<PAGE>
<PAGE>
(CONFORMED COPY)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 June 28, 1997
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 0-3704
NAI TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
New York 11-1798773
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
282 New York Avenue, Huntington, NY 11743
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 271-5685
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
As of July 25, 1997, 9,116,177 shares of NAI Technologies, Inc.'s $.10 par value
Common Stock were outstanding.
Page 1 of 14 Pages
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NAI TECHNOLOGIES, INC.
----------------------
INDEX
-----
PAGE
Facing Sheet 1
Index 2
PART I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets - 3
June 28, 1997 and December 31, 1996
Consolidated Statements of Operations - 4
Three months ended June 28, 1997 and
June 29, 1996
Consolidated Statements of Operations - 5
Six months ended June 28, 1997 and
June 29, 1996
Consolidated Statements of Cash Flows - 6
Six months ended June 28, 1997 and
June 29, 1996
Other Financial Information 7
Item 2. Management's Discussion and Analysis of 8-12
Financial Condition and Results of Operations
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
-2-
<PAGE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
NAI TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)
- --------------------------------------------------------------------------------
. June 28, Dec. 31,
1997 1996
(Audited)
- --------------------------------------------------------------------------------
ASSETS
Current Assets:
Cash and cash equivalents $ 1,116 $2,727
Accounts receivable, net 10,863 12,693
Inventories, net 10,338 10,270
Deferred tax asset 169 173
Other current assets 723 597
- --------------------------------------------------------------------------------
Total current assets 23,209 26,460
- --------------------------------------------------------------------------------
Property, plant and equipment, net 3,314 3,523
Excess of cost over fair value of assets acquired, net 9,389 9,707
Other assets 1,484 1,681
- --------------------------------------------------------------------------------
Total assets $37,396 $41,371
================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 5,803 $ 6,907
Current installments of long-term debt 129 158
Accrued payroll and commissions 205 680
Other accrued expenses 2,150 3,894
Income taxes payable 1,019 580
- --------------------------------------------------------------------------------
Total current liabilities 9,306 12,219
- --------------------------------------------------------------------------------
Long-term debt 10,316 12,224
Other accrued expenses 803 912
Deferred income taxes 36 36
- --------------------------------------------------------------------------------
Total liabilities 20,461 25,391
- --------------------------------------------------------------------------------
Shareholders' Equity:
Capital Stock:
Preferred stock, no par value, 2,000,000
shares authorized and unissued - -
Common stock, $.10 par value, 25,000,000
shares authorized; shares issued: 9,104,017
in 1997 and 9,016,937 in 1996 910 902
Capital in excess of par value 19,365 19,217
Foreign currency translation adjustment 232 313
Retained earnings (3,572) (4,452)
- --------------------------------------------------------------------------------
Total shareholders' equity 16,935 15,980
- --------------------------------------------------------------------------------
Total liabilities and shareholders' equity $37,396 $41,371
================================================================================
-3-
<PAGE>
<PAGE>
NAI TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands except per share amounts)
(Unaudited)
- --------------------------------------------------------------------------------
For the Three Months Ended
--------------------------
June 28, June 29,
1997 1996
- --------------------------------------------------------------------------------
Net sales $14,112 $17,354
- --------------------------------------------------------------------------------
Cost of sales 10,357 13,804
- --------------------------------------------------------------------------------
Gross margin 3,755 3,550
- --------------------------------------------------------------------------------
Selling expense 988 1,002
General and administrative expense 1,089 1,140
Research and development 368 505
Other 150 (636)
- --------------------------------------------------------------------------------
Total expenses, net 2,595 2,011
- --------------------------------------------------------------------------------
Operating income 1,160 1,539
- --------------------------------------------------------------------------------
Non-operating income (expense):
Other - 15
Interest income 18 46
Amortization of deferred debt costs (76) (170)
Interest expense (377) (609)
- --------------------------------------------------------------------------------
(435) (718)
- --------------------------------------------------------------------------------
Earnings before income taxes 725 821
Provision for income taxes 224 6
- --------------------------------------------------------------------------------
Net earnings $ 501 $ 815
================================================================================
Earnings per common share $ 0.05 $ 0.10
================================================================================
Average shares outstanding 10,391 8,513
================================================================================
-4-
<PAGE>
<PAGE>
NAI TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands except per share amounts)
(Unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended
------------------------
June 28, June 29,
1997 1996
- --------------------------------------------------------------------------------
Net sales $27,174 $33,857
- --------------------------------------------------------------------------------
Cost of sales 19,770 27,042
- --------------------------------------------------------------------------------
Gross margin 7,404 6,815
- --------------------------------------------------------------------------------
Selling expense 1,998 2,116
General and administrative expense 2,159 2,510
Research and development 792 872
Other 278 (472)
- --------------------------------------------------------------------------------
Total expenses, net 5,227 5,026
- --------------------------------------------------------------------------------
Operating income 2,177 1,789
- --------------------------------------------------------------------------------
Non-operating income (expense):
Other - 15
Interest income 32 101
Amortization of deferred debt costs (180) (225)
Interest expense (778) (1,174)
- --------------------------------------------------------------------------------
(926) (1,283)
- --------------------------------------------------------------------------------
Earnings before income taxes 1,251 506
Provision for income taxes 371 141
- --------------------------------------------------------------------------------
Net earnings $ 880 $ 365
================================================================================
Earnings per common share $ 0.09 $ 0.05
================================================================================
Average shares outstanding 10,295 7,988
================================================================================
-5-
<PAGE>
<PAGE>
NAI TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended
------------------------
June 28, June 29,
1997 1996
---------------------
Cash Flows from Operating Activities:
Net earnings $ 880 $ 365
Adjustments to reconcile net earnings
to cash provided by operating activities:
Depreciation and amortization 1,038 1,290
Gain on disposal of property, plant and equipment (7) (790)
Provision for inventory obsolescence 164 207
Loss on sale of notes receivable - 89
Change in operating assets and liabilities,
excluding effects from acquisitions, dispositions
and foreign currency adjustments:
Accounts receivable 1,830 (1,296)
Inventories (232) (2,492)
Accounts payable and other accrued expenses (3,432) (4,117)
Income taxes 443 139
Other, net (119) (829)
- --------------------------------------------------------------------------------
Net cash flow provided by (used in) operating activities 565 (7,434)
- --------------------------------------------------------------------------------
Cash Flows from Investing Activities:
Purchase of property, plant and equipment (276) (325)
Proceeds from sale of property, plant and equipment 19 1,363
- --------------------------------------------------------------------------------
Net cash used in (provided by) investing activities (257) 1,038
Cash Flows from Financing Activities:
Issuances of notes payable 69 590
Issuance of 12% Convertible Notes - 5,842
Payments of notes payable (69) (53)
Payments of long-term debt (1,973) (2,601)
Receipts of notes receivable - 1,101
Proceeds from exercise of stock options
and stock purchase plan 126 -
- --------------------------------------------------------------------------------
Net cash used in (provided by) financing activities (1,847) 4,879
- --------------------------------------------------------------------------------
Effect of foreign currency exchange rates on cash (72) 7
- --------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (1,611) (1,510)
Cash and cash equivalents at beginning of year 2,727 2,605
- --------------------------------------------------------------------------------
Cash and cash equivalents at end of period $1,116 $1,095
================================================================================
Supplemental disclosure of cash flow information:
Cash paid for:
Interest $ 728 $ 1,057
Income taxes $ 8 $ 3
Conversion of 12% Notes into common stock $ 30 $ 2,000
================================================================================
-6-
<PAGE>
<PAGE>
OTHER FINANCIAL INFORMATION
UNAUDITED FINANCIAL STATEMENTS
- ------------------------------
The accompanying unaudited consolidated financial statements have been prepared
by the Company pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC") and, in the opinion of management, include all
adjustments (consisting of normal recurring accruals) necessary for a fair
presentation of financial position, results of operations and cash flows for the
interim periods. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules and
regulations of the SEC. The Company believes that the disclosures contained
herein are adequate to make the information presented not misleading. The
consolidated statements of operations for the six months ended June 28, 1997 are
not necessarily indicative of the results to be expected for the full year.
These unaudited financial statements should be read in conjunction with the
audited financial statements and accompanying notes included in the Company's
1996 Annual Report on Form 10-K for the year ended December 31, 1996.
INVENTORIES
- -----------
Inventories are summarized by major classification as follows:
- -------------------------------------------------------------------------------
June 28, Dec. 31,
1997 1996
(Audited)
- --------------------------------------------------------------------------------
(In thousands of dollars)
Raw materials and components $9,188 $ 8,567
Work-in-process 2,265 3,010
Finished goods 1,300 1,204
Allowance for obsolescence (2,415) (2,403)
Unliquidated progress payments -- (108)
- --------------------------------------------------------------------------------
Inventories, net $10,338 $10,270
================================================================================
-7-
<PAGE>
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
Second Quarter 1997 Compared with Second Quarter 1996
- -----------------------------------------------------
The nature of the Company's business is such that year to year changes in sales
levels are predominantly due to changes in shipping volume or product mix rather
than changing sales prices. Net sales for the second quarter of 1997 were $14.1
million, a 19% decline when compared with $17.4 million for the same period in
1996.
The following chart provides the sales breakdown by subsidiary:
In thousands of dollars 1997 1996 % Change
- --------------------------------------------------------------------------------
Electronic Systems Segment
Codar Technology, Inc. $4,301 $ 8,487 (49%)
NAI Systems Division 3,991 3,451 16%
Lynwood Scientific Dev. Ltd. 4,693 3,438 37%
Inter-company (176) (151)
------------------------------------
Total Electronic Systems Segment 12,809 15,225 (16%)
Telecommunications Segment
Wilcom, Inc. 1,303 2,129 (39%)
------------------------------------
Total Telecommunications Segment 1,303 2,129 (39%)
------------------------------------
TOTAL $14,112 $17,354 (19%)
====================================
Sales in the Electronic Systems segment (net of intercompany eliminations)
decreased 16% to $12.8 million from $15.2 million for the same period in 1996.
Sales increases of 37% at Lynwood Scientific Development Ltd. and 16% at NAI
Systems Division were more than offset by a 49% sales decline at Codar. The
sales decline at Codar is attributable to several factors, most notably a
decline in Codar's rate of booking new orders. Codar considers the bookings
decline to be temporary and attributes it to delays in anticipated awards.
However, it must be noted that until the bookings rate does increase, Codar will
continue to report less than optimum operating results. The Company recently
reduced its ongoing operating expenses at Codar to mitigate the adverse impact
of the potentially lower sales. Codar is in the process of rebuilding its
internal sales and marketing resources. Codar's 1996 sales levels were favorably
impacted by delays in shipments from prior years. The quarter on quarter sales
increases at Systems Division and Lynwood are representative of the increased
levels of business at both companies.
In recent years the Company has reduced its dependency on the United States
defense budget by expanding its non-military business operations. However, the
Company still expects approximately 30% of 1997 sales to be directly to the U.S.
Military or through prime contractors to the military. The Company is not aware
of any programs in which it participates that are specifically targeted for
termination or curtailment. The Company's products are utilized on many
different U.S. Government programs, which reduces the adverse impact of
canceling a single specific program. However, changes in future U.S. defense
spending levels could impact the Company's future sales volume.
Sales in the Telecommunications segment decreased 39% to $1.3 million as
compared to $2.1 million for the same period in 1996. The decrease in sales was
attributable to reduced orders as well as delays in the introduction and
qualification of the Company's enhanced TurboAmp product line. The new TurboAmp
products became available in late June and are now being tested by
-8-
<PAGE>
<PAGE>
several prospective customers. The Company is exploring all avenues to increase
its business level and has recently added additional sales resources in the
Telecommunications segment.
The gross margin percentage for the second quarter 1997 was 26.6%, well above
the 20.5% in the comparable quarter of 1996. The following chart provides the
gross margin percentage by subsidiary.
1997 1996
- --------------------------------------------------------------------------------
Codar Technology, Inc. 11.9% 12.4%
NAI Systems Division 29.2% 18.8%
Lynwood Scientific Development Ltd. 33.6% 31.9%
Wilcom, Inc. 38.3% 35.3%
The relatively flat margins at Codar despite the 49% decline in revenues are
attributable to significant cost reduction efforts at the Company, as well as an
emphasis in competing for higher margin work.
The higher gross margin percentage at NAI Systems Division is attributable to
increased shipping volumes and a more favorable mix of development, production
and mature product sales.
Selling expense for the second quarter of 1997 and 1996 was relatively unchanged
at $1.0 million for both periods.
General and administrative expenses for the second quarter 1997 and 1996 were
relatively unchanged at $1.1 million for both periods.
Company-sponsored research and development expenditures for the second quarter
of 1997 were $0.37 million as compared with $0.51 million for the same period in
1996, a decline of 27%. The Company expects that the current level of the
internal research and development expenditures will be relatively constant for
the remainder of 1997.
For the second quarter of 1997, the Company had operating income of $1.2 million
as compared with operating income of $1.5 million for the same period in 1996.
However, it should be noted that the 1996 operating income included a gain of
$0.75 million from the sale of the Systems Integration Division.
Interest expense and amortization of deferred debt costs, net of interest
income, was $0.4 million for the second quarter of 1997 as compared with $0.7
million for the same period in 1996.
The Company accrued income tax expense of $0.224 million in the second quarter
of 1997, which equates to an effective tax rate of 31%. The entire tax expense
pertains to the Company's Lynwood subsidiary located in the U.K. Lynwood's
earnings are taxed in the U.K. and, while the Company has a U.S. net operating
loss carry-forward, it is required to pay taxes in the U.K. The Company is
unable to recognize the entire future tax benefit associated with its U.S.
operating loss carry-forwards due to uncertainties as to whether or not a future
benefit will be realized.
For the second quarter of 1997 the Company recorded net earnings of $0.501
million as compared with $0.815 million in the first quarter of 1996. Net
earnings per share was $0.05 per share as compared with $0.10 per share for the
same period in 1996, based on a weighted average of 10.4 million and 8.5 million
shares outstanding, respectively. The 1996 gain from the sale of the Systems
Integration Division contributed $0.753 million or $0.09 per share to the 1996
financial results.
-9-
<PAGE>
<PAGE>
First Half 1997 Compared with First Half 1996
The nature of the Company's business is such that year to year changes in sales
levels are predominantly due to changes in shipping volume or product mix rather
than changing sales prices. Net sales for the first half of 1997 were $27.2
million, a 20% decline when compared with $33.9 million for the same period in
1996.
The following chart provides the sales breakdown by segment and subsidiary for
the first six months:
In thousands of dollars 1997 1996 % Change
- --------------------------------------------------------------------------------
Electronic Systems Segment
Codar Technology, Inc. $8,234 $16,678 (51%)
NAI Systems Division 8,372 6,530 28%
Lynwood Scientific Dev. Ltd. 8,753 6,658 31%
Inter-company (532) (260)
----------------------------------------
Total Electronic Systems Segment 24,827 29,606 (16%)
Telecommunications Segment
Wilcom, Inc. 2,347 4,251 (45%)
----------------------------------------
Total Telecommunications Segment 2,347 4,251 (45%)
----------------------------------------
TOTAL $27,174 $33,857 (20%)
========================================
Sales in the Electronic Systems segment (net of inter-company elimination)
declined 16% to $24.8 million from $29.6 million for the same period in 1996.
Sales increases of 31% at Lynwood Scientific Development Ltd. and 28% at NAI
Systems Division were more than offset by a 51% sales decline at Codar. The
sales decline at Codar is attributable to several factors, most notably a
decline in Codar's rate of booking new orders. Codar considers the bookings
decline to be temporary and attributes it to delays in anticipated awards.
However, it must be noted that until the bookings rate does increase, Codar will
continue to report less than optimum operating results. The Company recently
reduced its ongoing operating expenses at Codar to mitigate the adverse impact
of the potentially lower sales. Codar is in the process of rebuilding its
internal sales and marketing resources. Codar's 1996 sales levels were favorably
impacted by delays in shipments from prior years. The sales increases at Systems
Division and Lynwood are representative of the increased levels of business at
both companies.
In recent years the Company has reduced its dependency on the United States
defense budget by expanding its non-military business operations. However, the
Company still expects approximately 30% of 1997 sales to be directly to the U.S.
military or through prime contractors to the military. The Company is not aware
of any programs in which it participates that are specifically targeted for
termination or curtailment. The Company's products are utilized on many
different U.S. Government programs, which reduces the adverse impact of
canceling a single specific program. However, changes in future U.S. defense
spending levels could impact the Company's future sales volume.
Sales in the Telecommunications segment declined 45% to $2.3 million as compared
to $4.3 million for the same period in 1996. The decrease in sales was
attributable to reduced orders as well as delays in introduction and
qualification of the Company's enhanced TurboAmp product line. The new TurboAmp
products became available in late June and are now being tested by several
prospective customers. The Company is exploring all avenues to increase its
business level and has recently added additional sales resources in the
Telecommunications segment.
-10-
<PAGE>
<PAGE>
The gross margin percentage for the first half of 1997 was 27.3% as compared
with 20.1% for the same period in 1996. The following chart provides the gross
margin percentage by subsidiary.
1997 1996
- --------------------------------------------------------------------------------
Codar Technology, Inc. 13.8% 10.7%
NAI Systems Division 28.3% 19.7%
Lynwood Scientific Dev. Ltd. 35.1% 32.9%
Wilcom, Inc. 35.3% 33.5%
The margin improvement at Codar despite the decline in sales is attributable to
cost reduction efforts implemented in 1996. Codar's 1996 first-half operating
performance was adversely impacted by several large contracts for which the
gross margins were -0-.
The higher gross margin percentage at NAI Systems Division is attributable to
increased shipping volumes and a more favorable mix of development, production
and mature product sales.
Selling expense for the first half of 1997 was $2.0 million as compared with
$2.1 million for the same period in 1996.
General and administrative expenses for the first half of 1997 were $2.2 million
as compared with $2.5 million for the same period in 1996. The decline is
attributable to the Company's continuing goal of reducing its operating
expenses.
Company-sponsored research and development expenditures for the first half of
1997 were $0.8 million as compared with $0.9 million for the same period in
1996. The Company expects that the level of the first half 1997 IR&D
expenditures will be relatively constant for the remainder of the year.
For the first half of 1997, the Company had operating income of $2.2 million as
compared with $1.8 million for the same period in 1996. The first half results
were favorably impacted by the recognition of a gain of approximately $0.753
million from the sale of the Systems Integration Division in June 1996.
Interest expense, net of interest income, was $0.9 million for the first half of
1997 as compared with $1.3 million for the same period in 1996.
The Company accrued an income tax expense of $0.4 million. The entire tax
expense pertains to the Company's Lynwood subsidiary located in the U.K.
Lynwood's earnings are taxed in the U.K. and, while the Company has a U.S. net
operating loss carry-forward, Lynwood is required to pay taxes in the U.K. The
Company is unable to recognize the entire tax benefit associated with its U.S.
net operating loss carry-forward due to uncertainties as to whether or not a
future benefit will be realized. Once the Company returns to sustained
profitability, the benefits of such a tax loss carry-forward will be recognized.
For the first half of 1997 the Company had a net profit of $0.9 million as
compared with $0.4 million in the first half of 1996. Earnings per share were
$0.09 as compared with $0.05 for the same period in 1996, based on a weighted
average of 10.3 million and 8.0 million shares outstanding, respectively. The
1996 gain from the sale of the Systems Integration Division contributed $0.753
million or $0.09 per share to the first-half 1996 financial results.
-11-
<PAGE>
<PAGE>
Liquidity and Capital Resources
- -------------------------------
Cash and cash equivalents totaled $1.1 million at June 28, 1997, as compared to
$2.7 million at December 31, 1996. Cash provided by operating activities
amounted to $0.6 million in the first half of 1997, as compared to cash used by
operating activities of $7.4 million in the comparable period of 1996. The 1996
period saw a large outflow of funds to the Company's vendors which had been
delayed pending completion of the Company's sale of 12% Convertible Notes.
During the first half of 1997, the Company reduced outstanding bank debt by $1.9
million bringing the total amount outstanding to $5.6 million at quarter end.
The Company has made payments totaling $3.9 million in excess of requirements
and has the right to borrow such amount back if needed.
During the first half of 1997, $43,500 of 12% Convertible Notes were converted
into 21,750 shares. At June 28, 1997 $5,183,500 of the 12% Convertible Notes
were outstanding.
The Company believes that it has adequate cash and borrowing capabilities in
place to fund future working capital needs.
Inflation
- ---------
The Company's financial statements are prepared in accordance with historical
accounting systems, and therefore do not reflect the effect of inflation. The
impact of changing prices on the financial statements is not considered to be
significant.
This document may contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are based on
current plans and expectations of NAI Technologies and involve risks and
uncertainties that could cause actual future activities and results of
operations to be materially different from those set forth in the
forward-looking statements. Important factors that could cause actual results to
differ include, among others, changes in government purchasing policies and
budget constraints, competition, the continuity of booking trends, the absence
of supply interruptions, new products' market acceptance and warranty
performance.
-12-
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
11 - Statement re: Computation of Per Share Earnings
27 - Financial Data Schedule (Edgar Filing only)
b) Reports on Form 8-K
None.
-13-
<PAGE>
<PAGE>
S I G N A T U R E S
-------------------
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.
NAI TECHNOLOGIES, INC.
(Registrant)
DATE August 11, 1997 By: \s\Richard A. Schneider
--------------------- ---------------------------------
Richard A. Schneider
Executive Vice President
(On behalf of the registrant and as
Principal Financial Officer)
-14-
<PAGE>
<PAGE>
Exhibit 11
NAI TECHNOLOGIES, INC. AND SUBSIDIARIES
(In thousands)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Three Months
Ended
June 28, June 29,
1997 1996
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Income (loss) $501 $815
Average shares of common stock outstanding during the period 9,075 8,031
Incremental shares from assumed exercise of stock options, stock
warrants & employee stock purchase plan (primary) 1,316 482
Total shares used to calculate PEPS * 10,391 8,513
------- -------
Primary earnings per share $0.05 $0.10
======= =======
Net Income (loss) 501 815
Interest on Convertible Debt (Net of Taxes) 157 217
Amortization of OID (Net of Taxes) 32 35
Amortization of Deferred Debt Expense (Net of Taxes) 77 170
------- -------
Adjusted Net Income 767 1,237
======= =======
Average shares of common stock outstanding during the period 9,075 8,031
Incremental shares from assumed exercise of stock options, stock
warrants & employee stock purchase plan (fully diluted) 1,316 870
Dilution from Convertible Debt 2,591 3,171
Total shares used to calculate FDEPS * 12,982 12,072
------- -------
Fully Diluted earnings per share $0.06 $0.10
======= =======
</TABLE>
* Per APB 15, when a net loss is reported, exercise or conversion is not
to be assumed.
================================================================================
<PAGE>
<PAGE>
Exhibit 11
NAI TECHNOLOGIES, INC. AND SUBSIDIARIES
(In thousands)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Six months ended
June 28, June 29,
1997 1996
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Income (loss) $880 $365
Average shares of common stock outstanding during the period 9,052 7,747
Incremental shares from assumed exercise of stock options, stock
warrants & employee stock purchase plan (primary) 1,243 241
Total shares used to calculate PEPS * 10,295 7,988
------- -------
Primary earnings per share $0.09 $0.05
======= =======
Net Income (loss) 880 365
Interest on Convertible Debt (Net of Taxes) 308 363
Amortization of OID (Net of Taxes) 76 61
Amortization of Deferred Debt Expense (Net of Taxes) 180 225
------- -------
Adjusted Net Income 1,444 1,014
======= =======
Average shares of common stock outstanding during the period 9,052 7,747
Incremental shares from assumed exercise of stock options, stock
warrants & employee stock purchase plan (primary) 1,336 436
Dilution from Convertible Debt 2,592 3,171
Total shares used to calculate FDEPS * 12,980 11,354
------- -------
Fully Diluted earnings per share $0.11 $0.09
======= =======
</TABLE>
* Per APB 15, when a net loss is reported, exercise or conversion is not
to be assumed.
================================================================================
-2-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-28-1997
<CASH> 1,116
<SECURITIES> 0
<RECEIVABLES> 10,863
<ALLOWANCES> 0
<INVENTORY> 10,338
<CURRENT-ASSETS> 23,209
<PP&E> 10,960
<DEPRECIATION> (7,646)
<TOTAL-ASSETS> 37,396
<CURRENT-LIABILITIES> 9,306
<BONDS> 5,184
<COMMON> 910
0
0
<OTHER-SE> 16,025
<TOTAL-LIABILITY-AND-EQUITY> 37,396
<SALES> 27,174
<TOTAL-REVENUES> 27,174
<CGS> 19,770
<TOTAL-COSTS> 24,997
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 778
<INCOME-PRETAX> 1,251
<INCOME-TAX> 371
<INCOME-CONTINUING> 880
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 880
<EPS-PRIMARY> 0.09
<EPS-DILUTED> 0
</TABLE>
