AYDIN CORPORATION
Telephone 700 Dresher Road
(215) 657-7510 P.O. Box 349
FAX Horsham, PA 19044
(215) 657-3830 U.S.A.
Telex
685 1211 AYDIN UW
May 16, 1995
(VIA EDGAR)
SECURITIES & EXCHANGE COMMISSION
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549-1004
Attn: Filing Desk, Stop 1-4
RE: Form 10-Q First Quarter 1995
File No. 1-7203
Gentlemen:
We are enclosing for filing Aydin Corporation's Form 10-Q for the First
Quarter ending April 1, 1995.
Sincerely,
/s/ Robert A. Clancy
Robert A. Clancy
Secretary and
Corporate Counsel
RAC:sbk
Enclosures
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 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 1-7203
AYDIN CORPORATION
________________________________________________________________________
(Exact name of registrant as specified in its charter)
DELAWARE 23-1686808
________________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700 DRESHER ROAD, HORSHAM, PA 19044
________________________________________________________________________
(Address of principle executive offices) (Zip Code)
(215) 657-7510
________________________________________________________________________
(Registrant's telephone number, including area code)
________________________________________________________________________
(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 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 ___________
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Shares of common stock, $1.00 par value, outstanding as of May 12,
1995.
______5,015,685______
<PAGE>
AYDIN CORPORATION
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Incorporated herein by reference are the Condensed Consolidated
Financial Statements of Aydin Corporation and the related Notes to
Financial Statements as set forth on pages 2 through 5 of the "1995
First Quarter Report" to Stockholders. These condensed consolidated
financial statements for the three month period ended April 1, 1995 have
been subjected to a limited review by Grant Thornton LLP, the
Registrant's independent accountants, whose report, set forth on page 6
of the "1995 First Quarter Report" to Stockholders, is incorporated
herein by reference.
Earnings per share are based on the weighted average number of common
shares outstanding plus shares issuable upon the assumed exercise of
dilutive common stock options. The number of shares used in the
computation of earnings per share for the three months ended April 1,
1995 and April 2, 1994 were 5,040,676 and 5,007,342, respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(1) Material Changes in Financial Condition (4/01/95 versus 12/31/94)
Unbilled revenue (net of advance payments and contract billings in
excess of recognized revenue) increased by $10.9 million because of
revenue recognized in excess of billings rendered on various contracts.
Cash and short-term investments decreased by $10.0 million because of
the unbilled revenue increase and a slow down in collections on the
TMRC-C3 contract with the Turkish Government.
Of the total of $17.9 million of cash and short-term investments at
4/1/95, approximately $15.9 million represents interest bearing
collateral required to be maintained against letters of credit for
foreign contracts.
The Company at 4/1/95 had short-term bank borrowings outstanding of $5.5
million. The banks are requesting reductions of these short-term
borrowings. The Company anticipates full payment of these bank loans in
1995 from internal cash flow. The Company is seeking new banking
arrangements to cover its future potential needs.
Based on the present backlog and projected cash flows, the Company
anticipates financing its capital needs from internal sources and from
some short-term borrowings in the foreseeable future.
(2) Material Changes in Operations (First Quarter 1995 versus 1994)
Cost of sales as a percentage of sales decreased to 72.9% from 74.9% as
a result of operating efficiencies and a more favorable sales mix.
Selling, general and administrative expenses increased by $924 thousand
(17%) as a result of increased selling efforts and lower net foreign
currency translation gains related to the Turkish subsidiary.
Research and development costs increased by $337 thousand (35%) because
of expanded development efforts in the telecommunications field.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
(a) The Registrant held its Annual Meeting of Stockholders on
April 28, 1995.
(b) Proxies for the meeting were solicited pursuant to Regulation
14A. There was no solicitation in opposition to management's
nominees for directors as listed in the Proxy Statement. All
such nominees were elected.
(c) The matters voted upon and the results of the voting were as
follows:
(1) Election of Directors
<TABLE>
<CAPTION>
For Withheld Broker
Non-Votes
<S> <C> <C> <C>
I. Gary Bond 4,479,857 19,307 None
Nev A. Gokcen 4,482,630 16,534 None
Ayhan Hakimoglu 4,482,342 16,822 None
Donald S. Taylor 4,484,434 14,730 None
Harry D. Train II 4,479,989 19,175 None
John F. Vanderslice 4,483,131 16,033 None
</TABLE>
(2) Approval of the Individual Non-Qualified Stock Options.
<TABLE>
<CAPTION>
For Against Abstain Broker Non-Votes
<S> <C> <C> <C> <C>
3,946,100 520,136 34,129 None
</TABLE>
(3) Approval of the Amended 1994 Incentive Stock Option Plan
<TABLE>
<CAPTION>
For Against Abstain Broker Non-Votes
<S> <C> <C> <C> <C>
3,969,138 495,897 34,129 None
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following is a list of Exhibits filed as part of this
report:
Exhibit 2 - None
Exhibit 3(i) - Restated Certificate of Incorporation
(filed as Exhibit 3(i) to Registrant's
Annual Report on Form 10-K for the year
ended December 31, 1994 and incorporated
herein by reference).
Exhibit 3(ii) - By-Laws (filed as Exhibit 3(ii) to
Registrant's Annual Report on Form 10-K
for the year ended December 31, 1994 and
incorporated herein by reference).
Exhibit 4 - None
Exhibit 10 - None
Exhibit 11 - None
Exhibit 15 - Letter re unaudited interim financial
information
Exhibit 18 - None
Exhibit 19 - "1995 FIRST QUARTER REPORT" to
Stockholders
Exhibit 22 - None
Exhibit 23 - None
Exhibit 24 - None
Exhibit 27 - Financial Data Schedule (electronic filing
only)
Exhibit 99 - None
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the First Quarter
1995.
<PAGE>
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 thereunto duly authorized.
AYDIN CORPORATION
DATE May 11, 1995 /s/ Herbert Welber
Herbert Welber, Controller
DATE May 11, 1995 /s/ Robert A. Clancy
Robert A. Clancy, Secretary
<PAGE>
AYDIN CORPORATION
FORM 10-Q QUARTERLY REPORT
EXHIBIT INDEX
N0. DESCRIPTION OF EXHIBIT
15 Letter re unaudited interim financial information
19 1995 First Quarter Report to Stockholders
27 Financial Data Schedule
<PAGE>
Exhibit 15
Two Commerce Square
Suite 3100
2001 Market Street
Philadelphia, PA 19103-7080
215-561-4200
FAX 215-561-1066
GRANT THORNTON LLP
Accountants and Management Consultants
The U.S. Member Firm of
Grant Thornton International
Securities and Exchange Commission
Washington, D.C. 20549
We have made a review of the condensed consolidated financial statements
of Aydin Corporation and subsidiaries as of April 1, 1995 and for the
three-month periods ended April 1, 1995 and April 2, 1994, in accordance
with standards established by the American Institute of Certified Public
Accountants, and issued our report thereon dated April 27, 1995. We are
aware that such financial statements and our above-mentioned report
appearing in the Form 10-Q of Aydin Corporation for the quarter ended
April 1, 1995 are being incorporated by reference in the Registration
Statement Nos. 33-53549; 33-34863; 33-22016; 33-14284; 2-97645;
2-93603; 2-77623; 2-64093 and that such report pursuant to Rule 436(c) of
the Securities Act of 1993 is not considered a part of a registration
prepared or certified by an accountant or a report prepared or certified
by an accountant within the meaning of Paragraphs 7 and 11 of that Act.
/s/ Grant Thornton LLP
Philadelphia, Pennsylvania
May 11, 1995
<PAGE>
Exhibit 19
Dear Stockholder:
Aydin's sales and net income for the first quarter of 1995 were
$35,588,000 and $1,191,000 respectively, representing $.24 per share as
compared to $33,975,000 and $1,193,000 representing $.24 per share in
the 1994 first quarter.
During the quarter, the backlog increased to $137,000,000 as
compared to $134,000,000 as of the end of 1994.
An address was made to the New York Society of Security Analysts
describing the Company's growth strategy. This includes continuing to
bid on large and small military and industrial programs, stressing its
telecommunication business and expanding its current military system
integration business into the non-military and commercial/industrial
marketplace.
During the quarter, Aydin was awarded a contract from the United
Kingdom for the supply of "Service Practice Instrumentation" totaling
$13.5 million including probable options. In addition, a contract worth
$5 million to supply the Egyptian Electric Authority with a digital
telecommunication system was received. These are in addition to smaller
orders.
Aydin has combined three of its East Coast Divisions forming Aydin
Corporation (East) to further enhance its current efficiency, marketing
and competitiveness in the bidding process.
/s/ Ayhan Hakimoglu
Ayhan Hakimoglu
Chairman of the Board
April 28, 1995
(page 1)
<PAGE>
AYDIN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands except for per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
April 2, 1994
April 1, 1995 Restated
(Unaudited) (Unaudited)
<S> <C> <C>
NET SALES $ 35,588 $ 33,975
COST AND EXPENSES
Cost of sales 25,937 25,455
Selling, general
and administrative 6,524 5,600
Research and development 1,449 1,072
Interest expense (income), net (157) (19)
_______ ______
Total 33,753 32,108
_______ ______
INCOME BEFORE INCOMES TAXES
AND MINORITY INTEREST 1,835 1,867
INCOME TAXES 636 674
_______ ______
INCOME BEFORE
MINORITY INTEREST 1,199 1,193
LESS MINORITY INTEREST 8 - 0 -
_______ ______
NET INCOME $ 1,191 $ 1,193
_______ ______
_______ ______
EARNINGS PER SHARE $ .24 $ .24
_______ ______
_______ ______
</TABLE>
(page 2)
<PAGE>
AYDIN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
($000 Omitted)
ASSETS
<TABLE>
<CAPTION>
April 1, 1995 Dec. 31, 1994
_____________ _____________
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash, including cash equivalents-
1995, $5,512; 1994, $18,220 $ 7,475 $ 20,961
Short-term investments 10,444 6,980
Accounts receivable 33,987 35,351
Unbilled revenue, after
progress billings 63,851 54,909
Inventories:
Raw materials 9,043 9,440
Work-in-process 8,459 7,419
Finished product 3,843 3,705
Prepaid expenses 1,664 1,350
________ ________
Total current assets 138,766 140,115
PROPERTY, PLANT AND EQUIPMENT,
net of accumulated depreciation:
1995, $56,941; 1994, $56,103 25,300 25,486
OTHER ASSETS 476 477
________ ________
TOTAL ASSETS $164,542 $166,078
________ ________
________ ________
__________________________________________________________________
<FN>
NOTE TO FINANCIAL STATEMENTS:
Interim financial statements reflect all adjustments which are, in
the opinion of management, necessary to a fair statement of the
results for the periods. The 1994 balance sheet has been derived
from the audited financial statements contained in the 1994 Annual
Report to Stockholders. The first quarter of 1994 reflects
amounts which were previously restated as a result of originally
not including the results of a foreign subsidiary. In periods
prior to 1994, the results of this subsidiary were not
significant. These interim financial statements conform with the
requirements for interim financial statements and consequently do
not include all the disclosures normally required by generally
accepted accounting principles. Disclosures are updated where
appropriate. There are no changes in contingency disclosures.
Pretax income for the first quarter of 1995 includes foreign
currency translation gains of $109,000 relating to the Turkish
subsidiary.
</TABLE>
(page 3)
<PAGE>
AYDIN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
($000 Omitted)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
April 1, 1995 Dec. 31, 1994
_____________ _____________
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Current maturities of
long-term debt $ 403 $ 402
Short-term bank debt 5,486 6,486
Accounts payable 25,806 27,055
Accrued liabilities 11,159 10,600
Advanced payments and
contract billings in
excess of recognized
revenue 2,178 4,169
Accrued and deferred
income taxes 10,264 9,617
________ _______
Total current liabilities 55,296 58,329
LONG-TERM DEBT,
less current maturities 1,394 1,549
DEFERRED INCOME TAXES 7,200 6,983
MINORITY INTEREST 111 - 0 -
STOCKHOLDERS' EQUITY:
Common stock, par value $1-
authorized 7,500,000
shares: issued 1995,
4,997,769 shares;
1994, 4,990,400 shares 4,998 4,990
Additional paid-in capital 857 787
Retained earnings 95,144 93,953
Less treasury stock at
cost: 1995, 3,597 shares;
1994, none (52) - 0 -
Foreign currency
translation effects (406) (513)
________ _______
Stockholders' equity 100,541 99,217
________ _______
TOTAL LIABILITIES
AND EQUITY $164,542 $166,078
________ _______
________ _______
</TABLE>
(page 4)
<PAGE>
AYDIN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
($000 omitted)
<TABLE>
<CAPTION>
Three Months Ended
April 2, 1994
April 1, 1995 Restated
_____________ _____________
(Unaudited) (Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 1,191 $ 1,193
Items not affecting cash:
Depreciation and
amortization 842 1,257
Deferred income taxes 142 (100)
Minority Interest 8 - 0 -
Other 108 (54)
Changes in certain
working capital items:
Accounts receivable 1,364 4,942
Unbilled revenue (8,942) (2,896)
Advance payments and
contract billings in
excess of recognized
revenue (1,991) 994
Inventories (781) 635
Prepaid expenses (314) (599)
Accounts payable and
accrued liabilities (690) (361)
Accrued income taxes 722 2,010
________ _________
CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (8,341) 7,021
INVESTING ACTIVITIES
Net property, plant and
equipment additions (656) (1,160)
Short-term investments (3,464) 713
________ _________
CASH USED BY
INVESTING ACTIVITIES (4,120) (447)
FINANCING ACTIVITIES
Principal payments on
long-term debt (154) (103)
Net repayments of
short-term borrowings (1,000) (6,500)
Purchase of Treasury Shares (52) - 0 -
Minority investment in
consolidated subsidiary 103 (105)
Proceeds from exercise of
stock options 78 11
________ _________
CASH USED BY
FINANCING ACTIVITIES (1,025) (6,697)
________ _________
DECREASE IN CASH AND CASH
EQUIVALENTS (13,486) (123)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 20,961 11,822
________ _________
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 7,475 $ 11,699
________ _________
________ _________
</TABLE>
(page 5)
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT ON REVIEW OF
INTERIM FINANCIAL INFORMATION
Board of Directors and Stockholders
Aydin Corporation
We have reviewed the condensed consolidated balance sheets of
Aydin Corporation and subsidiaries as of April 1, 1995 and April
2, 1994, and the related condensed consolidated statements of
income and cash flows for the three month periods then ended.
These condensed consolidated financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit in
accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the
financial statements as a whole. Accordingly, we do not express
such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the condensed consolidated
financial statements for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet as of December
31, 1994, and the related consolidated statements of operations
and cash flows for the year then ended (not presented herein) and
in our report dated February 20, 1995 we expressed an unqualified
opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of December 31, 1994 is fairly
stated, in all material respects in relation to the consolidated
balance sheet from which it has been derived.
/s/ Grant Thornton LLP
Philadelphia, Pennsylvania
April 27, 1995
_________________________________________________________________
A copy of Aydin Corporation's Form 10Q may be obtained without
charge, upon written request sent to Aydin Corporation
(page 6)
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from First Quarter Report to Stockholders and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER>1,000
<S> <C>
<PERIOD-TYPE> QTR-1
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> APR-01-1995
<CASH> 7,475
<SECURITIES> 10,444
<RECEIVABLES> 33,987
<ALLOWANCES> 0
<INVENTORY> 21,345
<CURRENT-ASSETS> 138,766
<PP&E> 82,241
<DEPRECIATION> 56,941
<TOTAL-ASSETS> 164,542
<CURRENT-LIABILITIES> 55,296
<BONDS> 1,394
<COMMON> 4,998
0
0
<OTHER-SE> 95,543
<TOTAL-LIABILITY-AND-EQUITY> 164,542
<SALES> 35,588
<TOTAL-REVENUES> 35,588
<CGS> 25,937
<TOTAL-COSTS> 33,753
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (157)
<INCOME-PRETAX> 1,835
<INCOME-TAX> 636
<INCOME-CONTINUING> 1,199
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,191
<EPS-PRIMARY> .24
<EPS-DILUTED> .24
</TABLE>
