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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended April 4, 1998
Commission File No. 1-8045
------------------------
GenRad, Inc.
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(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)
7 Technology Park Drive, Westford, Massachusetts 01886-0033
- ------------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (978) 589-7000
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.
28,817,683 shares of the Common Stock, $1 par value, were outstanding on May 6,
1998
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<PAGE>
GENRAD, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
Page
----
Part I. Financial Information:
Consolidated Statement of Operations ........................ 1
Consolidated Balance Sheet .................................. 2 - 3
Consolidated Statement of Cash Flows ........................ 4
Notes to Consolidated Financial Statements .................. 5 - 7
Management's Discussion and Analysis of
Financial Condition and Results of Operation .............. 8 - 12
Part II. Other Information:
Item 6. Exhibits and Reports on Form 8-K .................... 13 - 14
Signatures .................................................. 15
<PAGE>
GENRAD, INC. AND SUBSIDIARIES
Consolidated Statement of Operations
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended
-----------------------------
April 4, March 29,
1998 1997
------------ ------------
Sales:
Sales of products $ 38,484 $ 41,322
Sales of services 10,590 11,178
------------ ------------
Total sales 49,074 52,500
------------ ------------
Cost of sales:
Cost of products sold 16,885 17,497
Cost of services sold 6,917 5,988
------------ ------------
Total cost of sales 23,802 23,485
------------ ------------
Gross margin 25,272 29,015
Selling, general and administrative 18,434 17,477
Research and development 4,919 4,680
------------ ------------
Total operating expenses 23,353 22,157
------------ ------------
Operating income 1,919 6,858
Other income (expenses):
Interest income 217 175
Interest expense (326) (49)
Other, net (311) 18
------------ ------------
Total other (expenses) income (420) 144
------------ ------------
Income before taxes 1,499 7,002
Income tax benefit (7,410) (4,715)
------------ -------------
Net Income $ 8,909 $ 11,717
=========== =============
Net income per common and common
equivalent shares:
Basic $ 0.33 $ 0.45
=========== =============
Diluted $ 0.30 $ 0.42
=========== =============
Weighted average common and common
equivalent shares used in computing per
share amounts:
Basic 27,395,000 26,221,000
=========== =============
Diluted 29,621,000 28,106,000
=========== =============
The accompanying notes are an integral part of these Consolidated Financial
Statements.
1
<PAGE>
PART I. FINANCIAL INFORMATION
GENRAD, INC. AND SUBSIDIARIES
Consolidated Balance Sheet
(In thousands, except share and per share amounts)
April 4, January 3,
1998 1998
----------- ----------
(Unaudited)
Assets
Current Assets:
Cash and equivalents $ 16,299 $ 21,883
Accounts receivable, net 64,944 73,006
Inventories:
Raw materials 15,550 18,378
Work in process 13,208 8,355
Finished goods 8,963 3,163
---------- ----------
Total inventories 37,721 29,896
---------- ----------
Other current assets 4,967 4,194
---------- ----------
Total current assets 123,931 128,979
---------- ----------
Property, plant and equipment:
Buildings and leasehold improvements 14,590 14,612
Machinery and equipment 54,706 56,259
Service parts 13,436 12,757
---------- ----------
82,732 83,628
Accumulated depreciation (46,652) (50,149)
---------- ----------
Property, plant and equipment, net 36,080 33,479
---------- ----------
Deferred tax asset 15,368 7,868
Intangible assets 7,855 7,107
Other assets 1,419 1,524
---------- ----------
$ 184,653 $ 178,957
========== ==========
The accompanying notes are an integral part of these Consolidated Financial
Statements.
2
<PAGE>
GENRAD, INC. AND SUBSIDIARIES
Consolidated Balance Sheet (continued)
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
April 4, January 3,
1998 1998
----------- ----------
(Unaudited)
<S> <C> <C>
Liabilities and Stockholders' Equity
Current Liabilities:
Trade accounts payable $ 11,967 $ 12,730
Accrued liabilities 11,817 12,445
Accrued compensation and employee benefits 4,461 6,884
Income taxes payable 904 1,029
Current portion of long-term debt 2,440 2,434
---------- -----------
Total current liabilities 31,589 35,522
---------- -----------
Long-term Liabilities:
Long-term debt 7,931 8,519
Accrued pensions and benefits 10,869 11,239
Future lease costs of unused facilities 4,111 4,106
Other long-term liabilities 4,209 4,558
---------- -----------
Total long-term liabilities 27,120 28,422
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Stockholders' Equity:
Common stock, $1 par value, 60,000,000 shares
authorized; 27,592,000 and 27,349,000 issued and
outstanding in fiscal 1998 and 1997, respectively 27,592 27,349
Additional paid-in capital 174,112 172,026
Accumulated deficit (73,583) (82,492)
Cumulative translation adjustment (2,177) (1,870)
---------- -----------
Total stockholders' equity 125,944 115,013
---------- -----------
$ 184,653 $ 178,957
========== ===========
</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>
Three Months Ended
---------------------------------
April 4, March 29,
1998 1997
---------- ----------
<S> <C> <C>
Operating activities:
Net income $ 8,909 $ 11,717
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 2,116 2,016
Loss on disposition of property, plant and equipment 45 145
Payment for lease costs of excess facilities, net (392) (279)
Increase (decrease) resulting from changes in
operating assets and liabilities:
Accounts receivable 7,748 (11,996)
Inventories (7,876) (2,849)
Other current assets (775) (1,055)
Deferred tax asset (7,500) (5,388)
Trade accounts payable (749) 5,318
Accrued liabilities (218) (3,199)
Accrued compensation and employee benefits (2,679) (1,466)
Accrued income taxes (118) 188
Other, net (1,446) 350
---------- -----------
Net cash used in operating activities (2,935) (6,498)
---------- -----------
Investing activities:
Purchase of property, plant and equipment (4,370) (2,323)
---------- -----------
Net cash used in investing activities (4,370) (2,323)
---------- -----------
Financing activities:
Repayment of debt (610) (21)
Proceeds from employee stock plan 2,329 2,729
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Net cash provided by financing activities 1,719 2,708
---------- -----------
Effects of exchange rates on cash 2 1,166
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Decrease in cash equivalents (5,584) (4,947)
Cash and equivalents at beginning of period 21,883 10,557
---------- -----------
Cash and equivalents at end of period $ 16,299 $ 5,610
========== ===========
</TABLE>
The accompanying notes are an integral part of these Consolidated Financial
Statements.
4
<PAGE>
GENRAD, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 1: Accounting Comments
Reference is made to the Company's 1997 Annual Report and Form 10-K which
contains, at pages 13 through 38, 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.
The results of any interim period are not necessarily indicative of the results
for the entire year.
Note 2: 1997 Stock Option Award Plan
The Company has a 1997 Stock Option Award Plan for key employees excluding
directors and officers. In the first quarter of 1998, the Board of Directors
approved 1,250,000 additional shares for this plan. At April 4, 1998, there were
1,750,000 shares authorized and 1,057,750 shares available for future grant.
Options under this plan generally become vested over a four-year period and have
a maximum term of ten years.
Note 3: Impact of Recently Issued Accounting Pronouncement
In the first quarter of 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income". This Statement
requires disclosure of comprehensive income and its components in interim and
annual reports. Total comprehensive income components included in stockholder's
equity include any changes in equity during a period that are not the result of
transactions with owners, including cumulative translation adjustments,
unrealized gains and losses on available-for-sale securities and minimum pension
liabilities. For the first quarters ended April 4, 1998 and March 29, 1997,
comprehensive income items included in stockholders' equity consisted of
translation adjustments of ($0.3) million and ($0.5) million, respectively.
Note 4: Acquisitions
Industrial Computer Corporation
On April 7, 1998 GenRad acquired Industrial Computer Corporation ("ICC"). ICC is
a software company providing real-time manufacturing execution systems to
electronics manufacturers. ICC was established in 1980 and is located in
Atlanta, Georgia.
5
<PAGE>
GENRAD, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 4: Acquisitions (continued)
In connection with the acquisition of ICC, 1,237,917 shares of GenRad's common
stock were issued to ICC's Stockholders in exchange for all outstanding shares
of ICC stock in a tax free reorganization. Merger costs are estimated to be $2.5
million and will be expensed in the second quarter of 1998. The merger costs
consist of legal fees, accounting fees, broker fees and severance charges.
The acquisition will be accounted for as a pooling of interests and the
consolidated financial statements and all financial data will be restated to
include the accounts of ICC for all periods presented in the Form 10-Q for the
second quarter of 1998.
The following information shows revenue and net income for the separate
companies for the first quarter of 1998 and 1997, respectively, on a combined
pro forma basis:
(in thousands except share and per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------------
April 4, March 29,
1998 1997
-------------- -------------
<S> <C> <C>
Net revenue:
GenRad, Inc. $ 49,074 $ 52,500
ICC 2,848 2,539
-------------- -------------
$ 51,922 $ 55,039
============== =============
Net income:
GenRad, Inc. $ 8,909 $ 11,717
ICC (15) 186
--------------- -------------
$ 8,894 $ 11,903
============== =============
Net income per common and common
equivalent shares:
Basic $ 0.31 $ 0.43
============== =============
Diluted $ 0.29 $ 0.41
============== =============
Weighted average common and common
equivalent shares used in computing per
share amounts:
Basic 28,633,000 27,459,000
============== =============
Diluted 30,859,000 29,344,000
============== =============
</TABLE>
Manufacturing Execution Systems Business
On April 9, 1998, GenRad acquired certain assets of the Manufacturing Execution
Systems ("MES") business of Valstar Systems Limited located in Aberdeenshire,
Scotland. Valstar's MES component provides integration services and support
and distribution in Europe for ICC's Shop Floor Data Manager Software.
6
<PAGE>
GENRAD, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 4: Acquisitions (continued)
The acquisition of Valstar's MES business was for $3.0 million in cash and was
funded through internally generated funds. As part of the acquisition, the
Company entered into a two-year consulting and services agreement with Valstar
Systems Limited that includes securing certain Valstar personnel and other
resources to transition the business to GenRad. Of the $3.0 million purchase
price, $1.0 million is being held in escrow and the release is contingent upon
the retention of certain key personnel, as well as certain operating targets
being achieved through October 3, 1998. The acquisition will be accounted for in
the second quarter of 1998 by the purchase method of accounting. The excess
purchase price over the net assets acquired will be amortized on a straight-line
basis over the lesser of its useful life or 10 years.
Note 5: Contingencies
On April 28, 1998, the Company and James F. Lyons, President and Chief Executive
Officer, were served with a lawsuit purported to be a class action suit on
behalf of persons who purchased Company stock in the open market over a
specified period of time. The Company has reviewed the complaint and believes
that the allegations are without merit. The Company intends to vigorously defend
the suit and has notified its insurance carrier of the claim. Due to the
preliminary nature of the action, it is not possible at this time to assess the
outcome of the suit.
7
<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 in the first quarter of 1998
decreased to $53.9 million from $61.3 million in the comparable period in 1997.
Orders decreased across all geographies and most markets. Orders for the first
quarter of 1997 included a multi-million dollar order from BMW Motorcycles for
Advanced Diagnostic Solutions (ADS) and a multi-million dollar order from a
North American telecommunications customer for GENEVA. Single orders of this
magnitude were not realized in the first quarter of 1998.
Backlog at the end of the 1998 first quarter was $29.8 million as compared to
$24.9 at year-end 1997 and $33.4 million at the end of the 1997 first quarter.
The decrease in backlog in the first quarter of 1998 from the 1997 first quarter
was primarily the result of a decrease in backlog in the European ADS business.
ADS was selected by Ford USA in the second quarter of 1997 to be the full
service supplier of Ford's Worldwide Diagnostic System (WDS) project.
Significant work under this contract is in process, but product orders are not
anticipated to commence until the later part of fiscal 1998. The Company
believes that a substantial portion of the ending 1998 first quarter backlog
will be shipped prior to the end of fiscal 1998. The increase in backlog in the
first quarter of 1998 from year-end 1997 was primarily due to GENEVA orders
received in the quarter which have longer delivery cycles, as well as the annual
renewal of software maintenance contracts in Europe.
Sales decreased to $49.1 million in the first quarter of 1998 from $52.5 million
in the comparable 1997 period. Sales decreased in Europe and North America with
a minor increase in Asia. The decrease stems primarily from lower sales in two
product categories (GENEVA and brokerage of used equipment) in Electronic
Manufacturing Systems (EMS) and lower ADS revenues.
Sales from international markets decreased to 53.1% of sales in the first
quarter of 1998 from 55.3% in the comparable 1997 period. The decrease was
primarily attributable to decreased European ADS revenue. Product and service
revenues from international markets are subject to the risks of currency
fluctuations.
Product gross margin as a percent of sales decreased to 56.1% in the first
quarter of 1998 from 57.7% in the comparable 1997 period. Product margins
decreased due to lower revenues and a lower margin product mix in the first
quarter of 1998 from the comparable 1997 period. While Board Test margins were
higher in the first quarter of 1998, GENEVA margins were lower than the
comparable 1997 quarter due to lower margin shipments which are not anticipated
to continue in the second quarter of 1998. Additionally, there was under
absorption in manufacturing due to demand being less than anticipated.
Service gross margin as a percent of sales decreased to 34.7% in the first
quarter of 1998 from 46.4% in the comparable 1997 period. Service gross margin
decreased $1.5 million in the first quarter of 1998 from the comparable 1997
period primarily due to competitive pricing pressures and a decline in the
service utilization rate.
8
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Operating Results (continued)
Selling, general and administrative expenses increased to $18.4 million in the
first quarter of 1998 from $17.5 million in the comparable period in 1997. The
increase was primarily in global selling and support infrastructure costs.
Research and development expenses increased slightly in the first quarter of
1998 to $4.9 million from $4.7 million in the comparable 1997 period. As a
percentage of product and service sales, research and development expenses
increased to 10.0% from 8.9% in the comparable 1997 period due to the decrease
in sales. The Company continues to invest in new product development and
enhancements in existing products.
Interest expense was $0.3 million in the first quarter of 1998 and less than
$0.1 million in the comparable 1997 period. The 1998 interest expense relates to
the five year term loan entered into on June 26, 1997 that provided
approximately $12 million for the purchase of furniture and fixtures for the
Company's new corporate headquarters and manufacturing facilities in Westford,
Massachusetts. Interest is payable quarterly in arrears at LIBOR plus 1.25%.
A net income tax benefit of $7.5 million was recorded in the first quarter of
1998 as compared to $5.4 million in the comparable period in 1997. The tax
benefit represents a reduction in the Company's valuation allowance for deferred
taxes and was recorded due to management's expectations of future income and
expected utilization of the Company's domestic net operating loss carryforwards.
Excluding the deferred benefits, the income tax provision decreased to $0.1
million in the first quarter of 1998 as compared to $0.7 million in the
comparable period in 1997 due to a decreased level of estimated foreign taxable
income.
As a result of the above, the Company reported net income of $8.9 million for
the first quarter of 1998, a decrease from the $11.7 million reported in the
1997 comparable period.
Liquidity and Sources of Capital
Cash and equivalents at the end of the first quarter of 1998 totaled $16.3
million as compared to $21.9 million at year-end 1997 and $5.6 million at the
end of the 1997 first quarter. The Company's current ratio at the end of the
first quarter of 1998 increased to 3.9 from 3.6 at year-end 1997 and 3.0 at the
end of the 1997 first quarter.
Cash used in operating activities was $2.9 million in the first quarter of 1998.
Net income of $8.9 million for the three months ended April 4, 1998 included a
$7.5 million non-cash benefit resulting from the deferred tax asset that was
recorded in the first quarter of 1998. The decrease in accounts receivable
provided cash of $7.7 million as a result of significant collections during the
first quarter of 1998. Increases in inventory used cash of $7.9 million as a
result of work in process for the Ford WDS project, and the maintenance of
higher inventory levels to meet increasing customer demands for shorter delivery
periods. A decrease in current liabilities used cash of $3.8 million as a result
of the timing of payments to employees and vendors.
9
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Liquidity and Sources of Capital (continued)
During the three months ended April 4, 1998, $4.4 million of net cash was used
for the purchase of property, plant and equipment. Capital expenditures were
primarily for equipment used in manufacturing and in research and development.
Net cash provided by financing activities, attributable to the issuances of
stock under the Company's employee stock plans, was $2.3 million in the first
quarter of 1998.
The Company's primary source of liquidity is internally generated funds. The
Company also has an existing unsecured line of credit up to $25 million, against
which there were no borrowings outstanding on April 4, 1998. Borrowings under
the credit facility are subject to compliance with specified financial and
operating covenants. The credit facility expires on December 31, 1998. The
Company also has a five year term loan which provided approximately $12 million
for the purchase of furniture and fixtures for the Company's new corporate
headquarters and manufacturing facilities in Westford, Massachusetts. The
principal of the loan is repayable in twenty equal quarterly payments of $0.6
million to be paid through the second quarter of 2002. Interest is payable
quarterly in arrears at LIBOR plus 1.25%. The Company anticipates that in fiscal
1998 it will fund its working capital and capital expenditure requirements, make
interest payments on its borrowings and meet its cash obligations from
internally generated funds, and from the available credit facility.
The Company buys and sells foreign currencies using forward contracts intended
to hedge payables and receivables denominated in foreign currencies. The Company
primarily operates in U.S. dollars and European currencies. At April 4, 1998,
the Company had forward exchange contracts to sell approximately $24.9 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.
This Quarterly Report contains certain forward-looking statements which involve
risks and uncertainties. The Company's actual results of operations and future
financial conditions may differ materially from those expressed in any such
forward-looking statements as a result of many factors that may be beyond the
Company's control. Factors that might cause such differences include, but are
not limited to, those discussed below.
Factors That May Affect Future Results
The Company has experienced and expects to continue to experience fluctuations
in its results of operations, particularly on a quarterly basis. The Company's
expense levels are based, in part, on expectations of future revenues. If
revenue levels in a particular period do not meet expectations, due to the
timing of the receipt of orders from customers, customer cancellation or delays
of shipments, then operating results could be adversely impacted.
The market for the Company's products is characterized by rapid technological
change, an increased demand for specific feature requests by customers, evolving
industry standards, and frequent new product introductions. The introduction of
products embodying new technology or the emergence of new industry standards or
practices could render the Company's existing products
10
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Factors That May Affect Future Results (continued)
obsolete or otherwise unmarketable. Future operating results are dependent upon
the Company's ability to develop, design, manufacture and market technologically
innovative products that meet customer needs.
Competition in the markets where the Company operates is intense. The Company
continues to invest in manufacturing productivity to try to minimize the impact
of competitive pricing pressures, fluctuations within the Company's product mix,
potential inventory obsolescence exposure and start-up manufacturing costs for
new product introductions.
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, supply
shortages or increases in the costs of key raw materials could have a material
adverse effect on the Company.
The Year 2000 issue is the result of a computer program being written using two
digits rather than four to define the applicable year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in a major system failure or
miscalculations. The Company is in the process of rectifying the Year 2000 issue
in its core business systems, and it is projected to be complete by the third
quarter of 1998. Both internal and external resources will be utilized, and the
projected costs, which are expected to be minimal, will be expensed as incurred.
The Company has established a task force to ensure that the software utilized
within its wide suite of products is Year 2000 compliant and any vendor or
customer related issues are addressed. At this point, the Company cannot project
when it will be completed nor the estimated total costs associated with the
remediation plan.
Other factors which could impact future results are past and future
acquisitions, strategic alliances, patent or product liability claims in excess
of available insurance coverage, changes in the Company's effective tax rates,
new regulatory requirements, political and economic changes, tariffs, trade
restrictions, transportation delays, foreign currency fluctuations and
inflations.
The Company disclaims any intent or obligation to update any forward-looking
statements that may be included in this report. Additionally, there can be no
assurance that other factors, not included above, could impact future results.
Impact of Recently Issued Accounting Pronouncements
The Financial Accounting Standards Board issued Statement No. 131, "Disclosure
about Segments of an Enterprise and Related Information". This Statement
requires an enterprise to report financial and descriptive information about its
reportable operating income. Operating segments are components that are
evaluated regularly by chief operating decision makers in deciding how to
allocate resources and in assessing performance. This Statement requires a
business enterprise
11
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Impact of Recently Issued Accounting Pronouncements (continued)
to report a measure of segment profit or loss, certain specific revenue and
expense items (including interest, depreciation, and income taxes), and segment
assets. It also establishes standards for related disclosures about products and
services, geographic areas, and major customers. The Financial Accounting
Standards Board issued Statement No. 132, "Employers' Disclosure about Pensions
and Other Postretirement Benefits". This statement revises employer's
disclosures about pensions and other postretirement plans. The Statement does
not change the measurement or recognition of those types of plans. These
Statements are required to be adopted in the Company's fiscal year-end 1998.
These statements will not affect the Company's consolidated financial position
or results of operations as they impact disclosure only.
12
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) (3) The following Exhibits are filed as part of this report:
10. Lease agreement dated July 26, 1996 between GenRad, Inc. and
Michelson Farm-Westford Technology Park Trust, incorporated by
reference to Exhibit 10 to the Company's report on Form 10-Q
for the quarter ended June 29, 1996.
10.1 Facility agreement dated June 26, 1997 between GenRad Limited
and BankBoston, N.A. London Branch, incorporated by reference
to Exhibit 10.1 to the Company's report on Form 10-Q for the
quarter ended June 28, 1997.
10.2 Amended and restated revolving credit agreement dated May 6,
1997 between GenRad, Inc. and BankBoston, N.A., incorporated by
reference to Exhibit 10.2 to the Company's report on Form 10-Q
for the quarter ended June 28, 1997.
10.3 Severance Agreement between GenRad, Inc. and Paul Geere
effective as of May 9, 1997, incorporated by reference to
Exhibit 10.4 to the Company's report on Form 10-Q for the
quarter ended September 27, 1997.
10.4 Severance Agreement between GenRad, Inc. and Lori B. Hannay
effective as of May 9, 1997, incorporated by reference to
Exhibit 10.5 to the Company's report on Form 10-Q for the
quarter ended September 27, 1997.
10.5 Severance Agreement between GenRad, Inc. and Sarah H. Lucas
effective as of May 9, 1997, incorporated by reference to
Exhibit 10.6 to the Company's report on Form 10-Q for the
quarter ended September 27, 1997.
10.6 Severance Agreement between GenRad, Inc. and James F. Lyons
effective as of May 8, 1997, incorporated by reference to
Exhibit 10.7 to the Company's report on Form 10-Q for the
quarter ended September 27, 1997.
10.7 Severance Agreement between GenRad, Inc. and Paul Pronsky, Jr.
effective as of May 9, 1997, incorporated by reference to
Exhibit 10.8 to the Company's report on Form 10-Q for the
quarter ended September 27, 1997.
10.8 Severance Agreement between GenRad, Inc. and Michael W.
Schraeder effective as of May 9, 1997, incorporated by
reference to Exhibit 10.9 to the Company's report on Form 10-Q
for the quarter ended September 27, 1997.
13
<PAGE>
Item 6. Exhibits and Reports on Form 8-K (continued)
10.9 Severance Agreement between GenRad, Inc. and Walter A. Shephard
effective as of October 24, 1997, incorporated by reference to
Exhibit 10.10 of the Company's report on Form 10-K for the year
ended January 3, 1998.
10.10 Severance Agreement between GenRad, Inc. and Gary H. Mueller
effective as of October 24, 1997, incorporated by reference to
Exhibit 10.11 of the Company's report on Form 10-K for the year
ended January 3, 1998.
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 April 4,
1998.
14
<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/ Paul Pronsky, Jr.
-----------------------------------------
Paul Pronsky, Jr.
Vice President and
Chief Financial Officer and Secretary
Date: May 11, 1998
15
EXHIBIT 11
GENRAD, INC. AND SUBSIDIARIES
Computation of Earnings Per Share
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
April 4, March 29,
1998 1997
-------------- --------------
<S> <C> <C>
Basic earnings per share:
Net income available to common stockholders $ 8,909,000 $ 11,717,000
============== ==============
Weighted average number of common shares outstanding 27,395,000 26,221,000
============== ==============
Basic earnings per share $ 0.33 $ 0.45
============== ==============
Diluted earnings per share:
Net income available to common stockholders $ 8,909,000 $ 11,717,000
============== ==============
Weighted average number of common shares outstanding 27,395,000 26,221,000
Weighted average incremental shares from the assumed
conversion of stock options and restricted stock awards 2,226,000 1,885,000
-------------- --------------
Total: 29,621,000 28,106,000
============== ==============
Diluted earnings per share $ 0.30 $ 0.42
============== ==============
</TABLE>
16
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
EXHIBIT 27
GENRAD, INC. AND SUBSIDIARIES
ARTICLE 5
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF APRIL 4, 1998 AND THE CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE THREE MONTHS ENDED APRIL 4, 1998 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> JAN-2-1999
<PERIOD-END> APR-4-1998
<EXCHANGE-RATE> 1
<CASH> 16,299
<SECURITIES> 0
<RECEIVABLES> 66,183
<ALLOWANCES> 1,239
<INVENTORY> 37,721
<CURRENT-ASSETS> 123,931
<PP&E> 82,732
<DEPRECIATION> 46,652
<TOTAL-ASSETS> 184,653
<CURRENT-LIABILITIES> 31,589
<BONDS> 0
0
0
<COMMON> 27,592
<OTHER-SE> 98,352
<TOTAL-LIABILITY-AND-EQUITY> 184,653
<SALES> 38,484
<TOTAL-REVENUES> 49,074
<CGS> 16,885
<TOTAL-COSTS> 23,802
<OTHER-EXPENSES> 23,447
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 326
<INCOME-PRETAX> 1,499
<INCOME-TAX> (7,410)
<INCOME-CONTINUING> 8,909
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,909
<EPS-PRIMARY> 0.33
<EPS-DILUTED> 0.30
</TABLE>
