SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. - 20549
_________________________
FORM 10-Q
(Mark One)
* QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Quarterly Period Ended October 3, 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 No. 0-12588
_________________________
SALIENT 3 COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 23-2280922
(State of Incorporation) (IRS Employer
Identification No.)
P.O. Box 1498, Reading, Pennsylvania 19603
(Mailing address of principal executive offices) (Zip Code)
(610) 856-5500
________________________________________________________________________________
(Registrant's telephone number, including area code)
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
Class A Class B
Number of shares of each class of
common stock outstanding as of
October 3, 1997 (excluding 2,620,855
Class A treasury shares): 5,819,815 544,630
SALIENT 3 COMMUNICATIONS, INC. AND SUBSIDIARIES
INDEX
Part I. Financial Information Pages
Item I.
Consolidated Condensed Balance Sheets at
October 3, 1997 and January 3, 1997 (unaudited)
Consolidated Condensed Statements of Operations for the
three and nine month periods ended October 3, 1997
and September 27, 1996 (unaudited)
Consolidated Condensed Statements of Cash Flows
for the nine month periods ended October 3, 1997
and September 27, 1996 (unaudited)
Notes to Consolidated Condensed Financial Statements
Item II.
Management's Discussion and Analysis of Results of
Operations and Financial Condition
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE>
<TABLE>
Part I. Financial Information
Salient 3 Communications, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
October 3, 1997 and January 3, 1997
(Unaudited)
(000's)
<CAPTION>
October 3, January 3,
1997 1997
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 2,208 $ 1,482
Accounts receivable, net of allowance
for doubtful accounts of $1,912 and
$1,565, respectively 19,560 20,723
Inventories 20,199 16,244
Deferred income taxes 3,791 4,180
Other current assets 4,722 2,640
Net assets held for sale 15,956 45,996
------- -------
Total current assets 66,436 91,265
------- -------
Property, plant and equipment 42,744 37,105
Less accumulated depreciation and
amortization 20,253 17,821
------- -------
22,491 19,284
------- -------
Deferred income taxes 8,055 8,105
Other assets 1,000 500
Intangible assets 45,236 36,593
------- -------
Total Assets $ 143,218 $ 155,747
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 2,458 $ -
Accounts payable 5,555 7,657
Salaries and wages 1,575 1,256
Income taxes, currently payable 8,653 3,096
Estimated liability for contract losses 1,471 1,539
Other accrued liabilities 8,389 10,654
------- -------
Total current liabilities 28,101 24,202
------- -------
Long-term debt 11,330 26,549
Other long-term liabilities 5,207 4,967
Self-insured retention 2,677 2,409
Stockholders' equity:
Common stock 8,985 8,985
Capital in excess of par value 38,047 38,091
Warrants outstanding 1,665 1,180
Retained earnings 88,028 89,838
Foreign currency translation adjustment (27) -
Deferred compensation-restricted stock (870) (287)
Treasury stock (39,925) (40,187)
-------- --------
95,903 97,620
-------- -------
Total Liabilities and Stockholders' Equity $ 143,218 $ 155,747
======== ========
The accompanying notes are an integral part of the consolidated condensed
financial statements.
</TABLE>
<PAGE>
<TABLE>
Salient 3 Communications, Inc. and Subsidiaries
Consolidated Condensed Statements of Operations
(Unaudited)
(000's except for share information)
<CAPTION>
Nine Months Three Months
Ended Ended
-------------------------------------- --------------------------------------
Oct. 3, 1997 Sept. 27, 1996 Oct. 3, 1997 Sept. 27, 1996
------------ -------------- ------------ --------------
<S> <C> <C> <C> <C>
Sales $77,296 $62,579 $27,919 $21,939
Cost of goods sold 48,402 40,599 17,395 14,325
------- ------- ------- -------
Gross profit 28,894 21,980 10,524 7,614
Selling, general and administrative 25,372 15,865 9,260 5,433
Purchased in-process research & development 6,150 - - -
Research & development 6,841 4,962 2,384 1,501
Intangible amortization 1,266 573 457 193
-------- ------- ------- -------
Operating profit (loss) (10,735) 580 (1,577) 487
-------- ------- ------- -------
Interest income 73 242 40 73
Interest expense 1,526 160 403 44
-------- ------- ------- -------
Pre-tax income (loss)
from continuing operations (12,188) 662 (1,940) 516
-------- ------- ------- -------
Provision (benefit) for taxes
on income (loss) (2,218) 250 (699) 195
-------- ------- ------- -------
Net income (loss)
from continuing operations (9,970) 412 (1,241) 321
-------- ------- ------- -------
Income from discontinued operations:
Technical Services Segment
(less applicable income taxes of
$698 and $1,637 for the nine month
periods ended and $200 and $757
for the three month periods
ended, respectively) 1,214 2,647 354 1,220
Real Estate Segment
(less applicable income taxes of
$450 and $703 for the nine month
periods ended and $69 and $258
for the three month periods
ended, respectively) 781 1,137 122 415
Gains on disposals of
subsidiaries (less applicable
income taxes of $5,945 and $5,362
for the nine and three month
periods ended, respectively) 8,080 - 7,000 -
------- ------- ------ -------
Net income from
discontinued operations 10,075 3,784 7,476 1,635
------- ------- ------ -------
Total net income $105 $4,196 $6,235 $1,956
======= ======= ====== =======
Per share of common stock:
Net income (loss)
from continuing operations $(1.58) $0.07 $(0.20) $0.05
Net income from
discontinued operations:
Technical Services Segment $0.19 $0.42 $0.05 $0.19
Real Estate Segment $0.13 $0.18 $0.03 $0.07
Disposal of subsidiaries $1.28 $ - $1.11 $ -
------ ----- ----- -----
Total earnings per share $0.02 $0.67 $0.99 $0.31
====== ===== ===== =====
Cash dividend per share $0.30 $0.50 $0.10 $0.10
Average number of shares
of common stock 6,305,755 6,293,186 6,292,933 6,304,746
The accompanying notes are an integral part of the consolidated condensed
financial statements.
</TABLE>
<PAGE>
<TABLE>
Salient 3 Communications, Inc. and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(Unaudited)
(000's)
<CAPTION>
Nine Months Ended
Oct. 3, Sept. 27,
1997 1996
Cash flows from operating activities: -------- ---------
<S> <C> <C>
Net income $105 $4,196
Adjustments to reconcile net income to net
cash provided by (used for) operating activities:
Gain on the sale of subsidiaries (14,025) -
Purchased in-process research and
development write-off 6,150 -
Other items not affecting cash 4,149 6,119
Changes in current assets and current liabilities,
net of effects from acquitions and dispositions (1,190) (3,701)
Other, net - (236)
------- -------
Net cash provided by (used for) operating activities (4,811) 6,378
------- -------
Cash flows from investing activities:
Payments for acquisitions, net of cash acquired (19,302) (954)
Payments for property, plant and equipment (5,577) (4,930)
Proceeds from sale of subsidiaries 45,013 -
Proceeds from sale of property, plant
and equipment - 912
------- -------
Net cash provided by (used for) investing activities 20,134 (4,972)
------- -------
Cash flows from financing activities:
Proceeds from issuance of debt 19,900 -
Payments of debt (35,231) (1,134)
Borrowings under note payable 2,458 -
Issuance of treasury stock in connection
with stock option, award and purchase
plans 102 341
Payments to acquire treasury stock (441) (583)
Cash dividends paid (1,915) (3,150)
Other, net 530 (202)
------- -------
Net cash used for financing activities (14,597) (4,728)
------- -------
Net increase (decrease) in cash and cash equivalents 726 (3,322)
Cash and cash equivalents at beginning of period 1,482 11,119
------- -------
Cash and cash equivalents at end of period $2,208 $7,797
======= =======
Supplemental cash flow disclosures:
Interest paid $2,145 $102
======= =======
Income taxes paid, net of refunds received $1,603 $ (5)
======= =======
The accompanying notes are an integral part of the consolidated condensed
financial statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
(000's except for share and per share information)
1. On July 31, 1997, the Company sold its real estate complex, Green
Hills Corporate Center to Brandywine Realty Trust for $40,000,
substantially all in cash. The sale resulted in a $7,000 gain, net of
income taxes of $5,362, or $1.11 per share. Proceeds were used to
reduce the Company's outstanding debt.
On June 24, 1997, the Company sold its SRA Technologies, Inc. subsidiary
to Dames & Moore, Inc. for $8,800 in cash. The sale of SRA resulted
in a $1,080 gain, net of income taxes of $583, or $.17 per share.
Proceeds were used to reduce the Company's outstanding debt.
2. In the first quarter of 1997, the Company elected discontinued
operations treatment for both its Technical Services and Real Estate
Segments.
The results for technical services and the real estate segment have
been classified as discontinued operations for all periods presented
in the Consolidated Condensed Statements of Operations and Balance
Sheets. The assets and liabilities of the discontinued operations
have been classified in the Consolidated Condensed Balance Sheets as
"Net assets held for sale". Discontinued operations have not been
segregated in the Statement of Consolidated Cash Flows and, therefore,
amounts for certain captions will not agree with the respective
Consolidated Condensed Statements of Operations.
The following is a summary of revenue by discontinued segment:
Three Months Ended Nine Months Ended
---------------------------- ---------------------------
Oct. 3, 1997 Sept. 27, 1996 Oct. 3, 1997 Sept. 27, 1996
------------ -------------- ------------ --------------
Revenues:
Technical Services $15,191 $22,288 $51,284 $65,538
Real Estate 696 2,295 5,026 6,582
------- ------- ------- -------
$15,887 $24,583 $56,310 $72,120
======= ======= ======= =======
3. On April 30, 1997 the Company announced that it changed its name from
Gilbert Associates, Inc. to Salient 3 Communications, Inc. The name
change resulted from the Company's plan to solely focus on
telecommunications.
4. The financial statements furnished herein reflect all adjustments
which are, in the opinion of management, necessary for a fair
presentation of financial position and results of operations for the
interim periods. Such adjustments are of a normal recurring nature.
The consolidated condensed financial statements have been reclassified
to conform with current year presentation.
5. Net income per share of common stock was determined using the average
number of Class A and Class B shares outstanding. The effect on net
income per share resulting from dilution upon exercise of outstanding
stock options, warrants and restricted stock is not material, and
therefore is not shown.
No preferred stock was outstanding as of October 3, 1997.
6. During the first quarter of 1997 and the second quarter of 1996,
several key employees were issued an aggregate of 39,000 and 34,500
shares, respectively, of restricted stock in the Company. The value
of this stock is recorded as deferred compensation in the
stockholders' equity section of the consolidated condensed balance
sheets, and will be expensed over the vesting period. The vesting
period will not exceed 10 years and may be accelerated depending upon
the achievement of certain objectives.
7. The components of inventories as of the balance sheet dates are as
follows:
Oct. 3, 1997 Jan. 3, 1997
------------ ------------
Raw material $11,876 $10,755
Work in process 2,327 1,768
Finished goods 5,996 3,721
------- -------
$20,199 $16,244
======= =======
8. Other accrued liabilities includes an accrual relating to workers'
compensation of $1,920 and $2,082 at October 3, 1997 and January 3,
1997, respectively.
9. On September 30, 1996, the Company acquired the assets of SAFCO
Corporation's Electronic Systems Division (ESD), which was
subsequently renamed SAFCO Technologies Inc. (SAFCO). As part of the asset
purchase agreement, the Company paid former shareholders $1,204 during
the first quarter of 1997.
10. During the third quarter of 1996, the Company settled a claim filed by
a former employee of a subsidiary which closed in 1988. The
settlement resulted in an increase in net income of $435, net of
income taxes of $265, or $.07 per share, which is reflected in
discontinued operations.
11. On April 21, 1997, the Company acquired all of the outstanding capital
stock of TEC Cellular, Inc. (TEC) for $14,000 in cash subject to
certain adjustments plus seven year warrants exercisable to purchase
100,000 shares of the Company stock at $18 per share. Also, depending
upon the achievement of certain earnings objectives in 1997, the
former shareholders of TEC may be entitled to an additional $1,000
payment. Any payment will increase goodwill. TEC Cellular is part of
the Company's wireless telecommunication business and is a division of
SAFCO Technologies, Inc.
In conjunction with the TEC acquisition, the Company recorded a $6,150
after-tax charge, or $.97 per share, for purchased in-process research
and development costs. The purchased in-process research and
development has not yet reached technological feasibility and had no
alternative future use as of the date of closing.
On April 30, 1997, the Company acquired all of the outstanding stock
of DAC Ltd. (DAC) for 3 million British pounds sterling (approximately $5,000).
DAC is part of the Company's industrial telecommunication business and is a
subsidiary of the GAI-Tronics Corporation.
12. During the first quarter of 1997, the Financial Accounting Standards
Board (FASB) issued Statement 128, which specifies the computation,
presentation, and disclosure requirements for earnings per share (EPS)
for public companies. This statement is effective for financial
statements for both interim and annual periods ending after December
15, 1997 and adoption of this statement for the Company will occur in
the fourth quarter of 1997. This statement would not materially
affect the Company's EPS calculation.
13. During the first quarter of 1997, the Company paid $1,000 to the
former principals of Instrument Associates, Inc. as part of the 1993
purchase agreement.
14. The Company has elected to allocate interest not specifically
associated with any segment based upon a ratio of net assets.
Interest expense allocated to discontinued operations was not material
in both the nine and three month periods ended October 3, 1997.
<PAGE>
Management's Discussion and Analysis of Results of Operations and
Financial Condition
(000's except for share information)
Results of Operations
In June 1996, the Board of Directors announced that the Company had
begun to explore strategic options for its remaining subsidiaries within
the technical services and real estate segments. During the first
quarter of 1997, the Company adopted discontinued operations treatment
for its technical services and real estate segments.
For the nine months ended October 3, 1997, the Company lost $9,970 or
$1.58 per share from continuing operations. Included in the results, is
a second quarter charge of $6,150 or $.97 per share for purchased in-
process research and development associated with the TEC Cellular Inc.
(TEC) acquisition (Note 11). The purchased in-process research and
development has not yet reached technological feasibility and had no
alternative future use as of the date of closing.
Excluding the write-off of purchased in-process research and
development, the Company reported a loss from continuing operations of
$3,820 or $.61 per share for the first nine months of 1997 compared to
income of $412 or $.07 per share for 1996. For the quarter, the Company
reported a loss from continuing operations of $1,241 or $.20 per share
compared to income of $321 or $.05 per share for 1996. The net loss from
continuing operations is primarily due to the SAFCO subsidiary and
reduced revenue from the wireline group. SAFCO's results suffered
primarily due to continued product delays. Additionally, interest
expense and goodwill amortization associated with the SAFCO acquisition,
reduced results further.
The Company expects improvement in results of operations in the fourth
quarter. SAFCO's backlog has increased and should support a stronger
fourth quarter. However, if product delays are not resolved, the fourth
quarter results of operations will not be as strong as anticipated.
Revenue from continuing operations increased 24% and 27% for the nine
and three month periods in 1997, respectively, compared to the same
periods in 1996. The increases were primarily due to the SAFCO and TEC
(wireless group) and DAC Ltd. (industrial group) acquisitions.
The following is a breakdown of revenue by telecommunication group:
Year to Date Third Quarter
1997 1996 1997 1996
---- ---- ---- ----
Industrial $38,718 $30,698 $14,275 $11,048
Wireline 20,723 24,819 5,921 8,487
Wireless 17,855 7,062 7,723 2,404
------ ------ ------ ------
Total $77,296 $62,579 $27,919 $21,939
====== ====== ====== ======
The higher industrial revenue in both the nine and three month periods
of 1997 is due primarily to the DAC acquisition, and to a lesser extent,
new products and increased demand for products in the markets served by
the industrial group.
The decline in wireline revenue stems from a drop off of demand for
analog channel units prompted by certain re-use programs now in place at
some wireline business customers.
The wireless improvement in sales in both periods is due primarily to
the SAFCO and TEC acquisitions, offset to a lesser extent, by lower
revenue from Instrument Associates Inc. SAFCO and TEC had combined
revenues of $12,255 and $5,795 in the nine and three month periods of
1997.
The gross profit percentage increased from 35% in 1996 to 37% in 1997
for the nine month periods and from 35% in 1996 to 38% in 1997 for the
three month periods. The increase in gross profit percentage is
primarily due to higher margins realized from the recently acquired
businesses - SAFCO and TEC. Higher SAFCO and TEC margins were partially
offset by lower margins realized within the wireline and industrial
groups. Lower margins within the wireline group reflect reduced revenue
while the industrial group's margins suffered from start up costs
associated with the introduction of new products.
Selling, General and Administration, Research and Development and
Intangible Amortization
Selling, general and administrative, research and development and
intangible amortization increased 60%, 38% and 121%, respectively, in
the first nine months of 1997 compared to the same period in 1996.
Selling, general and administrative, research and development and
intangible amortization increased 70%, 59% and 137%, respectively, in
the current quarter compared to the third quarter of 1996. The
increases relate primarily to the acquisitions.
As a percentage of sales, selling, general and administrative was 33% in
both the nine and three month periods of 1997 compared to 25% in the
same periods in 1996, respectively. The unfavorable relationship stems
from lower wireline revenue and product delays at the SAFCO subsidiary.
Interest Expense
Interest expense increased in the first nine months and third quarter of
1997 as compared to the same periods in 1996 due to the debt incurred to
finance acquisitions.
Provision (Benefit) for taxes on income (loss)
Excluding the write-off of purchased in-process research and
development, the effective tax rate was 37% and 36% for the nine months
and third quarter of 1997, respectively, compared to 38% in the same
periods of 1996.
Income from discontinued operations
On July 31, 1997, the Company sold its real estate complex, Green Hills
Corporate Center to Brandywine Realty Trust, for $40,000, substantially
all in cash. The sale resulted in a $7,000 gain, net of income taxes of
$5,362, or $1.11 per share. The Company reduced its debt levels with
the sales proceeds.
On June 24, 1997, the Company sold its SRA Technologies, Inc. (SRA)
subsidiary to Dames & Moore, Inc. for $8,800 in cash. The sale of SRA
resulted in a $1,080 gain, net of income taxes of $583, or $.17 per
share.
The Company expects that its remaining discontinued subsidiary, Resource
Consultants, Inc. (RCI), will remain profitable until the disposition is
completed. The exact timing of the disposition is uncertain but should
occur within the following three months. The Company expects that the
sale of the remaining subsidiary could generate after-tax proceeds of
approximately $15,000 - $20,000.
Liquidity and Capital Resources
Working capital declined by $28,728 in 1997 primarily due to the sale of
SRA and Green Hills Corporate Center because cash proceeds received on
the divestitures were used to reduce long-term debt and finance
acquisitions.
Amounts generated from operations, anticipated proceeds from the RCI
divestiture, combined with available cash and cash equivalents, and
short-term lines of credit should provide adequate working capital
through the fourth quarter of 1997. The Company does not anticipate
making any contingent payments to former XEL, SAFCO, and TEC
shareholders in the fourth quarter of 1997.
Lines of credit with CoreStates Bank, N.A., are available to fund both
working capital needs and acquisitions. After the consideration of the
outstanding borrowings and certain loan covenants, the Company had
approximately $24,000 available under the lines of credit as of October
3, 1997. The Company was in compliance with its loan covenants as of
October 3, 1997.
On June 25, 1997, the Board of Directors authorized an expansion of the
1995 share repurchase plan to allow the Company to potentially purchase
up to one million shares in the open market. If the Company elects to
repurchase shares, based upon the expected results of operations,
anticipated proceeds from the RCI divestiture, lines of credit, and the
current stock price, sufficient funds should be available to repurchase
these shares.
The Company estimates that its total capital expenditures in 1997,
excluding acquisitions, will be approximately $7,000. No restrictions
on cash transfers between the Company and its subsidiaries exist.
In the first quarter of 1997, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards No. 128,
"Disclosure of Information about Capital Structure," which requires
companies to calculate earnings per share on a basic and diluted basis.
The statement becomes effective for the fourth quarter of 1997. The
adoption would not materially affect the Company's earnings per share
calculation for the quarter or nine months ended October 3, 1997.
In the second quarter of 1997, the FASB issued Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income," and
Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information". The Company has not
determined the effect of adopting these new pronouncements on the
consolidated financial statements.
The Form 10-Q contains certain statements of a forward-looking nature
relating to future events or the future financial performance of the
Company. Such statements are only predictions and involve risks and
uncertainties, and actual events or performance may differ materially as
expressed in any such forward looking statements. Potential risks and
uncertainties include, without limitation: the effect of general
economic conditions, the impact of competitive products, services and
pricing, and demand and market acceptance risks of current and new
products and services; with respect to the Technical Services segment,
its dependence on the U.S. government as a customer; and with respect to
the Telecommunication segment, the uncertain effect of the
Telecommunications Act of 1996, technology change, and risks of product
development and commercialization difficulties, and the Company's
ability to complete its divestiture program in the time frames and at
the prices indicated and the Company's ability to make acquisitions at
prices which will be accretive to earnings. Further information on
factors that could affect the Company's future financial performance can
be found in the Company's other filings with the Securities and Exchange
Commission. Words used in this report such as "positioned", "yields",
"should generate", "appears", "viewed", "could potentially", "would
position", "expected", and "should allow" indicate the presence of
forward looking statements.
<PAGE>
<TABLE>
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's Annual Meeting of Shareholders held on July 30,
1997, the shareholders elected eight directors, approved miscellaneous
amendments to the Certificate of Incorporation, approved amendment to
Certificate of Incorporation and Bylaws to provide for a classified
board, and ratified the appointment of independent auditors for 1997.
The results of the voting were as follows:
For Director Granted Withheld
<S> <C> <C>
John W. Boyer, Jr. 529,786 25,401
Timothy S. Cobb 530,011 25,176
Robert E. LeBlanc 530,011 25,176
Donald E. Lyons 529,786 25,401
Alexander F. Smith 530,011 25,176
Paul H. Snyder 530,011 25,176
James A. Sutton 529,786 25,401
Donald K. Wilson, Jr. 529,786 25,401
BROKER
Other proposals FOR AGAINST ABSTAIN NON-VOTES
Approval of misc.
amendments to
the Certificate
of Incorporation 537,462 12,804 4,920 0
Approval of Amendment
to Certificate of
Incorporation and
Bylaws to provide for
a classified board 537,004 13,717 4,465 0
Ratification of
appointment of
Arthur Andersen LLP
as independent
auditors 552,017 699 2,470 0
</TABLE>
<PAGE>
Part II. Other Information (continued)
Item 5. Other Information
On September 24, 1997, Mr. James A. Sutton voluntarily resigned as a Director
of the Company. The resignation was effective upon the adjournment of the
Board of Director's meeting held on that date. Mr. Sutton, who had been a
Director of the Company since 1986, resigned for personal reasons and not as
a result of any disagreement with the Company on a matter relating to
operations, policies or practices. No replacement for Mr. Sutton has been
named to the Board of Directors.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
(1) The registrant filed Form 8-K on August 13, 1997 for the sale
of the Green Hills Corporate Center, including Pro Forma
Unaudited Consolidated Condensed Financial Statements.
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.
Salient 3 Communications, Inc.
/s/Paul H. Snyder
Paul H. Snyder
Senior Vice President and
Chief Financial Officer
Date: November 12, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-02-1998
<PERIOD-END> OCT-03-1997
<CASH> 2,208,000
<SECURITIES> 0
<RECEIVABLES> 21,472,000
<ALLOWANCES> 1,912,000
<INVENTORY> 20,199,000
<CURRENT-ASSETS> 66,436,000
<PP&E> 42,744,000
<DEPRECIATION> 20,253,000
<TOTAL-ASSETS> 143,218,000
<CURRENT-LIABILITIES> 28,101,000
<BONDS> 11,330,000
0
0
<COMMON> 8,985,000
<OTHER-SE> 86,918,000
<TOTAL-LIABILITY-AND-EQUITY> 95,903,000
<SALES> 77,296,000
<TOTAL-REVENUES> 77,369,000
<CGS> 48,402,000
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 39,629,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,526,000
<INCOME-PRETAX> (12,188,000)
<INCOME-TAX> (2,218,000)
<INCOME-CONTINUING> (9,970,000)
<DISCONTINUED> 10,075,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 105,000
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
