UNITED STATES
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 June 30, 1996
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 July 28, 1996
----- ----------------------------
Common Stock, $1 par value 47,312,000
(Excluding treasury shares)<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
EG&G, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
For the Three and Six Months Ended June 30, 1996 and July 2, 1995
(Unaudited)
---------
<TABLE>
<CAPTION>
(In Thousands Except Per Share Data)
----------------------------------
Three Months Ended Six Months Ended
------------------- -------------------
June 30, July 2, June 30, July 2,
1996 1995 1996 1995
-------- ------- -------- -------
<S>
Sales: <C> <C> <C> <C>
Products $216,221 $207,300 $424,222 $403,680
Services 139,686 134,951 278,476 276,801
-------- -------- -------- --------
Total Sales 355,907 342,251 702,698 680,481
-------- -------- -------- --------
Costs and Expenses:
Cost of sales:
Products 137,712 135,309 269,637 264,592
Services 122,368 116,222 246,824 240,078
-------- -------- -------- --------
Total cost of sales 260,080 251,531 516,461 504,670
Research and development expenses 11,414 9,587 22,375 20,361
Selling, general and administrative
expenses 62,999 60,698 122,523 119,342
-------- -------- -------- --------
Total Costs and Expenses 334,493 321,816 661,359 644,373
-------- -------- -------- --------
Operating Income From Continuing
Operations 21,414 20,435 41,339 36,108
Other Income (Expense), Net (Note 2) (1,059) (167) (2,954) (367)
-------- -------- -------- --------
Income From Continuing Operations
Before Income Taxes 20,355 20,268 38,385 35,741
Provision for Income Taxes 6,212 7,925 12,360 14,046
-------- -------- -------- --------
Income From Continuing Operations 14,143 12,343 26,025 21,695
Income From Discontinued Operations,
Net of Income Taxes (Note 3) 1,496 4,033 2,396 8,370
-------- -------- -------- --------
Net Income $ 15,639 $ 16,376 $ 28,421 $ 30,065
======== ======== ======== ========
</TABLE>
2<PAGE>
EG&G, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
For the Three and Six Months Ended June 30, 1996 and July 2, 1995
(Unaudited)
---------
<TABLE>
<CAPTION>
(In Thousands Except Per Share Data)
----------------------------------
Three Months Ended Six Months Ended
------------------ ------------------
June 30, July 2, June 30, July 2,
1996 1995 1996 1995
-------- ------- -------- -------
<S>
Earnings Per Share: <C> <C> <C> <C>
Continuing Operations $.30 $.23 $.55 $.40
Discontinued Operations .03 .08 .05 .16
---- ---- ---- ----
Net Income $.33 $.31 $.60 $.56
==== ==== ==== ====
Cash Dividends Per Common Share $.14 $.14 $.28 $.28
==== ==== ==== ====
Weighted Average Shares of Common
Stock Outstanding 47,424 52,881 47,527 53,649
</TABLE>
The accompanying unaudited notes are an integral part of these consolidated
financial statements.
3<PAGE>
EG&G, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
As of June 30, 1996 and December 31, 1995
(Dollars in Thousands Except Per Share Data)
------------------------------------------
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------- -----------
(Unaudited)
---------
<S>
Current assets: <C> <C>
Cash and cash equivalents $ 69,794 $ 76,204
Accounts receivable (Note 4) 219,069 211,903
Inventories (Note 5) 125,918 114,199
Other (Note 7) 70,704 66,380
-------- --------
Total Current Assets 485,485 468,686
-------- --------
Property, Plant and Equipment:
At cost (Note 6) 447,479 417,566
Accumulated depreciation and amortization (274,768) (270,026)
-------- --------
Net Property, Plant and Equipment 172,711 147,540
-------- --------
Investments (Note 7) 13,105 16,072
Intangible Assets (Note 8) 115,371 123,421
Other Assets 50,724 48,196
-------- --------
Total Assets $837,396 $803,915
======== ========
</TABLE>
4<PAGE>
EG&G, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
As of June 30, 1996 and December 31, 1995
(Dollars in Thousands Except Per Share Data)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------- -----------
(Unaudited)
---------
<S>
Current Liabilities: <C> <C>
Short-term debt $ 46,237 $ 5,275
Accounts payable 78,309 72,759
Accrued expenses (Note 9) 156,053 168,671
Net liabilities of discontinued operations
(Note 3) 6,642 3,746
-------- --------
Total Current Liabilities 287,241 250,451
-------- --------
Long-Term Debt 115,079 115,222
Long-Term Liabilities 68,820 71,296
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 513,234 498,181
Cumulative translation adjustments 20,863 28,679
Net unrealized gain on marketable
investments (Note 7) 491 244
Cost of shares held in treasury;
12,805,000 shares at June 30, 1996 and
12,492,000 shares at December 31, 1995 (228,434) (220,260)
-------- --------
Total Stockholders' Equity 366,256 366,946
-------- --------
Total Liabilities and Stockholders' Equity $837,396 $803,915
======== ========
</TABLE>
The accompanying unaudited notes are an integral part of these consolidated
financial statements.
5<PAGE>
EG&G, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 1996 and July 2, 1995
(Unaudited)
---------
<TABLE>
<CAPTION>
(In Thousands)
------------
Six Months Ended
-----------------------
June 30, July 2,
1996 1995
-------- --------
<S>
Cash Flows Provided by Operating Activities: <C> <C>
Net income $ 28,421 $ 30,065
Deduct net income from discontinued operations (2,396) (8,370)
-------- --------
Income from continuing operations 26,025 21,695
Adjustments to reconcile income from continuing
operations to net cash provided by continuing
operations:
Depreciation and amortization 18,270 18,580
Changes in assets and liabilities:
Decrease (increase) in accounts receivable (8,654) 22,688
Decrease (increase) in inventories (13,234) 5,577
Increase in accounts payable 6,050 2,412
Decrease in accrued expenses (11,107) (5,353)
Change in prepaid and deferred taxes (1,477) (1,657)
Change in prepaid expenses and other (9,395) (5,731)
-------- --------
Net Cash Provided by Continuing Operations 6,478 58,211
Net Cash Provided by Discontinued Operations 5,292 19,124
-------- --------
Net Cash Provided by Operating Activities 11,770 77,335
-------- --------
</TABLE>
6<PAGE>
EG&G, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 1996 and July 2, 1995
(Unaudited)
---------
<TABLE>
<CAPTION>
(In Thousands)
------------
Six Months Ended
----------------------
June 30, July 2,
1996 1995
-------- --------
<S>
Cash Flows Used in Investing Activities: <C> <C>
Capital expenditures (45,851) (26,928)
Proceeds from sales of investment securities 7,038 4,538
Other 2,804 (1,236)
-------- --------
Net Cash Used in Investing Activities (36,009) (23,626)
-------- --------
Cash Flows Provided by (Used in) Financing Activities:
Increase (decrease) in commercial paper 41,000 (4,911)
Other debt payments (226) (3,718)
Proceeds from issuance of common stock 3,820 160
Purchases of common stock (12,032) (36,193)
Cash dividends (13,330) (15,158)
Other 63 (550)
-------- --------
Net Cash Provided by (Used in) Financing
Activities 19,295 (60,370)
-------- --------
Effect of Exchange Rate Changes on Cash
and Cash Equivalents (1,466) 1,062
-------- --------
Net Decrease in Cash and Cash Equivalents (6,410) (5,599)
Cash and cash equivalents at beginning of period 76,204 66,424
-------- --------
Cash and cash equivalents at end of period $ 69,794 $ 60,825
======== ========
</TABLE>
The accompanying unaudited notes are an integral part of these consolidated
financial statements.
7<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. 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
December 31, 1995 in this report were extracted from the Company's
audited 1995 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 June 30, 1996 and the results of operations for
the three and six months ended June 30, 1996 and July 2, 1995 and the
cash flows for the six months then ended. The results of operations are
not necessarily to be considered indicative of the results for the
entire year.
Effective January 1, 1996, the Company adopted the provisions of
Statement of Financial Accounting Standards (SFAS) No. 123, Accounting
for Stock-Based Compensation. SFAS No. 123 requires companies to
account for the grant of stock options and other stock-based
compensation at fair value or to continue to account for them at
intrinsic value in accordance with Accounting Principles Board (APB)
Opinion No. 25 with disclosure of the effects of the fair value
accounting on compensation expense, net income and earnings per share on
a pro forma basis. The Company has elected to continue to apply APB
Opinion No. 25.
(2) Other Income (Expense), Net
- --------------------------------
Other income (expense), net, consisted of the following:
<TABLE>
<CAPTION>
(In Thousands)
------------
Three Months Ended Six Months Ended
------------------- ------------------
June 30, July 2, June 30, July 2,
1996 1995 1996 1995
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Interest income $ 820 $ 1,076 $ 1,775 $ 2,135
Interest expense (3,232) (1,967) (6,416) (3,560)
Gains (losses) on
investments, net 917 (155) 917 745
Other 436 879 770 313
------- -------- ------- -------
$(1,059) $ (167) $(2,954) $ (367)
======= ======= ======= =======
</TABLE>
8<PAGE>
EG&G, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(3) Discontinued Operations
- ---------------------------
The former Department of Energy (DOE) Support segment, which has
provided services under management and operations contracts, is
presented as discontinued operations in accordance with APB Opinion
No. 30.
Summary operating results of the discontinued operations were as follows:
<TABLE>
<CAPTION>
(In Thousands)
Three Months Ended Six Months Ended
------------------ -------------------
June 30, July 2, June 30, July 2,
1996 1995 1996 1995
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Sales $28,790 $277,137 $61,079 $523,291
Costs and expenses 26,488 270,933 57,393 510,414
------- -------- ------- --------
Income from discontinued
operations before
income taxes 2,302 6,204 3,686 12,877
Provision for income taxes 806 2,171 1,290 4,507
------- -------- ------- --------
Income from discontinued
operations, net of
income taxes $ 1,496 $ 4,033 $ 2,396 $ 8,370
======= ======== ======= ========
</TABLE>
Sales and income from discontinued operations decreased in 1996,
reflecting the expiration of the Rocky Flats and Nevada Test Site
contracts in 1995.
Net assets (liabilities) of discontinued operations consisted of the
following:
<TABLE>
<CAPTION>
(In Thousands)
------------
June 30, December 31,
1996 1995
-------- ------------
<S>
Accounts receivable, <C> <C>
primarily unbilled $ 2,050 $ 7,575
Operating current
liabilities (8,692) (11,439)
Other - 118
------- -------
$(6,642) $(3,746)
======= =======
</TABLE>
9<PAGE>
EG&G, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(4) Accounts Receivable
- ------------------------
Accounts receivable as of June 30, 1996 and December 31, 1995 included
unbilled receivables of $43 million and $44 million, respectively, which
were due primarily from U.S. Government agencies. Accounts receivable
were net of reserves for doubtful accounts of $5 million and $4.4 million
as of June 30, 1996 and December 31, 1995, respectively.
(5) Inventories
- ----------------
Inventories consisted of the following:
<TABLE>
<CAPTION>
(In Thousands)
------------
June 30, December 31,
1996 1995
-------- -----------
<S> <C> <C>
Finished goods $ 29,683 $ 28,540
Work in process 33,618 28,613
Raw materials 62,617 57,046
-------- --------
$125,918 $114,199
======== ========
</TABLE>
(6) Property, Plant and Equipment, at Cost
- -------------------------------------------
Property, plant and equipment consisted of the following:
<TABLE>
<CAPTION>
(In Thousands)
------------
June 30, December 31,
1996 1995
--------- -----------
<S> <C> <C>
Land $ 11,714 $ 12,003
Buildings and leasehold
improvements 112,973 108,254
Machinery and equipment 322,792 297,309
--------- --------
$447,479 $417,566
======== ========
</TABLE>
10<PAGE>
EG&G, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(7) Investments
- ----------------
Investments consisted of the following:
<TABLE>
<CAPTION>
(In Thousands)
------------
June 30, December 31,
1996 1995
--------- ------------
<S> <C> <C>
Marketable investments $ 8,839 $ 9,547
Other investments 984 1,396
Joint venture investments 4,463 7,349
------- -------
14,286 18,292
Less investments classified
as other current assets (1,181) (2,220)
------- -------
$13,105 $16,072
======= =======
</TABLE>
11<PAGE>
EG&G, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
At June 30, 1996, marketable investments, all classified as available for
sale, had an aggregate market value of $8.8 million and gross unrealized
holding gains of $0.8 million. Gross unrealized holding gains, net of
deferred taxes, of $0.5 million were reported as a separate component of
stockholders' equity at June 30, 1996. Other investments of $1 million
and $0.2 million of marketable investments were classified as other
current assets at June 30, 1996.
(8) Intangible Assets
- ----------------------
The decrease in intangible assets resulted primarily from current year
amortization and the effect of translating goodwill denominated in non-
U.S. currencies at current exchange rates.
(9) Accrued Expenses
- ---------------------
Accrued expenses consisted of the following:
<TABLE>
<CAPTION>
(In Thousands)
------------
June 30, December 31,
1996 1995
-------- ------------
<S> <C> <C>
Payroll and incentives $ 21,634 $ 28,660
Employee benefits 46,777 40,178
Federal, non-U.S. and
state income taxes 29,047 33,153
Other 58,595 66,680
-------- --------
$156,053 $168,671
======== ========
</TABLE>
12<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations
-------------------------------------------------------------
and Financial Condition
-----------------------
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 Six Months Ended
---------------------------- -----------------------------
June 30, July 2, Increase June 30, July 2, Increase
1996 1995 (Decrease) 1996 1995 (Decrease)
-------- -------- -------- -------- -------- --------
<S>
Sales: <C> <C> <C> <C> <C> <C>
Instruments $ 78,776 $ 71,333 $ 7,443 $152,357 $141,175 $ 11,182
Mechanical
Components 69,240 63,517 5,723 137,781 123,307 14,474
Optoelectronics 68,205 65,944 2,261 134,084 125,377 8,707
Technical
Services 139,686 141,457 (1,771) 278,476 290,622 (12,146)
-------- -------- ------- -------- -------- --------
$355,907 $342,251 $13,656 $702,698 $680,481 $ 22,217
======== ======== ======== ======== ======== ========
Operating Income From
Continuing Operations:
Instruments $ 9,457 $ 2,851 $ 6,606 $ 16,265 $ 6,095 $ 10,170
Mechanical
Components 8,130 7,118 1,012 15,357 13,137 2,220
Optoelectronics 864 6,314 (5,450) 4,979 8,634 (3,655)
Technical Services 9,113 11,426 (2,313) 17,563 22,536 (4,973)
General Corporate
Expenses (6,150) 7,274) 1,124 (12,825) (14,294) 1,469
-------- -------- ------- -------- ------- --------
$ 21,414 $ 20,435 $ 979 $ 41,339 $ 36,108 $ 5,231
======== ======== ======= ======== ======== ========
</TABLE>
The discussion that follows is a summary analysis of the majorchanges in
operating results by industry segment that occurred for the three and six
months ended June 30, 1996 compared to the three and six months ended
July 2, 1995.
13<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations
-------------------------------------------------------------
and Financial Condition
-----------------------
EG&G, INC. AND SUBSIDIARIES
Results of Operations
---------------------
Overview
Sales from continuing operations increased 4% for the second quarter of
1996 compared to 1995, while sales for the six months increased 3%. The
quarter increase reflected 8% growth in the three products segments
partially offset by a decrease in Technical Services sales. Operating
income from continuing operations increased 5% for the second quarter and
14% on a year-to-date basis. The improvements reflected the impact of
higher sales in the Instruments and Mechanical Components segments and
lower costs resulting from the Company s restructuring plan, partially
offset by decreases in Optoelectronics and Technical Services income.
Cost savings under the restructuring plan totaled $6 million for the
quarter and $12 million for the six months of 1996. This represents a $3
million increase for the quarter and a $6 million increase for the six
months over the savings achieved for the comparable periods in 1995.
14<PAGE>
EG&G, INC. AND SUBSIDIARIES
Management's Discussion and Analysis (Continued)
Instruments
Second Quarter
The $7.4 million sales increase resulted mainly from strong demand for
advanced explosives detection systems from airport and government
agencies. Partially offsetting the increase was a $2.2 million decrease
due to the divestiture of two product lines in 1995 and lower sales due
to the effect of changes in foreign exchange rates. The $6.6 million
increase in operating income resulted primarily from improved margins on
higher sales, as well as income from the expiration of a grant liability,
the favorable impact on export shipment margins caused by the weakening
of the Finnish markka and lower costs resulting from the restructuring plan.
Six Months
The $11.2 million sales increase resulted mainly from higher demand for
security systems and diagnostic products. These increases were partially
offset by a $4.4 million decrease due to the divestiture of two product
lines in 1995. Operating income increased $10.2 million from improved
margins on higher sales, lower costs resulting from the restructuring
plan, income from the expiration of a grant liability and the favorable
impact on export shipment margins caused by the weakening of the Finnish
markka.
Mechanical Components
Second Quarter
The continued recovery of the aerospace market and higher demand for
electromechanical and industrial process sealing products resulted in a
$5.7 million sales increase. The increase of $1 million in income
resulted from the margin on higher sales and lower costs resulting from
the restructuring plan partially offset by the recognition of projected
excess contract costs in the aircraft exhaust and ducting components
business.
Six Months
Higher demand for aerospace, industrial process sealing and
electromechanical products resulted in a $14.5 million sales increase.
The $2.2 million income increase resulted from the margin on higher sales
and lower costs from the restructuring plan partially offset by projected
excess contract costs.
Optoelectronics
Second Quarter
Sales were $2.3 million higher than last year as a result of higher
demand for infrared detection and camera products offset partially by
decreases caused by the divestiture of a product line in 1995 and
continued lower power supplies sales. Operating income decreased $5.5
million primarily as a result of production yield problems, inventory
reserve provisions and fixed asset adjustments in the micromachined
sensor business, projected excess contract costs and lower sales in the
power supplies business, planned increased research and development
expenses for the amorphous silicon program and a reserve for a components
business receivable. Partially offsetting these decreases were lower
costs resulting from the restructuring plan.
15<PAGE>
EG&G, INC. AND SUBSIDIARIES
Management's Discussion and Analysis (Continued)
Six Months
Sales increased $8.7 million due to higher demand for micromachined
sensors for the medical market, accelerometers for the automotive market,
infrared detectors and camera products. Partially offsetting the
increases were decreases caused by the divestiture of a product line in
1995 and lower power supplies sales. Income decreased $3.7 million as a
result of production yield problems, inventory reserve provisions and
fixed asset adjustments in the micromachined sensor business, planned
increased research and development expenses for the amorphous silicon
program and projected excess contract costs and lower sales in the power
supplies business. Partially offsetting these decreases were lower costs
resulting from the restructuring plan.
Technical Services
Second Quarter
The $5 million sales decrease in automotive operations was primarily due
to lower demand for stationary testing services and completion of a
testing contract at the end of the first quarter of 1996. Sales in
government services operations increased $3 million primarily as a result
of increased billings from the chemical weapons disposal contract and a
new contract for construction and maintenance services, partially offset
by the completion of two contracts in 1995. The $2.3 million decrease in
income was primarily the result of lower sales in the automotive
operations.
Six Months
The $9 million decrease in automotive operations sales resulted primarily
from lower demand for stationary testing services and completion of a
testing contract. The $3 million sales decrease in government services
operations was mainly due to the combined impact of reduced government
funding levels and the completion of two contracts in 1995. The profit
impact of the sales reduction, primarily in automotive operations,
partially offset by an estimated provision for a legal judgment recorded
in 1995, resulted in a $5 million decrease in operating income.
General Corporate Expenses
The decreases for the quarter and six months were due primarily to lower
costs as a result of the restructuring plan.
Other
The net increase of $0.9 million in other expense for the second quarter
was due to higher interest expense reflecting the issuance of $115
million of ten-year notes in the third quarter of 1995, partially offset
by investment gains in 1996. The six month increase of $2.6 million was
mainly due to higher interest expense. The effective tax rate of 32.2%
for the six months of 1996 was lower than the 39.3% rate in 1995
primarily due to lower anticipated repatriation costs and changes in the
geographical distribution of income in 1996.
16<PAGE>
EG&G, INC. AND SUBSIDIARIES
Management s Discussion and Analysis (Continued)
Discontinued Operations
Income from discontinued operations, net of income taxes, decreased for
the quarter and six months, reflecting the expiration of the Rocky Flats
and Nevada Test Site contracts in 1995. The Mound contract, the
Company's remaining management and operations contract with the DOE,
expires on September 30, 1996. Sales and income from the Mound contract
are dependent upon the work scope and fee pools that are negotiated
annually. In accordance with contract terms, the DOE may extend the
Mound contract, under existing terms and conditions, for up to an
additional year.
Financial Condition
-------------------
The Company's cash and cash equivalents decreased $6.4 million in the
first six months of 1996 while short-term debt increased $41 million,
mainly due to an increase in capital expenditures. Net cash provided by
continuing operating activities was $6.5 million in 1996 compared to
$58.2 million in 1995. The change in net cash resulted primarily from
increases in accounts receivable and inventories in 1996 compared to
decreases in 1995. The accounts receivable increase was mainly caused by
higher sales in the products segments and the timing of payments under
government contracts. Inventory levels were increased primarily for
anticipated sales. Although progress was not achieved in the first half
of 1996, the Company s program to reduce receivables and inventories
remains a management priority.
Discontinued operations generated cash of $5.3 million in the six months
of 1996 compared to $19.1 million in 1995, reflecting the expiration of
the Rocky Flats and Nevada Test Site contracts.
Capital expenditures were $45.9 million in the first six months of 1996,
an increase of $19 million over the same period in 1995. In 1996,
capital expenditures are expected to exceed the 1995 level by
approximately 50%. These increases support new product development
initiatives primarily in the Optoelectronics segment.
During the first six months of 1996, the Company purchased 531,000 shares
of its common stock through periodic purchases on the open market at a
cost of $12 million. As of June 30, 1996, the Company had authorization
to purchase 5.1 million additional shares. The pace of future purchases
will be dependent upon working capital reductions and cash utilization
alternatives.
In March 1996, the Company renegotiated its credit facilities with the
signing of two revolving credit agreements totaling $200 million. These
agreements consist of a $100 million, 364-day facility and a $100
million, five-year facility, which expires in March 2001. These
agreements serve primarily as backup facilities for the Company's
commercial paper borrowing program.
17<PAGE>
Exhibits
- --------
EG&G, INC. AND SUBSIDIARIES
Exhibit 27 - Financial data schedule
18<PAGE>
PART II. OTHER INFORMATION
EG&G, INC. AND SUBSIDIARIES
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits incorporated by reference from Part I herein
Exhibit 27 - Financial data schedule (submitted in electronic
format only)
(b) Reports on Form 8-K
There were no reports on Form 8-K filed for the three months
ended June 30, 1996.
19<PAGE>
EG&G, INC. AND SUBSIDIARIES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EG&G, Inc.
By /s/ John F. Alexander, II
-------------------------
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date August 7, 1996
--------------
20<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<CIK> 0000031791
<NAME> EG&G, INC.
<MULTIPLIER> 1000
<CURRENCY> US$
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-29-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 69,794
<SECURITIES> 0
<RECEIVABLES> 219,069
<ALLOWANCES> 4,991
<INVENTORY> 125,918
<CURRENT-ASSETS> 485,485
<PP&E> 447,479
<DEPRECIATION> 274,768
<TOTAL-ASSETS> 837,396
<CURRENT-LIABILITIES> 287,241
<BONDS> 115,079
0
0
<COMMON> 60,102
<OTHER-SE> 306,154
<TOTAL-LIABILITY-AND-EQUITY> 837,396
<SALES> 702,698
<TOTAL-REVENUES> 702,698
<CGS> 269,637
<TOTAL-COSTS> 516,461
<OTHER-EXPENSES> 144,898
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,416
<INCOME-PRETAX> 38,385
<INCOME-TAX> 12,360
<INCOME-CONTINUING> 26,025
<DISCONTINUED> 2,396
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 28,421
<EPS-PRIMARY> .60
<EPS-DILUTED> .60
</TABLE>
