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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 31, 1997
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NICHOLS RESEARCH CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-15295 63-0713665
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(State or other jurisdiction (Commission File Number) IRS Employer
of incorporation) Identification No.
4040 South Memorial Parkway, Huntsville, Alabama 35802-1326
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(Address, including zip code, of principal executive office)
(205) 883-1140
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(Registrant's telephone number, including area code)
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) Pro Forma Financial Information.
The following unaudited condensed consolidated balance sheet and
unaudited pro forma condensed combined income statement are filed with this
report:
Condensed Consolidated Balance Sheet at August 31, 1997
Pro Forma Condensed Combined Statement of Income for the Year
Ended August 31, 1997
The unaudited Condensed Consolidated Balance Sheet of Registrant at
August 31, 1997, reflects the financial position of Registrant after giving
effect to the acquisition of all of the capital stock of TXEN which was
completed on August 29, 1997. The Pro Forma Condensed Combined Statement of
Income for the fiscal year ended August 31, 1997, assumes that the acquisition
occurred on September 1, 1996, and is based on the operations of Registrant
for the year ended August 31, 1997, and of TXEN for the year ended June 30,
1997.
The charge of $12 million resulting from the write-off of purchased
research and development costs has been excluded from the pro forma con-
densed combined statement of income for the year ended August 31, 1997.
The unaudited condensed consolidated balance sheet and unaudited pro
forma condensed combined income statement have been prepared by Registrant
based upon assumptions deemed proper by it. The unaudited pro forma condensed
combined income statement presented herein is shown for illustrative purposes
only and is not necessarily indicative of the future results of operations of
Registrant, or of the results of operations of Registrant that would have
actually occurred had the transaction been in effect for the periods presented.
The unaudited condensed consolidated balance sheet and unaudited pro
forma condensed combined income statement should be read in conjunction
with the historical financial statements and related notes of Registrant.
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NICHOLS RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
August 31, 1997
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(amounts in thousands)
ASSETS
Current Assets:
Cash and temporary cash investments $ 23,354
Accounts Receivable 93,425
Deferred income taxes 2,102
Other 3,311
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Total current assets 122,192
Long-term investments 3,738
Equipment, furniture and improvements, at cost:
Computers and related equipment 21,956
Furniture, equipment and improvements 9,666
Equipment - contracts 5,771
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37,393
Less accumulated depreciation 18,715
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Net equipment, furniture and improvements 18,678
Goodwill (net of accumulated amortization) 49,915
Software development costs (net of accumulated
amortization) 2,486
Investment in affiliates 8,363
Other assets 783
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Total assets $ 206,155
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LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable $ 28,448
Accrued compensation and benefits 11,388
Income taxes payable 369
Current maturities of long-term debt 761
Borrowing on line of credit 10,000
Deferred revenue 3,114
Other 1,534
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Total current liabilities 55,614
Deferred income taxes 1,816
Long-term debt:
Industrial development bonds 1,558
Long-term notes 2,467
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Total long-term debt 4,025
Minority interest in consolidated subsidiary 307
Stockholders equity:
Common stock, par value $.01 per share
Authorized - 20,000,000 shares
Issued - 13,137,657 shares 131
Additional paid-in capital 90,015
Retained earnings 55,535
Less cost of treasury stock - 168,500 shares (1,288)
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Total stockholders' equity 144,393
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Total liabilities and stockholders' equity $ 206,155
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Nichols Research Corporation and TXEN, Inc., Income Statement
Unaudited Pro Forma Condensed Combined Financial Information
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<CAPTION>
<S> <C> <C> <C> <C>
Income Statement NRC TXEN
Year ended August 31, 1997 year ended year ended Pro forma Pro Forma
(In thousands, except share data) 8/31/97 6/30/97 adjustments combined
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Revenues $ 379,695 $ 14,980 $ - $ 394,675
Costs and expenses:
Direct and allocable contract costs 335,222 5,167 340,389
General and administrative expenses 25,979 4,404 1,475 (a) 31,858
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Total costs and expenses 361,201 9,571 1,475 372,247
Operating profit 18,494 5,409 (1,475) 22,428
Other income (expense):
Interest expense (501) (88) (589)
Other income, principally interest 1,063 79 - 1,142
Equities in earnings of unconsolidated subsidiaries 656 (656) (b) -
Minority interest in consolidated subsidiaries (129) - (129)
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Income before taxes 19,583 5,400 (2,131) 22,852
Income taxes 7,109 1,979 (238) (c) 8,850
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Net income 12,474 3,421 (1,893) 14,002
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Earnings per share $ 1.02 $ 1.05
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Weighted average number of common
and common equivalent shares 12,244,371 1,084,148 (d) 13,328,519
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE UNAUDITED PRO FORMA
CONDENSED COMBINED INCOME STATEMENT
Notes to Unaudited Pro Forma Condensed Combined Income Statement
(a) Amortization of purchased intangible assets assuming acquisition
had taken place on September 1, 1996. Amortization of purchased intangible
assets is based on an estimated 20 year life.
(b) Exclusion of NRC's equity in earnings of TXEN for the fiscal year
ended August 31, 1997.
(c) Income tax effects of pro forma equity in earnings adjustment
computed using the combined federal and state statutory rate of 36.3%.
(d) Represents issuance of 1,084,148 shares of NRC Common Stock to
the former shareholders of TXEN as part of the purchase price consideration.
(e) The statement of income presentation excludes the effect of an
estimated $12 million charge to operations taken at the time of acquisition for
purchased research and development costs related to acquired technology
that has not reached technological feasibility and that has no alternative
future use. The statement of income presentation also excludes consideration
of integration costs and potential cost savings because NRC has not completed
its comprehensive review of TXEN's business, operations, capitalization and
management.
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(c) Exhibits.
None
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NICHOLS RESEARCH CORPORATION
(Registrant)
By: Michael J. Mruz
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Michael J. Mruz
Chief Executive Officer and
President
Date: October 31, 1997
