UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
Form 10-Q
---------------------
/X/ Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended December 31, 1999 or
/ / Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period from __________ to ___________
Commission file number 0-5404
_____________________
HADRON, INC.
(Exact name of registrant as specified in its charter)
New York 11-2120726
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5904 Richmond Highway
Suite 300
Alexandria, Virginia 22303
(Address of principal executive offices)
Registrant's Telephone number including area code
(703) 329-9400
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
___ ___
As of February 10, 2000, 2,808,560 shares of the Common Stock of
the registrant were outstanding.
<PAGE>
HADRON, INC.
TABLE OF CONTENTS
Part I Financial Information: Page No.
Item 1. Financial Statements
Consolidated Balance Sheets at 3
December 31, 1999 and June 30, 1999
Consolidated Statements 5
of Operations for the Three and Six
Months Ended December 31, 1999 and 1998
Consolidated Statements 6
of Cash Flows for the Six Months Ended
December 31, 1999 and 1998
Notes to Consolidated 7
Financial Statements
Item 2. Management's Discussion and Analysis 11
of Financial Condition and Results
of Operations
Part II Other Information:
Item 4. Submission of Matters to a Vote
Of Security Holders 15
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 16
<PAGE>
<TABLE>
HADRON, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND JUNE 30, 1999
<CAPTION>
DEC. 31, JUNE 30,
ASSETS 1999 1999
(Unaudited)
------ ------------ ----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 193,200 $ 256,000
Accounts receivable, net 3,354,300 3,495,700
Prepaid expenses and other 165,600 255,400
------------ ----------
Total current assets 3,713,100 4,007,100
------------ ----------
Fixed assets 256,600 290,900
Goodwill 2,098,600 2,246,600
Other 58,900 145,100
------------ ----------
Total other assets 2,414,100 2,682,600
------------ ----------
Total assets $ 6,127,200 $ 6,689,700
============ ==========
</TABLE>
See Notes to Consolidated Financial Statements
(Unaudited)
-3-
<PAGE>
<TABLE>
HADRON, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND JUNE 30, 1999
<CAPTION>
DEC. 31, JUNE 30,
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) 1999 1999
(Unaudited)
- -------------------------------------------------- --------------- -------------
<S> <C> <C>
Current liabilities:
Accounts payable $ 793,900 $ 917,100
Note payable - line of credit 1,267,500 638,800
Note payable 1,250,000 500,000
Note payable - related party 100,000 150,000
Other current liabilities 1,756,100 1,867,800
-------------- -------------
Total current liabilities 5,167,500 4,073,700
-------------- -------------
Notes payable 292,700 1,292,700
Notes payable - related parties 705,100 805,100
Other 41,800 62,600
-------------- -------------
Total long-term liabilities 1,039,600 2,160,400
-------------- -------------
Total liabilities 6,207,100 6,234,100
-------------- -------------
Shareholders' equity (deficit):
Common stock $.02 par; authorized 20,000,000 shares;
issued and outstanding - December 31, 1999,
2,808,860 shares, and June 30, 1999, 2,487,518 shares 56,200 49,700
Additional capital 9,847,300 9,758,300
Accumulated deficit (9,983,400) (9,352,400)
-------------- -------------
Total shareholders' equity (deficit) (79,900) 455,600
-------------- -------------
Total liabilities and shareholders' equity (deficit) $ 6,127,200 $ 6,689,700
============== =============
</TABLE>
See Notes to Consolidated Financial Statements
(Unaudited)
-4-
<PAGE>
<TABLE>
HADRON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 1999 AND 1998
<CAPTION>
Three Months Ended Six Months Ended
December 31 December 31,
1999 1998 1999 1998
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Revenues $ 4,960,700 $ 4,831,000 $ 10,267,300 $ 9,795,000
----------- ------------ ------------ -------------
Operating costs and expenses:
Costs of revenue 4,160,600 4,315,600 8,753,200 8,693,600
Selling,general and
administrative 923,500 464,100 1,995,200 915,400
----------- ------------ ------------ -------------
Total operating costs
and expenses 5,084,100 4,779,700 10,748,400 9,609,000
----------- ------------ ------------ -------------
Operating income (loss) (123,400) 51,300 (481,100) 186,000
----------- ------------ ------------ -------------
Other expense:
Interest expense (net) (87,600) (15,300) (166,500) (20,600)
Other income (expense) 31,300 (300) 16,600 (2,800)
----------- ------------ ------------ -------------
Total other expense (56,300) (15,600) (149,900) (23,400)
----------- ------------ ------------ -------------
Income (loss) before income taxes (179,700) 35,700 (631,000) 162,600
----------- ------------ ------------ -------------
Provision for income taxes - 8,500 - 19,400
----------- ------------ ------------ -------------
Net income (loss) $ (179,700) $ 27,200 (631,000) $ 143,200
=========== ============ ============ =============
Per share data:
Net income (loss) per share
Basic $ (.06) $ .01 $ (.24) $ .08
=========== ============ ============ =============
Diluted $ (.06) $ .01 $ (.24) $ .05
=========== ============ ============ =============
Weighted average number of shares
Basic 2,709,922 1,737,032 2,599,915 1,736,826
=========== ============ ============ =============
Diluted 2,709,922 3,086,673 2,599,915 3,093,459
=========== ============ ============ =============
</TABLE>
See Notes to Consolidated Financial Statements
(Unaudited)
- 5 -
<PAGE>
<TABLE>
HADRON, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED DECEMBER 31, 1999 AND 1998
<CAPTION>
Six Months Ended
December 31,
1999 1998
-------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (631,000) $ 143,200
-------------- ----------------
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization 208,700 21,100
Provision for doubtful accounts receivable (85,000) -
Changes in operating assets and liabilities:
Accounts receivable 226,400 1,138,200
Prepaid expenses and other 89,800 7,900
Other assets 86,200 (3,300)
Accounts payable (123,200) (357,900)
Other current liabilities (135,700) (360,500)
Other long-term liabilities (20,800) 2,100
-------------- ----------------
Total adjustments 246,400 447,600
-------------- ----------------
Net cash provided (used) by operating activities (384,600) 590,800
-------------- ----------------
Cash flows from investing activities:
Property additions (2,400) (57,100)
Purchase of Vail - (1,193,600)
Cash acquired in connection with Vail purchase - 779,700
-------------- ----------------
Net cash used by investing activities (2,400) (471,000)
-------------- ----------------
Cash flows from financing activities:
Proceeds of borrowings on bank and other loans 1,496,600 825,000
Proceeds of stock options and warrants exercised 58,800 3,500
Proceeds of employee stock purchases 36,700 52,300
Payments on bank and other loans (1,267,900) (905,000)
-------------- ----------------
Net cash provided (used) by financing activities 324,200 (24,200)
-------------- ----------------
Net increase (decrease) in cash and cash equivalents (62,800) 95,600
Cash and cash equivalents at beginning of period 256,000 60,500
-------------- ----------------
Cash and cash equivalents at end of period $ 193,200 $ 156,100
============== ================
</TABLE>
See Notes to Consolidated Financial Statements
(Unaudited)
- 6 -
<PAGE>
HADRON, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Basis of Presentation
The interim consolidated financial statements for Hadron, Inc.
(the "Company") are unaudited, but in the opinion of management
reflect all adjustments (consisting only of normal recurring accruals)
necessary for a fair presentation of results for such periods. The
results of operations for any interim period are not necessarily
indicative of results for the full year. The balance sheet at June
30, 1999 has been derived from the audited financial statements at
that date but does not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. These consolidated financial statements should
be read in conjunction with the financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the year
ended June 30, 1999 ("1999 Form 10-K") filed with the Securities and
Exchange Commission.
Certain reclassifications have been made to prior year amounts to
conform to current year classifications.
2. Debt
In connection with the December 1998 purchase of Vail Research
and Technology Corporation ("Vail"), the Company issued two non-
interest bearing promissory notes of $300,000 and $100,000,
respectively. The $300,000 non-interest bearing note, which was based
upon the collection of Vail's accounts receivable, was payable each
month in the amount of $25,000 for twelve months. As of December 31,
1999, $286,000 has been paid and $14,000 offset due to post-closing
adjustments, satisfying the note obligation of $300,000. The $100,000
non-interest promissory note is due and payable on the two-year
anniversary of the closing date, less permitted deductions taken for
contingent liabilities and uncollected accounts receivable.
The Company entered into a Loan and Security Agreement dated June
29, 1999 (the "Loan Agreement") with United Bank. The Loan Agreement
provides the Company with a one-year $1.5 million line of credit
facility (the "Credit Facility") and a three-year $1.5 million term
loan (the "Term Loan"). Interest on each of the facilities is at the
prime rate plus 150 basic points. Dr. C.W. Gilluly, Chairman and
Chief Executive Officer of the Company, and his wife have personally
guaranteed the Term Loan.
The Company is subject to certain financial covenants pursuant to
the Loan Agreement, including debt to net worth ratio, debt to EBITDA
ratio, and working capital and net worth requirements. The Company
has been unable to comply with certain of these original financial
covenants at December 31, 1999 due to operating losses incurred. The
Company is working with its bank to modify the covenants. Because the
covenants have not yet been modified, the long-term portion of the
debt totaling $750,000 is technically in default and has been
classified as current.
<PAGE>
The Credit Facility replaces the Company's previous line of
credit with Century National Bank. At December 31, 1999, the Company
had outstanding borrowings of $1,268,000 under this facility.
Proceeds from the Term Loan were used to repay the Company's $1.5
million in short-term notes that were issued in connection with the
Company's May 1999 acquisition of Avenue Technologies, Inc. ("ATI").
The Term Loan provides for monthly principal payments of approximately
$42,000, plus interest. As of December 31, 1999, principal payments
of $250,000 have been made, constituting all principal payments due at
such time, leaving an outstanding balance of $1,250,000.
The Term Loan and the Credit Facility are secured by the accounts
receivable and other assets of the Company. In addition, the 3-year
$998,000 convertible notes, interest payable at 6%, issued by the
Company to the former shareholders of ATI in connection with the
Company's acquisition of ATI, were subordinated to the Company's
obligations under the Term Note and the Credit Facility. The notes
are convertible into 444,000 shares of the Company's Common Stock at
$2.25 per share.
3. Earnings Per Share
<TABLE>
The following table sets forth the computation of basic and
diluted earnings per share:
<CAPTION>
Three Months ended Six Months Ended
December 31, December 31,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Numerator: Net Income (Loss) $(179,700) $ 27,200 $(631,000) $ 143,200
Effect of dilutive securities:
Convertible debt - 3,000 - 6,000
--------- -------- ---------- ---------
Numerator for diluted earnings
per share - income available
to common shareholders after
assumed conversion $(179,700) $ 30,200 $(631,000) $149,200
========== ======== =========== =========
Denominator:
Denominator for basic
earnings per share:
weighted average shares
outstanding 2,709,922 1,737,032 2,599,915 1,736,826
Effect of dilutive securities:
Warrants 881,413 885,079
Employee stock options 268,228 271,554
Convertible debt 200,000 200,000
--------- -------- ---------- ---------
Denominator for diluted
earnings per share 2,709,922 3,086,673 2,599,915 3,093,459
========= ========= ========== =========
Basic earnings per share $ (.06) $ .01 $ (.24) $ .08
========= ========= ========== =========
Diluted earnings per share $ (.06) $ .01 $ (.24) $ .05
========= ========= ========== =========
</TABLE>
<PAGE>
Shares issuable upon the exercise of stock options or warrants or
upon conversion of debt have been excluded from the computation to the
extent that their inclusion would be anti-dilutive.
<PAGE>
4. Concentration of Business
The Company provides a broad range of information, management and
technical services to businesses and federal government agencies. The
Company specializes in developing innovative technical solutions for
the intelligence community, analyzing and supporting defense systems
(including intelligent weapons systems and biological warfare
defense), and supporting computer systems.
Revenues from services performed under direct and indirect long-
term contracts and subcontracts with government defense and
intelligence agencies comprise the majority of the Company's business.
The majority of the Company's technical and professional service
business with governmental departments and agencies is obtained
through competitive procurement and through "follow-up" services
related to existing contracts. In certain instances, however, the
Company acquires such service contracts because of special
professional competency or proprietary knowledge in specific subject
areas.
5. Business segments and major customers
The Company has four reportable segments, comprising its
individual operating subsidiaries: Avenue Technologies, Inc. ("ATI"),
Engineering & Information Services, Inc. ("EISI"), SyCom Services,
Inc. ("SyCom"), and Vail Research and Technology Corporation ("Vail").
Each of the operating subsidiaries performs within the Company's one
industry segment, providing engineering, computer support services and
other professional technical services. The reportable segments are
distinguished by their individual clients, prior experience and
technical skills within the industry segment.
Each of the reportable segments has a president who is
responsible for the operating results. Operating results are measured
at the net income level for each segment. The accounting policies of
the reportable segments are the same as those described in the summary
of significant accounting policies. Interest on debt incurred in
connection with an acquisition and applicable associated goodwill
amortization is charged to the reportable segment. The Company's
corporate amounts consist primarily of certain activities and assets
not attributable to the reportable segments.
<PAGE>
<TABLE>
HADRON, INC.
REPORTABLE SEGMENTS - FASB FOR THE THREE AND SIX MONTHS
STATEMENT 131 ENDED DECEMBER 31, 1999 AND 1998
<CAPTION>
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
DEC. 1999 DEC, 1998 DEC. 1999 DEC.1998
DESCRIPTON:
- --------------------------- ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C>
Trade revenues:
ATI $ 1,207,900 $ - $ 2,589,000 $ -
EISI 2,426,800 2,725,400 4,946,500 5,492,100
SyCom 1,194,700 2,046,400 2,530,000 4,235,200
Vail 37,200 51,500 104,000 51,500
Corporate 94,100 7,700 97,800 16,200
------------ ----------- ------------ -----------
Total trade revenues $ 4,960,700 $ 4,831,000 $ 10,267,300 $ 9,795,000
============ =========== ============ ===========
Net income/(loss):
ATI $ (170,600) $ - $ (389,700) $ -
EISI 153,500 118,300 151,200 226,500
SyCom (137,000) (45,800) (252,000) (53,900)
Vail (61,400) 2,900 (123,900) 2,900
Corporate 35,800 (48,200) (16,600) (32,300)
------------ ----------- ------------ -----------
Total net income $ (179,700) $ 27,200 $ (631,000) $ 143,200
============ =========== ============ ===========
Assets:
ATI $ 3,644,400 $ - $ 3,644,400 $ -
EISI 1,134,400 1,058,900 1,134,400 1,058,900
SyCom 414,400 680,300 414,400 680,300
Vail 735,800 1,087,700 735,800 1,087,700
Corporate 198,200 658,400 198,200 658,400
------------ ----------- ------------ -----------
Total assets $ 6,127,200 $ 3,485,300 $ 6,127,200 $ 3,485,300
============ =========== ============ ===========
</TABLE>
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS AND QUANTITATIVE AND
QUALITATIVE DISCLOSURE ABOUT MARKET RISK
COMPARISON OF THE THREE MONTHS ENDED DECEMBER 31, 1999
TO THE THREE MONTHS ENDED DECEMBER 31, 1998
Revenues for the three months ended December 31, 1999 were
approximately $4,961,000, a 3% increase from the prior year quarter.
This increase reflects revenues from recently acquired ATI, partially
offset by fewer contract requirements at major government and
commercial customers of both EISI and SyCom, primarily due to certain
government budgetary constraints.
Costs of revenue for the quarter ended December 31, 1999 were
approximately $4,161,000, a decrease of approximately 4%. The decrease
is primarily due to the lowered personnel costs of both EISI and SyCom
due to certain government budgetary constraints, partially offset by
the costs associated with the increased revenues from ATI and Vail.
Costs of revenue as a percentage of revenues were approximately 84%
and 89% for the quarters ended December 31, 1999 and 1998,
respectively. This 5% decrease is primarily due to incorporating the
cost mixes of the recently acquired companies, ATI and Vail, coupled
with the reduction in retention of technical personnel on overhead
while awaiting new customer tasking and funding.
Selling, general and administrative expenses totaled
approximately $924,000 for the December 31, 1999 quarter, compared
with approximately $464,000 for the prior year quarter. The increase
is primarily due to the addition of key administrative personnel of
ATI and Vail, the Company's business development efforts targeting the
biological weapons defense and counterterrorism arenas, along with
the amortization of goodwill associated with the purchase of ATI.
The Company had an operating loss of $123,000 in the December 31,
1999 quarter, compared to an operating profit of $51,000 in the
corresponding prior period. This operating loss is primarily
attributable to the loss of billable employees due to customer
cutbacks, coupled with the increase in corporate personnel hired to
develop the Company's initiatives in the areas of biological weapons
defense and counterterrorism.
Net interest expense increased approximately $72,000 between the
quarter ended December 31, 1998 and the quarter ended December 31,
1999, due to higher outstanding borrowings and increases in debt
associated with the recent acquisitions.
The net loss for the quarter ended December 31, 1999 was
$180,000, compared to net income of approximately $27,000 in the prior
year quarter. The net loss resulted primarily from the loss of
billable positions and hiring freezes by the Company's major
customers, coupled with the costs of retaining key technical
professional personnel and diversifying business development efforts.
<PAGE>
COMPARISON OF THE SIX MONTHS ENDED DECEMBER 31, 1999
TO THE SIX MONTHS ENDED DECEMBER 31, 1998
Revenues for the six months ended December 31, 1999 were
approximately $10,267,000, a 5% increase from the prior year period.
This increase reflects revenues from recently acquired ATI and Vail,
partially offset by fewer contract requirements at major government
and commercial customers of both EISI and SyCom, primarily due to
certain government budgetary constraints.
Costs of revenue for the six months ended December 31, 1999 were
approximately $8,753,000, an increase of approximately 1%. The
increase is primarily due to the costs associated with the increased
revenues from ATI and Vail, partially offset by the loss of billable
personnel at both EISI and SyCom. Costs of revenue as a percentage of
revenues were approximately 85% and 89% for the period ended December
31, 1999 and 1998, respectively. This 4% decrease is primarily due to
incorporating the cost mixes of recently acquired ATI and Vail.
Selling, general and administrative expenses totaled
approximately $1,995,000 for the six months ended December 31, 1999,
compared with approximately $915,000 for the prior year period. The
increase is primarily due to the addition of key administrative
personnel of ATI and Vail, the Company's business development efforts
targeting the biological weapons defense and counterterrorism arenas
and the goodwill amortization associated with the purchase of ATI.
The Company had an operating loss of $481,000 for the six months
ended December 31, 1999, compared to an operating profit of $186,000
in the prior year period. This operating loss is primarily
attributable to the loss of billable employees due to customer
cutbacks, coupled with the retaining of technical personnel on
overhead while awaiting new customer tasking and funding, along with
the increase in corporate personnel hired to develop the Company's
initiatives in the areas of biological weapons defense and
counterterrorism.
Net interest expense increased approximately $146,000 from the
six months ended December 31, 1998 to the six months ended December
31, 1999, due to higher outstanding borrowings and increases in debt
associated with the recent acquisitions.
The net loss for the six months ended December 31, 1999 was
$631,000, compared to net income of approximately $143,000 in the
prior year period. The net loss resulted primarily from the loss of
billable positions and hiring freezes by the Company's major
customers, coupled with the costs of retaining key technical
professional personnel and diversifying business development efforts.
<PAGE>
CAPITAL RESOURCES AND LIQUIDITY
The working capital deficit at December 31, 1999 increased by
approximately $1,388,000 from June 30, 1999 primarily due to the
trickle-down effect resulting from the downturn experienced by the
Company's two largest customers, the Company's costs associated with
its business development endeavors, and the consequence of the
Company's inability to meet the financial covenants of its bank credit
facility.
Effective June 29, 1999, the Company entered into a Line of
Credit Agreement with United Bank, which provides the Company with a
$1,500,000 line of credit facility. The line of credit provides
additional working capital availability to fund the Company's growth.
Borrowings outstanding under the line of credit totaled $1,268,000 at
December 31, 1999.
The Company has been unable to comply with certain of the
original financial covenants of its bank credit facility at December
31, 1999 due to operating losses incurred. The Company is working
with its bank to modify the covenants. Because the covenants have not
yet been modified, the long-term portion of the debt totaling $750,000
is technically in default and has been classified as current. The
Company believes it has a good relationship with its bank, and that
the bank will continue to work with the Company as it seeks to improve
its financial condition. Based upon the foregoing, the Company
currently believes that the debt will not be called. However, the
inability of the Company to modify the covenants or to maintain
compliance with the covenants going forward, could have a material
adverse effect on the Company's liquidity, financial condition and
results of operations. The Company may require an infusion of capital
to pursue its new business development strategy and/or to facilitate
compliance with bank loan covenants.
The Company is exposed to market risks related to fluctuations in
interest rates on its debt. Increases in prevailing interest rates
could increase the Company's interest payment obligations relating to
variable rate debt. For example, a 100 basis points increase in
interest rates would increase annual interest expense by $25,000.
For the six months ended December 31, 1999, the Company received
new capital of $96,000, resulting from the exercise of stock warrants
and options and purchase of stock in connection with the Company's
Stock Purchase Program.
Year 2000 Issue
The Year 2000 issue is the result of computer programs being
written using two digits rather than four to define the applicable
year, resulting in possible system failure or miscalculations causing
disruptions of operations. The Company has not experienced any
significant operational problems or costs associated with the Year
2000 issue to date.
<PAGE>
Except for the historical information contained herein, the
matters discussed in this 10-Q include forward-looking statements
within the meaning of Section 21E of the Securities and Exchange Act
of 1934, as amended, that involve a number of risks and uncertainties.
These forward-looking statements may be identified by reference to a
future period by use of forward-looking terminology such as
"anticipate", "expect", "could", "may" and other words of a similar
nature. There are certain important factors and risks that could
cause results to differ materially from those anticipated by the
statements contained herein. Such factors and risks include business
conditions and growth in the information services, engineering
services, software development and government contracting arenas and
in the economy in general. Competitive factors include the pressures
toward consolidation of small government contracts into larger
contracts awarded to major, multi-national corporations; the Company's
ability to continue to recruit and retain highly skilled technical,
managerial and sales/marketing personnel; and the Company's ability to
successfully identify, complete and integrate acquisitions. Other
risks may be detailed from time to time in the Company's SEC reports.
<PAGE>
Part II. Other Information
Items 1-3.
None.
Item 4. Submission of Matters to a Vote of Security
of Security Holders
a) The Company's Annual Meeting of Stockholders was held on December
7, 1999.
b) At the Annual Meeting, the Company's stockholders re-elected the
Company's five directors, approved an amendment to the Company's 1997
Employee Stock Purchase Plan to increase by 350,000 the shares
reserved for issuance thereunder, and ratified the appointment of
Ernst & Young LLP as the Company's independent accountants.
The following votes were cast at the Annual Meeting with
respect to each of the matters above:
<TABLE>
Directors:
<CAPTION>
Abstentions and
Directors Votes For Votes Withheld Broker Non-Votes
- --------- --------- ------------- -----------------
<S> <C> <C> <C>
C.W. Gilluly 2,225,464 19,396 -
William Howard 2,220,644 24,216 -
Robert J. Lynch 2,220,664 24,196 -
John D. Sanders 2,220,664 24,196 -
Howard C. Whetzel 2,220,664 24,196 -
</TABLE>
Amendment to the 1997 Employee Stock Purchase Plan:
Abstentions and
Votes For Votes Against Broker Non-Votes
- --------- ------------- ----------------
2,115,986 119,419 9,455
Ratification of Appointment of Accountants:
Abstentions and
Votes For Votes Against Broker Non-Votes
- --------- ------------- ----------------
2,211,727 11,040 22,093
Item 5. Other Information
None.
Item 6. Exhibits and Reports.
(a) Exhibits
Exhibit No.
27 Financial Data Schedule.
(b) Reports on Form 8-K
None.
<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 there unto duly authorized.
Date: February 14, 2000 HADRON, INC.
(Registrant)
By:/S/ C.W. Gilluly By:/S/ C.W. Gilluly
C.W. Gilluly Ed.D. C.W. Gilluly Ed.D.
Chief Executive Officer Acting Chief Financial Officer
and Chairman (Principal Financial
(Principal Executive Officer) Officer and Principal
Accounting Officer)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 193
<SECURITIES> 0
<RECEIVABLES> 3,504
<ALLOWANCES> 150
<INVENTORY> 0
<CURRENT-ASSETS> 3,713
<PP&E> 790
<DEPRECIATION> 533
<TOTAL-ASSETS> 6,127
<CURRENT-LIABILITIES> 5,167
<BONDS> 0
0
0
<COMMON> 56
<OTHER-SE> (136)
<TOTAL-LIABILITY-AND-EQUITY> 6,127
<SALES> 10,267
<TOTAL-REVENUES> 10,267
<CGS> 8,753
<TOTAL-COSTS> 10,748
<OTHER-EXPENSES> (17)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 167
<INCOME-PRETAX> (631)
<INCOME-TAX> 0
<INCOME-CONTINUING> (631)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (631)
<EPS-BASIC> (.24)
<EPS-DILUTED> (.24)
</TABLE>
