<PAGE> 1
Rule 424(b)(1)
Reg. No. 33-63983
31,975 SHARES
ODETICS, INC.
CLASS A COMMON STOCK
-------------
This Prospectus relates to the offer by the stockholders named herein
under the caption "Selling Stockholders" (collectively, the "Selling
Stockholders") for sale to the public from time to time of up to 31,975 shares
(the "Shares") of Common Stock, $.10 par value per share (the "Class A Common
Stock"), of Odetics, Inc. (the "Company") held by the Selling Stockholders.
The Company will not receive any proceeds from the sale of the Shares.
The Common Stock is quoted on The Nasdaq National Market under the
symbol "ODETA." The closing price of the Class A Common Stock reported by The
Nasdaq National Market on November 16, 1995 was $9.00 per share. See "Price
Range of Common Stock and Dividend Policy."
The Company has two classes of Common Stock, Class A Common Stock,
which is offered hereby by the Selling Stockholders, and Class B Common Stock.
Except with respect to the election of directors, holders of Class A Common
Stock are entitled to cast 1/10th vote per share and holders of Class B Common
Stock are entitled to cast one vote per share with respect to all matters
submitted to a vote of stockholders and a matter will be deemed approved if a
majority of the votes cast are in favor of such matter. Holders of Class A
Common Stock, voting as a separate class, are entitled to elect 25% of the
directors of the Company (rounded up to the nearest whole number of directors)
and holders of Class B Common Stock, voting as a separate class, are entitled
to elect the balance of the directors. See "Description of Capital Stock."
The Company has been advised by the Selling Stockholders that all or a
portion of the Shares may be sold, directly or through brokers, from time to
time by the Selling Stockholders or by certain pledgees, donees, transferees or
other successors in interest. Such sales may be made in negotiated
transactions or in one or more transactions in the Nasdaq National Market or
otherwise at prices and terms prevailing at the time of sale. In connection
with such sales, the Selling Stockholders and any participating brokers or
dealers may be deemed to be "underwriters" of the Shares within the meaning of
the Securities Act of 1933, as amended. It is anticipated that usual and
customary brokerage fees will be paid by the Selling Stockholders in all
open-market transactions. The Company will bear substantially all other
expenses of this offering. See "Plan of Distribution."
The Company has informed the Selling Stockholders that the
anti-manipulation provisions of Rules 10b-6 and 10b-7 under the Securities
Exchange Act of 1934 may apply to their sales of the Shares and has furnished
each of the Selling Stockholders with a copy of these rules, as well as a copy
of certain interpretations thereof by the Securities and Exchange Commission.
The Company also has advised the Selling Stockholders of the requirement for
delivery of this Prospectus in connection with any sale of the Shares.
SEE "RISK FACTORS," BEGINNING ON PAGE 3, AND "RECENT DEVELOPMENTS,"
BEGINNING ON PAGE 6, FOR CERTAIN INFORMATION WHICH SHOULD BE CAREFULLY
CONSIDERED BEFORE PURCHASING THE SHARES OFFERED HEREBY.
-------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<S> <C> <C>
============================================================================================================
Proceeds to Selling
Price to Public(1) Stockholders(2)
- ------------------------------------------------------------------------------------------------------------
Per Share . . . . . . . . . . . . . . . . . . . . . . . . $9.00 $9.00
- ------------------------------------------------------------------------------------------------------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $287,775 $287,775
============================================================================================================
</TABLE>
(1) Based upon the closing price of the Class A Common Stock reported by
The Nasdaq National Market on November 16, 1995.
(2) The amount shown is without deduction for brokerage fees that may be
paid by the Selling Stockholders. The Company will bear other
offering expenses estimated at $5,600. The Company will not receive
any proceeds from the sale of the Shares.
The date of this Prospectus is November 16, 1995
<PAGE> 2
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance
therewith files reports, proxy or information statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information can be inspected and copied at the
public reference facilities maintained by the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, as well as at the following
regional offices: Seven World Trade Center, New York, New York 10048, and
Northwestern Atrium Center, 500 W. Madison Street, Chicago, Illinois 60661.
Copies of such material can be obtained from the Public Reference Section of
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates.
Additional information regarding the Company and the securities
offered hereby is contained in the Registration Statement of which this
Prospectus is a part, and the exhibits thereto, filed with the Commission under
the Securities Act of 1933, as amended (the "Securities Act"). For further
information pertaining to the Company and the securities offered hereby,
reference is made to the Registration Statement and the exhibits thereto, which
may be inspected without charge at, and copies thereof may be obtained at
prescribed rates from, the office of the Commission at Judiciary Plaza, 450
Fifth Street, Washington, D.C. 20549. Statements contained herein concerning
the provisions of any document are not necessarily complete and in each
instance reference is made to the copy of the document filed as an exhibit or
schedule to the Registration Statement. Each such statement is qualified in
its entirety by reference to the copy of the applicable documents filed with
the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission under
the Exchange Act (Commission File No. 0-10605) are incorporated in this
Prospectus by reference: (a) the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1995, as amended by the Company's Form 10-K/A filed
on September 25, 1995 with the Commission; and (b) the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1995.
In addition, any documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the securities
offered hereby shall be deemed to be incorporated by reference into this
Prospectus and to be a part of this Prospectus from the date of filing of such
document. Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents incorporated by reference (other than
exhibits to such documents that are not specifically incorporated by reference
in such documents). Written requests for such copies should be directed to
Gregory A. Miner, Vice President and Chief Financial Officer, Odetics, Inc.,
1515 South Manchester Avenue, Anaheim, California 92809-2907. Telephone
requests may be directed to Mr. Miner at (714) 774-5000.
2.
<PAGE> 3
THE COMPANY
Odetics, Inc. (the "Company") specializes in the design and
manufacture of systems and subsystems to automate the collection, storage,
distribution and management of information. The Company is organized into
divisions, each having primary responsibility for product development,
manufacturing and marketing of one or more of the Company's principal product
lines or services.
ATL Products, Inc., a wholly owned subsidiary of the Company (the "ATL
Products Division"), designs, develops, manufactures and markets automated
cartridge handling subsystems for integration by its customers into tape
libraries for the mid-range computer and client/server network markets. Tape
libraries allow computer users to mechanically store, retrieve and handle
removable cartridges used in mass data storage applications.
The Company's Broadcast Division is a leading supplier of automated
videotape cassette library management systems known as "cart machines." Cart
machines are used in broadcast television stations and satellite uplink
operations to automatically store, retrieve and televise commercials, news
posts and other television programming.
The Company's GYYR Division is a leading supplier of time-lapse
videotape cassette recorders ("VCRs"), digital image processing modules and
related products used in security and surveillance systems. Time-lapse VCRs
record individual video pictures at reduced frame rates resulting in time
compression during playback or at full video frame rates for real-time
continuous motion. Such systems are employed extensively for area monitoring
by banks, convenience stores, retailers and other businesses.
The Company is a leading supplier of digital data recorders used in
manned and unmanned space vehicles. Digital data recorders store data gathered
by on-board sensors prior to transmission of the data to ground receiving
stations. The Company's recorders are used as a computer mass memory system for
on-board computers used in the U.S. Space Shuttle program. Other representative
projects using the Company's data recorders are the French SPOT imaging
satellite and the U.S. Landsat, Galileo, Magellan and Hubble Space Telescope
projects.
The Company's ATL Products Division, Broadcast Division and GYYR
Division contributed approximately 18.5%, 15.7% and 36.1%, respectively, of the
Company's revenues for the fiscal year ended March 31, 1995. The balance of the
Company's revenues was contributed by the Company's other divisions. With the
exception of direct and indirect contract sales to the U.S. Government, during
the fiscal year ended March 31, 1995, no customer accounted for more than 10% of
the Company's revenues. Total direct and indirect contract sales to the U.S.
Government and certain foreign governmental agencies accounted for approximately
19% of the Company's revenues during the fiscal year ended March 31, 1995.
RISK FACTORS
In addition to the other information included or incorporated by
reference in this Prospectus, the following factors should be considered
carefully in evaluating the Company and its business before purchasing the
Shares offered hereby.
RELIANCE ON ATL PRODUCTS DIVISION
The Company's future results of operations and immediate prospects for
future growth will depend in large part on the continued development of the
market for mid-range computer and client/server network tape libraries and the
success of the ATL Products Division and its customers in serving this market.
Only a limited number of tape libraries incorporating the ATL Products
Division's automation subsystems have been sold, and there can be no assurance
that the ATL Products Division's customers will sell additional tape libraries
or will continue to purchase, market and support the ATL Products Division's
automation subsystems. See "Recent Developments." Management believes that
the continued development and future growth of the market for mid-range
computer and client/server network tape libraries will depend primarily upon
the success of computer equipment manufacturers, systems integrators and other
companies in developing applications software to meet the needs of users.
There can be no assurance that such market will continue to develop or grow.
3.
<PAGE> 4
ATL PRODUCTS DIVISION'S RELIANCE ON CERTAIN CUSTOMERS
The ATL Products Division sells modified versions of its ACL2640 and
its recently introduced ACL452 to Digital Equipment Corporation, which
accounted for approximately 27% of the ATL Products Division's sales in fiscal
1995. E-Systems, Inc. ("E-Systems"), previously the ATL Products Division's
largest customer, terminated its relationship with the Company in the third
quarter of fiscal 1995 and is no longer a significant customer. If Digital
Equipment Corporation also were to elect to discontinue its relationship with
the ATL Products Division for any reason, the ATL Products Division's business
and the future results of operations of the Company would be further adversely
affected.
RECENT TRENDS IN RESULTS OF OPERATIONS
The Company incurred a net loss of $4,678,000 during fiscal 1995 as
compared to net income of $1,822,000 in fiscal 1994. Although total revenues
increased during fiscal 1995 as compared to fiscal 1994, non-recurring charges
associated with the Company's dispute with E-Systems described below, along
with increased research and development programs and selling, general and
administrative expenses, resulted in the net loss. No assurance can be made
that the Company will be able to continue to increase its revenues or that
further losses will not occur.
In the third quarter of fiscal 1995, the Company announced that it
recorded a non-recurring charge of $4,393,000 for loss reserves for inventory,
accounts receivable and other expenses relating to a dispute with E-Systems, a
major customer that accounted for 7% of the Company's revenue in fiscal 1994
and 9% of its revenues in fiscal 1995 through December 31, 1994.
The Company's dispute with E-Systems impaired the Company's liquidity
and cash flow during fiscal 1995. In response to the E-Systems matter and in
an effort to improve its results of operations, the Company initiated a number
of cost-cutting measures, including early retirement incentives for its
associates and mandatory salary cuts. The measures contributed to additional
special charges of approximately $416,000 in the fourth quarter of fiscal 1995.
There can be no assurance that these measures will be successful, however, or
that further measures will not be required. There also can be no assurance
that the Company will not incur additional special charges in the future
relating to the E-Systems matter.
FLUCTUATIONS IN QUARTERLY RESULTS
The Company's results of operations also are subject to considerable
fluctuations from quarter to quarter due to changes in demand for the Company's
products and other factors, and there can be no assurance that the Company will
be profitable in any particular quarter. Demand for the Company's products in
each of the markets it serves can vary significantly from quarter to quarter
due to revisions in budgets or schedules for customer projects requiring the
Company's products, changes in demand for the customers' products which
incorporate or utilize the Company's products, ongoing "make-versus-buy"
decisions of the Company's customers and other factors beyond the Company's
control.
COMPETITION
The Company competes in each market it serves with numerous other
companies, many of which have far greater name recognition and financial,
technological, marketing and customer service resources than the Company. The
ATL Products Division competes in the mid-range computer tape library market
with Exabyte, IBM and Storage Technology, which are large integrated suppliers
of computer products. E-Systems, through its recently acquired GRAU Automation
subsidiary, also is expected to compete with the ATL Products Division.
Although certain other computer equipment manufacturers currently purchase
automation subsystems from the ATL Products Division, one or more of these
companies also may decide in the future to develop and sell their own
automation subsystems, which may compete with subsystems sold by the ATL
Products Division. The Broadcast Division's principal competitors are Sony
Corporation ("Sony"), Panasonic and Avid Corporation. The GYYR Division's
principal competitors are Panasonic, Toshiba, Sanyo and Sony. There can be no
assurance that the Company will be able to compete effectively in the markets
for its products.
4.
<PAGE> 5
TECHNOLOGICAL OBSOLESCENCE; PRODUCT DEFECTS
The markets served by the Company are characterized by rapid
technological advances, downward price pressure in the marketplace as
technologies mature, changes in customer requirements and frequent new product
introductions and enhancements. The Company's business requires substantial
ongoing research and development efforts and expenditures, and its future
success will depend on its ability to enhance its current products, reduce
product costs and develop and introduce new products that keep pace with
technological developments in response to evolving customer requirements. The
Company's failure to anticipate or respond adequately to technological
developments and changing customer requirements or the occurrence of
significant delays in new product development or introduction could result in a
loss of anticipated future revenues and impair the Company's competitiveness.
New products, when first released by the Company, may contain
undetected design faults and software errors, or "bugs" that, despite testing
by the Company, are discovered only after a product has been installed and used
by customers. There can be no assurance that faults or errors in the Company's
existing products or in new products introduced by the Company will not be
discovered in the future, causing delays in product introduction and shipments
or requiring design modifications that could adversely affect the Company's
competitive position and results of operations. In addition, there can be no
assurance that new products or product enhancements developed by the Company
will achieve market acceptance or, if successful, will not adversely impact
sales of the Company's existing products.
RELIANCE ON GOVERNMENT CONTRACT BUSINESS
During the fiscal years ended March 31, 1993, 1994 and 1995, direct
and indirect sales to the U.S. Government and certain foreign governmental
agencies pursuant to contracts accounted for approximately 36%, 27% and 19%,
respectively (22%, 18% and 12%, respectively, to the U.S. Government), of the
Company's revenues. Management expects the portion of the Company's total
revenues derived from government sales to continue to decline and is exploring
its options with respect to the information storage division.
The Company's backlog of unfulfilled firm orders was approximately
$21,600,000 at March 31, 1995, as compared with approximately $22,200,000 at
March 31, 1994. Pursuant to the customary terms of the Company's agreements
with government contractors and other customers, orders generally may be
cancelled or rescheduled by the customer. For these reasons, among others, the
Company's backlog at a particular date may not be indicative of its future
revenues.
RELIANCE ON CERTAIN SUPPLIERS
The Company purchases numerous parts, supplies and other components
from various independent suppliers, which the Company assembles into its
products. Any future disruptions in supply of suitable parts and components
from the Company's principal suppliers could have a material adverse effect on
the Company's business and results of operations.
POSSIBLE VOLATILITY OF STOCK PRICE
The trading price of the Company's Class A Common Stock from time to
time has fluctuated widely. The trading price of the Company's Class A Common
Stock may be subject to similar fluctuations in the future in response to
quarter-to-quarter variations in the Company's operating results, announcements
of technological innovations or new products by the Company or its competitors,
general conditions in the data storage and computer industries and other events
or factors. See "Price Range of Common Stock and Dividend Policy."
CONCENTRATION OF OWNERSHIP
The Company's officers and directors own beneficially an aggregate of
approximately 454,964 shares (9%) of the outstanding Class A Common Stock and
approximately 634,703 shares (54.7%) of the outstanding Class B Common Stock,
respectively, which represents approximately 41% of the total combined voting
power of the
5.
<PAGE> 6
outstanding shares of Class A Common Stock and Class B Common Stock. Such
persons also own options to purchase up to an additional 180,573 shares of
Class A Common Stock. As a result of their stock ownership, such persons have
the ability to elect a majority of the Company's directors and to direct its
business and affairs. The Company also maintains an employee stock ownership
plan, which owned approximately 8% of the Company's Class A Common Stock
outstanding as of October 1, 1995. This concentration of stock ownership of
the Company may have the effect of delaying or preventing a change in
management or control of the Company.
ANTI-TAKEOVER EFFECT OF CHARTER PROVISIONS, BYLAWS AND STOCK STRUCTURE
The Company has two classes of Common Stock with unequal voting power:
Class A Common Stock, including the Shares offered hereby, entitles the holder
to 1/10th vote per share and Class B Common Stock entitles the holder to one
vote per share, with concentration of ownership of the Class B Common Stock in
the Company's officers and directors and their affiliates. Additionally, the
Company's Board of Directors is elected annually on a split-vote basis, with
the holders of Class A Common Stock currently being entitled to elect two of
the directors and holders of the Class B Common Stock currently being entitled
to elect the remaining six directors. These provisions could have the effect
of discouraging a proxy contest or making it more difficult for a third party
acquiring a substantial block of the Company's Common Stock to effect a change
in management and control of the Company. Such provisions also could limit the
price that investors might be willing to pay in the future for shares of the
Company's Common Stock.
The Board of Directors of the Company is authorized to issue, without
stockholder approval, up to 2,000,000 shares of Preferred Stock with voting,
conversion and other rights and preferences, as well as additional shares of
Common Stock, which could adversely affect the voting power or other rights of
the holders of Class A Common Stock. Although the Company has no current plans
to issue any shares of Preferred Stock or additional shares of Common Stock,
the future issuance of Preferred Stock or Common Stock or of rights to purchase
Preferred Stock or Common Stock could be used to discourage an unsolicited
acquisition proposal. See "Description of Capital Stock."
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares offered hereby by the Selling Stockholders.
RECENT DEVELOPMENTS
As of June 30 and September 30, 1995, the Company was in violation of
certain financial loan covenants relating to its line of credit with its
primary banks. The banks have waived these prior violations and have expressed
a willingness to amend the Loan and Security Agreement pertaining to the line
of credit to revise the covenants in question so that the Company would be in
compliance with the terms of the line of credit. There can be no assurance
that the Company and its primary banks will enter into an amendment to the Loan
and Security Agreement. In the meantime, the Company continues to be in
violation of certain financial covenants under the Loan and Security Agreement
and, unless such violations are waived and the Loan and Security Agreement is
amended as referred to above, the banks could elect in the future to declare
the Company in default and exercise their remedies under the Loan and Security
Agreement, which could include an acceleration of all outstanding indebtedness
under the line of credit. A default by the Company under the Loan and Security
Agreement could have a material adverse effect on the Company.
In June 1995, the Company filed suit against Storage Technology
Corporation ("Storage Technology") and certain other defendants in United
States Federal Court for the Eastern District of Virginia, Alexandria Division,
alleging that certain products manufactured and sold by Storage Technology
infringe a Company patent covering automated tape libraries. The Company seeks
injunctive relief against further infringement and monetary damages according
to proof, which are subject to trebling under certain circumstances. In its
answer to the Company's complaint in this action, Storage Technology has
asserted counterclaims against the Company and the ATL Products Division for
alleged infringement of certain patented technology of Storage Technology. The
matter is scheduled for trial on January 22, 1996. Management intends to
vigorously prosecute the Company's claim and defend against Storage
Technology's counterclaims. No prediction can be made as to the likely outcome
of this matter, but management believes that the outcome of the suit is not
likely to have a material adverse effect on the Company's business or financial
condition.
6.
<PAGE> 7
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The Class A Common Stock and Class B Common Stock are traded in The
Nasdaq National Market under the symbols "ODETA" and "ODETB," respectively.
Prior to January 4, 1994, the Company's Class A Common Stock and Class B Common
Stock were traded on the American Stock Exchange (the "AMEX") under the symbols
"OA" and "OB," respectively. The following table sets forth for the fiscal
periods prior to January 1994 the high and low sale prices for the Class A
Common Stock and Class B Common Stock as reported on the AMEX and for the
fiscal periods commencing January 1994 the high and low sale prices of the
Class A Common Stock and Class B Common Stock as reported on The Nasdaq
National Market:
<TABLE>
<CAPTION>
CLASS A COMMON STOCK CLASS B COMMON STOCK
---------------------- ---------------------
HIGH LOW HIGH LOW
------- ------- ------- -------
<S> <C> <C> <C> <C>
FISCAL YEAR ENDED MARCH 31, 1994
1st Quarter . . . . . . . . . . . . . . . . . . . . . $10 1/2 $ 6 3/4 $10 $ 7 7/8
2nd Quarter . . . . . . . . . . . . . . . . . . . . . 11 1/4 8 11 9 3/8
3rd Quarter . . . . . . . . . . . . . . . . . . . . . 11 1/4 7 1/2 11 5/8 8 7/8
4th Quarter . . . . . . . . . . . . . . . . . . . . . 12 3/4 8 1/2 12 1/2 9
FISCAL YEAR ENDING MARCH 31, 1995
1st Quarter . . . . . . . . . . . . . . . . . . . . . $10 5/8 $ 7 3/4 $10 1/2 $ 8
2nd Quarter . . . . . . . . . . . . . . . . . . . . . 10 7 9 1/2 7
3rd Quarter . . . . . . . . . . . . . . . . . . . . . 7 3/4 5 1/4 7 1/4 5 7/8
4th Quarter . . . . . . . . . . . . . . . . . . . . . 6 3/4 3 3/4 6 3/4 4
FISCAL YEAR ENDING MARCH 31, 1996
1st Quarter . . . . . . . . . . . . . . . . . . . . . $ 5 1/2 $ 4 $ 5 3/4 $ 4 3/4
2nd Quarter . . . . . . . . . . . . . . . . . . . . . 5 3/4 5 6 5
3rd Quarter (through October 18, 1995) . . . . . . . . 9 5/8 4 5/8 9 1/2 5
</TABLE>
For a recent closing price of the Class A Common Stock reported by The
Nasdaq National Market, see the cover page of this Prospectus. As of October
18, 1995, the Company had 828 holders of record of Class A Common Stock and 251
holders of record of Class B Common Stock according to information furnished by
the Company's transfer agent.
The Company has never paid any cash dividends on its Common Stock, and
it has no current plans to pay such dividends in the foreseeable future. The
Company currently intends to retain any earnings for working capital and
general corporate purposes. The Company's bank line of credit includes
customary restrictions on the payment of cash dividends by the Company.
7.
<PAGE> 8
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated statement of income (loss) data
for the three years in the period ended March 31, 1995 and the selected
consolidated balance sheet data as of March 31, 1994 and 1995 are taken or
derived from the consolidated financial statements of the Company and notes
thereto incorporated by reference in this Prospectus and audited by Ernst &
Young LLP as set forth in their report thereon also incorporated by reference
herein. The selected consolidated statement of income (loss) data for the
years ended March 31, 1991 and 1992 and the selected consolidated balance sheet
data as of March 31, 1991, 1992 and 1993 are taken or derived from audited
consolidated financial statements of the Company not included or incorporated
by reference herein. The following selected consolidated statement of income
data for the three months ended June 30, 1994 and 1995 and the consolidated
balance sheet data as of June 30, 1995 are taken or derived from the unaudited
consolidated financial statements of the Company and notes thereto incorporated
by reference in this Prospectus. The following data should be read in
conjunction with "Management's Discussion and Analysis of Results of Operations
and Financial Condition" and the consolidated financial statements and notes
thereto incorporated by reference in this Prospectus.
CONSOLIDATED STATEMENT OF INCOME (LOSS) DATA
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED MARCH 31, ENDED JUNE 30,
----------------------------------------------------- ---------------------
1991 1992 1993 1994 1995 1994 1995
-------- ---------- --------- --------- ---------- ----------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales . . . . . . . . . . . . . . . $44,390 $40,346 $48,487 $66,063 $74,465 $17,968 $19,167
Contract revenues . . . . . . . . . . . . 28,001 29,918 20,825 18,099 13,280 4,517 2,270
------ ------ ------ ------ ------ ------ ------
Total net sales and contract revenues . . 72,391 70,264 69,312 84,162 87,745 22,485 21,437
Cost of sales . . . . . . . . . . . . . 28,727 27,671 33,668 44,281 51,148 12,315 12,185
Cost of contract revenues . . . . . . . . 18,960 19,994 13,967 11,114 6,633 2,030 1,359
Selling, general and administrative 15,726 14,627 14,169 17,162 20,899 4,911 5,143
expenses . . . . . . . . . . . . . . .
Research and development expenses . . . . 5,057 5,621 5,187 7,268 9,309 2,087 1,730
Non-recurring charges . . . . . . . . . . - - - - 4,809 - -
Interest expense . . . . . . . . . . . . 2,404 2,275 2,125 1,772 1,925 437 680
------- ------- ------- ------ ----- ------ -----
Income (loss) before income taxes . . . . 1,517 76 196 2,565 (6,978) 705 340
Income tax expense (benefit) . . . . . . 495 (13) 55 743 (2,300) 240 129
------- -------- ------- ----- ------ ------ -----
Net income (loss) . . . . . . . . . . . . $ 1,022 $ 89 $ 141 $ 1,822 $(4,678) $ 465 $ 211
======= ======== ======== ======= =======
Cash dividends per common share . . . . . $ -- $ -- $ -- $ -- $ -- $ - $ -
======= ======== ======== ======= =======
Net income (loss) per common share . . . $ .24 $ .02 $ .03 $ .34 $ (.80) $ .08 $ .04
======= ======== ======== ======= =======
Weighted average number of common shares 4,292 4,466 4,529 5,326 5,872 5,961 5,965
</TABLE>
CONSOLIDATED BALANCE SHEET DATA
<TABLE>
<CAPTION>
MARCH 31, JUNE 30,
------------------------------------------------------------------------- --------------
1991 1992 1993 1994 1995 1995
------------ ------------ ------------ ------------ -------------- --------------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Working capital . . . . . . . . . . . . $20,661 $23,429 $23,636 $29,062 $32,733 $34,109
Total assets . . . . . . . . . . . . . 56,225 58,589 55,124 65,928 72,358 71,971
Long-term debt (less current portion) . 24,561 26,216 24,413 16,723 25,757 26,812
Retained earnings . . . . . . . . . . . 8,654 8,743 8,884 10,706 6,028 6,239
Stockholders' equity . . . . . . . . . 17,721 18,723 19,213 31,239 27,736 27,952
</TABLE>
8.
<PAGE> 9
SELLING STOCKHOLDERS
The following table lists the Selling Stockholders, the number of
shares of Class A Common Stock held by each Selling Stockholder as of the date
of this Prospectus, the number of Shares offered hereby and the number and
percent of shares of Class A Common Stock to be held by each such Selling
Stockholder after the offering. None of the Selling Stockholders owns
beneficially any shares of the Company's Class B Common Stock.
<TABLE>
<CAPTION>
CLASS A COMMON STOCK
OWNERSHIP
SHARES OF CLASS A ---------------------------- PERCENT
COMMON STOCK BEFORE THE AFTER THE OWNERSHIP AFTER
SELLING STOCKHOLDER OFFERED HEREBY OFFERING OFFERING THE OFFERING
- --------------------------- --------------------- ------------ ------------- -------------------
<S> <C> <C> <C> <C>
Donald A. Forbes . . . . 27,614 32,453 4,839 *
E. Dale Lowe . . . . . . 4,361 4,361 0 0
</TABLE>
- ----------
* Less than one percent of the outstanding Class A Common Stock.
The Company originally issued 11,907 of the Shares being offered
hereby by the Selling Stockholders to the Selling Stockholders in connection
with the Company's acquisition in April 1994 of certain assets formerly owned
by American Broadcast Systems, Inc. ("ABS"). Pursuant to the terms of the
acquisition agreement, as amended, the Selling Stockholders received an
aggregate of 29,232 additional shares of common stock in May 1995, following
the end of the Company's fiscal year ended March 31, 1995. In October 1995, Mr.
Lowe received an additional 2,000 shares of the Class A Common Stock, following
the fiscal quarter ended September 30, 1995, which shares also are being
offered pursuant to this Prospectus.
The shares issued to the selling stockholders in May and October 1995
had an aggregate value, when issued, of $200,000 based on the relevant trading
prices of the Class A Common Stock. In addition, pursuant to a non-competition
agreement entered into by Donald A. Forbes in connection with the Company's
acquisition of ABS, the Company has issued to Mr. Forbes 31,586 shares of
Class A Common Stock, of which 23,761 are being offered pursuant to this
Prospectus. No further shares are issuable to the Selling Stockholders in
connection with these transactions.
As a condition to the closing of the Company's acquisition of the
assets of ABS, the Company granted the Selling Stockholders certain rights to
have the shares of Class A Common Stock issued to them in the acquisition,
including any future issuances of shares pursuant to the acquisition agreement
and the non-competition agreement, registered pursuant to the Securities Act.
Messrs. Lowe and Forbes were the co-owners of ABS, immediately prior
to the Company's acquisition of ABS's assets. Since the acquisition, Mr.
Forbes has served as the General Manager of ABS Products Group pursuant to a
written employment agreement with the Company. Neither of the Selling
Stockholders has or has had any other position, office or other material
relationship with the Company.
PLAN OF DISTRIBUTION
The Company has been advised by the Selling Stockholders that all or a
portion of the Shares may be sold, directly or through brokers, from time to
time by the Selling Stockholders or by certain pledgees, donees, transferees or
other successors in interest. Such sales may be made in negotiated
transactions or in one or more transactions in The Nasdaq National Market or
otherwise at prices and terms prevailing at the time of sale. In connection
with such sales, the Selling Stockholders and any participating brokers or
dealers may be deemed to be "underwriters" of the Shares within the meaning of
the Securities Act, and any discounts or commissions received by such brokers
or dealers and any profit on the sale of the Shares covered hereby by the
Selling Stockholders or such brokers or dealers might be deemed to be
underwriting discounts and commissions under the Securities Act. Sales in The
Nasdaq Stock Market may be made to broker-dealers making a market in the Class
A Common Stock or other broker-dealers, and such broker-dealers, upon their
resale of such securities, may be deemed to be "Selling Stockholders" in this
offering.
9.
<PAGE> 10
It is anticipated that usual and customary brokerage fees will be paid
by the Selling Stockholders in all open-market transactions. The Company will
bear all other costs and expenses of this offering, other than fees of counsel
(if any) for the Selling Stockholders. The Company will not receive any of the
proceeds from the sale of the Shares offered hereby.
From time to time this Prospectus will be supplemented and amended as
required by the Securities Act. During any time when a supplement or amendment
is so required, the Selling Stockholders are to cease sales until the
Prospectus has been supplemented or amended.
The Company has informed the Selling Stockholders that the
anti-manipulation provisions of Rules 10b-6 and 10b-7 under the Exchange Act
may apply to their sales of the Shares and has furnished each of the Selling
Stockholders with a copy of these rules, as well as a copy of certain
interpretations thereof by the Commission. The Company also has advised the
Selling Stockholders of the requirement for delivery of this Prospectus in
connection with any sale of the Shares.
DESCRIPTION OF CAPITAL STOCK
The Company is authorized to issue 2,000,000 shares of Preferred
Stock, $1.00 par value, none of which were issued and outstanding, 10,000,000
shares of Class A Common Stock, $.10 par value, 4,834,975 of which were issued
and outstanding, and 2,600,000 shares of Class B Common Stock, $.10 par value,
1,161,031 of which were issued and outstanding as of October 18, 1995.
PREFERRED STOCK
The Board of Directors of the Company is authorized, without further
action by the Company's stockholders, to issue from time to time shares of
Preferred Stock in one or more classes or series and to fix the designations,
voting rights, liquidation preferences, dividend rights, conversion rights,
rights and terms of redemption (including sinking fund provisions) and certain
other rights and preferences of the Preferred Stock. The issuance of shares of
Preferred Stock under certain circumstances could adversely affect the voting
power of the holders of Common Stock and may have the effect of delaying,
deferring or preventing a change in control of the Company. As of the date of
this Prospectus, the Company has no plan or arrangement for the issuance of any
shares of Preferred Stock.
COMMON STOCK
Except with respect to the election of directors, holders of Class A
Common Stock are entitled to cast 1/10th vote per share and holders of Class B
Common Stock are entitled to cast one vote per share with respect to all
matters submitted to a vote of stockholders and a matter will be deemed
approved if a majority of the votes cast are in favor of such matter. Holders
of Class A Common Stock, voting as a separate class, are entitled to elect 25%
of the directors of the Company (rounded up to the nearest whole number of
directors) and holders of Class B Common Stock, voting as a separate class, are
entitled to elect the balance of the directors. Holders of Class A Common
Stock and Class B Common Stock may cumulate their votes in the election of
directors if they comply with the provisions of the Company's Bylaws as to
cumulative voting.
Holders of shares of Common Stock have no preemptive or subscription
rights. Common Stock is neither redeemable nor convertible, except that shares
of Class B Common Stock are convertible at the option of the holder into a like
number of shares of Class A Common Stock, and there are no sinking fund
provisions for Common Stock. Holders of Common Stock are entitled to share pro
rata in any dividends declared by the Board of Directors of the Company out of
funds legally available therefor and, in the event of liquidation, in the net
assets of the Company available for distribution.
The outstanding shares of Common Stock, including the Shares of Class
A Common Stock offered hereby, are validly issued, fully paid and
nonassessable.
CERTAIN CHARTER PROVISIONS
The Company's Certificate of Incorporation eliminates, to the fullest
extent permitted by law, the liability of its directors to the Company and its
stockholders for monetary damages for breach of a director's fiduciary duty.
This provision is intended to afford the Company's directors the benefit of the
Delaware General Corporation Law, which provides that
10.
<PAGE> 11
directors of Delaware corporations may be relieved of monetary liability for
breach of their fiduciary duty of care, except under certain circumstances
involving breach of a director's duty of loyalty, acts or omissions not in good
faith or involving intentional misconduct or a knowing violation of law or any
transaction from which the director derived an improper personal benefit.
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
The Company is subject to Section 203 of the Delaware General
Corporation Law ("Section 203"), which restricts certain transactions and
business combinations between a corporation and an "Interested Stockholder" for
a period of three years from the date the stockholder became an Interested
Stockholder. Subject to certain exceptions, unless the transaction is approved
by the corporation's board of directors and the holders of at least 66 2/3% of
the outstanding voting stock of the corporation (excluding shares held by the
Interested Stockholder), Section 203 prohibits significant business
transactions such as a merger with, disposition of assets to or receipt of
disproportionate financial benefits by the Interested Stockholder, or any other
transaction that would increase the Interested Stockholder's proportionate
ownership of any class or series of the corporation's stock. The statutory ban
does not apply if, upon consummation of the transaction in which any person
becomes an Interested Stockholder, the Interested Stockholder owns at least 85%
of the outstanding voting stock of the corporation (excluding shares held by
persons who are both directors and officers and shares held pursuant to certain
stock plans). The Company may elect in its Certificate of Incorporation or
Bylaws not to be governed by Section 203, but it has not made such an election.
REGISTRAR AND TRANSFER AGENT
The Transfer Agent and Registrar for the Common Stock is First
National Bank of Boston, Boston, Massachusetts. Its telephone number is (617)
575-2900.
LEGAL MATTERS
The validity of the Shares offered hereby has been passed upon by Troy
& Gould Professional Corporation, Los Angeles, California.
EXPERTS
The consolidated financial statements of the Company appearing in the
Company's Annual Report on Form 10-K for the year ended March 31, 1995, have
been audited by Ernst & Young LLP (formerly Ernst & Young), independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such financial statements are, and audited
financial statements to be included in subsequently filed documents will be,
incorporated herein in reliance upon the reports of Ernst & Young LLP
pertaining to such financial statements (to the extent covered by consents
filed with the Commission) given upon the authority of such firm as experts in
accounting and auditing.
11.
<PAGE> 12
<TABLE>
<S> <C>
================================================ ==============================================
No dealer, salesman or other person has
been authorized to give any information or make
any representations, other than those contained
in this Prospectus, in connection with the
offering hereby, and, if given or made, such
information and representations must not be
relied upon as having been authorized by the
Company or the Selling Stockholders. This
Prospectus does not constitute an offer to sell,
or a solicitation of an offer to buy, any
securities to any person in any State or other
jurisdiction in which such offer or solicitation
is unlawful. Neither the delivery of this
Prospectus nor any sale made hereunder shall, 31,975 Shares
under any circumstances, create any implication
that there has been no change in the affairs of
the Company or the facts herein set forth since
the date hereof.
ODETICS, INC.
_______________
TABLE OF CONTENTS
Class A Common Stock
Page
----
Available Information . . . . . . . . 2
Incorporation of Certain
Documents by Reference . . . . . . 2
The Company . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . 3 ____________
Use of Proceeds . . . . . . . . . . . 6
Recent Developments . . . . . . . . . 6 PROSPECTUS
Price Range of Common Stock ____________
and Dividend Policy . . . . . . . . 7
Selected Consolidated
Financial Data . . . . . . . . . . 8
Selling Stockholders . . . . . . . . 9
Plan of Distribution . . . . . . . . 9
Description of Capital Stock . . . . 10
Legal Matters . . . . . . . . . . . . 11 November 16, 1995
Experts . . . . . . . . . . . . . . . 11
================================================ ==============================================
</TABLE>
