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 First Quarter 1994
File No. 1-7203
Gentlemen:
We are enclosing for filing Aydin Corporation's Form 10-Q/A amending
portions of the First Quarter Report for the period ending April 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 April 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 May 13,
1994.
______4,982,529______
<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
April 2, 1994
Restated April 3, 1993
(Unaudited) (Unaudited)
<S> <C> <C>
NET SALES $33,975 $37,434
COST AND EXPENSES
Cost of sales 25,455 26,642
Selling, general
and administrative 5,600 6,597
Research and development 1,072 1,630
Interest expense (income), net (19) 103
_______ ______
Total 32,108 34,972
_______ ______
INCOME BEFORE INCOMES TAXES
AND MINORITY INTEREST 1,867 2,462
INCOME TAXES 674 923
_______ ______
INCOME BEFORE
MINORITY INTEREST 1,193 1,539
LESS MINORITY INTEREST - 0 - 103
_______ ______
NET INCOME $ 1,193 $1,436
_______ ______
_______ ______
EARNINGS PER SHARE $ .24 $ .29
_______ ______
_______ ______
WEIGHTED AVERAGE COMMON
AND COMMON EQUIVALENT
SHARES OUTSTANDING 5,007 5,023
_______ ______
_______ ______
</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>
April 2, 1994
Restated Dec. 31, 1993
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash, including cash equivalents-
1994, $9,924; 1993, $10,908 $ 11,699 $ 11,822
Short-term investments 12,345 13,058
Accounts receivable 28,583 33,525
Unbilled revenue, after
progress billings 69,455 66,559
Inventories:
Raw materials 7,964 8,549
Work-in-process 6,014 6,036
Finished product 2,984 3,012
Prepaid expenses 2,069 1,470
________ ________
Total current assets 141,113 144,031
PROPERTY, PLANT AND EQUIPMENT,
net of accumulated depreciation:
1994, $54,853; 1993, $53,623 25,092 25,182
OTHER ASSETS 505 508
________ ________
TOTAL ASSETS $166,710 $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 current quarter has 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 the first quarter
of 1994 includes foreign currency translation gains of $495,000 relating
to the Turkish subsidiary.
</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>
April 2, 1994
Restated Dec. 31, 1993
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Current maturities of
long-term debt $ 398 $ 397
Short-term bank debt 15,025 21,525
Accounts payable 23,479 21,731
Accrued liabilities 13,186 15,295
Advanced payments and
contract billings in
excess of recognized
revenue 2,557 1,563
Accrued and deferred
income taxes 9,076 7,014
________ _______
Total current liabilities 63,721 67,525
LONG-TERM DEBT,
less current maturities 1,798 1,902
DEFERRED INCOME TAXES 6,078 6,230
MINORITY INTEREST 0 105
STOCKHOLDERS' EQUITY:
Common stock, par value $1-
authorized 7,500,000
shares: issued 1994,
4,982,304 shares;
1993, 4,981,273 shares 4,982 4,981
Additional paid-in capital 707 697
Retained earnings 90,099 88,906
Foreign currency
translation effects (675) (625)
________ _______
Stockholders' equity 95,113 93,959
________ _______
TOTAL LIABILITIES
AND EQUITY $166,710 $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>
Three Months Ended
April 2, 1994
Restated April 3, 1993
(Unaudited) (Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 1,193 $ 1,436
Items not affecting cash:
Depreciation and
amortization 1,257 1,314
Deferred income taxes (100) 168
Minority Interest 0 103
Other (54) 35
Changes in certain
working capital items:
Accounts receivable 4,942 11,335
Unbilled revenue (2,896) (14,617)
Advance payments and
contract billings in
excess of recognized
revenue 994 660
Inventories 635 (108)
Prepaid expenses (599) 244
Accounts payable and
accrued liabilities (361) (321)
Accrued income taxes 2,010 520
________ _________
CASH PROVIDED BY
OPERATING ACTIVITIES 7,021 769
INVESTING ACTIVITIES
Net property, plant and
equipment additions (1,160) (625)
Short-term investments 713 (3,373)
________ _________
CASH USED BY
INVESTING ACTIVITIES (447) (3,998)
FINANCING ACTIVITIES
Principal payments on
long-term debt (103) (98)
Net repayments of
short-term borrowings (6,500) (2,300)
Minority investment in
consolidated subsidiary (105) (189)
Proceeds from exercise of
stock options 11 182
________ _________
CASH USED BY
FINANCING ACTIVITIES (6,697) (2,405)
________ _________
DECREASE IN CASH AND CASH
EQUIVALENTS (123) (5,634)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 11,822 17,086
________ _________
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 11,699 $ 11,452
________ _________
________ _________
</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 April 2, 1994, and the related
condensed consolidated statements of income and cash flows for the three
month period ended April 2, 1994 as restated. See note Financial
Statements regarding this restatement. The condensed consolidated
statements of income and cash flows for the three-month period ended
April 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 (4/02/94 versus 12/31/93)
Cash of $7.0 million was provided by operating activities and was used
to pay off $6.5 million of short-term bank debt. The major components
of the $7.0 million of cash provided by operations was: (a) $2.5
million from net income plus depreciation and (b) $4.9 million of cash
provided from a decrease in accounts receivable because of cash
collected on an unusually large shipment on a U.S. Government contract
plus an excess of collections versus billings rendered a large contract
with the Government of Turkey. Partially offsetting this positive cash
flow was an increase in accounts receivable of the Argentina subsidiary
because of increased volume.
Other significant components of the changes in cash flow included a $2.1
decrease in accrued liabilities because of $2 million of payments made
in connection with terms of a settlement 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). Offsetting this was a $2.1 million
increase in accrued and deferred income taxes because of tax liabilities
of the Argentina subsidiary.
Of the total of $24.0 million of cash and short-term investments at
April 2, 1994, approximately $17.8 million represents interest bearing
collateral required to be maintained against letters of credit for the
Turkish contract.
The Company at April 2, 1994 had short-term borrowing arrangements
available of $19 million, of which $15 million was used. These
borrowing arrangements may be reduced if the Company has to increase
performance guarantees it issues in foreign countries.
Based on the present backlog and projected cash flows, the Company
anticipates financing its capital needs from internal sources and from
short-term borrowings in the foreseeable future.
(2) Material Changes in Operations (First Quarter 1994 versus 1993)
Net sales declined by $3.5 million (9%) because of the increasingly
competitive U.S. Government defense business and delays in booking new
export business partially offset by increased sales at the Argentina
subsidiary.
Cost of sales as a percentage of sales increased to 74.9% from 71.2%
primarily as a result of the more competitive U.S. Government defense
business environment and a more favorable sales mix in 1993.
Selling, general and administrative (SG&A) expenses declined by $1.0
million (15%) because of cost reductions necessitated by the decreases
in sales and backlog and as a result of net foreign currency translation
gains of $495 thousand related to the Turkish subsidiary, partially
offset by increased SG&A at the Argentina subsidiary.
Research and development expenses decreased by $558 thousand (34%)
because of a slow down or completion during 1994 of several
Company-funded new product development projects.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following is a list of amended Exhibits filed as part of
this report:
Exhibit 15 - Letter re unaudited interim financial
information
<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
<PAGE>
Exhibit 15
Two Commerce Square
Suite 3100
2001 Market Street
Philadelphia, PA 19103-7080
Grant Thornton
Grant Thornton LLP Accountants and
Management Consultants
Aydin Corporation The U.S. Member Firm of
Horsham, PA Grant Thornton International
Gentlemen:
We have made a review of the condensed financial statements as restated
of Aydin Corporation as of April 2, 1994 and for the three-month period
then ended, in accordance with standards established by the American
Institute of Certified Public Accountants, and issued our report thereon
dated March 22, 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 2, 1994 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 1933 is not
considered a part of a registration statement 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
Grant Thornton LLP
Philadelphia, Pennsylvania
March 22, 1995
