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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 28, 1996
Commission File No. 1-8045
-------------------
GenRad, Inc.
(Exact name of registrant as specified in its charter)
Massachusetts 04-1360950
----------------------------- ---------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
300 Baker Avenue
Concord, Massachusetts 01742
-----------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (508) 287-7000
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 [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
22,370,381 shares of Common Stock, $1 par value, outstanding October 25,
1996.
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<PAGE>
GENRAD, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
Page
----
Part I. Financial Information:
Consolidated Balance Sheet..................................... 1 - 2
Consolidated Statement of Operations........................... 3
Consolidated Statement of Cash Flows........................... 4 - 5
Notes to Consolidated Financial Statements..................... 6 - 8
Management's Discussion and Analysis of
Financial Condition and Results of Operation.............. 9 - 12
Part II. Other Information:
Item 6. Exhibits and Reports on Form 8-K........................ 13
Signatures.............................................. 14
<PAGE>
PART I. FINANCIAL INFORMATION
GENRAD, INC. AND SUBSIDIARIES
Consolidated Balance Sheet
(In thousands)
<TABLE>
<CAPTION>
September 28, December 30,
1996 1995
------------- -------------
Assets (Unaudited)
<S> <C> <C>
Current Assets:
Cash and equivalents $ 4,440 $ 9,064
Accounts receivable, net 45,286 41,284
Inventories:
Raw materials 11,243 9,399
Work in process 3,563 1,681
Finished goods 5,310 4,521
---------- -------------
20,116 15,601
---------- -------------
Other current assets 6,317 3,376
---------- -------------
Total current assets 76,159 69,325
---------- -------------
Property, Plant and Equipment:
Land 541 541
Buildings 24,277 25,098
Machinery and equipment 62,680 57,661
Service parts 15,291 14,568
---------- -------------
102,789 97,868
Less: Accumulated depreciation 84,547 82,658
---------- -------------
18,242 15,210
Deferred tax asset 2,480 -
Other assets 7,804 2,871
========== =============
$ 104,685 $ 87,406
========== =============
</TABLE>
The accompanying notes are an integral part
of these Consolidated Financial Statements.
1
<PAGE>
GENRAD, INC. AND SUBSIDIARIES
Consolidated Balance Sheet (continued)
(In thousands)
<TABLE>
<CAPTION>
September 28, December 30,
1996 1995
------------ -------------
(Unaudited)
<S> <C> <C>
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
Revolving lines of credit $ - $ 729
Trade accounts payable 6,293 7,743
Accrued liabilities 19,412 21,352
Accrued compensation and
employee benefits 6,175 9,816
Income taxes payable 1,626 742
Current portion long-term debt 507 24
---------- -----------
Total current liabilities 34,013 40,406
---------- -----------
Long-term Liabilities:
Long-term debt 50,751 49,073
Accrued pensions and benefits 11,283 11,969
Future lease costs of unused facilities 5,375 6,620
Other long-term liabilities 2,927 2,576
---------- -----------
Total long-term liabilities 70,336 70,238
---------- -----------
Stockholders' Equity (Deficit):
Common stock, $1 par value, 60,000,000
shares authorized; 22,283,000
and 21,232,000 issued and outstanding in
1996 and 1995, respectively 22,283 21,232
Additional paid-in capital 113,938 109,436
Accumulated deficit (133,452) (151,122)
Cumulative translation adjustment (2,433) (2,784)
---------- -----------
Total stockholders' equity (deficit) 336 (23,238)
---------- -----------
$ 104,685 $ 87,406
========== ===========
</TABLE>
The accompanying notes are an integral part
of these Consolidated Financial Statements.
2
<PAGE>
GENRAD, INC. AND SUBSIDIARIES
Consolidated Statement of Operations
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------------- ---------------------------
September 28, September 30, September 28, September 30,
1996 1995 1996 1995
------------ ------------ ------------ ----------
<S> <C> <C> <C> <C>
Revenues:
Sales of products $ 35,227 $ 28,503 $ 106,120 $ 89,726
Sales of services 10,925 9,548 28,754 27,303
---------- ---------- ---------- ---------
46,152 38,051 134,874 117,029
---------- ---------- ---------- ---------
Cost and expenses:
Cost of products sold 15,389 14,475 48,062 46,172
Cost of services sold 6,865 5,052 15,857 14,228
---------- ---------- ---------- ---------
22,254 19,527 63,919 60,400
---------- ---------- ---------- ---------
Gross margin 23,898 18,524 70,955 56,629
Operating expenses:
Selling, general and administrative 13,686 11,317 39,124 35,524
Research and development 4,175 3,978 12,644 11,289
Pension curtailment gain and
restructuring credit - - - (2,900)
---------- ---------- ---------- ---------
17,861 15,295 51,768 43,913
---------- ---------- ---------- ---------
Operating income 6,037 3,229 19,187 12,716
Other income (expense):
Interest, net (1,079) (951) (3,118) (2,896)
Other, net 352 (64) 400 121
---------- ---------- ---------- ---------
(727) (1,015) (2,718) (2,775)
---------- ---------- ---------- ---------
Income before income taxes 5,310 2,214 16,469 9,941
Income tax provision (benefit) 300 81 (1,201) 877
---------- ---------- ---------- ---------
Net Income $ 5,010 $ 2,133 $ 17,670 $ 9,064
========== ========== ========== =========
Earnings per common and common
equivalent shares:
Primary $ 0.21 $ 0.10 $ 0.74 $ 0.42
========== ========== ========== =========
Fully diluted $ 0.21 $ 0.09 $ 0.74 $ 0.40
========== ========== ========== =========
Shares used in computing earnings per
common and common equivalent shares:
Primary 24,029,000 22,362,000 23,723,000 21,759,000
========== ========== ========== ==========
Fully diluted 24,240,000 22,682,000 23,951,000 22,544,000
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part
of these Consolidated Financial Statements.
3
<PAGE>
GENRAD, INC. AND SUBSIDIARIES
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
--------------------------
September 28, September 30,
1996 1995
----------- -----------
<S> <C> <C>
Operating activities:
Net income $ 17,670 $ 9,064
Adjustments to reconcile net income
to net cash provided (used) by operating activities:
Depreciation and amortization 4,748 4,145
Reserve for future lease costs of unused facilities (1,245) (4,760)
Increase (decrease) resulting from changes in
operating assets and liabilities:
Accounts receivable (2,885) (5,456)
Inventories (4,910) (253)
Other current assets (3,378) (2,092)
Trade accounts payable (1,723) 1,368
Accrued liabilities and customer prepayments (1,987) (2,847)
Accrued compensation and employee benefits (4,320) (362)
Income taxes 887 (83)
Deferred tax asset (2,480) -
Other, net (57) 23
---------- ---------
Net cash provided by (used in) operating
activities 320 (1,253)
---------- ---------
Investing activities:
Purchases of property, plant and equipment (5,436) (4,981)
Purchase of Test Technology Associates, Inc. (3,745) -
Purchase of Field Orientated Engineering, AG (831) -
Proceeds from sale of property, plant and equipment 587 -
Proceeds from sale of assets held for sale - 3,157
---------- ---------
Net cash used in investing activities (9,425) (1,824)
---------- ---------
Financing activities:
Net change in long-term debt (111) 91
Borrowings under revolving lines of credit (729) 1,594
Proceeds from employee stock option exercises 5,150 1,969
---------- ---------
Net cash provided by financing activities 4,310 3,654
---------- ---------
Effects of exchange rates on cash 171 (76)
---------- ---------
(Decrease) increase in cash equivalents (4,624) 501
Cash and equivalents at beginning of period 9,064 7,997
---------- ----------
Cash and equivalents at end of period $ 4,440 $ 8,498
========== ==========
</TABLE>
The accompanying notes are an integral part
of these Consolidated Financial Statements.
4
<PAGE>
GENRAD, INC. AND SUBSIDIARIES
Consolidated Statement of Cash Flows (continued)
Supplemental disclosure of non-cash financing activity:
In conjunction with the purchase of Test Technology Associates, Inc. in the
first quarter of 1996, the Company has a minimum future obligation of $2.0
million which has been classified as current and long-term debt.
The accompanying notes are an integral part
of these Consolidated Financial Statements
5
<PAGE>
GENRAD, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 1: Accounting Comments
Reference is made to the Company's 1995 Annual Report and Form 10-K which
contains, at pages 7 through 34, financial statements and the notes thereto,
including a summary of significant accounting policies.
With respect to the financial information for the interim periods included in
this report, which is unaudited, the management of the Company believes that all
adjustments necessary for a fair presentation of the results for such interim
periods have been included. All adjustments are of a normal and recurring
nature.
Certain reclassifications have been made to the nine months ended September 30,
1995 Consolidated Statement of Operations. Within operating expenses, the
pension curtailment gain of $1.9 million was reclassified from selling, general
and administrative to pension curtailment gain and restructuring credit.
The financial statements and all financial data contained herein have been
restated to include the acquisition of Mitron Corporation, as more fully
discussed in Note 2.
The results of any interim period are not necessarily indicative of the results
for the entire year.
Note 2: Acquisitions
Test Technology Associates, Inc.
- --------------------------------
On January 16, 1996, the Company acquired Test Technology Associates, Inc.
("TTA"). Pro forma results of operations have not been presented because the
effects of the acquisition were not significant. TTA provides custom test
programming, test fixture integration and other value-added services to
manufacturers and users of electronic products. TTA, established in 1982, is
located in Lewisville, Texas and Milpitas, California. In May 1996, TTA opened
an office in Westford, Massachusetts.
The acquisition was accounted for by the purchase method of accounting and was
funded through internally generated funds and short-term borrowings under the
Company's revolving line of credit. The results of TTA are included in the 1996
financial statements. The excess purchase price over the net assets acquired is
being amortized on a straight-line basis over the lesser of its useful life or
10 years.
Mitron Corporation
- ------------------
On June 20, 1996, GenRad, Inc. acquired Mitron Corporation ("Mitron"), a
privately-held Oregon corporation, pursuant to the terms of an Agreement and
Plan of Merger dated June 5, 1996. Mitron is a developer of an integrated family
of software applications, tools and
6
<PAGE>
services for electronics manufacturing including its CIMBridge(R) software
applications. The products enable users to generate and collect electronics
manufacturing data for greater control, shorter time-to-market and lower costs.
In connection with the merger, 1,196,146 shares of GenRad Common Stock were
issued in exchange for all outstanding shares of Mitron common stock. Options to
purchase 107,467 additional shares of GenRad Common Stock were issued in
conjunction with the merger.
The merger was accounted for as a pooling-of-interests, and accordingly, the
consolidated financial statements and all financial data contained herein have
been restated to include the accounts of Mitron for all periods presented.
Merger costs were insignificant and were expensed in the second quarter of 1996.
Additional description of the merger and the Agreement and Plan of Merger is
contained in the Company's Current Report on Form 8-K dated June 20, 1996 as
filed with the Securities and Exchange Commission.
Field Orientated Engineering, AG
- --------------------------------
On August 14, 1996, GenRad acquired certain assets of Field Orientated
Engineering, AG ("FOE AG"), consisting primarily of the software program, known
as TRACS III, sold with GenRad's production Test Systems. In close collaboration
with GenRad, FOE AG developed TRACS III which provides manufacturers of
electronic products real-time data collection, analysis, reporting and paperless
repair for improved manufacturing process control. FOE AG, established in 1987,
is located in Zurich, Switzerland.
The acquisition was accounted for by the purchase method of accounting. The
purchase price paid by GenRad in connection with the acquisition of certain
assets consisted of shares of GenRad Common Stock and cash provided by
internally generated funds. The excess purchase price over the net assets
acquired is being amortized on a straight-line basis over the lesser of its
useful life or three years.
Note 3: Future Lease Commitments
On July 26, 1996, the Company entered into a 15 year lease to relocate its
corporate headquarters and domestic manufacturing facility to Westford,
Massachusetts. The lease is expected to begin in April 1997, the estimated
completion of the construction of the buildings. The future minimum commitment
for the noncancellable operating lease is $36.3 million.
Note 4: Subsequent Events
Redemption of Convertible Subordinated Debentures
- -------------------------------------------------
On October 22, 1996, the Company issued a Notice of Redemption for all of its 7
1/4% Convertible Subordinated Debentures with a scheduled maturity in 2011,
aggregating $50,000,000 in principal amount. The Debentures will be redeemed on
November 6, 1996. The right to convert each $1,000 of principal amount of the
Debentures bond into 69.565 shares of GenRad Common Stock, based on the
conversion price of $14.375 per share, will expire at the close of
business on October 30, 1996.
7
<PAGE>
In lieu of issuing any fractional share in connection with any conversion of the
Debentures, the Company shall make payment in cash based on the last sale price
of the Common Stock on the day prior to the day of conversion.
GenRad has received a commitment from a bank for a 90-day bridge loan up to
a maximum of $50,000,000 at the prime interest rate to provide financing for the
redemptions of the Debentures.
Sale of Corporate Headquarters and U.S. Manufacturing Facility
- --------------------------------------------------------------
On August 15, 1996, GenRad signed a purchase and sale agreement to sell its
corporate headquarters and its U.S. manufacturing facility in Concord,
Massachusetts. The sale is scheduled to close in December 1996. The Company will
lease the Concord, Massachusetts facility until its new facilities, currently
under construction in Westford, Massachusetts, are completed in April 1997.
Refinancing of U.S. Lines of Credit
- -----------------------------------
The Company has received a commitment from a bank to refinance its secured $12.8
million U.S. line of credit, scheduled to expire on December 31, 1996, with an
unsecured domestic line of credit of up to $20 million at the prime interest
rate. The new credit facility will expire on December 31, 1997 and will be
subject to compliance with specified financial and operating covenants. The
Company anticipates that the credit facility agreement will be executed in
November 1996.
8
<PAGE>
GENRAD, INC. AND SUBSIDIARIES
-----------------------------
Management's Discussion and Analysis of
Financial Condition and Results of Operations
---------------------------------------------
Operating Results
- -----------------
Orders for the Company's products and services increased to $43.4 million for
the three months and increased to $134.9 million for the nine months ended
September 28, 1996 from $34.8 million and $110.7 million, respectively, for the
comparable periods in 1995. The increase in orders between the periods resulted
from the acquisition of TTA as well as the strong demand in all aspects of the
Company's business, including strong demand from contract manufacturing,
computer manufacturers, diagnostic customers and transportation customers in the
North American and Asian markets.
Backlog at the end of the 1996 third quarter was $27.2 million compared to $26.3
million at year-end 1995 and $25.0 million at the end of the 1995 third quarter.
The 1995 third quarter backlog includes $1.0 million related to the U.S. Marine
Corps for which the related revenues were recognized in fiscal 1995. The Company
believes that a substantial portion of the 1996 third quarter backlog will be
shipped prior to the end of 1996.
Net product and service revenues were $46.2 million for the three months and
$134.9 million for the nine months ended September 28, 1996, as compared to
$38.1 million and $117.0 million, respectively, for the comparable periods in
1995. The increase between quarters and the nine month periods is due to
increased sales in Board Test and Advance Diagnostic Solutions (ADS); new
product introductions; and incremental revenues associated with the acquisition
of TTA, completed during the first quarter of 1996. Revenue from the U.S. Marine
Corps was $0.3 million for the three months and $0.7 million for the nine months
ended September 28, 1996, as compared to $2.1 million and $8.3 million for the
comparable periods in 1995, respectively. Revenues derived from international
markets accounted for 52.7% and 56.4% for the three and nine months ended
September 28, 1996, as compared to 59.5% and 56.8% for the similar periods in
1995.
Product gross margin as a percent of revenues increased to 56.3% for the three
months and increased to 54.7% for the nine months ended September 28, 1996, as
compared to 49.2% and 48.5%, for the comparable periods in 1995. Product margin
improvements resulted from a combination of new product offerings which yielded
higher gross margins, continued improvements in manufacturing costs and
efficiencies, and a reduction in warranty costs.
Service gross margin as a percent of revenues decreased to 37.2% for the three
months and decreased to 44.9% for the nine months ended September 28, 1996, as
compared to 47.1% and 47.9%, for the respective periods in 1995. Service margins
have declined as a result of a higher percentage of service revenue being
generated by customer funded development at a lower margin than the normal
service business and continuing competitive pricing pressures in the
maintenance business.
9
<PAGE>
Selling, general and administrative expenses increased for the three and nine
month periods ended September 28, 1996 to $13.7 million and $39.1 million,
respectively, from $11.3 million and $35.5 million in the comparable periods of
1995. The increase in expenses for the three and nine month periods in 1996 as
compared to 1995 is due primarily to increased selling expenses associated with
increased orders, additional expenses from the newly acquired TTA subsidiary
which were not present in the comparable periods in 1995, and start-up expenses
incurred to support new product offerings.
Research and development expenses increased for the three and nine month periods
ended September 28, 1996 to $4.2 million and $12.6 million, respectively, from
$4.0 million and $11.3 million in the comparable periods of 1995. The increases
are attributable to increased product offerings and continued investment in
software development across all product lines.
As a percentage of net product and service revenues, research and development
expenses decreased slightly for the three and nine month periods ended September
28, 1996 to 9.0% and 9.4%, respectively, from 10.5% and 9.6% in the comparable
periods of 1995. The Company continues to invest in research, new product
development and enhancements to existing products.
Income tax expense remained virtually unchanged for the three months ended
September 28, 1996 as compared to the corresponding period in 1995. The net
income tax benefit of $1.2 million for the nine months ended September 28, 1996
includes a benefit of $2.5 million which was recorded in the first quarter of
1996. The benefit represents a reduction in the valuation allowance for deferred
taxes and was recorded due to management's improved expectations of future
income and expected utilization of the Company's domestic net operating loss
carryforwards. Excluding the $2.5 million, the income tax provision of $1.3
million for the nine months ended September 28, 1996 increased by $0.4 million
from the comparable period in 1995. Although pretax profitability increased
substantially for the nine months ended September 28, 1996, GenRad's annualized
effective tax rate decreased due to higher profits in the U.S. as compared to
Europe. The 1996 income tax expense represents U.S. and foreign income taxes.
At September 28, 1996, the Company had a net deferred tax asset of $72.2 million
with a valuation allowance of $69.8 million. Management will continue to assess
the realizability of the deferred tax asset based on actual and forecasted
operating results.
As a result of the above, the Company reported net income of $5.0 million for
three months and $17.7 million for the nine months ended September 28, 1996 as
compared to net income of $2.1 million and $9.1 million, respectively, for the
comparable periods in 1995.
Liquidity and Sources of Capital
- --------------------------------
Cash and equivalents decreased $4.6 million for the nine months ended September
28, 1996 as compared to an increase of $0.5 million for the comparable period in
1995.
In the nine months ended September 28, 1996, net income provided $17.7 million,
which included a $2.5 million non-cash benefit resulting from the deferred tax
asset that was recorded in the first quarter of 1996.
10
<PAGE>
Increases in accounts receivable and inventory used cash of $2.9 million and
$4.9 million, respectively, for the nine months ended September 28, 1996. The
increase in accounts receivable is attributable to the timing of shipments and
increased revenues. The increase in inventory is due to investments in new
products, increased sales volume and continuing customer demands for shorter
delivery periods.
Current liabilities and long-term accrued pensions and benefits decreased by
$8.0 million during the nine months ended September 28, 1996, primarily due to a
reduction of customer prepayments resulting from competitive pressures and
timing of payments related to employee benefit costs.
Capital expenditures for the nine months ended September 28, 1996 of $5.4
million were offset by $4.7 million of depreciation and amortization expense and
$0.6 million of proceeds generated from the sale of property, plant and
equipment. Additions to property, plant and equipment were primarily for
equipment used in research and development and manufacturing.
The acquisitions of TTA and FOE, AG used $4.6 million of cash while the proceeds
from stock option exercises generated $5.2 million of cash during the nine
months ended September 28, 1996.
The Company's primary source of liquidity is internally generated funds. The
Company also had a secured line of credit of up to $15.0 million, against which
there were no borrowings outstanding on September 28, 1996. The total available
U.S. credit facility of $12.8 million was secured by all of the Company's
domestic assets. The total U.K. available credit line of $2.2 million is payable
on demand and is secured by all of the Company's U.K. assets. Borrowings under
the U.S. and the U.K. credit facilities are subject to compliance with specified
financial and operating covenants.
In October 1996, the Company received a commitment from a bank to refinance its
$12.8 million U.S. line of credit with an unsecured domestic line of credit up
to $20 million at the prime interest rate. The borrowings under the new credit
facility will expire on December 31, 1997. The refinancing is anticipated to be
completed in November 1996.
On October 22, 1996, the Company issued a Notice of Redemption for all of its 7
1/4% Convertible Subordinated Debentures aggregating $50,000,000 in principal.
GenRad has received a commitment from a bank for a 90 day bridge loan to finance
up to a maximum of $50,000,000 at the prime interest rate. The Company
anticipates that the redemption will have a minimal impact on the Company's
liquidity because the conversion price of $14.375 per share is substantially
below the current market price.
In 1996, the Company anticipates it will fund its working capital and capital
expenditure requirements, make interest payments on its borrowings and meet its
other cash obligations from internally generated funds and available credit
facilities. If there is a significant reduction in internally generated funds or
available credit facilities, the Company may require significant funds from
outside financing sources. In such an event, there can be no assurance that the
Company would be able to obtain such funding as and when required, or on
acceptable terms.
The Company buys and sells foreign currencies using forward contracts intended
to hedge payables and receivables denominated in foreign currencies. The Company
primarily trades in U.S. dollars and European currencies. At September 28, 1996,
the Company had forward exchange contracts to sell approximately $12.9 million
of foreign currencies. Inflation during the periods presented did not have a
significant effect on the operations of the Company. The Company attempts to
mitigate inflationary cost increases by continuously improving manufacturing
methods and technologies.
11
<PAGE>
Factors That May Affect Future Results
- --------------------------------------
This Quarterly Report contains certain forward-looking statements which involve
risks and uncertainties. The Company's actual results may differ significantly
from the results discussed in the forward-looking statements. Factors that might
cause such a difference include, but are not limited to those discussed below.
The Company's future operating results are dependent upon the Company's ability
to develop, manufacture and market technologically innovative products that meet
customers needs, fund its working capital, capital expenditure and financing
requirements and meet its other cash obligations, including those arising from
past restructurings.
The market for the Company's products is characterized by rapid technological
change, evolving industry standards, changes in customers needs, and frequent
new product introductions and is therefore highly dependent on timely product
innovation. Competition in the markets in which the Company operates is intense.
The introduction by the Company or its competitors of products embodying new
technology or the emergence of new industry standards or practices could render
the Company's existing products obsolete or otherwise unmarketable. The
Company's ability to develop and market products and services that successfully
meet changing market needs will impact future results. A portion of future
revenues will come from new products and services. The Company cannot determine
the ultimate effect that new products and services will have on revenues,
earnings and stock price.
The Company is dependent upon a number of suppliers for several key components
of its products. The loss of certain of the Company's suppliers or substantial
price increases imposed by suppliers could have a material adverse effect on the
Company.
Although margins continue to be impacted by competitive pricing pressures, the
Company's manufacturing costs have decreased due to manufacturing productivity
improvements and engineered cost reductions.
The Company is exposed to risks inherent in international trade and operations
as a result of its international sales and the operation of its manufacturing
facility in Manchester, England. Such trade and operations expose the Company to
continuing risks such as unpredictable and potentially inconsistent regulatory
requirements, political and economic changes, tariffs or other trade
restrictions, transportation delays, foreign currency fluctuations and labor
disruptions.
The Company may be subject to patent or product liability claims in the future.
A successful claim brought against the Company in excess of available insurance
coverage or any claim that results in significant adverse publicity may have a
material adverse effect on the Company's competitive position, financial
condition, results of operations or liquidity. In the opinion of management, the
amount of ultimate liability with respect to any pending legal proceedings will
not materially affect the results of operations or the financial position of the
Company.
12
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) 11. Statement re: Computation of Earnings Per Share.
27. Financial Data Schedule.
(b) There were no reports on Form 8-K filed during the quarter ended
September 28, 1996.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GenRad, Inc.
By: /S/ Daniel F. Harrington
-------------------------------------------
Daniel F. Harrington
Vice President and
Chief Financial Officer and Secretary
Date: October 31, 1996
14
EXHIBIT 11
GENRAD, INC. AND SUBSIDIARIES
Computation of Earnings Per Share
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
-------------------------------- --------------------------------
September 28, September 30, September 28, September 30,
1996 1995 1996 1995
------------- ------------- ------------- -------------
Primary:
- --------
<S> <C> <C> <C> <C>
Weighted average number of
shares outstanding 22,115,000 20,916,000 21,826,000 20,778,000
Shares deemed outstanding from
the assumed exercise of stock options 1,914,000 1,446,000 1,897,000 981,000
----------- ----------- ----------- -----------
Total: 24,029,000 22,362,000 23,723,000 21,759,000
=========== =========== =========== ===========
Earnings applicable to common shares $ 5,010,000 $ 2,133,000 $17,670,000 $ 9,064,000
=========== =========== =========== ===========
Earnings per share of common stock $0.21 $0.10 $0.74 $0.42
=========== =========== =========== ===========
Fully Diluted:
- --------------
Weighted average number of
shares outstanding 22,115,000 20,916,000 21,826,000 20,778,000
Shares deemed outstanding from
the assumed exercise of stock options 2,125,000 1,766,000 2,125,000 1,766,000
----------- ----------- ----------- -----------
Total: 24,240,000 22,682,000 23,951,000 22,544,000
=========== =========== =========== ===========
Earnings applicable to common shares $ 5,010,000 $ 2,133,000 $17,760,000 $ 9,064,000
=========== =========== =========== ===========
Earnings per share of common stock $0.21 $0.09 $0.74 $0.40
=========== =========== =========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE
CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 28, 1996 AND THE CONSOLIDATED
STATEMENTS OF OPERATIONS FOR THE PERIOD ENDED SEPTEMBER 28, 1996 FOR GENRAD,
INC. AND SUBSIDIARIES AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> Sep-28-1996
<EXCHANGE-RATE> 1
<CASH> 4,440
<SECURITIES> 0
<RECEIVABLES> 46,108
<ALLOWANCES> 822
<INVENTORY> 20,116
<CURRENT-ASSETS> 76,159
<PP&E> 102,789
<DEPRECIATION> 84,547
<TOTAL-ASSETS> 104,685
<CURRENT-LIABILITIES> 34,013
<BONDS> 0
0
0
<COMMON> 22,283
<OTHER-SE> (21,947)
<TOTAL-LIABILITY-AND-EQUITY> 104,685
<SALES> 35,227
<TOTAL-REVENUES> 46,152
<CGS> 15,389
<TOTAL-COSTS> 22,254
<OTHER-EXPENSES> 17,509
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,079
<INCOME-PRETAX> 5,310
<INCOME-TAX> 300
<INCOME-CONTINUING> 5,010
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,010
<EPS-PRIMARY> $.21
<EPS-DILUTED> $.21
</TABLE>
