Votes of Security Holders
------------------------------------
(a) The Company's annual meeting of stockholders was held on
April 25, 1995.
(b) Proxies for the meeting were solicited pursuant to Regulation
14A, and there were no solicitations in opposition to
management's nominees for Directors. All such nominees were
elected, and the number of Directors was fixed at ten.
(c) The stockholders voted 42,892,666 shares for and 1,192,424
shares against, with 258,938 shares abstaining and 3,179,568
shares not voting, on a proposal calling for the amendment of
the Company's articles of organization to provide for the
declassification of the Board of Directors commencing with the
Annual Meeting of Stockholders in 1996.
(d) The stockholders voted 17,249,719 shares for and 25,056,845
shares against, with 2,037,464 shares abstaining and 3,179,568
shares not voting, on a stockholder proposal recommending that
all future non-employee directors not be granted pension
benefits and that current non-employee directors voluntarily
relinquish their pension benefits.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits incorporated by reference from Part I herein
Exhibit 18 - Letter re change in accounting principle
Exhibit 27 - Financial data schedule
(b) Reports on Form 8-K
Report on Form 8-K dated January 25, 1995 was filed with the
commission reporting that the Company's Board of Directors
adopted a new Shareholder Rights Plan.
Report on Form 8-K dated January 25, 1995 was filed with the
commission reporting that the Company's Board of Directors
authorized the purchase of 10 million shares of the Company's
common stock in addition to the 3.3 million shares remaining
unpurchased under similar authorization dated October 27, 1993.
<PAGE>
EG&G, INC. AND SUBSIDIARIES
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.
EG&G, Inc.
By /s/ Thomas J. Sauser
-------------------------------
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date May 15, 1995
------------
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> APR-02-1995
<CASH> 76,624
<SECURITIES> 0
<RECEIVABLES> 216,767
<ALLOWANCES> 5,376
<INVENTORY> 123,833
<CURRENT-ASSETS> 481,951
<PP&E> 380,426
<DEPRECIATION> 251,610
<TOTAL-ASSETS> 809,814
<CURRENT-LIABILITIES> 303,836
<BONDS> 0
<COMMON> 60,102
0
0
<OTHER-SE> 376,826
<TOTAL-LIABILITY-AND-EQUITY> 809,814
<SALES> 338,230
<TOTAL-REVENUES> 338,230
<CGS> 129,283
<TOTAL-COSTS> 253,139
<OTHER-EXPENSES> 69,418
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,593
<INCOME-PRETAX> 15,473
<INCOME-TAX> 6,121
<INCOME-CONTINUING> 9,352
<DISCONTINUED> 4,337
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,689
<EPS-PRIMARY> .25
<EPS-DILUTED> .25
</TABLE>
May 15, 1995
EG&G, Inc.
45 William Street
Wellesley, MA 02181
Re: Form 10-Q Report for the quarter ended April 2, 1995
Gentlemen:
This letter is written to meet the requirements of Regulation S-K
calling for a letter from a registrant's independent accountants
whenever there has been a change in accounting principle or practice.
We have been informed that, as of January 2, 1995, the Company changed
from an accelerated method of depreciation for certain classes of plant
and equipment purchased after January 1, 1995 to the straight-line
method for financial statement purposes. In addition, the Company also
changed its convention for calculating depreciation expense during the
year in which an asset is acquired. Previously, the Company used the
half-year convention; starting in 1995, the Company will commence
depreciation in the month the asset is placed in service. According to
the management of the Company, these changes were made to more
appropriately reflect the timing of the economic benefits to be received
from these assets, which consist mainly of manufacturing equipment.
A complete coordinated set of financial and reporting standards for
determining the preferability of accounting principles among acceptable
alternative principles has not been established by the accounting
profession. Thus, we cannot make an objective determination of whether
the change in accounting described in the preceding paragraph is to a
preferable method. However, we have reviewed the pertinent factors,
including those related to financial reporting, in this particular case
on a subjective basis, and our opinion stated below is based on our
determination made in this manner.
We are of the opinion that the Company's change in method of accounting
is to an acceptable alternative method of accounting, which based upon
the reasons stated for the change and our discussions with you, is also
preferable under the circumstances in this particular case. In arriving
at this opinion, we have relied on the business judgment and business
planning of your management.
We have not audited the application of this change to the financial
statements of any period subsequent to January 1, 1995. Further we have
not examined and do not express any opinion with respect to your
financial statements for the three months ended April 2, 1995.
Very truly yours,
/s/Arthur Andersen LLP
