_______________________________________________________________________
_______
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________________________________________________________
_______
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JULY 1, 1995
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 33-10965
SSE TELECOM, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1466297
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
Suite 710, 8230 Leesburg Pike
Vienna, Virginia 22182
(Address of principal
executive office)
Registrant's telephone number, including area code:
(703) 442-4503
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 August 7, 1995, the following number of shares of each of the
issuer's classes of common stock were outstanding:
Common Stock 5,499,662
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
SSE TELECOM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
Assets October 1, July 1, 1995
1994
Current Assets (Unaudited)
Cash and cash equivalents $6,118,201 $2,679,070
Short term investments -- 2,499,845
Accounts receivable net of allowance 9,153,903 10,002,261
for doubtful accounts
of $93,647 at October 1, 1994, and
$156,845 at July 1, 1995
Inventory 5,722,572 5,647,526
Other current assets 657,561 658,628
Total current assets 21,652,237 21,487,330
Net property, plant and equipment at cost 1,554,258 1,645,766
Other asset - Investments -- 14,268,934
Goodwill - Directsat 853,236 --
Other long term assets, net of product
license amortization of $1,151,238 973,786 405,977
at October 1, 1994, and $1,176,363
at July 1, 1995
Total assets $25,033,517 $37,808,007
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable $397,567 $--
Accounts payable 2,170,532 1,668,495
Accrued salaries and employee benefits 765,236 836,317
Other accrued liabilities 654,949 1,017,583
Total current liabilities 3,988,284 3,522,395
Other long term liabilities 112,186 4,646,554
Long term debt 9,570,228 9,348,428
Commitments -- --
Stockholders' Equity
Common stock $.01 par value per share, 54,600 54,997
10,000,000 shares authorized;
5,459,996 and 5,499,662 shares issued in
1994 and 1995 respectively
Additional paid in capital 6,409,562 6,532,762
Retained earnings 5,495,113 6,853,134
Investment appreciation -- 7,581,220
Stockholders' notes receivable (135,000) --
Treasury stock, at cost, 79,148 shares and
123,275 shares at October 1, 1994, and (461,456) (731,483)
July 1, 1995 respectively
Total stockholders' equity 11,362,819 20,290,630
Total liabilities & stockholders' $25,033,517 $37,808,007
equity
See accompanying notes
SSE TELECOM, INC.
CONSOLIDATED INCOME STATEMENTS (Unaudited)
For The Three Months and Nine Months Ended July 2, 1994 and July 1,
1995
Three Months Ended Nine Months Ended
7/2/94 7/1/95 7/2/94 7/1/95
Revenue $7,115,7 $9,180,02 $21,880,7 $25,508,5
29 0 57 40
Cost of revenue 4,889,21 6,054,397 14,545,72 16,922,46
4 1 3
Gross margin 2,226,51 3,125,623 7,335,036 8,586,077
5
Expense
Research and 606,954 753,240 1,862,070 2,144,309
development
Marketing, general and 1,070,09 1,475,873 3,425,349 4,076,717
administrative 0
Operating income 549,471 896,510 2,047,617 2,365,051
Amortization of an 8,375 8,375 502,069 25,125
intangible asset
(Gain) on sale of -- -- (1,227,17 --
investment 9)
Net interest expense and 50,179 112,092 169,465 400,905
other expense
Income before income tax 490,917 776,043 2,603,262 1,939,021
Provision for income taxes 177,000 233,000 939,000 581,000
Net income $313,917 $543,043 $1,664,26 $1,358,02
2 1
Primary earnings per share $.06 $.10 $.30 $.24
Shares used in computing
primary earnings per share 5,538,57 5,574,017 5,470,188 5,554,870
3
See accompanying notes
SSE TELECOM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the Nine Months Ended July 2, 1994 and July 1, 1995
Increase (Decrease) In Cash
Operating Activities: July 2, July 1, 1995
1994
Net income $1,664,262 $1,358,021
Adjustments to reconcile net income to net
cash provided
by operating activities:
Depreciation and amortization 905,611 457,219
Changes in operating assets and liabilities:
Accounts receivable (354,655) (848,358)
Inventory (1,186,999) 75,046
Other current assets (214,684) (1,067)
Accounts payable (42,866) (502,037)
Other accrued liabilities 435,513 362,634
Accrued salaries and employee benefits 118,380 71,081
Net cash provided by operating 1,324,562 972,539
activities
Investing Activities:
Purchases of equipment (561,892) (523,602)
Other long term assets (189,802) (720,240)
Payment on product license (12,000) --
Short term investments --
(2,499,845)
Net cash used by investing (763,694) (3,743,687)
activities
Financing Activities:
Net payments under lines of credit (1,378,265) --
Borrowings under equipment note and other 328,400 --
notes
Payment on notes payable (284,317) (656,553)
Issuance of common stock upon exercise of
stock
options and warrants and related tax 1,316,414 123,597
benefit
Treasury stock repurchase (270,027)
--
Payment of stockholders' notes receivable -- 135,000
Sale of convertible debenture 2,750,000 --
Net cash provided (used) by 2,732,232 (667,983)
financing activities
Net increase (decrease) in cash and cash 3,293,100 (3,439,131)
equivalents
Cash and cash equivalents beginning of period 314,057 6,118,201
Cash and cash equivalents end of period 3,607,157 2,679,070
Short term investments end of period -- 2,499,845
Cash, cash equivalents and short term $3,607,157 $5,178,915
investments end of period
See accompanying notes
SSE TELECOM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. CONSOLIDATED FINANCIAL STATEMENTS
The financial information contained herein has been prepared by the
Company without audit except for information as of October 1, 1994,
which has been audited. In the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to present
fairly the financial position, results of operations and changes in
cash flows for the interim periods have been made.
Certain information and footnote disclosures normally included in the
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these consolidated financial statements be read in conjunction
with the financial statements and notes thereto included in the
Company's October 1, 1994, annual report on Form 10-K. The results of
operations for the period ended July 1, 1995, are not necessarily
indicative of the operating results for the full year.
The Company operates on a 52/53 week accounting year. Fiscal 1994
included 53 weeks, and fiscal 1995 will include 52 weeks. The
additional week during fiscal 1994 was added during the first quarter.
2. INVENTORY
Inventory consists of manufacturing raw materials, work-in process and
finished goods. Inventories are valued at the lower of cost or
realizable current value. Cost is based on the average cost method,
which approximates actual cost on the first-in, first-out ("FIFO")
basis. At October 1, 1994, and July 1, 1995, inventory consisted of:
October 1, July 1, 1995
1994
Manufacturing raw $3,877,216 $3,474,403
materials
Work-in-process 1,640,241 1,845,259
Finished Goods 205,115 327,864
Total $5,722,57 $5,647,
2 526
3. INCOME TAXES
Income taxes were accrued at a 30% rate for the quarter ended July 1,
1995, compared to 36% for the quarter ended July 2, 1994, due to an
anticipated larger percentage of tax savings from the foreign sales
corporation and state tax credits.
4. COMMITMENTS, NOTES PAYABLE AND LONG TERM DEBT
The Company leases office and manufacturing space under leases that
expire in March 1996. The terms of the leases provide for periodic
escalation in rent payments that have been expensed on a straight line
basis over the term of the lease. The Company also leases equipment
under leases expiring in various amounts through 1997. The Company
also has short term lease agreements related to office and
manufacturing equipment.
The Company maintains a secured operating line of credit with a
national bank. The maximum available under the line of credit was the
lesser of $5.0 million or 80% of qualified receivables. On July 1,
1995, the maximum available under the line of credit was approximately
$4.3 million of which none was borrowed. Amounts borrowed under the
line of credit and interest, which accrues at prime rate (9% at July 1,
1995), plus .75% are due on February 28, 1996. The Company is subject
to and in compliance with certain financial convenants and
requirements.
During fiscal 1994, the Company sold to EchoStar Communications
Corporation $8,750,000 of its 6.5% seven-year convertible subordinated
debentures. Total interest expense accrued but not yet payable is
$523,000 as of July 1, 1995, and is reflected in long term liabilities.
The debentures are convertible into the Company's common stock at
$12.00 per share.
5. SHORT TERM INVESTMENTS
Effective October 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115 (SFAS No. 115), "Accounting for Certain
Investments in Debt and Equity Securities." Previously, the Company's
securities investments were recorded at lower of cost or market. Under
SFAS No. 115, the Company's securities investments, including the
EchoStar investment, are classified as available-for-sale. Available-
for-sale securities are stated at fair value with the unrealized gains
and losses, net of taxes, reported in a separate component of
stockholders' equity. Realized gains and losses, and declines in value
judged to be other than temporary on available-for-sale securities, are
included in other income. The cost of securities sold is based on the
average cost method. Dividends on securities classified as available-
for-sale are included in other income.
On December 30, 1994, the Company completed the exchange of its 91.2%
interest in Directsat for 1,216,957 shares of EchoStar Communications
Corporation ("EchoStar"), Class A common stock, or approximately 2.5%
of EchoStar. Prior to EchoStar offering its shares for public trading,
a reverse split by EchoStar reduced the Company's holding to 912,717
shares. During the third quarter EchoStar's common stock began trading
on the NASDAQ stock market under the symbol "DISH". As of June 30,
1995, (the last trading day of the quarter) the stock was trading for
$15.25 per share. The Company has adjusted the value of the stock to
$13,919,000, an increase of approximately $12,227,000 over the
Company's initial investment in Directsat. This adjustment, net of
deferred tax, is reflceted as a separate component of stockholders'
equity.
The Company announced on June 16, 1995, that SSE Telecom, Inc. and
Paris based Alcatel Telspace ("Alcatel") agreed to invest up to
$1,300,000 in Media4, Inc., ("Media4") located in Atlanta, Georgia.
Media4 is developing new products for the distribution of multimedia
information over wireless networks. The investment is to be funded
equally by SSE and Alcatel and includes an equity interest as well as
proprietary product development. As of the end of the quarter, the
Company has invested $350,000 in Media4.
INVESTMENT TABLE
Estimated
Cost Fair Value
Available-for-Sale
Due in one year or less $ $
2,402,000 2,401,000
Due after one year 98,000 99,000
through three years
Due after three years
$ $
2,500,00 2,500,000
0
Other assets-Equity $ $14,269,0
investments 2,042,00 00
0
In accordance with SFAS No. 115, prior period financial statements have
not been restated to reflect the change in accounting principle. There
was no cumulative effect of adopting SFAS No. 115, as of October 1,
1994.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth, for the quarter periods ended the dates
indicated, certain income and expense items expressed as an approximate
percentage of the Company's total revenues:
Three Month Nine Month
07/02/9 07/01/9 07/02/9 07/01/9
4 5 4 5
Revenue 100% 100% 100% 100%
Gross margin 31% 34% 34% 34%
Research and development 9% 8% 9% 8%
expense
Marketing, general and 15% 16% 16% 16%
administrative expenses
Operating income 7% 10% 9% 10%
Amortization of product -- -- 2% --
license
Gain on sale -- -- (6%) --
Net interest expense and 1% 1% 1% 2%
other expense
Income before income tax 6% 9% 12% 8%
Provision for income 2% 3% 4% 2%
taxes
Net income 4% 6% 8% 6%
Three Months Ended July 1, 1995, Compared With Three Months Ended July
2, 1994.
SSE Telecom's revenues reached a new quarterly high and increased by
29% from $7,116,000 for third quarter 1994 to $9,180,000 for third
quarter 1995. International revenue continues to average approximately
eighty percent of total revenue.
Gross margin for the third quarter of 1995 increased $899,000 or 40%
from the same quarter fiscal 1994. The margin increase is attributable
to a decrease in product cost from the previous year, higher revenue
thus absorbing manufacturing overhead and a strong margin from the new
Triband converter sales. Offsetting the margin increase was an issue
with a supplier of a component that is included in one of the Company's
products which caused some extra repair or replacement costs this year.
These costs were higher than anticipated during the third quarter and
had an unfavorable effect on the gross margin. In the aggregate as a
percentage of revenue, gross margin increased from 31% to 34%.
Research and development expense for the quarter increased $146,000 or
24%. Emphasis during the quarter was on final design of the Star
series advanced satellite transceiver product and preparation of the
new product for manufacturing transfer. Other research and development
projects included final development of an outdoor Triband converter and
system designs, on-line engineering change order software and
processes, and ISO-9001 certification. During fiscal 1995, all
departments of the Company have been working on ISO-9001 certification.
The Company expects to complete the requirements for ISO-9001
certification during 1995. As a percentage of revenue, research and
development expenses during the quarter was 8% in 1995 and 9% in 1994.
Marketing, general and administrative expenses increased $406,000 or
38% from third quarter 1994. During the third quarter, the Company
offered greater support to its customers by increasing staff in the
areas of sales, marketing, and customer service. As a percentage of
revenue, marketing, general and administrative expenses during the
quarter was 16% in 1995 and 15% in 1994. The Company expects that
marketing, general and administrative expenses will continue at the
same level during the remainder of the year.
As a result of improved gross margin, operating income increased
$347,000 or 63% from third quarter 1994. As a percentage of revenue,
operating income increased to 10% in 1995 from 7% in 1994.
Amortization for the quarter of the Company's product license for the
Nokia open network modem was the same in 1995 and 1994.
Net interest expense and other expense increased $62,000 or 123% from
third quarter 1994. This increase is primarily the result of
additional interest expense of approximately $24,000 and an increase in
warranty reserve of approximately $30,000. The Company has higher
interest expense as a result of interest due on debentures sold to
EchoStar during fiscal 1994. Currently, the Company's quarterly
interest expense for the debentures is approximately $142,000. The
Company's third quarter interest income of approximately $79,000
resulted from short term investment of excess funds in securities
emphasizing fixed income and low risk. As a percentage of revenue, net
interest expense and other expense was 1% in 1995 and 1994.
Third quarter 1995 income before income tax increased $285,000 or 58%.
As a percentage of revenue, income before income tax increased to 9%
from 6% in 1994.
Provision for taxes on income increased $56,000 or 32% in third quarter
1995 from the same quarter in 1994. Such an increase is attributed to
the increase in quarterly income. The increase in provision for taxes
on income was lessened by a lower tax rate of 30% in fiscal 1995 versus
36% in fiscal 1994. The lower tax rate reflects larger percentage tax
savings from the Company's foreign sales corporation and state tax
credits.
Third quarter net income increased $229,000 or 73% from third quarter
1994. As a percentage of revenue, net income increased to 6% in fiscal
1995 from 4% in fiscal 1994.
The Company had a backlog of firm orders of $6.7 million on July 1,
1995. Management expects substantially all orders to be delivered
within fiscal 1995. The quarter ending backlog is representative of
the historic product and customer mix. Backlog as of August 7, 1995,
was $7.5 million. In addition, the Company has received approximately
$1 million of orders for the new STAR series advance satellite
transceivers that have not been added to backlog because delivery dates
have yet to be finalized; firm delivery dates are currently being
negotiated. The Company does not believe that backlog is necessarily
indicative of future revenues. Timing differences from quarter to
quarter as to the receipt of large orders and changes in factory
production make meaningful quarter to quarter comparisons of backlog
difficult.
Nine Months Ended July 1, 1995, Compared With Nine Months Ended July 2,
1994
Revenue year to date fiscal 1995 is $25,509,000. Revenue increased
$3,628,000 or 17% from the same time period in fiscal 1994.
Gross margin increased $1,251,000 or 17% from the comparable period in
1994. As a percentage of revenue, gross margin was 34% in 1995 and
1994. During the third quarter of the year an issue with a supplier of
a component that is included in one of the Company's products caused
some extra repair or replacement costs which adversely effected the
gross margin. The Company expects improved profitability with the
commercial quantity production and shipment of the new STAR series
advanced satellite transceiver.
The Company continues to invest substantially in research and
development. Research and development expense increased $282,000 or
15% during the first nine months from the same time period in 1994.
The focus of research and development during fiscal 1995 has been on
the completion of the Triband rack-mounted converters, the development
of C-Star and K-Star transceivers and software to monitor and control
equipment at remote sites. As a percentage of revenue, research and
development expense year to date in 1995 is 8% and 9% in 1994. The
Company anticipates similar levels of research and development expenses
through the balance of fiscal 1995.
Marketing, general and administrative expense increased $651,000 or 19%
in the first nine months of 1995 compared to the same period in 1994.
The Company added to the marketing department an Asia/Pacific regional
sales manager, opened an European sales office, added internal sales
and customer service support and increased marketing resources. The
increase in sales and marketing expense was required, and will continue
at similar levels, due to increased competition in the industry and the
Company's desire to provide improved customer service. General and
administrative cost also increased with the addition of personnel to
support the growth of the Company in areas such as management
information systems, cost accounting, and human resources. Marketing,
general and administrative expense as a percentage of revenue during
the first nine months was 16% in 1995 and 1994.
As the result of the forgoing, operating income increased $317,000 or
16% year to date 1995 from year to date 1994. As a percentage of
revenue, operating income was 10% in 1995 and 9% in 1994.
Amortization of the Company's product license decreased $477,000 or 95%
from the first nine months of 1994. During the second quarter of 1994,
the Company made the decision to reduce the carrying value of the
product license by $374,000 thereby reducing quarterly amortization
from approximately $60,000 to $8,400.
During fiscal 1994, the Company sold its approximate 8% minority equity
ownership interest and creditor position in DBSC to EchoStar which
resulted in a net gain of $1,227,000. This non-recurring gain cannot
be compared to year to date fiscal 1995. As a percentage of revenue,
the 1994 gain is 6%.
Net interest expense and other expenses increased $231,000 or 137% from
year to date 1994. This increase is from additional expenses of
approximately $135,000 for interest, $70,000 for allowance for doubtful
accounts and $50,000 warranty repair reserve. As a percentage of
revenue, net interest and other expense was two percent during the
first nine months of 1995 and one percent during the first nine months
of 1994.
Fiscal 1995 income before tax decreased $664,000 or 26% from 1994. The
factor contributing to this decrease in income before income tax is the
1994 non-recurring gain. As a percentage of revenue, income before
income tax decreased from 12% in 1994 to 8% in 1995.
Provision for taxes on income decreased $358,000 or 38% in 1995 from
the same time period in 1994. Such decrease resulted from a decrease
in the Company's taxable income and a lower effective tax rate of 30%
in fiscal 1995 versus 36% in fiscal 1994. The lower tax rate reflects
a larger percentage tax savings from the Company's foreign sales
corporation and state tax credits.
As a result of the foregoing, year to date 1995 income decreased
$306,000 or 18% from 1994 year to date results. As a percentage of
revenue, net income decreased to 6% in fiscal 1995 from 8% in fiscal
1994.
Liquidity and Capital Resources
On July 1, 1995, the Company had working capital of $18 million,
including $5.2 million of cash, cash equivalents and short term
investments, compared with working capital of $11.8 million, including
$3.6 million of cash and cash equivalents on July 2, 1994. Net cash
provided by operating activities was $973,000 for nine month period
ended July 1, 1995, compared to net cash provided by operating
activities of $1,325,000 for the nine month period ended July 2, 1994.
Accounts receivable increased $848,000 from year end 1994. During June
1995, the Company shipped record levels of equipment resulting in
higher levels of accounts receivable. The Company has offered extended
payment terms to certain customers. The Company has a policy of
granting extended terms to credit worthy international customers which
are usually backed by letters of credit or credit insurance. As of
August 7, 1995, the accounts receivable balance was approximately
$7,600,000.
Inventory turnover (defined as annualized cost of revenues divided by
quarter-end inventory balance) was 4.3 and 3.6 for the quarters ended
July 1, 1995, and July 2, 1994. After inventory increases through the
first six months of the year, inventory decreased $397,000 during the
third quarter. This decrease is the result of a plan instituted during
February 1995, to reduce inventory levels, while at the same time,
stocking appropriate levels of inventory to support shipments and
customer needs. The Company expects that the introduction of the Star
series of advanced transceiver products will increase inventory levels
through mid 1996, however it is still the goal of the Company to reduce
overall total inventory value.
The Company purchased $524,000 of fixed assets during the first nine
months of fiscal 1995. These assets include test equipment for
research and development, production, and additional computer equipment
for information systems. The Company is currently self funding the
purchase of assets.
Total long term assets have increased $12,848,000 since year-end 1994,
which is the primary result of the increase in the value of the
EchoStar stock owned by the Company. On December 30, 1994, the Company
completed the exchange of its 91.2% interest in Directsat for 1,216,957
shares of EchoStar, Class A common stock, or approximately 2.5% of
EchoStar. Prior to EchoStar offering its shares for public trading, a
reverse split by EchoStar reduced the Company's holding to 912,717
shares. During the third quarter EchoStar's common stock began trading
on the NASDAQ stock market under the symbol "DISH". As of June 30,
1995, (the last trading day of the quarter) the stock was trading for
$15.25 per share. The Company has adjusted the value of the stock to
$13,919,000, an increase of approximately $12,227,000 over the
Company's initial investment in Directsat. This adjustment, net of
deferred tax, is reflected as a separate component of stockholders'
equity,
A second increase in long term assets occurred when the Company
announced on June 16, 1995, that SSE Telecom, Inc. and Paris based
Alcatel Telspace ("Alcatel") agreed to invest up to $1,300,000 in
Media4, Inc., ("Media4") located in Atlanta, Georgia. Media4 is
developing new products for the distribution of multimedia information
over wireless networks. The investment is to be funded equally by SSE
and Alcatel and includes an equity interest as well as proprietary
product development. As of the end of the quarter, the Company has
invested $350,000 in Media4.
Other long term assets include some product development and
construction in process ("CIP") which increased to $381,000. The
Company is developing software to monitor and control its various
products and other equipment at remote sites. This cost of development
will be amortized over the useful life of the software. Current CIP
projects are for automatic test stations for manufacturing, and
teleconferencing equipment to link the Company's own facilities.
Trade accounts payable decreased $502,000 from year-end 1994. A plan
put in place during the second quarter to control inventory growth,
resulted in slowed receipts of inventory which is the major
contributing factor to the decrease in trade accounts payable.
Accrued salaries and employee benefits increased $71,000 from year-end
1994. The increase is primarily the result of an increase in accrued
payroll.
Other accrued liabilities increased $363,000 from year-end 1994.
Accrued taxes payable increased $367,000 and accrued interest decreased
$103,000. The Company currently does not make interest payments to
EchoStar for the $8,750,000 seven year 6.5% convertible debenture.
During the third quarter this accrued interest from fiscal 1994 and
1995, for the EchoStar debenture was adjusted as a long term
liability.
Short term notes payable decreased $398,000. The Company paid off its
current portion of its equipment line of credit.
Other long term notes payable increased $4,313,000 compared to October
1, 1994. Deferred taxes increased $4,647,000, as a result of the
unrealized gain in the value of the EchoStar investment. Long term
notes decreased $820,000. Of this total $324,000 paid off the long
term portion of the Company's equipment line of credit. The other long
term liability primarily related to Directsat debt, $496,000, which was
paid during the second quarter. Debenture interest, $523,000 was
reclassified from short term debt to long term debt.
The Company's capital resource commitments on April 1, 1995, primarily
consisted of obligations under operating leases for the manufacturing
facilities.
During 1995, the Company intends to pursue strategic acquisitions and
investments in the satellite communications and related markets that
will complement and expand its current market position. The Company
believes it has the necessary capital resources available to it for
such a program.
The Company's capital requirements could change in the event of factors
such as lower-than anticipated demand for the Company's products or
unanticipated limitations on debt financing. If any of these or other
events should occur, the Company could experience a need to raise
additional capital. The Company believes its current line of credit,
internally generated funds and funds from the sales of debentures will
be sufficient in fiscal 1995 to meet its operating and other capital
requirements needs.
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits included herein (numbered in accordance with Item 601 of
Regulation S-K)
Exhibit Number Description Sequential Page
Number
11 Computation of Per Share Page 14
Earnings
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: August 11, 1995 SSE TELECOM, INC.
By: /s/ Frederick C. Toombs
Frederick C. Toombs,
President
By: /s/ Daniel E. Moore
Daniel E. Moore,
Chief Financial Officer
Attached and Made Part of Part II
Of 10Q for the Quarters Ended July 2, 1994 and July 1, 1995
Three Months Nine Months
Ended Ended
7/2/94 7/1/95 7/2/94 7/1/95
Primary
Weighted common average
shares
outstanding before 5,218,3 5,399,6 5,060,7 5,401,7
repurchases 99 68 43 46
applying the treasury
stock method
Increase in weighted
average shares due to
repurchases applying the 320,174 174,349 409,445 153,124
treasure stock
method for stock options
and warrants
Primary weighted average 5,538,5 5,574,0 5,470,1 5,554,8
shares 73 17 88 70
Primary net income $313,91 $543,04 $1,664, $1,358,
7 3 262 021
Net income per share $.06 $.10 $.30 $.24
Fully diluted
Weighted common average
shares
outstanding before 5,218,3 5,399,6 5,060,7 5,401,7
repurchases 99 68 43 46
applying the treasury
stock method
Increase in weighted
average shares due to
repurchases applying the 320,174 189,180 409,445 212,749
treasure stock
method for stock options
and warrants
Fully diluted weighted average 5,538,5 5,588,8 5,470,1 5,614,4
shares 73 48 88 95
Fully diluted net income $313,91 $543,04 $1,664, $1,358,
7 3 262 021
Fully diluted net income per $.06 $.10 $.30 $.24
share
