SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended July 2, 1999.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 1-8502
----------
Comptek Research, Inc.
- ---------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 16-0959023
- ----------------------------------- ----------------------
(State or other jurisdiction (I.R.S. Employee
of incorporation or organization) Identification No.)
2732 Transit Road, Buffalo, New York 14224-2523
- --------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (716) 677-4070
--------------
Not Applicable
- -----------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check [x] whether the registrant (1) has filed all reports
required to be filed by Section 13 of 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
----- -----
Class Outstanding at July 23, 1999
- -------------------------- ------------------------------
Common $.02 Par Value 5,102,554
<PAGE 1>
COMPTEK RESEARCH, INC.
INDEX
Page
PART I. Financial Information Number
Item 1.Financial Statements
Consolidated Condensed Balance Sheets
July 2, 1999, and March 31, 1999 3
Consolidated Condensed Statements of Income
Thirteen Weeks Ended July 2, 1999,
and June 26, 1998 4
Consolidated Condensed Statements of Cash Flows
Thirteen Weeks Ended July 2, 1999,
and June 26, 1998 5
Consolidated Statement of Changes in Shareholders'
Equity Thirteen Weeks Ended July 2, 1999 6
Notes to the Consolidated Condensed Financial
Statements 7
Independent Accountants' Review Report 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 11
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K 15
<PAGE 2>
<TABLE>
<CAPTION>
COMPTEK RESEARCH, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
March
July 2, 31,
1999 1999
-------- -------
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and equivalents $1,648 $2,376
Receivables 42,410 36,099
Inventories 5,942 5,744
Refundable income taxes 578 109
Other 1,320 909
-------- -------
Total current assets 51,898 45,237
Equipment and leasehold improvements, net 7,135 7,034
of accumulated depreciation and
amortization of $9,636 at July 2, 1999
and $9,050 at March 31, 1999
Goodwill 42,176 41,645
Other assets 4,936 4,857
-------- -------
Total assets $106,145 $98,773
======== =======
Liabilities and Shareholders' Equity
Current liabilities:
Current installments on long-term debt $3,905 $4,030
Accounts payable 7,108 7,482
Accrued salaries and benefits 8,652 9,040
Other accrued expenses 4,241 3,804
Customer advances 6,659 7,646
Deferred income taxes 1,246 1,209
-------- -------
Total current liabilities 31,811 33,211
-------- -------
Deferred income taxes 879 853
Long-term debt, excluding current 57,414 49,610
installments
Shareholders' equity:
Common stock 110 110
Additional paid-in capital 16,330 16,190
Stock related awards and loans (223) (296)
Retained earnings 3,501 2,466
-------- -------
19,718 18,470
Less cost of treasury shares (3,677) (3,371)
-------- -------
Total shareholders' equity 16,041 15,099
Total liabilities and shareholders' equity $106,145 $98,773
======== =======
See accompanying notes to consolidated condensed financial statements.
</TABLE>
<PAGE 3>
<TABLE>
<CAPTION>
COMPTEK RESEARCH, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF
INCOME
(Unaudited)
(In thousands, except per share amounts)
Thirteen
Weeks
Ended
June
July 2, 26,
1999 1998
-------- -------
<S> <C> <C>
Net sales $38,069 $20,251
-------- -------
Operating costs and expenses:
Cost of sales 29,809 15,333
Selling, general and administrative 4,989 2,903
Research and development 768 647
-------- -------
Operating profit 2,503 1,368
Interest expense, net 930 248
-------- -------
Income before income taxes 1,573 1,120
Income taxes 538 437
-------- -------
Net income $1,035 $683
======== =======
Net income per share:
Basic $0.20 $0.14
======== =======
Diluted $0.18 $0.13
======== =======
See accompanying notes to consolidated condensed financial statements.
</TABLE>
<PAGE 4>
<TABLE>
<CAPTION>
COMPTEK RESEARCH, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Thirteen Weeks Ended
July 2, June 26,
1999 1998
-------- --------
<S> <C> <C>
Operating activities:
Net income $1,035 $683
Adjustments to reconcile net income to
net cash
Provided by (used in) operating
activities:
Depreciation and amortization 1,260 488
Deferred income taxes 60 384
Non-cash charges 141 165
Changes in assets and liabilities
providing (using) cash, excluding
the effects of acquisition:
Receivables (7,297) 768
Inventories (198) (121)
Other current assets (877) 399
Accounts payable and accrued (338) (2,556)
expenses
Customer advances (987) -
------- -------
Net cash provided by (used in) operating $(7,201) $210
activities
Investing activities:
Expenditures for equipment and $(686) $(246)
leasehold improvements
Software development costs (320) -
Payment from officer for stock 50 50
purchase
Proceeds from sale of assets 23 -
Payments pursuant to business
acquisitions, net of cash acquired - (17,946)
-------- --------
Net cash used in investing activities $(933) $(18,142)
-------- ---------
Financing activities:
Net proceeds from revolving debt $8,669 $4,898
Proceeds from issuance of long-term - 15,000
debt
Repayment of long-term debt (990) (386)
Repurchase of common stock (306) (336)
Proceeds from sale of common stock - 118
held in treasury
Proceeds from issuance of common stock 33 33
-------- --------
Net cash provided by financing activities $7,406 $19,327
-------- ---------
Net increase (decrease) in cash and $(728) $1,395
equivalents
Cash and equivalents at beginning of year 2,376 550
-------- --------
Cash and equivalents at end of period $1,648 $1,945
======== ========
See accompanying notes to consolidated condensed financial statements.
</TABLE>
<PAGE 5>
<TABLE>
<CAPTION>
COMPTEK RESEARCH, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Thirteen Weeks Ended July 2, 1999
(Unaudited)
(In thousands)
Addi- Stock
tional Related Trea-
Common Paid-In Awards Retained sury
Stock Capital and Loans Earnings Stock Total
------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at March $110 $16,190 $(296) $2,466 $(3,371) $15,099
31, 1999
Net income --- --- --- 1,035 --- 1,035
Exercise of --- 33 --- --- --- 33
stock options
Sale of common --- 107 --- --- --- 107
stock
Repurchase of --- --- --- --- (306) (306)
common stock
Payment from --- --- 50 --- --- 50
officer for
stock purchase
Stock issued to --- --- 23 --- --- 23
officer ------ ------- --------- -------- -------- ------
Balance at July $110 $16,330 $(223) $3,501 $(3,677) $16,041
2, 1999 ====== ======= ========= ======== ======== ======
See accompanying notes to consolidated condensed financial statements.
</TABLE>
<PAGE 6>
Comptek Research, Inc. and Subsidiaries
Notes to Consolidated 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 Friday of each quarter, which includes
thirteen weeks of operations. The fourth quarter ends on
March 31. 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 thirteen weeks ended July 2,
1999, are not necessarily indicative of the results to be
expected for the full year.
2. Net Income Per Share
The following table reconciles the effect that potentially
dilutive securities have on net income per share (amounts in
thousands, except per share data):
<TABLE>
Thirteen Weeks Ended
July 2, June 26,
1999 1998
---------------------------
<S> <C> <C>
Basic Net Income Per
Share:
Net income $1,035 $683
======== =========
Weighted average shares 5,094 4,992
outstanding
======== =========
Basic net income per $0.20 $0.14
share
======== =========
Diluted Net Income Per
Share:
Net income $1,035 $683
After-tax equivalent of
Interest expense on
8.5% convertible
subordinated
debentures 198 -
--------- ----------
Income for purposes of
Computing diluted net
Income per share $1,233 $683
========= =========
Weighted average shares
outstanding 5,094 4,992
Incremental shares from
Assumed conversions:
Stock
options 164 195
Convertible
subordinated
debentures 1,579 -
Weighted average shares
Outstanding
For purposes of
Computing diluted
Net income per share 6,837 5,187
========= =========
Diluted net income per $0.18 $0.13
share ========= =========
</TABLE>
<PAGE 7>
3. On March 26, 1999, the Company completed the purchase of the
business operations and substantially all of the related
assets and liabilities of Amherst Systems, Inc. (Amherst), a
privately-held company. Accordingly, the acquired operations
are included in the Company's operating results for the
thirteen weeks ended July 2, 1999.
For the thirteen weeks ended June 26, 1998, the following is
an unaudited pro forma results of operations assuming the
Amherst acquisition had occurred at April 1, 1998. These pro
forma results are not necessarily indicative of the actual
results of operations that may have occurred if the
combination had been in effect for the thirteen weeks ended
June 26, 1998.
Net Sales $30,310
Net Income $676
Earnings per share - Basic $0.14
Earnings per share - Diluted $0.13
4. Inventories consist of (in thousands):
<TABLE>
<S> <C> <C>
July 2, March 31,
1999 1999
--------- ----------
Parts $3,333 $3,114
Work-in-process 2,279 2,300
Finished goods 330 330
--------- ----------
Total $5,942 $5,744
========= ==========
</TABLE>
5. During the thirteen weeks ended July 2, 1999, 37,446 common
shares of the Company's stock were purchased and placed into
Treasury stock. These shares were acquired pursuant to a
stock repurchase plan approved by the Company's Board of
Directors. There were no common shares issued from the
Company's treasury shares. The total number of treasury
shares as of July 2, 1999 was 467,590.
6. During the thirteen weeks ended July 2, 1999, the Company
granted 111,000 options under its Equity Incentive Plans.
Accordingly, options for 616,711 shares were available for
future grants.
As discussed in Note 5 of the Company's Consolidated Financial
Statements as of and for the year ended March 31, 1999, no
shares were available at March 31, 1999 for future grants
under the Non-Employee Directors Stock Option Plan. On August
17, 1998, the Board of Directors amended the Non-Employee
Director Stock Option Plan to increase the number of shares
available for grant to 300,000 from 100,000 shares. Based on
this increase, which is subject to approval by shareholders at
the 1999 Annual Meeting of Shareholders, at July 2, 1999,
there were 179,000 shares available for future grants under
this Plan. No options were granted during the thirteen weeks
ended July 2, 1999, under the Non-Employee Director Stock
Option Plan.
7. On April 16, 1999, the Board of Directors adopted a
shareholders rights plan. The Board of Directors at that time
declared a dividend of one preferred-share-purchase-right,
generally referred to as a "right," on each share of common
stock. The rights dividend was issued to each shareholder of
record as of April 30, 1999.
Each right entitles shareholders to buy one-hundredth of a
share of Series A Junior Participating Preferred Stock at an
initial exercise price of $45. The rights will be exercisable
if a person or group acquires beneficial ownership of 20% or
more of the common stock. In addition, the rights will be
exercisable if an "adverse person," as determined by the
directors, acquires beneficial ownership of 10% or more of the
Company's outstanding common stock.
Until a triggering event, the rights attach to, and trade
with, the shares of the Company's common stock. No separate
rights certificate will be issued until and event triggering
the exercise of the rights occurs.
If any person becomes the beneficial owner of 20% or more of
the Company's common stock - except through an offer which the
Board of Directors determines to be fair - and the Board does
not redeem the rights within 10 days, or a 10% holder is
determined by the directors to be an "adverse person," then
each right not owned by such "adverse person" will then enable
its holder to purchase, at the right's then-current exercise
price, common stock of the other entity having a value of
twice the rights exercise price.
Under certain circumstances, if the Companys is acquired in a
merger or similar transaction with another person, or sells
more than 50% of its assets, earning power or cash flow to
another entity, each right that has not previously been
exercised will entitle its holder to purchase, at the right's
then-current exercise price, common stock of such other entity
having a value of twice the right's exercise price.
The rights will expire on April 29, 2009, unless redeemed by
the Company at an earlier date. The Company will generally be
entitled to redeem the rights at one cent per right at any
time until 10 days following a public announcement that a 20%
position has been acquired. The time limit may be extended by
the directors.
<PAGE 8>
8. Business Segment Information
<TABLE>
Thirteen Weeks Ended
July 2, June 26,
1999 1998
---------------------------
<S> <C> <C>
Net Sales
Simulation and $18,270 $4,670
Training
Tactical Systems 10,581 6,509
Engineering and
Technical
Services 9,218 9,072
-------- ---------
Total Net Sales $38,069 $20,251
======== =========
Operating Profit
Simulation and
Training $779 $286
Tactical Systems 1,058 642
Engineering and
Technical
Services 666 440
-------- --------
Total Operating Profit $2,503 $1,368
Interest expense, net (930) (248)
-------- --------
Income before
income taxes $1,573 $1,120
======== ========
</TABLE>
<PAGE 9>
Independent Accountants' Review Report
The Board of Directors and Shareholders
Comptek Research, Inc.:
We have reviewed the consolidated condensed balance sheet of
Comptek Research, Inc. and subsidiaries as of July 2, 1999, and
the related consolidated condensed statements of income, changes
in shareholders' equity, and cash flows for the thirteen week
periods ended July 2, 1999 and June 26, 1998. These consolidated
condensed financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data, and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit in
accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the consolidated condensed
financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Comptek
Research, Inc. and subsidiaries as of March 31, 1999, and the
related consolidated statements of income, shareholders' equity,
and cash flows for each of the years in the three-year period
then ended (not presented herein); and in our report dated May
14, 1999, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the
information set forth in the accompanying consolidated condensed
balance sheet as of March 31, 1999, is fairly presented, in all
material respects, in relation to the consolidated balance sheet
from which it has been derived.
/S/ KPMG LLP
KPMG LLP
Buffalo, New York
July 23, 1999
<PAGE 10>
Management's Discussion and Analysis
Financial Condition and Results of Operations
General
Comptek designs and develops specialized systems, software and
proprietary products intended for the global military electronics
market. These defense-related systems provide management
information and implement offensive and defensive responses in
combat situations. Additionally, we are a supplier of EW
simulation/stimulation, training and software validation systems
related to electronic surveillance. We also develop systems and
provide engineering and technical services for the maintenance
and upgrade of EW and Command, Control, Communications, Computers
and Intelligence systems for several U.S. Air Force and U.S. Navy
platforms.
Comptek operates in three business segments: EW
Simulation/Stimulation and Training Systems (Simulation and
Training), Tactical Systems, and Engineering and Technical
Services (Services).
In March 1999 we completed the acquisition of the business
operations, assets and related liabilities of Amherst Systems,
Inc. ("Amherst"). Amherst's annualized net sales, prior to the
acquisition were approximately $45 million, with the majority of
such sales attributable to domestic activities under fixed price
contracts. This acquired business operates under our Simulation
and Training business segment and has substantially affected the
Company's financial condition and operating activities, as
discussed in greater detail below. The pro forma financial
information pertaining to the Amherst acquisition is presented in
note 3 to the consolidated condensed financial statements.
The Company's contract backlog at July 2, 1999 was $173.4
million. Since March 31, 1999, backlog decreased by 7.9% as a
result of work performed under these contracts and was adjusted
downward by an additional 1.4% based upon a revised compilation
of Amherst's backlog at March 31, 1999.
Results of Operations
Net Sales. Net sales increased to $38.1 million in the thirteen
weeks ended July 2, 1999, from $20.3 million in the thirteen
weeks ended June 26, 1998, representing an increase of 88.0%.
The Simulation and Training segment's net sales were $18.3
million for the first quarter ended July 2, 1999, compared with
$4.7 million for the first quarter ended June 26, 1998. This
increase of 291.2% is primarily the result of the acquisition of
Amherst in March 1999, which recorded approximately $14.6 million
in net sales in the current quarter.
The Tactical Systems segment net sales increased to $10.6 million
for the first quarter ended July 2, 1999 from $6.5 million for
the first quarter ended June 26, 1998. The increase of 62.6% is
the result of increased sales of products in the current year as
compared with last year. Additionally, the Company purchased PRB
Associates, Inc. ("PRB") last year effective May 1, 1998, and as
a result only two months of PRB operations are reported for the
first quarter ended June 26, 1998.
The Services segment reported net sales for the first quarter
ended July 2, 1999, of $9.2 million consistent with that in the
prior year of $9.1 million.
Gross Margin. Gross margin increased to $8.3 million in the
thirteen weeks ended July 2, 1999 from $4.9 million in the
thirteen weeks ended June 26, 1998, representing an increase of
67.9%. Gross margin as a percent of sales decreased to 21.7% for
the current year's first quarter compared with 24.3% in the prior
year.
<PAGE 11>
The increase in gross margin dollars, as well as the decrease in
the gross margin as a percent of sales, is primarily the result
of business in the Simulation and Training segment. The acquired
operations of Amherst contributed an additional $3.0 million in
gross margin dollars, offset by a loss of approximately $330,000
in an existing simulation and training fixed priced contract.
Selling, General and Administrative (SG&A) Expenses. SG&A
increased to $5.0 million in the thirteen weeks ended July 2,
1999, from $2.9 million in the thirteen weeks ended June 26,
1998, representing an increase of 71.9%. SG&A as a percentage
of sales, however, decreased to 13.1% for the current quarter
compared with 14.3% in the prior year. An increase in the SG&A
dollars is associated with the acquisition of Amherst. The
decrease in the SG&A as a percentage of sales is primarily the
result of timing associated with marketing and bidding activity
for all business segments.
Research and Development(R&D) Expense. R&D expense increased to
$768,000 in the thirteen weeks ended July 2, 1999 from $647,000
in the thirteen weeks ended June 26, 1998, representing an
increase of 18.7% R&D efforts are primarily concentrated in the
Simulation and Training and Tactical Systems segments to enhance
and maintain current products. This increase is the result of
the acquired operations of Amherst and ongoing development
activity with the Company's products in the two segments
mentioned above.
Interest Expense. Interest expense increased to $930,000 in the
thirteen weeks ended July 2, 1999, from $248,000 in the thirteen
weeks ended June 26, 1998, representing an increase of 275.0%.
This increase is associated primarily with the financing costs
relating to the Amherst acquisition. Additionally, the financing
of the increase in working capital for the quarter resulted in
the Company incurring additional interest expense. The increase
in interest expense was partially offset by interest income of
approximately $165,000 associated with a state tax refund
approved during the first quarter.
Income Taxes. Income taxes increased to $538,000 in the thirteen
weeks ended July 2, 1999 from $437,000 in the thirteen weeks
ended June 26, 1998, representing an increase of 23.1%. The
Company recorded an effective tax rate of 34% for the current
year first quarter compared with 40% in the prior year. During
the first quarter the Company received final approval on a prior
year state tax refund which had been pending. The net refund
recorded as part of the provision for income taxes was
approximately $90,000. We expect the effective tax rate for the
balance of the current fiscal year to be approximately 40%.
Net Income. Net income increased to $1.0 million, or $0.18 per
diluted share, in the thirteen weeks ended July 2, 1999, from
$683,000, or $0.13 per diluted share, in the thirteen weeks ended
June 26, 1998, representing an increase of 51.5%. As a
percentage of sales, net income decreased from 3.4% to 2.7% for
the comparable quarters. Although sales increased significantly
as a result of the Amherst acquisition, the corresponding
increase in net income was adversely affected by the decrease in
gross margin percentage and increase in net interest expense.
These impacts were partially offset by approximately $250,000 in
non-recurring income related to the state tax refund.
Liquidity and Capital Resources
Net cash used by operating activities for the thirteen weeks
ended July 2, 1999, was $7.2 million compared with cash provided
by operating activities of $210,000 for the thirteen weeks ended
June 26, 1998. Working capital on July 2, 1999, was $20.1
million compared with $13.7 million in the prior year and $ 12.0
million on March 31, 1999. The increase is primarily the result
of increases in receivables of $7.3 million from March 31, 1999,
plus the reduction in customers advances of approximately $1.0
million. The Company experienced a delay in the ability to bill
certain receivables during the quarter as a result of certain
schedule delays on fixed-price contracts. We anticipate that
these billings will take place during the second quarter with
cash receipts expected during the third quarter. Increases in
depreciation and amortization for the period when compared with
the prior year are primarily the result of the acquired
<PAGE 12>
operations of Amherst and the associated intangible asset
amortization. The Company also purchased capital equipment
totaling $686,000 and invested $320,000 on software development.
Operating and investing activities were funded by the Company's
existing credit facility. The Company has a current available
capacity of $27 million.
We are reviewing the Company's current requirements for working
capital, capital expenditure demands, stock repurchases and
repayment of long-term debt with a view towards ensuring that
cash flows from operations and the available borrowing capacity
are sufficient to cover these requirements through the balance of
the fiscal year. We anticipate that some modifications to the
current revolving credit facility, due to increases in working
capital and letter of credit requirements, will be required.
Year 2000 Update
Comptek's assessment of Year 2000 issues is presented in the
Report on Form 10-K for the fiscal year ended March 31, 1999.
As discussed in our Report of Form 10-K for the fiscal year ended
March 31, 1999, we have completed our assessment of our internal
systems for the potential impact of the "Year 2000 Problem" and
have initiated appropriate remedial actions which were
substantially completed in fiscal 1999. The upgrade and testing
of our payroll systems was completed by July 31, 1999.
In addition to the testing of our primary information management
systems, we have tested, and corrected as necessary, all of the
personal computers currently in use. For the fiscal year ended
March 31, 1999, we budgeted $100,000 for Year 2000 compliance
upgrades and spend less than $80,000. For contingency purposes,
we budgeted an additional $100,000 for capital expenditures on
such items in the fiscal year beginning April 1, 1999. During
the first quarter, we spent approximately $29,000 for upgrades.
While we continue to evaluate the compliance activities of our
vendors and suppliers, we are satisfied with the responses
received to date and do not anticipate any material adverse
impact on our financial condition as it relates to vendors' and
suppliers' Year 2000 compliance. We will, to the extent
feasible, be testing such products for compliance, but can offer
no assurances that our vendors and suppliers will in fact by Year
2000 compliant.
While we do not currently anticipate a material adverse impact on
our financial condition or results of operations, we can offer no
assurances that the Year 2000 Problem will not adversely impact
Comptek. Accordingly, we expect on an on-going basis to continue
to evaluate the Year 2000 Problem and its potential impact on
Comptek and our industry group.
Forward Looking Statements
This Management's Discussion and Analysis contains forward-
looking statements about the Company's current expectations based
on current business conditions. Forward-looking statements are
subject to risks and uncertainties that could cause actual
results to differ materially. These risks and uncertainties
include the Company's dependence on continued funding of U.S.
Department of Defense programs. Some additional risks and
uncertainties, among others, that also need to be considered are:
the likelihood that actual future revenues that are realized may
differ from those inferred from existing total backlog; the
ability to transition and integrate Amherst; the ability to
expand sales in international markets; and the ability to
complete future acquisitions without adversely affecting the
Company's financial condition. Other risks and uncertainties are
described in the Company's Form 10-K Annual Report for the fiscal
year ended March 31, 1999.
<PAGE 13>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
3.1 Amendment to Restated By-Laws
11 Comptek Research, Inc. and Subsidiaries
Reconciliation of Basic and Diluted EPS
Computations.
15 Letter Regarding Unaudited Interim Financial
Information.
27 Financial Data Schedule.
(b) Reports on Form 8-K:
Form 8-K reporting date was April 16, 1999.
Items Reported:
Item 5. Other Events. On April 16, 1999, the Board of
Directors of the Registrant declared a dividend of one
Right for each outstanding share of the Company's
Common Stock, par value $0.02 per share to stockholders
of record at the close of business on April 30, 1999.
The description and terms of the Rights are set forth
in a Rights Agreement between the Registrant and
American Stock Transfer & Trust Company, as Right
Agent.
<PAGE 15>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
COMPTEK RESEARCH, INC.
Date: August 11, 1999 By: /s/ John J. Sciuto
John J. Sciuto
Chairman, President and
Chief Executive Officer
Date: August 11, 1999 By: /s/ Laura L. Benedetti
Laura L. Benedetti
Chief Financial Officer, Vice
President of Finance and
Treasurer
<PAGE 15>
INDEX TO EXHIBITS
- - - - - - -
Exhibit Page
No. Description of Exhibit No.
3.2 Amendment to Restated By-Laws 18
11 Comptek Research, Inc. and Subsidiaries 20
Reconciliation of Basic and Diluted EPS
Computations
15 Letter Regarding Unaudited Interim Financial 21
Information
27 Financial Data Sheet 22
<PAGE 16>
Exhibit 3.2
<PAGE 17>
Amendment of Restated By-laws
-----------------
The Restated By-laws of Comptek Research, Inc. were amended by
the Board of Directors on May 24, 1999, as follows:
Article II, Section 4
Record Date for Shareholders
Each reference to "fifty days" contained in this
Section 4 is replaced with "sixty days."
<PAGE 18>
Exhibit 11
COMPTEK RESEARCH, INC. AND SUBSIDIARIES
RECONCILIATION OF BASIC AND DILUTED EPS COMPUTATIONS
Thirteen Weeks Ended July 2, 1999 and June 26, 1998
(In thousands, except per share amounts)
Thirteen Weeks Ended
July 2, June
1999 26,
1998
Basic EPS
Net income (Numerator) $1,035 $683
======= =======
Shares (Denominator) 5,094 4,992
======= =======
Net income per share - $0.20 $0.14
Basic ======= =======
Diluted EPS
Net income (Numerator) $1,233 $683
======= =======
Shares (Denominator) 6,837 5,187
======= =======
Net income per share - $0.18 $0.13
Diluted ======= =======
<PAGE 19>
Exhibit 15
The Board of Directors
Comptek Research, Inc.
Buffalo, New York
Gentlemen:
Registration Statement Nos. 33-54170, 33-82536, and 333-11437
With respect to the subject registration statements, we
acknowledge our awareness of the use therein of our report dated
July 23, 1999, related to our review of interim financial
information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such
report is not considered part of a registration statement
prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of sections 7 and
11 of the Act.
Very truly yours,
KPMG LLP
Buffalo, New York
August 13, 1999
<PAGE 20>
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> JUL-02-1999
<CASH> 1,648
<SECURITIES> 0
<RECEIVABLES> 42,432
<ALLOWANCES> 22
<INVENTORY> 5,942
<CURRENT-ASSETS> 51,898
<PP&E> 16,771
<DEPRECIATION> 9,636
<TOTAL-ASSETS> 106,145
<CURRENT-LIABILITIES> 31,811
<BONDS> 57,414
0
0
<COMMON> 110
<OTHER-SE> 15,931
<TOTAL-LIABILITY-AND-EQUITY> 106,145
<SALES> 38,069
<TOTAL-REVENUES> 38,069
<CGS> 29,809
<TOTAL-COSTS> 29,809
<OTHER-EXPENSES> 5,757
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 930
<INCOME-PRETAX> 1,573
<INCOME-TAX> 538
<INCOME-CONTINUING> 1,035
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,035
<EPS-BASIC> $0.20
<EPS-DILUTED> $0.18
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