<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
( X ) QUARTERLY REPORT ( ) TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly
Period Ended March 31, 1994 Commission File No. 0-3953
SENSORMATIC ELECTRONICS CORPORATION
(Exact Name of Registrant as specified in its charter)
Delaware 34-1024665
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
500 N.W. 12th Avenue, Deerfield Beach, Florida 33442-1795
(Address of principal executive offices) (Zip Code)
(305) 420-2000
(Registrant's telephone number, including area code)
Same
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 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
--- ---
The Registrant had outstanding 59,909,065 shares of Common Stock (par value
$.01 per share) as of May 5, 1994.
<PAGE> 2
SENSORMATIC ELECTRONICS CORPORATION
INDEX
FORM 10-Q
THREE MONTHS ENDED MARCH 31, 1994
<TABLE>
<CAPTION>
Page
----
PART I. FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Financial Statements. . . . . . . . . . . 1
Consolidated Condensed Balance Sheets . . 2
Consolidated Condensed Statements of
Income . . . . . . . . . . . . . . . . 3
Consolidated Condensed Statements of
Cash Flows . . . . . . . . . . . . . . 4
Notes to Consolidated Condensed
Financial Statements . . . . . . . . . 5-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . 8-11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. . . . . 12
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The financial information included herein is unaudited.
Certain information and footnote disclosures normally
included in the financial statements have been condensed or
omitted pursuant to the rules and regulations of the
Securities and Exchange Commission, although the Company
believes that the disclosures made are adequate to make the
information presented not misleading. These financial
statements should be read in conjunction with the financial
statements and related notes contained in the Company's 1993
Annual Report on Form 10-K. Other than as indicated herein,
there have been no significant changes from the financial
data published in said report. In the opinion of
Management, such unaudited information reflects all
adjustments, consisting only of normal recurring accruals,
necessary for a fair presentation of the unaudited
information shown.
Results for the interim period presented herein are not
necessarily indicative of results expected for the full
year.
1
<PAGE> 4
SENSORMATIC ELECTRONICS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
March 31, June 30,
1994 1993
---------- ----------
<S> <C> <C>
ASSETS
Cash and marketable securities (including
marketable securities of $34,665 and $28,798
at March 31 and June 30, respectively) $ 79,263 $ 117,899
Accounts receivable, net 131,623 128,137
Receivables under deferred terms
and installment contract obligations, net 70,530 61,201
Net investment in sales-type leases 75,617 65,240
Inventories, net 146,720 102,759
Revenue equipment, less accumulated
depreciation of $34,580 and $26,832 at
March 31 and June 30, respectively 55,155 53,867
Other property, plant and equipment, net 96,199 67,236
Deferred charges, patents and other assets, net 97,431 39,177
Costs in excess of net assets acquired, net 320,333 291,338
---------- ---------
$1,072,871 $ 926,854
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 41,593 $ 27,462
Accrued liabilities 124,850 84,576
Accrued and deferred income taxes payable 29,794 16,670
Debt 193,549 194,224
7% convertible subordinated debentures 114,095 114,165
Stockholders' equity:
Preferred stock, $.01 par value
Common stock, $.01 par value, 59,891 and
58,079 shares outstanding at March
31 and June 30, respectively 419,985 392,891
Retained earnings 218,924 178,018
Treasury stock, at cost (7,517) (14,757)
Foreign currency adjustments (58,893) (61,495)
Notes receivable from stock sales (3,509) (4,900)
---------- ---------
Total stockholders' equity 568,990 489,757
---------- ---------
$1,072,871 $ 926,854
========== =========
</TABLE>
The notes to consolidated condensed financial statements on pages 5-7 are an
integral part of these statements.
2
<PAGE> 5
SENSORMATIC ELECTRONICS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months ended Nine Months ended
March 31, March 31,
------------------------- -------------------------
1994 1993 1994 1993
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Sales $ 137,889 $ 93,340 $ 396,528 $ 292,191
Rentals 11,134 11,120 33,698 34,301
Other 13,130 9,987 35,080 29,792
--------- --------- ---------- ----------
Total revenues 162,153 114,447 465,306 356,284
Operating costs and expenses:
Costs of sales 62,976 43,712 179,584 143,229
Depreciation on revenue
equipment 3,575 3,820 11,607 11,985
Selling and customer service 53,642 37,924 150,138 115,548
Administrative 9,806 7,948 27,611 23,930
Research, development and
engineering 4,369 3,359 12,851 9,812
Amortization of intangible
assets 2,650 1,874 7,582 5,101
--------- --------- ---------- ----------
Total operating costs
and expenses 137,018 98,637 389,373 309,605
--------- --------- ---------- ----------
Operating income 25,135 15,810 75,933 46,679
Other income (expenses), net (3,241) (44) (9,111) 1,682
--------- --------- ---------- ----------
Income before income taxes 21,894 15,766 66,822 48,361
Provision for income taxes 5,500 3,900 16,800 12,000
--------- --------- ---------- ----------
Net income $ 16,394 $ 11,866 $ 50,022 $ 36,361
========= ========= ========== ==========
Primary earnings per
common share $ .27 $ .21 $ .82 $ .66
========= ========= ========== ==========
Fully diluted earnings
per common share $ .26 $ .20 $ .79 $ .64
========= ========= ========== ==========
Cash dividends per common
share $ .055 $ .05 $ .155 $ .15
========= ========= ========== ==========
Common shares used in
computation of:
Primary earnings per
common share 61,235 56,955 60,973 55,233
========= ========= ========== ==========
Fully diluted earnings per
common share 68,515 64,470 68,253 62,694
========= ========= ========== ==========
</TABLE>
The notes to consolidated condensed financial statements on pages 5-7 are an
integral part of these statements.
3
<PAGE> 6
SENSORMATIC ELECTRONICS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED MARCH 31, 1994 AND 1993
(In thousands)
<TABLE>
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 50,022 $ 36,361
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 26,373 22,038
Other non-cash charges to operations 8,904 2,025
Net changes in operating assets and
liabilities, net of effect of
acquisitions (70,495) (52,862)
----------- -----------
Net cash provided by operating
activities 14,804 7,562
----------- -----------
Cash flows from investing activities:
Capital expenditures (36,112) (13,172)
Purchases of marketable securities (18,509) (1,786)
Maturities of marketable securities 12,468 17,631
Increase in revenue equipment
and inventory available for lease (12,078) (17,739)
Acquisitions and other investments (10,363) (301,679)
Other, net 2,193 4,964
----------- -----------
Net cash used in investing activities (62,401) (311,781)
----------- -----------
Cash flows from financing activities:
Proceeds from issuances of common stock
under employee benefit plans and for
acquisitions, net 13,147 204,188
Repayments of debt (9,456) (105,762)
Bank borrowings 6,782 125,593
Cash dividends (9,116) (7,736)
Proceeds from issuance of Senior Notes - 135,000
Other, net 1,391 484
----------- -----------
Net cash provided by financing activities 2,748 351,767
----------- -----------
Effect of exchange rate changes on cash 346 3
----------- -----------
Net increase (decrease) in cash (44,503) 47,551
----------- -----------
Cash at beginning of period 89,101 16,082
----------- -----------
Cash at end of period 44,598 63,633
Marketable securities at end of period 34,665 28,567
----------- -----------
Cash and marketable securities at end of
period $ 79,263 $ 92,200
=========== ===========
</TABLE>
The notes to consolidated condensed financial statements on pages 5-7 are an
integral part of these statements.
4
<PAGE> 7
SENSORMATIC ELECTRONICS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
a) Receivables and net investment in sales-type leases
Accounts receivable are stated net of the following at March 31,
1994 and June 30, 1993 (in thousands):
<TABLE>
<CAPTION>
March 31 June 30
-------- -------
<S> <C> <C>
Allowance for doubtful accounts $ 10,590 $ 4,694
</TABLE>
Receivables under deferred terms, the majority of which mature within
one year, and installment contract obligations, are stated net of the
following at March 31, 1994 and June 30, 1993 (in thousands):
<TABLE>
<CAPTION>
March 31 June 30
-------- -------
<S> <C> <C>
Allowance for doubtful accounts $ 3,064 $ 6,908
Unearned interest and maintenance $ 18,829 $ 17,239
</TABLE>
Net investment in sales-type leases are stated net of the following
at March 31, 1994 and June 30, 1993 (in thousands):
<TABLE>
<CAPTION>
March 31 June 30
-------- --------
<S> <C> <C>
Allowance for doubtful accounts $ 3,327 $ 1,943
Unearned interest and maintenance $ 30,394 $ 25,975
</TABLE>
The Company had accrued loss contingencies at March 31, 1994 and June
30, 1993 of $1.6 million and $1.4 million, respectively, related to
approximately $189.5 million and $125.9 million, respectively, of
receivables and leases sold to third party financing institutions
which are outstanding and subject to full or partial repurchase
should certain events (primarily related to customer non-payment)
occur. At March 31, 1994 and June 30, 1993, accounts receivable
assigned to a third party financing institution on a non-recourse
basis was $47 million and $24.5 million, respectively, of which the
financing institution had advanced $47 million and $20 million,
respectively, to the Company (bearing interest at floating rates),
resulting in $4.5 million due from the financing institution at June
30, 1993 which is included in "Accounts receivable, net". The
Company received net proceeds of $221.4 million and $49.9 million
upon the sale and assignment of receivables and leases in the nine
months ended March 31, 1994 and 1993, respectively.
b) Inventories
Inventories at March 31, 1994 and June 30, 1993 consisted of parts
inventory of $31.1 million and $18.5 million, work-in-process of
$17.7 million and $5.1 million and inventory available for sale or
lease of $97.9 million and $79.2 million; and are net of allowance
for inventory losses of $9.4 million and $8.6 million, respectively.
5
<PAGE> 8
c) Debt
Debt at March 31, 1994 and June 30, 1993 is summarized as follows
(in thousands):
<TABLE>
<CAPTION>
March 31 June 30
-------- --------
<S> <C> <C>
Senior Notes $135,000 $135,000
Unsecured revolving credit notes
payable 49,129 41,332
Acquisition indebtedness 2,913 11,136
Capital lease obligations and other,
net 6,507 6,756
-------- --------
$193,549 $194,224
======== ========
</TABLE>
At March 31, 1994, the Company had approximately $89.2 million of unused
credit under all of its line of credit arrangements.
Interest expense for the nine months ended March 31, 1994 and 1993 was
$18.3 million and $12.6 million, respectively.
d) Income taxes
In the three-month period ended September 30, 1993, the Company adopted
Financial Accounting Standards Board Statement No. 109, "Accounting for
Income Taxes" (FASB 109). As permitted by FASB 109, the Company has
elected not to restate the financial statements of any prior periods. The
cumulative effect of the change was not material and therefore no
adjustment was separately reported in the Consolidated Condensed Statement
of Income for the nine months ended March 31, 1994. However, the adoption
of FASB 109 required certain of the Company's tax balances at July 1, 1993
(the effective date of the change) to be reclassified. Deferred income tax
balances which were not attributable to the same tax jurisdiction were no
longer presented on a net basis at July 1, 1993. Related deferred tax
assets at July 1, 1993 (the effective date of the change) aggregating
approximately $20 million resulted primarily from reserves and liabilities
not currently deductible (approximately $7 million), accelerated income
recognition on leased equipment (approximately $5 million) and intercompany
inventory profit elimination not currently taxable (approximately $4
million). Additionally, approximately $10 million of remaining deferred
tax assets at July 1, 1993 resulted from the application of FASB 109 to the
accounting for the valuation of assets acquired (approximately $6 million
related to inventories) and liabilities assumed (approximately $4 million
related to accrued liabilities) in prior years' business combinations.
The provisions for income taxes were computed using an estimated annual
effective tax rate based on a United States statutory rate of 35% and 34%,
respectively, adjusted principally for anticipated United States/Puerto
Rico "Section 936" tax benefits, amortization of costs in excess of net
assets acquired and foreign tax rate differentials.
6
<PAGE> 9
e) Acquisitions
The Company's unaudited pro forma consolidated condensed statement of
income for the nine months ended March 31, 1993, assuming the acquisitions
of Automated Loss Prevention Systems (July 29, 1992) and Security Tag
Systems, Inc. (June 1993) were effected at July 1, 1992, is summarized as
follows (in thousands, except per share amounts):
<TABLE>
<S> <C>
Total revenues $374,531
Net income $ 35,879
Primary earnings per share $ .61
Fully diluted earnings per share $ .56
</TABLE>
This pro forma information does not purport to be indicative of the
results which may have been obtained had the acquisitions been
consummated at the dates assumed and is not necessarily indicative of
results for the full year.
f) Supplemental cash flow information
Cash paid by the Company for interest and income taxes for the nine
months ended March 31, 1994 and 1993 was as follows (in thousands):
1994 - $17,742 and $6,533; 1993 - $10,229 and $5,884, respectively.
In connection with certain acquisitions, the market value of the
assets acquired for the nine months ended March 31, 1994 and 1993 was as
follows (in thousands):
<TABLE>
<CAPTION>
1994 1993
------------- -----------
<S> <C> <C>
Cash paid (net of cash acquired) $ 8,416 $ 301,679
Liabilities assumed and/or incurred 7,793 65,331
Common stock issued 20,008 1,869
------------- -----------
Market value of assets acquired $ 36,217 $ 368,879
============= ===========
</TABLE>
g) Stock dividend
On November 11, 1993 the Company's Board of Directors declared a
three-for-two stock split effected in the form of a 50% stock
dividend to shareholders of record on November 30, 1993, payable on
December 17, 1993. All share and per share amounts previously
reported have been adjusted to give retroactive effect to the
increased number of common shares outstanding due to the stock split.
h) Reclassifications
Certain amounts in the prior period's consolidated condensed
financial statements have been reclassified to conform to the current
period's condensed presentation.
7
<PAGE> 10
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The Company's consolidated condensed financial statements present a
consolidation of its worldwide operations. This discussion supplements the
detailed information presented in the Consolidated Condensed Financial
Statements and Notes thereto (which should be read in conjunction with the
financial statements and related notes contained in the Company's 1993 Annual
Report on Form 10-K) and is intended to assist the reader in understanding the
financial results and condition of the Company.
Financial Condition
The Company's overall financial condition remained strong as reflected in the
Consolidated Condensed Balance Sheet at March 31, 1994 compared to June 30,
1993. Cash and marketable securities decreased $38.6 million primarily due to
(a) net capital expenditures ($36.1 million), (b) an increase in revenue
equipment and inventory available for lease ($12.1 million) and (c)
acquisitions and other investments ($10.4 million); offset in part by (a) net
cash provided by operations ($14.8 million) and (b) proceeds from issuances of
Common Stock ($13.1 million). Total stockholders' equity at March 31, 1994
increased $79.2 million over the June 30, 1993 balance to $569 million (of
which approximately $15 million resulted from the issuance of Common Stock for
the September 1993 acquisition of Robot Research Inc. (Robot), a U.S.
manufacturer of sophisticated closed circuit television (CCTV) equipment),
while debt decreased by $745,000 (due to a payment of an acquisition
indebtedness partially offset by an increase in short term credit line
borrowings by European subsidiaries) to $307.6 million, resulting in a
debt-to-equity ratio of .54 to 1 at March 31, 1994 compared to .63 to 1 at June
30, 1993. In April 1994, the Company announced that it will redeem on June 1,
1994 all of its outstanding 7% convertible subordinated debentures. Based on
the current market price of the Company's Common Stock, it is anticipated that
these debentures will be converted to Common Stock prior to June 1, 1994 which
will further lower the Company's debt-to-equity ratio. The shares issuable
upon conversion of these debentures are deemed outstanding for purposes of
reporting fully diluted earnings per share, and therefore, conversion will not
have a dilutive effect on previously reported fully diluted earnings per share.
Total receivables and net investment in sales-type leases increased to $277.8
million at March 31, 1994 from $254.6 million at June 30, 1993 resulting
principally from the higher level of business offset in part by net sales and
assignments of receivables and sales-type leases to third party financial
institutions in the first nine months of fiscal 1994.
The Company has historically had a high level of outstanding receivables as a
percentage of revenues. This results in part from the use of its financial
strength as a marketing tool in obtaining new business by, for example,
offering to customers flexible, deferred payment arrangements (the majority of
which mature within
8
<PAGE> 11
one year), or longer term installment sales financing (subject to stated or
imputed interest) to facilitate purchases. Additionally, the Company has
experienced an historical pattern of delayed payments to the Company by certain
of its major retail customers which has extended its receivables aging profile.
During fiscal 1993 the Company increased its efforts to reduce receivables by,
among other things, (a) implementing an enhanced invoicing and accounts
receivable system; (b) employing the use of third party servicing agents to
increase the efficiency of its billing and collection practices; (c) expanding
the number and use of relationships with third party financing institutions to
sell or assign receivables and sales-type leases; and (d) generally increasing
its collection efforts. The results of such ongoing efforts have been to
reduce the time required to collect receivables and to provide the Company with
the flexibility to convert its receivables into cash as needed.
The Company believes its allowance for doubtful accounts is adequate after
taking into account the aging of its receivables and net investment in
sales-type leases, the payment history of its customers, the Company's security
interest position in equipment financed under deferred terms and installment
sales contracts (and its ability to re-market such equipment if needed), the
prospects of its collection efforts and its relationships with major retail
customers. Additionally, with the rapid broadening of the Company's customer
base both geographically and to include hard goods retailers, commercial and
industrial customers, and manufacturers and vendors providing retailers with
"source labeled" merchandise under Sensormatic's Universal Product Protection
(UPP(SM)) program, the Company's historical concentration in soft goods
retailers is being reduced.
Inventories at March 31, 1994 increased $44 million over June 30, 1993 in order
to meet forecasted production and sales levels. Deferred charges and other
assets increased $58.3 million primarily as a result of the Company's adoption
of FASB 109 in the first quarter of fiscal 1994 (see note d of Notes to
Consolidated Condensed Financial Statements).
In February 1994, the Company filed a shelf registration statement with the
Securities and Exchange Commission under which the Company is able to issue up
to 4.5 million shares of its Common Stock. These securities are intended to be
used in connection with acquisitions of other businesses or assets (4.3 million
shares remain available at March 31, 1994).
The Company believes it is well positioned to meet anticipated future capital
requirements through the use of funds to be generated by operating activities,
existing cash and marketable securities ($79.3 million at March 31, 1994), its
ability to sell sales-type leases to financing institutions under existing
agreements ($20.8 million of aggregate unused facilities at March 31, 1994) and
assign receivables to a financing institution under an existing program, and
funds available from existing worldwide credit lines ($89.2 million at March
31, 1994).
9
<PAGE> 12
Results of Operations
Three Months and Nine Months Ended March 31, 1994 Compared to Three Months and
Nine Months Ended March 31, 1993
Revenues for the three months and nine months ended March 31, 1994 increased
42% and 31%, respectively, over the three months and nine months ended March
31, 1993. The revenue growth resulted principally from increased revenues from
the UltraoMax(R) product line primarily for hard goods retail customers and
used in the Company's UPP program for source labeling; increased revenues from
the Commercial/Industrial Group which markets electronic asset protection
(EAP), CCTV and access control systems to non-retail customers; and revenues
generated from the sale of Security Tag products (of which approximately $19.2
million in the nine months ended March 31, 1994 is a result of the acquisition
and consolidation of Security Tag Systems, Inc. effective June 1993); (see Note
e of Notes to Consolidated Condensed Financial Statements); offset in part by
the effect on the international subsidiaries' local currency revenues when
translated into U.S. dollars for financial statement purposes caused by the
stronger average U.S. dollar (relative to the international subsidiaries' local
currencies, in the aggregate) throughout the first nine months of fiscal 1994
compared to the first nine months of fiscal 1993 (approximately $22.4 million).
Revenues from retail customers for the electronic article surveillance (EAS)
product lines increased 25% to $97.7 million in the third quarter of fiscal
1994 and 23% to $298 million in the first nine months of fiscal 1994 compared
to $78.2 million and $242.7 million, respectively, in the comparable periods of
fiscal 1993. These increases resulted principally from growth of over 50% in
the third quarter and in the first nine months of fiscal 1994 (compared to last
year) in revenues from the UltraoMax product line and the addition of revenue
from the Security Tag product lines; offset in part by a 33% and a 16% decline
in revenues in the third quarter and in the first nine months of fiscal 1994,
respectively, (compared to last year) from U.S. soft goods retailers for the
traditional microwave product line, and the translation effect caused by the
strengthening of the U.S. dollar. Revenues from the Commercial/Industrial
Group increased 135% to $21.2 million and 90% to $50.6 million (including
installation revenues) in the third quarter and the first nine months of fiscal
1994, respectively, compared to fiscal 1993 due primarily to improved sales of
CCTV products to non-retail customers and the acquisition of Robot in September
1993 ($5.3 million and $11.2 million, respectively).
Operating income in the three and nine months ended March 31, 1994 improved 59%
and 63%, respectively, over last year's comparable periods primarily due to the
higher level of business and improved gross margins. Gross margins for the
third quarter and first nine months of fiscal 1994 increased to 54% and 55%
compared with 53% and 51%, respectively, for last year's comparable periods,
primarily from increased manufacturing efficiencies resulting from increased
production volumes and long-term programs aimed at reducing manufacturing costs
and the inclusion of the manufacturer's gross margin (as a result of the
acquisition of Security Tag) on the Security Tag product line.
10
<PAGE> 13
Total selling and customer service, administrative, and research, development
and engineering expenses, as a percentage of total revenues, decreased to 42%
and 41% for the third quarter and first nine months of fiscal 1994,
respectively, compared to 43% and 42% for the comparable periods of fiscal
1993. The aggregate amount of these expenses increased by 28% in the current
year's first nine months over last year's comparable period primarily as a
result of the higher level of business in fiscal 1994 offset in part by the
translation effect on the international subsidiaries' local currency operating
expenses caused by the stronger average U.S. dollar (relative to the
international subsidiaries' local currencies, in the aggregate) throughout the
first nine months of fiscal 1994 compared to the first nine months of fiscal
1993 (approximately $9.2 million).
Total net other non-operating expenses in the third quarter and the first nine
months of fiscal 1994 were $3.2 million and $9.1 million, respectively,
compared to $44,000 of net other non-operating expenses and $1.7 million of net
other non-operating income for the comparable periods of fiscal 1993,
principally due to an increase in interest expense resulting from the higher
levels of borrowings throughout the first nine months of fiscal 1994 (primarily
resulting from the acquisition of Automated Loss Prevention Systems (ALPS) and
increased net short-term bank borrowings by the Company's European
subsidiaries) and a decrease in interest income due primarily to a decline in
both interest rates and the aggregate amount of longer term receivables and
sales-type leases (which earn interest income) outstanding throughout the first
nine months of fiscal 1994 compared to the first nine months of fiscal 1993.
The provision for income taxes for the first nine months of fiscal 1994 is
based on an estimated effective annual consolidated tax rate of 25% (the same
tax rate reported on the Company's income from continuing operations for the
full 1993 fiscal year). The adoption of Financial Accounting Standards Board
Statement No. 109 "Accounting for Income Taxes" did not have a material effect
on the Company's results of operations (see Note d of Notes to Consolidated
Condensed Financial Statements).
Consolidated net income for the third quarter and first nine months of fiscal
1994 increased $4.5 million and $13.7 million, respectively, when compared to
the prior year's comparable period due primarily to the factors discussed
above.
11
<PAGE> 14
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
11) Computation of earnings per common share.
b) Reports on Form 8-K:
There were no reports on Form 8-K filed during
the three-month period ended March 31, 1994.
12
<PAGE> 15
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.
SENSORMATIC ELECTRONICS CORPORATION
By /S/ Michael E. Pardue
-----------------------------------
Michael E. Pardue
Executive Vice President,
Chief Operating Officer, Chief
Financial Officer and Director
/S/ Lawrence J. Simmons
-----------------------------------
Lawrence J. Simmons
Vice President of Finance and Chief
Accounting Officer
Date: May 10, 1994
13
<PAGE> 1
Exhibit 11
SENSORMATIC ELECTRONICS CORPORATION
COMPUTATION OF EARNINGS PER COMMON SHARE
(IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months ended Nine Months ended
March 31, March 31,
------------------ -----------------
1994 1993 1994 1993
------- -------- -------- -------
<S> <C> <C> <C> <C>
Income:
Net income for primary
computation $ 16,394 $ 11,866 $ 50,022 $ 36,361
Add interest expense (net
of tax) on 7% convertible
subordinated debentures 1,335 1,330 3,871 3,990
-------- -------- -------- --------
Adjusted net income for fully
diluted computation $ 17,729 $ 13,196 $ 53,893 $ 40,351
======== ======== ======== ========
Common shares (1):
Weighted average shares
outstanding during the period 59,507 55,407 58,916 53,488
Potential dilutive exercise of
stock options and warrants (2) 1,728 1,548 2,057 1,745
-------- -------- -------- --------
Shares included in computation
of primary earnings per share 61,235 56,955 60,973 55,233
Shares issuable on conversion
of 7% convertible subordinated
debentures 7,225 7,341 7,225 7,341
Maximum dilution of stock
options and warrants (3) 55 174 55 120
-------- -------- -------- --------
Shares included in computation of
fully diluted earnings per
share 68,515 64,470 68,253 62,694
======== ======== ======== =======
</TABLE>
(1) Share amounts reflect the three-for-two stock split declared in
November 1993.
(2) Computed under the treasury stock method based on the average stock
price during the periods.
(3) Computed under the treasury stock method based on stock price at end
of periods if higher than the average price during the periods.
