<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the three month period ended March 31, 2000.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-11685-NY
RADYNE COMSTREAM INC.
(Exact name of registrant as specified in its charter)
NEW YORK
(State or other jurisdiction of incorporation or organization)
11-2569467
(IRS EMPLOYER IDENTIFICATION NO.)
3138 EAST ELWOOD STREET, PHOENIX, AZ 85034
(Address of principal executive offices)
602-437-9620
(Registrant's Telephone number)
Indicate by check mark whether the registrant (1) 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 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 by check mark whether the registrant filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
YES X NO
--- ---
The registrant had 14,271,557 shares of its common stock, par
value $.002, outstanding as of March 31, 2000.
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PART I - FINANCIAL INFORMATION
RADYNE COMSTREAM INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
ITEM 1 Unaudited Audited
Assets
Current assets:
<S> <C> <C>
Cash & cash equivalents $ 19,956,792 2,947,660
Accounts receivable - trade, net of allowance for doubtful
accounts of $826,746 and $791,746 respectively 9,718,909 8,678,153
Other receivable 14,489 --
Inventories, net 10,006,936 8,339,112
Prepaid expenses 522,570 929,076
------------ ----------
Total current assets 40,219,696 20,894,001
------------ ----------
Property and equipment, net 3,438,600 3,595,168
Other assets:
Purchased technology, net of accumulated amortization of $605,000
and $505,000, respectively 1,895,000 1,995,000
Goodwill, net of accumulated amortization of $297,459 and
$253,530, respectively 1,500,932 1,544,861
Deposits and other 118,075 207,032
------------ ----------
Total other assets 3,514,007 3,746,893
------------ ----------
$ 47,172,303 28,236,062
============ ==========
Liabilities and stockholders' equity
Current liabilities:
Notes payable under line of credit agreement $ 5,500,000 12,920,000
Current installments under capital leases 22,362 44,332
Accounts payable, trade 4,524,990 3,911,742
Accrued expenses 5,416,581 5,043,391
Customer advances 2,772,011 545,218
Taxes Payable 706,246 684,382
------------ ----------
Total Current Liabilities 18,942,190 23,149,065
Obligations under capital leases, excluding current installments 44,185 64,652
Accrued stock option compensation 568,170 695,433
------------- ----------
Total Liabilities 19,554,545 23,909,150
------------- ----------
Stockholders' equity:
Common Stock, $.002 par value, 20,000,000 shares authorized;
shares issued and outstanding, 14,271,557 at March 31, 2000
and 10,739,382 at December 31, 1999 28,544 21,476
Additional Paid-In Capital 45,244,778 23,353,318
Accumulated deficit (17,655,564) (19,047,882)
------------ ----------
Total stockholders' equity 27,617,758 4,326,912
------------ ----------
$ 47,172,303 28,236,062
============ ==========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
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RADYNE COMSTREAM INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31, 2000 March 31, 1999
<S> <C> <C>
Net Sales $ 16,752,174 12,318,705
Cost of Sales 8,921,518 6,772,429
------------ ------------
Gross Profit 7,830,656 5,546,276
------------ ------------
Operating expenses:
Selling, general and administrative 3,538,541 2,227,022
Depreciation and Amortization 619,882 773,668
Research and development 2,174,172 2,307,475
------------ ------------
Total operating
expenses 6,332,595 5,308,165
------------ ------------
Earnings from operations 1,498,061 238,111
Other (income) expense:
Interest expense 218,520 543,001
Other (income) expense (141,777) 11,773
------------ ------------
Earnings (loss) before income taxes 1,421,318 (316,663)
Income taxes 29,000 --
------------ ------------
Net earnings(loss) $ 1,392,318 (316,663)
============ ============
Basic net earnings(loss) per share $ 0.11 (0.05)
============ ============
Diluted net earnings(loss) per share $ 0.10 (0.05)
============ ============
Weighted average number of common shares
outstanding - basic 12,458,322 5,931,968
============ ============
Weighted average number of common shares
outstanding - diluted 14,274,501 5,931,968
============ ============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
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RADYNE COMSTREAM INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 2000 MARCH 31, 1999
<S> <C> <C>
Cash flows from operating activities:
Net earnings(loss) $ 1,392,318 (316,663)
Adjustments to reconcile net earnings (loss) to cash flows
provided by
Operating activities:
Loss on disposal of assets 28,073 --
Depreciation and Amortization 619,882 773,668
Increase (decrease) in cash resulting from changes in:
Accounts receivable (1,040,756) 1,358,159
Other receivables (14,489) --
Inventories (1,667,824) 358,103
Prepaid expenses 406,506 (92,646)
Deposits and other 88,957 70,580
Accounts payable, trade 613,248 (648,964)
Accounts payable, affiliates -- (6,950)
Accrued expenses 373,190 (962,370)
Customer advances 2,226,793 --
Taxes payable 21,864 --
Accrued stock option compensation (127,263) --
------------ ------------
Net cash provided by operating activities 2,920,499 532,917
------------ ------------
Cash flows from investing activities:
Capital expenditures (347,458) (28,910)
------------ ------------
Net cash used in investing activities (347,458) (28,910)
------------ ------------
Cash flows from financing activities:
Borrowings on notes payable under line of credit -- 1,000,000
Payments on notes payable under line of credit (7,420,000) --
Net proceeds from exercise of stock options 753,876 7,500
Net proceeds from sale of common stock 21,144,652 --
Principal payments on capital lease obligations (42,437) (42,587)
------------ ------------
Net cash provided by financing activities 14,436,091 964,913
------------ ------------
Net increase in cash
17,009,132 1,468,920
Cash and cash equivalents, beginning of year
2,947,660 254,956
------------ ------------
Cash and cash equivalents, end of period $ 19,956,792 1,723,876
============ ============
Supplemental disclosure of cash flow information:
Cash paid for interest $ 477,951 179,025
============ ============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
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RADYNE COMSTREAM INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION FOR MARCH 31, 2000 AND MARCH 31, 1999 IS UNAUDITED)
1 BUSINESS
Radyne ComStream Inc. (the "Company") was incorporated on November 25,
1980 and commenced operations on May 22, 1981. On August 12, 1996 the Company
became a majority owned subsidiary of Singapore Technologies Pte Ltd ("STPL"),
through its wholly-owned subsidiary, Stetsys US, Inc. ("ST").
In March 1999, Radyne Corp. changed its name to Radyne ComStream Inc.
The Company's principal manufacturing and headquarters facilities are located in
Phoenix, Arizona and San Diego, California. The Company designs, manufactures,
and sells products, systems and software used for the transmission and reception
of data over satellite and cable communication networks.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Presentation
The interim unaudited condensed consolidated financial statements
furnished reflect all adjustments which are, in the opinion of management,
necessary for a fair presentation of financial position as of March 31,
2000 and the results of operations and cash flows for the three months
ended March 31, 2000 and 1999. Such adjustments are of a normal recurring
nature. This information should be read in conjunction with the
consolidated financial statements included in the Company's Form 10-K for
the twelve month period ended December 31, 1999.
The results of operations for the interim period are not necessarily
indicative of the results to be expected for the full year.
(b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities as of the financial
statement date and the reported amounts of revenue and expenses during the
reporting period. Rapid technological change and short product life cycles
characterize the industry in which the Company operates. As a result,
estimates are required to provide for product obsolescence and warranty
returns as well as other matters. Actual results could differ from those
estimates.
(c) Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and its subsidiaries. Significant intercompany accounts and
transactions have been eliminated in the consolidation.
(d) Cash Equivalents
The Company considers all money market accounts with a maturity of 90
days or less to be cash equivalents.
(e) Revenue Recognition
The Company recognizes revenue upon transfer of title and shipment of
product.
(f) Inventories
Inventories, consisting of satellite modems and related products, are
valued at the lower of cost (first-in, first-out) or market.
(g) Property and Equipment
Property and equipment are stated at cost. Equipment held under capital
leases is stated at the present value of future minimum lease payments.
Expenditures for repairs and maintenance are charged to operations as
incurred, and improvements which extend the useful lives of the assets are
capitalized. Depreciation and amortization of machinery and equipment are
computed using the straight-line method over an estimated useful
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life of three to ten years. Equipment held under capital leases and
leasehold improvements are amortized on a straight-line basis over the
shorter of the lease term or estimated useful lives of the assets.
(h) Goodwill
Goodwill, which represents the excess of purchase price over fair value
of net assets acquired, is amortized on a straight-line basis over ten
years.
(i) Purchased Technology
In connection with the acquisition of ComStream, value was assigned to
purchased technology. Purchased technology is being amortized on a
straight-line basis over the expected period to be benefited of 6.25 years.
(j) Impairment of Long-Lived Assets
The Company reviews long-lived assets and certain identifiable
intangibles for impairment whenever events or changes in circumstances
indicate the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of
the carrying amount of an asset to future undiscounted net cash flows
expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by
which the carrying amounts of the assets exceed the fair value of the
assets. Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell.
(k) Warranty Costs
The Company provides limited warranties on certain of its products and
systems for periods generally not exceeding two years. The Company accrues
estimated warranty costs for potential product liability and warranty
claims based on the Company's claim experience. Such costs are accrued as
cost of sales at the time revenue is recognized.
(l) Research and Development
The cost of research and development is charged to expense as incurred.
(m) Income Taxes
The Company accounts for income taxes under the asset and liability
method. Deferred tax assets and liabilities are recognized for the future
consequences attributed to differences between the consolidated financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Differences between income for financial and tax
reporting purposes arise primarily from accruals for warranty reserves and
compensated absences. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date.
(n) Concentration of Credit Risk
Financial instruments, which potentially subject the Company to
concentrations of credit risk, are principally accounts receivable. The
Company maintains ongoing credit evaluations of its customers and generally
does not require collateral. The Company provides reserves for potential
credit losses and such losses have not exceeded management's expectations.
(o) Net Earnings/(Loss) Per Share
Basic earnings (loss) per share is computed by dividing earnings
available to common stockholders by the weighted-average number of common
shares outstanding for the period. Diluted earnings (loss) per share
reflects the potential dilution that could occur if securities or contracts
to issue common stock were exercised or converted to common stock or
resulted in the issuance of common stock that then shared in the earnings
or loss of the Company. Assumed exercise of outstanding stock options and
warrants for the three months ended March 31, 1999 have been excluded from
the calculations of diluted net loss per commons share as their effect
would have been antidilutive.
(p) Fair Value of Financial Instruments
The fair value of accounts receivable, accounts payable and accrued
expenses approximates the carrying value due to the short-term nature of
these instruments. Management has estimated that the fair values of the
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notes payable, approximate the current balances outstanding, based on
currently available rates for debt with similar terms.
(q) Employee Stock Options
The Company has elected to follow Accounting Principles Board Opinion
No. 25, Accounting for Stock Issued to Employees (APB 25) and related
interpretations in accounting for its employee stock options and to adopt
the "disclosure only" alternative treatment under Statement of Financial
Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS
123). SFAS 123 requires the use of fair value option valuation models that
were not developed for use in valuing employee stock options. Under SFAS
No. 123, deferred compensation is recorded for the excess of the fair value
of the stock on the date of the option grant, over the exercise price of
the option. The deferred compensation is amortized over the vesting period
of the option.
(r) Segment Reporting
The Company has only one operating business segment, the sale of
equipment for satellite and cable communications networks.
(s) Comprehensive Income
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive Income"
(SFAS No. 130) which became effective for the Company January 1, 1998. SFAS
No. 130 established standards for reporting and displaying comprehensive
income and its components in a full set of general-purpose financial
statements. The Company had no items of comprehensive income. Therefore,
the adoption of SFAS No. 130 had no effect on the Company.
3 PUBLIC OFFERING
In January 2000, the Board of Directors approved a public offering of
2,760,000 units which became effective on February 11, 2000 upon the
approval by the Securities and Exchange Commission of the S-2/A
Registration Statement which was filed on February 7, 2000. Each unit
offered consisted of one share of the Company's common stock and one
warrant to purchase an additional share of common stock. The units were
offered at a net price of $6.44 each (after a $0.56 per unit underwriting
discount), subject to adjustment in certain circumstances. As a result, the
Company received $17,301,500 in proceeds which were offset by $809,836 in
costs associated with the offering. Management of the Company anticipates
that these proceeds will primarily be used in on-going Research and
Development projects for the purpose of expanding current product lines.
Additionally, Warrant Holders exercised a total of 531,770 warrants to buy
shares at $8.75 per share, which generated another $4,652,988 of cash.
These funds will be used for general corporate expenses and to retire debt.
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<TABLE>
<CAPTION>
4 INVENTORIES MARCH 31, 2000 DECEMBER 31, 1999
<S> <C> <C>
Inventories consist of the following:
Raw materials and components $ 6,017,155 $ 5,550,279
Work in process 4,644,144 3,724,908
Finished goods 1,060,308 863,154
------------ ------------
11,721,607 10,138,341
Obsolescence reserve (1,714,671) (1,799,229)
------------ ------------
Total $ 10,006,936 $ 8,339,112
============ ============
</TABLE>
<TABLE>
<CAPTION>
5 PROPERTY AND EQUIPMENT MARCH 31, 2000 DECEMBER 31, 1999
<S> <C> <C>
Property and equipment consist of the following:
Machinery and equipment $ 3,744,027 $ 3,674,803
Furniture and fixtures 2,211,855 2,048,976
Leasehold improvements 730,765 445,127
Computers and Software 217,687 462,042
----------- -----------
6,904,334 6,630,948
Less accumulated depreciation & amortization (3,465,734) (3,035,780)
----------- -----------
Total $ 3,438,600 $ 3,595,168
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
6 ACCRUED LIABILITIES MARCH 31, 2000 DECEMBER 31, 1999
<S> <C> <C>
Accrued liabilities consist of the following:
Wages and related payroll taxes $1,620,118 $ 788,559
Interest expense 43,774 303,205
Professional fees 366,353 630,650
Warranty reserve 869,682 924,928
Lease buyout 267,759 172,511
Accrued MIP 154,700 439,168
Accrued Executive Bonuses 406,247 --
Accrued Commissions 671,492 688,758
Other 1,013,456 1,095,612
---------- ----------
Total $5,416,581 $5,043,391
========== ==========
</TABLE>
7 RELATED PARTY TRANSACTIONS
Sales to Agilis Communication Technologies Pte Ltd, a company under common
control with Radyne ComStream, for the three months ended March 31, 2000 and
1999 were $6,300 and $1,200 respectively. Cost of such sales for the same
periods were $3,789 and $1,150 respectively.
Interest expense on notes payable to affiliates was $0 and $255,000 for
the three months ended March 31, 2000 and March 31, 1999 respectively.
8 NOTES PAYABLE
The Company has a $20,500,000 credit agreement with Citibank, N.A. that
includes $20,000,000 available under an uncommitted line of credit facility and
facilities for bank guarantees and/or standby letters of credit up to $500,000.
An affiliate of ST has issued a nonbinding letter of awareness in connection
with this credit agreement. Borrowings under the line of credit bear interest at
a fluctuating rate equal to LIBOR plus 1% per annum or an
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alternative Citibank Quoted Rate plus 1% per annum (rates varied from 7.18 % to
7.37% on balances owed at March 31, 2000). The credit agreement requires the
Company to maintain certain financial leverage ratios. At March 31, 2000, the
Company was in compliance with all such covenants. The availability of
additional borrowings under the credit agreement expires September 28, 2000 and
is renewable annually at the option of the bank. The Company owed principal of
$5,500,000 under the line of credit as of March 31, 2000 and $12,920,000 as of
December 31, 1999.
9 EARNINGS (LOSS) PER SHARE
A summary of the reconciliation from basic earnings (loss) per share to
diluted earnings (loss) per share follows:
<TABLE>
<CAPTION>
Quarter ended
March 31,
---------
2000 1999
---- ----
<S> <C> <C>
Earnings (loss) available to common stockholders $ 1,392,318 (316,663)
============ ============
Basic EPS-weighted average shares outstanding 12,458,322 5,931,968
============ ============
Basic earnings (loss) per share .11 (.05)
============ ============
Basic EPS-weighted average shares outstanding 12,458,322 5,931,968
Effect of dilutive securities 1,816,179 --
------------ ------------
Dilutive EPS-weighted average shares outstanding 14,274,501 5,931,968
============ ============
Diluted earnings (loss) per share .10 (.05)
============ ============
Stock options not included in diluted EPS since antidilutive -- 616,228
============ ============
</TABLE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This information should be read in conjunction with the condensed
consolidated financial statements and the notes thereto included in Item 1 of
Part I of this Quarterly Report and the audited consolidated financial
statements and notes thereto and Management's Discussion and Analysis of
Financial Condition and Results of Operations for the year ended December 31,
1999 contained in the Company's 1999 Annual Report on Form 10-K.
Except for the historical information contained herein, the following
discussion contains "forward-looking statements" within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors,
which may cause the actual results, performance or achievements of Radyne
ComStream Inc., or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, the following:
- - loss of, and failure to replace, any significant customers;
- - timing and success of new product introductions;
- - product developments, introductions and pricing of competitors;
- - timing of substantial customer orders;
- - availability of qualified personnel;
- - the impact of local political and economic conditions and foreign
exchange fluctuations on international sales;
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- - performance of suppliers and subcontractors;
- - market demand and industry and general economic or business conditions;
- - availability, cost and terms of capital;
- - Radyne ComStream's level of success in effectuating its strategic plan,
including realization of all of the anticipated benefits of the
integration of Radyne and the recently acquired ComStream Holdings,
Inc.;
- - other factors to which this report refers or to which the Company's
1999 Annual Report on Form 10-K refers; and
RESULTS OF OPERATIONS
The Company's net sales increased 36% to $16,752,000 during the period
ended March 31, 2000 from $12,319,000 during the period ended March 31, 1999
primarily as a result of integration of the Company's core product lines into
the established ComStream Holdings marketing and distribution channels in
addition to an increase in bookings between the two periods.
The Company's cost of sales as a percentage of net sales decreased to
53% during the period ended March 31, 2000 from 55% during the period ended
March 31, 1999. This decrease is primarily the result of an increase in margins
on product sales due to product mix during the current quarter compared to the
first quarter of 1999.
Selling, general and administrative costs increased 59% to $3,539,000
during the current period from $2,227,000 during the fiscal period ended March
31, 1999. The increased level of expenses for the period was primarily the
result of the increased level of business activity, in addition to higher
accruals made for commissions and executive bonuses. Marketing expenses have
remained high, based on the Company's attempts to position itself to compete
head-to-head with larger competitors without giving up margin advantages.
Depreciation and amortization decreased 20% to $620,000 during the
current period from $774,000 during the fiscal period ended March 31, 1999. The
decreased level of overall depreciation and amortization expenses is the result
of the lower net book values of fixed assets and intangible assets.
Research and development expenditures decreased 6% to $2,174,000 during
the current period from $2,307,000 during the period ended March 31, 1999. These
expenditures may fluctuate from period to period depending on the staging of
on-going projects. In future periods, we anticipate research and development
expenditures to remain high as we plan to expand current product lines.
Based on above, the Company experienced net operating income of
$1,498,000 for the three month period ended March 31, 2000 as compared to
238,000 for the three month period ended March 31, 1999. This increase is mainly
attributed to the increase in sales and product margins discussed above.
Interest expense decreased to $219,000 in the current period ended
March 31, 2000 from $543,000 in the prior period ended March 31, 1999 due to a
decrease in the Company's debt level.
Other income increased to $142,000 in the current period ended March
31, 2000 from an expense of $12,000 in the prior period ended March 31, 1999 due
mainly to interest earned on interest bearing cash accounts. As discussed above,
overall cash levels increased by $17,009,000 from December 31, 1999 to
$19,957,000 at March 31, 2000.
The Company's new-orders-booked (Bookings) increased by 49% to
$20,245,000 for the current period from $13,607,000 for the period ended March
31, 1999. This increase was primarily due to one large order for the Company's
"internet-over-satellite" products in the amount of $8,600,000.
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The Company's level of unfilled-orders-to-ship (Backlog) increased 88%
to $18,555,000 for the current period from $9,894,000 at March 31, 1999. This
increase is due primarily to the above mentioned order for $8,600,000.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital was $21,278,000 at March 31, 2000, an
increase in working capital of $23,533,000 from ($2,255,000) at December 31,
1999. This change is primarily a result of the public offering in February which
provided cash of $17,302,000.
Net cash provided by operating activities was $2,920,000 for the
current period, as compared to $533,000 used in the three-month period ended
March 31, 1999. This increase is primarily attributed to an increase in net
earnings of $1,709,000 and customer advance payments of $2,227,000, partially
offset by increases in accounts receivable and inventory of $1,041,000 and
$1,668,000 respectively.
Cash used in investing activities, consisted of additions to property
and equipment of $347,000 for the current period as compared to the prior period
amount of $29,000.
Net cash provided by financing activities increased to $14,436,000 from
$965,000 for the periods ended March 31, 2000 and March 31, 1999, respectively.
The increase is attributed to the public offering completed in February and
subsequent exercise of stock warrants which provided cash of $21,144,652,
partially offset by $7,420,000 of payments on notes payable under lines of
credit.
As a result of the foregoing, the Company increased its cash balances
by $17,009,000 during the current period, compared to an increase in cash
balances of $1,469,000 for the three month period ended March 31, 1999.
The Company believes that its bank credit lines, cash on hand, and cash
from operations are likely to be sufficient to fund its planned future
operations and capital requirements for continued growth for the next twelve
months.
ITEM 3- QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk on our financial instruments from changes
in interest rates. We do not use financial instruments for trading purposes or
to manage interest rate risk. Increases in market interest rates would not have
a substantial adverse effect on profitability.
Our financial instruments consist primarily of short-term variable rate
revolving credit lines. Our debt at March 31, 2000 consisted of notes payable
under a line of credit agreement. Interest income from cash invested in interest
bearing accounts should offset interest expense on borrowings for the remainder
of the current fiscal period.
PART II - OTHER INFORMATION
ITEM 4- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters which security holders voted on during the three
month period ended March 31, 2000.
ITEM 5 - OTHER INFORMATION - RECENT DEVELOPMENTS
Public Offering
Radyne ComStream Inc completed a public offering as of February 11,
2000. The Company received $17,301,500 in gross proceeds from the sale of
2,760,000 units each consisting of one common share and one warrant to purchase
a common share. In addition, as of March 31, 2000, a total of 531,770 warrants
had been exercised for the aggregate exercise price of $4,652,988.
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ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBIT DESCRIPTION
3.1* Restated Certificate of Incorporation
3.2** Bylaws, as amended and restated
27 Financial Data Schedule
* Incorporated by reference from Registrant's report on Form 10-Q, filed
March 11, 1997.
** Incorporated by reference from Registrant's Form 10-K, filed April 15,
1999.
(b) Registrant filed the following reports on Form 8-K during the period of
January 1, 2000 through March 31, 2000:
Current Report on Form 8-K dated February 8, 2000, Item 5.
Current Report on Form 8-K dated March 3, 2000, Item 5.
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated: May 2, 2000 RADYNE COMSTREAM INC.
By: /S/ ROBERT C. FITTING
------------------------
Robert C. Fitting
Chief Executive Officer and
President
By: /S/ GARRY D. KLINE
------------------------
Garry D. Kline
Vice President, Finance
(Chief Financial Officer and
Accounting Officer)
13
<PAGE> 14
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------ -----------------------
27 Financial Data Schedule
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS CONTAINED IN THE FORM 10-Q FOR THE QUARTER ENDED 3-31-00
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 19,956,792
<SECURITIES> 0
<RECEIVABLES> 10,545,655
<ALLOWANCES> 826,746
<INVENTORY> 10,006,936
<CURRENT-ASSETS> 40,219,696
<PP&E> 6,904,334
<DEPRECIATION> (3,465,734)
<TOTAL-ASSETS> 47,172,303
<CURRENT-LIABILITIES> 18,942,190
<BONDS> 0
0
0
<COMMON> 28,544
<OTHER-SE> 27,589,214
<TOTAL-LIABILITY-AND-EQUITY> 47,172,303
<SALES> 16,752,174
<TOTAL-REVENUES> 16,752,174
<CGS> 8,921,518
<TOTAL-COSTS> 8,921,518
<OTHER-EXPENSES> 6,332,595
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 218,520
<INCOME-PRETAX> 1,421,318
<INCOME-TAX> 29,000
<INCOME-CONTINUING> 1,392,318
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,392,318
<EPS-BASIC> 0.11
<EPS-DILUTED> 0.10
</TABLE>
