SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (date of earliest event reported) July 21, 1997
Tracor, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-20227 74-2618088
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation or
organization)
Tracor, Inc.
6500 Tracor Lane
Austin, Texas 78725
512/926-2800
(Name, address, and telephone number,
including area code, of principal executive offices)
Item 5. Other Events.
Tracor, Inc. (the "Company"), or its executive officers and
directors or other representatives on behalf of the Company, may
from time to time make "forward-looking written or oral
statements" within the meaning of the Securities Act of 1933 and
the Securities Exchange Act of 1934 (collectively, the "Acts" ).
The Company is filing this Current Report on Form 8-K to avail
itself of the safe harbor provided in the Act with respect to any
such forward-looking statements that may be contained in the
Company's reports as well as documents filed with the Securities
Exchange Commission ("SEC") under Section 13 or 15(d) of the
Securities Exchange Act of 1934, and oral forward-looking
statements made by the Company's executive officers and
directors or other representatives on behalf of the Company to
the press, potential investors, securities analysts, and others.
Such forward-looking statements could involve, among other
things, statements regarding the Company's intent, belief, or
expectation with respect to (i) the Company's results of
operations and financial condition; (ii) the consummation of
acquisition and financing transactions and the effect thereof on
the Company's business; and (iii) the Company's plans and
objectives for future operations and expansion. Any such
forward-looking statements would be subject to the risks and
uncertainties that could cause actual results of operations,
financial condition, acquisitions, financing transactions,
operations, expansion, and other events to differ materially from
those expressed or implied in such forward-looking statements.
Any such forward-looking statements would be subject to a number
of assumptions regarding, among other things, future economic,
competitive, and market conditions generally. Such assumptions
would be based on facts and conditions as they exist at the time
such statements are made as well as predictions as to future
facts and conditions, the accurate prediction of which may be
difficult and involve the assessment of events beyond the
Company's control. Further, the Company's business is subject to
a number of risks that would affect any such forward-looking
statements and such risks include, among others, the following:
Competitive Nature of Government Contracting Industry.
Declining defense budgets and increasing pressures for cost
reductions have precipitated a major consolidation in the
defense industry. This consolidation has resulted in program
cancellations, scope reductions, delays in contract funding or
awards, and significant predatory pricing pressures associated
with increased competition and reduced funding. Because some
of the Company's current and potential future competitors may
have significantly greater resources than the Company, the
Company's ability to compete effectively in the consolidating
defense industry could be adversely impacted.
Risks of Reductions or Changes in Military Expenditures.
The primary customers of the Company are the U.S. Navy, Air
Force, Army, and other agencies of the Department of Defense
(DOD). The U.S. defense budget has declined in real terms
since the mid-1980s, resulting in some delays in new program
starts, program stretch-outs, and program cancellations. A
major portion of the Company's DOD business is funded by the
operations and maintenance segment of the defense budget,
which has declined less than any other segment and is expected
to comprise approximately one-third of the defense budget over
the next decade. A significant decline in U.S. military
expenditures, particularly in the operations and maintenance
segment of the defense budget, or a reapportioning of such
expenditures reducing the operations and maintenance segment,
might materially and adversely affect the Company's sales and
earnings. The loss or significant curtailment of the
Company's material U.S. military contracts would materially
and adversely affect the Company's future sales and earnings.
Uncertainty Associated with Government Contracts.
The Company's contracts with the U.S. government and its prime
contractors are subject to termination either upon default by
the Company or at the convenience of the U.S. government.
Termination for convenience provisions generally entitle the
Company to recover costs incurred, settlement expenses, and
profit on work completed prior to termination. In addition to
the right of the U.S. government to terminate, U.S. government
contracts are conditioned upon the continuing availability of
congressional appropriations. Congress usually appropriates
funds for a given program on a fiscal year basis even though
contract performance may take more than one year.
Consequently, at the outset of a major program, the contract
is usually partially funded, and additional monies are
normally, incrementally, committed to the contract by the
procuring agency from appropriations made by Congress for
future years.
The Company in the ordinary course of its business
occasionally performs under contracts for which funding
authorization from the U.S. government has either expired or
not been obtained. No assurance can be given that the Company
will realize revenue expected from performing under such
contracts.
Because the Company contracts to supply goods and services to
the U.S. government, it is also subject to other risks,
including contract suspensions, protests by disappointed
bidders of contract awards which can result in the reopening
of the bidding process, and changes in government policies or
regulations.
Restrictions Imposed by Terms of the Company's Indebtedness.
The indenture issued in connection with the Company's
subordinated indebtedness restricts, among other things, the
Company's ability to incur additional indebtedness, incur
liens, pay dividends, or make certain other restricted
payments, consummate certain assets sales, enter into certain
transactions with affiliates, incur indebtedness that is
subordinate in right of payment to any senior indebtedness, as
the case may be, imposes restrictions on the ability of a
subsidiary to pay dividends or make certain payments to the
Company, merge or consolidate with any other person, or sell,
assign, transfer, lease, convey, or otherwise dispose of all
or substantially all of the assets of the Company. In
addition, the Company's bank credit facility contains other
and more restrictive covenants and prohibits the Company from
prepaying its other indebtedness. The bank credit facility
also requires the Company to maintain specified financial
ratios and satisfy certain financial condition tests. The
Company's ability to meet those financial ratios and tests can
be affected by events beyond its control, and there can be no
assurance that the Company will continue to meet those tests.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
TRACOR, INC.
Date: July 21, 1997 By: /s/ James B. Skaggs
_____________________
James B. Skaggs
President
