<PAGE>
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 quarterly period ended September 30, 1999 .
-----------------------------------------------
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: 0-19381
------------------------------------------------------
WESTWOOD CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 87-0430944
- --------------------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
5314 South Yale Street, Tulsa, Oklahoma 74135
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (918) 524-0002
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 and 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.
(x) Yes ( ) No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Outstanding at November 12, 1999
- ----------------------------- --------------------------------
Common Stock, $.003 par value 6,891,647
<PAGE>
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I Financial Information:
Consolidated Balance Sheets as of
September 30, 1999, and March 31, 1999 1
Consolidated Statements of Operations
for the second quarter and six months
ended September 30, 1999 and 1998 3
Consolidated Statement of Cash Flows
for the six months ended September 30,
1999 and 1998 4
Notes to Consolidated Financial Statements 5
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9
Part II Other Information:
Item 1. Legal Proceedings
(None)
Item 2. Changes in Securities
(None)
Item 3. Defaults Upon Senior Securities
(None)
Item 4. Submission of Matters to a Vote
of Security Holders
(None)
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
</TABLE>
<PAGE>
WESTWOOD CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands)
<TABLE>
<CAPTION>
September 30 March 31
1999 1999
------------------------
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 1,025 $ 1,283
Accounts receivable (including retainage
receivable of $14 at September 30, 1999
and $16 at March 31, 1999), net
of allowance for doubtful accounts 2,973 3,696
Income tax receivable 211 789
Notes receivable 400 -
Costs and estimated earnings in excess of
billings on uncompleted contracts 931 625
Inventories:
Raw materials and purchased parts 1,263 2,648
Work-in-process 812 1,573
------- -------
2,075 4,221
Prepaid expenses 63 40
Assets held for sale - 402
------- -------
Total current assets 7,678 11,056
Plant and equipment, at cost:
Leasehold improvements 310 310
Machinery and equipment 4,160 4,275
Patterns and tools 79 195
------- -------
4,549 4,780
Accumulated depreciation (2,858) (2,937)
------- -------
1,691 1,843
Goodwill (net) 6,013 6,250
Long-term accounts receivable, retainage 372 533
Note receivable 500 -
Deferred charges & other 2 1
------- -------
Total Assets $16,256 $19,683
======= =======
</TABLE>
See accompanying notes
1
<PAGE>
WESTWOOD CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands)
<TABLE>
<CAPTION> September 30 March 31
1999 1999
-------------------------
(Unaudited)
<S> <C> <C>
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 1,474 $ 2,397
Accrued liabilities 1,315 1,489
Billings in excess of costs and estimated
earnings on uncompleted contracts 1,223 501
Current portion of long-term debt:
Payable to bank 2,326 6,533
Other 26 46
Acquisition debt 1,500 990
------- -------
3,852 7,569
------- -------
Total current liabilities 7,864 11,956
Long-term debt:
Payable to bank 1,648 -
Other 106 77
Acquisition debt - 480
------- -------
1,754 557
------- -------
Stockholders' equity:
Preferred stock, 5,000,000 shares authorized,
$.001 par value, no shares issued and
outstanding - -
Common stock, 20,000,000 shares authorized,
$.003 par value, 6,891,647 shares issued
and outstanding at September 30, 1999 and
March 31, 1999, respectively 21 21
Capital in excess of par value 5,978 5,978
Retained earnings 639 1,171
------- -------
Total stockholders' equity 6,638 7,170
------- -------
Total liabilities and stockholders' equity $16,256 $19,683
======= =======
</TABLE>
See accompanying notes.
2
<PAGE>
WESTWOOD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands)
<TABLE>
<CAPTION>
Second Quarter Ended Six Months Ended
September 30 September 30
1999 1998 1999 1998
-------------------- ------------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Sales $ 4,246 $ 8,724 $ 8,940 $ 16,223
Cost of sales 3,639 8,211 7,304 14,263
------ ------ ------ -------
Gross profit 607 513 1,636 1,960
Operating expenses:
Selling, general & admin. 1,231 1,238 2,491 2,452
------ ------ ------ -------
Operating income (loss) (624) (725) (855) (492)
Other income (expense):
Interest expense (130) (170) (245) (334)
Other income (expense) 24 92 47 96
Gain on sale of assets 15 - 309 -
------ ------ ------ -------
(91) (78) 111 (238)
------ ------ ------ -------
Income (loss) before taxes (715) (803) (744) (730)
Provision (benefit) for
income taxes (211) (275) (211) (250)
------ ------ ------ -------
Net income (loss) $ (504) $ (528) $ (533) $ (480)
======= ======= ====== =======
Basic, and diluted, earnings
(loss) per share $ (.073) $ (.077) $(.077) $(.070)
Weighted average common shares
used in computing earnings per
share - 6,891,647 shares
Cash dividends per share $ - $ - $ - $ .010
</TABLE>
See accompanying notes
3
<PAGE>
WESTWOOD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
Six Months Ended
September 30
1999 1998
----------------------
(Unaudited)
Operating activities
<S> <C> <C>
Net income (loss) $ (533) $ (480)
Adjustments to reconcile net income (loss)
to cash provided (used) in operations:
Depreciation and amortization 509 673
Deferred income taxes - 11
Gain on sale of assets (309) -
Cash flows impacted by changes in:
Accounts receivable 723 723
Costs and estimated earnings in excess
of billings on uncompleted contracts (306) 1,585
Inventories 236 (299)
Prepaid expenses (23) (34)
Long-term accounts receivable, retainage 161 148
Deferred charges (1) 20
Accounts payable (923) (2,019)
Accrued liabilities and rent (173) (75)
Billings in excess of costs and estimated
earnings on uncompleted contracts 722 (442)
Income taxes payable/receivable 578 341
Other - (2)
------- -------
Net cash provided (used) in operating activities 661 150
Investing activities
Purchase of plant and equipment (209) (214)
Proceeds from sales of assets 1,849 -
------- -------
Net cash provided (used) in investing activities 1,640 (214)
Financing activities
Principal payments on debt (6,559) (540)
Borrowings on debt 4,000 750
Dividends paid - (69)
------- -------
Net cash (used) provided by financing activities (2,559) 141
------- -------
Net (decrease) increase in cash (258) 77
Cash at beginning of period 1,283 574
------- -------
Cash at end of period $ 1,025 $ 651
======= =======
</TABLE>
See accompanying notes.
4
<PAGE>
WESTWOOD CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
Note 1 - Basis of Presentation
- ------------------------------
The accompanying unaudited consolidated financial statements include Westwood
wholly-owned subsidiaries NMP Corp., TANO Corp., and MCII Electric Company.
Consolidated operations for Westwood include Peter Gray Corporation only through
April, 1999, when its operations ceased, and NMP Corp. marine hardware products
only through July, 1999, when these hardware-related assets were sold. These
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. Management believes all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the fiscal second
quarter and six months ended September 30, 1999, may not necessarily be
indicative of the results that may be expected for the year ended March 31,
2000. For further information, refer to the consolidated financial statements
and footnotes included in Westwood Corporation's annual report on Form 10-K for
the year ended March 31, 1999, and the first quarter fiscal 2000 report on Form
10-Q.
Note 2 - Sale of Businesses
- ---------------------------
In April, 1999, the Company sold certain Peter Gray inventory and equipment for
$568,000, and Peter Gray operations ceased on April 30, 1999. The Company sold
the remaining equipment at that location for $181,000 in June, 1999. In
connection with this sale, the Company recorded a gain of $294,000 in the first
quarter ended June 30, 1999. Proceeds from this sale were used to reduce debt.
In July, 1999, the Company sold certain marine hardware-related assets of NMP
Corp. which generated operating losses in fiscal 1999 and the first quarter of
fiscal 2000, for a total purchase price of $2,000,000. Of the purchase price,
$1,100,000 was paid at closing, with $150,000 to be paid within 90 days, and the
remaining balance of $750,000 is to be paid in three annual installments of
$250,000. The Company recorded a $15,000 gain in the second quarter in
connection with the sale, and proceeds were used to reduce debt.
Note 3 - Long-Term Debt
- -----------------------
On August 13, 1999, the Company closed a new bank credit facility for a
$2,000,000 revolving credit line, and a $2,000,000 five-year term note.
5
<PAGE>
Proceeds from this new credit facility were used to repay all amounts
outstanding under the previous bank facility. As part of the new bank
commitment, the Company is required to obtain $1,000,000 of subordinated debt
within 90 days of closing, which is November 12, 1999. The Company is in the
final stages of negotiating the offer and placement of the subordinated debt and
a waiver has been requested from the bank that issued the credit facility.
Note 4 - Income Taxes
- ---------------------
The Company generated net operating loss carryforwards in fiscal 1999 and the
first six months of fiscal 2000, whereby no deferred tax asset was established
as future taxable income is not certain in fiscal 2000. However, the Company
filed an amended tax return for the fiscal year ended March 31, 1999, which
resulted in a refund application of $211,000 and was recorded as a tax benefit
for the quarter ended September 30, 1999.
Note 5 - Comprehensive Income
- -----------------------------
For the second quarter and six month periods ended September 30, 1999 and 1998,
respectively, comprehensive income (loss) and net income (loss) are the same.
Note 6 - Contingencies
- ----------------------
In connection with the acquisition of MCII, the Company signed a $1,500,000
noninterest-bearing note payable with the former owner of MCII. The note
required three annual installments, beginning in May 1998, of $500,000. The
Company has recorded the obligation at a discount rate of 8.5%, which was
consistent with the rate obtainable from the lender of the existing revolving
credit facility in May 1997. No payments have been made due to the
indemnification claims filed against the former owner. Subsequent to the
acquisition of MCII, the Company was informed by U.S. government contract
officials of concerns relating to the adequacy and accuracy of certain MCII
contract accounting information. The Company believes it has fully responded to
concerns raised. However, as a result of this notification and other
information learned subsequent to the acquisition, the Company has filed several
indemnification claims against the former owner of MCII regarding the
representations the owner made prior to the acquisition. The former owner has
in turn filed counter claims against the Company. While initial settlement
discussions have commenced, it is still uncertain as to the ultimate resolution
of the claims. Any settlement under the indemnification provision would
correspondingly reduce or increase the amount of goodwill associated with MCII
and not materially impact operating results of the Company.
6
<PAGE>
Note 7 - Segment Information
- ----------------------------
(In Thousands)
<TABLE>
<CAPTION>
Revenues
-------------------------
Three Months Ended Inter- Net Income Total
Sept. 30, 1999 External Segment Total (Loss) Assets
- -------------- -------- ------- ----- ---------- ------
<S> <C> <C> <C> <C> <C>
Marine Switchgear $ 985 $ 174 $ 1,159 $ (71) $13,139
Mobile Power Systems 1,229 - 1,229 (792) 7,535
Engineered Automation
and Control 2,032 63 2,095 279 4,499
Eliminations - (237) (237) 80 (8,917)
----- ---- ----- ---- ------
Total $ 4,246 $ - $ 4,246 $ (504) $16,256
===== ==== ===== ==== ======
Three Months Ended
Sept. 30, 1998
- --------------
Marine Switchgear $ 2,899 $ 252 $ 3,151 $ (78) $16,112
Mobile Power Systems 4,840 - 4,840 (420) 9,336
Engineered Automation
and Control 985 - 985 8 3,498
Eliminations - (252) (252) (38) (6,990)
----- ---- ----- ---- ------
Total $ 8,724 $ - $ 8,724 $ (528) $21,956
===== ==== ===== ==== ======
<CAPTION>
Revenues
-------------------------
Six Months Ended Inter- Net Income Total
Sept. 30, 1999 External Segment Total (Loss) Assets
- -------------- -------- ------- ----- ---------- ------
<S> <C> <C> <C> <C> <C>
Marine Switchgear $ 3,585 $ 175 $ 3,760 $ 218 $13,139
Mobile Power Systems 1,710 - 1,710 (1,236) 7,535
Engineered Automation
and Control 3,645 117 3,762 502 4,499
Eliminations - (292) (292) (17) (8,917)
------ ---- ------ ----- ------
Total $ 8,940 $ - $ 8,940 $ (533) $16,256
====== ==== ====== ===== ======
Six Months Ended
Sept. 30, 1998
- --------------
Marine Switchgear $ 5,884 $ 553 $ 6 437 $ (114) $16,112
Mobile Power Systems 8,031 - 8,031 (407) 9,336
Engineered Automation
and Control 2,308 - 2,308 82 3,498
Eliminations - (553) (553) (41) (6,990)
------ ---- ------ ---- ------
Total $16,223 $ - $16,223 $ (480) $21,956
====== ==== ====== ==== ======
</TABLE>
7
<PAGE>
Included in revenues of the marine switchgear segment for the second quarter and
six months ended September 30, 1998, were revenues of $2,581,000 and $4,599,000,
respectively, that were attributable to Peter Gray and NMP marine hardware
products sold in April and July, 1999. Assets attributable to the sold
operations were $4,296,000 at September 30, 1998.
A loss reserve of $355,000 was recorded by the mobile power systems segment in
the three months ended September 30, 1999, in connection with the TQG first
article testing and MEP-12 long-term contracts. A loss reserve of $478,000 was
recorded in the same period last year related to the TQG first article test
units.
8
<PAGE>
WESTWOOD CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
September 30, 1999
GENERAL
- -------
Results of Operations - Second Quarter Ended September 30, 1999 and 1998
- ------------------------------------------------------------------------
For the second quarter ended September 30, 1999, the Company had a net loss of
$504,000 compared to a net loss of $528,000 for the same quarter last year. The
net loss per share was $.073 compared to a net loss of $.077 for the prior year.
Consolidated sales for the second quarter decreased 51.3% to $4,246,000 compared
to $8,724,000 for the previous year. Last year's second quarter sales included
Peter Gray and NMP Corp. marine hardware product lines which were sold in April
and July, 1999, respectively.
Gross profit, as a percentage of sales, was 14.3% for the current quarter
compared to 5.9% for the same period last year. Cost of sales for the current
quarter included additional loss reserves of $335,000 recorded by MCII in
connection with TQG first article testing and the MEP-12 contract. Primarily as
a result of the substantially lower sales volume, the Company incurred an
operating loss of $624,000 in the current quarter compared to a loss of $725,000
for the same period last year. Interest expense decreased 23.5% as a result of
lower borrowings.
A breakdown by company segments follows:
. Marine switchgear sales by NMP Corp. were $1,159,000 for the second quarter
compared to $3,151,000 for the same period last year, which included
$2,581,000 attributable to Peter Gray and NMP marine hardware products.
. Mobile power system revenues by MCII were $1,229,000 for the quarter compared
to $4,840,000 for last year which included revenues of $1,598,000 in
connection with the delivery of the TQG test units and $1,777,000 for MEP-12
shipments. As a result of the low sales volume and recording of additional
loss reserves for the TQG first article testing and the MEP-12 contract, this
segment reported a net loss of $792,000 for the quarter compared to a net
loss of $420,000 for the same period last year.
9
<PAGE>
. Engineered automation and control system sales by TANO Corp. were $2,095,000,
a substantial increase over the $985,000 for last year, which was unusually
low due to a delay in the production release of a major contract. As a
result of the higher sales volume, this segment reported net income of
$279,000 for the period compared to a net income of $8,000 for the same
period last year.
Six Months Ended September 30, 1999 and 1998
- --------------------------------------------
For the six months ended September 30, 1999, the Company incurred a net loss of
$533,000 compared to a net loss of $480,000 for the same period last year. Net
loss per share was $.077 compared to a net loss of $.070 per share for the prior
year.
Sales for the six months ended September 30, 1999, were $8,940,000, a 44.9%
decrease compared to $16,223,000 for the previous year. Last year's revenues
included $4,599,000 for Peter Gray and NMP marine hardware products which were
sold in April and July, 1999, respectively. In addition, last year's revenues
also included $1,598,000 in connection with the shipment by MCII of the TQG test
units and $3,609,000 for MEP-12 shipments.
For the six months ended September 30, 1999, gross profit, as a percentage of
sales, increased to 18.3% compared to 12.1% for the same period last year. Last
year's gross profit margins were impacted as a result of substantial cost
overruns incurred to meet shipping dates for the TQG test units.
The Company incurred an operating loss of $855,000 for the six months ended
September 30, 1999, compared to an operating loss of $492,000 for the same
period last year. The increased operating loss for the period was primarily the
result of substantially lower sales volume and a 1.6% increase in operating
expenses. During the six months ended September 30, 1999, the Company was in
the process of a significant shift in product line direction, which included the
sale of two operations. The Company recorded a gain of $309,000, included in
other income, in connection with the sale of these units.
Liquidity and Capital Resources
- -------------------------------
Operating activities for the six months ended September 30, 1999, resulted in
net cash provided of $661,000. During this period, major items providing cash
were depreciation and amortization of $509,000, reductions in accounts
receivable of $723,000 and income taxes receivable of $578,000, along with
increases in billings in excess of costs and estimated earnings on uncompleted
contracts of $722,000. The major use of operating cash flow during the period
was a $923,000 reduction in accounts payable.
10
<PAGE>
The most significant investing activities for the six months ending September
30, 1999, were the sales of Peter Gray and the sale of marine hardware-related
assets of NMP Corp. Cash proceeds received from these sales during the period
were $749,000, and $1,100,000, respectively.
As a result of these sales, along with cash flow from operations, total bank
debt was reduced $2,559,000 from $6,533,000 at March 31, 1999 to $3,974,000 at
September 30, 1999.
As disclosed in Note 3, the Company closed on August 13, 1999, a new $2,000,000
revolving credit facility and $2,000,000 five-year term note with a bank. The
proceeds were used to repay amounts then outstanding under the existing
revolving credit facility and term note. As part of the new bank facility, the
Company is required to obtain $1,000,000 of subordinated debt within 90 days of
closing, which is November 12, 1999. The Company is in the final stages of
negotiating the offer and placement of the subordinated debt and a waiver has
been requested from the bank that issued the credit facility. The Company
believes that the new credit facility and subordinated debt along with cash
provided from operations will provide adequate funding for the Company's
anticipated growth requirements.
Year 2000 Compliance
- --------------------
As a result of both internal and external review processes, the Company has
implemented new accounting, engineering, and information system software which
has been represented by the manufacturers to be Year 2000 compliant. The Company
has also acquired hardware items including additional workstations and periphery
equipment to facilitate the implementation of the new software processing
systems. The new information software system has been installed and employee
training on a Company-wide basis has been completed. The Company's new software
processing system has been installed at the offices of the Company and its
subsidiaries, NMP Corp. in Tulsa and MC II in Dallas. TANO Corp. utilizes its
own information, accounting and processing software which has been represented
by the manufacturer to be Year 2000 compliant.
The Company and its subsidiaries have conducted Year 2000 compliance surveys and
inquiries with substantially all of their vendors, suppliers, and professional
and service organizations, consisting of approximately 1500 entities. The
Company has received a return rate of approximately 95% of NMP's vendor survey
letters and 85% of MC II's vendor survey letters. Approximately 90% of the
surveys indicate general Year 2000 compliance. Those survey letters indicating a
lack of current Year 2000 compliance have provided the Company with a time line
in which these entities believe they will be Y2K compliant. The Company is
following up with vendors and suppliers that have not yet returned Year 2000
compliant surveys but does not believe that any such entities provide services
or
11
<PAGE>
supplies which cannot be supplied by other suppliers in a timely fashion. The
Company has developed and put into effect certain contingency plans regarding
potential adverse effects from Year 2000 problems, but such plans do not and
cannot anticipate every possible contingency.
For the fiscal year ended March 31, 1999, the Company incurred software
implementation costs of approximately $120,000. Costs of labor, and personnel
time for purposes of the Year 2000 compliance reviews, training, and
implementation were approximately $90,000. Remaining administration costs
incurred in developing contingency plans and further testing are believed to be
negligible.
The Company is relying, in part, on survey representation of approximately 1500
business organizations as well as defense related customers including the U.S.
Government to whom the Company sells its products. The Company does not have
control over these third parties and, as a result, cannot currently estimate to
what extent future operating results may be adversely affected by the failure of
these third parties to successfully address their Year 2000 issues.
Statements included in this Form 10-Q constitute "year 2000 readiness
disclosures" subject to the Year 2000 Information and Readiness Disclosure Act
of 1998.
Outlook for Fiscal Year 2000 and Beyond
- ---------------------------------------
On June 15, 1999, the Company announced that NMP had received orders in excess
of $22,000,000 from Avondale Industries to design and build the ships service
electrical distribution systems for the LPD-17 and 18 amphibious assault ships.
TANO will also participate with NMP by supplying their proprietary TANOnet
system for the electrical communications aboard the ship. There are twelve
ships in this class, and deliveries will begin the fourth quarter of fiscal 2000
and continue through fiscal 2004.
On July 27, 1999, MCII was notified by the United States Army that it was being
granted a conditional release on the major TQG contract. As a result of the
production release, the Company will now begin to phase into full production the
TQG contract, which the Company anticipates to begin the week of November 15,
1999.
The Company believes that the combination of new NMP orders, the TQG production
start-up, the sale of Peter Gray and the hardware product business, which
generated operating losses in fiscal 1999 and the first quarter of fiscal 2000,
and major cost reductions implemented throughout the year will all combine to
significantly improve future operating results beginning in the third quarter of
fiscal 2000.
12
<PAGE>
Forward Looking Information
- ---------------------------
Certain matters discussed in this report, excluding historical information,
include forward-looking statements. Although the Company believes such forward-
looking statements are based on reasonable assumptions, no assurance can be
given that every objective will be reached. Such statements are made in
reliance on the safe harbor protections provided under the Private Securities
Litigation Reform Act of 1995.
As required by such Act, the Company hereby identifies the following important
factors that could cause actual results to differ materially from any results
projected, forecasted, estimated or budgeted by the Company in forward-looking
statements: (i) risks and uncertainties impacting the Company as a whole relate
to changes in general economic conditions in the United States; the availability
and cost of capital; changes in laws and regulations to which the Company is
subject, including tax, environmental and employment laws and regulations; the
cost and effects of legal and administrative claims and proceedings against the
Company or its subsidiaries or which may be brought against the Company or its
subsidiaries; conditions of the capital markets utilized by the Company to
access capital to finance operations; and, to the extent the Company increases
its investments and activities abroad, such investments and activities will be
subject to foreign economies, laws, and regulations; and (ii) for the Company's
defense-related business, business conditions in the military and commercial
industries served by the Company; Federal Government defense budgeting process;
compliance with Government contract and inspection programs; and other risk
factors listed from time-to-time in the Company's reports with the Securities
and Exchange Commission.
PART II - OTHER INFORMATION
Item 5. Other Information
- --------------------------
John P. Gigas was nominated and elected to the position of Executive Vice
President and Chief Operating Officer on October 27, 1999. Mr. Gigas co-founded
Reatta Textile Company and prior to that was the Senior Vice President and Chief
Financial Officer of the John Zink Company, now owned by Koch Industries, Inc.,
of Wichita, Kansas. Mr. Gigas received his Master of Business Administration
degree with emphasis in international finance and economics from the University
of Tulsa in 1982.
William J. Preston was nominated and elected to serve on the Board of Directors
on October 27, 1999. Since 1978, Mr. Preston has been a principal and one of
the founding partners of Preston Exploration,
13
<PAGE>
L.L.C., a privately owned oil and gas exploration and production company located
in The Woodlands, Texas. In 1978, Mr. Preston retired from the active practice
of medicine after twelve years of practice in Tulsa, Oklahoma, in the field of
otolaryngology. Mr. Preston received an undergraduate degree in engineering from
the University of Tulsa, and subsequently graduated from the University of
Oklahoma Medical School.
Mr. Preston has been a principal shareholder of the Company since 1988 and
currently holds 770,558 shares, or 11.2 percent, of the outstanding common stock
of the Company.
Item 6. Exhibits and Reports on Form 8-K
- ----------------------------------------
(a) The following document is filed as an exhibit to this Form 10-Q:
Exhibit 27 - Financial Data Schedule.
(b) No reports on Form 8-K have been filed during the quarter for which
this report is filed.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
DATE: November 12, 1999 WESTWOOD CORPORATION
By: /s/ Ernest H. McKee
-------------------------
Ernest H. McKee, Director
President and
Chief Executive Officer
By: /s/ Paul R. Carolus
-------------------------
Paul R. Carolus, Director
Secretary/Treasurer and
Chief Financial Officer
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Westwood
Corporation Consolidated Balance Sheet (unaudited) for June 30, 1999, and the
related Consolidated Statement of Operations (unaudited) for the six months
ended September 30, 1999, and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-2000
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0
0
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</TABLE>
