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
March 29, 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/A Second Quarter 1994
File No. 1-7203
Gentlemen:
We are enclosing for filing Aydin Corporation's Form 10-Q/A amending
portions of the Second Quarter Report for the period ending July 2,
1994.
Very truly yours,
/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/A
(Mark One)
_X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended _______July 2, 1994_______________
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 August 15,
1994
_____4,998,900_____
<PAGE>
PART 1, ITEM 1, FINANCIAL INFORMATION
page 1 of 5
AYDIN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands except for per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
7/02/94 7/02/94
Restated 7/03/93 Restated 7/03/93
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
NET SALES $38,635 $36,969 $72,610 $74,403
COST AND EXPENSES
Cost of sales 28,283 27,206 53,738 53,848
Selling, general
and administrative 7,068 6,741 12,668 13,338
Research and development 1,389 1,223 2,461 2,853
Interest expense, net 209 72 190 175
_______ _______ _______ _______
Total 36,949 35,242 69,057 70,214
_______ _______ _______ _______
INCOME BEFORE INCOMES TAXES
AND MINORITY INTEREST 1,686 1,727 3,553 4,189
INCOME TAXES 414 572 1,088 1,495
_______ _______ _______ _______
INCOME BEFORE
MINORITY INTEREST 1,272 1,155 2,465 2,694
LESS MINORITY INTEREST - 0 - 3 - 0 - 106
_______ _______ _______ _______
NET INCOME $ 1,272 $ 1,152 $ 2,465 $ 2,588
_______ _______ _______ _______
_______ _______ _______ _______
EARNINGS PER SHARE $ .25 $ .23 $ .49 $ .52
_______ _______ _______ _______
_______ _______ _______ _______
WEIGHTED AVERAGE
COMMON AND COMMON
EQUIVALENT SHARE
OUTSTANDING 4,996 5,013 5,002 5,018
_______ _______ _______ _______
_______ _______ _______ _______
</TABLE>
<PAGE>
PART 1, ITEM 1, FINANCIAL INFORMATION
page 2 of 5
AYDIN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
($000 Omitted)
ASSETS
<TABLE>
<CAPTION>
July 2, 1994
Restated Dec. 31, 1993
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash, including cash equivalents-
1994, $7,799; 1993, $10,908 $ 9,188 $ 11,822
Short-term investments 11,655 13,058
Accounts receivable 51,865 33,525
Unbilled revenue, after
progress billings 50,645 66,559
Inventories:
Raw materials 8,542 8,549
Work-in-process 6,806 6,036
Finished product 3,489 3,012
Prepaid expenses 2,187 1,470
________ ________
Total current assets 144,377 144,031
PROPERTY, PLANT AND EQUIPMENT,
net of accumulated depreciation:
1994, $55,799; 1993, $53,623 25,423 25,182
OTHER ASSETS 496 508
________ ________
TOTAL ASSETS $170,296 $169,721
________ ________
________ ________
__________________________________________________________________
<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 1993 balance sheet has been derived from the audited
financial statements contained in the 1993 Annual Report to
Stockholders. The 1994 periods have been restated as a result of
previously not including the results of a foreign subsidiary. In
previous periods 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 1994 includes
foreign currency translation gains relating to the Turkish subsidiary
of $307,000 for the second quarter and $802,000 for the six months.
</TABLE>
<PAGE>
PART 1, ITEM 1, FINANCIAL INFORMATION
page 3 of 5
AYDIN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
($000 Omitted)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
July 2, 1994
Restated Dec. 31, 1993
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Current maturities of
long-term debt $ 399 $ 397
Short-term bank debt 15,025 21,525
Accounts payable 26,055 21,731
Accrued liabilities 12,135 15,295
Advanced payments and
contract billings in
excess of recognized
revenue 1,572 1,563
Accrued and deferred
income taxes 10,789 7,014
________ _______
Total current liabilities 65,975 67,525
LONG-TERM DEBT,
less current maturities 1,698 1,902
DEFERRED INCOME TAXES 6,087 6,230
MINORITY INTEREST - 0 - 105
STOCKHOLDERS' EQUITY:
Common stock, par value $1-
authorized 7,500,000
shares: issued 1994,
4,988,900 shares;
1993, 4,981,273 shares 4,989 4,981
Additional paid-in capital 770 697
Retained earnings 91,371 88,906
Foreign currency
translation effects (594) (625)
________ _______
Stockholders' equity 96,536 93,959
________ _______
TOTAL LIABILITIES
AND EQUITY $170,296 $169,721
________ _______
________ _______
</TABLE>
<PAGE>
PART 1, ITEM 1, FINANCIAL INFORMATION
page 4 of 5
AYDIN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
($000 omitted)
<TABLE>
<CAPTION>
Six Months Ended
July 2, 1994
Restated July 3, 1993
(Unaudited) (Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 2,465 $ 2,588
Items not affecting cash:
Depreciation and
amortization 2,244 2,411
Deferred income taxes (100) 41
Minority Interest 0 106
Other 30 59
Changes in certain
Working capital items:
Accounts receivable (18,340) 8,612
Unbilled revenue 15,914 (18,197)
Advance payments and
contract billings in
excess of recognized
revenue 9 727
Inventories (1,240) 519
Prepaid expenses (717) 468
Accounts payable and
accrued liabilities 1,164 607
Accrued income taxes 3,732 (440)
________ _________
Cash Provided (Used) By
Operating Activities 5,161 (2,499)
INVESTING ACTIVITIES
Net property, plant and
equipment additions (2,472) (1,134)
Short-term investments 1,403 (3,469)
________ _________
Cash Used By
Investing Activities (1,069) (4,603)
FINANCING ACTIVITIES
Principal payments on
long-term debt (202) (197)
Net repayments of
short-term borrowings (6,500) (4,200)
Minority investment in
consolidated subsidiary (105) (2,316)
Proceeds from exercise of
stock options 81 186
________ _________
Cash Used By
Financing Activities (6,726) (6,527)
________ _________
DECREASE IN CASH AND CASH
EQUIVALENTS (2,634) (13,629)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 11,822 17,086
________ _________
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 9,188 $ 3,457
________ _________
________ _________
</TABLE>
<PAGE>
PART 1, ITEM 1, FINANCIAL INFORMATION
page 5 of 5
INDEPENDENT ACCOUNTANTS' REPORT ON REVIEW OF
INTERIM FINANCIAL INFORMATION
Board of Directors and Stockholders
Aydin Corporation
We have reviewed the condensed consolidated balance sheet of Aydin
Corporation and subsidiaries as of July 2, 1994, and the related
condensed consolidated statements of income and cash flows for the
three and six month periods ended July 2, 1994 as restated. See note
to Financial statements regarding this restatement. The condensed
consolidated statements of income and cash flows for the three and
six-month periods ended July 3, 1993 were reviewed by other
accountants. These condensed consolidated financial statements are the
responsibility of the /Company's management.
Our review and that of the prior accountants was conducted 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 taken as a whole. Accordingly, we do not express
such an opinion.
Based on our review, and that of the prior accountants, we are not
aware of any material modifications that should be made to the
condensed consolidated financial statements referred to above for them
to be in conformity with generally accepted accounting principles.
The consolidated balance sheet of Aydin Corporation and subsidiaries as
of December 31, 1993, and the related consolidated statements of
operations and cash flows for the year then ended (not presented
herein), were audited by other accountants in accordance with generally
accepted auditing standards. In their report dated February 25, 1994,
they expressed an unqualified opinion on those consolidated financial
statements. In their opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of December 31,
1993 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
March 22, 1995
<PAGE>
AYDIN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(1) Material Changes in Financial Condition (7/02/94 versus 12/31//93)
Accounts receivable increased by $18.3 million because of higher
billings this quarter compared to the fourth quarter of 1993
particularly on large contracts with the Government of Turkey and an
Argentina customer. Unbilled revenue decreased by $15.9 million
because of the higher Government of Turkey billings and also because
of the lower level of percentage completion sales this quarter compared
to the fourth quarter of 1993.
Accrued liabilities decreased by $3.2 million primarily because of $2
million of payments made and other costs incurred in connection with
the terms of a settlement made with the Department of Justice on the
AN/GRC-222 microwave radio contract with the U.S. Army (see Note K of
the 12/31/93 Annual Report).
Accounts payable and accrued and deferred income taxes increased by
$4.3 million and $3.8 million, respectively, because of volume and tax
liability increases at the Argentina subsidiary.
Short-term bank debt was reduced by $6.5 million owing to the favorable
cash flow for the six months of 1994. Of the total of $20.8 million of
cash and short-term investments at July 2, 1994, approximately $14.9
million represents interest bearing collateral required to be
maintained against letters of credit for the Turkish Contract.
The Company at July 2, 1994 had short-term bank borrowings outstanding
of $15 million. The banks are requesting partial or full 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 (Second Quarter and Six Months 1994
versus 1993)
Net sales increased by 5% in the quarter and decreased by 2% in the six
months. Sales were favorably impacted, particularly in the 2nd
quarter, by increased volume at the Argentina subsidiary. Offsetting
this were delays in booking new export business and the continuing
increasingly competitive U.S. Government defense business environment.
Cost of sales as a percentage of sales decreased in the quarter to
73.2% from 73.6% and increased in the six months to 74.0% from 72.4%.
The decreases were primarily a result of operating efficiencies
achieved particularly on a large contract. These were offset,
particularly in the quarter, by a higher percentage of cost of sales
versus sales at the Argentina subsidiary.
The income tax provision as a percentage of pre-tax income decreased to
24.6% from 33.1% for the quarter and to 30.6% from 35.7% for the six
months, primarily because of foreign currency translation gains not
subject to tax.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this to be signed on its behalf by the
undersigned thereunto duly authorized.
AYDIN CORPORATION
DATE _____March 27, 1995_____ /s/ Herbert Welber
Herbert Welber, Controller
DATE _____March 27, 1995_____ /s/ Robert A. Clancy
Robert A. Clancy, Secretary
