SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
__________
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
May 14, 1996
COMPTEK RESEARCH, INC.
___________________________________________________
(Exact Name of Registrant as Specified in Charter)
New York 1-8502 16-0959023
__________________ _________________ ____________________
(State of Other (Commission File (IRS Employer
Jurisdiction of Number) Identification No.)
Incorporation)
2732 Transit Road, Buffalo, New York 14224-2523
_____________________________________ ___________
(Address of Prinicpal Executive (Zip Code)
Offices)
Registrant's telephone number, including area code: (716) 677-4070
_________________
Not Applicable
___________________________________________________________________
(Former Name or Former Address, if Changed Since Last Year)
<PAGE 1>
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements for Businesses Acquired
1. Financial Statements of Advanced Systems
Development, Inc. as of and for the period ended
September 30, 1995, together with Report of Independent
Public Accountants and consent.
2. Unaudited Financial Statements of Advanced Systems
Development, Inc., as of and for the three months ended
December 29, 1995.
(b) Unaudited Pro Forma Financial Information.
1. Unaudited Pro Forma Condensed Consolidated Statements
of Operations for the nine months ended December 29,
1995 and the year ended March 31, 1995.
2. Unaudited Pro Forma Condensed Consolidated Balance
Sheet as of December 29, 1995.
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 hereunto duly
authorized.
COMPTEK RESEARCH, INC
Date: April 29, 1996 By: /S/ John J. Sciuto
________________ __________________________
John J. Sciuto
President and CEO
<PAGE 2>
INDEPENDENT AUDITORS' REPORT
Advanced Systems Development, Inc.
96-10 23rd Avenue
Elmhurst, New York 11369
To the Stockholders:
We have audited the accompanying balance sheets of Advanced Systems
Development, Inc. as of September 30, 1995 and 1994 and the related
statements of income, stockholders' equity and cash flows for the
three years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test bases, evidence supporting the amounts, and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial position of the Company at September
30, 1995 and 1994 and the results of its operations and its cash flows
for each of the years in the three year period ended September 30,
1995, in conformity with generally accepted accounting principles.
Respectfully submitted,
/S/David Michael & Company, P.C.
DAVID MICHAEL & COMPANY, P.C.
Certified Public Accountants
New York, New York
November 30, 1995
<PAGE 3>
DAVID MICHAEL & COMPANY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
SEVEN PENN PLAZA
NEW YORK, NY 10001
(212) 563-2525
The Board of Directors
Comptek Research, Inc.
2732 Transit Road
Buffalo, NY 14224
Gentlemen:
We consent to the incorporation by reference in the registration
statements (No. 33-54170, 33-30253, and 33-82536) on Form S-8 of
Comptek Research, Inc. of our report dated November 30, 1995, with
respect to the balance sheets of Advanced Systems Development, Inc. as
of September 30, 1995 and 1994, and the related statements of
earnings, stockholders' equity and cash flows for each of the years in
the three-year period ended September 30, 1995, which report appears
in the Form 8-K of Comptek Research, Inc. dated May 14, 1996.
/S/David Michael & Company
DAVID MICHAEL & COMPANY,
Certified Public Accountants, P.C.
New York, New York
May 9, 1996
<PAGE 4>
<TABLE>
<CAPTION>
ADVANCED SYSTEMS DEVELOPMENT, INC.
BALANCE SHEETS
ASSETS
September 30,
_________________________
<S> <C> <C>
1995 1994
___________ ___________
CURRENT ASSETS
Cash and equivalent $141,444 $230,618
Contracts receivable 3,400,385 1,400,749
Costs and earnings in excess of billings
on uncompleted contracts 2,412,564 4,104,517
Inventory 1,331,321 946,033
Prepaid taxes 56,817 16,193
Prepaid expenses 30,526 28,434
Loans & exchanges 28,272 41,997
Other current asset 29,644 30,300
_________ _________
Total Current Assets 7,430,973 6,798,841
_________ _________
OTHER ASSETS
Fixed assets 1,583,606 2,067,668
Less: Accumulated depreciation (947,031) (1,288,841)
Security deposits 127,378 141,437
Patents 1,090 1,090
Investment in Xelex, Inc. 0 250,000
_________ _________
Total Other Assets 765,043 1,171,354
_________ _________
TOTAL ASSETS $8,196,016 $7,970,195
========= ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE 5>
<TABLE>
<CAPTION>
ADVANCED SYSTEMS DEVELOPMENT, INC.
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30,
_________________________
<S> <C> <C>
1995 1994
_________ _________
CURRENT LIABILITIES
Notes payable $2,507,071 $2,256,208
Accounts payable 983,842 744,234
Taxes and accrued liabilities 343,695 373,855
Billings in excess of costs and earnings
on uncompleted contracts 310,449 180,667
_________ _________
Total Current Liabilities 4,145,057 3,554,964
OTHER LIABILITIES
Notes payable 17,974 2,673
_________ _________
Total Liabilities 4,163,031 3,557,637
_________ _________
COMMITMENTS
STOCKHOLDERS' EQUITY
Common stock-no par value;
Authorized - 1,000 shares
Issued and outstanding - 507.3205 shares 5,905 5,905
Additional paid in capital 99,992 99,992
Retained earnings 4,075,105 4,454,678
Less: Treasury stock at cost (148,017) (148,017)
_________ _________
Total Stockholders' Equity $4,032,985 $4,412,558
_________ __________
Total Liabilities and Stockholders'
Equity $8,196,016 $7,970,195
The accompanying notes are in integral part of these financial statements.
</TABLE>
<PAGE 6>
<TABLE>
<CAPTION>
ADVANCED SYSTEMS DEVELOPMENT, INC.
STATEMENT OF INCOME FOR THE YEARS ENDED
September 30,
______________________________________
<S> <C> <C> <C>
1995 1994 1993
__________ __________ __________
REVENUES $13,752,275 $12,695,100 $12,371,027
COST OF REVENUES 10,577,784 9,911,337 9,389,497
_________ _________ _________
GROSS PROFIT 3,174,491 2,783,763 2,981,530
_________ _________ _________
OPERATING EXPENSES
Research and development costs 609,382 489,793 281,199
Selling and General 1,982,313 1,981,095 2,345,834
_________ _________ _________
2,591,695 2,470,888 2,627,033
_________ _________ _________
Income from operations 582,796 312,875 354,497
OTHER INCOME (EXPENSES)
Interest expense net of interest
income of $5,981, $13,416 and
$8,241 respectively (175,617) (15,252) (32,278)
Income (loss) on investment (92,208) 0 29,278
________ ________ _________
Net Income before income 314,971 297,623 351,497
taxes ________ ________ _________
INCOME TAXES
Current 39,021 96,200 113,030
Deferred 0 (77,000) (60,000)
________ ________ _________
Total Income Tax (Credit) 39,021 19,200 53,030
________ ________ _________
NET INCOME $275,950 $278,423 $298,467
======== ======== =========
Earnings per share $543.94 $548.81 $588.32
======== ======== =========
Shares 507.3205 507.3205 507.3205
======== ======== =========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE 7>
<TABLE>
<CAPTION>
ADVANCED SYSTEMS DEVELOPMENT, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
Additional Treasury
Common Paid-in Retained Stock
Stock Captial Earnings at Cost Total
________________________________________________________
<S> <C> <C> <C> <C> <C>
Balance at September $5,905 $99,992 $4,726,604 $(148,017) $4,684,484
30, 1992
Net income - - 298,467 - 298,467
Cash dividend of
$20.98 per share - - (10,642) - (10,642)
________ ________ __________ ________ _________
Balance at September
30, 1993 5,905 99,992 5,014,429 (148,017) 4,972,309
Net income - - 278,423 - 278,423
Cash dividend of
$1,652.16 per share - - (838,174) - (838,174)
________ ________ _________ ________ ________
Balance at September
30, 1994 5,905 99,992 4,454,678 (148,017) 4,412,558
Net income - - 275,950 - 275,950
Cash dividend of
$1,292.13 - - (655,523) - (655,523)
________ ________ _________ ________ ________
Balance at September
30, 1995 $5,905 $99,992 $4,075,105 $(148,017) $4,032,985
======== ======== ========= ======== =========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE 8>
<TABLE>
<CAPTION>
ADVANCED SYSTEMS DEVELOPMENT, INC.
STATEMENT OF CASH FLOWS INCREASE (DECREASE) IN CASH FOR THE YEARS ENDED
September 30,
_____________________________________
1995 1994 1993
_________ ________ _________
<S> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income $275,950 $278,423 $298,467
Adjustments to Reconcile Net Income
To Net Cash Provided (Used) By
Operating Activities:
Depreciation 222,858 250,044 230,960
Deferred income taxes - (77,000) (60,000)
Income (loss) on investment 92,208 - (29,278)
(Increase) decrease in contracts
receivable (1,999,636) (162,638) 911,016
(Increase) decrease in costs &
earnings in excess of billings on
uncompleted contracts 1,691,953 (1,145,059) (821,949)
(Increase) decrease in inventory (385,288) (114,412) 386,786
(Increase) decrease in prepaid
expenses & other current assets (28,335) 63,282 (67,920)
Increase (decrease) in accounts
payable 239,608 (8,955) 388,130
Increase (decrease) in billings
in excess of costs & earnings on
uncompleted contracts 129,782 (1,080,321) 42,008
Increase (decrease) in taxes
withheld & accrued liabilities (30,160) 31,634 (48,938)
_______ _______ _________
Net Cash Provided (Used) By
Operating Activities 208,940 (1,965,002) 1,229,282
_______ _______ _________
CASH FLOWS PROVIDED (USED) BY INVESTING
ACTIVITIES:
Expenditures for fixed assets (80,606) (176,146) (229,446)
Shareholders' distribution (655,523) (838,174) (10,642)
Investment in Xelex, Inc. 157,792 - (250,000)
(Increase) decrease in security
deposit 14,059 2,875 (98,440)
_______ _______ _______
Net Cash Provided (Used) By
Investing Activities (564,278) (1,011,445) (588,528)
_______ _______ ________
CASH FLOW PROVIDED (USED) BY FINANCING
ACTIVITIES:
Proceeds from loans 1,824,384 2,200,000 95,434
Principal payments on loans
payable (1,558,220) (207,020) (133,524)
_______ _______ _______
Net Cash Provided (Used) By
Financing Activities 266,164 1,992,980 (38,090)
_______ _______ _______
Net Increase (decrease) in cash (89,174) (983,467) 602,664
Cash at beginning of period 230,618 1,214,085 611,421
_______ _______ _______
Cash at end of period $141,444 $230,618 $1,214,085
======= ======= ========
Supplemental disclosures of cash flow
information Cash paid during the period
for.
Interest $157,679 $28,668 $40,699
======= ======= =======
Income taxes $84,243 $79,341 $252,220
======= ======= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE 9>
ADVANCED SYSTEMS DEVELOPMENT, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS DESCRIPTION:
The Company was incorporated in March, 1977 under the
laws of the State of New York. The Company is a defense sub-
contractor, with its customers located in Europe, Asia and
the West Coast of the United States. The Company has one
customer that accounted for approximately 30% of its total
revenues.
Revenue and Cost Recognition:
The accompanying financial statements are prepared
according to the "percentage of completion" method, and,
therefore, take into account the profit earned to date on
contracts not yet completed.
The amount of earnings recognized at statement date is that
portion of the total contract price that the cost expended
bears to the anticipated final total cost, based on current
estimates of cost to complete the project. If the
anticipated final cost is greater than the total contract
price, the resulting loss is included in the current years
operations.
Amounts earned on specific jobs in excess of billings are
treated as a current asset, and billings in excess of
earnings are treated as a current liability.
Property, Plant and Equipment:
Property, plant and equipment are recorded at cost.
Depreciation has been computed using the straight-line and
accelerated methods.
Change of Tax Accounting Method:
The Company changed from the completed contract method
of accounting to the percentage of completion method for tax
reporting purposes, during the year ended September 30,
1992. The accounting change resulted in additional taxable
income of $2,954,343, that was phased in over three years.
For the years ended September 30, 1993 and September 30,
1994, the final phase in, $984,781 per year was included in
taxable income (note 7). This change in tax accounting
method had no effect on net earnings in accordance with
generally accepted principles. This change resulted in the
acceleration of the payment of deferred taxes.
NOTE 2. INVENTORY
Inventory is stated at the lower of cost or market. Cost is
determined by the average cost method. Inventory consists
entirely of raw materials.
<PAGE 10>
ADVANCED SYSTEMS DEVELOPMENT, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
NOTE 3. PROPERTY, PLANT AND EQUIPMENT
The Company's property, plant and equipment consisted of the
following at cost:
<TABLE>
<CAPTION>
September 30,
___________________________
1995 1994
___________________________
<S> <C> <C>
Machinery and equipment $1,000,537 $1,497,328
Leasehold improvements 408,929 396,870
Furniture and fixtures 120,290 119,620
Telephone system 53,850 53,850
_________ _________
Total $1,583,606 $2,067,668
========= =========
</TABLE>
NOTE 4. INVESTMENTS
The Company invested $250,000 in a development stage company
in exchange for a minority share of common stock. There are
certain restrictions on the transfer of this stock. The
investment was sold during fiscal 1995 at a loss of $92,208.
NOTE 5. NOTES PAYABLE
Notes payable of the Company at September 30, 1995 are as
follows:
<TABLE>
<CAPTION>
Total Long-Term Current
__________________________________
<S> <C> <C> <C>
Capital leases $25,045 $17,974 $7,071
NatWest Bank 2,500,000 - 2,500,000
_________ _________ _________
$2,525,045 $17,974 $2,507,071
========= ========= =========
</TABLE>
The loan from Nat West Bank is a line of credit for the
lesser of 75% of domestic accounts receivable aged less than
90 days plus 75% of foreign insured accounts receivable that
are less than 120 days past due or $3,200,000. The credit
line will be reduced by the aggregate amount of any
outstanding letter of credit (See Note 9). The credit line
expires on February 1, 1996, subject to renewal by both
parties. The interest rate fluctuates at 1.00% above the
prime rate. This line of credit is collateralized by the
company's accounts receivable, inventory, contract rights,
equipment not already subject to lien, a general lien on all
other assets and a personal guarantee by the company's
shareholders.
<PAGE 11>
ADVANCED SYSTEMS DEVELOPMENT, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
Future minimum annual loan payments for the above notes and
loans are as follows:
Years ending September 30, Payment
___________________________ _____________
1997 $5,751
1998 6,379
1999 5,844
_____________
Total $17,974
=============
NOTE 6. INCOME TAXES
Federal income taxes have not been provided because the
shareholders elected to treat the company as a small
business corporation for income tax purposes as provided in
the internal revenue code and the applicable state statutes.
As such, the corporation income or loss and credits are
passed through to the shareholders and combined with their
other personal income and deductions to determine taxable
income on their individual tax returns. Income taxes have
been provided for California and New York City. New York
State taxes small business corporations on the difference
between the maximum corporate and individual rates, New York
State income taxes have been provided for this difference
(see notes 1 and 7).
NOTE 7. DEFERRED INCOME TAXES
Deferred taxes are provided for in California and New York
City for the amount not yet phased in due to the tax
accounting change that occurred during the year ended
September 30, 1992 (see notes 1 and 6).
NOTE 8. RELATED PARTY TRANSACTIONS
The Company leases its primary premises from a related
partnership under a lease expiring in December, 2000. Rent
expense under this least was $200,000 per year for each of
the three years in the period ended September 30, 1995.
NOTE 9. COMMITMENTS AND CONTINGENCIES
Leases:
In addition to the related party lease (see note 8),
the Company also leases a sales and service facility in San
Clemente, California for $1,444 per month, expiring June 14,
1996.
<PAGE 12>
ADVANCED SYSTEMS DEVELOPMENT, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
Future minimum annual lease payments for both of these
leases and various auto leases for the years ending
September 30, are as follows:
1996 $248,403
1997 239,529
1998 222,999
1999 220,000
2000 220,000
Thereafter 55,000
_________
$1,205,931
=========
Letters of Credit:
The Company has a stand by letter of credit with NatWest
Bank in the amount of $1,500,000. Any amounts outstanding
on the letter of credit will reduce the amount available on
the line of credit (see note 5). As of September 30, 1995,
$291,603 was outstanding on the letter of credit.
The Company has an open letter of credit with another
bank (see note 5) for $561,579 which guarantees performance
on a contract. The performance guarantee expires on the
later of February 28, 1997 or two years beyond the
acceptance date of the equipment.
At September 30, 1995, the Company was in default of
certain covenants of their agreement with the bank as
follows:
Actual Required
______________________
Current ratio as defined by 1.76:1 2.0:1
the agreement
Net worth $4,032,985 $4,500,000
These defaults have been waived by the bank.
Line of Credit:
As discussed in Note 5, all assets of the Company are
subject to lien as collateral.
<PAGE 13>
<TABLE>
<CAPTION>
ADVANCED SYSTEMS DEVELOPMENT, INC.
SUPPLEMENTAL FINANCIAL INFORMATION
UNAUDITED SELECTED QUARTERLY FINANCIAL DATA
Quarter
____________________________________________
First Second Third Fourth
_________ _________ _________ _________
<S> <C> <C> <C> <C>
Year ended September 30,
1995:
Net sales $2,612,347 $3,492,666 $3,377,175 $4,270,087
========= ========= ========= =========
Gross profit $ 645,088 $844,945 $896,760 $797,698
========= ========= ========= =========
Net income $(97,062) $20,276 $129,057 $223,679
========= ========= ========= =========
Earnings per share $191.32 $39.97 $254.39 $440.90
========= ========= ========= =========
Year ended September 30,
1994:
Net sales $3,173,915 $3,270,719 $3,625,719 $2,625,417
========= ========= ========= =========
Gross profit $994,072 $743,421 $811,920 $234,350
========= ========= ========= =========
Net income $138,566 $(47,165) $101,470 $85,552
========= ========= ========= =========
Earnings per share $273.13 $92.97 $200.01 $168.63
========= ========= ========= =========
</TABLE>
<PAGE 14>
<TABLE>
<CAPTION>
ADVANCED SYSTEMS DEVELOPMENT, INC.
CONDENSED BALANCE SHEET
DECEMBER 31, 1995
(Unaudited)
<S> <C>
ASSETS
CURRENT ASSETS
Cash and Equivalent $105,242
Contracts Receivable 3,234,013
Cost and earnings in excess of billing on
uncompleted contracts 2,636,696
Inventory 1,410,431
Other Current Assets 143,280
___________
Total Current Assets $7,529,662
___________
OTHER ASSETS
Fixed Assets $1,638,834
Less: Accumulated Depreciation (993,206)
Other Assets 153,560
___________
Total Other Assets $799,188
___________
TOTAL ASSETS $8,328,850
===========
See accompanying notes to financial statements.
</TABLE>
<PAGE 15>
<TABLE>
<CAPTION>
ADVANCED SYSTEMS DEVELOPMENT, INC.
CONDENSED BALANCE SHEET
DECEMBER 31, 1995
(Unaudited)
<S> <C>
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES
Notes Payable $2,005,321
Accounts Payable 1,384,249
Accrued Salaries and Benefits 213,837
Billings in excess of Cost and Earnings on
uncompleted contracts 332,398
___________
Total Current Liabilities $3,935,805
___________
OTHER LIABILITIES
Notes Payable $3,766,592
___________
Total Liabilities $7,702,397
___________
STOCKHOLDERS' EQUITY
Common Stock $ 5,905
Additional Paid in Capital 99,992
Retained Earnings 668,573
Less: Treasury Stock (148,017)
___________
Total Stockholders' Equity $ 626,453
___________
Total Liabilities and Stockholders
Equity $8,328,850
===========
See accompanying notes to financial statements.
</TABLE>
<PAGE 16>
<TABLE>
<CAPTION>
ADVANCED SYSTEMS DEVELOPMENT, INC.
CONDENSED STATEMENT OF INCOME
QUARTER ENDING DECEMBER 31, 1995
(Unaudited)
<S> <C>
REVENUES $3,792,247
COST OF REVENUES 2,818,041
___________
GROSS PROFIT $974,206
___________
OPERATING EXPENSES
Research and Development Costs $74,187
Selling and General 504,015
___________
578,202
___________
Income from Operations $396,004
OTHER INCOME (EXPENSES)
Interest expense net of interest income of
$1,333 (52,536)
___________
NET INCOME $343,468
===========
See accompanying notes to financial statements.
</TABLE>
<PAGE 17>
<TABLE>
<CAPTION>
ADVANCED SYSTEMS DEVELOPMENT, INC.
STATEMENT OF CASH FLOWS FOR THE QUARTER ENDED DECEMBER 31, 1995
CASH FLOW FROM OPERATING ACTIVITIES:
<S> <C>
Net Income $343,468
Adjustments to Reconcile Net Income To
Net Cash Provided (Used) By Operating
Activities:
Depreciation 46,175
Increase in other assets (25,092)
Decrease in contracts receivable 166,372
(Increase) in costs & earnings in excess
of billings on uncompleted contracts (224,132)
(Increase) in inventory (79,110)
Decrease in prepaid expenses & other
current assets 1,979
Increase in accounts payable 400,407
(Decrease) in other liabilities (107,909)
__________
Net Cash Provided (Used) By Operating
Activities $522,158
__________
CASH FLOWS PROVIDED (USED) BY INVESTING
ACTIVITIES:
Expenditures for fixed assets (55,228)
Shareholders' distribution (3,750,000)
__________
Net Cash Provided (Used) By Investing
Activities $(3,805,228)
__________
CASH FLOW PROVIDED (USED) BY FINANCING
ACTIVITIES:
Proceeds from loans 3,750,000
Principal payments on loans payable (503,132)
__________
Net Cash Provided (Used) By Financing
Activities $3,246,868
__________
Net (decrease) in cash (36,202)
Cash at beginning of period 141,444
__________
Cash at end of period $105,242
==========
See accompanying notes to financial statements.
</TABLE>
<PAGE 18>
<TABLE>
<CAPTION>
Advanced Systems Development, Inc.
Condensed Statement of Changes in Shareholders' Equity
Quarter Ended December 31, 1995
(Unaudited)
Additional Retained Treasury
Common Paid-In Earnings Stock Total
Stock Capital
__________________________________________________
<S> <C> <C> <C> <C> <C>
Balance at September
30, 1995 $5,905 $99,992 $4,075,105 $(148,017) $4,032,985
Net earnings -- -- 343,468 -- 343,468
Distribution to
shareholders -- -- (3,750,000) -- (3,750,000)
_____ ________ _________ _________ _________
Balance at December 31,
1995 $5,905 $99,992 $668,573 $(148,017) 626,453
===== ======== ========= ========= =========
See accompanying notes to financial statements.
</TABLE>
<PAGE 19>
ADVANCED SYSTEMS DEVELOPMENT
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. In the opinion of Management, the accompanying unaudited
consolidated condensed financial statements contain all
adjustments, consisting of normal recurring items, necessary to
present fairly the financial position, results of operations and
cash flows for the periods shown. It is the Company's policy to
end its first three quarterly accounting periods on the last
calendar day of each quarter. The fourth quarter ends on
September 30. The financial data included herein was compiled in
accordance with the same accounting policies applied to the
Company's audited annual financial statements, which should be
read in conjunction with these statements.
The results of operations for the quarter ended December 31,
1995, are not necessarily indicative of the results to be
expected for the full year.
2. Costs and estimated earnings in excess of billings on uncompleted
contracts primarily represent revenue recognized on contracts,
including retainage, for which billings could not be presented
under the terms of the contracts at the balance sheet dates.
3. During the quarter the Company distributed to its shareholders
$3,750,000 in cash. The Company took additional long term
financing to find this distribution. The promissory note for
$3,750,000 bears interest at 9.75% with total principal due on
April 30, 1996 and interest payments due monthly.
<PAGE 20>
<TABLE>
<CAPTION>
Unaudited Pro Forma
Condensed Consolidated Statement of Operations
For the Nine Months Ended December 29, 1995
(In thousands, except per share data)
Advanced
Consolidated Systems Unaudited Note Unaudited
Comptek Development Pro #2 Pro
Research, Inc. Forma Ref. Forma
Inc. Adjustments Statement
_____________________________________________________
<S> <C> <C> <C> <C> <C>
Net Sales $39,438 $11,440 ($240) (a) $50,638
Costs and Expenses
Costs of sales 32,706 8,771 (240) (a) 41,121
(68) (g)
(48) (h)
Selling, general and
administrative 5,215 1,595 174 (b) 6,736
(248) (g)
Research and development 1,045 209 (113) (g) 1,141
Litigation settlement (477) 0
Other expense 164 170 334
___________________________________________________
Total costs and expenses 38,653 10,745 (543) 49,332
___________________________________________________
Earnings before income
taxes and equity in net
loss of affiliate 785 695 303 1,306
Income tax expense (314) 0 (399) (c) (713)
__________________________________________________
Earnings (loss) before
equity in Net earnings
(loss) of affiliate 471 695 (96) 1,070
Equity in net loss of
affiliate (8,615) 0 (8,615)
__________________________________________________
Net earnings (loss) ($8,144) $695 ($96) ($7,545)
==================================================
Weighted average number
of common shares 4,453 -- 359 (d) 4,812
Net earnings (loss)
per share $(1.83) -- -- ($1.57)
==================================================
See accompanying notes to the unaudited pro forma condensed consolidated
financial statements.
</TABLE>
<PAGE 21>
<TABLE>
<CAPTION>
Unaudited Pro Forma
Condensed Consolidated Statement of Operations
For the Year Ended March 31, 1995
(In thousands, except per share data)
Consolidated Advanced Unaudited Consolidated
Comptek Systems Pro Note Unaudited
Research Development Forma #2 Pro Forma
Inc. Inc. Adjustments Ref. Statement
_______________________________________________________
<S> <C> <C> <C> <C> <C>
Net Sales $57,835 $12,356 ($320) (a) $69,871
Costs and Expenses
Costs of sales 49,387 9,820 (320) (a) 58,733
(90) (g)
(64) (h)
Selling, general and
administrative 6,380 1,792 223 (b) 8,215
(180) (g)
Research and development 2,356 550 (150) (g) 2,756
Special charge (credit) (331) 0 (331)
Other expense 73 84 157
______________________________________________________
Total costs and expenses 57,865 12,246 (581) 69,530
______________________________________________________
Earnings (loss) before
income taxes and equity
in net loss of affiliate (30) 110 261 341
Income tax expense
(benefit) (83) 0 149 (c) (232)
_____________________________________________________
Earnings before equity in
Net loss of affiliate 53 110 112 275
Equity in net loss of
affiliate (1,033) 0 (1,033)
_____________________________________________________
Net earnings (loss) ($980) $110 $112 ($758)
=====================================================
Weighted average number
of common shares 4,373 -- 216 (d) 4,589
Net loss per share ($0.22) -- -- ($0.17)
=====================================================
See accompanying notes to the unaudited pro forma condensed consolidated
financial statements.
</TABLE>
<PAGE 22>
<TABLE>
<CAPTION>
Unaudited Pro Forma
Condensed Consolidated Balance Sheet
As of December 29, 1995
(In thousands)
Consolidated Advanced Consolidated
Comptek Systems Unaudited Note Unaudited
Research Development Pro Forma #2 Pro Forma
Inc. Inc. Adjustments Ref. Statement
__________________________________________________________
<S> <C> <C> <C> <C> <C>
Assets
Current Assets:
Cash and equivalents $27 $105 $132
Receivables 3,747 3,234 (50) (f) 6,931
Costs and estimated
earnings in excess
of billings on
uncompleted contracts 6,332 2,305 (150) (f) 8,487
Inventory 340 1,410 (50) (f) 1,700
Other assets 761 143 (22) (d) 882
________________________________________________________
Total current assets 11,207 7,197 (272) 18,132
________________________________________________________
Net equipment and
leasehold improvements 1,850 646 2,496
________________________________________________________
Deferred income taxes 375 -- 375
Other assets 232 153 4,626 (b) 5,011
________________________________________________________
Total assets $13,664 $7,996 $4,354 $26,014
========================================================
Liabilities and
Shareholders' Equity
Current Liabilities:
Current installments
on long-term debt $20 -- $20
Accounts payable 2,024 1,384 3,408
Accrued salaries
and benefits 2,758 214 2,972
Other accrued
liabilities 2,252 -- 2,252
________________________________________________________
Total current
liabilities 7,054 1,598 8,652
________________________________________________________
Long-term debt,
excluding current
installments 2,463 5,772 330 (d) 8,565
________________________________________________________
Total Liabilities 9,517 7,370 330 17,217
________________________________________________________
4,147 626 (626) (e) 8,797
Shareholders' Equity 4,650 (d)
________________________________________________________
Total liabilities and
shareholders'equity $13,664 $7,996 $4,354 $26,014
========================================================
See accompanying notes to the unaudited pro forma condensed consolidated
financial statements.
</TABLE>
<PAGE 23>
COMPTEK RESEARCH, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited pro forma condensed
consolidated financial statements of Comptek Research, Inc.
(the Company) is presented to reflect the acquisition of
Advanced Systems Development Inc. ("ASDI")(the
"Acquisition"). On March 10, 1996 the Company completed the
acquisition all of the outstanding stock of ASDI in exchange
for $329,842 in cash, $22,019 in forgiveness of notes, and
623,856 shares of the Company's common stock. These pro
forma statements reflect a preliminary purchase price
allocation which is likely to change as information become
available.
The unaudited pro forma consolidated condensed statements of
operations for the year ended December 29, 1995 and nine
months ended March 31, 1995 and the unaudited proforma
consolidated condensed balance sheet as of December 29,
1995 were prepared based upon the respective historical
financial statements. The unaudited pro forma consolidated
condensed statements of operations present the consolidated
condensed results of operations of the Company as if the
Acquisition was completed at the beginning of the periods
presented. The unaudited pro forma consolidated condensed
balance sheet reflects the Acquisition as if it had occurred
on that date. The pro forma combined results of operations
are not necessarily indicative of future operations of the
Company or results that actually would have occurred had the
Acquisition been effected on the dates indicated. The
unaudited pro forma consolidated condensed financial
statements should be read in conjunction with the notes
thereto and the Company's audited consolidated financial
statements filed with the Securities Exchange Commission in
its Annual Report on Form 10-K for the fiscal year ended
March 31, 1995 and the unaudited condensed consolidated
financial statements of the Company filed with the
Securities and Exchange Commission in its Quarterly Report
on Form 10-Q for the nine months ended December 29, 1995.
Certain reclassifications have been made to the ASDI
financial statements to conform to the Company's
presentation.
NOTE 2. PRO FORMA ADJUSTMENTS
The pro forma adjustments are as described below:
(a) Intercompany elimination of sales and cost of sales
between the Company and ASDI for performance under one
of the Company's government contracts.
(b) Goodwill related to the purchase of ASDI is amortized
on a straight-line basis over a 20 year life and is the
result of excess purchase price over the fair value
allocation of net assets acquired. The purchase price
equals the fair value of the Company's stock issued
plus amounts paid to former shareholders of ASDI in the
form of cash and notes receivable forgiven. Using the
fair value of shares issued at the assumed transaction
dates, the total ASDI purchase price used is as
follows:
Assumed Transaction Date Purchase Price
___________________________________________
December 29, 1995 $5,001,300
April 1, 1995 $5,203,899
April 1, 1994 $4,542,901
<PAGE 24>
COMPTEK RESEARCH, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
(c) Represents additional income tax provision that results
from the net addition of ASDI results of operations and
the unaudited pro forma adjustments at the assumed
effective tax rate of 40%. ASDI's income tax filing
status was sub-chapter S-Corporation. As a result of
the acquisition ASDI will become a taxable entity. As
of March 31, 1996 the Company expects to recognize
additional deferred tax liability, which is still being
evaluated at the time of this filing. The Company will
disclose the impact of such an adjustment in it's March
31, 1996 10-K filing.
(d) The Company negotiated with the shareholders of ASDI to
give stock consideration value of $4,905,950. The
number of shares to be issued were then determined
using the average closing price of the Company's common
stock for the 30 days prior to the date of closing.
The Company then recorded as a part of the purchase
price the number of shares at the fair value on the
date of closing. Additionally, the Company paid
$329,842.50 in cash (increase in long term debt) and
forgiveness of a note receivable due from a shareholder
of ASDI of $22,019.
For purposes of these pro forma financial adjustments,
the number of shares assumed issued were calculated
using the same approach. The purchase price includes
the fair value of the Company's stock issued on the
assumed date of the transaction as follows:
Assumed Number of
Transaction Market Price Shares Assumed
Date Per Share Issued
__________________________________________________
December 29, 1995 $8.44 551,045
April 1, 1995 $13.50 359,410
April 1, 1994 $19.38 216,312
(e) The adjustment reflects the elimination of
the shareholders' equity of ASDI.
(f) Represents adjustments to record assets, at their
estimated fair value on the date of acquisition.
(g) Represents the financial impact of the initial
reorganization of ASDI's management including salary
and associated fringe reductions as a result of the
acquisition. The Company continues to evaluate the
ASDI operations for further cost savings.
(h) Represents the contractual reduction in rental expense
for ASDI's facility in East Elmhurst, New York which
was renegotiated as part of the Acquisition.
<PAGE 25>
